VOCATIONAL EDUCATION AND TRAINING (COMMONWEALTH POWERS) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 19 October 2011.)

Mr PISONI (Unley) (10:33): I indicate that I am the lead speaker for the opposition on this bill. The opposition is supporting the bill. We will probably raise some questions, particularly about fees, if we have an opportunity to do so during the committee process, or the minister may wish to answer those questions in his response to the second reading.

The Vocational Education and Training (Commonwealth Powers) Bill 2011 follows on from the 2009 COAG agreement on the establishment of a national regulator with powers to register training organisations and accredited courses. This bill is further to the Training and Skills Development (Miscellaneous) Amendment Bill passed in South Australia earlier this year, with the support of the opposition.

The necessity of the earlier bill was queried at the time, as the current bill was in the pipeline and soon to be introduced. As you may recall, the bill itself came through the parliament in a speedy manner after the collapse of the Adelaide Pacific International College (APIC), which was situated in Currie Street. This was despite a number of state-based audits of the organisation. A whistleblower who had worked at the organisation approached the opposition with concerns.

He was not the first, of course, to raise those concerns. Concerns were also raised by the Motor Trade Association about the qualifications being offered. The Motor Trade Association is not just, of course, a training organisation, but a representative organisation of those who actually run businesses in the automotive trades, whether they be service stations, petrol outlets, automotive dealers—new and used—spare parts and other areas in the automotive industry who simply could not see that the college itself could possibly be offering the types of courses that would entice them to employ any of its graduates here in South Australia.

Those concerns were ignored by the then minister, Michael O'Brien, and dismissed by the minister who replaced him (Jack Snelling) as simply being a difference of opinion in the way that the training should be carried out. Of course, the Motor Trade Association was proven to be right when it was, in fact, discovered through the media campaign that was conducted with the ex-employee and the Liberal opposition that it was nothing more than a scam.

It was a scam for Indian migration. Many of the students were not participating at all in the courses; many were driving taxis, and one of the owners of the college owned up to 100 taxi licences here in South Australia. Many of the allegations were that many of the students were forced to drive those taxis, many of them without being paid, in order to retain their student status to remain in South Australia with the hope, of course, of getting permanent residency here in South Australia.

The surprising thing about that was that the APIC organisation did, in actual fact, pass several state-based audit programs. They did not have equipment. Students were sitting on the floor, and I have seen photographs of students sitting on the floor being lectured in an empty building. Many of them were working on repairing taxis as their hands-on experience through the APIC college. That is now history, of course, and we have seen changes at a federal level and at a state level in order to help deal with that situation. This bill will move the registration of training organisations and the administration to a federal body.

There have certainly been concerns with some other organisations here in South Australia, where we do not have as many VET training courses run by the private sector particularly targeted at international students, such as those you might see in Melbourne or in Sydney. However, we certainly do have a number of them, and I have had people contacting me about such colleges.

I note that, despite all the fanfare made by the previous premier, Mr Mike Rann, announcing from India the arrival in Adelaide of the Indian Business School, after less than two years that school has announced that it is now moving out of South Australia to expand its interests in India. The opportunities they expected were not here and that school has now closed. Ironically, across the road from APIC in Currie Street, you will find that the floors the business school vacated are now empty.

The bill will allow the transfer of South Australian powers through the adoption of the commonwealth National Vocational Education and Training Regulator Act 2011 and the National Vocational Education and Training Regulator (Transitional Provisions) Act 2011 with the intention for the regulator to operate under a referral of state powers. However, I note from the briefing eventually organised by the minister, that the bill is being marketed as an adoption rather than a referral, this being a result of the process whereby New South Wales passed the bill initially, which allowed the commonwealth legislation that it is hoped the states will now adopt.

The bill refers to the ability to amend to the commonwealth, the proposed referral of power that is appropriate, and that it is limited and revocable by the proclamation of the Governor. Our opinion is that the amendment of the national law within the commonwealth's original or referred jurisdiction is also appropriate, but there is an ability for those states which participate in the national scheme to veto any changes to the bill, so it still enables an inclusive process. There are some concerns that have been raised by a small number of stakeholders regarding fees and charges with the new regulator, but we will cover that a bit later in the debate.

My understanding of the mechanics of the way that this is adopted, or how referred legislation will work in relation to other states going down the same path, is that South Australia can terminate an amendment reference that is unacceptable, but that this will not in effect veto all jurisdictions in relation to the proposed amendment. Victoria and Western Australia, who did not sign up to the original COAG agreement, will be a non-referring power, however in order to ensure consistent application to national standards, I understand, moreover, that it is agreed that any RTO wishing to operate in more than one jurisdiction will still need to be registered through the national regulator. So, in those states we will actually be seeing two regulation processes—state and national.

