TAFE SA BILL

Second Reading

Adjourned debate on second reading.

(Continued from 3 May 2012.)

Mr PISONI (Unley) (16:54): I would like to continue my opening remarks from 3 May, when we last debated this bill. While the opposition and industry are generally supportive of the move to establish TAFE SA as a statutory body separate from DFEEST, a step which the industry itself feels is long overdue in a competitive environment, there are several issues that are unclear and that we feel could lead to inequity going forward with the Skills for All and VET training provisions into the future.

Most notably, the Skills for All Subsidy Calculator recently released reveals a chasm between the subsidies paid to the public provider (that is, TAFE) and those proposed for private providers, sometimes varying as much as double to three times higher for TAFE SA for the same qualification that may be offered by a private provider.

For example, the TAFE SA subsidy for a Diploma in Building and Construction is $22,400, whereas the private provider receives $13,800. For a Certificate III in Carpentry, TAFE SA receives a subsidy of $20,700, while the private provider receives a subsidy of only $11,500. So, you can see the pattern that is developing here. TAFE SA receives a subsidy of $5,096 for a Certificate IV in Business compared with between $1,880 and $2,300 less than the current user choice levels for a private provider.

Another example is the TAFE SA subsidy for a Certificate IV in Occupational Health and Safety, which is $5,413.07; the private provider receives $3,230.57 less, which is a figure of $2,182.50. I seek leave to insert into Hansard statistical data that illustrates further inequity or differences in the payments made to a TAFE provider as opposed to a private provider.

Leave granted.

Differences in payments made to TAFE and private providers:

Mr PISONI: The reality is that this imbalance in subsidy will make it impossible for private providers to compete, resulting in them either making compromises affecting their service provision or going out of business. This issue was raised by almost every non-government provider, whether they be not-for-profit or profit providers. They are still having difficulty trying to understand why there is such a discrepancy between the subsidies given to TAFE and the subsidies given to non-TAFE providers.

It has in fact been suggested under the Fair Trading Act that a government body or statutory authority should not receive more funding for the same service provided by any non-government entity. There have been a couple of instances in the past where competitive neutrality complaints have been made against the government here in South Australia. It will be interesting to watch how this develops as the Skills for All money rolls out and TAFE moves in to compete with the private sector with that huge advantage of funding.

There is some suggestion by some providers that the main motivation for the government to have large discrepancies is actually to offset the inefficiencies in TAFE that it is not prepared to tackle itself. We know that TAFE has a large capital exposure. We also know that, per student, many of the private providers also have large overheads and capital exposures. We also know that TAFE has continually needed annual bailouts from DFEEST because it has not met its budgets.

I suppose the unfair thing about this for those students and participants in the Skills for All program is that we know that there is $194 million in the Skills for All funding for students to access, but if we see more and more of those students accessing TAFE facilities as opposed to private sector facilities, we will see an enormous difference in the number of training places, and that will result in TAFE winning the lion's share of that training money. For example, TAFE provided the carpentry certificate and received $20,700 for Skills for All funding, and the private sector received nearly half that at $11,500. Of course, the effect of that is that we will see fewer people training if more people go to TAFE providers as opposed to non-TAFE providers. I will be interested to hear the minister's comments on that issue as we move through the debate, and we might even go there during the committee stage with some direct questions.

Overall, the biggest question with regard to this level of subsidy is: how will the government measure the productivity, the value for money, the efficiency and the quality of TAFE services for the public funding contributed? The new transparency in the levels of public funding needed to subsidise TAFE is welcome. However, it reveals what many have previously suspected; that is, there are obvious inefficiencies in the use of public funds in the TAFE system.

