Legislative Council Fifty-Fifth Parliament, First Session (55-1) 55 1 Parliament of South Australia Legislative Council published Bills Construction Industry Training Fund (Miscellaneous) Amendment Bill Construction Industry Training Fund (Miscellaneous) Amendment Bill Construction Industry Training Fund (Miscellaneous) Amendment Bill Second Reading Second Reading The Hon. K.J. MAHER Legislative Council Minister for Aboriginal Affairs Attorney-General Minister for Industrial Relations and Public Sector The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (16:52): I move: That this bill be now read a second time. I seek leave to have the second reading explanation and explanation of clauses inserted in Hansard without my reading them. Leave granted. Today, I rise to introduce the Construction Industry Training Fund (Miscellaneous) Amendment Bill 2024. This Bill implements recommendations from a comprehensive, independent review of the Construction Industry Training Fund Act 1993 conducted on the third anniversary of amendments to that Act in 2019. As the Act had not been comprehensively reviewed in nearly two decades, the Government considered it appropriate to expand the scope of the Review to matters beyond those introduced by the 2019 amendments. The Review considered the view of the Board and received 45 submissions from stakeholders in response to an Issues Paper released for public comment in December 2022. I accepted 30 of the Review's 31 recommendations for immediate implementation. The remaining recommendation, to investigate an alternative, more robust collection mechanism, will be delayed three years, pending evaluation of the other reforms this Bill introduces. A further round of consultation was undertaken on an early draft Bill with key government and non-government stakeholders to identify possible financial impacts and implementation issues. The Bill introduces an objects section to the Act that provides focus to the Board's purposes and functions, including to promote high quality training, innovative training options and access to training for underrepresented groups. LEVY PAYMENT Objects of the Bill also include that the Board must ensure the Fund is appropriately administered and compliance with levy payment is maintained. The Bill reinforces the Board's responsibility in this regard, by adding to the Board's functions oversight of revenue collection. The Review supported improving accountability for levy payment by project owners and the Bill amends the definition of 'project owner' to provide greater clarity that, when government delivers a project, the government authority responsible for a project's delivery is liable to pay the levy. Outside of government projects, the Bill retains the current definition of a project owner to include the person engaged to deliver all, or substantially all of the project; or in any other case, the person who directly benefits from the building and construction work. The Bill will support, through regulations, an increase of the project value threshold at which the levy is payable from $40,000 to $100,000. The Review found that this increase had a small impact on the Board's income and would result in a substantial reduction in the number of low value projects subject to the levy; around 3,500. The Board must review this threshold at least once every three years and may recommend its adjustment. The Bill does not change the current 0.25 per cent levy rate, consistent with the Review's recommendation. Stakeholders viewed the application of the GST to the calculation of a project's value as a tax on a tax. Accordingly, the Bill removes GST from the calculation of a project's cost, resulting in a reduction in the amount of levy payable for all project owners. Consistent with the findings of the Review and a previous independent review of the Act, the requirement that the Board allocate monies from the Fund in proportion to each sector's contribution is removed. This will not alter the Board's overriding duty to consult with the sectors in the allocation of the Fund and, importantly, will enable the Board to allocate monies from the fund based on the best evidence, and industry intelligence. This reform also brings the Act in line with similar legislation in other jurisdictions. BOARD COMPOSITION The Bill responds to feedback that changes to the Board appointment process and composition introduced in 2019 resulted in a lack of balance of representation by members at Board level. This is not a criticism of the work of the Board or Board members. It simply states that a Board that has the benefit of representative members to voice the interests, needs and concerns of employers and employees, is better informed and makes better decisions about how to allocate funding for training across the industry. The Board will comprise 4 members to represent the interests of employers and 4 members to represent the interests of employees. The Bill will require the Minister to consult with prescribed employer and employee associations to identify nominees in this category. An additional 4 members will be independent of the industry, and selected through an expression of interest process. Deputy members can continue to be appointed to the Board, as required. The Bill will authorise the Minister to appoint a person to attend a meeting of the Board. This will replace the current