Funding for the national VET regulator, we are told, will be provided by the commonwealth for the next four years, after which it will be maintained by a cost recovery, and this is where some—particularly Group Training Australia—have concerns about increases in costs. Perhaps the minister might address anticipated costs under the new scheme to providers—registered training organisations—as to what modelling or information he may be able to inform the parliament that his department has done about the changes in the regulatory process, and what impact that may very well have on the cost for either students or, alternatively, registered training organisations themselves.

The cost recovery element of this scenario is something which has been raised as a concern by stakeholders. As I mentioned earlier, Group Training Australia has raised that concern with me, and it is something that the minister may wish to expand upon. I think that the assumption that a reduction in fee revenue being offset by reduced costs in regulatory activity will create a neutral effect on a budget may be a little optimistic.

We had some figures provided to members of the opposition after the briefing by the department that tell us that the savings from the transfer of regulatory services will be captured under the DFEEST restructure budget measure approved in the 2010 budget, and will result in a full year expenditure in the vicinity of $1.461 million in the 2012-13 budget, indexed in the out years. These savings have been captured under the DFEEST restructure budget measures approved in the 2010-11 budget.

The memo from the minister's office then goes on to tell us that with the transfer of functions to the National VET Regulator, DFEEST will no longer receive revenue of $0.422 million in 2011-12, $1.123 million in 2012-13, $1.483 million in 2013-14, and $1.453 million 2014-15, as this revenue will be received by the commonwealth. We also raised some questions of consultation, and I will cover those a little bit later in my contribution.

There are a couple of issues that I would like to touch on in regard to the consultation on this bill with stakeholders and the training sector and concerns that have been raised. In terms of the consultation, the Liberal opposition makes every effort to consult on legislation as widely as possible, given the very short notice we are often given between bills being tabled and debated in this place. We were left with the impression in our recent briefing that consultation in regard to this bill by the government had been sketchy, at best. Of course, I asked the minister's office for a list of those stakeholders that had been consulted, and I will come back to what came back from the minister's office shortly.

Feedback from stakeholders has unfortunately confirmed that the consultation process was, in fact, very narrow, if conducted at all. The minister's office has told us that extensive consultation with state and territory governments occurred prior to this agreement being reached (we all understand that) and subsequent consultation in South Australia has occurred across several government departments (that is not surprising), the Crown Solicitor's Office and the Training and Skills Commission.

Registered training organisations and relevant peak bodies, such as the Australian Council for Private Education and Training (ACPET) and TAFE Directors Australia, have also been consulted by both state and commonwealth governments in the development of the national regulatory scheme, the legislation for the national regulator, the fee schedule, the national regulator and the legislative instruments for the standards for regulation.

In fact, the Australian Council for Private Education and Training, the main body that represents private RTOs who will be affected by this bill, were not consulted by the government. I can quote from the response by the executive officer to my letter inviting their views on the legislation. He wrote:

Dear Mr Pisoni,

Thank you for sending me a copy of the Vocational Education and Training (Commonwealth Powers) Bill 2011 for comment by the Australian Council for Private Education and Training. This is the only time we have had the opportunity to see or comment on the bill in South Australia so your consideration of the private sector view is very much appreciated.

If you read between the lines of the response from the minister's office, you can see that, whether on purpose or otherwise, they omit to discuss consultation of the bill itself with the Australian Council for Private Education and Training. I find it difficult to understand, if consultation had occurred with that organisation prior to the bill being drafted, why a draft bill was not presented to them for comment prior to it being brought to this place for debate.

Group Training Australia, again, have raised concerns, and they represent a major number of not-for-profit organisations, in particular, such as the MTA and those in the building and hospitality industries—a wide range of industries—who provide apprentices for host employers, and a host employer of course is a business that then contracts with one of the organisations that are member partners of Group Training Australia to hire one of their apprentices while the member of Group Training Australia (for example, the Motor Trades Association or Peer Veet, which is another) take the responsibility of placing that apprentice. The four-year contract or commitment is with them.

It is a very good system. It works particularly well for small businesses that may not be conducting their businesses in a full range within the trade. For example, there may very well be an auto company or a mechanics company that simply services automatic transmissions, and, of course, an apprentice working there would get a very limited understanding of other parts of the motor trade industry in terms of completing their apprenticeship over four years.

What the group training enables them to do, of course, is to move that apprentice to other organisations so that they may then move to a general dealership for 12 months and get some valuable and broader experience in their training. They may move into other areas in the motor trade industry to help broaden their ability to train. It is particularly important for those in hospitality, which is very much a people business. Group training employees can move from a hotel to a fine restaurant to a cafe, for example, to get a broad range of experience in the hospitality industry.

It is a great system. I am very pleased because this is a result of the pressure that was put on by the Liberal Party in the lead-up to the last election when we announced that we would remove the payroll tax requirement for apprentices who are employed under group training. In other words, we released a policy that would exempt the calculation of payroll tax for apprentices in South Australia, and that was immediately copied by the Labor Party.

Ultimately, the Labor Party was successful in winning the election with that policy, but it did try to delay the implementation of that from 1 June last year to a potential—but not confirmed—start date of 1 January this year. We got wind of that, of course; and, if you read it, the memo suggested that, when January came around, it might be time to review that situation again—in other words, not allow for that promise to be delivered.