This was identified 10 years ago when the government commissioned the Kirby report. The Kirby report was very critical of the very same issues that the government is still trying to tackle 10 years down the track. Despite being extremely critical of their predecessors, the government, after being in charge of the levers at DFEEST, has failed to implement any of the improvements. It has moved a long way away from those initial recommendations and observations by Mr Peter Kirby in the report. One of the interesting points made by Mr Kirby about institutes and councils is on page 70 of the report:

The TAFE Institute should be made the primary focus of TAFE activity. The review believes that it would not be appropriate for this juncture to revert to a centralised department structure managing a large number of campuses, nor removed to a single institute of TAFE. However, it is important to realise, that no governance arrangement is permanent and proposals advanced by the review could evolve towards a centralised department if institutes are unable to manage themselves or their collegial functions successfully, or towards greater autonomy and management if the proposed arrangements work successfully. Equally, evolution to a single institute of TAFE remains a possibility.

I suppose it is no wonder, with that type of advice, that it has taken the government 10 years to make any move on TAFE. I have to say that we are supporting the bill, but that does not mean that we will not use this opportunity to point out areas which we are concerned about and areas which the industry is concerned about, in order to fully scrutinise the implications of the bill. It is our hope, on the opposition benches, that skills reform will start the process of addressing this inequity in the funding between the non-TAFE sector and the TAFE sector.

The new transparency in the levels needed to subsidise TAFE will, of course, make it easier for us to monitor that and for TAFE's competitors to monitor it. The good thing about any institution or any business having competitors is that it becomes almost self-monitoring because there are rules that businesses must comply with, whether they be training businesses like TAFE or private providers or not-for-profit providers. My experience has certainly been that those who are competing for the same dollar tend to keep one eye on the way their competitors are operating. It works as a very good way of keeping quality in check, on top of the official means of quality control through inspections or audits that have now become the role of the federal body.

Another area of concern for many in the private sector is that many courses are quarantined for TAFE only to receive a subsidy. In other words, TAFE not only receives much more generous subsidies for courses but others are locked out of competition in a number of areas. In these instances private providers are excluded completely, making it impossible for these businesses to deliver those qualifications using Skills For All or other government-type funding.

I have some tables of courses that are operated through South Australia, whether they be through TAFE or not. Some of them have been superseded and some of them are waiting for funding to be determined. My statistical data tells us the number of courses and highlights those courses that are available as fee-free courses for TAFE or private providers, or TAFE-only courses. I seek leave to insert my statistical tables into Hansard.

Leave granted.

Where funding for a course is yet to be determined, providers may be able to use information from an equivalent/superseded course to estimate prices. Providers must independently confirm delivery conditions for any course.

Where funding for a course is yet to be determined, providers may be able to use information from an equivalent/superseded course to estimate prices. Providers must independently confirm delivery conditions for any course.

Where funding for a course Is yet to be determined, providers may be able to use information from an equivalent/superseded course to estimate prices. Providers must independently confirm delivery conditions for any course,

Where funding for a course is yet to be determined, providers may be able to use information from an equivalent/superseded course to estimate prices. Providers must independently confirm delivery conditions for any course,

Where funding for a course is yet to be determined, providers may be able to use information from an equivalent/superseded course to estimate prices. Providers must independently confirm delivery conditions for any course.

Where funding for a course is yet to be determined, providers may be able to use information from an equivalent/superseded course to estimate prices. Providers must independently confirm delivery conditions for any course.

Where funding for a course is yet to be determined, providers may be able to use information from an equivalent/superseded course to estimate prices. Providers must independently confirm delivery conditions for any course.

Mr PISONI: It is of concern that there is no transparent time line for reduction in public subsidies or this underpinning corporate support. Perhaps the minister could elaborate on that in his response to the second reading speeches.

Obviously, our private providers deliver recognised VET training with the same salaries as TAFE; however, they do not enjoy the same economy of scale, benefits, the enormous subsidies, or the underpinning of the public sector corporate support. This is an issue for all small businesses. Twenty years ago there were many more small businesses that operated in South Australia, such as small supermarket chains. I can remember that Tom the Cheap on John Street in Salisbury was one of the very—

The Hon. I.F. Evans interjecting:

Mr PISONI: Another one in Gawler, did you say? Tom the Cheap was very, very popular. I can remember those ads on television as well. I think they almost had weekly talkback radio debates about how annoying they were but they were effective. Of course, as we saw the expansion of Coles and Woolworths we saw many of those smaller operators not being able to compete.

