Details of the Financial Framework (Supplementary Powers) Amendment (Employment, Skills, Small and Family Business Measures No. 2) Regulations 2019

 

Section 1 - Name

 

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Employment, Skills, Small and Family Business Measures No. 2) Regulations 2019.

 

Section 2 - Commencement

 

This section provides that the Regulations commence on the day after the instrument is registered on the Federal Register of Legislation.

 

Section 3 - Authority

 

This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.

 

Section 4 - Schedules

 

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedule to the Regulations.

 

Schedule 1 - Amendments

 

Item 1 - In the appropriate position in Part 4 of Schedule 1AB (table)

 

This item adds a new table item to Part 4 of Schedule 1AB to establish legislative authority for government spending on an initiative that will be administered by the Department of Employment, Skills, Small and Family Business (the department).

 

New table item 357 provides legislative authority for government spending on the Skills Organisations to assist in vocational education and training.

 

The Government will provide funding to implement two pilot Skills Organisations in response to the Expert Review of Australia's vocational educational and training system (the Joyce Review), which recommended a national rollout of Skills Organisations, commencing with pilots, as part of longer-term reforms of the vocational education and training sector.

 

The two pilot Skills Organisations in the industries of digital technology and human services care, will be representative of key industry players, and will undertake activities including a trial of new industry led methods for the development of qualifications and assessment to align training with industry skills needs, and the development of standards for endorsing high-quality providers.

 

The pilot Skills Organisations will enhance the role of industry in the national training system, in an effort to ensure training aligns to the needs of employers and thereby improves employment outcomes for students who undertake the training. The role of the pilot Skills Organisations in providing industry endorsement for certain high-quality Registered Training Organisations (RTOs), is also intended to support employers and students to identify RTOs with links to industry. Ultimately, the pilot Skills Organisations will benefit both employers and employees.

 

The pilots will inform longer-term arrangements for a broader rollout of Skills Organisations which could build on and ultimately absorb the current arrangements, whereby a network of Industry Reference Committees provide industry-based advice and set requirements for skills standards and national VET qualifications.

 

The department will provide funding for the establishment and operation of pilot Skills Organisations. For each pilot, funding will be provided to an entity identified through consultation with industry, and assessed as having the capacity and capability to operate as a pilot Skills Organisation on behalf of the industry.

 

Subject to industry consultations, the pilot Skills Organisations are expected to commence operation from 1 December 2019. The pilot Skills Organisations will inform advice to government regarding further development and implementation of the Skills Organisation model.

 

Funding of $41.7 million was included in the 2019-20 Budget under the measure 'Skills Package - delivering skills for today and tomorrow' for a period of four years commencing in 2019-20. Details are set out in the Budget 2019-20, Budget Paper No. 2 Part 2: Expense Measures at page 69.

 

The then Minister for Small and Family Business, Skills and Vocational Education, Senator the Hon Michaelia Cash, publically announced the pilot Skills Organisations through a media release on 2 April 2019.

 

Funding for the pilot Skills Organisations will be provided by way of a procurement process. The process for, and the administration of the procurement, will be conducted in accordance with the Commonwealth Procurement Rules, and will adhere to applicable approach to market and other procurement requirements.

Funding will also be expended in accordance with the Department's Secretary Instructions and delegations on the expenditure of relevant monies, and in accordance with the
Public Governance, Performance and Accountability Act 2013 (PGPA Act).

 

The Minister for Employment, Skills, Small and Family Business will determine the successful recipients (informed by recommendations from the department), and be briefed in relation to specific funding decisions. A delegate of the Secretary of the department will be responsible for making final decisions in relation to any relevant expenditure.

 

Prior to a decision being made in relation to funding, program guidelines will be established for approval by the Minister for Finance.

 

Information on the tender and the resultant contracts will be made available on AusTender (www.tenders.gov.au) once the agreements with providers are signed.

The procurement will be conducted as a limited tender, and as such, will not be a
"covered procurement" under the Government Procurement (Judicial Review) Act 2018, and thus not subject to the review mechanisms available under that Act. No merits review will be provided as the decision to procure the services of one provider involves the allocation of finite resources between competing applicants. As the funding is limited and only two applications can be met, any reversal of a decision on whether a party is successful or not may then cause the displacement of, and disadvantage to, another successful party. It would not be feasible for the department to make such decisions subject to independent merit review. Given the nature and purpose of the expenditure, the department considers that current mechanisms are appropriate and reasonable for any procurement process undertaken in relation to the pilot Skills Organisations.

 

In accordance with the department's procurement complaints process, any complaints in relation to the procurement will be directed, in the first instance, to the relevant contact for the procurement. Unresolved complaints may be directed to an independent officer of my department or a probity advisor if required.

 

Delivery of the activities will be carried out in accordance with an agreement. At the completion of the work, the department will assess the work against the agreement.

 

Once agreements have been entered into between the department and relevant entities, any disputes relating to those agreements will be subject to the ordinary contractual dispute resolution processes, under which there is ultimate recourse to the courts.

 

Additional information about the program will be available on the Department of Employment, Skills, Small and Family Business website. Preliminary information about the pilot Skills Organisations is currently available at:

 

https://www.education.gov.au/skills-and-training-budget-overview-2019-20

https://www.budget.gov.au/2019-20/content/business.htm

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the purpose of the item references the following powers of the Constitution:

*         the external affairs power (section 51(xxix))

*         the executive power (section 61).

