SENATE

COMMONWEALTH OF AUSTRALIA







Official Committee Hansard



SENATE

EMPLOYMENT, WORKPLACE RELATIONS, SMALL BUSINESS

AND EDUCATION REFERENCES COMMITTEE





Reference: Quality of vocational education and training in Australia



WEDNESDAY, 5 JULY 2000

CANBERRA









BY AUTHORITY OF THE SENATE

INTERNET





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some House of Representatives committee hearings and some joint

committee hearings are available on the Internet. Some House of

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SENATE

EMPLOYMENT, WORKPLACE RELATIONS, SMALL BUSINESS

AND EDUCATION REFERENCES COMMITTEE

Wednesday, 5 July 2000



Members: Senator Collins (Chair), Senator Tierney (Deputy Chair), Senators Brandis, Carr, Crossin and

Stott Despoja

Participating members: Senators Abetz, Allison, Boswell, Brown, Calvert, George Campbell, Chapman,

Coonan, Crane, Crowley, Eggleston, Faulkner, Ferguson, Ferris, Gibbs, Gibson, Harradine, Hutchins,

Knowles, Lightfoot, Mackay, Mason, McGauran, O’Brien, Payne and Watson

Senators in attendance: Senators Brandis, Carr, Collins, Crossin and Tierney



Terms of reference for the inquiry:

The effectiveness of the vocational education and training sector in developing the educational skills of the Australian

people and the skills formation and productivity of the Australian workforce, including:

(a) an evaluation of the place of the new apprenticeships scheme within the national priorities set for Australia’s

vocational education system and the appropriateness of those priorities, with particular reference to:

(i) resource allocation across the sector, between the states and territories, and within program priorities,

(ii) demographic distribution and equity of structured training opportunities,

(iii) opportunities for youth and for older people, and

(iv) the respective obligations of industry and government;

(b) an evaluation of claims that the key objectives of the original new apprenticeships scheme, as agreed by the

states and territories, are not being met, and specifically whether:

(i) training outcomes are of diminishing quality,

(ii) older people rather than younger people and new entrants to the workforce are the main beneficiaries of

new apprenticeships,

(iii) the system is more rather than less complex, and

(iv) the system is being driven by financial incentives and targets rather than the needs of industry;

(c) an assessment of the quality of provision of technical and further education (TAFE) and private providers in the

delivery of nationally recognised and non-recognised vocational education and training (VET) services and

programs, including:

(i) the adequacy of current administration, assessment and audit arrangements for registered training

organisations and the credentials they issue,

(ii) processes for the recognition of registered training organisations, the effectiveness of compliance audits

and validations of registered training organisations, operations, and sanctions for breaching the conditions

of registration,

(iii) the level and quality of VET occurring within registered training organisations, including TAFE, private

providers, workplaces and schools,

(iv) the extent to which employers of apprentices and trainees are meeting their obligations to deliver training

on the job, and the adequacy of monitoring arrangements,

(v) the range of work and facilities available for training on the job,

(vi) attainment of competencies under national training packages, and

(vii) the reasons for increasing rates of non-completion of apprenticeships and traineeships;

(d) an examination of the impact on the quality and accessibility of VET resulting from the policy of growth

through efficiencies and user choice in VET, with particular reference to the:

(i) viability of TAFE, particularly in regional Australia,

(ii) quality of structured training,

(iii) quality of teaching,

(iv) appropriateness of curriculum and learning resources,

(v) range and availability of student services, and

(vi) effects of fees and charges on TAFE;

(e) an evaluation of the provision of Commonwealth and state employers’ subsidies, including:

(i) the effectiveness of existing subsidies arrangements in meeting national VET needs,

(ii) the impact of changes to the new apprenticeships policy, which broadened employer trainee subsidies to

include existing workers, and

(iii) accountability and audit procedures within the Department of Education, Training and Youth Affairs, the

Australian National Training Authority and state training authorities;

(f) an evaluation of the growth, breadth, effectiveness and future provision of vocational education in schools,

including:

(i) the quality of provision of VET in both government and non-government schools,

(ii) the relationship between vocational education in schools, and accredited training packages,

(iii) the effectiveness and quality of curriculum materials and teaching,

(iv) accountability provisions for the funding of vocational education in schools, and

(v) school-to-work transitional arrangements; and

(g) an assessment of the consistency, validity and accessibility of statistical information on the performance of

national VET systems, especially relating to apprenticeships and traineeships.

WITNESSES







ARBON, Ms Veronica May, Director, Batchelor Institute of Indigenous Tertiary Education............ 775



BENNETT, Ms Barbara, Assistant Secretary, New Apprenticeships Branch, Department of

Education, Training and Youth Affairs................................................................................................. 834



BERTRAM, Ms Judith Carolyn, General Manager, Policy and Research, Department of

Employment, Training and Industrial Relations .................................................................................. 783



BOWMAN, Dr Kaye, Director, Planning and Performance Review, Australian National Training

Authority ................................................................................................................................................ 814



BYRNE, Mr Paul Geoffrey, General Manager, Australian National Training Authority................... 814



COLES, Ms Patricia Midori, Senior Policy Analyst, Batchelor Institute of Indigenous Tertiary

Education................................................................................................................................................ 775



MANNS, Mr Roderick Glen, Assistant Secretary, Vocational Education and Training Reform

Branch, Department of Education, Training and Youth Affairs.......................................................... 834



McMORROW, Dr James, Deputy Director-General, Policy and Planning, New South Wales

Department of Education and Training ................................................................................................ 798



NOONAN, Mr Peter John, Deputy Director General, Department of Employment, Training and

Industrial Relations................................................................................................................................ 783



SCOLLAY, Ms Moira Jean, Chief Executive Officer, Australian National Training Authority ........ 814



SOBSKI, Ms Jozefa Bronislawa, Deputy Director-General, Development and Support, New South

Wales Department of Education and Training ..................................................................................... 798



THORN, Mr William, Assistant Secretary, Research and Evaluation Branch, Department of

Education, Training and Youth Affairs................................................................................................. 834



WALTERS, Mr Colin John, First Assistant Secretary, Training and Youth Division, Department of

Education, Training and Youth Affairs................................................................................................. 834



WHITE, Ms Lorraine Susan, Assistant Secretary, Pathways Programs Branch, Department of

Education, Training and Youth Affairs................................................................................................. 834



WILMOTT, Dr Gary Maurice, Assistant Director-General, Industry Services, New South Wales

Department of Education and Training ................................................................................................ 798

Wednesday, 5 July 2000 SENATE—References EWRSBE 775







Committee met at 9.11 a.m.



ARBON, Ms Veronica May, Director, Batchelor Institute of Indigenous Tertiary Education



COLES, Ms Patricia Midori, Senior Policy Analyst, Batchelor Institute of Indigenous

Tertiary Education



CHAIR—This is scheduled as the final day of hearings for this inquiry. On 10 August last

year, the committee was asked by the Senate to inquire into the quality of vocational education

and training in Australia. Over the past decade there have been a number of important policy

changes affecting the vocational education and training sector, which have been a part of wider

government reform agendas. The committee’s inquiry will focus on the assessment of the new

vocational education and training structure, particularly in regard to its capacity to deliver

quality training in an increasingly deregulated and contested framework. The committee’s terms

of reference are extensive in that they will allow the committee to look at how all stakeholders

in the vocational education and training sector view current arrangements and outcomes.



Before we commence taking evidence today, I wish to state for the record that all witnesses

appearing before the committee are protected by parliamentary privilege with respect to

evidence provided. Parliamentary privilege refers to special rights and immunities attached to

the parliament or its members and others necessary for the discharge of parliamentary functions

without obstruction and fear of prosecution. Any act by any person which operates to the

disadvantaged of a witness on account of evidence given before the Senate, or any of its

committees, is treated as a breach of privilege. I welcome all observers to this public hearing. I

would now like to welcome our first witnesses from the Batchelor Institute of Indigenous

Tertiary Education, who are appearing via teleconference. The committee has before it your

submission, No. 58. Are there any changes you wish to make to that submission?



Ms Arbon—There is a small typing error on page 4 in the first line of the second last

paragraph. It should say, ‘situated cognition’, rather than ‘situation cognition’.



CHAIR—Thank you. The committee prefers that all evidence be given in public, although

we will consider any request for all or part of any evidence to be given in private or in camera. I

point out, however, that such evidence may subsequently be made public by order of the Senate.

I now invite you to make a brief opening statement, and then we will move to questions.



Ms Arbon—I thought I would give a brief description of Batchelor and our work. The

Batchelor institute works across both the vocational education and training, or TAFE, sector and

the higher education sector. Batchelor is multisited. We have a campus at Batchelor, which is

about 100 kilometres from Darwin, and another campus within the centre of Alice Springs at

this time. We also have a number of regional centres at Tennant Creek, Katherine and

Nhulunbuy. We also have a series of community study centres in communities right across the

Territory, and these add up to around 45 at this stage. These places are usually small rooms

where students can respond to lecturers, send faxes, make phone calls and, of course, study.









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Batchelor itself is organised into several regions based on annexes and our main campuses.

We operate across the Northern Territory and into north Queensland, northern Western Australia

and some parts of northern South Australia. So across the north of Australia we have got a fairly

wide spread. Batchelor’s mission is to respond to community aspirations and individual

aspirations with a focus on remote and rural Australia, particularly north Australia. We operate

with some fairly basic underpinning principles. One is both ways. That means that in the way

we work, in the way we attempt to work with new knowledge, we look at it from a Western

cultural context as well as try and work with students to look at it, challenge it and think about it

from their own cultural context.



So it is about allowing space for other cultures to come into the learning environment. We

also operate on a principle of community based so that where possible we deliver at the local

level or at the level of annex or region, but we also try to embed the learning within the context

of communities or the culture of the community. We use a mixed mode methodology, in that

students travel in to a central location or we travel out to where students are based, if possible.

We also used mixed mode to think about the methodologies we use in the learning context,

drawing on technology, drawing on different teaching and learning methodologies, drawing on

different resources et cetera.



Batchelor runs overall about 1,100 EFTSU, or 2,000 students. That is across both sectors. In

the TAFE-VET area it is probably about half that. Our students are mainly women, averaging

about 70 or 75 per cent each year. Our students are mainly older, aged between 25 and 35 or 40

years. Our students come from multilingual and multicultural backgrounds and of course from

remote areas. As we have learnt and heard recently from the Learning Lessons report, our

students come from extremely educationally disadvantaged backgrounds. In remote Australia

there is not much access to secondary education at all.



Our submission that you have got before you raises a number of concerns, particularly in

relation to the training packages. I argue that each of the concerns that we raise is central to

quality outcomes. Another concern I am specifically raising here is the concern about funding

which is also central to achieving quality outcomes, and particularly in this very complex

context that we work in. The other point is that at Batchelor we have been working for a number

of years now trying to integrate a quality system across the institution that is able to respond to

the plethora of requests and demands we get from external bodies on reporting of our work.

Those demands come of course from VET, higher education and other funding sectors. What we

try to do is integrate so that we are not fractured, I guess, by those external demands.



In this interconnected and complex environment that I have just spoken about, Batchelor is

attempting to establish and work in partnerships with communities and their families. We are

trying to work regionally and locally as much as possible but, again, this is subject to funding.

In the VET area we are moving across to training packages, and within those packages we are

fighting to make changes where critical and visible issues arise. There are some examples in our

submission, and there are other examples that we could possibly talk about later. We have tried

to develop resources or pull together teaching tools from nationally developed resources, from

resources developed at Batchelor and from other resources that are available on the market to

try to contextualise the learning for students. Another key area is to increase staff development









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Wednesday, 5 July 2000 SENATE—References EWRSBE 777





opportunities within the institute because it is no good having a good training package or good

resources without also having a very well-trained educator or trainer.



There are a number of core issues that we raised in our submission on page 5 which are

fundamental and essential to the work we do. These are things like English language, literacy

and numeracy, and trying to address the underpinning knowledge and cultural context issues

because we find that Western cultures and Western capitalist systems are not known in many of

these communities. So we have a lot of work to do in filling in the gaps about this culture that

we now live and work in. We also struggle with narrow definitions of work. Training packages

are based on quite specific notions of work, and quite often beyond the boundaries of Darwin or

Alice Springs work may require multiskilling and the ability to work across training packages

or across competencies. And of course remoteness is a major issue.



Finally, in our submission we identified a number of areas of importance. I would probably

argue, if I was forced to prioritise, that Nos 1 to 4 on the bottom of page 5 are of the most

importance. No. 1 is about providing funding to support Batchelor in relation to English

language development. No. 2 looks at some way of providing unattached ASCH within our

profile funding, so that we can respond more quickly and more flexibly to requests from

communities. No. 3 looks at some kind of differential funding money model. Here in the

Northern Territory we have received in the last year or so a slight loading for delivering

remotely, but I think there are still huge issues of equity that need to be considered because, I

would argue very strongly, that that slight increase does not come anywhere near addressing the

real costs of working beyond the boundaries. No. 4 is about funding RTOs, or giving a

percentage of funding to RTOs, to develop support materials locally for training packages. I will

close with that at this stage.



CHAIR—Thank you very much. We will start with questions from Senator Crossin.



Senator CROSSIN—Would either of you like to elaborate a little bit more on some of the

difficulties that you have with the current training framework that is being produced by ANTA

and the way in which, if you overlay that framework, it does not specifically meet the needs of

your clients? I am referring more to things like on-the-job training where there are perhaps few

work sites for on-the-job training in remote communities. Training packages assume that people

already have a degree of literacy and numeracy. What are the problems that you have trying to

actually put in place a training framework that exists in this country?



Ms Arbon—The issues are multiple and quite complex. Up front I need to say that there are

some positives to training packages but there are a huge lot of negatives as well, and here we

are focusing mainly on the negatives. Some of the issues we have already raised in our

submission. Those are things like Trish has mentioned—the lack of infrastructure and work

sites in communities. We were talking a little earlier about how we have a number of

apprenticeships now starting to emerge at the local level and how we are actually delivering in

communities the off-the-job requirements. But there are issues where the community has to

have a tradesperson to actually supervise and do the on-the-job training with those people. Quite

often communities have not got those persons or have not got enough of those people out there,

so that is one issue.









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EWRSBE 778 SENATE—References Wednesday, 5 July 2000





Another is the ratio. There is a requirement for a ratio of one tradesperson or supervisor to

four students. If you are flat out getting one tradesperson, you are not going to get two or three

out there in Lajamanu, Nyirrpi or somewhere like that. So that ratio is quite difficult. It also

affects us whereby we have to have far more staff to work with those small groups of people out

there. Another one is the qualification of the tradesperson. Quite often communities need

multiskilled tradespeople who may not have a trade certificate. But it is a requirement for on-

the-job training that they have a qualification—a trade certificate of some form. So that is one

area that is emerging just with apprenticeships.



There is the whole issue of funding. Funding levels are quite low and barely cover our costs

to travel to these small groups of people, let alone pay the off-the-job trainer’s wage. It is a very,

very difficult issue. There are issues with the assumptions that are built into training packages

about students coming with a certain level of English language knowledge. There is an

assumption that students are coming in with year 11 or 12. That is not the reality where we

work. Quite often they are much, much lower than that. If we are lucky, 90 per cent of our

students come with grade 5 and it is probably much lower than that. So there are assumptions of

English language built into the packages. There is an assumption that people know about the

world of commerce and the capitalist systems that we work in today. That is not a reality, as you

know, Trish, if you go beyond the Stuart Highway in the Northern Territory.



There is an assumption about work. We have had a number of issues about this, and we raised

one in our submission about the construction package where one of the certificates requires

scaffolding. Out there in the communities you do not require that, and we have actually had to

bring people into Darwin to allow them to achieve that competency. There is also an example in

children’s services where how you raise children in a Western urban environment is quite

different to how you raise children culturally and also environmentally out in a community. So

there have been issues there. It goes back to the notions of work that surround how

competencies are developed within training packages.



There are issues with the underpinning philosophy of User Choice, because we have quite

thin markets across the Territory. What has happened in some of our communities is that they

have become sites of struggle for registered training organisations. They have ended up with

two organisations basically delivering the same course to a very small number of students. That

is a huge negative for Aboriginal people because it adds to confusion and adds to exploitation

on the ground. There are issues again to do with User Choice, in that there is an expectation that

we actually deliver locally but the funding does not match that expectation. We are constantly

trying to negotiate a balance so that we can achieve what the community wants with as little

coming out of the community as possible; but at times it is necessary, and that causes conflict

between us as an institution and our constituents. Pat might want to add to that.



Ms Coles—I will add a little more to that. The fact is that the training packages are developed

with a certain world of work in mind—a metropolitan, industrial, Anglophone world of work.

We acknowledge and have no problem with the fact that English is the language of work, but

that is one of the things we are grappling with. The fact that a lot of the competencies within

training packages are based on that other world of work devalues the knowledge and the skills

that are necessary in a lot of the work contexts for the people who attended Batchelor.









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Wednesday, 5 July 2000 SENATE—References EWRSBE 779





Senator CROSSIN—Following on from that, about User Choice and the role of RTOs:

Batchelor Institute is a publicly funded institution but, to your knowledge, are there any private

providers operating in remote communities and trying to deliver the sorts of courses that you are

delivering?



Ms Arbon—Yes; there are some who are working in communities. Some of them have

actually pulled out in the past year or six months or so. We had some quite negative feedback

about a year ago, but there are still some private providers working out there. We also have had,

more recently through the competitive tendering process, a number of interstate institutions that

have won tenders through that process.



Senator CROSSIN—Given that the current training framework seems to not adequately

meet the needs of your clients and that you seem to always have to readjust the framework and

your delivery model, what support do you get from the state training authority and from ANTA,

when it comes to quality measures, in terms of the expectation they have from training

organisations in other states compared with the expectation they would have of you—given that

the training framework is severely restricted when it comes to what you are trying to deliver?



Ms Arbon—Basically we go through the same process as any other institution in the

Northern Territory or, it is likely, in the rest of Australia. So we do not get any support in the

types of processes that we have to respond to in relation to quality, and we do not get any

additional financial support. Within the institution, we dedicate almost a position to cover the

quality area and keep it moving and we also use a lot of staff time to actually work through and

report on our work—because that is what the quality system is basically about: having the

processes to report on your work. It is a different thing from your work itself. At Batchelor, we

have tried to embed it so that it is linked closely to what we to. We do not get any additional

support at all, either financially or in any other way. I think the biggest thing has been our

ability to highlight the difficulties we face daily.



Senator CROSSIN—I have one last question. Are any of your students actually under the

category of New Apprenticeships?



Ms Arbon—Yes, we have a small but growing number. We have a quite successful

construction program in Galiwin’ku where we work very closely with the Galiwin’ku

community. There were initially 12 or 14 students, I think, who started that program. Some have

completed certificate II. There are six continuing at certificate III level. We have six or seven

students out at Lajamanu who are involved in apprenticeships, although there have been some

issues in the community and that may have to be put on hold for a while out there. There are a

number at Macarthur River Mine in the certificate III construction (carpentry)—I think two

male students and a female student—who are doing quite well. There are 17 coming online in

Alice Springs today or tomorrow in construction as well.



So construction is one area where that is actually starting to work on the ground for

communities and it is probably one of the first examples in Australia where remote

communities have taken on traineeships and then apprenticeships. But it is very slow and it is

hard work. As I have said previously, there are a lot of issues we have to work through in

relation to the ratio, the funding, the qualification of the people on the ground and so on and so







EMPLOYMENT, WORKPLACE RELATIONS, SMALL BUSINESS & EDUCATION

EWRSBE 780 SENATE—References Wednesday, 5 July 2000





forth. But some of that is starting to happen and we have started to get outcomes for

communities.



Senator TIERNEY—Ms Arbon, you did indicate in your earlier comments the problems

with the balance between general and vocational education.



Ms Coles—Sorry, the sound is breaking up. We are only hearing every second syllable.



Senator TIERNEY—I am speaking about the comments you made earlier about the balance

between general and vocational education and the need for a lot of the students to make up

some of the general education they might have missed. Could you paint us a clearer picture of

how that actually works out in practice in the curriculum. If there are deficiencies in, say,

literacy skills, how do you build that into your vocational program, particularly when you are

trying to implement these training packages?



Ms Arbon—I think we take various approaches. One is prior to students moving into an

actual training package and the other is in relation to the technical skills out of a training

package. In relation to the first one, we have purchased, I guess, the right to deliver the

Certificate I and II in Spoken and Written English that comes out of the Migrant Services in

New South Wales. We have worked closely with the group and had in-service et cetera. We are

getting success stories. There is a very low level of English language here. As you must be

aware, beyond the Stuart Highway in the Northern Territory, access to and success in primary

and secondary education is very low. But we are getting outcomes.



The students then move on out of the Certificate I and II in Spoken and Written English into a

course in General Education or Pre-tertiary Studies program if they choose. That gives them

study skills as well as moving into some of the introductory units in science perhaps or history

or whatever. So there is that line for base level underpinning English language, developing the

basics.



