David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

I present an interim report of the Red Tape Committee on the effective red tape on private education, together with the Hansard report of proceedings and documents presented to the committee. I move:

That the Senate take note of the report.

The Senate Select Committee on Red Tape was established to inquire into the restrictions and prohibitions on business, the economy and community. It has produced interim reports on the sale, supply and taxation of alcohol, tobacco retail, environmental assessment and approvals, pharmacy rules, health services, child care, occupational licensing, and now private education. The inclusion of private education arose out of a meeting I had with the private education sector in Parliament House at which I heard a litany of complaints about excessive and inappropriate regulation. Despite not being constitutionally responsible for education, the Commonwealth government is deeply involved and spends a lot of money on it. In fact, you'd have to wonder how much more it would cost if it did have constitutional responsibility.

Total Commonwealth expenditure on education is currently $34 billion, rising to $39 billion by 2021-22. Among its main responsibilities is funding of non-government schools—$11 billion this year, rising to $14 billion by 2021-22. On higher education, the Commonwealth is involved via various policies, programs and funding. It registers education providers and accredits their courses of study, regulates the provision of education services for overseas students, provides income-contingent loans to eligible students, funds state and territory governments to support their training systems and provides certain specific interventions and support. Its involvement in higher education costs $10 billion, and in vocational and other education it costs $2 billion.

The private education sector unanimously described to the committee high levels of regulation that are negatively affecting providers, students, industry and the Australian economy. The Council of Private Higher Education described the high regulatory burden and red tape as 'the new reality'. The Australian Council for Private Education and Training said that regulatory measures are 'crushing' private providers in the higher education and VET sectors, and, in the latter case, is pushing students towards the less regulated university sector. Open Colleges said there has recently been an 'upsurge' in red tape with consequent impacts on private VET providers. They said:

In 2007 the regulatory framework for Registered Training Organisations (RTOs) was articulated in the Australian Quality Training Framework (AQTF) via the Essential Standards for Registration. This suite of standards encompassed three Standards, 14 Elements and supported by nine Conditions of Registration, all packaged in a 12-page document (including covers, definitions, introduction and an appendix). The nuts and bolts of the regulatory obligations for registration were explained in plain English over five pages.

In comparison, the Standards for Registered Training Organisations (RTOs) 2015 consists of 8 Standards, 59 Clauses, over 100 sub-clauses and six Schedules, packaged in a 33-page legislative instrument.

The Catholic Education Commission of Victoria submitted:

… schools are caught in a massive web of regulatory requirements that burden principals and staff with administrative tasks.

The Independent Education Union of Australia said its members are 'reeling under the burden of red tape and administrative demands'. Its submission cited ABS data, showing that, over the ten years to 2017, school staff working in administrative and clerical positions increased by 71 per cent while the number of teachers increased by just 15 per cent. Some submitters made the obvious point that this burden comes at the expense of educating students, enriching students' school experiences or having the capacity to pursue improvements that better support better outcomes.

Open Colleges referred to the increasing distance between the relevance and timeliness of nationally recognised training and the needs of employers and the workforce in a global economy, with training packages out of date before they are released. Open Colleges said the trajectory of education regulation is clearly failing to meet the current and future needs of employers and students, with the National Training Framework at risk of being discarded by its core stakeholders in favour of more innovative, responsive and flexible options offered by education providers operating outside the national framework.

Some red tape is attributable to duplication. For example, the National Catholic Education Commission noted that private providers report financially to both the Department of Education and Training and the Australian Charities and Not-for-profits Commission, with the data required not being the same. Some of the red tape can be traced to a specific source. For example, the Council of Private Higher Education, the Australian Council for Private Education and Training and Open Colleges all attributed overregulation in the VET sector to the recent VET FEE-HELP scandal.

Some of the regulation of private sector providers does not apply to the public providers. Independent Schools Council of Australia referred to the need for each private school to be a registered provider, whereas a single registration covers all public schools in the jurisdiction of state education departments. Independent Schools Victoria noted that independent schools are significantly affected by town planning processes that do not apply to public schools. It gave the example of a school on the urban fringe of Melbourne where traffic lights are being installed following an accident. The school is being asked to put up $2 million to pay for it. The Council of Private Higher Education described higher education policy settings as enforcing a system that preferences publicly funded institutions at the expense of private education, with public institutions heavily subsidised, lightly regulated and free to pursue market and product development without external approvals. By contrast, private educations operate without public subsidy, are extremely heavily regulated and effectively require government approvals for new sites, new courses, new delivery modes, permission to grow international student numbers and change of ownership.

The committee believes it would be beneficial for federal and state governments to undertake an audit to determine the volume and quality of regulation currently affecting the private education sector to identify opportunities for deregulation and red tape reduction. The committee also recommends that the Department of Education and Training review the findings and recommendations of the 2013 Review of Higher Education Regulation Report to assist in the identification of deregulation opportunities for higher education.

The committee is concerned that, unless there is a renewed focus on red tape reduction, the private sector will be substantially inhibited from achieving its potential as a contributor to the economy through education, and the burden will unnecessarily fall on taxpayers via public education. The committee recommends that Australian governments, state and federal, consider whether a 'one size fits all' approach to regulation of education is appropriate, and suggests that governments explore options to implement better risk based regulation. The committee supports a five-year review of the Regulator Performance Framework to identify opportunities to improve Commonwealth regulators' performance.

The committee believes there is inequity in the provision of FEE-HELP to VET and higher education students who choose to enrol in courses offered by private providers. The committee considers that the policy rationale underpinning the 25 per cent loan fee cannot be sustained. It received no evidence regarding the Commonwealth's costs to show that students enrolled with private providers are more likely to incur doubtful and ultimately bad debts. In fact, the committee recommends that the Australian government remove all forms of discrimination against private education in its funding and support programs.

This is an excellent report and should be of substantial benefit to the government policy process. I would like to thank my fellow committee members for their involvement and assistance in this inquiry—in particular, Senators Griff and Anning. I seek leave to continue my remarks later.

Leave granted; debate adjourned.