We also saw that in the furniture industry where many furniture businesses were small family businesses and then the large companies from the Eastern States came over (whether they be Nick Scali or Harvey Norman or whatever) with much greater ability to get their message out. They used economies of scale to always have something in stock and, of course, always be able to sell it at a better price.

It is ironic that many of the smaller providers have raised with me their concern about the corporate conglomerate, if you like, that TAFE will become with its unfair advantage of higher subsidies for courses compared to the smaller businesses. The smaller operators here in South Australia are actually at a market disadvantage yet if you listen to the AEU and the correspondence that they have been sending to members of parliament they would lead you to believe that TAFE is at risk from the small providers because of the competition.

I would not like to think that any organisation, particularly one the size of TAFE, was going to be damaged because of competition. I would have thought that any organisation that stood by the services it provided and that stood by the quality and the delivery of those services would relish the ability to take on competitors, particularly with such an advantage as government funding.

We hope to see TAFE become responsive to industry needs and to become more flexible with when it begins courses and how it constructs those courses. I think that is important; it is important for the future workforce and it is important for TAFE to be competitive. As and when the economy picks up, it will not be the size of the subsidy that will matter as to whether TAFE will survive or not, it will be how quickly and effectively they can deliver their services.

Private providers must also bear the heavy cost of ever-increasing compliance, administration and reporting. We know that with every business red tape and bureaucracy is a cost. We need to ensure that we have a strong and vibrant VET business community here in South Australia, so we need to ensure that we have strong auditing in place so that we can stand by our product as South Australians encouraging those interstate, overseas or even those living here to stay and conduct their studies and their training at our own institutions, whether government institutions such as TAFE or non-government sector institutions. In addition there are cases where businesses have to wait months to receive subsidies for training delivered and there are serious cash-flow difficulties, more difficult to overcome without government backing when the need arises, so that is another test for the government's delivery of funding.

One of the points that some of the providers have raised with me is that it is a long time between drinks for government subsidies for training. They have costs that they need to meet weekly or fortnightly, particularly when it comes to wages and salaries. They have rents and taxes they need to pay, and these tend to be monthly commitments, yet sometimes they need to wait until the completion of a course before they get money or, alternatively, several months prior before they are paid for the work that they have delivered through the process.

There is no doubt that up until now the TAFE system has not been subject to the same level of scrutiny as private providers. In the main, private providers—particularly those represented by ACPET—have worked hard to raise quality and compliance among VET providers, and it is not unreasonable to expect that, under Skills for All, this will also now be the case in the public system. I have some questions that the minister might wish to consider in concluding the debate. What criteria were used to calculate and determine the Skills for All subsidy levels for TAFE SA and private providers, and what was the time frame for achieving parity in these subsidised levels, if there was a time frame? What is the time frame for reducing other government support to TAFE? How will the government measure the productivity, value for money, efficiency, quality and TAFE services for the public funding contributed? Who will set the rate that TAFE will charge for the use of their public provider facilities? Will it be market driven or will it be some other mechanism?

Some providers have told me that, when they have enquired about using dormant TAFE facilities, they may be offered times that are simply not commercial for access to that facility. I think that is another area that could be explored in order to make full use of the enormous capital assets that TAFE is holding in the way of buildings, machinery and other assets needed in a training environment.

It does not make a lot of sense to me that, on long Christmas breaks, for example, the buildings are closed and not accessible for the use of others, even if they want to pay a fee to use them. Other opportunities include school holidays (where there is a break between the four terms), evenings and weekends. We know that the private sector is very adaptable. It can work around penalty rates and other areas in order to use facilities effectively or in order to deliver training when the customer wants it. We see this all the time with the private sector.

