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Estimates: Education and Employment Legislation Committee (Australian Skills and Quality Authority)

Estimates & Committees
Lee Rhiannon 25 Feb 2015

Senator RHIANNON: Is it correct that even though a private RTO—like Vocation and a number of its subsidiaries—might be registered in New South Wales, and therefore fall within ASQA's purview, if another subsidiary was based, say, in Victoria you would not have regulatory responsibility.

Mr Robinson : Yes. Vocation is a company which purchased a number of RTOs, as you may be aware. One of those RTOs, BAWM—about which considerable problems were found in Victoria by the Victorian government in their funding of them—was an RTO that was regulated by the Victorian regulator because it operated entirely within Victoria's state boundary and it did not have overseas students. If it is registered in Victoria but it has overseas students or operates across state borders, then we regulate them. We regulate the other RTOs in the Vocation group. The Victorian government raised with us concerns about another RTO in that group, Aspin. They were managed by the same people that managed BAWM. We did a lot of follow-up work with them and discovered considerable issues. We gave them an ultimatum around redressing the noncompliancess that we found, and they decided to close the RTO instead of fixing it up. It was, also, I believe required to repay moneys to the state government over training funding that it had given that RTO. We are looking at all the other RTOs in the Vocation group because of the concerns with those two RTOs. We have been auditing those. We have renewed the registration of one of those RTOs because we did not find the same kind of problems, but their management was a different group of people. Vocation is the owning company, but they run a number of discrete, different RTOs.

Senator RHIANNON: So you are saying that Vocation is the only one that you have found that has that cross-border problem that I just spoke about?

Mr Robinson : No. Vocation owned 10 RTOs. They closed three of them and merged them into their remaining seven. Six of those are regulated by us, and one was regulated by Victoria. Two more have closed, because of that regulation.

Senator Birmingham: Victoria and Western Australia are not—

Senator RHIANNON: In the system?

Senator Birmingham: There are provisions under which RTOs operating in Victoria and Western Australia are covered by ASQA, but if they solely operate within Victoria or WA and do not have international students then they are not covered by ASQA. I am engaging in some conversations to see whether we can try to close some of those gaps. That is contingent upon cooperation of those state governments.

Senator RHIANNON: Can that be changed by law at a federal level? Or do you need your state colleagues to cover that? Is that a jurisdiction issue?

Mr Robinson : ASQA's legal situation required a referral of powers from the state parliaments to the Commonwealth to allow national regulation of VET to occur. There has been only a handful of previous occasions when state parliaments have referred powers to the Commonwealth—income tax powers in the war. The Commonwealth did not give them back after the war. In the case of this situation, the governments of Western Australia and Victoria did not refer those powers, but the Commonwealth laws nevertheless prevailed over the RTOs in those states that had overseas students or worked across state borders in referring states.

Senator Birmingham: But yes, we would need some referral from those states to close that irregularity that exists with some RTOs.

Senator RHIANNON: Thank you. It will be interesting to hear how your talks go. Does ASQA keep a record of fees being charged by providers for courses?

Mr Robinson : ASQA has no role in regulating the fees of providers or monitoring those fees.

Senator RHIANNON: It was not about regulating; it was just about whether you keep a record of them.

Mr Robinson : No. The only role we have is in relation to providers not charging more than $1,500 up-front or at any one time in advance of the training being delivered by a provider.

Senator RHIANNON: Wouldn't it be relevant to look at this data—in particular, fees for diplomas and advanced diplomas that are deregulated, where there is no government subsidy?

Mr Robinson : I think that is a policy question. It is not really a question that relates to our current functions.

Senator RHIANNON: Minister, do you have a comment on that?

Dr Banerjee : Sorry—could you just repeat the question?

Senator RHIANNON: What I was inquiring about was in the first instance a record of fees, and you have said no. And I thought it would be relevant for that information to be collected, in particular fees for diplomas and advanced diplomas that are deregulated where there is no government subsidy. Isn't that important information that you need?

Dr Banerjee : At the moment the information that is collected in the fee-for-service market is not comprehensive. The NCVER, the body that looks at statistics for the VET sector, does, I believe, through some of its collections and surveys, collect some fee information, but it is not a comprehensive collection at the moment. My understanding is that the total VET activity collection that is currently underway will address some of that. I cannot go to the detail of whether or not it will collect a comprehensive picture of fees, but it will certainly collect a comprehensive picture of the activity that is underway in the private fee-for-service market.

Ms Paul : It has been an issue for many, many years. Naturally, why would an entirely private full-fee-charging service that does not receive public funding give data to the public collector?—the National Centre for Vocational Education Research, NCVER. But we are hoping that we are just about to crack that nut for the first time with the data collection that Dr Banerjee has just described.

Senator RHIANNON: But doesn't it go to the issue of standards?

