HANSARD
SITTING CALENDAR
SEARCH
LIVE BROADCAST
Hansard Dynamic Subject Index
House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-05-03 Daily Xml
Contents
Pdf Xml

TAFE SA BILL

Second Reading

Adjourned debate on second reading.

(Continued from 5 April 2012.)

Mr PISONI (Unley) (17:20): I indicate I am the lead speaker for the opposition on this bill, and the opposition supports this bill. I take it that we will be dealing with the consequential provisions bill later. As part of its Skills for All strategy the government is seeking to separate TAFE SA from DFEEST and to set it up as a statutory authority under the provisions of Public Corporations Act 1933, governed by a board of directors. Three institutes will operate TAFE SA: Adelaide North TAFE SA, Adelaide South, and TAFE SA Regional.

From talking with my country cousins in the Liberal Party I know that TAFE SA Regional is seen as a valuable asset for members in regional Australia. The Skills for All operation will require DFEEST as a purchaser of education and training services to be at arm's length from providers, including TAFE SA, which is the state's largest provider of publicly funded training. South Australians have access to a training subsidy and the ability to select the training provider, whether it is a TAFE or a private RTO in most instances but not every instance, as I will discuss later in my contribution.

The objective of this bill is for TAFE to become more commercially autonomous and accountable for attracting potential students. Of course, it remains to be seen how TAFE, with its more public provider culture and unionised workforce, will fare in retaining or growing market share in a more competitive environment, even with this level of continued subsidy and support from the government; and I will discuss and raise that further in my contribution.

In other words, what we are hoping to see on our side of politics from this transition is more of a customer-driven focus, more of a private-sector attitude with TAFE. We are hoping we can achieve that. Last time we were in office we certainly started to move in that area. Interestingly enough, it was a key criticism of the Labor Party, when they were in opposition, about our moves to corporatise TAFE and make it more relevant to industry and to make it more accountable and competitive.

I refer the house to a report that was handed down in December 2002 and commissioned by the incoming Labor government in 2002. It was written by Peter Kirby, who was the principal reviewer. In a letter to the then minister for employment, training and further education (Dr Jane Lomax-Smith) Mr Kirby pointed out what he saw as being some of the weakness of TAFE, as it stood then, and why it was important that the move to corporatisation be immediately ceased.

It is interesting that here we are 10 years later and the government, which promised to stop the corporatisation of TAFE, is going even further than what the Liberal Party was proposing 10 years ago. Some of the remarks made by Mr Kirby in his letter to Dr Jane Lomax-Smith were interesting. He pointed out the lack of leadership provided to the system in recent years, the absence of any strategic planning that would set priorities with regard to state development, and the failure to maximise the benefits and collaboration between institutes that have resulted in duplication and wasteful petition.

They are fair and reasonable criticisms, I think, of any organisation that is in government hands. I think you would certainly find that, and the idea of corporatising an organisation like that would be to iron those sorts of things out. However, what has happened after 10 years of Labor running a TAFE system? In that time, of course, it has had seven ministers running the TAFE system as well. In that time, we see that there is still a mess in the TAFE system in South Australia, so much so that TAFE itself, DFEEST and the public servants who work within DFEEST have given up trying to fix it. In December of last year, they put out expressions of interest for the provision of a timetabling system in South Australia.

What was interesting were some of the problems that were described in TAFE's existing environment. Bear in mind that this is 10 years after the Kirby report that was put together to fix the so-called mess this government was left with by the previous government. I must say the Kirby report is a very political document. It is very ideologically driven to the left and very much focused on a publicly-funded and publicly-cultured TAFE system. If he has not seen it, I recommend that the minister perhaps look at it to see just how far he has moved with his bill here today from those evil reds who were running the system 10 years ago.

