TAFE SA BILL

Second Reading

Second reading.

The Hon. R.P. WORTLEY (Minister for Industrial Relations, Minister for State/Local Government Relations) (16:28): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

This Bill establishes TAFE SA as a statutory corporation which is an important part of our Skills for All vocational education and training reform. This initiative deals with the major skills challenge facing the State from a rapidly changing economy and our ageing population.

In its most recent report, the South Australian Training and Skills Commission identified additional job openings in South Australia over the next five years to 2015. These amount to 163,000 due to both economic growth and the need to replace workers as they retire. Labour supply and skill levels in South Australia must increase to capitalise on these opportunities.

Our changing economy also means that the skills needed to do those jobs are also changing. The Training and Skills Commission projects a total demand for 299,000 qualifications—both for new entrants to the labour force as well as existing workers—over the same five years.

The vast bulk of these, more than 85 per cent, will be for higher qualifications of Certificate III and above.

It will be a massive task to meet this challenge—one that will require very significant reform of the vocational training and education system—which is why we are implementing Skills for All, the most wide ranging and significant reform of the vocational education and training system in this State to date.

The State Government has committed an additional $194 million to support this reform over six years and to help fund the 100,000 additional training places for South Australians.

The TAFE SA Bill 2012 to establish TAFE SA as a statutory corporation is a key component of Skills for All.

The State Government recognises and respects the importance of TAFE SA to the South Australian economy and the role it will play in meeting this enormous challenge.

This government is committed to a strong, dynamic, modern and publicly owned TAFE SA. We are committed to ensuring TAFE SA students have access to state-of-the-art training infrastructure. We are also committed to seeing TAFE SA succeed under Skills for All and putting in place the appropriate legislative framework to enable it to do so.

A skilled workforce is fundamental to realising South Australia's potential for a high growth economy. TAFE SA, as the State's largest training provider and the State's largest provider of publicly funded training, will play a critical role in skilling that workforce. Since 2007-08 this Government, together with Commonwealth support, has made the biggest single investment ever in TAFE SA infrastructure. More than $200 million has been committed to upgrades and new facilities. $125 million has been committed for the Sustainable Industries Education Centre at Tonsley Park, $50 million has been spent on new infrastructure and upgrades to existing facilities, while a further $33 million in Commonwealth funds has been invested in improving facilities in a number of metropolitan and regional TAFE SA campuses. Modernising infrastructure is however only one part of the equation. We also need to modernise and improve the vocational education and training (VET) system to be able to respond quickly to the needs of industry and to deliver the breadth and depth of skills demanded by a rapidly changing economy.

The State Government's Skills for All initiative is a comprehensive reform program, which aims to increase the number of people in training and in jobs. Skills for All will introduce a demand driven system in which access to public funding will be open to both public training providers and approved private training providers. Together with this significant system reform, the State Government will give eligible South Australians a training subsidy that provides them with ability to select the training provider of their choice.

TAFE SA is here to stay and it is going to play a central role in this new training system. The establishment of TAFE SA as a statutory corporation is a key component of Skills for All because it modernises governance arrangements to enable TAFE SA to operate in the more commercial and competitive environment Skills for All will bring. An update to the legislation is well overdue with the current legislation dating back to1975.

The State Government is committed to recognising the importance of TAFE SA as the State's largest provider of publicly funded training within this context. TAFE SA will continue to play an important role in this new demand-driven VET system, by meeting industry training and community service needs and contributing to the social and economic development of regional communities.

The existing TAFE SA brand is synonymous with quality training, excellent employment outcomes and high student satisfaction. Modern, state-of-the-art facilities, together with autonomy and flexibility as an independent statutory corporation, will create the opportunity for TAFE SA to build on its existing strong reputation, attract more funding, and grow in the expanded training market that Skills for All will bring. To this end, this Bill establishes TAFE SA as a statutory corporation.

There are three main outcomes achieved by introducing a statutory corporation model for TAFE SA.

Firstly, by establishing TAFE SA as a statutory corporation, TAFE SA will be provided with greater commercial autonomy and accountability through a board of directors, and flexibility and independence from government processes. This will enable TAFE SA to be even more responsive to market needs.

Secondly, by establishing TAFE SA as a statutory corporation, greater separation of the roles of TAFE SA and the Department of Further Education, Employment, Science and Technology (DFEEST) will be achieved. This is important in the development of the demand-driven and market-based model introduced by Skills for All, to ensure that the relationship between the funder and the provider of the training is transparent for all participants of the training system.

