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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-05-16 Daily Xml
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TAFE SA BILL

Committee Stage

In committee (resumed on motion).

Clause 6.

Mr PISONI: Before the lunch break we were discussing TAFE facilities and the use of those TAFE facilities for other providers and/or community use for other purposes for a fee. Are you able to provide any guarantees that private providers or community users can access the premises at times that suit their needs, and I understand that that will need to be managed within the TAFE program? The reason I ask that is because we have had anecdotal evidence that, despite the fact there has been space or assets available for use, the times that were offered were not convenient even though convenient times were still available.

Are you able to guarantee that there will be a common-sense approach to this, and will there be a process in place whereby, if they feel as though a decision has been made without proper process or with something else in mind other than commercial practice or community responsibility, a community group or a private provider will be able to raise that concern in dealing with such requests?

The Hon. T.R. KENYON: I cannot give guarantees about times and that the times available will always suit private providers. However, with respect to the earlier point the honourable member made, there will be a common-sense approach to this. There will be an incentive for the department as the owner of the assets. It will be in the department's interest to have the facilities used as much as possible. Third-party users or people seeking to be third-party users of facilities will come to the department.

They still have the option of talking to TAFE, of course, about a sublease arrangement, should they choose to do that, or they can come straight to the department and attempt to get space that way. It will be a common-sense approach. It will be in the interests of the department to have those facilities used as much as possible. The department has internal processes and review processes for decision-making and they will be applied.

Mr PISONI: If I were a community group or a private provider and I wanted to have access to TAFE facilities, what would be the process in order to inquire and then acquire that access?

The Hon. T.R. KENYON: My advice is that the private provider would have two options. First, they could approach the local manager of the campus, the TAFE manager, and seek to negotiate with them. That is one option. The other option is that they can come straight to our facilities manager in the department and make application to them. That would be a commercial negotiation; the end result would not necessarily be commercial rents but it would be a commercial negotiation.

In some instances we already go through that process internally. For instance, the Maritime & Fisheries Academy is collocated with Port Adelaide TAFE down at the Port Adelaide TAFE site. So we have been through that process before. Being the owner of the facilities, and with tenants——the main one, of course, being TAFE—it will be in the interests of the department to have those facilities used as often as possible.

Mr PISONI: This may sound unlikely, but I imagine that as we see more private providers and more not-for-profit providers in the marketplace there may be the situation where two or perhaps even three providers, who are competitors, apply for the same space at the same time. How is that fairly dealt with?

The Hon. T.R. KENYON: Should that event occur, we will just have to go through the negotiations with each of the prospective tenants. There is a good chance that there will be space, because it is fair to say that TAFE campuses are underutilised at the moment. There is no reason why you cannot have a number of third party organisations on the same campus, as well as TAFE. We do that at Regency at the moment; we have Le Cordon Bleu, TAFE, and the International College of Hotel Management all operating off the TAFE Regency campus, and there is space for all of them.

It really is a matter of working through it as the circumstances present themselves. That is not to say that we would not start advertising for use of space at some point, as well. So the approach would vary depending on the circumstances; that is probably the best answer.

Mr PISONI: Would it be your view, minister, that there would need to be some formal process in place to not only ensure that the process was fair but also that it was seen to be fair? I am not satisfied that you actually do have a process in place to deal with such matters. I would imagine that TAFE's community obligation would extend to other providers, and if TAFE had decided that letting out space or letting out facilities was part of its business plan, it would need to have something in place in order to deal with that. A classic example is: would TAFE be able to decline a request for space simply because that provider was a competitor of TAFE?

The Hon. T.R. KENYON: The answer to the last bit of the question is no because TAFE will not be the facility manager, DFEEST will be. That is not to rule out that third-party providers, as I have said, may choose to work with TAFE and sublease from TAFE. They may choose to do that, but in the event that there is some tension between TAFE and the private provider, the decision-maker will be the department rather than TAFE, so TAFE will not be able to make that decision.