In relation to working with or adding to training packages, initially when training packages

came in the argument was that training packages alone could be delivered, so we had to work

with trying to deconstruct what was the underpinning knowledge to achieve a competency, and

of course English language was one. We tried to argue for longer hours to cover some of the

costs we were actually sustaining to try and achieve these English language skills, but we did

not win that one. We then argued that there had to be space within a training package where we

could bring in these electives. We have been given a little bit of freedom there. For example, we

are able to enrol those students in a Certificate III in Construction in an English Language unit

out of the Certificate II in Spoken and Written English or the Course in General Education.



Those are our two strategies. The other one is to unpack the competency and try to work with

the English language alongside the knowledge and the technical skills within the curriculum or

the training package itself. So there are a number of strategies we attempt to use. It probably

even goes as far as resource development, trying to work out how you build English language

development within a series of readings or a series of exercises in a small resource document

that might be provided in a workshop or for students to take home and work on. So there are a

number of layered strategies that we draw on.







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Wednesday, 5 July 2000 SENATE—References EWRSBE 781





Ms Coles—Perhaps I could just add to that. This also has implications for what Veronica said

before about the training of staff. To be able to do all of this, the staff have to be knowledgeable

in more than just their specific technical area.



Senator TIERNEY—I suppose it would make life easier for you if participation rates and

completion rates in high schools were higher. Is that on an improving trend in the Northern

Territory?



Ms Arbon—From my recent look at the Northern Territory statistics, I think they have

slightly decreased over the last couple of years.



Senator TIERNEY—Did you say decreased?



Ms Arbon—Yes. I have not been able to look recently at primary school statistics. But just

looking generally at secondary education, I think it has decreased nationally over the last couple

of years, particularly in the Northern Territory.



Senator TIERNEY—Once students come and start these training packages, and given that

you are, I suppose, in some ways extending the course by covering some basic skills, what

effect is that having on the attrition rates in the courses? Can you provide us with some picture

of the attrition in terms of numbers between the start and the finish?



Ms Arbon—I do not have the exact figures in my head, but we probably lose just under 50

per cent of our students in a lot of our programs. In some of our programs the figures are better

than in others. For example, in the Galiwin'ku Construction Certificate II, I think it came to

eight students. So just over half achieved the Certificate II. In other programs, it is better than

that. But yes, we do have high attrition rates but no more different than across Australia, I

would argue, because it is a very real and complex issue.



One of the things we have been able to do is allow students to have longer times or to remain

as a continuing student for slightly longer. This comes back to a huge load on the institution

ultimately because, if you are carrying a student for longer hours, you are not funded for those

hours. But yes, attrition rates are a concern. We are trying to set up systems so we can more

closely monitor those into the future.



Senator TIERNEY—Is this system at a point where you can comment on the employment

rate following training?



Ms Arbon—We have had a survey running for the last number of years, which shows us that

the majority of our students—over 80 per cent; I think it is 89 per cent—are in employment

alongside or immediately after they complete some form of training. The survey focused on

higher level qualifications in the main—that is, certificate or diploma and the higher education

area. There is probably about five per cent not working; sadly, another three or four per cent we

have lost—that is, they have passed away; and another very small number is unemployed. We

have quite high statistics on employment outcomes for those people who stay and complete

their studies. So we have very good statistics on outcomes.









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Senator TIERNEY—Ms Arbon, you did mention the need for packages to be more

culturally sensitive. How do you balance that with the need, particularly if you are in skill

training for particular jobs, to actually deliver a set of skills or competencies that are basic to

actually performing a job? In terms of the way you develop the curriculum, how do you balance

that?



Ms Arbon—I think you try to leave some space within the curriculum. One of the things that

training packages have is no space. Basically, they have 20 competencies, and you have to

achieve 20 competencies. All of those competencies usually relate to work. One other thing that

we have argued strongly is that there must be some space, and usually that would mean having

electives. Students can then pick up an English language competency, or a workplace practice

competency, where they can actually go into a work site at the local level, or something more

relevant to the cultural context; for example, a history competency, or something about

communities and how they operate. I think many of those competencies are out there, but at this

time the way that certificates are written within training packages you cannot bring them in

unless you re-register them as registered training programs. That is the only way that you can

actually bring in that other factor. I think this applies not only to indigenous people but also to

people who are perhaps from poor economic situations, or culturally different situations, in

urban areas like Sydney, from what I have read.



CHAIR—Ms Arbon and Ms Coles, thank you for your contribution to this inquiry.

Unfortunately, our time is limited by a security alarm that is going to happen a bit later this

morning, so we need to cut short the questioning. Thank you for your submission as well.



Ms Arbon—Thank you.









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[9.48 a.m.]

BERTRAM, Ms Judith Carolyn, General Manager, Policy and Research, Department of

Employment, Training and Industrial Relations



NOONAN, Mr Peter John, Deputy Director General, Department of Employment,

Training and Industrial Relations



CHAIR—I welcome back officers of the Queensland Department of Employment, Training

and Industrial Relations. The committee prefers that all evidence be given in public, but we will

consider any request for matters to be dealt with in private, which is in camera, although I

should point out that such evidence may subsequently be made public by order of the Senate. I

invite you now to make some brief comments on matters which may relate to this committee

since we last met. We will then move to questions.



Mr Noonan—The department is pleased to have an opportunity to reappear before the

committee. I thought it might be useful if I updated you on the progress of our measures to

address quality system and administrative issues in Queensland since we last appeared before

the committee and to give some views on progress which has been made nationally. However, I

believe it would be more appropriate for ANTA to detail any of the outcomes, particularly of

last week’s ministerial council, rather than for me, as a state officer, to go into detail on those

outcomes.



Since we last appeared, Queensland has started the process of fully implementing new

administrative arrangements for apprenticeships and traineeships which we were piloting in two

regions. These arrangements are in the process of being rolled out across the states. They will

integrate the business operations of New Apprenticeships centres, registered training

organisations and the department to ensure that the initial sign-up process for apprentices and

trainees is such that all parties are aware of their rights and obligations, that there is a proper

training plan developed in conjunction with the employer, the trainee or apprentice and the

registered training organisation, and that their rights in terms of User Choice—that is, for choice

of provider—are explained. It will lead to significant streamlining of the administrative process

for sign-ups, including the development of a training agreement which, for the first time, will

combine both Commonwealth and state forms and to the point where we expect to be able to

move to electronic lodgment of training agreements some time in the next year or so.



We have instituted a new User Choice process which involved a significant pre-tender so we

could ensure that all providers in the market were fully ARF compliant and were able to meet

their obligations under User Choice contracts. It will also ensure that we have greater stability in

the market by having a clearer idea of the numbers of providers operating in different market

segments and a greater capacity to assess how they are delivering.



We are moving to new contract management arrangements with registered training

organisations. We have undertaken a significant number of User Choice and ARF audits and

established an integrated audit process for all TAFE institutes. We have new legislation which

integrates the regulatory functions previously undertaken by the state training council and the

accreditation council and which will remove the separate regulatory process that still existed in

Queensland under the old legislation and make the national consistency issue in Queensland









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easier to deal with. We have broadened the membership of both the training and employment

board and the new regulatory body to include greater community and provider representation.

We have undertaken some major reports on assessment, which I now believe will emerge as one

of the key policy issues, and I suggest the committee also look at the assessment issue. We have

also undertaken a major independent study on reasons why apprentices and trainees were not

completing their contracts at training.



The Queensland minister’s initiative—not at the last ministerial council meeting but the one

before—when he wrote to Dr Kemp suggesting that the ministers focus on issues to do with

national consistency, was picked up by the ministerial council. It has led to outcomes, which

you will probably hear of later in the day, in terms of what we believe will be significantly

improved arrangements for national consistency. We believe that the work we have done in

raising the quality issue from early last year has led to the quality issue now being addressed

much more vigorously on a national basis. We are continuing with the implementation and roll-

out of training packages, while continuing to focus on the need to ensure that there is a range of

courses available for students who are not able to access training package qualifications,

particularly those in institutional pathways who may not be able to gain access to a workplace

for workplace assessment.



In conclusion, I would like to indicate that I believe these processes nationally and in

Queensland do need to be brought to a conclusion in terms of the shift in policy stands. I believe

that the work on national consistency needs to be completed by the end of the year and that

there does need to be, as we have argued, a review of the Australian Recognition Framework

and some new standards developed. That work needs to be completed quickly, because I believe

that the providers and those who use their services now need a clearer and more stable policy

environment, administrative arrangements, better information and a greater capacity to develop

resources and ensure staff have the skills and knowledge to operate in a new environment. In

other words, the focus has to shift from macro-level policy, structural and systemic changes, to

delivery on the ground. To do that, we still need more effective systems operating, as we said in

our original submission, on a bilateral basis between the states, ANTA and DETYA. The

department is fully involved with those parties, particularly DETYA and us, in terms of the new

administrative arrangements I outlined earlier for the administration of apprenticeships and

traineeships in Queensland.



Senator CARR—Thank you for coming today. The inquiry has made considerable progress

since it was announced last year. Despite the fact that the government sought to torpedo it last

year, it seems that we now have quality as an issue centrally placed on the VET agenda. What

troubles me, though, is that it takes a political process to produce these sorts of results, when

these issues, we were told, were well covered by the leaders in vocational education through

this magnificent new system called the New Apprenticeships system. I am led to believe that

Minter Ellison’s legal advice seriously challenges the legal basis of the ARF, insofar as it goes

to the question of registration and deregistration across state borders and the issue of mutual

recognition. And now we receive advice that last Friday the minister unilaterally announced a

position at the MINCO meeting in regard to creating the National Training Quality Council—he

just dropped it on the table. This body is to be the replacement of the National Training

Framework Committee. Three legs of the trifecta have effectively been seriously challenged









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through this process. In Queensland’s view, do you believe that the national framework is

sufficiently rigorous and legally sound?



Mr Noonan—Senator, you probably need to refer back to the comments I made at the

previous hearing. It is my strong conviction that the implementation arrangements in most states

and territories for the Australian Recognition Framework, for User Choice and for New

Apprenticeships were not well handled, and that includes legislative provision. In Queensland

we were fortunate to have legislation which, as I think the Minter Ellison advice indicated, is

fairly soundly based in respect of the measures that you raised. We have new legislation which

we have checked against the Minter Ellison advice to ensure that we have the full powers to

operate the National Training Framework, so I am confident of our position in Queensland. But,

as we have consistently said, if under a mutual recognition arrangement there are weaknesses in

other jurisdictions in terms of these legislative issues—for example, if another state has

problems in deregistering providers—then that creates problems for us in Queensland. I think it

is imperative that all states ensure that their legislation contains all the necessary provisions to

ensure that the national framework operates. Having said that, I should also mention that where

a state does not control an upper house it is not necessarily the fault of the state government

concerned that legislation has not been able to proceed. As you would understand, the

legislative process can be reasonably tortuous. But in Queensland we made a determined effort,

and the government gave legislative reform the highest priority in the most recent session of

parliament to make sure that our legislation was able to get through.



The other point I would make is that I do believe that the standards in the recognition

framework needed to be raised in a number of respects and that it was inevitable. There were

compromises in getting the ARF established in the first place and I think experience has shown

that it does need to be strengthened as Kaye Schofield’s report in Victoria has fairly adequately

demonstrated. Our concern was that when we were raising a number of these issues last year,

there did not seem to be the same degree of concern that we felt in Queensland about some of

these quality issues, although it is clear that the level of abuse and disregard for quality was

probably more pronounced in Queensland than in other jurisdictions. We still believe that the

same symptoms existed elsewhere. All we can say is that we are glad that they now have been

fully addressed, although progress has probably not been quite as speedy as it should have been.



Senator CARR—I appreciate the point you make about the lack of concern being expressed

in other quarters. I recall Dr Kemp saying that I was risking public confidence by raising these

issues. Yet we find out now that, since at least the middle of last year, senior VET officials in

this country have known that the legal basis of the program is seriously questionable. When did

you first hear, Mr Noonan, of the possibilities of a legal challenge to national mutual

recognition?



Mr Noonan—Senator, I was concerned about the legislative position while I was still at

ANTA, well over two years ago, and my recollection is that there was an undertaking by the

states and territories to—



Senator CARR—Could you please speak up, Mr Noonan?









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Mr Noonan—Sorry. I was aware of concerns about legislative issues while I was still at

ANTA when the recognition framework was put together, and there was a collective

commitment on the part of the states and territories to make sure that there would be legislation

put in place to enable the national framework to operate effectively. In hindsight, I regret that

we did not ourselves commission the sort of advice that subsequently came from Minter Ellison.

I am not sure if it would have been politically possible at the time in terms of states’ concerns

about protecting their own legislative areas, but I think that work should have been undertaken

at the outset. My recollection is that there was a commitment for people to pass legislation to

support the national framework.



Senator CARR—So how many states have passed that legislation?



Mr Noonan—I am now only—



Senator CARR—Yes, but you—



Mr Noonan—No, I really could not—



Senator CARR—It is just that I recall that there was a discussion about model legislation.

My recollection was that only Victoria passed—



Mr Noonan—No, I am sorry, there was informal discussion about model legislation some

years ago. I do not think it even got into the formal process because it was agreed that it really

was too complex a process to get into and that it would probably result in huge delays in getting

any legislation through at all. Certainly Victoria has passed legislation under the previous

government—



Senator CARR—That was the declaration to trade, so essentially that was the—



Mr Noonan—No, I think it went beyond that. I think it also picked up some issues around

the national framework, but you would really be testing my memory to—



Senator CARR—The point I am making, Mr Noonan, is that it is extremely difficult to get

uniform legislation across all the parliaments in this country, irrespective of the problems of

upper houses—that is one dimension of the obstacle. There is also the political dimension of

each and every cabinet in the country considering matters, and each and every government party

room in the country considering legislation. So the consequences are that it is very difficult to

get that—



Mr Noonan—Our view is that you do not need model legislation. We believe that there

should be legislation which has common legislative provisions in respect of provider

registration, deregistration, audit, endorsement of national standards—all mutual recognition:

the seven or eight main elements that you need the national framework to operate under. We

have been prepared to go along with the process of looking at model legislation because that

may in fact yield some best practice or model clauses which can be inserted into legislation. But

our legislation has just gone through the state parliament and I think the minister would have

great difficulty fronting up to the Leader of the House to say, ‘Well, we’ve taken up—







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Senator CARR—‘Yes, we want another cut of the action.’



Mr Noonan—‘four days of parliament or two days of parliamentary hearings and now we

want to come back with another bill.’



Senator CARR—Yes.



Mr Noonan—The other problem is that my concern would be that if one parliament

deviated, or one upper house forced a change in that model legislation, would all other states

and territories then have to go back and again amend all of their legislation? It becomes, in

effect, an endless process.



Senator CARR—Would it not be better, therefore, Mr Noonan, to do it at a national level?



Mr Noonan—I have got qualifications in arts and education, Senator, I am not a

constitutional lawyer. I am really not sure of what constitutional basis the—



Senator CARR—Has there been any discussion about national legislation as distinct from

legislation of a national character across all the different states? The corporations power is

there. There are section 92 powers there on cross-border trade. There are a number of other

provisions, I would have thought. The ANTA Act itself presumably could be amended?



Mr Noonan—To my knowledge there has not been any real consideration given to national

legislation. I would have thought—again, without being a lawyer—that there would possibly be

significant constitutional impediments.



Senator CARR—There would be considerable political problems, too, I would think.



Mr Noonan—I would think so.



Senator CARR—They would be more substantial perhaps than the constitutional—



Mr Noonan—Our view is that, in fact, through a different form of the ANTA agreement

which focuses more on embedding the national framework in the agreement and which has a

stronger focus on the key elements of the framework and much more clearly defined roles and

responsibilities for ANTA, the states and territories and the Commonwealth, you would

probably achieve—



Senator CARR—But that would have to be attached to the VET bill to give it legal power,

would it not? It just cannot be an agreement between the states; it actually has to have a legal

force of law.



Mr Noonan—It depends how far you want to go in terms of whether it would be the

Commonwealth itself that would be registering and deregistering training providers, for

example, rather than that being done at a state and territory level.









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Senator CARR—What are the cost implications of this move towards higher quality? What

provisions have been made available to fund any additional costs that might arise from lifting

the bar, as the resolution from MINCO on Friday spoke of?



Mr Noonan—I think there are costs at different levels. I do not believe that the states can

legitimately claim that re-engineering their administrative and audit processes is a cost the

Commonwealth should bear. We ourselves would certainly not argue that, and we would not

regard that as a priority for the Commonwealth, given that it is a core state responsibility. It is

true that there are costs involved in the transition to the training package environment, which is

where ANTA and the Commonwealth have provided some transitional funding. I believe it is

essential that that form of support continues because, with the number of packages which are

now out in the marketplace and the enormous job of actually getting all the providers up to

speed with those packages, it is essential to develop product at the local level and to ensure that

staff have the skills and competence to work in the new environment. I believe that if there are

additional costs, which may be attributed nationally, that is where support is legitimate. Our

view basically is that the functions which are the core responsibilities of the states should

remain funded by the states, and if there is a need to realign some resources to better support

those functions, which is what we are doing internally in Queensland, then we should do that

ourselves.



Senator CARR—What is Queensland’s view on the general question of growth funding, in

view of the new ANTA agreement and the dispute that has arisen between the states and

Commonwealth, particularly arising from the National Resourcing Working Group paper? Do

you support the forecasts contained in that by the ANTA CEOs, or has there been any change in

your position?



Mr Noonan—No. We believe it is a very good piece of work. Technically, our view always

was that that work needed to be done. I think it is now almost a decade since similar work was

done nationally before the first injection of Commonwealth growth funding in 1992 when a

range of scenarios was produced. We believe it is essential that there is a proper public debate

about what those projections mean, and we believe that we need to have discussions with our

own Treasury and state government, and the Commonwealth also has an obligation to look at its

contribution.



Senator CARR—Its share of contribution, presumably. You are not asking the

Commonwealth to fund all of that growth, are you?



Mr Noonan—No. But I have to be careful here because I cannot, obviously, get into issues of

discussion between ourselves and our own state Treasury.



Senator CARR—My understanding is that the growth projections can be calculated on an

assumption of $234.3 million a year in terms of additional resourcing per one per cent.

Therefore, predicted growth rates of up to 5.7 per cent may lead to a situation where there is an

expectation that the system will be required to find an additional $1.5 billion. Is that your

understanding?









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Mr Noonan—I have not read the National Resourcing Working Group document for some

months.



Senator CARR—I am just trying to get some fix on the implication. DETYA says that, on

their analysis, 2.8 per cent growth would be a reasonable figure, although I understand there

might be some backtracking on that now that the opposition has got hold of their workings.

They have asked for the working group to be reopened. Is that the case?



Mr Noonan—Yes, that is the case.



Senator CARR—Has that meeting occurred yet?



Mr Noonan—No.



Senator CARR—However, you stand by the position of the ANTA CEOs and the up to 5.7

per cent growth? It is not a precise science, I know that. Do you stand by that?



Mr Noonan—We have never said that that is the only and final figure. My view is that there

is a range of scenarios in that paper, all of which point to the need for growth in vocational

education and training over the next few years. I think what then has to happen is that there has

to be a sensible negotiation about how that level of growth might be accommodated. As in any

resource negotiation and budgetary process, I am sure that the final outcome will probably be

less than the—



Senator CARR—I understand the point you are making. Can I ask you, Mr Noonan, whether

it is possible to get some assistance from the Queensland government on this matter. The

projections that I have put into the Hansard—the tables are in Hansard so you might have a

look at them—are that the 2.8 per cent projection on a pipeline effect is equivalent to about

$1.5 billion, and the 5.7 per cent projection is about $3 billion. Could you have a look at those

tables and see whether they make much sense to you as a reasonable guide to the resourcing

implications of this agreement?



Finally, because our time is so short, can I turn to the question of the marketing strategy. We

have been told again and again that this is yet another saviour about to visit upon us. In a letter

dated 31 March, Mr Braddy wrote to Dr Kemp pointing out his reservations about the

marketing strategy. I note in the documents from MINCO last Friday that there does not seem to

be much recognition of the concerns you have raised. You actually state:



These issues include the need to ensure consistency in quality of outcomes across the States and Territories, progress with

the implementation of National Training Packages in terms of their actual use in training providers, emerging evidence of

differences and inconsistencies in the implementation of user choice and some specific issues relating to apprenticeships

and traineeships, including the use of completion rates.



As I read this letter, you are saying that these are more substantive questions than the issue of a

marketing strategy which is supposed to sell a product, which now appears to have some

difficulties associated with it. What is your view? Has there been any progress in terms of the

concerns you expressed in this letter of 31 March?









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Mr Noonan—We never had a problem with the marketing strategy as such. Because we had

been consistently raising the issues in our submission and in the issues that were publicly

canvassed last year, I suppose our concern was that there was a special ANTA Ministerial

Council meeting on the marketing strategy, when in fact our view was that there were more

important issues that needed to be discussed by ministers, which is why Minister Braddy wrote

his letter to Dr Kemp. That letter resulted in the CEOs’ working group producing the report that

went to the ANTA Ministerial Council. That report, we believe, was a big step forward in terms

of having the issues that we were concerned about addressed.