Under Skills for All, the role of DFEEST will be to:

manage the VET market to direct training resources to meet the critical and strategic skills needs of the State in consultation with industry and other stakeholders;

be the purchaser and funder of VET in South Australia;

provide guidance, advice and support to industry, training providers, students and other users of VET;

ensure the quality and integrity of the VET system is maintained and enhanced through approval processes and contractual arrangements with Skills for All training providers.

The primary function of TAFE SA will be to provide technical and further education—defined in the Bill as education and training recognised as vocational education and training or higher education for the purposes of a law of the Commonwealth or a law of the State and other post-compulsory education and training in any academic, vocational or practical discipline. In addition, the Bill gives TAFE SA statutory functions to:

undertake or facilitate research that relates to technical and further education;

provide consultancy or other services, for a fee or otherwise, in any area in which staff of TAFE SA have particular expertise developed (whether wholly or partly) in the course of, or incidentally to, the provision of technical and further education;

undertake or provide for the development or use, for commercial community or other purposes, of any intellectual property, product or process created or developed (whether wholly or partly) in the course of, or incidentally to, the provision of technical and further education;

perform any other function assigned to it by the Minister.

Thirdly, by establishing TAFE SA as a statutory corporation, the State will meet an important requirement of the Commonwealth government's reform of the VET system. The proposed governance changes for TAFE SA satisfy the Commonwealth's National Skills Reform agenda. The direct implication is that VET FEE-HELP (income contingent loans) will be available to VET students in South Australia who study at least diploma level where study is publically subsidised through approved training providers.

TAFE SA will be established as a corporation to which the provisions of the Public Corporations Act 1993 will apply, other than section 35 relating to the appointment of the Chief Executive, which is otherwise provided for in the Bill.

TAFE SA will be governed by a board of directors appointed by the Governor. There will be between 6 and 11 members. The board members will together have the expertise, abilities and experience required for the effective performance of TAFE SA's functions and the proper discharge of its business and management obligations. The Minister will have power to recommend to the Governor removal of a director on any ground that the Minister considers sufficient.

A chief executive of TAFE SA will be appointed by the board with the approval of the Minister. The chief executive will be responsible to the board of TAFE SA for giving effect to the board's policies and decisions, the attainment of performance objectives, and the effective management of TAFE SA and the conduct of its employees. The Minister will have the ultimate power to approve the dismissal of a chief executive by the Board.

The staff of TAFE SA will be employed by the chief executive on terms and conditions determined by the chief executive with the approval of the Commissioner for Public Sector Employment. This Bill and the Statutes Amendment and Repeal (TAFE SA Consequential Provisions) Bill 2012 preserve, without any substantive amendment, existing employment conditions that apply under Part 3 of the Technical and Further Education Act 1975 and the regulations. Relevant provisions will be relocated to Schedule 1 of the TAFE SA Act 2012. Importantly, under the transitional provisions, all existing staff will be transferred to the employment of the chief executive of TAFE SA retaining their current terms and conditions of employment.

The existing enterprise bargaining processes will continue for each category of staff and staff will continued to be employed on the same terms and conditions, whether they are currently employed under the Technical and Further Education Act 1975, the Public Sector Act 2009, or under an Enterprise award or agreement under the Fair Work Act 1994.

If a new staff member is required to fill a position in which the duties and roles are the same or substantially similar to an existing classification, it is intended that the employee will be employed by the chief executive of TAFE SA in the existing classification on the same terms and conditions as others in the classification. The terms and conditions will be subject to the same enterprise bargaining processes as exists currently.

If a new staff member is required to fill a new position that is not captured by existing classifications or categories of staff in TAFE SA, the chief executive may employ the new employee on terms and conditions that will meet the needs of TAFE SA, subject to the approval of the Commissioner for Public Sector Employment. The relevant unions will be consulted in the employment of staff in these new roles.

The Bill provides for the use of services of an administrative unit of the Public Service. This ensures that Department of Further Education, Employment, Science and Technology (DFEEST) can continue to provide Corporate Services to TAFE SA when the need arises.

The Bill is intended to operate alongside the Public Corporations Act 1993. Under that Act:

TAFE SA will be under the control and direction of the Minister, and will be required to provide and disclose information to the Government, both on the basis of regularly reporting as well as in response to specific requests for information.