About the formal process, it is fair to say that there is no formal process in place for the situation the member described with two or three people all putting in applications at the same time for a piece of real estate, but I would not want TAFE to get too rigid either in its processes around who can rent. I would not want to have to wait for tenders to be called because the whole point of the process is to utilise that space effectively and efficiently, and I would be reluctant to see that tied up in a very bureaucratic process. I think it is unlikely to occur—it may—but the department will have to address that as it arises. It is fair to say that there is no formal process for multiple bids at the same time.

Mr PISONI: I think we are all aware of how important a place of business is for the private sector and there is no more obvious reminder of that than what is happening at the Brickworks Markets at the moment, and all of that has been caused by dealing with tenants in a sloppy way and having no formal agreement. Has TAFE or the department made any inquiries or investigations into how it would protect those businesses that were using TAFE assets? For example, the furniture manufacturing facilities at Marleston. If a small family business which was in the training business moved into cabinet making as a provider of VET, they qualified to be providers and they negotiated an arrangement with Marleston, and then their business was very successful and they wanted to forward plan, how would you avoid a similar situation to what we are seeing at the Brickworks Markets?

Have you looked at tenancy agreements, for example, and their legal standing for both TAFE and tenants? I do accept that it is the tenant's responsibility to get their own legal advice. I would have thought that a lot of this debate has been about opening TAFE up, utilising the facilities that are often idle for many months of the year and hours of the day. If that was part of TAFE SA's business plan, have you made any inquiries or made any progress in designing standard agreements for those who may wish to use those TAFE assets?

The Hon. T.R. KENYON: We currently have a lease agreement with tenants within TAFE. There are a number of tenants on various TAFE campuses around the state, and we have tenancy agreements with them. I understand the point the member is making about the Brickworks. I think the key is to have a tenancy agreement, and we would be seeking to do that. I was not suggesting in my previous answer that there would be no formalised arrangements in terms of lease agreements. There would have to be lease agreements and contracts, so I would expect that to be in place. We currently have them, so they would probably be modelled largely on those, I would imagine, but it is a really good point.

Clause passed.

Clause 7.

Mr PISONI: This relates to the composition of the board. Clause 7(3) provides, 'At least 2 members must be women and at least 2 must be men.' Is the male to female ratio consistent with the government's goals for board participation in the Strategic Plan?

The Hon. T.R. KENYON: The standard drafting for boards in government authorities and organisations is for one male and one female. In this bill, we are increasing that to two males and two females. The department and I will be attempting to meet that fifty-fifty objective the government has in the Strategic Plan. It would be an unusual day in cabinet when there is not some discussion about board composition and the gender balance. Minister Gago is a very fiery advocate for that goal, and she does a good job. I will try to meet that gender balance; it is a worthy thing.

Mr PISONI: Subclause (4) sets out the membership of the board. It provides:

The board's membership must include persons who together have, in the Governor's opinion, 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).

Is the minister able to clarify whether trade union membership, or someone representing a trade union, would be enough to qualify for that position, or would a member of a trade union appointed to the board have to at least demonstrate an ability in one or more of those areas that have been outlined in the make-up of the board's membership?

The Hon. T.R. KENYON: Membership of a union is not one of the criteria mentioned there, so they would have to have something other than membership of a union as the sole basis for their selection. Of course, it makes the supposition, which is erroneous in my view, that members of a union have nothing to offer whatsoever, other than their membership of the union. I do not think that is fair. I think there are many people within the union movement who have a very deep interest in skills, training and workforce participation and have a lot to contribute. Having said that, assuming that the bill is passed by both houses, I will be complying strictly to what will be the law around the formation of the board. So, the board would need to meet in its entirety those areas, including skills in education and training, business, industry, community affairs and strategic planning.

Mr PISONI: Would they need to be formal skills, or would skills learnt through experience suffice?

The Hon. T.R. KENYON: I think some of them are talking about having experience, so that would have to be one of the criteria. Looking at community affairs, there is very little in the way of formal qualifications in community affairs so broad experience is going to be important.

Mr Pisoni: There's another opportunity in TAFE.

The Hon. T.R. KENYON: Certificate IV in Community Affairs.

