Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

by leave—I move amendments (1) and (2), as circulated in my name, together:

(1) Schedule 1, item 6, page 6 (lines 4 and 5), omit the item, substitute:

6 Subsection 17(5)

  Omit "more than 5 years", substitute:

     more than:

  (a) 5 years; or

  (b) if the application is to renew the registration of an NVR registered training organisation that the Regulator has rated as low risk (using the Risk Assessment Framework)—7 years.

(2) Schedule 2, item 2, page 16 (line 11), omit "registration, including renewal of registration", substitute "renewal of registration".

The opportunity to discuss these matters in the previous debate on the second reading of the National Vocational Education and Training Regulator Amendment Bill 2015 gave me the opportunity to outline the reason that Labor has put this amendment forward in the consideration in detail section—and I just want to reiterate it in the few minutes in this part of the debate. I indicated that Labor recognises that the vast bulk of this bill is intended to provide really sensible amendments to the powers of the regulator and the government in order to increase or improve definitional terms—for example, as many members indicated, the fact that the original bill's RTO strict definition was hampering and tying the hands of the regulator with respect to some of those purported RTO activities that were going on in the market—and to provide some significant quality assurance improvements, particularly the ability for the minister to act more speedily to address some of the things that had emerged in the market. We absolutely endorse many of those.

The message from those amendments is particularly important and useful for the general public at the moment—and that is why I commend the government for them. It is clear to see day by day from media reports the very unscrupulous behaviour that is going on in the VET market. Only this morning, I opened my own paper the Illawarra Mercury to see another story about more students, with very significant debts, who felt that they had got a very poor outcome and were potentially misled or given misinformation about their enrolments. This is out there in our communities. I listened to as many of the second reading speakers as I could, not only on our side of the House but on the other side of the House, telling very moving and concerning stories about their constituents who had been to them with great concerns about their children or vulnerable people they were caring for who had been caught up in this scandalous scam behaviour in the community.

The bill, in its vast bulk, is exactly on message. It is saying exactly what should be said. We should be strengthening the arm of the regulator; we should be strengthening the arm of the minister to respond—and that is why we endorse it. This is why I am a bit bemused and why I really want to take this opportunity to at least put my amendments on the record to give those on the opposite side—and I do not know that I have convinced them—the chance to also support them on the record in the public debate.

The particular section that I want to amend now puts in place a change to the registration period. Previously, when registering under ASQA, an RTO was given a registration for five years. The proposal is to move that out to seven. In normal circumstances, in a well-regulated market operating as it should, and not as we are seeing at the moment, these things might be quite logical. The regulator outlined at Senate estimates how they want to shift from a focus of doing known audit processes, where people are able to plan well in advance of the audit—therefore limiting its effectiveness—to a much more intelligence-based, risk-based intervention system. I think that is a good thing to do. Their argument is that the move from five to seven years actually will free their resources up so that they will be doing fewer renewals of registration and can focus on these high-risk ones—and I do understand that as well. The other argument, which I also understand, is that TEQSA, which regulates the university sector, has seven-year time frames. There are quite a few people operating across sectors, so for them it is a logical thing to have a seven-year period.

My problem is that I think now is exactly the wrong time to have included this clause in the bill. I am proposing in my amendment that it becomes an earned capacity—that is, once an RTO has been registered and has earned the reputation of being a low-risk, reliable provider, then, on renewal, they can then get a seven-year period. I think it is a sensible strengthening of the message that the government is attempting to put in place through this bill. For that reason, I commend the bill and I hope those opposite find the ability to support my amendments.

Christopher Pyne (Sturt, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

The government does not support the amendment proposed by Labor. The amendment is unnecessary and duplicates powers the regulator already has. The time periods in the legislation are upper limits—that is, up to seven years. ASQA already has the power to make decisions both at the time of initial registration and renewal to register a provider for less than the maximum of seven years. Subsection 157(4) of the act currently requires ASQA to apply the risk assessment framework when performing its functions. It is unnecessary and duplicative to reference the risk assessment framework in relation to the renewal of registration.

The amendment will also see ASQA diverting resources away from the most effective regulatory actions. ASQA has also advised the government that to incorporate the notion of a low-risk rating into the legislation as the basis for the period of registration is extremely problematic. It will in fact divert resources from more effective compliance monitoring and action against poor providers. A provider risk rating is only one element of ASQA's overall risk approach to regulation. ASQA has previously advised the government that re-registration audits are the least effective method of identifying poor performing providers, leading to less sanction activity than other types of audit.

ASQA's transition to a full, proportionate risk-based approach places less emphasis on the registration life cycle and more emphasis on the collection and analysing of data to determine where problems exist in the sector. This more proactive form of regulation includes annual environmental scanning and six-month monitoring, to properly identify where problems exist; collecting and using data analytic tools and better use of intelligence, including complaints, to direct regulatory interventions; and using profiles rather than simple risk ratings to better identify potential problems in the market. ASQA can then direct its resources to addressing these problems and higher-risk providers and practice.

Moving to a seven-year registration cycle is consistent with this risk approach. The amendment would tie up ASQA's resources in dealing with reviews of and appeals against its risk rating of providers rather than addressing poor practice. Including a reference to risk ratings in the renewal process will leave the regulator vulnerable to lengthy disputes around rationales for discriminating between various providers on the basis of untested risk ratings. Administrative appeals processes can be lengthy and resource intensive for the regulator, with matters taking at least eight to 12 months to resolve.

All in all, an amendment to draw distinctions between the initial registration period and the re-registration period would complicate the regulatory architecture, lead to the potential for challenge and litigation attaching to the regulator's decision as to the allocation of a risk rating, misinterpret the relative role that a risk rating plays in an overall and comprehensive risk approach to regulation and divert resources of the regulator towards red tape and administration and away from identifying and acting upon high-risk providers and poor practices. So the government does not support that amendment.

In closing, I do not blame the current shadow minister for amendments such as these or, in fact, the situation we find ourselves in in the vocational education and training regulatory space, because she has been trying to be proactive and as helpful as possible to the government over these matters which are important. But the seeds of the issues we are dealing with now were created when the system was first established by the previous government when Senator Carr was the minister. Yet again, Senator Carr has proven why he should not be the shadow minister for education.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

I appreciate the minister's comments. It is an important area to look at. I would just like to put on the record that the VET FEE-HELP scheme was actually established in 2007 under the Howard government, although it did commence in 2009. So I think the history is important but less important than those people in our communities who are being exploited at this point in time. I have to put on the record my appreciation to the assistant minister as well and encourage him to perhaps have some conversations with me before the bill is finalised to find a way to address some of these issues.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

The question is that the amendments be agreed to.

Bill agreed to.