Federal Government updates legislation to crack down on ‘dodgy’ VET providers

The Federal Government has introduced integrity legislation designed to crack down on unscrupulous and non-genuine Vocational Education and Training (VET) providers and improve the integrity of the nation’s VET sector.

The National Vocational Education and Training Regulator Amendment (Strengthening Quality and Integrity in Vocational Education and Training No. 1) Bill 2024, introduced into parliament yesterday in response to integrity and quality issues in the VET sector.

These issues were highlighted by the 2023 Rapid Review into the Exploitation of Australia’s Visa System, (the Nixon Review), the All eyes on Quality: Review of the National Vocational Education and Training Regulatory Act 2011 (the 2018 Braithwaite Review) and the 2023 report of the Joint Standing Committee on Foreign Affairs, Defence and Trade: ‘Quality and Integrity – the Quest for Sustainable Growth’: Interim Report into International Education. 

The key amendments in the Bill will:

• Cause an RTO’s registration to automatically lapse where the RTO has not delivered training and/or assessment for 12 months. This addresses integrity risks of dormant/”shell” RTOs failing to show genuine commitment to VET;
• Prevent RTOs from expanding their course offering if they have been operating for less than 2 years. This will allow ASQA to scrutinise new RTOs to ensure they demonstrate capability and genuine commitment to VET over a reasonable period;
• Provide ASQA with greater discretion in prioritising, considering and deciding RTO applications. This will allow ASQA to quickly progress applications for reputable organisations, while scrutinising high risk ones. 
• Empower the Minister (with the agreement of state and territory Skills Ministers) to determine that ASQA need not, or must not, accept or process new RTO applications (or those for one or more classes of RTO). This will enable ASQA to address trends in applications by non-genuine providers, or manage unsustainable influxes into the VET sector and address associated risks;
• Expand offence and civil penalty provisions to cover a broader range of false or misleading representations by RTOs about their operations. This will allow ASQA to target egregious RTO conduct exploiting and luring students with false descriptions of training, facilities and false testimonials;
• Increase five-fold maximum penalties for a breach of relevant offences or civil penalties under the Act. Tougher penalties will deter RTOs that currently see penalties as a risk worth taking or a ‘cost of doing business’.

The new Bill empowers the Australian Skills Quality Authority (ASQA) to take decisive action against the minority of Registered Training Organisations (RTOs) that use their operations as a veil of legitimacy for fraudulent activity, or to circumvent regulatory requirements.

“What we are doing is simple. We are making it tougher for the bottom-feeders, the fraudsters, and the cheats to take advantage of students for a quick buck. We are restoring integrity to the sector,” Minister for Skills and Training, the Hon Brendan O’Connor MP said. 

“We will weed out dodgy providers that exist in the sector, who seek to exploit students and compromise the integrity and reputation of the entire sector in the process,” he added.

“Most providers do the right thing and are in the business of education and training for the right reasons. They will benefit from the removal of non-genuine actors, who undermine integrity and trust in VET.”

As well as enabling ASQA to take swift action to deter and remove ‘dodgy’ RTOs and apply greater scrutiny to new RTOs seeking to enter the VET sector, the Bill also expands the kinds of false and misleading conduct that ASQA can target through offence and civil penalty provisions and provides for long overdue increases to the penalties applicable to egregious conduct and breaches of the NVETR Act.

This Bill supports the majority of providers who are doing the right thing. They, along with students, industry and the whole Australian community will benefit from the removal of dodgy providers, who undermine integrity and trust in VET.

Other minor amendments streamline regulatory processes and clarify review processes for RTOs. The Government has also strengthened the Fit and Proper Person Requirements under the Act and work is underway to revise the Standards for RTOs to support high-quality delivery across the sector.

The new legislation has been welcomed by the Australian Education Union (AEU), with Federal President Correna Haythorpe saying the measures are “long overdue.” 

“As the Minister said today, for too long the system has been plagued with bottom-feeders, fraudsters and cheats. That stops now and we urge all political parties to support this legislation,” she added. 

Access the legislation here.