Mr PISONI: Minister, subclause (2) refers to a minimum of six and a maximum of 11; that is a very significant range. Why isn't it a more targeted figure?

The Hon. T.R. KENYON: I think it is to give a fair amount of flexibility to the minister (and future ministers), but it is not out of step with similar boards around the country. Queensland has up to 12, Victoria has between nine and 15, and Western Australia has between six and 10. Six is a reasonable number. I don't think you would want to go much below six in terms of a board. Equally, you do not want them to get too large and cumbersome, so I think six to 11 is actually quite a good range.

Clause passed.

Clause 8.

Mr PISONI: What will be the total remuneration structure for the board of directors including allowances and expenses? I would like, if I may, to have the overall budget and a breakdown of whether there is a cap on fees for the chair and for ordinary members.

The Hon. T.R. KENYON: There are some fairly detailed guidelines around boards and committees and their remuneration across government. The final make-up and remuneration of the board has yet to be decided by cabinet, but so that I can provide an example of what that might be: level 3s are the lowest level of category 1, which would be around $37,000 for the chair and members might receive $24,000 (around that mark) and the range of remuneration for between six and 11 members would be $161,000 to $284,000. I reiterate that that has not been finalised yet but that is one example of where it might head.

Mr PISONI: Are you able to give some examples of the duties of the chair and the duties of the board members? How often will they be meeting, will they be expected to sit on subcommittees and will those subcommittees attract additional payments for those members?

The Hon. T.R. KENYON: The duties that the member for Unley describes are pretty much the standard duties of a director, so, yes, monthly meetings. There will be subcommittees (audit committee and the like). There is a schedule of directors' fees as part of the cross-government boards and committees fee structure, and they will be caught up in that once we have made a decision on the category and the level of board fees. So nothing out of the ordinary and certainly in compliance with government procedures.

Mr PISONI: Will members be entitled to travel expenses?

The Hon. T.R. KENYON: That will be a matter for the board itself to decide, I would think, as they go through their meetings and processes as board members, just like on any other board.

Mr GRIFFITHS: I apologise if this is covered in a further clause of the bill later on. The directors, I presume, will be the people who will review the performance of the chief executive?

The Hon. T.R. KENYON: Yes; that is correct.

Mr PISONI: Will the director removed from office, under subclause (3), be entitled to any compensation?

The Hon. T.R. KENYON: Being a director is not an employment contract. My advice is that there are no redundancy payments and things like that for being a director. Again, it is a very standard provision across many acts that involve boards and committees.

Clause passed.

Clause 9.

Mr PISONI: You mentioned that there would be monthly meetings, but will there be a minimum number of meeting attendances expected from directors and, if so, what is that number?

The Hon. T.R. KENYON: To be honest, member for Unley, I will be expecting them to attend all meetings, but we have not stipulated a minimum number of meetings or anything like that. It would be very disappointing if they could not attend almost all meetings.

Mr PISONI: This relates to subclause (5). The decision carried by the majority of the votes, cast by directors at a meeting, is the decision of the board. Will the minister be bound by any decision of the board, will the CE be bound by any decision of the board, or are board decisions advisory for the minister or advisory for the CE?

The Hon. T.R. KENYON: The decisions of a board are binding on the CE and the corporation itself, as they are in any company or other public corporations. Corporations have a level of independence. The idea is that they all run themselves, largely, and report back to the minister on operations. Under the act the minister has the power to direct the board. I do not anticipate that that will be used very often.

This is a similar power that currently exists under the Water Act, for instance, and various other boards and committees throughout government. It is very rarely used, and I do not expect it would be used very often at all in this case. For all intents and purposes, the idea is that they will operate as a corporation, and board decisions will be binding.

Mr PISONI: Is it the intention of the minister for the board to be involved in any facet of the EBA, for example, negotiating or recommending changes to the EBA for the Industrial Relations Commission to consider?

The Hon. T.R. KENYON: The EBA? Enterprise bargaining? The board will be very heavily involved in those negotiations, as you would expect a board of a company to be involved. The actual negotiating may well be done by the Public Sector Workforce Relations (PSWR) unit. The actual negotiation itself may be done by that unit within government but the board will have a very strong say in the direction of those negotiations and where they head.