Observations of TAFE's current timetabling scheduling process—and of course, timetabling is such an important role when it comes to how business is managed—there is no centralised planning or scheduling. That is interesting, as a similar criticism was made 10 years earlier by a government report. Many people involved in labour-intensive, low-tech processes—that is, using spreadsheets. I have also been advised that up until recently in many TAFEs students could only pay cash for their courses; there were not even credit card facilities available.

Duplication of program scheduling among three institutes—this is 10 years after these very same issues or similar issues were identified in the Kirby report that was commissioned by this government. Constraints and variables are difficult to manage, changes are very difficult and labour-intensive to handle and, in brackets, it states that it adds significant cost and non value-added activity. I think that it is another major concern that those who send their staff to TAFE, those who pay for TAFE courses, and those who attend TAFE are critical of the TAFE system and point it out regularly.

Practically impossible to optimise all people, facilities, resources across the entire system—that is a damning problem to have. You have all these human recourses, and we know how important it is to have qualified, well-utilised human resources in the competitive environment in which we live today, particularly with the cost pressures that families have experienced over the years. We have seen dramatic increases in business costs, and we have seen dramatic increases in government costs. We know that government taxes and charges in South Australia over the last 10 years have increased by 81 per cent, even though the inflation rate has only been 33 per cent and, of course, costs are extrapolated across institutions such as TAFE.

It is important that we manage our people, our facilities and our resources effectively and efficiently across the entire system. That is not being done, according to these tender documents released by the department less than six months ago. Planners and management cannot see the impact of decisions, changes and costs—another very damning criticism. Do not forget that these are things that the department has gone outside the department to look for advice to fix. Ten years after they have been identified by a government report, the department has gone out to tender to look for somebody to help it manage these processes.

Some programs are easy to schedule, such as full-time and part-time students in non-trade studies because they do not have many changes during the semester. Some are very dynamic throughout the year and have multiple changes. Schedules are not available online. It is hard to believe in this day and age, isn't it, that schedules for students and teachers and so forth are not available online? We even have government high schools, as well as private high schools, now handing out iPads to their students. It is hard to believe that something as vital as a schedule is not online. Students are forced into making choices with limited visibility of options. I would have thought that that is a fairly major criticism of the department and the way in which it has been running TAFE, that students are forced into making choices with limited visibility of options.

We know that we have a situation here in South Australia where it is important to be skilled up in order to make yourself employable. We know that we have not been as successful, certainly over the last 10 years, in our education system in producing work-ready students. The Premier, Mr Weatherill, and the education minister, minister Portolesi, have been asked what reasons they would give for that, and they have said that we have a higher proportion of lower socioeconomic families in South Australia—that is why we have been falling backwards in our NAPLAN results here in South Australia over the last four years.

In 2010, Mr Weatherill, as education minister, in excusing the fact that South Australia had gone backwards in 2010 on the 2009 NAPLAN results, told the media, 'Here in South Australia, we have a higher proportion of lower socioeconomic families.' Low and behold, who would have thought that, for 2011, we would be even further behind with our NAPLAN results and the new education minister, minister Portolesi, would open the Hawker Britton handbook and find that same line and use it again in the media and say that the reason our NAPLAN results are not as good as they could be is that we have a higher proportion of lower socioeconomic families in South Australia?

What is the way out of that situation? The way out of that situation, of course, is a skilled workforce. What we are discovering today is that the government had identified issues in the TAFE system 10 years ago in its very own commissioned report. Yet 10 years down the track, we find that those same problems are still there and, if they are not, they are worse than the government claimed to have experienced when it came to office.

This is a damning commentary of TAFE and the way in which it has been run by the Department of Further Education, Employment, Science and Technology over the last 10 years. I certainly would be embarrassed if I were a Labor member of parliament—and I am genuine in this comment—knowing how many on the Labor side of politics, through their trade union connections, value training. I certainly value training equally as highly, if not more, because I am here today as an outcome of an apprenticeship system which gave me all sorts of opportunities which I would not have had if I had not got those skills.