I think the outcome with the marketing strategy as well was to give it a more specific focus

on the employer segments of the market and the youth most at risk. While we have not formally

looked with the minister at the outcomes of the marketing strategies from last Friday, my

personal view is that I was quite encouraged by the work that had now been done in terms of

where the specific things had got to.



I think the most important thing now, though, is that the marketing strategy is worked in very

carefully with states and territories. What we do not want is what you are alluding to: a

marketing strategy leading to increased demand for VET services in areas where, frankly, we

already have no more capacity to enrol or where products may not be ready. So it is essential

that marketing activity, as I have said, in relation to a whole range of things is really undertaken

as a combined function between ANTA, DETYA and the state training agencies.



Senator CARR—My concern, as you have obviously identified, relates to the fact that there

is a strong prediction from all quarters now that there will be significant growth in the system,

be it the 2.8 per cent that DETYA is saying—it may be as much as 16 per cent growth over the

next couple of years—or a one-third increase in the size of the system, if we take the higher

figure that ANTA CEOs are pointing to. And now we have a marketing strategy which appears

to be trying to draw more people into the system, yet there is no money to pay for any of this.

My question to you is: is it possible to achieve both a growth in the system with no money and

an increase in quality, or is it inevitable that there will be, if there is no additional growth

money, a decline in quality?



Mr Noonan—I certainly think the situation has been reached where the general question of

government contribution to VET has to be on the table. I do not believe that can be an issue for

the Commonwealth alone, however. The ANTA agreement is clearly a partnership agreement

between both the state and Commonwealth governments, and I believe that both levels of

government have to look at their contributions. I also believe, in respect of the marketing

strategy, that it needs to be primarily directed at employer investment in training. Employers can

become engaged in and involved in the national structured training system in terms of getting

recognition for skill outcomes from enterprise based training programs and a whole range of

things. If you like, one of the key things with the marketing strategy is to ensure that a greater

proportion of the money that employers invest has recognised training outcomes. It would

certainly be a major problem, as you allude to, if the marketing strategy resulted in a big

increasing demand from students for ordinary VET courses when we have unmet demand or no

capacity to enrol students in some of those programs.









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Senator CARR—So what actions are being taken within ANTA and the CEOs within the

system at large to increase the level of employer contribution towards the system?



Mr Noonan—I think it is extremely difficult when—



Senator CARR—Does that mean there is none or that it is just difficult?



Mr Noonan—It is difficult. I would not say that there is none. It can only be done, I believe,

at the end of the day—given that the training guarantee has now been abolished so

government’s legislative taxation capacity has gone—through ensuring that the products and

services of the VET system are sufficiently attractive to make employers want to invest in the

system.



Senator CARR—Why would they, if they have the Commonwealth or state governments

pouring money into the system, as they currently are? Why would the average small

businessman want to pour money into this, with having the increased costs of the GST and all

the other expenses that currently they are faced with? Why would they specifically want to do

that without some encouragement from government?



Mr Noonan—I certainly think that one thing that we need to look at—and we are looking at

it in Queensland—is the way in which we can use public funding to leverage private

expenditure. I think that more creative approaches to that are required, particularly at the

institute level. Our own experience with the small program in the past which had that objective

was that there was a real problem in terms of exactly what you are saying, which is the tendency

for employers to want to cost shift from what they are currently spending into that program.



Trying to work out an agreement where the employers do not reduce their expenditure is

actually quite difficult when you do not really know what they have spent in the past, but my

own view is that that is a path we have to go down. Otherwise, you end up in the rather strange

situation where an employer will receive no public support for, for example, becoming involved

in providing structured training in the workplace, but if their employees walk down the street to

the local TAFE institute and enrol as individuals in a program, they will in effect get almost a

full public subsidy. To me, the current situation is far too black and white and we have to look at

ways in which we can strategically lever investment from companies through partnerships at the

local level with TAFE institutes.



Senator BRANDIS—Senator Carr asked you about the desirability of national legislation,

and you observed that you were not a constitutional lawyer and you said little more about that. I

understood you to be of the view that uniform national legislation—even if there were no

constitutional difficulties—was not a desirable way of dealing with this area of policy. Can you

expand on that, please?



Mr Noonan—I do not think Queensland has any in-principle problem with nationally

consistent legislation. I suppose our concern is that it may become a red herring in terms of the

need for all states to at least have common legislative provisions, if you can see the distinction.



Senator BRANDIS—Yes.







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Mr Noonan—I think all states need to ensure that in their legislation—and I would have

thought that this was politically possible because there is a fairly bipartisan commitment to the

national framework—they have powers to register providers, to audit providers, to deregister

providers, to recognise qualifications issued in other jurisdictions, to accredit courses on the

basis of national schemes, to endorse training packages and to do all those sorts of things. These

are all the things that we can do in our own legislation.



Senator BRANDIS—Each state and territory could do that, so there would be no difficulty in

having common provisions of the kind you speak of.



Mr Noonan—I think there is a difference between common provisions and model legislation.

My problem with model legislation, as I have said, is that I believe that it would be extremely

difficult to get agreement on the words. In many cases we are dealing with legislation which

goes back decades and which has been progressively amended—in other words, it is not

greenfields legislation. The way in which we undertake this process in Queensland and the

bodies we use to do it will be different from those in Western Australia. Therefore, coming up

with model legislation is going to be extraordinarily difficult.



Senator BRANDIS—And unnecessary as long as there is a sufficiency of common

provisions to enable appropriate mutuality between states and territories.



Mr Noonan—Precisely. If as far as possible there were similar wording in those clauses,

drawing on legal advice for the best way to embed some of these processes in legislation, that

would also be productive. It is clear from the legal advice which ANTA has received that some

states thought they had covered things, but the way in which their legislation has been

worded—at least in the opinion of Minter Ellison—means the ground they are on is not as safe

as they had thought it was. We have certainly discovered a few things about our own legislation

in the process of going through deregistration of providers and some other things. We are in

fairly new territory in respect of a number of these things.



Senator BRANDIS—Mr Noonan, you also observed that the level of abuse and disregard for

quality control—which is a feature of your report—is perhaps less significant now, in the

middle of this year, than it was at the time your report was prepared in January.



Mr Noonan—I think that the abuse was most evident at the beginning and the middle of last

year.



Senator BRANDIS—Can I suggest to you that these quality assurance issues which you

identify and which are now, as I understand your evidence, a less significant concern for you

reflect a natural transition to a new set of arrangements that one would expect in any transitional

phase in the early days of a new scheme.



Mr Noonan—I would like to agree that it was only that, Senator. I think, unfortunately, that

the level of abuse and rorting that I encountered when I moved to Queensland from ANTA at

the beginning of last year went well beyond transitional problems. Perhaps I could give you

some figures, as I think there has been some debate about Queensland’s relative performance in

terms of apprenticeship and traineeship commencements in recent times. Just to give you an







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example of how extraordinary the situation in Queensland had become, between the months of

July and December 1998 when I think probably the level of abuse was at its worst, in those

quarters Queensland had alleged commencements—I do not believe that many of these people

were actually legitimate trainees—of 27,865, Victoria had 23,792 and New South Wales had

11,445.



Those figures would surely give you an indication that, in fact, there was a very large level of

inappropriate activity going on, and it was happening for two reasons. One was the effect of

both the previous state government and the Commonwealth government opening up their

subsidy and payment arrangements to cover existing workers, which ANTA certainly cautioned

against at the time. The inevitable result of opening those up was that a whole range of

inappropriate people were enrolled in traineeships. Secondly, Queensland had adopted more

enthusiastically than any other state the so-called fully on-the-job traineeship model going back

over a number of years.



We have now discontinued that model where we pay the service fee of $1,000 for fully on-the

job-training, which, frankly, never really occurred in many cases and which really involved no

more than two visits by the registered training organisation. The effect of both of those

measures resulted in a very significant level of abuse of the system, which cannot be purely

ascribed to transitional measures, as Kaye Schofield said in her Queensland report. The

transitional issues that I referred to went more to inadequate preparation for the introduction of

User Choice, the process of deeming of providers under the Australian Recognition Framework

who were not fully ARF compliant but were deemed to be compliant and then issued with

contracts for User Choice, and an inadequate audit process. I think they are the three main areas

where transitional arrangements had not been properly handled.



Senator CARR—Can I return to be MINCO meeting of last Friday. When did you first hear

about the proposal for this new national council, Mr Noonan?



Mr Noonan—I think on the morning of the meeting, Senator.



Senator CARR—So that was Friday?



Mr Noonan—Yes.



Senator CARR—Was it discussed with the states?



Mr Noonan—It was raised in the ministers only meeting with the ministers.



Senator CARR—That was on the Friday morning?



Mr Noonan—Yes.



Senator CARR—Is that usual to have a major change like this discussed on the day of the

meeting itself?









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Mr Noonan—I think the decision in the first place to establish the National Training

Framework Committee was similarly raised in the ministers only meeting, in whatever year that

was.



Senator CARR—Who was the minister at the time?



Mr Noonan—I believe it was Dr Kemp.



Senator CARR—So is he making a bit of a pattern of this? He got away with it once, and

perhaps he will do it again.



Mr Noonan—I am not going to comment on that.



Senator CARR—No, that is fair enough; I apologise. As public servants, you could not

possibly comment on those sorts of things. I noticed in the MINCO paper of last November

entitled ANTA CEOs committee resolutions on key aspects of quality assurance in the VET

sector, under item 5 there was considerable discussion about possible legal issues relevant to the

sharing of the RTO and financial and audit information across jurisdictions. As part of the

resolution of that problem, it was agreed that the National Training Framework Committee

could form a view as to whether or not changes were required to the ARF, and a whole lot of

specific functions were directed towards it. Where they ever completed?



Mr Noonan—I am sorry, would you repeat the question?



Senator CARR—Last November the NTFC was given a large number of jobs to do on

quality control, and specifically with regard to issues that arose from legal challenges. Were

those tasks completed before the NTFC was abolished last Friday?



Mr Noonan—As to the tasks passed to the CEOs group established at the April ministerial

council meeting, I know those issues were discussed at the National Training Framework

Committee, but you would be better off directing those questions to ANTA.



Senator CARR—I will. As a participant in these forums—



Mr Noonan—Senator, I have not been quite as close a participant in some of the more

detailed arrangements that you are going to as I may once have been. So you are testing my

memory a little on some of these things.



Senator CARR—Nonetheless, you have widespread expertise in this area. Was there ever a

specialist national law firm retained to provide advice on the relationship of the so-called

protocols that the NTFC—this is the abolished NTFC, the unilaterally decapitated NTFC—was

establishing? Was such a law firm ever engaged?



Mr Noonan—Certainly Minter Ellison, the ANTA lawyers, were retained, and they produced

the work on the legislation. Whether that commission went into the issues you are dealing with,

I am not sure.









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Senator CARR—What about the protocols themselves? Who prepared them?



Mr Noonan—You’ve got me, Senator. You are really stretching my knowledge here.



Senator CARR—Are there any protocols?



Mr Noonan—Protocols in relation to what?



Senator CARR—The protocols referred to in the decision made on Friday. In fact, Mr Colin

Walters has written to us about these protocols that were established on Friday as a result of the

formation of this new council. Have they been prepared?



Mr Noonan—I do not know. They may or may not have been. I attended one or two

meetings of the implementation group that was set up in November and of the CEO’s group that

came out of the April ministerial council meeting. But, frankly, my primary concern now is

what is going on in Queensland.



Senator CARR—I appreciate that but, nonetheless, this is a national body in which you, one

would expect, would be obliged to participate. It says here that this new body will have the role

of providing ‘independent advice from state and territory registration audit and related

processes’. Are you aware of how the body is to be structured? Have those issues been

addressed?



Mr Noonan—No, they have not. They did not form part of—the resolution passed is what

you have in front of you. I am not sure of the specific composition, apart from the fact that I

think the state representation was—



Senator CARR—I am deeply troubled by this. Here we have the minister unilaterally

announcing this thing that is going to solve our problems yet again and we do not seem to have

the membership sorted out, let alone the powers it has, nor, for that matter, what happened to the

old committee.



Mr Noonan—I imagine there would be a fair degree of transition between the old and the

new committees.



Senator CARR—I guess we will follow that up. Finally, Dr Larry Smith has once again done

us a great service. I found interesting his paper on learning outcomes, ‘The impact of quality on

vocational training in Queensland’ dated March 2000, which you were kind enough to send

along to the committee.



Mr Noonan—Is this his report on assessment or is it the second trends report?



Senator CARR—It is about the impact on quality; it is essentially on assessment. Does this

report have the support of the department?









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Mr Noonan—As a contribution to the debate—I have said that I think probably the next

most important policy issue is the question of assessment—yes, the report does have our

support.



Senator CARR—I am particularly interested in the issue of the learning environment, which

I think has been grossly neglected in the discussions we have had in recent years about the

direction of vocational education in this country. Dr Smith makes the point:



The pervasive view among the trainers interviewed was that Training Packages are, in fact, Assessment Packages in that

their focus generally is not on how to structure and deliver training but rather on what, how and where to assess.



On page 9 he goes on to say:



Assessment does not, of itself, deliver a quality outcome.



Do you think this concentration on the question of the learning environment will take off?



Mr Noonan—I think that report goes on to make the point that training packages were never

designed to provide, if you like, the resources and the support materials for the learning process.

There is no surprise in that; that was always the case. I would still strongly argue that there is

nothing wrong with that.



The endorsed parts of training packages provide a set of standards, the means by which they

are to be assessed and the evidence requirements for effective assessment in issuing

qualifications. In effect, the learning process has been deregulated and broadened away from

traditional institutional learning. I think the experience has been that, nonetheless, most

registered training organisations were not adequately prepared for this new environment. I am

still very strongly personally committed to the flexibilities inherent in the system—as is the

Queensland government—and I think you will find this with most providers, including TAFE

providers, in Queensland. That is not to say that we should not put a much stronger focus on the

quality of the learning process and the learning environment. It is, I think, undoubtedly true that

those issues have to be put back into the equation, but I do not believe that is an argument to

return to the kind of model that had built up in Australia over the last decade.



Senator CARR—I accept that but, nonetheless, this is a welcome contribution in that it is re-

balancing the system, as Schofield talks about in her Victorian report which I take it you have

read now.



Mr Noonan—I have read it.



Senator CARR—Were you surprised that Schofield had come up with so many conclusions

that she had also reached in Queensland? They were not to the same extent but, nonetheless,

they were the same issues.



Mr Noonan—No, I was not surprised. I think in Ms Schofield’s second report she was able

to get into more detail around some of these educational policy issues than she was in the

Queensland report, where frankly she was concerned more directly with the widespread









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problems in the actual system itself. In many ways, her second report is, if you like, an

expansion on some of the things she was thinking about at the time in Queensland.



Senator CARR—She talks about 10 per cent of people in Victoria being engaged in

inappropriate activities, so it is not quite as squeaky clean as it might first appear. Finally, we

have raised here the question of retention rates and their dispute, and I have been pursuing that

with the department, NCVER and again in Dr Smith’s work. Has there been any follow-up with

the department and Dr Smith on those issues in terms of trying to find an agreed methodology?



Ms Bertram—We have actually explained to one of the DETYA officers Larry Smith’s

methodology.



Senator CARR—When did you do that?



Ms Bertram—About two weeks ago.



Senator CARR—Two weeks ago? Perhaps we could tell the DETYA officials down the back

there that we are very pleased with the speed at which they move on these questions.



Ms Bertram—We are also sitting down with NCVER to work through the Larry Smith

methodology, just to explain how he went about the process.



Senator CARR—Would you mind keeping us informed on the progress of those

discussions?



Mr Noonan—We will. Frankly, I am not particularly concerned whether the Smith

methodology is right or the DETYA methodology is right. I am sure we could run our numbers

in any number of different ways which could produce results that you can have all sorts of

debates about looking at commencements, completions and those things. The point is that,

whichever way you look at it, the non-completion rate is too high, particularly for traineeships,

and it has always been too high. It is about time that it was focused on as an issue.



Senator CARR—I agree entirely with you, and that is the point of keeping us informed. I

can assure you that, if we raise the issue, the department will be obliged to focus on the

question. Equally, knowing the way the VET system is currently working, it will oblige other

officials right up to the minister’s office to take the matter more seriously than they have. I

understand we have to conclude at this point.



Mr Noonan—Yes, I am sorry, Senator. We have to leave early.



CHAIR—Thank you for appearing today. I should indicate that there is to be a fire drill in

the building in about five minutes. As we are having a break before the next witness, the

committee and observers can participate in the fire drill.



Proceedings suspended from 10.39 a.m. to 11.34 a.m.









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McMORROW, Dr James, Deputy Director-General, Policy and Planning, New South

Wales Department of Education and Training



SOBSKI, Ms Jozefa Bronislawa, Deputy Director-General, Development and Support,

New South Wales Department of Education and Training



WILMOTT, Dr Gary Maurice, Assistant Director-General, Industry Services, New South

Wales Department of Education and Training



CHAIR—I welcome officers from the New South Wales Department of Education and

Training, and my apologies for the delay in our return from the fire drill. I think it is appropriate

that I give you the opportunity to make an opening statement about events that have occurred

since you last gave evidence to the committee, and then we will move to questions.



Dr McMorrow—You may recall that at our last meeting we referred to the general theme of

our submission to the inquiry, which was that we thought it was time to take stock of where we

have come from with the national training system and to build on those achievements to try to

iron out the difficulties and to see if we could create a bit of enthusiasm among the partners,

whether they were providers or trainees, in industry or in government. Since then, as you

probably know, the Commonwealth Minister for Education, Training and Youth Affairs has

made an offer in relation to the continuation of ANTA funding and the conditions around that,

which was discussed amongst all ministers for education last week. You probably know all that.

At that meeting, the New South Wales minister tabled a draft paper, which I am happy to give to

you but that you may already have.



Senator CARR—Could that be tabled?



Dr McMorrow—I will table this, and I will provide the committee members with copies.

That statement represents the efforts and the contribution of most states and territories in

looking at the submissions that have been made to this inquiry to see if we could extract from

them the key issues. We have tried to come up with a statement, the rhetoric of which at least

presents a basis for a new partnership between government, industry and the community. We

think it is a process which could lead to some renewal. We particularly need a renewal of

interest and enthusiasm within industry, but we also think it is timely to get some clear

statements of commitment from governments as well. We do not just want to cut and paste the

current agreement; we want something that is fundamentally different. We do not want a system

that is about just promoting rivalry between states and territories and providers. We want to

work constructively towards improving quality. The New South Wales minister said that the

offer that was on the table was not acceptable because it did not provide the commitment and

the funding that is needed for predicted growth in the VET system, and we need to take a

serious look at the quality issues. In a sense, that offer still has in it, without a formal

requirement, the growth through efficiencies theme.



In the paper that I have just tabled, you will see five core elements. This is intended to be

simply a framework for negotiation of a more comprehensive and forward looking national







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agreement. We want, as we said in our submission before, to start from a process in which we

are building on the current achievements. We think there is still a significant press for a national

system that works and is founded on quality. That, I guess, summarises the themes in the first

page of this under ‘Purpose’ and in points 1 and 2. I will not spend time on that now, but you

may have some questions on our point of view. With regard to point 3, we think there are still

some very urgent issues—



Senator TIERNEY—This document has nothing written on it in terms of putting it into

context.



Dr McMorrow—I am sorry.



CHAIR—Perhaps you could go back and make your earlier comments about the status of

this document.



Dr McMorrow—Yes. This is simply a draft statement prepared by states and territories and

tabled by the New South Wales minister at the ministerial council last week as a basis for

discussion on a new national agreement.



Senator TIERNEY—The document we are talking about is a new agreement between state,

territories and the Commonwealth to build a national vocational education training system for

the 21st century.



Dr McMorrow—Yes, that is what it currently has on it. I apologise if it does not have the

preamble of what its context is.



CHAIR—Was that all states?



Dr McMorrow—At that stage and at that level of officials, only South Australia had

reserved its position on that.



CHAIR—Please continue.



Dr McMorrow—I will not spend too much time on this, but I do want to point out that in

No. 3 there are some key issues that, from our point of view in particular, are important. For

example, for young people we still have significant and what appears to be chronic

marginalisation of a significant number of young people; we have mature age workers who, in

the light of economic change, are in need of retraining; and there are the other dot points there.

But those first two in particular—and maybe the first three dot points under No. 3—are not

areas that are easily able to be addressed in a ‘growth through efficiencies’ principle for an

agreement. They are not the kinds of areas that are able to be competed for successfully in open

markets.



Under section 4, we have dot-pointed the sorts of pressures that are on the system. Again, I

will not go through all of those. I will just say that there are four broad developments that will

place pressure on demand for vocational education and training. The first factor is jobs growth;

in each of the next three years in New South Wales we are expecting that there will be an







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additional 140,000 workers. The second factor is the effects, if not the success, of the so-called

new economy where more skilled workers will be required quickly more than at any time in

history. The third factor, which you know about because we discussed it before, is skilling and

reskilling. The fourth factor relates to training in new areas.