Mr PISONI: Who will be the public spokesperson for TAFE SA? Will it be the chair of the board or the chief executive officer or the minister?

The Hon. T.R. KENYON: In the first instance it will be either the chief executive officer or the chair of the board. That will be a matter for resolution between the board and the chief executive officer. No doubt from time to time, its being a publicly owned corporation, ministers will be asked for comment on matters relating to TAFE in much the same way that SA Water operates. They have their own spokesman, they comment on their own issues. That would be the same for them.

Mr PISONI: Will minutes of meetings be available publicly either through the FOI process or through any easier process?

The Hon. T.R. KENYON: The minutes of the board will be subject to the FOI Act and will have the same considerations. Confidentiality agreements, matters of commercial in confidence and things like that would still be pertinent to the determination under FOI, but I do not think we would be proposing to make them public as such.

Mr PISONI: Will there be an annual general meeting of the board where others may be in attendance who may feel as though they have an interest either as a participant, a student or a general member of the public?

The Hon. T.R. KENYON: Subject to complying with the relevant Corporations Law, my advice is that there would not necessarily be AGMs. Under the Public Corporations Act, they are not required, and they would not be in this case. I think the shareholder would be the Treasurer and the minister.

Clause passed.

Clause 10.

Mr PISONI: This relates to conflict of interest. Could the minister clarify: can a board member be a private provider, have a financial interest in a private provider, be employed or provide representation as a non-government provider or even an employee of TAFE themselves?

The Hon. T.R. KENYON: There is no section of the bill that specifically outlaws that, but I think it would be highly unlikely in any sector of the economy really. It would be unlikely for a private provider or an employee or director of another private training company to sit on the board of TAFE. Obviously, we have to manage conflicts of interest very carefully and those conflicts would have to be carefully managed in the appointment process as well. As I say, there is nothing in the legislation that specifically rules that out, but it is unlikely to happen.

Mr GRIFFITHS: Just taking up that point, I can see that the minister's response is appropriate, but there might be somebody who has had a long-term involvement at a private RTO but has decided to remove themselves from that direct involvement and sold their company—because, in essence, that is what it is—and, therefore, has a skills set that might be seen as being attractive to TAFE SA. So, presumably there is a need for a register of interests to be presented as part of the director's responsibility. Is there a time limit going backwards on how far a previous involvement might be and if that might create a potential conflict in the future?

The Hon. T.R. KENYON: I dare say that, if we could find someone who was previously working in the private sector in training and was no longer, and was happy to be involved, then they would, as you say, be an attractive person to have on the board. Again, there are processes for conflict of interest within government on boards and committees. Those standard processes would be followed and that is why I am not prepared to rule it out completely.

Forgive me, member for Unley, if I am verballing you here but, I think you are talking about current employees and people who are actively engaged in working with private providers being on the TAFE board at the same time. I think we would want to avoid that.

Mr PISONI: If I can just give you an example where it may be a bit grey, you might want to clarify this for those who are following the debate, minister. I can think of at least two unions, for example, that have significant stakes in RTOs—training organisations. The CEPU is involved with PEER VEET and a union, I think it is the CFMEU, is involved with the CITV. Because they are part of an organisation that has an interest in a competitor to TAFE, would that then rule them out of having a representative or nominating somebody with that union membership to be a member of the TAFE board? Is that an area that you would say was too close and, consequently, would be seen as a conflict of interest?

The Hon. T.R. KENYON: That is something that would need to be examined closely. I am loath to rule it out now, but you make a valid point that those conflicts of interest need to be very carefully managed and thoroughly thought through. Again, disclosure provisions are required under the corporations act, and section 19, I think it is, covers conflict of interest in the Public Corporations Act, and they would need to go through that. So, it would need to be very, very clear.