The former minister, the Hon. Paul Holloway in the other place, was acting treasurer at that time, and I think that his excuse was that he signed it without looking at it. That is how that delay got through, according to the minister, if you believe what the minister said. I think that South Australians understand that the Labor Party are masters of saying one thing at election time and doing something else after, and that was just another example.

Of course, it is important that we keep the costs of training down, and that is why Group Training Australia has raised concerns about what the new regulatory costs may very well be. Employers are put between a rock and a hard place when it comes to employing apprentices. They have substantial training costs they need to meet. It is not just the cost of the salary of the apprentice, it is the cost of the tradesmen who are working with them because they are not working at 100 per cent productivity and they are spending down time training the apprentice.

They may have to redo work that the apprentice has done and not quite got right. They are dealing with customers, of course, and customers demand the very best, as they should and as they are entitled to. It is a chicken-and-egg scenario: if you do not make that investment in training, you do not get the good tradesmen that South Australians have come to enjoy and expect, whether it be in the building industry, in the automotive industry, or whether it be in the hospitality industry.

I remember a company which made some very fine furniture here in Adelaide for approximately 22 years and which trained about 20 apprentices. I know that the customers of that business were very pleased to know that the trades were continuing in those areas, and they were very pleased with the workmanship that was delivered. I have to tell the house that, when an apprentice makes a mistake, it can be pretty costly for an employer.

I particularly recall in my case a customer ordering several king single beds. Anyone that knows about furniture knows that king single beds are not a popular item as a single bed, so you do not sell a lot of them. What is even less popular is what they call a long single, which is six inches narrower than a king single, but the same length. And this was not the apprentice's fault; it was the factory manager's fault.

Mr Venning: Name him.

Mr PISONI: No, I will not name him; he is a good tradesman, a very good tradesman. They ended up as long singles instead of king singles, so we were stuck with four unusual sized beds, and we had to eventually—

Ms Chapman: Could a man sleep in one of those? The member for Stuart?

Mr PISONI: Yes, the member for Stuart could have slept in one of those. The mattress was six-foot eight inches long, for a long single. Of course, these things happen and these are all costs that employers take on when they are training staff, so there is a cost pressure for employers. There is also the issue of the fact that apprentice wages are not terribly attractive. In these days, of course, apprentices do tend to start later. When I did my apprenticeship I started at the age of 16. These days, many apprentices are not starting until they are 18, and many of them, as I said, are not finishing their apprenticeships until they are 21, 22 years of age.

Many of them have already moved out of home, a difficult thing to do on apprentice salaries. That is another pressure that apprentices have. In order to deal with that you may argue that apprentice salaries need to be increased. In South Australia we have 96 per cent of our employees employed by small businesses. Those sorts of additional costs make it more difficult for small businesses to do the right thing and take apprentices on.

I have digressed there a little bit, Madam Speaker, and I am not strictly speaking about the bill, but it is a very relevant point about the pressures that employers have in taking on staff and why it is important that we do have consistency. Although we have many small businesses here in South Australia, we are very good at niche products and niche services. I think that has evolved over the years because South Australia is a pretty difficult market.

Anyone who has been in business here in South Australia would know that it is a difficult market. There is a well-known saying for many people producing consumer products in particular, who say that if it will sell in Adelaide it will sell anywhere, because we are a difficult market here in South Australia.

Before mobile phones you may recall the phone card was trialled in Adelaide. Adelaide was the only city to have a trial for the phone card that went into phone boxes instead of coins. I had no idea that it was a trial. I was travelling regularly to Sydney in those days. I remember going into the post office at Double Bay, or out that way, and asking to purchase a phone card, with the guy behind the counter looking very blank, not knowing what I was talking about.

Of course, I realised then that perhaps South Australia was trialling these, and not long after that they did become a product that was available nationally; but they were in fact trialled in South Australia. The tough market here in South Australia proved that phone cards would, in fact, work. People liked the convenience of them and then, of course, they were superseded not long after that by mobile phones.

Getting back to the consultancy or the consultative process of this bill by the government, it has been an inconsistent approach in this instance as it is with many things that this government introduces. On one hand they say that they want to consult and decide, but we are still seeing situations where it is announce and defend. I think in this instance it is disappointing that when I went out to consultation, as the opposition member, it was the first time a number of key players in the industry were aware that the bill had been drafted and had been presented to parliament.

The Australian Council for Private Education and Training generally supports the introduction of the national regulation to ensure consistency and certainty across state boundaries, but it has some concerns with regard to potential processing delays, for example, in requests for accreditation, registration or expansion in the scope of courses if dealing with a national body as opposed to a state body. That is understandable, but then again this state government does not have the best record, if we look at the way it handled the APIC situation.