In New South Wales, as elsewhere, another aspect might be that the successful development

of vocational education and training in schools also leads to a pathway into further education

and training, particularly in vocational education and training—and that would be our hope.

There is some early evidence of that in New South Wales, although very early. We think that the

new national system needs to be much more explicit about the resource implications of those

pressures for increased demand and for the quality issues we discussed last time.



I would like to leave it there at this stage. The ministerial council meeting last week did not

unanimously accept this framework itself as a basis for further negotiation, but over the next

few months there will be negotiations between the states and the Commonwealth on the form of

a new agreement. We are not particularly wedded to the form of words in here. We think they

are more than motherhood statements, as some might say. We think they are the sort of rhetoric

that ought to underpin a more comprehensive agreement. That is all I would like to say at this

stage.



Senator CARR—I read in the Campus Review this morning that the meeting last Friday was

particularly fiery, with Dr Kemp describing your document as being full of motherhood

statements, having no status and being presented out of the blue. How do you respond to those

claims?



Dr McMorrow—I was there at the meeting as an observer. Most of the meeting was a

‘ministers only’ meeting. I cannot possibly say whether that was fiery or otherwise. I had no

reports back from our minister on that one. He said it was fairly standard, if I recollect.



Senator CARR—It says that there was no notice, but I also note that the resolution of the

MINCO meeting No. 4 included a whole lot of stuff that had no notice, including the formation

of a new skills council—the quality council, or whatever it was called.



Dr McMorrow—That is true.



Senator CARR—Was there notice of that that you are aware of?



Dr McMorrow—No, not that I am aware of. I was aware of previous discussions with the

ANTA board but not of the particular resolution that came out.



Senator CARR—When was the first time you heard of the National Training Quality

Council?



Dr McMorrow—I first heard of it Friday morning.



Senator CARR—Is that a normal practice?









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Dr McMorrow—It is not unusual for ANTA ministerial councils to have helpful suggestions

circulated on the day of the meeting.



Senator CARR—We understand, according to the resolution, that there is to be new

membership for this new council. Are you familiar with that membership?



Dr McMorrow—Not in detail. I have the resolution here. I do not know the exact numbers

of that, but it will be industry chaired, it will be a board reporting through to ANTA and there

will be representatives from the states and territories—two from the large states and two coming

from the smaller states and territories.



Senator CARR—Given that there has been so much discussion about this, how much

confidence do you think we should place in this being a vehicle for improving quality assurance

within the system?



Dr McMorrow—Our judgment at this time is that it has potential, but we would need to

work through what it might mean in practice. We would like to go into it in good heart about

achieving national consistency.



Senator CARR—The resolution also spoke of a whole series of new standards lifting the bar

in quality control. I wonder what the New South Wales response to this resolution would be.

Were you surprised that there was suddenly an interest in lifting the bar in quality assurance

from the Commonwealth?



Dr McMorrow—No. That general issue has been discussed for some months, not least

provoked by this inquiry I think. But we would support the principle of raising the bar for

registered training organisations. We think, however, New South Wales might be pretty close to

that. Perhaps Dr Wilmott might like to comment on that. We are not opposed to a quality

system.



Senator CARR—I am pleased to hear that support for quality.



Dr Wilmott—I could perhaps add a comment. The Australian Recognition Framework has a

series of standards embedded in it. The key to raising the bar is to tighten and lift the evidence

requirements in compliance assessment in relation to those standards. In New South Wales we

have been pursuing that issue, and we believe that the kinds of evidence requirements that we

apply are as high as any that are applied anywhere in the country. One of the issues in terms of

national consistency of quality is to ensure that the same evidence requirements in relation to

those standards are applied nationally.



Senator CARR—I am concerned when I read that Minter Ellison legal advice has cast

serious doubt on the legal framework of, one, mutual recognition and, two, registration and

deregistration of RTOs. It seems to me to draw or raise serious questions about the entire

scheme. It goes to the heart of the program. Would you agree?



Dr Wilmott—The advice from Minter Ellison draws attention to the fact that, while mutual

recognition has the status of a ministerial understanding and agreement, the legislation which







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relates to the actual registration and recognition of training organisations in each state is

embedded in state legislation. So the key to this is to have those various pieces of state and

territory legislation acknowledge legislation and decisions in other states. I think one of the keys

to bringing about a more consistent legislative framework is to draw some of those acts more

closely together and for them to recognise that decisions are made in other states.



Senator CARR—The problem I have when looking at this brave interpretation is that we do

not have a great record in this country of getting parallel legislation—and the railway gauge is

the obvious example to draw your attention to. I think there is considerable difficulty in getting

mirror legislation around the country on anything, let alone something as complex as this. So

what confidence do you have that it is possible to secure a sound legal framework, and how

long will it take before that arrives?



Dr McMorrow—We would enter into the negotiations—



Senator CARR—In good faith.



Dr McMorrow—In good faith—on the principle that it is desirable and possible to achieve

national consistency. We do not think it likely that there will be uniform legislation, given the

different histories and legislative frameworks of the states and territories. But, if that is

accepted, we ought to be able to approach national consistency because, in that sense, we do

agree with the concerns of industry about removing any unnecessary barriers. But you might

like to comment more on the detail.



Dr Wilmott—I would certainly support the comment that we would approach this with the

hope that we could achieve national consistency. It is the fact that the context in each state and

territory is different in relation to this legislation, and that is an issue that I think would need to

be considered. However, some of the broad principles around the legislation which actually

recognises training organisations, it seems to me, could be looked at across jurisdictions, with

some common principles being embedded in legislation in different jurisdictions.



Senator CARR—Do you regard this as an urgent problem or one that we have a bit of time

to deal with?



Dr Wilmott—At the moment, the principle of mutual recognition of training organisations is

being applied. Training organisations from other states are operating in New South Wales under

mutual recognition principles and, similarly, across other jurisdictions. I guess the crunch comes

in terms of mutual recognition around the crisis points of such things as the need for

deregistration in particular jurisdictions. That is where some effort to consider how the

legislative framework might apply could be addressed.



There have been some cases which you may be aware of where a particular training

organisation may be operating in more than one state and where it might have substantial

facilities and a pretty good track record in its primary state of registration. It goes into other

jurisdictions and perhaps its performance is less than satisfactory. One of the issues, for

example, about which some discussions have already been occurring, has been the matter of

having a geographic scope to registration. There would then need to be some kind of







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consideration of the registration of a training organisation at the point of primary registration in

terms of whether it intended to operate in other jurisdictions. Those jurisdictions would then

have some say and some involvement in its primary registration.



Senator CARR—On the issue of urgency, I read the papers from MINCO with interest. For

instance, in the report on national consistency at 2.1, on the question of mutual recognition, it

states:



Recent legal advice indicates that, overall, State and Territory legislation for vocational education and training does not

effectively provide for the mutual recognition of the registration of providers, accreditation of courses or of

qualifications.



It goes on to point out:



However no jurisdiction has legislation which adequately deals with de-registration or other

sanctions.



Do you think that is a matter that needs urgent attention?



Dr Wilmott—There are pressing issues in relation to questions of deregistration when they

arise. However, the issue is one that does not have to be resolved only through consistent

national legislation. There have been instances where collaboration between registering bodies

in two states have taken on board an issue of deregistration and where there has been a

resolution of the matter through appropriate collaboration between different jurisdictions. It is

possible for these matters, particularly the deregistration issue, to be addressed in other ways.

Consistent legislation around all jurisdictions is, you might say, the Rolls Royce solution to that

problem, but it is possible to resolve it in other ways.



Senator CARR—How long will it take us to fix this problem? I am sorry to press you on this

issue, but it strikes me that it goes to the heart of the system.



Dr Wilmott—The achievement of consistent legislation, it seems to me, is a long-term goal.



Senator CARR—On the question of the debate, are these problems of quality assurance just

problems of implementation, or are they problems that go to some fundamental questions of the

Australian Recognition Framework? Where do you stand in that debate? Ms Sobski, I notice

that there are some comments you have made publicly. Would you like to advise us?



Ms Sobski—I think perhaps they are problems both of the overall framework and of the

parties’ interpretation of the framework as well as of implementation at the state level.



Senator CARR—Could you enlarge on that?



Ms Sobski—I would throw a buck each way.



Senator CARR—What areas of improvement would you like to see with the Australian

Recognition Framework? What would you like to see done with that?









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Ms Sobski—I do not want to answer that.



Dr McMorrow—Two things come to mind, and I could take them on notice and consider

them.



Senator CARR—Yes, if you would not mind. I think this is a serious debate.



Dr McMorrow—One is to remove the degree of variability in the quality of training

packages as a foundation for a quality system. I think that is recognised, and we will contribute

to the review of training packages trying to achieve that.



CHAIR—Before you move on from that though, how do you do that within the framework?

Do you have to be more specific in the framework itself in order to achieve that outcome? How

are you suggesting we do that within the framework?



Dr McMorrow—My answer to that is that I am not sure. I think we ought to work through

from the experience we have had with those packages we think are more successful in achieving

the appropriate standards and work from there. But I guess it is about being more explicit about

these standards themselves and the processes for establishing and reviewing.



CHAIR—Do you use them as an example to incorporate within the framework more explicit

details about what standards are meant to be required?



Ms Sobski—If you take the issue of the variability and the quality of training packages, I

think the process for their development is at the heart of the problem. The concept may be a

sound one in terms of the framework within which they are developed. The problem is with the

process of their development and the parties around the table that are making a contribution to

the definition of standards. As concerns competency standards, you can take them around the

country and talk to various industry parties and you will get very, very different views on the

value of those standards within the training packages. So there is a process problem.



Also, the process of development itself is a problem. The players are simply too narrow a

group. Development has been concentrated very largely in the hands of industry training

advisory bodies that not only in this process develop the standards but then also have been

asked to review the adequacy of the training packages within which they are incorporated. It

seems to me that, when the developer becomes also the reviewer or assessor, there may be

questions around the states, and certainly amongst industry parties, about the validity of that

process.



CHAIR—Some of these ITABs have also been told that they are being too prescriptive in

what they are developing.



Ms Sobski—You will get everything from highly prescriptive standards and very narrow

standards to very broad ones. I can use two examples. For example, the meat industry training

package goes down to things like ‘trim short skirts’ and ‘bone head’ as competency standards,

while the IT training package goes from ‘scan an image’ with a nominal 10 hours for delivery to

‘develop a software package’ with a nominal 200 hours for delivery. There is enormous







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variability in what constitutes a competency standard, and industry has quite different views

about the level of prescription required.



As can be seen in the Australian Industry Group’s recent report, some industry players are

looking to more generic skills, to the softer skills, in their workers as well as quite specific

technical skills. Others are saying that what they want is a competent worker ready to hit the

ground running in a workplace. As educators, we still stand by the view that we are developing

more than simply a worker in a specific workplace, in a specific enterprise; we are educating

and training for a lifetime, and we want to lay good foundations for those workers to pursue

further study and further training when it is required by either changes in processes in the

workplace or by other changes resulting from personal circumstances, industry restructuring or

whatever the range of issues that might contribute to a change in circumstances. Consistency of

approach in the development of the training packages needs to be an important objective, but we

also need to widen the number of people who are contributing to their development.

Importantly, I think training providers need to be around that table.



Senator CARR—Thank you very much for that. Mr McMorrow, if you have the time, I

would ask you to give us a considered response as to what New South Wales thinks needs to be

done in regard to the ARF. The paper I referred to is—



Senator TIERNEY—It is time to move on.



Senator CARR—I would like them to know what my source is. They may wish to comment

further.



Senator TIERNEY—Sure.



Senator CARR—The report is titled Risk management and quality in the national system. In

3.4. it talks of ‘the need to strengthen the ARF in a number of areas, including revisiting quality

endorsement provisions within the ARF’. I ask you to give us your judgment on that. I would

appreciate that.



Dr McMorrow—Yes, we will do that.



Senator CARR—Can I return to the resourcing issue. It seems to me that we have got, for

the first time, public recognition by MINCO ministers of the serious problem of quality

assurance within the system. Despite the complaints that have been made and the extraordinary

responses we have seen with people defending the system, they are now acknowledging that the

system is in deep crisis. We have legal advice saying that there is a very serious legal flaw in the

system, yet we have predictions of growth of between 2.8 and 5.7 per cent. On the outward

level, that is a growth rate of about a third of the system—one-third extra people in the system.

At the same MINCO meeting, we had a commitment to running a marketing campaign, which

presumably will add to demand. I see no money in the budget anywhere to fund growth. I do

not see any money in particular state budgets to fund growth. It has been catch-up money to

repair some of the damage done by the last agreement. What is your judgment? Can we see a

continued expansion of the system without additional growth funding and with, simultaneously,

a growth in quality or a maintenance of quality?







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Dr McMorrow—I can only speak from New South Wales’ point of view on that. I think we

are getting very close to the end of the scope for efficiencies. As you know, the New South

Wales budget has responded to that over the last few years despite continuing growth, including

in TAFE. There is no doubt that economic pressures and general social pressures, with increased

demand for education and training more generally, will require governments to respond more

explicitly to that. In a nutshell, our judgment is that the assumption that this demand can be

resourced simply through efficiencies cannot go on for much longer.



Senator CARR—In your judgment, are the states obliged to put in some growth money, or

do you expect it to be all funded by the Commonwealth? Do you expect employers to have an

obligation to fund part of the growth?



Dr McMorrow—If it is a true partnership, all parties will contribute.



Senator CARR—We know what the argument is between the governments in terms of the

contributions. How are you going to get more money out of employers to fund their share of

contributions?



Dr McMorrow—It is a very good question. I will be looking to your report to help us in that

regard.



Senator CARR—I see!



Dr McMorrow—Apart from direct contribution, there is the issue of traineeships more

generally, which Dr Wilmott might like to comment on, and the incentives for training that

might come out through those policies. One angle that I do not think we have thought about

enough is the significant role of workplace learning and assessment, including for school

students, as a commitment in itself by industry to the process of vocational education and

training.



Ms Sobski—For example, in our preliminary look at the statistics in New South Wales for

vocational education programs in schools, we saw a four-fold increase in enrolments in

vocational programs. Part of our initiatives in the HSC reform process has been to introduce

dual-accredited programs in seven industry areas. A key component of those programs is work

placement, and we need the cooperation of employers right across the state in order to achieve

our target of gaining dual-accreditation for these courses. A key contribution that employers and

industry might make is to say, ‘Yes, a proportion of our effort in terms of our commitment to

training will be to make structured work placement a key part of the way we work.’ I think that

is a medium-term objective that we must achieve. Wherever we can gain support, both from the

outcomes of this inquiry as well as from national initiatives, we would welcome that, because

we believe it is a key and important part of the reform process, certainly for secondary

education and high school students entering the work force or further training.



Senator CARR—On the question of VET in Schools, I cannot see too many employers

coming to the aid of the state on that issue.



Ms Sobski—I would be more optimistic, Senator Carr.







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Senator CARR—I noticed in the report on growth funding from the National Resourcing

Working Party that you have actually excluded VET in Schools as a component for growth.

None of these predictions actually go to that issue, so it may well be that the predictions here

are a little pessimistic in that regard. How do you encourage employers to carry their share of

the load, not just in VET in Schools but in the broader VET system?



Ms Sobski—Obviously, government incentives are important, and there is a combination of

those in play; we may need to look for others. That is one key. Policy is also important—a

policy underpinning that which encourages industry, enterprise and local business contributions

is important. Selling the notion of investment in training as being a key to a productive future

for this country is important. These are messages that we have got to sell at every level of

government through interagency cooperation as well as local-level initiatives. We work with

state chambers, regional chambers and various industry associations, encouraging employers to

take a different outlook on this. This is not, however, fundamentally a problem of education

systems or training systems; this is a problem of a culture which simply does not exist in certain

sectors.



I think the VET reform process has contributed to some extent to a change in thinking

amongst some employers. However, making a system more complicated or introducing

concepts which employers are not terribly familiar with or do not give a fig about is not helpful

to selling that message. So an effective marketing strategy is an important component, but it has

to work at a number of levels. Policy is important, but that has to work at a number of levels

and then has to be sold by various sectors through various organisations. I do not believe ITABs

are doing sufficient to actually sell the policy and the importance of training as part of

workplace culture.



Senator CARR—So you would recommend some further support for ITABs to encourage

them to do that?



Ms Sobski—No. I think a reorientation of their role—removing them from tasks which they

are not very well equipped to undertake and placing at the centre of their task a greater

promotional job in order to advance the system—would be an important and key achievement.



Senator CARR—I read in item eight of the last MINCO papers that there was a discussion

on the annual national priorities for the next ANTA agreement. Given that there is no ANTA

agreement, it is a little awkward, I would have thought. But I cannot see those issues being

pursued through those draft provisions. Would you agree? It says that a quality national training

system provides value for money. Where would your proposals fit within that?



Dr McMorrow—I would actually agree with not only what my colleague said but what you

are leading to. Perhaps it needs to be more explicit in the kind of statement we drafted. We do

talk about strengthening the commitment and partnership between industry, governments and

the community. We need to flesh that out.



Senator CARR—It seems to me that there is a lot of work to be done on this new ANTA

agreement if it is to produce the sorts of results that you are speaking of.









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Dr McMorrow—Yes. I think our submission goes into some more detailed aspects of that

from our point of view. This draft statement was one that was constructed as a draft agreement

from most states and territories.



Senator CARR—And you believe there is general support within the states for broadening

the system to encompass these sorts of objectives that you are now speaking about?



Dr McMorrow—I would believe so, but I cannot speak on behalf of them.



Senator CARR—But you did have support for the paper that you put up on Friday?



Dr McMorrow—Yes.



Senator CARR—And the only state that reserved its position was South Australia? Have I

understood you correctly?



Dr McMorrow—That is correct.



Senator CARR—So the Commonwealth is basically rejecting that. I understand it was

rejected out of hand, in fact.



Dr McMorrow—That is what the Commonwealth minister said.



Senator CARR—I am told that Commonwealth officers were not to be made available to

consider that paper. Was that proposition put to you?



Dr McMorrow—No, I have not heard that one.



Senator CROSSIN—Just following on from that, how are you expected to jump on board

and warmly embrace this new quality council? Without much warning that it is going to be

established, you are expected to negotiate in good faith and participate in this council, but at the

same time the national ideas that look at improving the training arena and go to some measures

of quality are rejected out of hand. Don’t you find there is some inconsistency there and in fact

we are staring down the barrel of a further crisis in the VET area?



Dr McMorrow—We will enter into those negotiations, as I said, in good faith. We will try to

generate enthusiasm because we think these principles are still worth pursuing. If we need to

change the words to make them sound a little less motherhood in tone, we will probably do that.

We have got the basis, however, in our own submission to generate more detail about how to do

it.



Senator CARR—How does the New South Wales government respond to this statement

made in the minister’s press release of 28 June: ‘Record numbers put at risk by Labor states’?



Dr McMorrow—Do you mean the apprenticeship numbers?









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Senator CARR—That is what he said: ‘Record numbers put at risk by Labor states’.



Dr Wilmott—New South Wales rejects that view. If I could draw your attention to the

National Centre for Vocational Education Research statistics for the January to March quarter

which in fact the minister was quoting from—these are not New South Wales figures, they are

endorsed by NCVER—we find that, for example, the estimated number of apprentices and

trainees in training in New South Wales has increased by 31.9 per cent over the previous year.

That compares with a national increase in numbers in training of 12.3 per cent. So the growth in

numbers in training in New South Wales is almost three times the national level.



When we look at, for example, the estimated number of commencements for the 12 months to

31 March 2000, New South Wales commencements in apprenticeships and traineeships

increased by 57.5 per cent. The comparative national figure in growth in commencements,

taking all states and territories into consideration, was 2.7 per cent. That, to me, suggests that

the growth in commencements in New South Wales is 20 times greater than the national growth

in commencements of apprenticeships and of trainees in training. It is difficult to deduct from

those kinds of statistics that the apprenticeship and traineeship program in New South Wales in

terms of numbers is problematic. We have some further data—which has not been verified yet

by the NCVER but has been generated from our own statistics and will be provided in our

transfer to the NCVER in due course—which suggests that the numbers in training in New

South Wales in the most recent quarter have increased to 84,000, which is another factor of

growth of over 15 per cent in one quarter. In broad terms, we find it difficult to find and sustain

the position put in those comments in the data which was presented by the National Centre for

Vocational Education Research.



ACTING CHAIR (Senator Tierney)—Dr McMorrow, Senator Carr has been putting a

proposition that federalism is a somewhat difficult form of government. He alluded to the

railway system and how it took 80 years to get a standard gauge railway line across the country.

But wouldn’t it be true to say that, in terms of vocational education and training in the last 10

years if we go back to roughly to when ANTA was established, while we have not created a

perfect system, we have made considerable process in establishing a recognition framework and

in now moving to a quality mechanism? Ten or 20 years ago those sorts of things did not exist,

nor was there significant growth funding from the Commonwealth government as has occurred

through ANTA in the last 10 years. Surely, while we have not perhaps created a perfect system,

we have made considerable progress?