They may have significant experience that would be valuable to TAFE, and it may be judged that, having looked at their experience, they could offer quite a lot to TAFE. Processes could then be set in train to manage any potential conflict of interest. So, I would be reluctant to rule anyone out just on the basis of them working for or being part of a union or any organisation, for that matter, that has other arrangements.

McDonald's does its own training. Someone who is, for instance, a director of McDonald's would bring very valuable experience, and we would have to think that issue through. The value that a director brings would have to be weighed up against potential conflicts of interest and we would have to work through whether it was possible to marry the two up or whether, if it was just too hard, we could not then go through with the appointment.

Mr PISONI: Would it then be your expectation, minister, that if somebody had that sort of connection through an association that they are a member of and there is debate or discussion on the board that could affect their organisation or the information could be valuable to their organisation, they would declare their interest and leave the board while those points were discussed and that vote was taken?

The Hon. T.R. KENYON: Yes, that would be an expectation. I think that is fairly standard procedure for dealing with those conflicts of interest. I think they are set out quite clearly within the Private Corporations Act, I assume, and they would need to be conformed with. That happens on many occasions in the private and public sector: that where an individual conflict of interest is identified they do not take part in that decision-making process. That is an appropriate way to carry on in those circumstances and I would expect it to be followed.

Clause passed.

Clause 11 passed.

Clause 12.

Mr PISONI: This clause relates to the chief executive. I know you touched on this in your reply to the second reading contributions, minister, and you explained that Elaine Bensted would be moving into that position temporarily. Can you give us an idea of the time frame as to when you expect to start advertising for the permanent position and what the remuneration package will be, including expenses or any incentive payments, and whether you are looking at adding incentive payments to the package? Can you give us some idea as to what comparisons you may be looking at for that position?

The Hon. T.R. KENYON: Once the act is proclaimed and is law and the board has been appointed, we will move very quickly to then advertise that position. The total package will really be a matter for the board, but incentive payments are not allowed under government regulations and government processes. I am advised that the government has a policy of no incentive payments, so there would not be any incentive payment. The total package is to be determined in consultation with the board and with the approval of the minister.

Mr PISONI: I certainly know that the contracts for heads of department are available through the FOI process. Will the chief executives of TAFE SA's contract and the terms and conditions of payment be available through the FOI process?

The Hon. T.R. KENYON: Yes, FOI would apply in the same way to TAFE SA as it would to other public corporations and across government.

Clause passed.

Clause 13 passed.

Clause 14.

Mr PISONI: This clause relates to other staff. Subclause (1) provides:

The other staff of TAFE SA comprise persons employed by the chief executive on terms and conditions to be determined, subject to this Act, by the chief executive.

How many staff is it envisaged—other than teaching staff—will be required under the corporation of TAFE SA?

The Hon. T.R. KENYON: My advice is that currently about 2,000 of the 2,500 TAFE employees are teaching staff, and they are mainly on the administration side. The bill does not require TAFE to maintain any ratios. I think that, obviously, over time we would like to reduce the administrative burden, or at least to reduce costs with respect to administration. I do not think that, over time, it would be any secret that we would be attempting to make that as efficient as possible.

Mr PISONI: Will any non-teaching staff be employed under awards or EBAs that are not covered by the Australian Education Union?

The Hon. T.R. KENYON: Non-teaching staff generally are normally covered by the Public Service Association. The Public Sector Management Act covers administrative staff. They will come across into TAFE under that act and conditions, and they are generally represented by the PSA.

Mr PISONI: Will any new staff recruited be permanent or will they be on contracts, or is that decision yet to be made by the yet to be established board?

The Hon. T.R. KENYON: That would be a decision for the CE and the board between them—probably the CE in the first instance, to be honest. Currently TAFE has hourly-paid instructors on a casual basis as it were. There are hourly-paid instructors. They are paid by the hour—casual equivalent, I suppose, is the most direct way of describing it. There currently are people employed on contracts in TAFE, there are currently people employed by the hour in TAFE and there are currently permanent employees in TAFE.

Mr GRIFFITHS: Minister, subclauses (4) and (5) refer to the Superannuation Act 1988. I am aware of the transitional provisions that are later in this bill, but not being familiar with the Superannuation Act 1988 can you outline for the benefit of the chamber what that means?