The government sector tends to have some difficulty in understanding that the customer is right and the customer should be considered in order to deliver those services: the customer's needs, the convenience for the customer and the timing. All these things are important in the private sector, and I hope that we will see TAFE moving towards that type of an attitude in the near future. Hopefully, it will not take as long as it took Qantas, after they were privatised, to understand the importance of customers.

I think Qantas got there in the end, but I think it took them close to 20 years to understand, after being a government-owned institution, that people really had very little choice but to use them. Under the two-airline system we saw that customer service was quite often a bit rough-and-ready, but I have to say that it is much better these days. The market has done its job when it comes to the airline industry.

Another question I pose to the minister is: will there be any guarantees regarding the times when TAFE premises will be available and will these times suit the needs of private providers? For example, we were recently made aware—and these are the specifics of the detail I raised earlier—by the private sector of a TAFE manager telling them the facilities would be available on Tuesday and Thursday nights from 8 to 11pm. The point made there by the private provider, of course, was that is not very user-friendly.

When will TAFE-only qualifications be opened up to the private sector providers and what is the plan for managing the quality of training, should there be an influx of interstate providers to take advantage of funding and training opportunities that, until now, have not been available to the private sector? I can understand why there are some local providers who are concerned, to a certain degree. They are relishing the competition but, of course, there are some pretty big providers.

Because we have been one of the last states to move on this process of opening up funding for VET beyond TAFE, there are companies in Victoria and other states—Queensland and elsewhere—that have grown to be quite substantial and quite large. We are already seeing many of those on the move here into South Australia, opening up branch offices. I know that, certainly, branch offices are always welcome here in South Australia, but there is nothing like a home-grown head office in South Australia. I hope that we can see the growth of our home-grown companies in South Australia as well.

It is interesting that the minister has decided to placate the AEU by transferring the terms and conditions that exist with TAFE as DFEEST employees—the TAFE employees—without any change into the new bill. As a matter of fact, I think there is even a schedule attached to the new bill that transfers those, yet minister Kenyon is on record as acknowledging that, in order for TAFE to be competitive, there may need to be changes to the EBA so that it is more in line with the private sector. Nothing in this bill addresses that and that may be part of the reason why there is no time line on the differences in the subsidies to reduce those differences and there is no time line as to when we will see more of the courses that are funded opened up to full contestability.

We know that this could be seen as a great opportunity for TAFE. We know that DFEEST, for example, has a shocking reputation for being top heavy and inefficient. You just need to refer to the annual report in 2009 and compare that to the annual report in 2010, when we look at the DFEEST senior executive salary scale from the annual report in 2010-11. In 2009, we had 194 full-time employees earning more than $100,000 and up to $380,000, amounting to $22.8 million in salaries. Then in 2010, just one year later, we saw that rise to a figure of 265 full time employees, which also saw the top salary in 2010 at $280,000. The very next year the top salary in DFEEST was $380,000, a $100,000 increase in salary. We also saw new salary brackets introduced of $290,000, $300,000, $320,000, $330,000, $340,000 and $350,000. In that grouping we have 14 staff earning more than $280,000 a year, which I believe is more than what the minister earns. That has happened in just a 12-month period.

You can see that there seems to be a culture of entitlement in DFEEST, and people that obviously feel that they are worth a substantial amount of money. When one looks at DFEEST reports, documents that analyse DFEEST programs and some of the outcomes that DFEEST has been achieving, one has to ask: what is the justification to taxpayers in South Australia to see such a dramatic increase in salaries in just one year? That is 194 staff earning more than $100,000 in 2009, with the top salary being $280,000, then the following year there are 265 staff earning up to $380,000.