Dr McMorrow—I think our submission says that we should build on what we have achieved

so far. We went into some of the more recent policy issues, particularly around quality and now

around both quality and growth. We have said that some of that is due to demographic changes

and some of it is due to economic changes. I would not disagree with the general point you are

making. I think the national vocational education and training system is a brave idea that is still

worth pursuing as an idea.



ACTING CHAIR—Particularly as the initial legislative framework and allocation of powers

virtually totally allowed the states to go off and do their own thing originally. Coming together,

as the states and the Commonwealth have in the last 10 years, has produced these very positive

outcomes. You did mention that we have got to a certain point. You are not saying that we







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should go back; you are saying we should build on what we have got at the moment, including a

diversified framework, private providers and public providers. Where broadly do you think the

system should go from this point, on the basis of what you said about building on what is there?



Dr McMorrow—In a sense, from our minister’s point of view, it is working on a statement

like this or the positions put out in our submission to you. To put it in a nutshell, I think it is

about consolidating the concept of collaboration at partnership and being more explicit about

those commitments, including the discussion we have just had in relation to the role of

industry—both the direct and indirect contributions of industry. I think we really have to

re-engage with industry in that commitment. But I would also like to see involvement of the

governments, federal and state. And I agree with you: I do not know who is responsible for the

federal system of government, but they have a lot to answer for, haven’t they. It is tricky.



ACTING CHAIR—But you really would not want everything run from Canberra, would

you? That might have some significant advantages also.



Dr McMorrow—Probably not, no.



ACTING CHAIR—One thing that has changed radically in the last 10 years is the way

apprenticeships and traineeships are being handled. There has been an evolution from the old

traditional apprenticeships into the more flexible traineeship and new apprenticeship system to

suit our very rapidly changing economy. That change has been criticised, but would you see it

as inevitable to move in that general direction? You might have some question about the detail, I

suppose, but what about the general direction?



Dr McMorrow—I think the general issue of having flexibility in all areas is right. We would

not want to talk through the detail about the continuing role of apprenticeships and their

relationship to traineeships, but I do not think there is any question that we are in an era of more

flexibility across structures and processes. I would give just one example in relation to school

students. In a sense, employers a decade or more ago invested quite heavily, through the

apprenticeship system, in the training of young people. That has declined significantly and, to

some extent, it is being replaced by vocational education and training in schools, as more and

more young people stay on at school and want to keep their options open. That is a bit of a shift

of responsibility and commitment that we would like to re-engage with. In our earlier

discussion, I was reminded of that point and how workplace learning is a significant aspect of

industry investment in the system. That is particularly the case in the schools area where, as I

said, I think there has been somewhat of a shift over the last 10 years in the role of industry in

supporting young people.



ACTING CHAIR—Particularly if you look at electricity commissions, as they were, BHP,

banks. All these private providers who used to train very large numbers of apprentices have

largely moved out of that role, creating an inevitable shift.



Perhaps we could just turn to this issue of quality, because it has come up across the states,

and try to tie it down a little more closely, particularly in relation to the role of RTOs. We did

receive some hard evidence from Western Australia and South Australia where audits had been

done on RTOs. The figure that came out there was roughly one to three per cent having some







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real problems. I wonder whether you have conducted an audit in New South Wales on RTOs. If

you have, where is that up to; and are there any findings in relation to that?



Dr Wilmott—We are working through a most comprehensive compliance audit of registered

training organisations to bring them within the Australian Recognition Framework. I am

advised that, to date, we have audited 435 registered training organisations. I should say that

each of those audits in New South Wales involves a detailed process of submission from the

training organisation itself. That is then followed up by a visit from an audit team usually of two

or three people who may visit the organisation for up to two days to do a full compliance visit.



Senator CARR—How many RTOs are there in New South Wales?



Dr Wilmott—In the order of 900, and we expect to have completely compliance audited of

all those training organisations that wish to be assessed for the Australian Recognition

Framework by the end of this year. In the order of 100 of the previously registered training

organisations—and I believe the exact figure was reported to the last hearing—chose not to seek

registration under the Australian Recognition Framework because of the level of compliance

they would have needed to have met, and they chose to move out of the sector.



So we have been undertaking a substantial compliance audit. I have not got a precise figure

for the number of those organisations that have been found wanting and either have been not

successfully compliance audited or have been given a reserve judgment where they had to

resubmit for further visits. But in the process of that compliance audit system, indeed, there

have been a number of circumstances where the more stringent compliance audit processes that

we have applied have resulted in organisations either not choosing to continue as registered

training organisations or being not successfully audited and having to be reassessed.



ACTING CHAIR—Of the 435 you have audited, do you have any preliminary results; or are

you waiting until the end of the process?



Dr Wilmott—I would have to take that on notice to give you a figure, but I could do that.



ACTING CHAIR—If you could; we could then compare it with the data we have on South

Australia and Western Australia. Given that the states seem to be taking this auditing process of

RTOs very seriously and doing it very thoroughly, would it be true to say, having created a new

approach and now having audited the way in which people are applying that, we do have

systems in place that are actually, I suppose, assisting the market to work in terms of the

delivery of apprenticeship and training services?



Ms Sobski—The issue there though is that the inputs might be quality. All the inputs might

be right, but I think we actually need to look at outputs and outcomes from the system as well.

The quality cannot be simply in terms of what sorts of facilities you have, what sorts of teachers

or trainers you employ, the quality of their qualifications, et cetera.



ACTING CHAIR—It is a pretty good start though, isn’t it?



Ms Sobski—It is a good start, but it is not the finish.







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ACTING CHAIR—But the finish is a systemic problem right across government, and we

are moving towards measuring outputs. The whole budgetary process has changed to that rather

than focusing on inputs.



Ms Sobski—It is an important closure to the loop. Industry and client satisfaction—the

outcomes from delivery have got to be looked at. It is one way of also assessing whether the

input quality is standard or whether it is variable across states.



ACTING CHAIR—But if the facilities are right, the teaching is right and the curriculum is

right, you are in a pretty good position—



Ms Sobski—I am glad you said ‘curriculum’.



ACTING CHAIR—to predict that your outcomes might be reasonable, given that we are

moving towards that anyway, and that is a systemwide thing rather than just something related

to RTOs.



Dr Wilmott—Perhaps I could comment. I think one of the issues that is raised by the ARF—

and I know that Senator Carr asked this question earlier today—clearly is the question of—and

it is raised in the papers—national consistency of the approach to compliance auditing. I do not

wish to comment on the approach taken in other states, but the interpretation of those standards

across states is an issue which I think warrants some attention.



Secondly—and this goes to whether there are fundamental flaws in the ARF compliance

standards themselves—I remember some years ago, when we were devising the basic

assessment standards, New South Wales made a very strong push for a strong teaching and

learning compliance standard in the ARF; that was, that an organisation needed to be skilled in

teaching, learning, interpreting curriculum or training packages and devising teaching programs

to deliver the training products that it was being registered for. In my view, the compliance

standard in relation to teaching and learning in the ARF is still relatively weak. If there is one

particular thing that the ARF needs to be revisited for, it is that particular standard.



The last comment I want to make is that it is the case—and my colleague Dr McMorrow I

think made the comment a minute ago—that the compliance process is an up-front process. We

do receive, after registration and compliance assessment, complaints against particular

providers. That is another feature of the compliance process, that we do need to investigate

those complaints. But any up-front process without a commensurate process of quality review at

the output stage is susceptible to some erosion of those points that you raised earlier about the

quality of facilities—teaching, learning and so on—during the period of registration. Some

monitoring of outputs in terms of the quality of the actual training products and skill outcomes

is warranted to complete the loop.



ACTING CHAIR—It would be true to say, wouldn’t it, that if we went back 10 years and

tried to pick up anything in relation to quality of outcomes, perhaps even inputs, in the TAFE

system across Australia and tried to put them together in a national picture, we could not have

done it back then, could we? We really did not know at a national level what was happening

then, did we?







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Ms Sobski—I do not think it is fair to say that we did not know what was happening. There

were at that time both ministerial meetings and also TAFE directors’ meetings which looked at

national approaches, for example, to the development of curriculum. It was in the early 1990s,

certainly when I was still fairly involved in the TAFE system, that we started that process of

what one might call loosely ‘nationalisation’.



But in terms of quality, the quality movement is a more recent phenomenon across the board

both in industry and in education sectors. It was not until I think 1994 that TAFE New South

Wales adopted the Australian quality council approach to improving the quality of both its

systems processes and delivery. Its client focus and its outcomes focus date back to that period.



ACTING CHAIR—Which I think reinforces my point: 10 years ago you could not have

done—



Ms Sobski—I agree with you, Senator Tierney, but there were national approaches being

taken to the development of products and a look at services to standardise services. The

librarians met nationally, student counsellors met nationally. There were national approaches.

The focus on quality, however, is a more recent phenomenon.



Dr Wilmott—Perhaps I could add to Ms Sobski’s comments. I think the other major point of

difference between the vocational training system as it existed 10 years ago and as it exists now

is that 10 years ago we were really dealing with eight TAFE systems around the country as the

centrepiece and providing the major component of provision across the whole country. It is still

the case that the public provider is the dominant provider. But in every state we have a very

large number of private training organisations that are essentially in the game of training as a

business proposition. When you have, as we do in New South Wales, in addition to the public

provider in excess of 700 or 800 private training organisations, then clearly the question of

some kind of quality control becomes more acute.



ACTING CHAIR—We are over time, and I have to leave for a broadcast right at this

moment. I thank the witnesses for appearing.



Senator CARR—I have a series of questions.



ACTING CHAIR—Perhaps, Senator Carr, you could put those questions on notice.



Senator CARR—All right. I have questions on the curriculum issue.



Proceedings suspended from 12.34 p.m. to 1.38 p.m.









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BOWMAN, Dr Kaye, Director, Planning and Performance Review, Australian National

Training Authority



BYRNE, Mr Paul Geoffrey, General Manager, Australian National Training Authority



SCOLLAY, Ms Moira Jean, Chief Executive Officer, Australian National Training

Authority



CHAIR—I welcome again officers of the Australian National Training Authority. I think it is

best if we commence with you having an opportunity for an opening statement to update us on

events since your last appearance, and then we will move to questions beyond that, thank you.



Ms Scollay—Thank you, Chair. I would like to spend a few minutes introducing some

important initiatives that are new since we appeared before the inquiry last time. Last Friday we

had what you would call a big MINCO meeting: there were lots of important items and a

considerable amount of discussion. The most important items were national consistency, quality

and risk management, and the results of the market research. I will come back to those, but there

were actually other important items.



In relation to equity, we now have blueprints to drive improvements in vocational education

and training for indigenous Australians and for people with disabilities. These have been a long

time in their development and represent an outstanding collaborative effort. They are really

designed to make a difference for these two groups. I will be tabling these particular documents

in a minute. In 1999, ANTA’s equity advisory groups developed broad national strategies for

indigenous Australians and for people with disabilities, and these have now been followed up

by implementation plans, which are really designed to work on the ground. They are referred to

as blueprints and they set out specific actions required by governments, by providers and by

industry to improve access, participation and outcomes for individuals from these two client

groups—people with disabilities and indigenous Australians. The MINCO also agreed to a new

set of guidelines for the infrastructure program for indigenous people, to offer more tailored and

local solutions. I will be tabling those as well.



In relation to VET in Schools, as you know there is a refreshing acceptance these days of the

need to see education and training in a holistic manner and as a seemless pathway from the

schoolyard to the workplace. The VET in Schools program, as you know, has been resoundingly

successful. At their meeting last week, ministers agreed to extend the funding of $20 million for

VET in Schools for one more year on the basis of revised principles and guidelines for VET in

Schools. These will be agreed in time for the next school year. These guidelines will be

developed in the light of the evaluation of VET in Schools which is now complete, and which I

am also providing to this committee today. The issue of ongoing funding is being considered by

the MCEETYA VET in Schools task force and will be considered again by MINCO in the light

of that work.



At item 8 of the MINCO agenda, the ministers endorsed the annual national priorities in key

result areas for 2001, and I am happy to take you through those if you wish. These items are all







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important but the next two items are, if you like, the breakthrough items. Ministers agreed to

work cooperatively to achieve a fully integrated national VET system, particularly in relation to

fundamental regulatory issues underpinning mutual recognition. This agreement sets in train a

whole phase of work for all players in the system.



In relation to national consistency, ministers endorsed all the resolutions in the report as the

basis for further work to improve consistency, although some ministers did have reservations in

relation to certain aspects of the report. Ministers wanted it noted that the achievement of a fully

integrated national system will have significant resourcing impacts that must be addressed in the

context of negotiations on the future of the ANTA agreement. I will also table this report on

national consistency. Ministers endorsed the resolutions in the report on risk management and

quality in the national system and work will proceed on the identified priority areas.



CHAIR—I am sorry, Ms Scollay, but what was the name of that report?



Ms Scollay—Risk management and quality in the national system.



CHAIR—Is that one of the ones you are tabling today?



Ms Scollay—Yes. Under item 4 ministers considered two. They considered integration of the

national VET system and risk management and quality. The ANTA board, however, is firmly

committed to driving change in this area. The ANTA board knows that the clients are impatient

for change. Concerned that such detailed public administration can be a slow process, ANTA

board members are very pleased that ministers agreed to a priority list of changes to be achieved

by the end of this calendar year addressing both quality and consistency issues. There is a list of

those in the resolutions that I will table, and I am very happy to take you through them. They

include clearer higher national standards for RTOs and a single level of registration for all

purposes, et cetera. I am happy to detail those one by one, if you wish.



The board is also very pleased that ministers have agreed that legislation, regulatory and

administrative change, while absolutely critical are not in themselves sufficient. There is also an

urgent need to address the unacceptable levels of outdated business processes in use in the VET

industry. Clients who operate on a national basis are particularly frustrated by the myriad of

different rules and processes they have to follow. Why can’t we use modern business processes

with our clients? What about call centres, linked web sites and electronic business? Last Friday,

ministers agreed that ANTA would investigate some of these possibilities, along with service

standards for clients more generally. These sorts of changes have the potential to significantly

simplify for the clients navigation of the national system.



The MINCO also agreed, I am sure you know, to restructure some of the ANTA committees

to ensure streamlined representation of industry, ANTA and the Commonwealth, states and

territories. It was agreed that the National Training Framework Committee would be renamed

the National Training Quality Committee with a strengthened role. The ANTA board advisory

committee on New Apprenticeships and the implementation issues group will be combined into

a new committee to be chaired by an ANTA board member.









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The marketing strategies were also agreed, and we are thrilled by the positive response to the

work on marketing. Ministers have agreed in principle to four marketing strategies to boost

training. We have done extensive market research, as you know, into the learning and skills

needs of individual Australians and individual enterprises, and the strategies agreed by ministers

involve tailoring our products and services to meet those needs. That is what the marketing

strategies are proposing. I might add here that the MINCO resolutions on quality and

consistency are also responding to the client feedback on those issues that we received through

our market research. The marketing strategies are much more than advertising campaigns. To

the extent that they are advertising campaigns, they are at the end of the process. Tailoring

products and services to meet clients’ needs is the crux of it all. Three of the four strategies are

to be directed at employers to support an increased investment in skills. The fourth is directed at

individuals to reinspire people who drop out of learning.



The market research identified three different groups within business: those who value

learning per se, those who value learning that is directly related to productivity today and those

mainly in small business who put very little value on training. Different goals and strategies

have been agreed for each group. Ministers also agreed to the implementation of a strategy to

convince young people to stick with learning. In a group we call ‘might give it away’, these are

mainly single and are aged between 16 and 24. They are currently studying but they are on the

verge of dropping out because they cannot see that personal investment will deliver any benefits

for them. In order to show ministers how an advertising campaign can work—the bit at the end

of the process—ministers were introduced to two such campaigns: a campaign for the ‘here and

now’ employer segment to help lift their investment in training, and one for the ‘might give it

away’ kids. I would be delighted to give you a preview if you wish. We are very confident of

success, and I will be tabling these papers from the ministerial council here today and I would

be happy to answer any further aspects.



To sum up, I have read almost every submission to this inquiry, or a summary of it. I have

also read just about all of the Hansard reports from it. This inquiry process has provided very

valuable feedback for us—so too have the Schofield reports conducted by three states. I have

several times referred you to the resolutions on quality passed by CEOs in September last year

and endorsed by ministers in November last year. Today I am tabling the resolutions from

MINCO dealing with quality consistency, risk assessment and other resolutions, and I note that

they are draft resolutions. I believe that all of these together indicate that the VET system is

tackling head-on any issues that have been raised about quality and consistency. But I stress

again that we need to keep these issues in perspective. The board’s view, reinforced by MINCO,

is that the fundamentals are right. This is confirmed in our view by the weight of evidence

through this inquiry process. The Australian VET system, which we are implementing and at

the same time continuously improving, is responsive, flexible, industry led and to a very large

extent delivering high quality outcomes to its clients, to individuals and to enterprises. I have

here the full set of documents from MINCO, which are for tabling now.



CHAIR—How many sets do we have?



Ms Scollay—There are two sets here. We come from far away and we brought two in our

bags; I believe there are more in the post.









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Senator CARR—That is really good. Thank you. I have been quoting from them all day. We

are familiar with the documentation; I want to take you to the detail of the documentation.



CHAIR—Senator Carr, you are familiar with it. Senator Brandis perhaps could have one of

the sets and I will leave one here for the moment.



Ms Scollay—All the resolutions are there, too.



Senator CARR—That is not the complete set of papers from MINCO, is it?



Ms Scollay—It includes all the documents that ministers used as the core documents. It does

not cover the covering papers, which are the input advice to ministers.



Senator CARR—Ms Scollay, I appreciate your response to our inquiry. You obviously have

taken the matters very seriously, and it is quite apparent, given the complete backdown the

minister has made at last in terms of a number of statements he has issued to the ministerial

council, that this inquiry has had a dramatic impact. I do not think anyone could argue against

that. Despite the fact that the government has sought to resist it in every way in terms of the

procedures through the parliament, this inquiry demonstrates that this parliament is able to

produce quite significant changes of policy, and I think that that is a very good result already.



However, I am interested in some of your comments about the way in which the

fundamentals of the system are working and your concept that the states and the

Commonwealth are working cooperatively. I note in the Campus Review just today that, when a

proposal was put to the MINCO council by New South Wales on behalf of all the states—with

the exception of South Australia, which reserved its position—which called for not just a cut

and paste agreement but a fundamentally different agreement in terms of the next three years,

the minister rejected the proposal out of hand. He said that it was full of motherhood statements

and that it had no status. I am just wondering how you reconcile your view that the states and

the Commonwealth are working cooperatively with the demonstrable evidence of what occurred

at MINCO last Friday.



Ms Scollay—I suppose I can answer that on a range of levels. The first is that I do not have

the knowledge from being at MINCO—



Senator CARR—The Campus Review is nothing secret.



Ms Scollay—I do not have the interpretation from the Campus Review that the Campus

Review article has. I was going back to your statement about another document that was tabled

that had the dissent only from South Australia. If that is the case, that is not what happened at

MINCO. I think it is necessary for the committee to understand that there are lots of meetings

that happen at the MINCO event. In the ministerial council meeting where officers attended—

and that would be the one where I was present—that is not what happened with that document.

The resolution simply is that officials will go forward and work to negotiate the next ANTA

agreement.









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Senator CARR—We got quite stark and contrasting evidence to what you have just given us

from the government of New South Wales only an hour ago.



CHAIR—Just for the record, I want to clarify the point Ms Scollay referred to about the

South Australian dissent. The evidence before us was that South Australia reserved their

position.



Ms Scollay—I am sorry; I used the wrong word.



CHAIR—I appreciate that; I just wanted to clarify it.



Ms Scollay—I correct that.



Senator CARR—But there is a stark contrast in what the states are telling us before this

inquiry and the evidence that you are giving us here. I do not want to make too much of it but it

strikes me that it is a difficult proposition for us to accept—certainly for me to accept—that

there is a cooperative arrangement at the moment. You have an ANTA CEO’s group, the

National Resourcing Working Group, producing a report which suggests that the growth rate is

likely to be, on DETYA’s figures, 2.8, and on the others, 5.7, with a resourcing impact of

somewhere between $1.5 billion and $3 billion, and you are running a marketing program now

which is likely to increase demands still further with no growth moneys being made available

and no apparent progress being made on the formation of a new ANTA agreement. How can

you say that there is cooperation between the Commonwealth and the states?



Ms Scollay—I believe that the resolutions out of MINCO are a major step forward. To an

overwhelming extent we have all ministers with their eyes firmly on one national fully

integrated system and on improving the quality of the system. I think that there is unanimous

agreement around the implementation of the indigenous strategy and the blueprint for

disabilities. A very significant achievement has come out of MINCO in terms of the strength of

those resolutions. However, I would say that our view is that the proof will be in the pudding in

terms of what happens in the next six months. The ANTA board’s position is that there are some

issues here—and they are itemised in the resolution—which need to be dealt with as a matter of

some urgency; they need to be dealt with quickly. We will be focusing our attention with the

Commonwealth, the states and the territories in a very cooperative way to progress those

resolutions. The request is that we take them back to the November MINCO.