Even now if you are looking at transferring your responsible persons accreditation from one establishment to another there is a $17 fee, but no-one tells you that it could take a minimum of a month or even up to three months before that transfer is enacted, which makes it very difficult for people moving from one workplace to another. I have had several calls to my office, concerned about this. I have spoken to the Australian Hotels Association. It is an important issue in the lead-up to Christmas, because we need to have responsible persons behind the bar, but if they are not having their applications processed in a timely manner one would have to ask why does it take so long; why is it such a difficult process? Hopefully we will not see that situation transfer to the federal level.

That reminds me of the situation of a Melbourne training organisation which has opened a branch office here in Adelaide and which took nearly two years to get accreditation in South Australia. I am sure that they would be very pleased to move to a federal system. I was quite involved in dealing with the registering authority here in South Australia, and it was difficult to understand the reason for the delay. As a matter of fact there was nothing wrong with the services that were being provided (they have been provided in Victoria and other states for 20-odd years in the area of health training: nurses, aged care and that type of area), yet for some reason what was satisfactory in other states was not satisfactory here in South Australia.

That it is an example where the national regulatory body will help the industry in South Australia to grow, whether from home-grown businesses that start off here (a husband and wife team, for example, that grows from there) or from an office of an interstate company moving and establishing itself here in South Australia. I would certainly welcome any new private provider starting up in South Australia or expanding to South Australia.

The Australian Council for Private Education and Training has raised other areas of concern about being impacted by regulatory changes, reporting requirements and red tape, which of course seems to be the hallmark of Labor administrations. It is hoped that these busy businesses and employers will be given a reasonable time to digest the new arrangements and conditions. We need to recognise that errors or omissions could happen and it would be nice for it to be a cooperative process to help those businesses transition, rather than a heavy-handed approach to those who may make a mistake.

Another area of concern raised by RTOs and training organisations was a belief that the fee structures could rise substantially, from the hundreds to the thousands in some cases. For RTOs, for example, fees apply when they add additional qualifications to their scope and they have their five-yearly mandatory audit. They will incur audit fees for the regulator to assess if the RTO has the ability to deliver a new qualification that it has applied for.

It would be of interest to know if South Australia's RTOs will be paying substantially more for these services after the transition than they are now. Other points to pick up on in regard to regulation and compliance are that the private sector is keen for the TAFE colleges to be transitioned from self-assessment and compliance to the same requirements as the RTOs, which is fair and reasonable. Those of us who support the private sector believe that when they are in fact competing with the government sector that they compete on equal grounds, that their competitors are not their regulators.

We saw that with changes to the early childhood and education bill, where we finally saw that the competitor for early childhood services in schools, DECS, was no longer the regulator of that industry or sector, and the regulator is now an independent body which has representation from across the sector. A further point is that staffing levels, training standards, service delivery and other resources are consistent across jurisdictions and meet the needs of South Australia. We would all agree that that is important, and it is of course to be hoped that quality outcomes in regard to compliance are higher than are currently being delivered through DFEEST, otherwise there would hardly seem any point. That is fair and reasonable.

Getting back to the APIC situation, that did pass a number of state regulatory audits, and one has to ask why. Let us hope we will see some higher standards. I believe that would be of interest to the minister to ensure that that be the case. Obviously there will need to be amendments and some changes to the Training Skills Development Act 2008 as a result of the commonwealth powers bill. Stakeholders have flagged that, and, hopefully, they will be fully consulted. Some key differences between South Australia and other jurisdictions will need to be considered, including South Australia's specific requirements for employer registration prior to engaging apprentices and the South Australian right to declare vocations.

Ms CHAPMAN (Bragg) (11:07): I rise to speak on the Vocational Education and Training (Commonwealth Powers) Bill 2011, and I thank the member for Unley for his generous contribution to the parliament on this matter outlining the opposition's indication of support for the same. Perhaps it is the time of the year, as we approach Christmas, that he is being so generous and affable—of course that fits with his nature. He is a strong advocate for quality education for our young people in South Australia, and he also wishes to make sure we have a system which ensures a high standard of quality, and a registration and regulatory process and structure which he has outlined is one that he endorses.

Quite rightly he has outlined some concerns about costs, consultation and other impacts that have not yet been answered, and no doubt he will be efficient in his responsibility during the committee stage to have some indications, undertakings and answers from the minister. I am not feeling quite so generous. Perhaps as the Christmas spirit descends upon us I will improve in that regard, but I think the government has been derelict in its duty to us as a parliament and to the young people of South Australia in making sure they undertake their responsibilities properly and have full disclosure about what this is all about.

We know that the 2009 COAG, the little meeting of the ministers and the federal representative, decided that it would have a national VET regulatory system and that that would be important. The usual reason for this is the significant inclusion and expansion of bodies or companies or entities that work across borders and that the most efficient model is to have a national scheme—it produces harmony and everyone is happy, it is efficient and we save money. We had all of these promises and, really, did they come to fruition? That is what is so disappointing.