The Hon. T.R. KENYON: This provision allows employees who are currently in the department and who will transfer across to TAFE SA to maintain and continue to access their current superannuation arrangements. They can vary a little bit depending how long people have been around, but it is a transitional clause essentially. It facilitates the movement of people from the department into TAFE and the statutory authority, and it allows them to maintain their current superannuation arrangements.

Mr GRIFFITHS: I presume it relates more to defined benefit members than it does to accumulation scheme superannuation members, given its date. I think it was post 1993 that defined benefits was basically stopped.

The Hon. T.R. KENYON: My advice is that that is an accurate observation.

Clause passed.

Clause 15.

Mr PISONI: This refers to use of services or staff of the administrative unit. To what extent does the minister envisage this arrangement will be utilised? Can he perhaps give some examples of where we might see the services of the administrative unit used for TAFE SA?

The Hon. T.R. KENYON: The best example would be the service level agreement for HR and IT arrangements that I talked about earlier, and some financial services. Initially these would be provided by DFEEST, and once the board has had time to think that issue through it may choose either to continue with DFEEST or pick another administrative unit within government or use a private provider. They may choose to have a private operator take care of those, or they may choose to insource it themselves and have it as a unit within TAFE itself.

Mr PISONI: That being the case, does that mean that while they are using those services TAFE will be billed for those services from DFEEST?

The Hon. T.R. KENYON: Yes, it does.

Clause passed.

Clauses 16 to 20 passed.

Clause 21.

Mr PISONI: This is an interesting aspect, and I think it might even be unique to TAFE here in South Australia. The bill provides:

use 'TAFE' or 'technical and further education' for the purposes of promoting the sale of goods or services or the provision of benefits, or sell goods marked with 'TAFE' or 'technical and further education', 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.

I am aware that there are a number of interstate providers who use their trading name and then the term 'a private TAFE', and I know of one Melbourne-based provider that had enormous difficulty initially getting registration because he wanted to use that term. Is that still an objection? Is that paragraph (c)(iv) intended to be read where someone uses the term 'private' prior to using the term 'TAFE', where it is very clear that it is a private organisation, that they will not be able to use that?

Technical and further education is actually a description of education that happens after high school, and although 'TAFE' itself has become the brand, it is still accepted that it does, in fact, mean technical and further education. I suppose the question I am asking is: has there been a change in policy for the use of 'TAFE' or 'technical and further education' providing it can be made clear that it is in fact an organisation that is offering technical and further education as opposed to an organisation that is associated with TAFE? I hope that question is clear enough, because I know it has certainly been difficult for this particular individual to argue that case based on his understanding.

The Hon. T.R. KENYON: The purpose of this clause is to protect the brand name of TAFE. As I said earlier, I think TAFE's best competitive advantage is its quality and that is obviously identified in the name 'TAFE'. We would be seeking to prevent private providers trading on the good name of TAFE as part of a marketing strategy. You make the point that the phrase 'technical and further education' can be a description of a service that is provided. Where that is part of their branding, that is where we would take an interest, and that is where TAFE would take an interest. Where it is within their material that they hand out and it is a description of what they do, then I do not think that would be an unreasonable thing to use.

But what we are trying to protect the name 'TAFE'. It is a brand name, so the use of 'Private TAFE' would not be acceptable because it would be tending to try to trade off the good name of TAFE, and that is what this clause is seeking to prevent. Obviously private providers are welcome into the market, that is the whole point of Skills for All, but the TAFE corporation also has to protect its good name, its intellectual property and its brand name.

Mr PISONI: It has been suggested that it may very well give TAFE an unfair advantage. If technical and further education is their business and the well know acronym for that is TAFE—a classic example would be that no single university is granted the right to use the term 'university'. Any such institutions have the right to use it, private or government run—for example, Bond University, University of Adelaide or University of South Australia—providing they achieve the accreditation as a university. Many people will shorten that to 'uni', and they will use acronyms to describe those particular universities.

