COAG IN CONFIDENCE—WITHOUT PREJUDICE SCHEDULE 7 Vocational Education and Training, and Higher Education VOCATIONAL EDUCATION AND TRAINING (VET) Description of reform (VET) system. 2. The Parties agree that shared funding arranger funded model. The Commonwealth wil als administration of Australian Apprenticeshi an apprenticeship or traineeship; however exch relations). luding determination of, hat is and what is not ling responsibility with respect to workplace (the availability of subsidies and loans and the qualifications that be targeted and prioritised to support national skills needs and ,, and determined by the Commonwealth with advice from ensure budget Sisteigah iflal Council to ensure local skills needs are considered, and with advice States via the Mini from industry including via the AISC. ©. Fee policy, subsidies and loans will be determined at the same time to ensure they effectively target priority skills, and will include consideration of the arrangements offered by higher education providers for similar qualifications or courses. d. Funding will be available for prioritised individual skill sets, as well as full qualifications, determined by the Commonwealth with advice from States via the Ministerial Council, and with advice from industry including via the AISC.COAG IN CONFIDENCE—WITHOUT PREJUDICE ‘SCHEDULE 7 fe. Funding will prioritise apprenticeships and traineeships. f. Training providers delivering funded training to students will be required to demonstrate an appropriately high quality threshold for access to public funding. 5, Parties agree that this mainstream funding will be complemented by targeted funding to support local skills priorities (not otherwise met through the main subsidy system, Including in thi markets and/or regional and remote areas), to identified student cohorts (such as Indigenous Australians), and to respond to unanticipated changes in national skills needs (for example, in ‘emerging markets). The allocation of targeted funding will be agreed on a case-by-case basis between the Commonwealth Minister responsible for VET and the responsible State Minister, {reform vevcnne its changes to the VET FEE-FELP scheme) before the new funding mic juced. Me a to the Review of Training. #2016; \) on outcomes rather than fifst time, fee policy, loans and subsidies will be synchronised, and the allocation of funding will reflect information about both national and local skills needs, drawing from industry. 10. The Commonwealth, asthe system manager, will be able to make effective interventions in the ‘market and will allow for government investment to be coordinated and directed towards improvements in quality. 11, Better targeting of fee policy to national skills needs will provide incentives for providers to offer {raining that will match skills needs, and for students to choose those courses that will lead to jobs. This will result in a high-performing VET sector that flexibly responds to skills needs and student demand, boosting workforce participation and productivityCOAG IN CONFIDENCE—WITHOUT PREJUDICE SCHEDULE 7 12. This model will also introduce an appropriately high quality threshold for access to public” funding, for example, where training providers have a record of high quality and regulatory compliance. 13. The provision of better public information for users of the system and performance monitoring of providers and training products will ensure students are able to choose high quality courses that are right for them and their future employment options. 44, These reforms will build on governments’ existing efforts and experiences to improve the VET system and manage risk —for example, recent reforms to eliminate abuses ofthe VET FEE-HELP scheme, States’ experiences managing entitlements, the establishment of the AISC to oversee How the reform will improve efficiency 15, As the single funder, the Commonwealth will base.t public benefit of education and training and will reflect the private benefit. 16. A single system will also be simplep.s Ad.employers wll no longer be required to grapple with multiple fun p iceships will be subject to ir learning and training product. Government-owned providers ‘as private providers. Consequently, as providers begin to =| will drive further improvernents both to the quality and efficiency compete on quality, within the sector. 19, Consistent national funding arrangements will also make it easier for training providers to operate in multiple Jurisdictions. This will expose providers to more competition and give students and employers more choices. Enhanced consumer information and performance ‘monitoring will ensure competitive pressures favour high-quality providers. 