I can remember standing here debating the health practitioners national regulation scheme—and what do we have now? Complaint after complaint after complaint about the heavy cost of regulation and the burden on health professionals in this state. Have we improved the protection for patients and consumers in that field? Probably not. Have we adopted a scheme that is beneficial for South Australians? I do not think so. So, I am a little more concerned that we examine these things more carefully and that we ask the question and have a positive answer about whether the model we introduce to produce this panacea of protection is actually going to be with us.

Of course, the other thing this bill does, in the tranche of legislation, is to formalise the transfer of the regulation of services which our overseas students come under (they are actually brought in under separate legislation) to the federal arena. So, we have the adoption of a federal act, which we are being asked to support today, and a referral of powers in relation to the veterinary regulation powers to support a national scheme.

The situation, I remind members, follows a period of sensational embarrassment for this state government. It follows a period when the entity Australian Pacific International College—APIC, I think it was often called—

Mr Pisoni: APIC.

Ms CHAPMAN: APIC, the member for Unley reminds me. What a scandal! It was a situation where an institution was established, and there was a huge enrolment of students who did not even go to school. There were rooms where there were no classroom facilities and workshops where there was no equipment. This was a scandalous situation, which was exposed as really a rort on the immigration rules. Post that exposure, it was found that there had been a monumental failure by repeated audits of this organisation and the government closed it down, which it should have done.

I remember former members of the ministry in this very government—the member for Ashford, for example, who, in her time as minister, closed down an organisation that clearly was not meeting the standards, as she should have done—and everyone here, I am sure, in the parliament supported that. Here was a situation where, under the government's own watch, there had been a monumental failure, even with the rules the government had to deal with this. So, what did we do? Of course, we had a report—we had the McCann report. He was trotted in to prepare a report about how we might toughen this up.

So, earlier this year, we were asked to come into the parliament and provide some new rules to strengthen what had been a failure in the state system before we ultimately came to this tranche of legislation. So, we are here now to hand over the whole kit and caboodle to the federal arena. I am never confident that the federal arena is good at doing these things. The AQIS disaster in relation to the horse influenza issue is just a more recent contemporary example of how hopeless and incompetent federal agencies can be. That ought to be one that should remind us that just by transferring something to a federal organisation, we are not going to have something better.

But the thing that concerns me particularly is that there has been a failure in the provision of information which I think is fundamental to our approving this transfer, and that is: what is it going to cost South Australian RTOs? Members of the department very kindly provided a briefing to members of the opposition, including myself, to provide information about how the structure was going to operate. One of the pieces of information which I had sought and which I think is reasonable for us to have before we are asked to approve this legislation is: what is it going to cost the RTOs in South Australia?

Not the few that work nationally and that will have the benefit of being able to have one national registration; I am talking about all the others in South Australia that will need to go through a potentially much more expensive process. I asked for the modelling, I asked for the costings on that, and what did I get back? I got back a summary of what it will save the state government.

I do not give a tink at the moment about what cost savings they want to give themselves; that is not what concerns me. Obviously they do not give a toss about what the poor old taxpayer pays anyway, but they say that this is actually going to be a saving for the state government. It may be for taxpayers, but if it is at the expense of transferring a cost to all the registered training organisations in this state that operate wholly in this state, then that is not acceptable.

We need to see that modelling. I hope the minister has viewed it and had a good read of it; apparently it is available, but we still have not got it. We should know what that information is before we are asked to transfer this power to the commonwealth. They can muck up all sorts of things; we have seen their stuff-ups, so I am not confident they are going to do it properly. I want to know, here, what it is going to cost our people to go through this process.

There is an alternative, and this was canvassed during discussions of information that was provided. It is an alternative that the Western Australian and Victorian governments have taken up, that is, to retain a system for the state-based RTOs and allow a system of regulation for those that are operating in a national field. Of course we need to consider their convenience as well, but it is not all about big business; this is about the little ones as well.

They elected not to sign up to the 2009 COAG, not refer any of their powers under their own legislation. They would maintain their own legislation and would mirror what the other states were doing under the national scheme. So they had an agreement that there would be a special reference, that any RTO wishing to operate in more than one jurisdiction would need to comply with the new national regulator rules. That was fine; that was easy, but they kept responsibility at the state level.

Now, where is the most obvious precedent for that here with our own state government? The most obvious, of course, is when we had the industrial law reform in this state, and ministers in the Rann government came in here to tell us how important it was that we transfer into a national scheme, how fabulous it was—except that public servants should not. For some reason the people who work for the state government should be the only group that is protected and kept in the state arena. They were there to push the national model, to transfer to the national level—except for the public servants, who they wanted to keep control of.

I did notice that minister O'Brien announced last week, I think, that we are now up over 100,000 public servants in this state, full and part-time. Sadly, they are not all doctors and teachers and nurses and policeman. We have over 100,000 in the state, so not surprisingly they wanted to say to the parliament of South Australia, 'We are going to keep them back; we are going to keep them under our watch. We know what we are doing. It is important that we protect them under state law.' But every other poor tosser in South Australia has to be shoved off to be dealt with at the Canberra level. That is the reality.