The Government will be responsible for setting the strategic direction and framework for TAFE SA operations via a Charter and a Performance Statement. The Charter can limit the statutory functions and objects of TAFE SA.

The Performance Statement will set specific financial and non-financial targets for TAFE SA to pursue, against which the board's performance will be assessed.

The board will also be responsible for protecting the long-term viability of TAFE SA and the Crown's financial interests.

Within this context, the board will provide strategic leadership of TAFE SA, through appropriate strategic and business plans that are consistent with the Charter and Performance Statement. It will evaluate and monitor the performance of TAFE SA's chief executive. These duties are clearly stipulated in Part 4 of the Public Corporations Act 1993.

The changes proposed for TAFE SA will improve its ability to win business and earn market share, as well as enter into partnerships in its own right as a public corporation, and attract students to its pathways. TAFE SA will continue to partner with higher education providers as well as providers in the school sector and provide pathway opportunities.

The Bill includes new provisions for the protection of proprietary interests including the 'TAFE SA' name and brand and the terms 'TAFE' and 'technical and further education'. The Bill makes unlawful the use of these terms and names in circumstances in which it would be reasonably understood to indicate that a person is TAFE SA. This is considered important in a competitive training environment where the TAFE SA brand is well established and highly regarded.

The Bill provides that TAFE SA will have the power to create rules and bylaws, a power commonly given to statutory bodies such as Universities.

TAFE SA will be able to make rules for the purposes of the administration of TAFE SA including the formation of student or staff associations, residential accommodation for students and disciplinary action against students.

The by-laws deal with the grounds of TAFE SA and conduct in those grounds, with provision for fines and expiation fees to be imposed for the breach of a by-law. For example, by-laws may prohibit trespassing on TAFE SA grounds, regulate driving, riding and parking on TAFE SA grounds and prohibit disorderly or offensive behaviour on TAFE SA grounds.

The Bill does not provide any power to TAFE SA to make rules or bylaws to deal with employment conditions. Employment conditions are expressly provided for through the determination of the chief executive, with the approval of the Commissioner for Public Sector Employment, Schedule 1 (provisions relocated from the current Technical and Further Education Act 1975 and the regulations.

The existing regulations under the Technical and Further Education Act 1975 will continue in existence under the new Act, and will be consequentially amended as required to remove any regulations for which a regulation-making power is not provided for in the measure.

It has been made clear by the quality of the feedback during the consultation period that there is great interest in this proposal, not only among TAFE SA staff but also the general public. There is no doubt that the reforms will be an important milestone for TAFE SA and for Skills for All .

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

3—Interpretation

This clause defines certain terms used in the measure.

Part 2—TAFE SA

4—Establishment of corporation

This clause establishes TAFE SA as a body corporate that has all the powers of a natural person that are capable of being exercised by a body corporate and that has the functions and powers assigned or conferred by or under the measure or any Act.

5—Application of Public Corporations Act 1993

This clause provides that TAFE SA is a statutory corporation to which the provisions of the Public Corporations Act 1993 (other than section 35) apply.

6—Functions

This clause provides for the functions of TAFE SA, that are:

(a) to provide technical and further education; and

(b) to undertake or facilitate research that relates to technical and further education; and

(c) to provide consultancy or other services, for a fee or otherwise, in any area in which staff of TAFE SA have particular expertise developed in providing technical and further education; and

(d) to undertake or provide for the development or use of any intellectual property, product or process created or developed in the course of the provision of technical and further education; and

(e) to perform any other function assigned to it by the Minister.

In providing technical and further education, TAFE SA may—

(a) provide services at campuses and premises established for the purpose, at industry and commercial premises and elsewhere, whether within or outside the State; and

(b) provide Internet based services; and

(c) provide services to domestic and international students; and

(d) in order to provide students with practical training and experience—

(i) establish or carry on an enterprise or activity, for commercial, community or other purposes, in which students are to participate; and

(ii) provide for the participation of students, on such conditions as TAFE SA thinks fit, in a commercial, community or other enterprise or activity carried on by some other person or body; and

(e) provide scholarships or establish other schemes to assist students; and

(f) charge fees for goods and services.

7—Establishment of board

This clause establishes a board of directors as the governing body of TAFE SA to be appointed by the Governor.

The board's membership must include persons who together have the expertise, abilities and experience required for the effective performance of TAFE SA's functions and the proper discharge of its business and management obligations (including in the areas of education and training, business, industry and community affairs and strategic planning).

8—Conditions of office of director

This clause provides for the conditions of office of a director of the board.