 

External affairs power

 

Section 51(xxix) of the Constitution empowers the Parliament to make laws with respect to 'external affairs'. The external affairs power supports legislation implementing Australia's international obligations under treaties to which it is a party.

 

In particular, the following treaties are relevant:

*         ILO Convention (No 122) concerning Employment Policy [1970] ATS 17 (ILO Convention 122), particularly Articles 1 and 2, which are about promoting full, productive and freely chosen employment.

 

The objective of the pilot Skills Organisations is consistent with the intention of improving employment outcomes for individuals. In particular, the pilot intends to trial methods to improve the link between the training packages available to individuals through the vocational education and training system in Australia, and the skills that employers need. It will also increase the responsiveness of the training system to changes in workplace requirements. This will ultimately increase the opportunity for each worker to use their skills in a job for which they are well suited, in alignment with Article 1, item 2(c). As such, it may be seen as contributing to full, productive and freely chosen employment.

 

*         ILO Convention (No 142) concerning Vocational Guidance and Vocational Training in the Development of Human Resources [1986] ATS 2 (ILO Convention 142), particularly Articles 1, 2 and 4, which are about vocational guidance and training.

 

Consistent with Article 1, the outcomes of the pilot Skills Organisations will assist to inform the government on how to improve existing policies of vocational guidance and vocational training. This includes by trialling new methods of qualification development and assessment to align training with industry skills needs. Consistently with Articles 2 and 4, the pilot will contribute to improvement and adaptation of the overall vocational training system, to meet the vocational training needs for all individuals.

 

*         International Covenant on Economic, Social and Cultural Rights [1976] ATS 5 (ICESCR), particularly Article 6 (the right to work).

 

The pilot Skills Organisations will operate consistently with the right to work as set out in Article 6, as their objective is to contribute to improved employment outcomes for individuals. Under Article 6(2) the steps to be taken to achieve full realisation of the right to work include technical and vocational guidance and training programs. The pilot will assist in improving Australia's technical and vocational guidance and training programs.

 

The Australian Government announced pilot Skills Organisations in response to the recommendations of the Joyce Review. The Joyce Review conducted a far-reaching consultation, and ultimately received 192 public submissions from training organisations, employers, governments, and individuals.

Executive power and express incidental power

The express incidental power in section 51(xxxix) of the Constitution empowers the Parliament to make laws with respect to matters incidental to the execution of any power vested in it by the Constitution. Together with the executive power in section 61 of the Constitution, the express incidental power supports activities that form part of the ordinary and well-recognised functions of government.

 

The pilot Skills Organisations will assist the Commonwealth in informing itself on the potential implementation of a broader rollout of Skills Organisations.

 

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Framework (Supplementary Powers) Amendment (Employment, Skills, Small and Family Business Measures No. 2) Regulations 2019

 

This disallowable legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

 

Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the FF(SP) Regulations. Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs. The FF(SP) Act applies to Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.

 

The Financial Framework (Supplementary Powers) Amendment (Employment, Skills, Small and Family Business Measures No. 2) Regulations 2019 amend Schedule 1AB to the
FF(SP) Regulations to establish legislative authority for an initiative which will be administered by the Department of Employment, Skills, Small and Family Business (the department).

 

The department will undertake a procurement process to establish the two pilot Skills Organisations. Each pilot Skills Organisation will be representative of key industry players, and will: trial new, industry led methods of qualification development and assessment to align training with industry skills needs; and develop standards for endorsing high-quality training providers.

 

Human rights implications

 

This instrument engages the following rights:

*         the right to education - Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR)

*         the right to work - Article 6 of the ICESCR.

 

Right to education

 

This instrument engages the right to education, contained in Article 13 of the ICESCR. Article 13 provides that vocational education is a part of secondary education
(Article 13(2)(b)), and secondary education must be available and accessible to all on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education (Article 13(2)(c)).

 

Pilot Skills Organisations promote the right of all people to education by trialling industry-led methods of qualification development and assessment, which will improve links between training providers and industry, ensuring students receive training which equips them with the skills required by employers.

 

This instrument is compatible with and promotes the right to education.

 

Right to work

 

This instrument engages the right to work set out in Article 6 of the ICESCR. Article 6 recognises the right to work which includes the right of everyone to have the opportunity to earn their living by work which they freely choose or accept. Article 6(2) provides the steps to be taken by States Parties to achieve the full realisation of this right including providing technical and vocational education and training programmes, policies and techniques to achieve steady economic, social and cultural development and full and productive employment under conditions safeguarding political and economic freedom to the individual.

 

Pilot Skills Organisations promote the right to work by assisting the government to evaluate different models for the development and accreditation of training packages. A Training Package is a set of nationally endorsed standards and qualifications used to recognise and assess the skills and knowledge people need to perform effectively in the workplace. Training Packages are relied upon by registered training organisations (RTOs) in the delivery of structured, accredited training.

 

The pilot Skills Organisations will also develop standards for industry to endorse RTOs. Providing industry the capacity to acknowledge high performing RTOs with industry connections will enable students to identify training that meets the needs of employers. The intention is ultimately to achieve better employment outcomes.

 

This instrument is compatible with and promotes the right to work.

 

Conclusion

 

This instrument is compatible with human rights because it promotes the right to education and the right to work under the ICESCR.

 

 

 

 

Senator the Hon Mathias Cormann

Minister for Finance