provision permitting attendance by a Commonwealth Ministerial appointee. The Bill confirms that the Minister's appointed person cannot vote or compromise the independence of the Board. COMMITTEE STRUCTURE The current three-committee structure comprising housing, commercial and civil is preserved and their functions expanded to include oversight of revenue collection. The Bill also requires the establishment of a cross-sector planning committee to advise the Board on issues that impact the industry as a whole. The Review heard from stakeholders that professional and small businesses views were an important input into planning by the Board and the cross-sector planning committee can be a conduit for these views. Attracting Committee members with requisite expertise in an area essential for administration of the Fund can be difficult. Accordingly, the Bill permits Ministerial approval of allowances and expenses incurred by committee members; and requires their publication in the Board Annual report and on its website. BOARD ADMINISTRATION The Bill responds to the Board's request to change its financial and operational reporting from a financial to a calendar year. This facilitates planning by stakeholders who deliver training subsidised by the Fund. The Bill streamlines reimbursement of expenses reasonably incurred by Board members; and formalises the ability of the Board to engage staff or services of the public service under an arrangement agreed with the relevant Minister. A new section allows the Minister to present the Board with an annual statement of the government's priorities for the application of the Fund, to inform the Board and assist with its planning. The Board is not compelled to adopt the government's priorities and the Bill will ensure the Board's independence in this regard. The Review concluded that the current annual training plan development cycle constrains the Board's outlook and planning. Accordingly, the Bill introduces a three yearly training plan cycle, with annual reviews. This encourages medium and long-term planning without loss of the flexibility of annual adjustments and ad hoc variations. Based on feedback to the Review, the Bill permits allocation of monies from the Fund for the purposes of workforce attraction and retention activities. REVIEW EXEMPTIONS The Review considered the exemptions in the Act and whether they remained relevant and appropriate. Applying this test, it concluded that the exemptions for power generation and works performed by a self-employed people in industries outside of building and construction, did not meet the test of relevance or appropriateness and should be removed. The Government accepts this approach and will proceed with these reforms. The Review also recommended the exemption for mining and petroleum works be reviewed. Having considered the efficacy of removing this exemption, the Government has decided not to proceed with this course of action at this stage. The Bill will mandate a review of the operation of the Act following its fifth anniversary. Finally, the Bill introduces a number of housekeeping amendments that update provisions or remove obsolete provisions, as required. For example, the Bill will replace the reference to a 'local council' with a 'relevant authority' to reflect the various approval pathways through which building and construction projects progress. I acknowledge the collaborative and consultative approach of the Board, the Department and the Reviewers resulting in the sensible and contemporary reforms introduced by this Bill. I commend the Bill to members and seek leave to have the explanation of clauses inserted in Hansard without my reading it. Explanation of Clauses Explanation of Clauses Part 1—Preliminary 1—Short title 2—Commencement These clauses are formal. Part 2—Amendment of Construction Industry Training Fund Act 1993 3—Amendment of section 3—Interpretation Amendments are made to various definitions for the purposes of the measure. 4—Insertion of section 3A This clause inserts a new section 3A into the principal Act: 3A—Objects Proposed section 3A sets out the objects of the principal Act. 5—Amendment of section 4—Constitution of the Board This clause notes that the Board continues in existence, and directs attention to the new section 32A which provides for the Board to potentially operate under a different name. 6—Amendment of section 5—Composition of the Board This clause makes several amendments around the composition of the Board, and makes provision for how the Board members are to be selected. It provides that the Board will consist of 12 members appointed by the Governor on the nomination of the Minister and that, of those 12, 4 are appointed to represent the interests of employers and 4 are appointed to represent the interests of employees. It provides for the appointment of a presiding member and for the appointment of deputies of members. 7—Amendment of section 7—Procedures of the Board This clause provides for the Minister to nominate a person to attend at a meeting of the Board but notes that such a person is not a member of the Board and can't vote or compromise the independence of the Board. 8—Amendment of section 8—Disclosure of interest This clause replaces a reference to a private interest with a reference to a personal or pecuniary interest, and makes amendments modernising language. 