So for the government to come in here and pretend that it actually cares about what is happening in the RTO arena, for the government to come in here and say that it is going to get tough on these issues, when it stuffed up its own compliance in dealing with the protection and the abuse that was exposed in the APIC case, is not good enough for me. And it should not be good enough for the parliament, until we have those answers before us and we can properly examine this by way of comparison. Otherwise, in my view we should be looking more seriously at the Victorian and Western Australian model and adopt that, until we are convinced that this would be beneficial for the registered training organisations in this state.

While I have the full attention of the Treasurer, who has a lot of financial responsibility in this state and who was previously a minister dealing with higher education and training and so on, I will say this. In this state we have maintained legislation specifically for our universities—state legislation, not commonwealth. In fact, I think the University of Adelaide was the third university in this state. We have very proudly maintained state legislation, under the Education Act, for public schools in this state and for the regulation and registration of independent schools.

We have maintained state legislation on law and order to protect others. We have maintained state housing and planning legislation to protect those who are in student accommodation. We have maintained higher education legislation and regulation. What is wrong with us retaining some responsibility for the vocational education in this state, especially under the regulatory regime under which many of our RTOs operate, just within the borders of this state? What is wrong with that?

If it is good enough for industrial law, and if it is good enough for a myriad of other things like education and law and order, why is it not good enough for us to control it? Why? Because the government does not want to have to deal with overseas students disasters—that is the RTO disaster that was exposed under their watch. They do not want to deal with that. They will send it over to some poor person in Canberra who is going to be expected to pick that up.

Let me finally conclude by saying this: do you think under the new regime, under the act which specifically provides for the referral of powers which will enable a referred VET matter—that is, the issue and cancellation of vocational education and training qualifications—do you think that when somebody else mucks up in South Australia and it is a national RTO, somebody over in Canberra is going to be concerned to close down a national RTO which has operations in a whole lot of other states because of a defect or deficiency in South Australia? I am not confident of that and neither should the rest of this house be. I will await their answers.

Mr VENNING (Schubert) (11:21): I rise just briefly to support this bill with some comment. I also note that the Liberal Party supports this and note what the shadow minister had to say earlier. I am always a little concerned when we refer powers to the commonwealth, particularly where I do not think in some instances it is totally imperative that we do so, but in this instance there are arguments on both sides, particularly to ensure consistent application of the national standards that we have.

I have a lot of questions in relation to what will happen to the office here in South Australia. I am not sure how many people are actually employed there; I probably should have asked the shadow minister that before. What will happen to that office; how many people are employed there; and have any of them been offered jobs in the new central national office? I would like those questions addressed in the minister's wind-up speech because I do not want to see people lose their jobs for things we do in this place.

Also, will this proceed if any of the other states do not agree? There are still three states that have not agreed to this; if they do not all agree, do we continue without them, particularly if they do not agree and do not pass the enabling legislation as we are doing here? Also it does mention here that, after four years, things will change and it will move to a full cost recovery system.

If this does not work (and I think the member for Bragg just intimated this) is there a sunset clause in this legislation? Could or should there be a clause as a safeguard that, if this does not go as planned, it could revert back to the state jurisdiction? Nobody has said anything about that. I would like an answer to that question. Referral of power to the commonwealth is one-way traffic nowadays. Under current situations, there are some things that the states do better, so if the quality of service fails the people of South Australia it should revert back, but it never seems to.

Why are we introducing this legislation? I presume it is for uniformity across the country. I have not actually heard what the problem is that we have at the moment and why it is not working. In my time in this place, so often we bring in legislation because it is a feel-good thing, but really when you get out there is this legislation necessary? In this instance, I presume it is, but again, I give the benefit of the doubt. However, we will lose the competitive incentive, I believe, to ensure that we have benchmarks in the service division, and by that I mean that the worst performing state was always continually ranked against the best performing state. When you have not got those individual states doing it, there will not be any other service provider. I bet you London to a brick that your quality of service will probably fall, but I hope I am wrong.

As the member for Unley said, the area of worker training and apprenticeships is very important to us all, whether you be a farmer, a furniture maker, a plumber or an electrician. Apprenticeships have served us very well over many, many years. We all know now of big skills shortages in many of our workplaces, especially in the mining industry. By centralising all these powers in one office, I presume it will assist in targeting the shortages, especially today when we have a very mobile workforce that flies in and flies out. Even flying out of Australia is now common.

We are living in a very changing world and I have to say that it is going to get tougher in the future for all of us. All vocations are affected by the open economies we now have, particularly in Australia, which arguably has the most open economy in the world, and there are a few downsides to that. We have seen what happened with Qantas, and yesterday American Airlines went into insolvency. We are seeing the pressures that overseas economies are going to put on us, particularly as our dollar is able to float. Other countries trade with our currency, particularly China, and controls the level of their own currency. It is going to cause us a great deal of angst.