We often see restructures within DFEEST that sees more managers and fewer people actually delivering services. I am hoping that by decoupling TAFE from DFEEST we will see a culture of service and a culture that relates to industry develop in our TAFE system. I know from my country colleagues that the TAFE system is very important in regional South Australia, and I am sure there will be a number of regional members of parliament that will speak very favourably of TAFE. In my own experience, as a former student at Marleston TAFE, it was an opportunity for me to move into self-employment once I was given those formal skills that TAFE gave me, along with the on-the-job training I received during my apprenticeship.

TAFE traditionally has had a good reputation certainly in delivering apprentice training. Things have become more complicated over the last 10 years or so, and I concede that, as more and more is being delivered by TAFE. However, it is important that we have that distinction between the department who are delivering funding and TAFE who are a competitor for receiving that funding. We see that they are now two separate bodies. I understand it will be the same minister administering both departments, but I do not have a problem with that.

On our side of politics we are certainly hoping that we will see good training and educational outcomes out of TAFE. We hope that we see some fair and increased competition through the non-government providers in South Australia in delivering VET services. We certainly hope that the minister does meet the very ambitious promise of 100,000 training positions in South Australia with the use of the Skills for All funding and that we do not see it simply used to prop up a TAFE system that has refused to acknowledge that it is now on its own.

We do need to be concerned that we might not see the delivery of those training places, and we also need to be concerned that those training places might not be delivered in areas that the industry needs. My understanding, from speaking to industry representatives—skill training boards, for example—is that there has been very little consultation on this bill or Skills for All in delivering industry-driven or industry-required skills through the Skills for All funding. We know that the focus at a federal government level for university funding is student-centric and we know that Skills for All is student-centric. I think there is a responsibility for a government that, when it is handing out taxpayers' money like this, in the end there is an outcome not just for the student but also for the community.

We have enormous skills shortages in South Australia, if not immediately, certainly into the future. It is imperative that when government money is being spent on skilling our own citizens in South Australia they are skilled in areas where they are going to get jobs, where they are going to be able to provide for their families and where they are going to be able to contribute to the state economy—pay their taxes—because they have a skill that is in demand.

I would not like to see money being spent skilling up our young people, who, in particular, will be the vast beneficiaries of this funding, and then either to be misled into taking on skills for which there is no demand or feeling that they are not being guided into areas where there is demand. That is why it is important that industry continually has a guiding hand in VET training in South Australia. It is so important that funding decisions are made with strong consultation with those who are in the box seat to employ South Australians who have developed those skills. With those remarks, I shall return with questions during the committee stage.

Mr WHETSTONE (Chaffey) (17:33): I too rise to support this TAFE SA Bill. In doing so I would like to think that this bill might help to ensure that private registered training organisations will be placed on a more even playing field with TAFE in terms of attracting students whose training is publicly subsidised.

In the electorate of Chaffey I am fortunate to have a new TAFE campus, which is located at the Glossop High School senior campus in Berri. Just recently I attended the opening of that facility, and it really is a great facility and a great asset to the electorate because, in some cases, it provides preliminary skills or accreditation for the young ones—and not just the young ones; middle-aged people also attend the facility.

The TAFE facility at Berri provides courses that are more relevant to the area, particularly horticulture, hospitality, winemaking and viticulture, management and administration. Of course, what piggybacks those skills and those specialty areas is the need for good accounting and finance, automotive, welding and IT. All that makes a really good package for the area.

I attended the opening, and the Hon. Bob Sneath in another place was there to open the facility. He was quite amazed at some of the native bush food that the students presented to all comers, and that was just an example of what the training there can do. It is something outside the square. It is not just about presenting the standard food and the standard training line. It gives an opportunity for all to come along and see something new. I think in food production we are always looking at something new that will grab the eye and the attention and, when students later move into the private sector or the world of employment, it gives them a wider capacity to present.