Senator Birmingham: In the circumstance of a provider offering a diploma or an advanced diploma who is not receiving any public subsidy, while there are always questions of standards, of course in that circumstance the student is indeed paying up-front. In many ways I have greater concern about where providers are operating in the VET FEE-HELP space, which comes to taxpayer dollars but also means that the background checking that the student might be incentivised to do is diminished because they are not having to pay any up-front fees; they can all be put on VET FEE-HELP. So, while it is a gross generalisation to say this, I suspect that where it is purely a case of up-front fees being charged there may well be fewer quality issues than in the space where the consumer is not having to fork the money out up-front and therefore does not have as much incentive to be doing the checking in the first place.

Senator RHIANNON: Since ASQA's inception, how many instances of noncompliance have been found during your re-registration audits?

Mr Robinson : Senator Carr read out a statement before for one of those financial years where around 80 per cent of the RTOs we audited had at least one noncompliance at the initial audit. But after they had the opportunity of 20 days to rectify those issues, that turned into around 20 per cent remaining noncompliant. That figure for the last financial year has actually improved. It is now 15 per cent that are not compliant after rectification, and 85 per cent are compliant. So, we have identified a lot of noncompliances, but we also have a process in place to require the RTOs to fix those noncompliances or have some regulatory sanctions applied to them.

Senator RHIANNON: Those percentage figures you just gave: are they a percentage of what you investigate, or a percentage of the total?

Mr Robinson : They are a percentage of all the audits we have done, and we have done over 4,000 or them since we commenced.

Senator RHIANNON: What role does ASQA have in monitoring and auditing RTOs in Victoria that have access to VET FEE-HELP?

Mr Robinson : Of the people who have access to VET FEE-HELP, we would monitor those in Victoria who operated beyond the jurisdiction of the state of Victoria. Even though they are based in Victoria, we regulate those, and we regulate the RTOs that also have overseas students. So, we would regulate RTOs in Victoria or in that category. If they were not, they would be regulated by the Victorian regulator.

Senator RHIANNON: So, if they are just in Victoria, and no international students, you do not—

Mr Robinson : But we do regulate I think around 55 per cent of all the RTOs in Victoria, and we regulate all the big ones—the TAFEs and big private ones as well.

Senator RHIANNON: How many providers does ASQA currently register that deliver courses in hypnotherapy?

Mr Robinson : I could not answer that question.

Senator RHIANNON: I have a few questions that you could maybe take on notice, or perhaps somebody has the figures here. How many providers do you register that have courses in hypnotherapy, reiki, life coaching and body-mind-soul coaching?

Mr Robinson : We would have to go and check the register as to which RTOs had those courses on their scope. We would have to take that one on notice.

Senator RHIANNON: Yes, if you could give us a breakdown for the four categories, that would be useful.

Mr Robinson : Yes, we could give you the number of RTOs that have any one of those, and we could give you the number that have each of those.

Senator Birmingham: It might be useful to add on to that the level of qualifications associated with any of those—

Mr Robinson : Yes, we could say whether it was a cert III or a cert IV or whatever.

Senator RHIANNON: Minister, you have spoken here about your concerns about the standards, and we are also aware of some of your comments in the media. Could you give us a date for when you decided to instigate these crack audits, as some people are calling them?

Senator Birmingham: That was work that ASQA has been preparing for a while. Certainly since my appointment on 23 December I have become increasingly concerned and aware of some of the issues in relation to quality and some of the concerns about abuse of VET FEE-HELP. And from my very first discussion, Mr Robinson and I talked about those issues, and that has continued through all of our discussions. It is not me instructing or directing ASQA to undertake a crack audit or the like. It is an organic process out of ASQA's own concerns, my concerns and, to be fair, Minister Macfarlane's concerns that he had previously, noting that he had taken a number of steps to try to strengthen the standards and the regulations in the funding for ASQA to allow them to deal with the problems that were there—which, it is worth re-emphasising, essentially have all been inherited by this government.

Mr Robinson : In relation to the VET FEE-HELP issue, we have had only about 135 complaints so far since the start of 2013, when the VET FEE-HELP program commenced. The department has informed me that there are some 190,000 students on VET FEE-HELP, so it is an extremely small percentage of the overall number of students that have been on VET FEE-HELP. But we have been concerned about the nature of some fee issues that have been raised, about very poor student recruitment practices and deceptive and misleading student recruitment practices. So we think that, even though the overall number is not huge, some of the claimed and alleged abuses seem to be really quite serious. So we have been increasingly concerned, and we set up a group within ASQA late last year to pull together a more coherent strategy for us to go out and look at the providers that have got most of those complaints accruing to them so that we can check and see what is going on here—whether it is indicative of a wider systemic issue or is isolated to these sorts of instances—and what we can do to assist the department in its work to sort some of those issues out.