While the mining industry is booming like it is and our farmers are getting a reasonable price for their product it is all okay, but you wait until the mining industry crashes—and it will; we all know that, it is just a matter of when—and world food prices crash. I think we will be in a bit of bother. I think we need to be smart about this. I was also concerned about the discussions last week about OneSteel in Whyalla. I only hope that is not true, because it will have a devastating effect on regional South Australia if OneSteel stops manufacturing steel in Whyalla.

Our future lies in working smarter, and this could help that, and in marshalling our workers with individual talents into key areas. We must also encourage our people to work harder, I believe. I think we could all work a big harder. People in some other countries, particularly the Chinese, certainly work harder than we do.

We must also encourage our older Australians to stay in the workforce longer, and many of us can. Should 60 year olds do apprenticeships? I cannot see why not, because I think we are always learning, and it should be encouraged. The question is: why are people expected to retire at the age of 65?

The Hon. J.J. Snelling: I entirely agree, Ivo. You resist, mate. You hang in there.

Mr VENNING: I heard what the Treasurer said. I have to declare that I am 65—nearly 66, actually, in about four weeks; I can't tell a lie. I have to say that I reckon I have another 10 years in me, and a lot of people say the same thing. If you like doing it, you should continue to do it. However, when you are here for 22 years you have to understand that you may be keeping another person out of the job. You have to consider that, in this particular vocation, but not in all of them.

The Hon. J.J. Snelling: Your best years are in front of you, Ivan.

Mr VENNING: I hear what the Treasurer said. Honestly, they certainly are in front of me. However, one, you have to be well enough to enjoy it and, two, have a memory to know what you are doing. That is the worry at my age. You are right, whether it is in this place or wherever. I think we have to wake up.

Mr Pederick: Is this a formal announcement?

Mr VENNING: It's not a formal announcement, no. Looking at apprenticeships, I cannot understand why apprenticeships cannot be offered to people of 60 years of age. I intend to have a change of vocation when I do leave this place. I want to go back into doing something physical, like crash repairs and fixing up my own vintage car. I need skills to do that. I am going to learn them through TAFE or whatever. I believe the day you stop is the day you die. I think while you can you do, whatever it is, in every sphere, both personal and professional. You only have to look at the Hon. John Darley, a man of 73, to see what value he is.

Mr Pengilly: And he's standing for another term.

Mr VENNING: He is standing for another term, the member for Finniss says. I agree. He is standing again and he is a great asset to this place. The mind, the intelligence and his experience is of real value to this place. So it is time we focus on this area in relation to this legislation. I am looking on the positive side of this. Hopefully this is the right thing to do. With all those questions I have raised, I hope it is the right thing to do and that this legislation will assist people to prepare themselves for the future—it can be bright but, if we are not smart, it will not be.

The Hon. R.B. SUCH (Fisher) (11:30): I will make some brief comments. I support this bill. Some members have expressed concern that we are handing over too many powers to the federal government or the commonwealth to administer. However, we are one nation and we need to remember that we are one country, and it would be good to have some consistency, not only in the area of VET but across the board. At the moment we have a whole lot of varying approaches to all sorts of things once you cross a border. Not only would it make life simpler for citizens but it would assist in productivity and competitiveness if we had a standardised approach to most things across what is meant to be one nation.

I believe that historically South Australian has had a pretty good system in respect of monitoring Vocational Education and Training (VET) standards. That has been shown in recent times when the minister acted in relation to an operation that was not doing what it should, and there have been occasions in the past where ministers have acted on the recommendations of the professionals who keep an eye on what is happening in the VET sector.

I make the point that it is good to have standards, you need standards but you must have them enforced. There is no point in having standards in the vocational area if you do not have enforcement as well. In the case of Victoria, I am told on good authority that it has, as a result of a loosening of the system, people being able to get a diploma in a matter of days. Well, that is just ridiculous.

What we need in this country is an increase in the upskilling of our workforce. Countries like Germany are industry-based and they put in a lot of effort, and it is no wonder that its products are well received and continue to sell against cheap labour opposition. I believe it is largely because of their research, development and training commitment. In Australia today, even with the high cost of labour in Germany (it is not a low-wage state), they are able to sell their products here and people are willing to pay, in some cases a little bit more, because they know that if it is made in Germany it is good quality.

What we need from companies in Australia in particular is a greater commitment to training in-house and not resorting to what is often the case of poaching trained people from other companies who are committed to upskilling. We have seen over time some abuses with the VET sector where for years people came to Australia ostensibly to become hairdressers or work in the beauty industry or work in hospitality and train as chefs when their real motivation was to become Australian citizens and do anything but those particular occupations. The federal government has restricted some of those abuses, and so it should.

At the university level now we see that there is a not-so-subtle reward for studying here at university level, and that is that you are more likely to obtain citizenship. I am always concerned when we trade off a qualification for, in effect, the promise or the hope of citizenship in Australia. Ultimately, as a nation (and it applies not only in VET but in the university sector, as well) you are judged in terms of the standard you meet and, if you lose that respect, then people overseas will not value your training—the levels and quality—and over time you will suffer.