The region also has a GrowSmart training program, and they are in a partnership with the PICSE program in the region and they provide a wide range of training programs specific to the region's needs and, naturally, many are horticulture and agriculture driven. Again, I have been to some of the grading nights through the GrowSmart training program, in partnership with PICSE, and it is really great to see that some of those private training organisations can step up to the plate and, I think, put pressure on TAFE. I think this bill will put TAFE under a little bit of pressure to perform and have a cost-effective training regime. I think the GrowSmart team has worked really well in addressing regional needs, particularly in the electorate of Chaffey.

The GrowSmart team has lobbied me, and the previous member for Chaffey, for a number of years to allow them to perform, for instance, a firearms training program. To date, the government has resisted allowing them to do that. I think, perhaps with a new minister and this bill now to be put in place, that we might see some more flexibility with the government allowing a private training facility to come on board and offer what I would consider is a more relevant training program that suits the needs of primary food production, particularly with regard to vermin control.

It also has been revealed to me that this program would be much more flexible for trainees, as well as being a much more cost-effective program. I have seen the TAFE program for firearms training and it is quite expensive and rigid in its time lines as to when students and people can go along and perform those programs. The GrowSmart training program is ready to go and it has the accredited trainees in place. Obviously, some legislation would allow them to perform that training.

Unfortunately, as I said, to date, the government has blocked GrowSmart from providing this training and I am hoping, again, that this bill will give them the mechanism to provide firearms training. I have a letter with the minister's office to give this training organisation some consideration to be able to perform firearms training, and I will be waiting on a reply from the minister's office.

Again, we have the Flinders University medical training facility at Renmark, and it is a fantastic training facility. It trains medical students for nursing and is now about to step up and train third-year doctors. It gives them an opportunity to be trained in a regional post. To date, the training facility up at Renmark has been very successful. It allows young country trainees to train locally. It does not put added pressure on them to have to travel, to have to find accommodation, to be away from home. Ideally, it could give city trainees a country experience. I think that is very valuable for those who want to be medical professionals. I think it gives them a rounding experience.

I note that the Flinders training facility is looking for some RDA funding that will upgrade the facility to be able to do much more comprehensive training, not just in the third year but trainees will be able to complete their training at the Renmark hospital, which is in partnership with the Flinders Medical Centre. It will mean that regional trainees will not have to travel, they will not have that extra cost burden and it will leave them in a much more comfortable environment so that they can actually perform their training. It also gives the region a much better opportunity to retain some of those trainees when they become qualified.

As we all know, attracting doctors and nurses to regional areas is a very hard job. It is an exceptionally hard job to attract them and it is just as hard to actually retain them. By giving country trainees an opportunity to train and get their qualifications in their backyard gives the region a better chance to retain those trainees or those qualified students so that they can contribute back into the community. It also assists in the development of local industries, and I think that is very important, particularly for the regions.

As many of my regional colleagues here today would acknowledge, we are seeing a slow exodus of skilled doctors and nurses in particular. We are seeing an exodus of a lot of skilled labour into the mining industry, and that is putting pressure on skilled labour, skilled employees, to perform their duties, particularly in the electorate of Chaffey. The Riverland is known as the food bowl of South Australia, and we need research and development to stay within the region. We need those skills to stay in the region so that we can move with the times, so that we can progress, so that we can produce more with less. I think those training facilities up in the regions lend a hand in doing that.

Again, it is very important that these regional training facilities and programs improve the prospects of growth in regional communities. I was a trainee through TAFE in the early days and I then moved into an apprenticeship. It really does give young people a great opportunity to be trained, and skilled to go out into the workforce.

I think this amendment bill will give all registered training organisations a more level playing field. In particular, I think the TAFE facility up in Berri, in the Riverland, is a great asset to the region, but so are the other training programs. As I have said, the PICSE GrowSmart program really highlights what the region needs, and it addresses that. It addresses horticulture and agriculture in particular, food production and, food presentation and what revolves around them. So, in saying that, I think TAFE and the training programs that are in the regions, are a necessity and I would like to think that they will be enhanced as time goes on.

