Training Guarantee Administration Regulations (Amendment) 1992 No. 190
EXPLANATORY STATEMENT
STATUTORY RULES 1992 No. 190
Issued by the authority of the Minister for Employment, Education and Training
Training Guarantee (Administration) Act 1990
Training Guarantee Administration Regulations (Amendment)
Legislative Authority
1. The Training Guarantee (Administration) Act 1990 (the Act) and the Training Guarantee Act 1990 provide the legislative authority for the Training Guarantee Scheme (the Scheme), under which, as from 1 July 1990, employers with an annual national payroll of $200,000 or more (increased to $214,000 from 1 July 1991) are required to spend a minimum amount on eligible training activities. This amount is the equivalent of 1 per cent of payroll in each of the first two years of the Scheme, rising to 1.5 per cent from in the third year. The annual national payroll threshold is indexed annually in line with full-time adult average weekly earnings.
2. The Commissioner of Taxation has the general administration of the Act.
3. Section 102 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
Regulations
4. Section 4 of the Act includes definitions of "annual national payroll", "employee", "employer" and "salary or wages". Paragraph (e) of the definition of "employee" provides that an employee does not include a prescribed person. Where regulations are made to prescribe a person, these have the effect of excluding the person's salary or wages from the annual national payroll of the employer.
5. Thus, an employer's payroll and minimum training requirement for purposes of the Act will be reduced to the extent that the employer has prescribed persons on the payroll.
6. The Commonwealth funded employment program, the Community Development Employment Projects (CDEP) program, provides funds to communities or groups, where the funding is based, either wholly or partly, on the number of people in the community or group who are, or are likely to be, qualified for job search or newstart allowance. For the purposes of the Act, the community or group is an employer who uses the CDEP funds to pay salary or wages to its employees.
7. The CDEP program is directed to communities or groups where there are no, or only limited, employment prospects. The vast majority are in remote areas of Australia. There are presently around 170 communities or groups which, wholly or partly because of their participation in the program, are at or above the payroll threshold for the purposes of the Act.
8. The prescribing of persons who receive income by way of salary or wages through the CDEP program will have the effect of bringing payrolls of the vast majority of communities or groups below the payroll threshold, so that they are exempt under section 16 from the various requirements of the Act.
9. The CDEP program provides the means for employment opportunities, instead of individuals having a continuing reliance on Commonwealth income support. The Regulations will avoid the possibility of a community or group being discouraged from participating in the program because it has to comply with the various provisions of the Act.
10. Unlike other employers, the communities or groups do not generally have their own income to undertake training. Instead they are reliant on government funding, primarily through a Commonwealth training program which is entirely separate from the CDEP program.
11. However, under section 25 of the Act, funds received for training must be deducted from 'eligible training expenditure' to determine net eligible training expenditure' for purposes of meeting the minimum training requirement. For this reason the communities or groups may be unable to meet the Act's requirements concerning the minimum training rate.
12. The communities or groups face difficulties in meeting other requirements of the Act, partly because the vast majority are located in remote areas with limited access to advice and support. Also, compliance with the Act would place excessive burdens on their already strained administrative infrastructure, and would often require additional administrative resources, for no practical benefit. For instance, difficulties may arise in meeting the criteria under section 27 of the Act for an eligible training program', and relating this to eligible training expenditure' as required under sections 25 and 26. Similarly, problems may occur with requirements such as establishing and maintaining records for five years, and lodging training guarantee statements with the Commissioner of Taxation.
13. The Regulations will relieve the relevant communities or groups from these difficulties. At the same time, it is expected that they will continue to be given substantial Commonwealth support for training appropriate to their circumstances and needs, under conditions which are consistent with the Commonwealth's training objectives and requirements for public accountability.
14. For 1991-92, it is estimated that Commonwealth training expenditure on such communities or groups will be around $14.4 million. This is the equivalent of around 9.5 per cent of the estimated total payroll of $151 million being funded in 1991-92 through the CDEP program. In that sense, the level of training among these communities or groups is well exceeding the minimum requirement of the Act.
15. The Regulations have the effect of excluding from the annual national payroll of a community or group the salary or wage of a person which is paid from funds received under the CDEP program.
Notes on the Regulations are at paragraphs
16. The Regulations are retrospective to 1 July 1990 to coincide with the commencement of the Scheme. The retrospectivity does not offend section 48 of the Acts Interpretation Act 1901 since no individual is prejudiced or suffers liabilities.
Commencement
17. The Statutory Rules will take effect from 1 July 1990.
Notes on Regulations
Regulations 3.1
18. This defines a "Commonwealth funded employment program". It has the same meaning as in Section 23 of the Social Security Act 1991.
Regulations 4.1
19. This means a prescribed person for the purposes of paragraph (e) of the definition of "employee" in Section 4 of the Act. This is a person who is receiving income that is paid by a community or group from funds provided under a Commonwealth funded employment program.