Senator RHIANNON: Could you just detail, when you are responding in that way, where you are taking your information from.

Mr Robinson : As I say, overall the complaints from students comprise 44 per cent of our complaints, so we get a lot of complaints from students. We get some from employers and the like. We monitor the media and some issues get raised through the media. We also liaise with a range of industry bodies and occupational regulators. We do hear about some of the issues that states might be concerned about, and we use that to frame our regulatory responses. As I was saying before, we are developing a new regulatory approach which is focused on drawing these sources of information together and using that to trigger our regulatory response. In a way, this VET FEE-HELP strategy is that kind of response. There have been these complaints out there, so we want to pull them together and have a good look.

Senator RHIANNON: If we asked you about all—some of them have been very serious and very alarming, as I am sure you are aware—of the reports in the media, can you then respond that you have investigated all of those, because there is so much detail; so much of your work is actually done already.

Mr Robinson : The RTOs that we are including in our crackdown, as we were calling it, are where there have been two or more complaints at any RTO; we are looking at those RTOs. That comprises more than 70 per cent of the complaints we have had about VET FEE-HELP, so we are following up on those.

Senator RHIANNON: Can I just clarify that. When you say two or more complaints, do you regard a report in the media as just one complaint?

Mr Robinson : It is when a complaint has been formally lodged with us, but we also look at the media reports as well. We try to follow up with people if we can. Some of the stories that come through the media, however, do not have actual people identified who are making the allegations, so it can be very difficult. We do look at all those issues and we might follow up with RTOs about what has been alleged and what they have got to say about it and the like. So we do follow up there.

Senator RHIANNON: Just to ask the question again, with the reports that have been in the media, can you say that you have followed up on all those reports? Do you want to take it on notice?

Mr Robinson : We can give you a more comprehensive analysis of that.

Senator RHIANNON: To be fair, of which ones in the media you have followed up.

Mr Robinson : But I believe we would have looked at them. There have been quite a few.

Senator RHIANNON: Yes, and they are comprehensive.

Mr Robinson : Some of them will be included in this audit work we are doing.

Senator RHIANNON: Did you advise—I was just trying to understand the process here—the government that the registration period for RTOs should be extended from five to seven years?

Mr Robinson : We did advise some time ago that that was a possible option to be considered, and that has been looked at. The issue here is that registrations for higher education go up to seven years and registrations for RTOs for VET have gone up to five years, and also registrations for CRICOS for overseas students go up to five years, but there is some work going on, which someone else in the department may be able to talk about later, in relation to the ESOS Act reconsideration at the moment, which I think has that issue in its sights as well.

The reason we think it is appropriate is that RTOs do have a good track record and are not figuring in intelligence about poor practice or complaints coming in or other information or analysis that we might do on the new data that is about to roll out that might indicate there are some risk factors that we need to go and look at. It is appropriate, I think, to have a reasonably long-term registration period to allow people to build their RTO practice, to invest in quality and to get a surety of a longer return on that. We do not believe, under the regulatory strategy that we are pursuing, that, if that RTO is of concern and causing concern out there, we should be waiting for five years to go and look at it. We should go and look at it much sooner. Our regulatory strategy should not be related simply to the length of the registration period.

Senator RHIANNON: Minister, have you been lobbied by any RTOs or lobbyists for the industry for this sector to make that extension?

Senator Birmingham: To make the extension for five to seven years?

Senator RHIANNON: Yes.

Senator Birmingham: I would not say that I have been lobbied to make that extension. It is welcomed by the sector as well. Ultimately, they would rather have a system where compliance activities and enforcement activities were effective and directed at maintaining high-quality standards rather than being bureaucratic and simply imposing essentially a tick-a-box approach or a red-tape burden, or just not being effective at lifting the standards.

As I explained to Senator Carr before, and as Mr Robinson has certainly explained a couple of times, the evidence across a suite of landscapes when it comes to auditing activities is that risk based auditing, random auditing, is far more effective in identifying problems than well-sequenced and known auditing. When a provider knows that the auditor is coming five years in advance because that is the re-registration date, then they know to be ready for it five years in advance. These types of random audits, like Mr Robinson is doing with the 23 VET FEE-HELP providers, are far more likely to catch people off guard—that is why he is not revealing the names of them tonight—so that we get a true reflection in the audit activity of what is happening.

Yes, the sector are happy that they do not have to re-register every five years, from a red-tape perspective, but those in the sector who are serious about seeing good-quality outcomes are happy that it also frees the regulator up to be more effective in how they target their auditing activities.

Senator RHIANNON: But isn't it the case that you could also have your random audits over five years? There was nothing stopping you.