Mr VAN HOLST PELLEKAAN (Stuart) (17:45): Like my colleagues, I rise to speak in support of this bill, and the shadow education minister, the member for Unley, has gone into many aspects of this bill in great detail, as he usually does, and very well. I would like to touch on a few regional aspects. TAFE in regional South Australia is incredibly important, as educational opportunities are everywhere. The ability for our people in regional South Australia to get to go to small schools often—sometimes big schools in regional centres—but the importance of small primary schools, potentially with only 20 kids in them, and for them to flow through high school and be able to undertake tertiary education in regional areas, is vitally important.

In the region that I live in and represent, the Upper Spencer Gulf, there are four key TAFE campuses—not all of them in the electorate of Stuart—but Port Pirie, Port Augusta, Whyalla and Roxby Downs are vital institutions, and it is important to say that there are TAFE campuses all over regional South Australia.

They are particularly important because they provide a wide variety of educational opportunities, which I think country kids probably need access to perhaps even more than city kids do. We have just as many smart kids who would like to be doctors or lawyers, or pursue more academic paths. We have just as many of them proportionally in regional South Australia, but we probably have more young people—whether they be young or middle-aged adults who would like to pursue more hands-on educational opportunities that take them towards trades, and with our impending mining growth coming in South Australia, and we all know that both sides of this house are extremely supportive of what we hope will be a mining boom in the future for South Australia, this is going to be even more important.

I would also like to say that with TAFE and educational opportunities in general—but certainly TAFE—I think the value of these institutions in addition to their primary purpose of educating people is often undervalued. The value that a TAFE campus provides by being located in a regional town or a regional city is extremely important.

Of course, the primary purpose always has to be there—they must be good education facilities—but there is the additional value that they offer these communities with regard to employment opportunities, with regard to retention of young people, with regard to attraction of young people from outside the region, and with regard to the ability for older people to stay and grow and learn and be productively involved, for whom it may not openly lead towards an income earning opportunity but may well lead to a greater quality of life and a greater ability for them to contribute as volunteers to the community. All of those values are often overlooked. Now, never once would I say that the primary purpose of course is not the most important, but in regional areas those extra opportunities are very important.

So I hope that this TAFE SA Bill 2012 will allow those opportunities to grow and not diminish them. There is, of course, the fear by some people that the marketisation of TAFEs, while offering great competition and potentially creating the opportunity for some courses to be cheaper and some courses to be more swiftly tailored to the market, might also take away that public component, and that public conscience that TAFEs have had under governments of both persuasions for decades now. If it becomes a market rules situation, we might find that we have cheaper courses tailored to the demand that is there on the spot for graduates but there may not be the same sort of foresight and opportunities, if those institutions—whether they be TAFE or other registered training organisations—do not have more of a community mandate.

The broader values of TAFEs that I just discussed may be diminished somewhat and also I fear that the opportunity for timing the delivery of TAFE courses in line with future demand may not be done quite as well as it could if the trainer, the training organisation—whether it be TAFE or another one—is essentially there trying to make money. I am not suggesting that TAFE's only desire will be to make money but if it is in a competitive market it will be forced to compete and it will be forced to justify itself in that way.

The example which I used and which I have seen in Port Augusta in two cycles now was that, when there is a downturn in the economy, when there are fewer jobs, when there are fewer opportunities for people, often fewer training opportunities are provided as well. I think that is a great mistake because at a time when there are fewer employment opportunities for people that potentially is the time to create more training opportunities for people. Whether it is a six-month course or a three-year course, the reality is that it is going to take a certain amount of time to get through your training and if there is an assumption that when demand for job placements returns we will just ramp up the delivery of training so that people can get those jobs, things are out of whack because you have lost the opportunity to train people before the job opportunities are there.