If you look at the history of Japan, it was not until about 1949 or the early fifties that they brought in a standard, a quality control for all Japanese products, if they were to be exported. That has paid off over time because people can be assured that if it is made in Japan it meets quality standards. If you want to have quality standards, you must have people who are appropriately trained at the level to deliver those quality products and services.

We are talking here particularly about the VET sector, and I am pleased that it will relate to overseas students; as I said earlier, in South Australia we have a pretty good track record of monitoring that. To go beyond the VET sector for a moment, at the university level it is important that proper standards are maintained in the courses and so on that are offered. We know that universities have a different qualifications framework, but there is a temptation for them to water down some of their courses and academic requirements, and I think we are seeing that in a couple of areas, such as so-called 'double degrees', which are not two degrees at all but more like 1½ degrees.

Universities are also into the business of trying to fool people by whittling away standards. We see it in the postgraduate area, where people are playing mickey mouse with some of the postgraduate qualifications. It will come back to bite the universities because, ultimately, they live or die by their reputation, and once they get a name as a mickey mouse provider then the game is over for them. Whilst we are focusing on the VET sector here, the same lessons apply: if you become known as a mickey mouse provider, your days are numbered. Under this new proposal, one would hope that any mickey mouse operator would be thinned out quickly and appropriately.

I do not have any concerns about transferring the powers to the commonwealth. I think it makes sense to have a national system, otherwise you will have a patchwork of different qualification levels and quality assurance throughout the country, and I do not think that is in anyone's interests. We have an increasingly mobile population, and we need to know that if someone qualifies in one state that the standard is the same in any other state or territory.

As we now move increasingly into a competitive world, we have to set the standard in terms of quality training. Part of that challenge will be consequential on the bill that, hopefully, we will finalise today in relation to Roxby Downs. The demand for skilled labour will increase dramatically, but they have to be appropriately skilled, and that means having a body that enforces standards and does not simply allow people to do what they like when it comes to the provision of vocational education and training in this country.

The Hon. T.R. KENYON (Newland—Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for Recreation and Sport) (11:38): I will make some brief comments. I thank members for their contributions, which reflect the importance of training in the current economy and also in the future economy of South Australia. Education and training drive productivity. As our population ages, productivity growth and productivity improvements will become more and more important right across the economy.

Part of that is a national system. Part of having an effective training regime is that it has to be a nationally common regime so that right across the country, if you get a qualification in a certain area in one state, it counts in another state. As numerous speakers pointed out in the second reading, Australia is a mobile society: people move from state to state to follow jobs, to be closer to family or for a myriad of reasons, and having a qualification they can take with them is important.

One of the greatest criticisms of the current regime is that it is often difficult to move from state to state with qualifications and that you can have a qualification in one state that is not recognised in another. This is part of that process. If we are going to have a national system, the appropriate regulator of a national system is the national government, the commonwealth—and that is where we are heading with this bill. Part of that is the referral of powers; that is what we are doing today, and it is an important part of it.

The regulatory jobs currently held under DFEEST will be moving to the commonwealth—largely, most people will transfer. It will be a local office. It will be based in Adelaide. The training provider is based in South Australia and it will deal with the South Australian office and South Australian people. It will know most of them because, in large part, they will be the same people doing the regulation here in South Australia at the moment as part of DFEEST.

The member for Bragg talked about the Victorian model and asked why there could not be a separate South Australian system. Even if there were a separate South Australian system, somewhere between a third and half of all current training providers would need to be part of the national system anyway because it ties in overseas students, who are particularly the people who get caught up in that. In fact, TAFE would need to be part of a national system because TAFE deals with overseas students.

The member for Bragg mentioned the McCann review. That, I am told, fully informed the federal act and was especially around penalties. The big area on which the McCann review had an effect was penalties in the federal act. The member for Bragg also talked briefly about higher education. Higher education is not covered in this bill, obviously, because the feds have taken it over through the Corporations Act. They did not need a referral of powers; that was not required. We did not have to pass a bill because, under corporations law, and constitutionally, that is held under the federal government. They just took that area over.

The member for Bragg also mentioned fees. As part of the 2010-11 budget, the state government decided to increase fees to private training providers to reflect full cost recovery, and that has been the case in many areas of government for a long time. PIRSA led the way in full cost recovery. Where a government provides a regulatory service, it recovers the cost of doing that. The federal government will have a full cost recovery scheme. It will be phasing in its full cost recovery model, as we did, so there will not be a single shock to the system. It will be introduced gradually and work its way up to full cost recovery, so it will not be the shock to the system that the member alluded to.

With that, I thank all members for their contribution. I thank them for their interest in training; it is a very important area. I commend the bill to the house.

Bill read a second time.

Committee Stage

In committee.

Clause 1

Progress reported; committee to sit again.