Changes to VET Regulation aim to Improve ASQA’s Function

On 30 March of this year (2017), the Commonwealth Government introduced a package of bills designed to improve the Australian Skills Quality Authority's (ASQA) regulatory functions. A review of ASQA’s fees and charges scheme has shown that there is a risk that annual registration fees may be characterised as a tax, and therefore need to be collected under separate tax legislation. Since its establishment in 2011, ASQA’s regulatory approach has shifted to include a diverse range of techniques encompassing intelligence collection, and data analysis. ASQA’s risk based approach is now heavily dependent on these activities, and the bills aim to better resource ASQA to continue undertaking these compliance monitoring activities.

Legislative function

The Bills include the

• National Vocational Education and Training Regulator Amendment (Annual Registration Charge) Bill 2017 [CTH]; and the 
• National Vocational Education and Training Regulator (Charges) Amendment (Annual Registration Charge) Bill 2017 [CTH]

Both Bills propose to amend the National Vocational Education and Training Regulator (Transitional Provisions) Act 2011 (CTH) and the National Vocational Education and Training Regulator Act 2011 (‘NVETR’) (CTH).

The NVETR Act originally established the National VET Regulator (NVR) with the goal of providing a cohesive regulatory environment for businesses, and increase certainty and protections for VET students.  The purpose of the amending Bills is to ensure that ASQA will recover the costs of compliance monitoring and intelligence analysis work, with the goal of protecting the quality of Australian VET. The bills include provisions to ensure that VET providers will be notified of amounts owing , timeframes for payment, and refunding arrangements.

Another purpose is to ensure that the annual registration fees collected from NVR registered training organisations (RTOs) and other providers who are listed on the Commonwealth register of Institutions and Courses for Overseas Students (CRICOS providers) are underpinned by constitutional authority under s 55 of the Constitution. 

ASQA Background

ASQA was established in July 2011 for compliance monitoring and registration purposes as a regulator of RTOs and accreditation of courses. However, since then, ASQA has shifted its regulatory focus to a risk-based approach which depends on data analysis and intelligence monitoring to improve the quality of the VET sector. While ASQA has not commented on the proposed legislative changes, earlier this year in response to criticism, ASQA Chief Commissioner Mark Paterson highlighted that the system had been shifted to a risk-based system to improve monitoring of service providers. His comments also highlighted that ASQA’s operations were limited by its reliance on powers referred by the states. This is in contrast to either similar regulations such as fair trading agencies or the Australian Competition &Consumer Commission.  

Government purpose

MP Karen Andrews, Assistant Minister for Vocational Education and Skills, stated that:

The changes are part of a wider programme of reform, which focuses on the student experience, practices and behaviours of providers, use of risk intelligence and increased student input through interviewing, surveys and focus groups.

Australian National Audit Office (ANAO)– Audit Report, December 2016 'Administration of the VET FEE-HELP Scheme'

The ANAO tabled a report for the purposes of learning from the impact of the now defunct VET FEE-HELP scheme. The report found that the scheme led to a blowing up of costs, and crucially, the Department of Education and Training was found to not have worked effectively with ASQA and ACCC to ensure effective regulation.

In a media release on the 3 April 2017, Mr Paterson said:

While the legislative changes are enabling in operation, they must be supported by other legislative changes that will enable ASQA to more effectively regulate the VET sector.

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Explanatory Memorandum, National Vocational Education and Training Regulator Amendment (Annual Registration Charge) Bill 2017 [CTH], as reproduced in TimeBase LawOne.

Report No. 31 of 2016-2017, Australian National Audit Office, "Administration of the VET FEE-HELP Scheme," December 20, 2016.

Second Reading Speech, National Vocational Education and Training Regulator Amendment (Annual Registration Charge) Bill 2017 [CTH], as reproduced in TimeBase LawOne.

Media Release, Karen Andrews, "ASQA’s student centred audit approach receives widespread support" 3 April 2017.