I have every expectation that every state and territory authority, and the Commonwealth and

ANTA, with industry, will be working exceptionally hard together over these issues. At the time

of renegotiation of ANTA agreements, there is always going to be some heightened level of

discussion leading up to an agreement, but I do not see that as any major issue. I really believe

that what came out of this MINCO was a set of decisions by all ministers, in agreement, that we

want one nationally consistent, fully integrated quality system, and we are all going to work

really, really hard to get there—by Christmas.



Senator CARR—I am pleased to hear that we are going to work hard to get there. When did

you first hear about the National Training Quality Council?









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Ms Scollay—The proposal to restructure the committees to give a heightened representation

to industry came out of the ANTA board meeting a couple of weeks prior to MINCO.



Senator CARR—I am sorry, Ms Scollay, my question was: when did you first hear of the

National Training Quality Council?



Ms Scollay—Probably two or three days before MINCO.



Senator CARR—You have a decided advantage on all of the states that we have spoken to so

far, which have said that they only heard about it on Friday morning.



Ms Scollay—In these contexts, there are all sorts of different resolutions that appear to be

tabled on the day by different constituencies. Certainly the ANTA board had foreshadowed that

it was going to be tabling something about hastening the process of implementation and

restructuring the committees, and, to the extent that different constituencies table documents,

that often happens at MINCO.



Senator CARR—Fair enough.



Ms Scollay—Given that it was an ANTA board suggestion that the committees be

restructured, then I do not think it is at all unusual that that was something that was

foreshadowed with the ANTA board just ahead of the meeting, as opposed to being

foreshadowed with the states and territories.



Senator CARR—So the ANTA board had a resolution, did it, to that effect?



Ms Scollay—Yes. That was going before ministers. That was in the MINCO papers leading

up to MINCO, that there be a restructuring of the committees.



Senator CARR—No, the words are here that the National Training Framework Committee

be ‘replaced by’ a National Training Quality Council. It is a bit more than a restructure. I am

just wondering where that formulation appeared in the MINCO papers and in the board.



Ms Scollay—That formulation appeared at the meeting. But a restructuring of committees

was foreshadowed in the papers that went to the ministers and that everybody saw ahead of the

meeting. The actual final solution was what was tabled on the day.



Senator CARR—And so there was discussion about the structure and the role of this body,

was there?



Ms Scollay—On the day I believe there was, in the ministers-only meeting.



Senator CARR—Was there before the meeting?



Ms Scollay—I believe that was what happened at the meeting.



Senator CARR—There was nothing before the meeting?







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Ms Scollay—At the ministers-only meeting. I am not there.



Senator CARR—Again I come to the question about the degree of cooperation that exists

between the Commonwealth and the states, and the extent to which ministers—in this case the

federal minister—are able to drop something as significant as this allegedly is on the states on

the day of MINCO. How would you regard that? Would that be reasonable?



Ms Scollay—I think that is a matter to take up with the Commonwealth, Senator.



Senator CARR—If you were a state minister, would you think that is a reasonable way to

proceed?



Ms Scollay—I have already said to you that different ministers table different things.



Senator CARR—Yes.



Ms Scollay—There was also, as you would know, a resolution from New South Wales tabled

on the day. But that is not unusual for MINCO.



Senator CARR—You said that ANTA is now driving change.



Ms Scollay—Yes.



Senator CARR—I put it to you that it is not ANTA driving change; it is the ministerial office

that is driving change.



Ms Scollay—Certainly there are several ministerial offices driving change. Clearly, the

Commonwealth minister is driving change, and it is also quite apparent that the Queensland

minister is driving change. It is also apparent that there are other ministers around the table that

are really keen to see this national system work. You would know that several ministers have

also commissioned these inquiries. So it seems to me that there is, around the table, a push by

ministers to fully implement the system that we are in transition on.



Senator CARR—Yes. I compared the minister’s statements in previous times about the

quality assurance system basically being sound with this dramatic change that occurred on

Friday, which I acknowledge is a very important development. But I am wondering whether or

not there were any discussions with you as to why it was necessary to do it on Friday. Was it

anything to do with the work of this committee?



Ms Scollay—Being a bit reflective about this, there seemed to be all sorts of people in the

system claiming responsibility for progress around this issue. Very clearly, there are actions

taking place at state and territory level. There has been this inquiry; there has been an enormous

amount of work done through the committee systems. It has been driven at the Commonwealth

level. It would seem to me that there are players in every part of the system who are driving,

influencing and claiming credit.









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Senator CARR—Perhaps I will turn to your submissions from previous hearings. At the time

of your submissions, because you had a number of employer satisfaction surveys which

suggested the system was working well, you were basically satisfied that the quality issue was

not quite as stark as had been made out. Would that be a fair presentation of your—



Ms Scollay—We have had work going on this since May-June last year. But we have argued

throughout that the system is fundamentally sound, that we have an outstanding vocational

education and training system in this country and that is reinforced when you look overseas. We

get continuous responses to surveys, with satisfaction in the main with the system from

employers, employees, evaluations of User Choice—you name it. The most recent inquiry out

of Victoria also says that there is very good stuff happening to a basically good system. We

have never argued that there was no need for improvement and we have never argued that these

issues that are being raised do not need to be addressed. They clearly do. But I believe they need

to be kept in perspective.



Senator CARR—So you are no longer relying just on employer satisfaction surveys?



Ms Scollay—We never were. I think that is a misrepresentation of our submission.



Senator CARR—You say the system is fundamentally sound. You have the Minter Ellison

legal advice on the question of mutual recognition of providers and on the deregistration of

providers. How can you say the system is fundamentally sound when the report here says:



... limitations in the operations of mutual recognition, whereby a recognition authority seeks to sanction or de-register a

training organisation with primary registration in another jurisdiction. These limitations on the powers of most

jurisdictions to apply the mutual recognition provisions of the ARF ... have been confirmed in recent legal advice.



And so on. Do you understand that?



Ms Scollay—We agree with you that that is an issue that we are going to address head-on.

There is no question about that.



Senator CARR—How can you say the system is fundamentally sound when this sort of legal

advice has been put to you?



Ms Scollay—I think there are a couple of reasons why we can do that. There are clearly

issues about the system we are going to address. One of them is this legal issue and I will come

back to that. Another one is lifting the standards in the Australian Recognition Framework. I

can come back and talk to you about that. We are continuously improving training packages and

making sure that we are getting good assessment outcomes through that process. I am not

saying for one minute that there is not need for improvement. We believe that, when you look at

the system overall, there is a hell of a lot of good stuff happening out there—really good

training with students satisfied with the outcomes.



Coming back to the Minter Ellison legal advice, I want to put that very quickly in its

perspective. As you know, there are eight states and territories bringing their different

legislation, if you like, to the table. The system so far has been set up on the basis of ministerial

decision. It became clear to us late last year and early this year that, at the point at which the







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EWRSBE 822 SENATE—References Wednesday, 5 July 2000





system starts to be questioned when you want to deregister a provider, if you end up in a court

of law then the administrative decisions do not have enough weight and so we need to fix the

law. It does not mean that the system is not working in the main, but there are some serious

issues to do with the law that do need to be fixed, and we are looking to fix them. All of those

issues that have been raised by Minter Ellison are being addressed. There was a resolution out

of this ministerial council to address them, and we will be facing them head on.



Senator CARR—Ms Scollay, your report to the council states that a considerable amount of

work remains.



Ms Scollay—That is right.



Senator CARR—It says:



There are deficiencies in these areas which have the potential to weaken client confidence in the system if swift and

comprehensive action is not taken to make reality match the promise of the national system.



Ms Scollay—That is right.



Senator CARR—You say that the report follows this paper and ‘deals with the critical issues

of inconsistency and quality assurance which, from a client’s perspective, are inhibiting the full

implementation of the agreed integrated national VET system’.



Ms Scollay—That is right.



Senator CARR—It goes on and on. It says, for instance, that forums confirm that the

inconsistencies and lack of transparency are regarded ‘as extremely serious’. These are a bit

more than what you have suggested to date.



Ms Scollay—No, I think it just needs to be put in perspective. I absolutely own those

documents. There is no walking away from those documents. Those documents are the position

as we see it and as we have stated it. However, they need to be put in the context, and they are

in those documents put in the context, of the good things that are happening. The issues around

legislation, we believe, now absolutely urgently need to be fixed, and we also agree that the

issues of national consistency urgently need to be fixed. These issues are coming to light as we

go forward with the implementation. As they arise, we are fixing them. That was always going

to be the situation.



Senator CARR—I appreciate your point, and I have been saying that to you for a long time.

I have been saying that to ANTA and to your predecessors in your particular job for a long time.

For three years I have been saying that these are serious questions, and I have been told for

three years that there are no real problems here except a few minor transitional issues, a few

implementation problems, a few cruddy state bureaucrats that cannot organise themselves. Now

we are told in the documentation that you have known for some time just how serious this

situation is. I would ask you: when did you first become aware of the serious legal flaws within

the national mutual recognition framework?









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Wednesday, 5 July 2000 SENATE—References EWRSBE 823





Ms Scollay—We foreshadowed in the CEO papers the CEOs’ resolutions in September last

year. Work on that started in May/June. There was a report in August, there were resolutions in

September and these were endorsed by ministers in November. We contracted Minter Ellison to

look at this and we got the results from the Minter Ellison study in maybe March.



Senator CARR—That was this year?



Ms Scollay—It was this year. At the time those issues arose, we had working groups looking

at the significance of them. You will have heard from the different parts of the system. Even

today Peter Noonan, from Queensland, said that, yes, the legal issues need to be fixed but that

they are finding many administrative ways of addressing these in the short term. There is no

question that we need to fix these issues. We have not been hiding anything from this

committee, Senator.



Senator CARR—Well I have a difference of view on that point and that will be an issue we

will pursue. I put it to you that, in July of last year, it became apparent to the Australian

Recognition Framework Transition Group that the existing protocols were not adequate to deal

with across-border mutual recognition quality issues. Can you confirm or deny that proposition?



Ms Scollay—The implementation issues group was not formed until maybe September.

There was another group that was looking at some of this work, as a forerunner.



Senator CARR—All right. So you say there was no transitional group at that time. Were you

aware of this inside of ANTA in July of last year?



Ms Scollay—There was a transitional issues group; there was not an implementation issues

group. Sorry, I might have—



Senator CARR—I am sorry: if I have got my names wrong and you have got your names

wrong, I do not particularly care about that. What I would like to know is: were you aware in

July of last year that there were serious legal problems, that the existing protocols were—as I

understand the situation—not adequate to deal with across border mutual recognition quality

assurance issues?



Mr Byrne—Maybe I will be able to help. It was the transition issues group, I think—I cannot

quite remember the exact titles—the forerunner of the Implementation Issues Group. It was

dealing only with ARF matters. At around that time, a particular issue came up about mutual

recognition between two states, which I think might have been New South Wales and

Queensland. One of the states was running into serious difficulties in handling the

registration/deregistration question regarding a particular provider whose primary registration

was in the other state. It did not raise the issues in general, but there was quite a bit of work at

that time between the two governments—between the two departments in the various states—

and that committee to solve the problem itself.



Ms Scollay—It was that case that formed the basis for our recommendations to the CEOs that

were passed in September, for us to look at those legal issues.









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Senator CARR—The point I am putting to you is that it has been known for over a year—

you have had serious doubts for over a year—that the framework is basically flawed, that a

good strong blow of wind from a person with a good lawyer and deep pockets could blow the

system apart. What we have had since then is a whole lot of talk to us about how the system is

basically sound, but just subject to a few implementation problems. While we are on the

question of—



Senator BRANDIS—Did anybody answer the question?



Senator CARR—There was a nod. I take it that was an answer. Was it?



Ms Scollay—No.



Senator BRANDIS—The question, Senator, as I heard it, was that the witness had known

something that you put to her since the middle of last year. She should be entitled to affirm that

or disagree with you.



CHAIR—Ms Scollay, were you after space to respond to that?



Ms Scollay—The situation is that we knew of a case, we took it to the CEOs committee that

we needed to get legal advice, we did not know the extent of the issue until we received that

legal advice in March this year, and it was a process that was going continuously through our

committee systems. It went to November MINCO. It was nothing that was being, in a sense,

buried. I also think that even this legal issue needs to be put in perspective. It is part of the

underpinnings that we need to fix but the system has been operating, and operating in the main

without those issues having to be addressed until now. It is at the point now, where some of the

parts of the system are being challenged, that we are going to need to make sure we have the

legislative underpinnings.



Senator CARR—Ms Scollay, you say you were not able to be certain of this until March, till

the legal advice arrived.



Ms Scollay—Yes.



Senator CARR—I have before me here a paper from the ANTA CEOs in November of last

year, saying that the CEOs considered possible legal issues relevant to the sharing of RTOs’

financial and other audit information across jurisdictions.



Ms Scollay—That is right.



Senator CARR—That is November last year.



Ms Scollay—That is the point I am making, Senator. They were our documents.



Senator CARR—Exactly.









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Wednesday, 5 July 2000 SENATE—References EWRSBE 825





Ms Scollay—We put those to the CEOs, and they went to MINCO, on the basis that those

assertions were around and we needed to go and get legal advice. The resolution that got

endorsed was that we needed to check. We were wanting to have a system in which, across state

borders—we discussed this with you—we would be able to get sharing of information about

providers that might not be behaving as well as we would like.



Senator CARR—I do not want to go into the semantics of this. I am putting it to you that as

of July last year there were serious doubts about this and, as your documents state, this became

apparent to the ARF Transitional Issues Group. That is the name by which I have been told the

organisation goes. You are confirming that?



Ms Scollay—It is not that any more, but it probably was then.



Senator CARR—It was at that time. You knew in July of last year, and in November—I

have got another document here that seems to indicate it—you knew quite clearly how serious it

was, to the point where you said you were developing an appropriate set of protocols which

went to applying the ARF in cases where an RTO is litigating with another jurisdiction over

contractual or related matters. We are continually told it is just a transitional problem. I am

putting it to you that it is a more substantial problem for the national VET scene than you have

indicated to this point.



Ms Scollay—I do not believe that all of the issues that have been presented through the

different submissions we have given you have been painted as all transitional issues. There are

some issues that certainly need fixing with the structure but they are not of a totally debilitating

kind; they simply are not. A lot of activity is still able to happen, and there are parts of the

system in various states and territories who believe that they can continue on an administrative

basis without fixing the law. I do not agree with that. I want to pursue the issue of fixing the law

and getting the legal underpinnings right. But you will hear from certain parts of the system that

it has been operating relatively smoothly without that and can continue to do so. It is not in the

category of being disastrous, as you paint it. It is not in that category at all.



Senator CARR—All right. I will go through a few other little issues associated with this

problem. As I read the situation, the ARF arrangements were actually being signed off in

November 1997. Is that right? The ARF arrangements go to the issues of principles, protocols

and standards for the implementation of the ARF. The transitional arrangements came in with

existing registered providers in January 1998. That is correct, is it not?



Ms Scollay—Yes.



Senator CARR—And there were a number of issues that the transitional group had

identified at that point. Is that true as well?



Ms Scollay—Yes.



Senator CARR—I also notice that, through this process, a national criteria was developed

for the ARF auditors to assist in the development of the marketing strategies to promote the

ARF. Is that correct as well?







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Ms Scollay—Yes.



Senator CARR—What was the legal basis for those protocols? Do they have a force of law?



Ms Scollay—I believe not.



Senator CARR—It has been drawn to my attention that I should ask you to be more explicit

in your answers.



Ms Scollay—I believe there was no force of law.



Senator CARR—There was no legal basis to those?



Ms Scollay—The work happened on the basis that it was going to be done administratively.



Senator CARR—So that is the assumption that has been made. Can I ask you: what is the

legal basis for the current ANTA agreement, which now expires, of course, at the end of the

year? Is there a legal or legislative basis to that?



Ms Scollay—Is it attached?



Senator CARR—The first one was; was the second one attached?



Ms Scollay—It is in a schedule to the act.



Senator CARR—Where are your powers in law? Where do I find that?



Ms Scollay—In the ANTA Act and in the schedule.



Senator CARR—Yes, but my reading of it is that that really goes to some fairly broad

concepts such as the development, management and promotion of national aspects of the

national training framework and training agreement. That is in the national framework too, isn’t

it?



Ms Scollay—Yes.



Senator CARR—Is there any legal basis for that?



Ms Scollay—To the extent that it is either in the act or it is in the agreement and the

agreement is in a schedule to the act. There is a legislative basis for that, yes.



Senator CARR—I will put it to you this way: can you confirm the following propositions—

and you may want to think about this. As I understand it, the ANTA Act provides for the

establishment of the body of the Australian National Training Authority as an entity itself. The

ANTA agreement loosely defines your roles and responsibilities. Would that be true?









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Ms Scollay—Yes.



Senator CARR—The directions for the National Training Framework Committee and

various other policies and guidelines which are endorsed by MINCO are the basis on which you

derive authority?



Ms Scollay—Yes. We operate largely off ministerial decision.



Senator CARR—Ministerial decision—that is the point.



Ms Scollay—Largely.



Senator CARR—So this whole structure that is there at the moment could, effectively, be

removed by ministerial decision?



Ms Scollay—That is true.



Senator CARR—And there would be no legal obstacles to that occurring?



Ms Scollay—That is what happens in the renegotiation of the ANTA agreement every time.



Senator CARR—So you could be out the door if there was no agreement?



Ms Scollay—Certainly.



Senator CARR—Thank you for that.



Senator BRANDIS—Ms Scollay, could I deal in turn with what you have described as

structural issues and transitional issues. In relation to structural issues, are you of the view that

there are any aspects of the system that are—to use an expression that Senator Carr used—

fundamentally flawed?



Ms Scollay—No, I do not believe that there are any aspects that are fundamentally flawed. I

believe that the fundamentals are right, but I also need to say that there are some things that

have now been highlighted through implementation that we need to fix. One of them is the

legislative base and another is the standards in the recognition framework. That includes the

standards for auditing and quality.



Senator BRANDIS—And, in a complex system like this that depends upon cooperation

between the Commonwealth, state and territorial governments, are the issues that have arisen in

the implementation phase beyond what you would expect to arise in the ordinary course of

events?



Ms Scollay—I would have to say that I think most of them have been foreshadowed before

the system started as the kinds of things that would arise.









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Senator BRANDIS—I know it is easy to be wise in hindsight and it is easy to offer counsel

of perfection in a Senate committee hearing. However, are you particularly alarmed for the

viability of the system by any of the implementation issues that have presented themselves?



Ms Scollay—No, we are not, and I think that is the point: we are not alarmed, we are dealing

with them as they come up and we have got good processes for dealing with them. These

particular ones we want to deal with quickly, but none of them are insurmountable.



Senator BRANDIS—You were asked a number of questions by Senator Carr in relation to

legal advice from Minter Ellison. Your evidence, as I understood it, Ms Scollay, was that you

received that advice in March 2000.



Ms Scollay—Approximately March. I am not sure of the exact date.



Senator BRANDIS—Having requested the advice when? Mr Byrne, perhaps you can help

us.



Mr Byrne—December—



Ms Scollay—We would have to take that on notice, but I think the request was after the

November MINCO when that was endorsed.



Senator BRANDIS—Towards the end of 1999?



Ms Scollay—Yes, towards the end of 1999.



Senator BRANDIS—And the instructions given to the solicitors in seeking that advice arose

from certain issues that had presented themselves in the implementation stage, did they?



Ms Scollay—Yes.



Senator BRANDIS—And those issues presented themselves to you during the course of

what span of time?



Ms Scollay—They came during 1999, from my perspective.



Senator BRANDIS—Is it fair to say—and this is what has been put to you by Senator

Carr—that, at the time you gave instructions to solicitors to advise on these issues, you were of

the belief that the system was fundamentally flawed?



Ms Scollay—No.



Senator BRANDIS—Was it not the purpose of giving instructions to solicitors that they

should advise so that any implementation issues could be clarified and any difficulties could be

approached in a proper professional manner?



Ms Scollay—That is right.







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Senator BRANDIS—And that is what you are proceeding to do?



Ms Scollay—That is right. That is exactly what you would expect us to do, I think.



Senator BRANDIS—I have looked at the ministerial council resolutions. Those resolutions,

I must say, seem to me to suggest that there is a high level of cooperation at the ministerial level

in ensuring that the system works well and that—to use a vernacular expression—any bugs in

the system are sorted out with as much dispatch as possible. Would you agree with that?



Ms Scollay—I would agree.



Senator BRANDIS—Are you, in your own professional judgment, pleased with the level of

cooperation there has been among governments at the ministerial level?



Ms Scollay—It is not really for me to comment on the ministerial level. That is between

ministers. But at the level where we try and operate—



Senator BRANDIS—To the extent to which the state of mind of the ministers is reflected in

the resolutions of the ministerial council.



Ms Scollay—Yes, I think they are a fabulous set of resolutions and will take us a long way

forward. There is a lot of willingness on the part of the states and territories now to get on with

this.



Senator BRANDIS—Are you satisfied, having regard to the advice you have received from

your solicitors and to the resolutions of the ministerial council, that the appropriate strategies to

deal with outstanding issues are now in place?