A director will be appointed for a term, not exceeding 3 years, and will be eligible for reappointment at the expiration of that term. Remuneration will be fixed by the Governor.

A director may be removed from office by the Governor on the recommendation of the Minister, which may be made on any ground that the Minister thinks sufficient. The clause also lists other ways in which the office of a director becomes vacant.

9—Board proceedings

This clause provides for the conduct of board proceedings.

10—Conflict of interest under Public Corporations Act

This clause provides that a director of the board will not be taken to have a direct or indirect interest in a matter for the purposes of the Public Corporations Act 1993 by reason only of the fact that the director has an interest that is common with those engaged in or associated with the technical and further education sector generally, or a substantial selection of those engaged in or associated with the technical and further education sector.

11—Common seal and execution of documents

This clause provides for the use of the common seal of TAFE SA and for the execution of documents on behalf of TAFE SA.

12—Chief executive

This clause provides for the appointment of a chief executive of TAFE SA and for the responsibilities of that chief executive, namely—

(a) giving effect to the board's policies and decisions; and

(b) the attainment of performance objectives set from time to time by the board; and

(c) the effective management of TAFE SA and the general conduct of its employees.

13—Delegation by chief executive

This clause provides that the chief executive may delegate a function or power of the chief executive under the measure, or any other Act, to another person.

14—Other staff

This clause provides for the employment of staff of TAFE SA by the chief executive (subject to the measure) on terms and conditions determined by the chief executive, which must be approved by the Commissioner for Public Sector Employment.

Subclauses (4) and (5) operate together to maintain the eligibility of certain employees under the Superannuation Act 1988 who are transferred to the employment of the chief executive under the measure.

15—Use of services or staff of administrative unit

This clause provides that TAFE SA may, under an arrangement established by the Minister administering an administrative unit of the Public Service, make use of the services or staff of that administrative unit.

Part 3—Rules and by-laws

16—Power to make rules

This clause provides that TAFE SA may make rules for the purposes of the administration of TAFE SA. The measure specifically lists purposes, such as the formation of student or staff associations, residential accommodation for students and disciplinary action against students.

17—Power to make by-laws

This clause provides that TAFE SA may, with the approval of the Minister, make by-laws for certain purposes related to the grounds of TAFE SA and conduct in those grounds. For example by-laws may prohibit trespassing on TAFE SA grounds, regulate driving, riding and parking on TAFE SA grounds and prohibit disorderly or offensive behaviour on TAFE SA grounds. There is provision for fines (not exceeding $1,250) to be imposed for the breach of a by-law and also for related expiation fees (not exceeding $160).

18—Evidentiary provision

This clause provides evidentiary presumptions relating to certain offence provisions that operate in the absence of proof to the contrary.

19—Fines and expiation fees

This clause provides that a fine recovered in respect of an offence against a by-law and an expiation fee paid in relation to an expiation notice issued for an alleged offence against a by-law must be paid to TAFE SA.

20—Availability of rules and by-laws

This clause requires TAFE SA to ensure the availability of copies of each rule and by-law by publication on the Internet or by public inspection at the principal office of TAFE SA.

Part 4—Miscellaneous

21—Protection of proprietary interests of TAFE SA

This clause provides that TAFE SA will have a proprietary interest in all official insignia, such as logos, designs and official titles and creates offences in relation to the unauthorised use of such insignia.

This clause also creates an offence in relation to the use of other terms and phrases in the course of a trade or business in circumstances in which it would be reasonably understood to indicate that the goods, services or benefits are provided by or in association with TAFE SA.

22—Regulations

This clause provides that the Governor may make regulations for the purposes of the measure.

Schedule 1—Transitional provisions

1—Transfer of staff

This clause provides for the transfer of employees employed under the Technical and Further Education Act 1975, and certain employees of the chief executive of the administrative unit that is under the Minister responsible for the administration of the Technical and Further Education Act 1975, to the employment of the chief executive of TAFE SA on the same terms and conditions.

This clause provides that a transfer of a person under the clause does not constitute a breach of the person's contract of employment or termination of the person's employment, or affect the continuity of the person's employment for any purpose.

2—Regulations

This clause provides that the Technical and Further Education Regulations 1999 will continue in force as if they were made under this measure and will be taken for the purposes of Part 3A of the Subordinate Legislation Act 1978 to have been made on the day of commencement of this clause.

Debate adjourned on motion of Hon. J.M.A. Lensink.