20. The new arrangements will also promote competition between providers of simitar courses in the VET and higher education sectors, encouraging students to choose a high quality course in the sector that suits them.COAG IN CONFIDENCE—WITHOUT PREJUDICE SCHEDULE 7 21, [Further competition reforms will be considered in Treasuries’ work on the Competition Policy Review, for example:...] Roles and Responsibilities 22. The Commonwealth wi 2. be fully responsible for mainstream funding of VET (except for ‘school- like” programmes); and be fully responsible for the funding, regulation, and adifinistration of apprenticeships; and c._ be fully responsible for regulation of the sect ighythe National VET regulator, ASA : . me 23, The States will: =. lescribed in Cla ‘ ove); iy to the extent necessary to achieve ‘Bers, and not otherwise contribute 9s, including governance (for example, ed training providers; design of the new funding system; b. participate in a Ministerial Council, to be chaired by the Commonwealth Minister with responsibilty for VET, that will continue to oversee the Commonwealth-funded system; c. retain the national infrastructure for provider regulation and training development and thelr participation in it; d. agree the allocation of targeted funding and jointly fund initiatives where skills needs are not met through the main subsidy system; @. support the work of the AISC; and.COAG IN CONFIDENCE—WITHOUT PREJUDICE SCHEDULE7 support the work of the ASQA, the national VET regulator. Implementation 25. The Parties agree the new system will be implemented by 1 January 2018 in the following stages, with the transition to the new system to be overseen by a Mi chaired by the Commonwealth Minister with responsibility for VET: Coun a. implementation of the existing reform programme and prerequisites to the new model in the following timeframes: © by31 December 2016, an improved tratning © by 31 December 2016, arse focus on outcomes rather than oes framework; management approach to ns, © by 1 January 2017, further refoyiné to VET FEE-HELP; and © © by 30 June 2026, continued reform FES, ‘eg ire they are’ be etitive; yodatoy from 1 January 2018. Ider organisations are appropriately consulted as part of of any nélw arrangements. This will include the Business Council alia, the Australian Chamber of Commerce and Industry, the \ustralian Council for Private Education and Training, Community Colleges Australia, .¢ RTO Association, and the Australian Industry and Skills, Committee, Costings/funding 27. As at 2014-15, States spent around $4 billion per year and the Commonwealth spent around $3 billion per year (not including the funding it provided for VET FEE-HELP). 28, Detailed design work and calculation of the risk to be managed will be undertaken to ensure budget sustainability. This work will be informed by transparent information sharing betweenCOAG IN CONFIDENCE—WITHOUT PREJUDICE SCHEDULE 7 governments, including on spending on VET in secondary schools and departmental expenses for administration of the system (including compliance). 29. From 1 January 2018, transition arrangements will begin to transfer existing State funding to the Commonweaith, and the Commonwealth willfully fund the sector. Regulatory impacts 30. The regulatory impacts of this reform will be significant. A COAG Regulatory Impact Statement will be required.COAG IN CONFIDENCE—WITHOUT PREJUDICE SCHEDULE 7 HIGHER EDUCATION Description of reform 1. This reform will make it simpler for universities to meet their reporting requirements and offers greater opportunity for alleviating unnecessary constraints on university autonomy. The Commonwealth will assume responsiblity for university governance and financial accountability where as a State requests that it does so and ‘opts in’ to the reform. Any transfer of responsibilities to the Commonwealth wil not include land or asset ownership. Effect of the reform ae 2. The reform will streamline university administration and.tnake it easier for universities to report to government. Universities in the jurisdictions that. oa ye reforms will no longer have to report to both the States and the Commonwealign nancial aégauntability or corporate governance matters. - Roles and Responsibilities 3. The Commonwealth wil: a. as system manager and pfijori responsibilities that are ct 1. These include finan establishing acts, 1g, governance, and stitution. Se . develop a legislative framework for the governance iniversities. Participating States will then pass legislation fh to enact the legislative framework, 7. The legisiative framework will come into effect from 1 July 2017. From then, universities will submit all financial accountability and governance reporting to the Commonwealth Department of Education. [This is in addition to their current reporting on the administration of that Commonwealth funding.) 8, The Parties agree to ensure key stakeholder organisations are appropriately consulted as part of the design and implementation of any new arrangements, including Universities Australia, Costings/funding 9. [Any implementation costs will be met by ..COAG IN CONFIDENCE—WITHOUT PREJUDICE ‘SCHEDULE 7 Regulatory impacts 10. This reform will make a small reduction in red tape. A [COAG] Regulatory Impact Statement is not required.