I think this is what has been lost in the last 10 years in the government's deck chair shuffling of training ministers responsible for this portfolio. Certainly, over the last four years, it has been even worse in relation to the shuffling of ministers. I think there has been some confusion by the government in relation to the training portfolio over the last few years. It seems to have been that new ministers have gone into the training portfolio. It is not actually a portfolio for training ministers: it is a portfolio for training the people of South Australia. However, there must have been some confusion with that process along the way. Jane Lomax-Smith, Paul Caica and Michael O'Brien were trained in this portfolio.

We had Mr Snelling train in this portfolio—he was obviously having a bit of trouble, because not long after he was made minister, he had an assistant minister for training and employment; that was Mr Kenyon, who has now graduated to be the minister in his own right. I congratulate the minister for training and skills; congratulations for graduating through the Labor ranks and through their own training program using this portfolio to be a minister in your own right. It still does not, of course, help us to understand why we have struggled to deliver students out of schools ready for further education and training—work-ready students.

Talk to any group training organisation and they will tell you that they have introduced trade-based maths and English for when their students come out of high school so they can understand how to read a manual and instructions, or how to work out simple maths processes that they need for changing a litre of oil, or measuring a piece of four-by-two. These are skills that you would expect students to be leaving schools with, ready to use and to apply for the workforce.

It was certainly an expectation when I started my apprenticeship back in 1980. I remember the expectation was that I could obviously fill out my own timesheet, read a cutting list, and read other instructions to deal with construction and maintenance of machinery. These are important skills that students should be learning at school and that TAFE and other institutions would take to the next level.

The new TAFE board would become responsible for protecting the long-term viability of TAFE SA and the Crown's significant financial interest. We know it is a significant investment that the Crown has made in TAFE over decades, and we have seen some very good results. I am a former student of Marleston college, and it is a college that has been there for a very long time. It will be closing, as the government rationalises and changes where it is offering TAFE facilities, and moving to the Tonsley—I am just trying to work out what it is actually called these days, because now they have introduced housing to the block. It was supposed to be a high technology centre when it was first—

The Hon. T.R. Kenyon: Sustainable Industries Education Centre.

Mr PISONI: Sustainable Industries Education Centre. It has housing, which is handy I suppose; it saves you catching the bus home if you have housing on the block. We will see Marleston close, we will see Panorama close, and we will see O'Halloran Hill close as part of that process. The South Australian government will remain the owner of TAFE SA, as I understand it, and the bill safeguards all existing employment terms and conditions for the transferral of staff.

As a matter of fact, this is quite an extraordinary way of dealing with that. I understand that the minister decided to go against departmental advice—and you might want to correct me if I am wrong. I think the advice was for any employee disputes to be handled by the same organisation that deals with the Public Service, but the AEU wanted it to be dealt with through the Teachers Appeal Board, and I believe the minister rolled over on that and allowed that to happen. That was your prerogative, but I put it to you that that was probably more about a turf war between the AEU and PSA than anything else.

What I found interesting was the amount of contact I had with AEU delegates working at TAFE, prior to this bill being released publicly, about their concern about the changes the minister would be making to their terms and conditions. They continue to tell me that they were predominantly concerned about the quality of training, but now that you have rolled over on all their demands, including introducing a schedule of the terms and conditions into the bill, it appears as though they do not have any concerns at all about the quality of training by private RTOs, because I have not heard anything from them. So that was an interesting observation, as a member of the opposition who has been handling this bill.

The TAFE SA Bill 2012 also provides for the protection of TAFE SA and TAFE and technical and further education brands, and this is just one element of the legislation that I would like to explore a bit later on. Perhaps in the committee stage I may have a couple of questions about how that is operating and just what restrictions will be placed on organisations which do, in fact, provide technical and further education but which, because of this bill, may not be able to use that term to describe the services they offer. Perhaps we can explore that further in the committee stage, but I just give the minster advance notice that I would like to go there during that process.