Ms Scollay—Yes. If we get all of this done, then all of the appropriate strategies will be in

place. It is a big ask; it is a big task, and it will require a lot of ongoing cooperation, because

some of this stuff is not easy in this federal system.



Senator BRANDIS—Quite.



Ms Scollay—But if it all gets done, then all of it will be in place.



Senator BRANDIS—And those strategies in each case will be pursued in furtherance of and

within the broad framework of the system as originally conceived?



Ms Scollay—That is right.



Senator BRANDIS—Thank you, Ms Scollay.



CHAIR—Ms Scollay, I have had a chance to have only a quick glance at the report on risk

management and quality, but there are some components of the resolution that I would like to

go to.









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Ms Scollay—To the report or to the resolution?



CHAIR—The MINCO resolution endorses the resolution attached to the report, doesn’t it?



Ms Scollay—Yes.



CHAIR—I think I am doing well enough on the spot to be able to follow through that thread

from first looking at these papers. Point (iv) talks about further development of a targeted

approach to auditing activity across the national training system. I have since noticed—because

I was about to ask you a question on that—that there is attachment A about a targeted approach

to auditing activity across the national training system. What is the status of that attachment and

what else can you tell us about the development of the targeted approach?



Ms Scollay—I suppose this is at the heart of the risk management approach. Its intention is

that we develop a mechanism across the country whereby we build up a profile of what we

believe to be RTOs that may be at risk. If they have that set of characteristics, that would mean

they would be targeted for audit. One of the positive outcomes of this process is that that is

exactly what is intended to happen. In any system—and I have made reference before to my

experience in dealing with this with Tax—in order to be able to effectively target your resources

against areas of risk and not waste them on areas where there is no risk, you need a set of

criteria. So the states and territories have been collaborating about a set of criteria for RTOs that

might be at risk. This is at a stage of development which will go on being refined as we get

more information from across the states and territories as to what really looks like being a good

pointer to an organisation that needs to be looked at.



CHAIR—Take me through the risk management process then, and I will home in on just one

issue. I have looked at the issues as they have been described in this paper, but I have not yet

had the chance to look through the other paper that cross-relates to this paper on national

consistency and that might answer some of my questions. But let us just look at one issue. Is the

CEOs Implementation Issues Group the correct title?



Ms Scollay—Yes, although it is being amalgamated now into a new committee.



CHAIR—And it was previously another name?



Ms Scollay—That is right; it was previously another committee.



CHAIR—Fine. Wasn’t one of the risks that group identified that the capacity of a number of

RTOs to comply with the ARF had not been tested?



Ms Scollay—I am not sure. I would have to take that on notice. That would certainly be an

area of risk if that were the case, but I do not think it was so directly specific.



CHAIR—My understanding is that one of the proposed treatments, in fact the only proposed

treatment, in relation to that risk which was rated at an H-level—I do not know if that stands for

high—is an audit of all RTOs. Are we moving away from that sort of approach here?









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Ms Scollay—No. I did say at the estimates hearing that we were reluctant to have too much

of a discussion about the risk issue unless we could do that in camera. In any system I have

worked in where you have analysed risk, one of the things you do not do is then publish those

areas of risk, necessarily, because from a systems point of view it may not be clever to do that.



CHAIR—I think we are still speaking fairly generally. The proposition that has been

canvassed is that all RTOs be tested, but the approach here seems to be to come at it a different

way.



Mr Byrne—There has been quite a backlog of RTOs since the ARF started that have not yet

been audited.



CHAIR—Is that a resource issue?



Mr Byrne—Yes, but the states are committed to auditing all the RTOs and most of them are

either completed or well past the halfway mark in getting there. When an audit of all RTOs has

been completed, and even if that is done periodically, there is still going to be a need on a risk

basis to have a targeted approach to RTOs. A regular, periodic audit will not necessarily pick up

all issues.



CHAIR—So we do still have a system objective that all RTOs be audited?



Mr Byrne—I believe so. I believe all the states and territories have committed to it.



CHAIR—I have not found that in this paper yet.



Mr Byrne—I do not think it is in the paper.



Ms Scollay—It would not be in that paper that was tabled. It was a very general paper that

was tabled at the MINCO.



CHAIR—Ms Scollay, if I understand you correctly, if we want to have a more detailed

discussion about risk management, you would prefer to do that in camera.



Ms Scollay—That is right. In relation to the process of risk management and audit, it may

well be an ongoing resolution on the part of those who are looking at this closely that there need

to be regular or at least one-off audits of all RTOs. But, if you really follow the risk

management approach through to its logical conclusion, you might audit some many times and

you might audit others extremely infrequently—if at all, if we are clever enough with the

criteria that we get to over time.



CHAIR—And unreliably?



Ms Scollay—Yes. At the moment, I believe that there is still a resolution to continue to audit

all providers, but I think the better we get at being sophisticated about this, the more we need to

focus on areas of risk and not waste resources on areas where there is no risk. And that is

exactly why you do this risk assessment: in order to know how to allocate your resources.







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CHAIR—Yes, but the commentary on this issue has been, for instance, that currently

stakeholders become confused about the ARF and its standards, confidence in ARF falls,

quality of training falls, national employers leave the system. You are saying to me that we are

still—



Ms Scollay—That would be a risk analysis. That would not be what necessarily is going to

happen.



CHAIR—I appreciate that.



Ms Scollay—We need to really be careful with that context.



CHAIR—Yes, I appreciate that. But what I am saying in relation to the risk analysis is that

one of the things it seems to be crying out for is some clarity or some public message about the

quality of risk management. That does not seem to be coming through in this paper. That

comment about a desire that ‘all RTOs be audited by’ is not here.



Ms Scollay—That is at the next level of detail, I think you will find, Senator. We certainly

did not—



CHAIR—I appreciate that it may be at the next level of detail, but it is not dealing with the

risk that has been identified, which is that stakeholders, if they are not hearing that message,

continue to have poor confidence in the system. If you are going to be changing the approach to

heighten the emphasis on quality and risk management, then that message needs to be stated

strongly up front.



Ms Scollay—Absolutely, yes.



CHAIR—As I said, if it is the case that there is an expectation on the states that all RTOs be

audited, at the moment this does not say it.



Ms Scollay—Yes. The states and territories would know what the current situation is at the

next level of detail because—



CHAIR—But that does not get the message to the stakeholders.



Ms Scollay—No, that is right. And part of the strategy would be to make sure that the

stakeholders know. There has to be a close working relationship with RTOs. They need to know

what the audit standards are, what the expectations are, how often they will need to be audited

and what the documentation requirements will be—so that we are not running a ‘gotcha’ system

of auditing here. They have to be absolutely clear as to what standards are expected of them and

the ways in which it will be approached. They need to know what is coming and what

evidentiary requirements they will be required to produce. At the moment, we are working with

the states, territories and the Commonwealth on a best practice guide that is collaborative across

all the auditors, across all the states, to get some uniform standards here. That is one of the

resolutions that we will be pursuing that came out of MINCO.









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CHAIR—What is the time frame for that?



Ms Scollay—That is one of the things that should be done by November MINCO.



Senator CROSSIN—I am interested to find out from you ANTA’s view about the paper that

was tabled, you say, by the New South Wales government last Friday. In fact, they gave

evidence this morning that they tabled it on behalf of all of the other states and territories albeit

South Australia reserved their position. What is your view about some of the aspects that are in

that paper? I am assuming you have seen it.



Ms Scollay—I have seen it. I do not believe it is my place to comment on that, Senator. The

next ANTA agreement is something which is negotiated around us, around ANTA, and I am not

in a position to comment.



Senator CROSSIN—In that paper, they outline a number of five core elements that they see

might go towards improving the system. Are those five elements similar to where you want to

drive the system by, you say, ambitiously, the end of the year?



Ms Scollay—I would not want to be commenting on their specific document. I did hear this

morning some of the evidence from New South Wales. In terms of consistency and quality,

there would seem to be a somewhat common agenda there.



CHAIR—Ms Scollay, there has been a fair amount of fresh documentation put before the

committee. In one sense, it is unfortunate that the next estimates are not until the end of the year

and we cannot combine two processes to prevent an element of duplication. At this stage, I have

not pursued going into some details where we might need to go into camera. That is a matter for

the committee to discuss to see whether we want to go further. It might be an avenue on which I

might seek to have less formal dialogue with you. We appreciate what you have put before us

today, and we appreciate your many appearances on the many issues that we will be reporting

on. It is inevitable that our timing does not necessarily conveniently coincide with the timing of

other matters. I am sure the dialogue will continue. Thank you for your appearance today.



Ms Scollay—Thank you, Senator. We are happy to help in whatever way we can on an

ongoing basis. If there are issues arising out of the documentation we have tabled today, we are

happy to give you more information.



CHAIR—The committee might seek that you deal with some issues on notice.



Ms Scollay—Yes, sure. We have got some other documents to table as well which we had

foreshadowed, which we can do outside of this if you wish.



CHAIR—Yes, that is fine.









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EWRSBE 834 SENATE—References Wednesday, 5 July 2000









[2.40 p.m.]



BENNETT, Ms Barbara, Assistant Secretary, New Apprenticeships Branch, Department

of Education, Training and Youth Affairs



MANNS, Mr Roderick Glen, Assistant Secretary, Vocational Education and Training

Reform Branch, Department of Education, Training and Youth Affairs



THORN, Mr William, Assistant Secretary, Research and Evaluation Branch, Department

of Education, Training and Youth Affairs



WALTERS, Mr Colin John, First Assistant Secretary, Training and Youth Division,

Department of Education, Training and Youth Affairs



WHITE, Ms Lorraine Susan, Assistant Secretary, Pathways Programs Branch,

Department of Education, Training and Youth Affairs



CHAIR—Welcome. I invite the department to make an opening statement on issues that may

be relevant to the committee since your last evidence, and then we will move to questions.



Mr Walters—We provided a short letter in the form of a supplementary submission to draw

attention to one or two recent developments. We do not have any other opening statement to

make.



CHAIR—Before we move to questions, there is one issue of perhaps a more technical matter

that I would like to deal with in relation to correspondence. Mr Walters, I think yesterday you

provided the committee with a copy of a series of letters sent out by Ms Bennett to witnesses to

this inquiry. Aside from pointing out to you the fine line that you tread in relation to the nature

of evidence brought before a Senate committee, I will alert you to the fact that this committee

will readvise the individuals to whom you have written of the status of the evidence they have

provided to date in relation to parliamentary privilege.



There is one point that I would like to follow up. For instance, in the first letter on the list that

I was given, from Ms Bennett to Mr Blandthorn, in the third paragraph she says:



I am very concerned that Commonwealth Incentives are appropriately paid ... I would be grateful if you would provide

me with further details to allow the Department to follow up on these claims.



The reason I query this is that there was some evidence provided to the committee in South

Australia, which I sought the secretariat to follow up on behalf of the committee, in relation to

comments that Commonwealth incentives had been misused and that the Commonwealth was

pursuing that matter. I understand from a reported conversation between an officer of DETYA

and the secretary of the committee that, once the Commonwealth had handed over funds to the

states, DETYA had no role in monitoring the administration of the funds, nor was there any

provision in the states grants acts which allowed the Commonwealth to be reimbursed any









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Wednesday, 5 July 2000 SENATE—References EWRSBE 835





funds provided under the act, except in the case of where an overpayment had been made.

Could you confirm, firstly, that that information is correct?



Mr Walters—That does not sound as if it relates to the incentives scheme, which is paid

directly by the new apprenticeship centres to employers. Perhaps it relates to a different scheme.



Mr Manns—I can help you there because I believe I was the officer Mr Carter spoke to. My

recollection is that the conversation related to a training provider which had gone into

liquidation or had otherwise gone out of business. The question was about whether any of the

Commonwealth funds that would have found their way through the state training authority to

that training provider could be recovered. It had absolutely nothing to do with employer

incentives.



CHAIR—So then an assertion that the Commonwealth are now onto a particular practice and

that they are going around to people and saying that they want their subsidy back, and that this

is causing ripples all around the countryside, would not be accurate?



Mr Manns—As Mr Walters has said, you are talking about two entirely different funding

sources. The subject of the conversation between Mr Carter and me related to the funds that are

passed to states and territories through ANTA for the purpose of supporting all kinds of VET

delivery. We pass $920-odd million to the states and territories each year. My answer to that

question was in relation to those funds. Under the act, those funds are passed to ANTA for

allocation to the states and territories. Neither ANTA nor the Commonwealth department has

any direct relationship with any individual provider. The funds are mixed up with the states’

own VET funds and allocated by the state, and any contractual or other arrangements are

between the state training authority and the training provider. The funds you seem to now be

talking about are the employer incentives, which the department pays direct to employers

through new apprenticeship centres and where there is clearly a direct relationship between the

recipient of those funds, namely the employer, and the department—a connection which the

department seeks to pursue in appropriate circumstances.



CHAIR—There has been no suggestion that it is not appropriate—let me put that straight at

the moment. You are saying, then, that these letters and the evidence that you have identified

from Mr Blandthorn, Ms Vijars, Mr Norris, Ms Sykes and Ms Burrow all solely relate to

NACs?



Mr Walters—To employer incentives.



Ms Bennett—They are in relation to employer incentives. They were in relation to the public

evidence that was provided to this committee. As with past practice—Senator Carr has

previously referred matters to us, as has the Queensland government—when issues are raised

where there is a suggestion that there has been an abuse or that obligations have not been met

that entitle someone to those moneys, we have sought further information that would allow us

to investigate those claims.



CHAIR—So you assert that the difference with this South Australian example is that the

funds there were not—







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EWRSBE 836 SENATE—References Wednesday, 5 July 2000





Ms Bennett—A direct payment.



CHAIR—So any suggestion in evidence to the committee that the Commonwealth was

pursuing those funds is confused with the NACs payments?



Mr Walters—Apparently so.



Ms Bennett—The payments to employers, specifically.



Senator CROSSIN—Ms Bennett, you are aware that the people you have written to have

provided to us in submission form information that they have made available to us under

parliamentary privilege?



Ms Bennett—Yes.



Senator CROSSIN—What legal protection can you then offer these people if they respond

in fine detail to the request that you have made?



Mr Walters—Having surveyed the evidence that was given to the committee, we considered

the question of what was the best course of action to try to pursue any suggestions that the

scheme had been abused. We took the advice of our senior legal adviser on this. It was

considered to be acceptable by the legal adviser to write and ask if people wished to put forward

any evidence that we could then go and investigate. Obviously, anything that they put forward

would be dealt with in the normal way, as would anything that was put forward to us suggesting

that there was something that needed to be investigated. It is entirely up to the people concerned

as to whether they believe they have anything that could form the subject of an investigation or

whether they wish to put it forward.



Senator CROSSIN—What is your definition of ‘in the normal way’?



Mr Walters—For example, from time to time, as Ms Bennett said, Senator Carr has put

forward things which he asked us to investigate, or Queensland has, or other people do from

time to time. We take them up, look at the facts, see if there is something to be investigated and

then hand the thing to our national investigations unit and they go ahead and investigate.



Senator CROSSIN—These people have not actually asked you to investigate that, have

they? These are just submissions that you have looked through, and you decided you would

handle it personally and write to these people. Is that correct?



Mr Walters—That is correct.



Senator CROSSIN—Why, then, is there not a paragraph in here alerting these people to the

fact that there is no parliamentary privilege provided to them now if they respond directly to

you outside of this committee process?









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Mr Walters—We took legal advice on the correct form of words to use, and that point was

not put to us. I am more than happy to take that suggestion away and discuss it with our legal

advisers. If they consider that it is a good idea, then we can write a supplementary letter.



Senator CARR—What, retract the letters?



Mr Walters—We can certainly add that paragraph—they might want to talk to the

parliamentary authorities—if it is considered to be necessary; I am just not a lawyer.



Senator CARR—Yes, I think you have acted in good faith. I am not suggesting otherwise,

and I do not think other senators are. It is just that there is a problem here about the protection

of witnesses before parliamentary committees.



Mr Walters—I accept what you are saying. We did take legal advice; that point was not

raised with us. May I take that away and raise it with our legal adviser?



Senator CARR—Yes. The problem with lawyers is that they do not seem to know very much

about parliament, and it is occurring again and again. I ask you to bear that in mind, particularly

with advice tendered on what documents ought be presented to parliamentary committees.



CHAIR—Just before you go on, Senator Carr, I should clarify also that in relation to the

other matter I have been referring to, in South Australian evidence, there has been a need to be

relatively cryptic because that evidence is in camera.



Senator CARR—Which is an even more serious problem.



CHAIR—But we will pursue, as a committee, clarification on some points that have been

made about Commonwealth subsidies and the pursuit of them.



Senator CARR—Before I start my more general line of questioning, I ask for an update, on

notice, please. The answer to question No. E428 in Senate estimates of 11 February 1999 went

to the numbers of persons in the off-the-job training provision—entirely on the on-the-job

training, if you like. I am wondering if that can be updated for previous years for the purposes

of this inquiry?



Mr Walters—Certainly. May I just say that certainly we will investigate and see whether we

have the data. If we haven’t, we haven’t.



Senator CARR—You know I will be back if you do not.



Mr Walters—Yes.



Senator CARR—So it is worth while having a look at it properly, Mr Walters. It is just that I

did ask the question in 1999 and I was told then that figures were available for 1996 and 1997.

We are not going to play any games here. Then you said that no data was available for 1998 yet.

That was on 11 February 1999, and I have not heard from you. I am anxious to hear from you.

For this inquiry, could we have the updated figures?







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EWRSBE 838 SENATE—References Wednesday, 5 July 2000





Mr Walters, I have been putting to you and your predecessors for a number of years now that

there are inevitable outcomes from this new VET system, the New Apprenticeships system in

particular, and that there would be a disastrous decline in quality and a decline in confidence in

the system amongst the people who are using it and the people who worked in it. You and your

colleagues have told me for three years that everything is basically fine and there are no major

problems. I put it to you that it gives me no satisfaction that your advice has been appallingly

optimistic. It is abundantly clear from all the ‘good news’ media releases from the minister and

all the ‘good news’ publications that you and ANTA have pushed out through the country that

the real situation is one of crisis. It has become abundantly clear from the recent ministerial

meetings that one thing that is central—and this is where the cooperation really begins and my

judgment ends—is crisis management. We have been told there are repeated requests for urgent

reports to deal with the question of quality assurance, and I can point to numerous documents to

suggest that—



Senator TIERNEY—Through you, Chair, will there be any question at the end of this

process?



Senator CARR—Senator Tierney, when you know something about it perhaps we will get a

question from you, but in the meantime let me ask my question.



Senator TIERNEY—We are eagerly waiting for the question.



Senator CARR—I put to you, Mr Walters, that there has been the sacking of various

committees and the setting up of new committees, there has been the changing of the various

memberships of your national committees, there has been a claim that you are going to further

strengthen employer involvement in the process—as if we have not got sufficient evidence to

date of what happens when you leave it to industry to run the vocational education system in

this country. I can point to a number of examples in the MINCO papers, as you would no doubt

be aware. I put it to you that section 11.2 on page 2, for instance, reveals to us, when we look at

the report on national consistency, that the provider recognition system under ARF has no

sanctions and cannot be effectively applied to registered training organisations in breach of their

registered requirements. I also put to you that the ARF is the cornerstone of the quality

assurance of your government’s new scheme. I would ask you again: how is it that, after

working on the ARF for three to four years, you discover, your department discovers, there is no

effective means of disciplining recalcitrant RTOs?



Mr Walters—You referred to confidence in the system. I think earlier sessions today and

yesterday referred to the report by Ms Schofield on the quality of apprenticeships and

traineeships in Victoria. She reports:



The vast majority of apprentices, trainees and employers value their experience and strongly endorse the system. 96% of

apprentices, 93% of trainees and 96% of employers (regardless of location or size or type of employee) would

recommend apprenticeships/traineeships to others. 97% would also employ apprentices/ trainees again.



Those are the sorts of results with which, in most government programs in terms of an approval

rating, you would honestly think you had died and gone to heaven. That is not to say that there

are not problems and issues. I do not think I have a lot to add to what Ms Scollay has already

said about the range of those problems and issues. The Commonwealth has played a leading







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Wednesday, 5 July 2000 SENATE—References EWRSBE 839





part, over the last few months, in trying to marshal the information and in driving ahead

effective means for dealing with those problems and issues. I might remind you of the opening

statement I made when we first appeared before this committee. I said:



... the Commonwealth has played, and will continue to play, a central role within the ANTA structure in promoting the

case for measures to strengthen quality controls and processes, and sees achievement of a high quality VET system as a

central purpose of the reform process overall.



That has been a consistent theme in our approach to these matters over the last few months, and

it remains a consistent theme for us.



Senator CARR—Thank you, Mr Walters, but I come back to the point. First of all, Ms

Scollay made some points about employer confidence in the system which were true enough.

You have drawn our attention to Schofield, in Victoria, about which she says, and I draw your

attention to this particular quote:



Deep-seated and widespread anxieties about poor quality training must be dealt with and a shared understanding of where

the system is heading needs to be developed.