9—Amendment of section 9—Member's duties of honesty, care and diligence etc This clause makes amendments modernising language. 10—Amendment of section 10—Allowances and expenses This clause makes amendments allowing for Board members to be reimbursed for expenses reasonably incurred in the performance of their functions under the Act and allows for other remuneration and allowances as approved by the Minister. 11—Amendment of section 11—Functions and powers This clause adds a new function of the Board, being the overseeing of revenue collection for the fund, and makes a consequential amendment stemming from the amendments relating to the Training Plan. 12—Amendment of section 13—Committees This clause adds a new function to the committees of the Board in addition to requiring the Board to establish a new committee and providing for the remuneration and reimbursement of committee members in circumstances approved by the Minister. 13—Amendment of section 14—Delegations This amendment is consequential. 14—Amendment of section 17—Annual report This clause changes the annual report of the Board from being on a financial year basis to being on a calendar year basis. 15—Substitution of section 18 Section 18 is substituted: 18—Staff and resources Proposed section 18 establishes that the staff of the Board are not public service employees, and that the Board may enter into agreements to make use of the staff or services of an administrative unit of the Public Service. 16—Amendment of section 20—Imposition of levy This clause removes an obsolete reference. 17—Amendment of section 23—Exemptions This clause makes it clear that the threshold amount for the exemption can be found in the regulations and requires the Board to conduct a review of the threshold amount once every 3 years and, if necessary, recommend to the Minister an adjustment. 18—Amendment of section 24—Liability of project owner to pay levy This clause establishes that where building or construction work requires approval from a relevant authority (within the meaning of the Planning, Development and Infrastructure Act 2016), those authorities are not to issue that approval unless the levy has been paid or the authority is satisfied that no levy is payable. 19—Amendment of section 26—Notice of variation This clause makes clear that the amount which triggers the requirement of a project owner to notify the Board is set by the regulations. 20—Amendment of section 31—Construction Industry Training Fund This clause amends section 31(4) by allowing to be paid from the fund any amount the Board considers appropriate for workforce attraction and retention purposes, and makes a minor amendment to a reference to training plans consequent on changes to section 32. 21—Insertion of section 31A This clause inserts a new section 31A: 31A—Minister may present Board with statement of priorities Proposed section 31A gives the Minister the power to give the Board a statement of the government's priorities each year, however it is made clear that nothing requires the Board to do anything to give effect to such a statement. 22—Substitution of heading to Part 6 This clause amends the heading to Part 6, consequent to changes to section 32. 23—Substitution of section 32 Section 32 is substituted: 32—Training Plan Proposed section 32 provides for the development and implementation of training plans, on a 3 yearly cycle, for the purposes of improving training quality and skill levels across the Building and Construction industry. Provision is also made for variation of a training plan within the life cycle of the plan, and for yearly reviews of the plan. 24—Insertion of section 32A This clause inserts a new section 32A: 32A—Board may conduct activities under other name Proposed section 32A allows the Board to conduct its activities under a name prescribed by regulation. 25—Amendment of section 37—Regulations This clause makes a minor amendment modernising language. 26—Substitution of section 38 Section 38 is substituted: 38—Review of Act Proposed section 38 requires the Minister to cause a review of the Act to be completed as soon as is practicable after the fifth anniversary of the commencement of the section. 27—Amendment of Schedule 1—Building or construction work under the Act This clause amends clause 2 of Schedule 1 by removing certain maintenance or repair work from the list of things which do not constitute building or construction work for the purposes of the principal Act. 28—Amendment of Schedule 1A—Value of building or construction work This clause makes various changes to the manner in which the value of building or construction work is to be determined for the purposes of the principal Act. 29—Amendment of Schedule 4—Public accountability of Board This clause makes minor amendments consequential on the change to section 32, as well as for the purposes of modernising language. Schedule 1—Transitional provisions 1—Composition of Board This clause provides that, on the commencement of section 6 of the measure, all the offices of the Board will be vacated. 2—Annual report during transitional period This clause provides for the transition from financial year reporting to calendar year reporting. 3—Training plan This clause provides that the training plan in force immediately prior to the commencement of the measure will be taken to be the Training Plan. Debate adjourned on motion of Hon. L.A. Henderson.