Senator Birmingham: Certainly, but that then becomes a question of resources. If Mr Robinson and ASQA are having to audit all RTOs just for the re-registration purpose every five years, that means they are spending more time on re-registration audits and have less time available to spend on risk based auditing. By extending it out an extra two years, they have more resources and more time to spend on the risk based auditing activities.

Senator RHIANNON: Minister, you said then, at the start of the response, 'I wouldn't say that I was lobbied.' Could you clarify that? Were you lobbied, or were you not lobbied?

Senator Birmingham: I do not recall a single provider, lobbyist or otherwise, speaking with me specifically about wanting to change the registration period from five years to seven years. I have certainly had a lot of them say: 'A lot of what we do is jump through compliance hoops or tick-a-box compliance activities and red tape. If you guys are going to invest in auditing activities, why don't you make them more effective?'

Senator RHIANNON: Mr Robinson and Senator Birmingham, could you both take on notice if you have been lobbied by the sector, by lobbyists for the sector or by RTOs?

Mr Robinson : I do not need to take that on notice. I have not been lobbied by any professional lobbyists.

Senator RHIANNON: Okay, so Senator Birmingham?

Senator Birmingham: I will check. Obviously, as a new minister, lots of people have written me letters. Whether it has been included in one of those letters as a suggestion we will check. I certainly do not recall any conversations to that effect.

Mr Robinson : In my case the issue has come up when we have been having discussions with TEQSA about more efficient and streamlined registration processes between both of us and the problem that them having seven years while we have five years registration has caused. As you are aware, probably the majority of the providers that TEQSA actually regulates are providers who are both VET and higher ed providers, so there are some benefits in being able to streamline some of these regulatory activities in that dual sector part of the operation, but more generally for us it is about freeing up our resources to focus on the worst offenders in the system. The good RTOs in the system are deeply keen on us doing this as much as anyone else because the poor RTOs undercut quality by offering programs more cheaply to attract business when they are not really offering a quality program that they have invested resources into. So the responsible providers out there who are interested in good quality are very keen on us doing more to get rid of the poor providers out of the system as quickly as possible.

Senator RHIANNON: So you have given a lot of emphasis to resources, and this is where it seems to me the logic breaks down. If you are being provided with extra resourcing, why do you in effect need to devote resources away from re-registration? It appears that is the motivation. You are saying it is a matter of resources, but you have extra resources.

Mr Robinson : We want to give the highest priority to dealing with the poor quality providers. We have been given some extra resources that are assisting in that, but the biggest part of that process is to be able to reprioritise our existing audit resources away from the automatic re-registration process—the minister described where they know that their registration is going to finish on a certain date and sometime around that period they could be subject to an audit. When we have people who are causing real concern out there, we are able to focus our resources on looking at those people far more quickly than we otherwise would. That is what is important. I am not saying that we do not have enough resources to do our work—I think we do—but it is important that we deploy those to the biggest problem areas and the highest priority issues for the quality of the whole sector.

Senator Birmingham: I think the figures that Mr Robinson gave Senator Carr earlier about the proportion of audits that are driven by re-registration or registration based activities versus those driven by complaints or risk based activities are concerning. They are already taking action to move that in the right direction, but changes to registration time lines will allow them to take more action to do that risk based auditing to a greater extent and ultimately the advice I have is that re-registration auditing is the least likely to result in some type of sanction activity occurring. If we are all serious—and I think this is agreed across parties; we might have different philosophical approaches to some of the funding equation and so on—about wanting to see quality outcomes in this sector and wanting to see a heavy hand applied to those doing the wrong thing, then we should be wanting to see auditing activity directed where it is most likely to result in the pickup of noncompliance and most likely to result in sanction activity, and that is not re-registration.

Senator RUSTON: You may not have the information on you but, in follow-up to Senator Rhiannon's questions, do you have a breakdown of the data on noncompliance between the public providers, private not-for-profits and private profits?

Mr Robinson : I would have to take that on notice. We could not get information about that. So far, I could say we have not taken action to close a public provider. They tend to be larger and have many different areas on scope, but the big private providers and big public providers tend to have quality people working in the organisation, looking at their quality systems, more than some of the small providers.

What we have found in a number of cases, with those big providers, is that one part of their operation may be found very wanting. The result is that they get some of their scope amended so they are not allowed to continue offering certain courses. That has happened with public dividers as it has happened with private providers. We will get you a breakdown of the public-private split or the provider type and the regulatory action we have taken, to date.

The other thing I would say is that we also have not had a large chunk of the TAFE system come up for re-registration yet, although quite a bit of it is coming up in 2015. When we received them 3½ years ago from the state regulators, most of them had a fair bit of registration period to go when they were handed over to us. So there were not many coming up for re-registration shortly after they were handed over to us. We will be doing more regulatory work with the public-sector providers in the coming two years than we have done in the past two.

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