I know that DFEEST has trademarked the term 'TAFESA', but without the space. It is actually trademarked as a single word and, consequently, it puts you in a position where you are in a strong negotiating position, because TAFESA was in actual fact trademarked. But the term 'TAFE' is not trademarked. I am wondering what your advice has been as to how solid you are in insisting that TAFE not be used for an organisation that clearly identifies itself as being a private organisation; for example an RTO calling itself 'Roxby Downs Private TAFE', or 'Defence Industries TAFE Private', just like we have private medical clinics, we have private hospitals, and we have community hospitals. So, there are many terms that are used to describe that style of care, just like technical and further education is a type of education. I think it is fair to say that over many years, and by accident rather than by design, technical and further education has been, almost exclusively, monopolised by government.

Of course, if people were being introduced into technical and further education, they would have been introduced through the TAFE system, which was, in fact, their only option in South Australia for many years. Minister, are you able to advise the committee how confident you are that, having that very strong stance on the use of TAFE for private RTOs who identify themselves as private operators, that is solid advice and that you can insist on that being a condition of registration as a provider in South Australia?

The Hon. T.R. KENYON: What this clause is seeking to do is to protect basically the trading name of TAFE. What started out as colleges of technical and further education have become known pretty much ubiquitously as 'TAFE'. At the same time, they have built up a reputation for quality provision of vocational education and training. Private providers may argue that by putting 'TAFE Private' or 'A Private TAFE' or something like that in their title, they are seeking to explain what they do, but also if they do that they are trading off by using the good name and the reputation for quality of TAFE to explain what they do.

Obviously, this is going to be on a case-by-case basis as things come along. I think that private providers have enough advantages in many ways in this situation, and they have their own advantages and disadvantages, and TAFE has its advantages and disadvantages in this process, and one of them (and this is the same for any business) is that they would vigorously seek to protect their trading name and prevent people using similar signage that would give the impression they were operating in the same way or they were, in fact, very similar or related to the company. McDonald's would protect its signage and its trademarks and logos. Coca-Cola is very vigorous in its protection of its trademarks and logos. It is not an unusual thing in the commercial area. This clause gives TAFE the power to protect its commercial trademarks and its signage, and I do not know that that is a terrible thing to do.

Clause passed.

Clause 22.

Mr PISONI: Subclause (3) relates to regulation made under subclause (2), and it provides:

...unless the Minister has taken reasonable steps to consult with employees who, in the opinion of the Minister, would be directly affected by the regulations, or persons who, in the opinion of the Minister, represent such employees.

How will you consult with those employees? What is the process or criteria? I know that there would be a number of employees who would be covered by either the PSA or the Australian Education Union, but how would you consult with employees who choose not to be a member of those unions?

The Hon. T.R. KENYON: It would be very, very similar to the current arrangements for consultation, and in fact the arrangements are in place on this bill. We did consult, as you would expect, with the unions—the PSA, the AEU and the United Voice union as well—who had employees who were tied up in this change. The management of TAFE also held consultative sessions via videoconferencing, local meetings and the like. They were open to all employees regardless of membership or not of a union and I would assume that we would use exactly the same processes in the future to undertake consultation.

Clause passed.

Schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. T.R. KENYON (Newland—Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for Recreation and Sport) (16:46): I move:

That this bill be now read a third time.

I would like to thank all the members of this place who have made a contribution. The member for Unley has obviously gone to quite a lot of work to think through this bill and I thank him for that, and the member for Goyder as well.

I would like to thank my staff for helping me to prepare it, and also the staff of the department. A lot of work on the bill has gone on underneath all this. Some of the issues that we have talked about (the subsidy lists and the first part on Skills for All) are a very large undertaking. The Skills for All reforms are very, very large reforms. They involved a lot of work, quite a few late nights and almost unending reading of spreadsheets which is more entertaining for some people than others but that certainly does not lessen the workload. I am very pleased we have reached the third reading of this bill and I commend it to the house.

Mr PISONI (Unley) (16:47): I was pleased that we spent quite a bit of time in committee. It was quite a bit of work preparing those questions and I do thank my lonely staff member in my office for helping me with that, and of course the stakeholders who are involved in VET services here in South Australia.