TAFE will also be supported through its transition into a more competitive training environment with higher subsidy prices, funding for community services, etc. These subsidy prices will, according to the government, recognise the additional cost of being the public provider. While the private training community is generally supportive of the corporatisation of TAFE SA, it is the level of the subsidy, as well as those courses that remain TAFE only, which are of concern to those who provide vocational training outside the government TAFE system.

In particular, they would like more information with regard to a projected time line for TAFE to be more fully competitive, and the Statutes Amendment and Repeal (TAFE SA Consequential Provisions) Bill repeals the existing act, including provisions relating to existing governance arrangements, reallocates amendments, and redesignates all other provisions into a schedule of the TAFE SA Bill 2012 and, as a result, relocates all employment terms and conditions of existing staff into the new award.

As I said earlier, that is done through inserting a schedule. When we had our briefing with the department we did explore that slightly, and my recollection of that meeting (again, the minister might want to correct me if I am wrong) was that that situation simply has not occurred anywhere else when this process of corporatisation of a government organisation has occurred. Whether it is necessary I do not know, whether it is another concession to the Australian Education Union I do not know. Perhaps the minister could explain why it is necessary, and perhaps even what effect it would have if it did not happen.

A key feature of Skills for All is student access to VET fee help, a HECS-style scheme of income-contingent loans for TAFE students undertaking courses at diploma level and above, a system that I believe has been operating successfully for quite some time in Victoria and Sydney and a system that we support. I think it is important for those people who do not have their TAFE fees covered through Fair Work Australia, or through very generous employers who are happy to do that or who can afford to that, to be able to improve their educational outcomes and pay later through a HECS scheme.

I think it is a very fair and reasonable way to achieve that. It certainly helps those who are balancing a difficult family situation, whether it be through having to revert to part-time work because of family responsibilities or whether it be giving up full-time work and studying full-time at TAFE. It certainly takes away some of the immediate burden and provides the ability to pay for the qualification when you are actually using it. In my view that makes a lot of sense.

The federal government has required the states to commit to the separation of TAFE from government prior to this implementation. It is important that we support this bill and as I said earlier we do support this bill because the federal government has put a condition, as I understand it, that TAFE becomes a separate body in order to participate in the VET FEE-HELP scheme. Via this scheme the state government will access increased federal VET funding. However, a greater share of the cost of training passes to the student when they earn more than $44,912. That is the latest figure I have; if that has changed I would be very happy to hear about it.

I am not aware of whether it was concluded as to whether the state or federal governments would carry the financial burden of any dishonoured debts with regard to the scheme. Again, perhaps the minister might be able to clarify that either in his response, his closing summary to the second reading speech, or alternatively through the committee stage.

With the proposed establishment of TAFE as a statutory corporation and its separation from DFEEST we should expect independence of decisions made, competitive tendering, equity in compliance standards, and accountability. The past experience of private sector registered training organisations (RTOs) is that the assessment criteria relating to registration, auditing and delivery of training have been much more stringent for them than they have been for TAFE, the public provider.

As the primary provider and the public provider of VET across the state it is important with these changes that the same standard competition and compliance principles are applied. I think it is important whenever the government sector is competing with the private sector that there is a level playing field, and I am sure that is one of the reasons we will hear from the minister a bit later on why there are substantial discrepancies in what private providers are paid to provide the same qualifications to students compared with what TAFE is paid.

They would argue that TAFE has a higher cost structure, and I would not disagree with that one bit—I am sure that TAFE does have a higher cost structure—but it is also important that the same regulatory and compliance principles apply to both TAFE and to the private provider, because we want to ensure that those who choose TAFE are protected in the same way as those who choose the private sector and vice versa. We also need to ensure that the quality of training is exemplary in both instances, whether it be privately provided or provided through TAFE.

The TAFE SA Bill 2012 and report provided by the government set out the role of DFEEST in managing Skills for All. Their ability to do so will be vital to the success of the program, and there remains some disquiet in the private sector regarding their capacity to do this within a reasonable time frame, and the methodologies that they will use. That has been raised with me time and time again from various industries and RTOs. Whether they be part of an industry group, whether they be for-profit RTOs or whether they be not-for-profit RTOs, they all raise that same concern.