That is also stated there, and there are numerous other examples where she points to gross

problems on the question of confidence. I ask you this question: how is that, after working on

the ARF for three to four years, you now suddenly discover that there is no effective means of

disciplining recalcitrant RTOs?



Mr Walters—In terms of the point made about RTOs, another point that is made by Ms

Schofield, I think on page 15, is that it could be estimated from the information provided by the

state training authorities that something like ‘one in 100 registered providers across the

Victorian system may not be meeting the existing standards for registration’. So I think it is

important to keep the scale in mind.



Senator TIERNEY—South Australia and Western Australia were the same as well.



Senator CARR—She also says that the system of registration in Victoria has a standard that

it is far too low. You say in your own papers from last Friday that the bar needs to be lifted, so

do not talk to me about the quality and the measurement on statistical terms of the numbers that

are there at the moment.



Senator BRANDIS—Please do not badger the witness, Senator.



Senator TIERNEY—I raise a point of order, Chair.



Senator CARR—I ask you again, Mr Walters: can you answer the question? Why is it that,

after three years—



CHAIR—Senator Carr, there is a point of order.



Senator TIERNEY—Senator Carr is badgering the witness. Call him into line, Chair.









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EWRSBE 840 SENATE—References Wednesday, 5 July 2000





CHAIR—Senator Carr, ask the question again, please.



Senator CARR—I would ask you again: after three years, why is it that you now discover

that the legal framework of the Australian Recognition Framework is basically flawed?



Mr Walters—I do not think I can add a great deal to what Ms Scollay has already said. The

legal opinion you are referring to goes back to a report which was presented to the ANTA chief

executives, I think last December, and that went to some initial concerns and work

commissioned several months before that. It has been a logical process in which the

Commonwealth has played a leading part in trying to make sure that the problems are brought

to the surface and are formally analysed. The fact that there is an issue about mutual recognition

and that there are issues about harmonising standards for audit, which Ms Scollay has already

talked about, does not mean that the state training authorities do not deal with providers. I think

you have heard evidence as you have gone around the states of a number of cases in which

providers have been deregistered.



I think the point Ms Scollay was trying to make was that we were trying to improve the

system across the board and reach a harmonised standard. Certainly, where standards need to be

raised, they should be raised. This is one of the issues you get in a federal system, where each

state and territory runs its own system but everyone is committed to trying to produce the

maximum amount and optimum amount of national harmonisation. That is the process we have

been working through. It has not been a sudden discovery; it has been something we have been

working at and that the Commonwealth has taken a leading part in over the last few months.



Senator CARR—A few months. When did you first become aware that there was a serious

legal problem with the ARF?



Mr Walters—I think to describe it as a serious legal problem with the ARF is to put a very

condensed version of the point. The problem we have got is actually applying consistent

standards across all of the states and territories. In terms of the legal basis, I think the legal

advice you have got has pointed out that that will be greatly facilitated by having a harmonised

and much improved legislative basis for the whole process. As you know, the minister himself

has moved for model national legislation on this issue and has tried to set a lead in that regard,

so we firmly believe in going down that path.



Senator CARR—Mr Walters, you have said that the Commonwealth has been leading this

process of reform and is coming to terms with the quality assurance issue. I ask you again:

when were you first aware of the legal difficulties with the ARF?



Mr Walters—The precise legal difficulties have been set out in the legal advice to which you

have referred which was presented to the chief executives not very long ago. That itself was the

result of an exercise that was set in train at the CEOs meeting last November, and that itself was

the result of work which was set in train some months before that. So it is a question of what

level of realisation that you are referring to, Senator. In terms of the full statement of what the

problem is and how to go about dealing with it, then that comes out of the legal advice which

we saw fairly recently.









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Senator CARR—What troubles me with that answer is that as of July last year this was

apparent. On the documents which I have got in front of me and which have been drawn to the

attention of this committee, it was July of last year. The minister of course spoke in July of last

year as well, and since then has been denouncing any attempt to draw attention to these issues

of quality assurance. He said, for instance, on 11 May 1999, that it was about ‘distortions,

untruths’ and that it was a campaign of ‘distortion, continuing misrepresentation’. Yet in July of

last year it was known that—in the words I see in various other points here—the legal

underpinning of the regime was to be seriously questioned. Again I come back to the point: at

what stage were you aware of how serious the situation was?



Mr Walters—I think we have all been aware from the very start that we were proceeding on

a basis of agreement between the states and territories to make progress on a whole disparate set

of legal issues. You heard from Mr Noonan who made the point that the legal underpinnings, if

you like, of the issues which we are looking at here vary from one state to another. They have

all got different structures. There was an issue of harmonisation which goes back to the very

start of the whole process. That is obvious. What we have been trying to do over the last few

months is to move the agenda ahead in terms of identifying the specific issues on which action

needs to be taken.



Senator CARR—We will press on. In 1.3 of the same document, we make another

discovery. Mutual recognition, which is very much the currency of the ARF in terms of the

training packages, has no fundamental legal basis to it as well. I am wondering how such a basic

proposition escaped your attention.



Mr Walters—I think Mr Manns can perhaps describe the history of this one.



Mr Manns—We know that the states and territories use different mechanisms for giving

effect to national agreements. It is a fact that the majority of the states and territories have used

their own legislation that predates the invention of training packages to implement training

packages. In a number of states that means that they use the existing provisions in their

legislation for the accreditation of courses and they treat training packages as if they were

courses and put them through that process. If you like, that is a bit of a work-around. It does

work. Training packages are available to clients in the system, but it is far from perfect and we

would like to see that improved. We would like to see legislation in the states and territories

make specific reference to training packages so it is much clearer to the world at large and the

process is more transparent and streamlined.



But it is not to say that in all cases these legislative problems have not been worked around. I

think the flavour of the minister’s resolution—and certainly the flavour of the Commonwealth’s

position—is that we are getting a bit impatient with work-arounds. We would like things to be

put on a more solid footing, a more transparent footing, one that gives more fulsome effect to

the series of resolutions that ministers have made over the last couple of years.



Senator CARR—What your documents actually say is:



There are deficiencies in these areas which have the potential to weaken client confidence in the system if swift and

comprehensive action is not taken to make reality match the promise of the national system.









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Mr Manns—I think that is exactly what I have just said: we are getting impatient with the

lack of transparency, with the fact that a lot of back office stuff has to happen, that people do not

understand to give effect—



Senator CARR—And at what point, Mr Manns, have you become impatient? Is this a new

discovery, a third discovery for the day—the Commonwealth is impatient?



Mr Manns—I think the Commonwealth’s impatience has been pretty much on the record for

at least the last several MINCO meetings.



Senator CARR—I notice that these reports that have been referred to today—Larry Smith’s

report and Kaye Schofield’s Victorian report—all draw attention to the same problem, that is,

that the education and training component—the education component particularly—is missing

from the system. I notice that Larry Smith reports that there has been a persuasive view amongst

trainers that the training packages are nothing to do with training; they are assessment packages.

I notice that education and training is to be replaced by coaching to achieve the minimalist

position of giving students an assessment tick against a myriad of competencies. I notice that

Kaye Schofield has gone to some lengths to warn about the disastrous effects on the training

outcomes of the ‘flick and tick’ approach to assessment. At what point do you think you are

going to raise these issues?



Mr Manns—I am not sure that there are any terribly new issues in all that, to be fair. There is

a range of comments there that you have relayed, which may or may not have validity. But I

think, as we have told this committee and the estimates committee on other occasions, and

ANTA has as well, there is a great deal of work going on in the national system. I heard Paul

Byrne mention this morning the continuous improvement process for training packages. I am

sure we have mentioned to you previously—and I am fairly certain it was in our submission to

this inquiry—that there are a number of national strategic evaluations under way, one of which

is into the consistency of assessment. We certainly have actively, on the agenda of the National

Training Framework Committee, worked to examine the whole issue of key competencies,

generic skills and underpinning knowledge and whether it is adequately being addressed in the

delivery of training packages. So I take issue with any suggestion that these are not matters that

are taken seriously within the national system.



Senator CARR—I am drawing your attention to a couple of problems here. One is the

obvious difficulties with the registration and deregistration proceedings within the current

system. There is the question of mutual recognition; there are serious problems there. There are

serious questions about the level of confidence in the quality of the system, so much so that

MINCO has said it needs to lift the bar on the system itself. In all of that, where can we go to

find a proper auditing regime and a proper measure of confidence that can actually say that the

system is in fact built on quality?



Mr Manns—There is a lot in that question.



Senator CARR—There usually is, but given the time I have to pack a lot in.









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Mr Manns—It is important to distinguish between perception and confidence in the system

and what is actually going on. I think a great deal of evidence has been presented to the

committee to indicate—and I think it was said by Ms Scollay earlier—that states and territories

are taking auditing seriously. Great numbers of training providers are being audited. You have

evidence that says that action is in fact being taken against providers who are not meeting the

standards. There are providers actually being deregistered, and Kaye Schofield’s report in

Victoria gives you some figures on that in Victoria. That is not to say that all that is obvious to

outsiders outside the bureaucracy.



This is one of the very important rationales for the Commonwealth’s proposal that was

conveyed in the minister’s letter to state ministers on the ANTA agreement—that we increase

the public reporting of this process so that not only do we know that it is happening but it is

seen to be happening and the world at large can see that it is happening. I know the minister was

very pleased that at MINCO on Friday, notwithstanding the fact that there is still work to be

done on the ANTA agreement, state and territory ministers agreed to at least go part-way and

establish the National Training Quality Council, which would have this very role.



Senator CARR—Yes, let me come to that. You drop it on the table on the Friday morning;

ministers do not know about it until Friday morning. That is the evidence we have heard from

the departmental officials from the states today. You basically say there is going to be a whole

set of new protocols, which presumably has been discussed at some other forum. How can you

expect the states to have any confidence in that system when you just demand of them such a

proposition on the Friday of the meeting?



Mr Walters—A number of witnesses you have spoken to over the last two days commented

on this. I think both Mr Noonan and Ms Sussex made the point that this was not a particularly

unusual way of proceeding. Obviously, in any process of evolution their ministers will decide

how they want to play things. The fact of the matter is that there was consultation. The minister

raised this at a ministers-only meeting, and it was adopted unanimously by a resolution. It was

not something imposed on the states; it was something that they chose to adopt.



Senator CARR—I see.



Mr Walters—I might also add an additional comment to Mr Manns’s answer to your last

question. It is necessary to keep some of these things in perspective. If one looks at what Ms

Schofield said overall about the Victorian system, she said that the management of the Victorian

apprenticeships and traineeships systems has a number of important strengths. Its end users are

well satisfied with the services currently provided. The majority of RTOs are delivering services

according to their contractual and other obligations, the provider audit and review program is

being continuously improved, the legislative framework is essentially in place and many aspects

of administration of the system are reasonably efficient. What we are talking about here is

trying to improve on what we already have.



Senator CARR—That is right. But she also said that current standards for the delivery of

training are inadequate, that registration audits and audits of workplace training are inconsistent

or inadequate, that breaches of registration are not being dealt with, that 46 per cent of trainees

and 34 per cent of apprentices are not sufficiently challenged by their training and that fully on-







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EWRSBE 844 SENATE—References Wednesday, 5 July 2000





the-job training is not sufficient to develop the broad range of skills required to pursue a career

in a particular industry. So let us get these things in perspective, as you say. I am coming back to

this proposition: how can the states and institutions expect to plan for and provide training and

an educational service to 1.8 million Australians with any confidence for the year 2001 when

they have no agreement at this point and are not likely to get one at least until November of this

year, at the very minimum?



Mr Walters—The point that the minister made at the open part of the session—which we all

attended—was that the Commonwealth was offering an assurance of real-terms funding for the

three years ahead. The states now know that they have got that, and that gives a remarkable

degree of planning assurance. I think the minister posed the question: how many state treasuries

would offer a similar assurance in terms of three years ahead?



Senator CARR—We have your working documents which mention a growth rate of 2.8 per

cent, and we have the ANTA CEOs predicting growth of up to 5.7 per cent, without including

VET in Schools. You have your marketing strategy, which appears to be suggesting that you are

actually looking for a greater number of students to enter the system, and you are now saying

that there are no growth moneys to fund the system. Why should the states accept that as a

proposition?



Mr Walters—The states have not, and there is indeed a process, which Ms Scollay described

to you earlier, by which there will be further discussions on that subject. I do not think I can

usefully add to the very long discussions we had last time around on the subject of the demand

paper and the various figures that come out of that. The only comment I would make is on the

marketing strategy which you mentioned. On that particular issue, there are two focuses. One is

on employers and seeking to increase employer interest in training options and skilling the work

force. The second is aimed at the kids who might give it away—part of the clientele who are at

risk of dropping out and who have been a concern to all of us. It is not actually aimed at getting

more kids into the system; it is aimed at making sure that those who are there make the best of

the opportunities they have got and do not drop out.



Senator CARR—Mr Walters, I do not see how you can expect the states to work in a

cooperative way with the Commonwealth when there are press releases such as the one issued

last Thursday by Dr Kemp attacking the states’ growth. Are you aware of that press release?



Mr Walters—I am aware of that press release.



Senator CARR—Are you also aware of the comments that have been made by all the states

in regard to the figures used in that press release?



Mr Walters—I am not aware of all the comments; I am aware of some of them.



Senator CARR—You would be aware of the ones that have been made here through the

proceedings of this committee. Are you aware of those?



Mr Walters—I have heard some of the comments which some of the witnesses to the

committee have made.







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Senator CARR—You are also aware of the NCVER comments about the misuse of their

statistics?



Mr Walters—I do not believe that Mr Robinson made that comment.



Senator CARR—He said that he was not responsible for the misuse of the statistics.



Mr Walters—He said he was not responsible for the statistics, but, to the best of my

recollection, I do not think he implied that there had been any misuse of them.



Senator CARR—I beg to differ, Mr Walters, particularly on the question of, for instance,

Victoria’s growth rates, which were attributed to Victoria in that press release.



Mr Walters—I am not sure what the question is.



Senator CARR—I am saying to you that the NCVER have challenged the minister’s press

release. This is the question; how do you think you are likely to get the states to agree when

such provocative, distorted and plainly untruthful statements are made in the run-up to an

agreement?



Mr Walters—What the press release says is that since December 1999 commencements in

Victoria have fallen by 10.9 per cent and, looking at the NCVER statistics, that appears to be

correct. I think the issue which was raised was whether that was the most appropriate statistic to

use or some other time frame, but that does not dispute the fact that that particular figure comes

out of the NCVER statistics. In terms of cooperation, we did not have any indication after

Friday that the states were not perfectly willing to cooperate in the processes that they had all

agreed on, bearing in mind that the process for looking at the ANTA agreement and the

processes associated with the National Training Quality Council, and everything to do with that

long resolution, were all adopted by ministers unanimously. So there is no suggestion that they

were not prepared to go along with them.



Senator CARR—I think we all understand the processes of MINCO. We also understand

that most of this has been driven by a top-down approach by the minister’s office. My point to

you is that, in all of this crisis management that has actually developed in recent months, where

can we look to find any real proposal, any serious proposal, to address the fundamental

problems that are impeding the development of the Australian Recognition Framework? I

emphasise to you that I am a strong supporter of an effective national vocational education

system and, as a concept, I think the ARF is a very good idea. My concern is the failure of the

system to actually deliver. Where can I look to find action that is being taken to actually

strengthen the ARF in terms of the criticisms that have now been raised?



Mr Walters—I think resolution 4 from last Friday presents a reasonable record of the main

actions in tow. As I recall, you asked Ms Scollay whether she felt that all of the main problems

and issues that had been identified were now being addressed. My recollection is that she said

that the answer was yes. Obviously, we will look forward to seeing whether the committee in its

report identifies anything that we have not picked up.









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Senator CARR—I understand the government has some questions.



Senator TIERNEY—I would like to return to the issue of RTOs and the way in which in this

hearing we have heard some anecdotal evidence that there were problems. We did hear from the

states of Western Australia and South Australia, which had done extensive audits, about the

problems of RTOs showing up somewhere around one or three per cent. I believe, Mr Walters,

you were presenting evidence earlier that in Victoria it is showing up in about one per cent of

problems. Can you elaborate on that a bit?



Mr Walters—I was simply quoting. We ourselves have only just received the Schofield

report. If you look at page 15, taking the figures from the state training authority itself, she says:



... something like one in 100 registered providers across the Victorian system may not be meeting the existing standards

for registration.



There are 1,015 private training organisations registered in Victoria, so one in a hundred comes

to about 10.



Senator TIERNEY—Given that this is a relatively new approach, would you say that a 99

per cent success rate is a reasonable sort of outcome?



Mr Walters—That would be one interpretation. I would not like to finesse Ms Schofield’s

recommendations any further than simply reporting to you what they are, and I think the

committee should be aware of them.



Senator TIERNEY—We have now got very hard evidence from Victoria, South Australia

and Western Australia. We did question New South Wales earlier on; they are halfway through

their audit process, so they have not got their final results yet. But Victoria, South Australia and

Western Australia add up to more than half the VET system. It seems to be showing that,

although there are some problems, they are not significant in terms of scale. The problem that

we have in these hearings is that we get anecdotal evidence here and there: is it one per cent, 10

per cent or 50 per cent of the system? We do not know. It now seems to be tying it down to a

relatively small number of problem providers at a stage when the system is still in its early days.



Mr Walters—It is certainly interesting that that is the conclusion that has come out of Ms

Schofield’s report. I think all the preceding discussion indicates the commitment of the

Commonwealth to national consistency which ensures that high quality standards are

maintained.



Senator TIERNEY—A little earlier on Senator Carr was critical of the federal involvement

of your department in an auditing process in relation to RTOs. Could you clarify for the record:

whose responsibility is it to audit RTOs in terms of the levels of government?



Mr Manns—The states and territories.



Mr Walters—It is the states and territories, yes.









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Senator TIERNEY—That is right. And, looking at the evidence we have received, could

you perhaps confirm or counter the impression that we on the committee have received that the

states seem to be very much aware of their responsibilities in terms of an audit process and are

carrying out very thorough audit processes into RTOs across the country? Is that your

impression?



Mr Walters—Certainly all the discussions which have taken place in the various ANTA fora

recently have suggested that they do, indeed, take that responsibility very seriously. Most of the

discussion has been around how you can better coordinate those activities and maintain

common standards, and how information available in one jurisdiction can be made available in

another—that kind of coordination issue.



Senator TIERNEY—Would it be realistic to expect the federal government to be able to

carry out an audit process across RTOs?



Mr Walters—Auditing as such is not something which the federal government currently has

the power or the machinery to undertake.



Senator CARR—But hang on! In regard to the ESOS Act, is it not your proposal that the

Commonwealth have powers to intervene in VET programs involving overseas students?



Senator TIERNEY—That is the international.



Mr Walters—My understanding of the ESOS procedure is that the lever which the

Commonwealth has in that particular instance is the registration of the provider on the relevant

database—the name of which my colleague will perhaps remind me of.



Senator CARR—CRICOS?



Mr Walters—CRICOS, yes.



Senator CARR—That might be the case, but I make the point on the principle that, if the

Commonwealth can intervene on that issue, what is to stop the Commonwealth taking a broader

view of its responsibilities, since you are so impatient?



Mr Walters—The issue is what legislation is available and what heads of power are

available, and you simply have to look at those on a case-by-case basis.



Senator CARR—What about the question of section 92, ‘free trade amongst the states’?



Mr Walters—That is a constitutional issue. Not being a constitutional lawyer, you will

forgive me if I do not engage in debate on that particular issue today.



Senator CARR—Particularly given the quality of the advice you have tendered so far on

legal issues.









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Senator TIERNEY—I turn to the issue of financial incentives for employers’ support for

participation in the VET system. There has been a number of allegations at these hearings about

abuse of incentives being widespread. I draw your attention to 13.5 in the ACTU submission. I

would like to quote that and get your comment on it:



Overall, the ACTU submits that financial incentives are a significant factor in gaining employer support for participation

in the VET system but they do not result in substantial numbers of employers utilising the system simply in order to

access the incentives.



That is the ACTU's view. What is your view of the way the incentive system is working?



Mr Walters—I think that is an interesting view, particularly given the close involvement that

the ACTU have had with the development of the training framework and other aspects of the

system. I notice that again Ms Schofield says in her report:



The provision of Commonwealth and state incentives and subsidies has a positive bearing on employer involvement with

apprenticeships and traineeships. Incentives have encouraged many employers with no training history to become

involved in the formal VET system and through additional targeted Commonwealth and now State government

incentives, the access of those most disadvantaged in the labour market has been enhanced.



Those expressions of support for the system are something I think we should take note of.

Nevertheless, I would like to repeat, as we have done in the past, that any instances where there

is a suspicion that the incentives regime may be being abused is something we take very

seriously and will want to look into as carefully as we can. We do investigate and look at any

instances of that sort which come to light.



CHAIR—Senator Carr, you have some questions on notice, have you?



Senator CARR—Yes, a whole series of questions on notice.



CHAIR—This concludes the public hearings of the inquiry. We thank you for your

attendance.



Committee adjourned at 3.26 p.m.









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