I think this bill is long overdue. There is no doubt that we all know it has never really been a process that could be seen as fair when the provider of funding is also the provider of training. Certainly members on this side of the chamber are very concerned whenever the government is competing with the private sector. At the same time we know that there is broader responsibility on TAFE SA and we do have a belief in South Australia that education should be available to everybody regardless of where they are. I know many of my colleagues representing regional South Australia will be ensuring that TAFE works; they are very keen to see TAFE become a stronger organisation.

Some of the debate around this TAFE bill has been concerning, such as where there is an organised group that is frightened of competition and is frightened of a larger pie in the training sector. I see it as an opportunity to bring innovation into training in South Australia, to bring innovation into small businesses that may have access to training that they have not had before. I am a believer that having a nudge of a competitive nature introduced into TAFE will certainly bring the best out of TAFE management and bring the best out of the TAFE board.

I will be looking very closely at the composition of the board. I hope the minister does select a very well-qualified and passionate board for TAFE. This is an opportunity for TAFE to shine after being shackled for so many years in being a part of DFEEST, which, I think it is fair to say, is not one of the most efficiently run departments in South Australia.

We know that, even through the debate we had earlier about the dramatic increases in salaries, the minister did not clarify in enough detail where some of those very high salaries had come from and why we saw jumps of significant amounts of dollars in a 12-month period for some of the highest executive salaries within TAFE. This was at a time after the GST, a time when we saw the slowing of the economy and the need for restraint. I think it was in the 2010 budget, where the then treasurer, Mr Foley, indicated that he wanted to cap public servants' pay rises to 2.5 per cent, but we certainly did not see that sort of restraint at the executive level of DFEEST. I certainly hope that we will not see the executive level of TAFE with the same types of salaries that we are seeing in DFEEST.

It may even be an opportunity for the minister to revisit those DFEEST salaries now that DFEEST will be much smaller in size and much easier to manage. I think that if we are serious about having good and efficient government in South Australia, when one decision makes a difference elsewhere, then that elsewhere also needs to be examined. I hope that, once DFEEST has got TAFE off its books, we will see an effort from DFEEST to review the way it conducts itself, and maybe have a look at its culture and improve efficiencies for service delivery, because, let's face it, it is part of the public service and members of the public do want service from their public servants.

If we go back to the Kirby review of TAFE governance in South Australia, it went beyond that. It was a very political document aimed at having a go at the previous Liberal government in its attempt to reform TAFE, all those many years ago, with the beginning of the corporatisation process. I think this department has been very slow to move TAFE into a competitive position. One cannot help but think that it was more or less one of the last in the country to do so, and the implications of not having HECS-style funding available for students virtually forced it to move in this direction.

I think the committee process will make for very interesting reading of the Hansard for those providers and those involved either working for TAFE directly, or indirectly those RTOs that are associated with TAFE and competing with TAFE. I think that in some areas it has cleared things up for those members; in other areas, I think it has raised some additional questions. I am sure that when the Hon. Rob Lucas in the other place handles this bill, as it moves through the Legislative Council, there may be some clarification or some more questions being asked then.

I thank the minister for the opportunity and I thank the minister for answering the questions that he has answered in committee. I thank the staff that have been engaged in preparing this shift and I wish them all the best for ensuring that it is a smooth transition for TAFE. I have confidence in human nature that the people working for TAFE will be quite excited about this process, about being able to be their own organisation and be responsible (and held responsible), to be given some more latitude and freedom and competition.

They will relish the challenge to be a corporation and answerable to a board, and we will see significant improvements in outcomes, service delivery and industry response, which I think is an important factor. Certainly, in my experience as an employer training 20 apprentices over 22 years, it was difficult at times for TAFE to understand industry needs. It is a bit slow to move. It is a bit slow at times to respond to demands of industry. I hope that separating TAFE away from the department will enable the ship to be turned substantially quicker when there are new areas that can be exploited in the way of providing training in the future.

Bill read a third time and passed.

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