Obviously, if the transition to one organisation is done efficiently in terms the operation, sharing of services and streamlining of administration we will see the minimisation of unnecessary duplication. The tender documents that I spoke about earlier say that is a significant problem within the TAFE system at the moment, with the way it is being run by the department. The provision of more cost-effective training and elimination of unnecessary overservicing I think is important. I think that when we are spending government money it is important that we do not see overservicing from any provider that is receiving that public money. We need to ensure, obviously, that it does not happen in a TAFE institution and it does not happen in a private institution. It is important that we can get these students trained and upskilled in a timely and efficient manner, and of course with qualifications that are respected by employers.

We saw a classic example just a couple of years ago now with Adelaide Pacific International College, a college that predominantly provided services to Indian students. It was offering automotive services that simply were not recognised by any employer in South Australia. If you were an Indian student and you had invested substantially in the course that was being provided by this provider in automotive and you went along with those qualifications to a mechanic, a car dealer or a truck servicing operation, for example, and said, 'Look, I've got this VET training certificate'—certificate IV in diesel mechanics, automotive electrical or spray painting or whatever—the advice I was given by anybody who was in that industry was that they simply were not interested in considering that person for employment. That was a very cruel hoax that, in the end, was exposed as nothing more than a scam for permanent residency for those students.

I think the disappointing thing about that was that I understand that the Motor Trade Association warned the then minister O'Brien about the fact that employers would not be recognising the training that was happening in this organisation, yet it still continued to trade. It continued to take the money from foreign students and it continued to operate what was, in effect, a scam.

It is interesting that one of the directors was linked to the ownership of about 120 taxi plates as well. At that time I think there was no shortage of Indian taxidrivers who happened to be students of this college travelling around Adelaide when they were supposed to be either at school studying or sleeping so they could in fact study. It was quite an interesting experiment for the government, and what was even more intriguing was that this organisation, as I understand it, had also passed audits run by DFEEST before the scam was exposed.

It does show how important it is that we have a strong regulatory system in place for our VET providers here in South Australia. We did see some quite ugly situations in Melbourne, for example, when the former Labor government certainly opened up the VET system very quickly—too quickly, I think—in order to manage the regulatory process and manage the quality. We did see it damage the Victorian education industry to a certain extent.

Fortunately, here in South Australia we did not have the boom and we did not have the crash. It is a steady as she goes approach. I am hoping this bill will take us to the next stage in the steady as she goes approach—although, I must say, 10 years is just a bit too steady for my liking. It was 10 years ago through the Kirby report that many of the issues were identified by this government, yet here we are, 10 years down the track before we have seen any serious action being taken by the department, the government or the minister. Obviously, if the transition to one organisation is done efficiently in terms of operation sharing and services and streamlining of administration we will see the minimisation of unnecessary duplication, revision of more cost-effective training and the elimination of overservicing. I just emphasise that because I did go there earlier.

While generally supportive of the move to establish TAFE SA as a statutory body and separating it from DFEEST (a step which the private providers feel was long overdue in the competitive environment), there are several issues that are unclear to the non-TAFE providers of VET training which they feel could lead to an inequity going forward with the Skills for All and VET training provisions into the future, and I will discuss those issues a little later, perhaps in committee. I will ask the minister some questions.

Most notably, the Skills for All subsidy calculator recently released reveals a chasm between the subsidies paid to the public provider and those proposed for TAFE providers, sometimes providing as much as double to three times higher for TAFE for the same qualification than what it provides for the private provider. I seek leave to continue my remarks.

Leave granted; debate adjourned.

PARLIAMENTARY BUSINESS
MEMBERS
GET INVOLVED
ABOUT PARLIAMENT
VISIT
LEGISLATIVE COUNCIL
HOUSE OF ASSEMBLY
CONTACT