That is a concern I have with this marketisation. As I said, I have seen that happen for two cycles now in the northern part of the state. I am also particularly concerned because I saw the demise of the Australian Technical College (ATC) which, to my mind, was an absolutely outstanding institution. It was set up across three Upper Spencer Gulf campuses, plus Roxby Downs, and it gave young people particularly the opportunity to complete their high school diploma at ATC, or to complete a trade (an apprenticeship essentially) at ATC, or to do both at ATC. That was a fantastic model but it was disbanded. There are people in the area that I represent who are still dreadfully disappointed about that. I hope that the outcome of this bill which, as I have said, I do support overall (as do all of my opposition colleagues) does not lead to that sort of short-sighted decision, because unrealistic commercial expectations are put on TAFE when it is put into a more competitive market.

Like my colleagues, I support competitive markets. We believe that those sort of commercial realities lead to good outcomes. However, there are some things that governments are obliged to do on behalf of people and one of the greatest reasons we have governments is to provide services and to provide opportunities that the markets on their own would not provide. We can debate in this house about how far that should go but we all believe that at some level that is what government does, and I know that is currently what TAFE does. That must be kept front of mind as the government progresses after, presumably, this bill passes successfully.

Another example of a concern here is the astounding revelation that we had in question time today (which was very swiftly picked up by the shadow treasurer, the member for Davenport) that the Labor government is now considering using the construction industry training levy to meet budget savings targets. I hope it does not but if somehow this marketisation of TAFE leads to those sorts of decisions then, of course, we will all be very sad about that outcome.

I have spoken about the value of TAFE, the flexibility and the wide range of courses (and the member for Chaffey touched on that as well) that TAFE offers a wide range of people. Let's not beat around the bush here: the sort of people who can attend TAFE may be rich, may be poor, may be men, may be women and also come from a very wide range of intellectual horsepower—and that is fantastic. To provide opportunities to improve their lives, to get access to the workforce and to contribute to their communities is vitally important to a very wide range of people, and I think vitally important in regional areas where we fight so hard to retain our communities and where we fight incredibly hard to even try to attract people to grow our communities as well.

I have another issue which I will touch on now but it is probably more for the minister in the committee stage of the bill. It is the issue that has been floating around Port Augusta of the lease of the cinema at Port Augusta to the people who currently lease it and have felt incredibly under threat. They operate the cinema in a TAFE facility and I have always said both publicly and in private discussions that if TAFE has a need for that facility for an educational TAFE purpose that is where it should go and unfortunately the cinema would have to miss out.

If that is not the case—and the minister has assured us that it is not the case, TAFE does not need that cinema—then the current operators, Roger and Michelle Cole, should be able to continue to use it. The minister has been true to his word. Things have dragged on a bit and time has taken a lot longer than everybody wanted but I give the minister credit. He has said that he will lease the cinema on a long-term basis to the Coles. They will be obliged to meet the necessary maintenance costs to the structure of the building associated with that lease but they will get a long-term lease to operate that business.

I say this now so the minister can think about it and I am happy to address it again in committee. I would like to be sure that this bill, with regard to the arm's length relationships that it establishes, will not in any way interfere with the commitment that the minister has given to Roger and Michelle Cole. I do not suggest for a minute that the minister would do that deliberately but sometimes unexpected things come up and I would like to be absolutely sure that that will not happen through this bill. Those people have a commitment from the minister and from TAFE as it currently stands that they can lease that facility so I will allow the minister to come back to me when he is ready on that issue, but without that I cannot support this bill.

I am happy to leave it at that. I greatly appreciate the opportunity to speak on this bill and, as my colleagues have said, to support the bill.

The Hon. T.R. KENYON (Newland—Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for Recreation and Sport) (17:57): I will formally start my conclusion on the second reading.

The DEPUTY SPEAKER: Is the minister aware that he will be closing the debate?

The Hon. T.R. KENYON: Yes. I formally start my second reading reply and I undertake to get back to members with full answers on the next day of sitting, which is tomorrow. I seek leave to continue my remarks.

Leave granted; debate adjourned.