What will happen to sponsors training funds contributed under Training Benchmark A, should the DIBP approved training institutions close down?

Currently, most of the Training Benchmark A funds from employers seeking sponsorship under the sc457 program find their way to various TAFE institutes largely due DIBPs encouragement.

The legislative instrument however only provides broad directions as follows: “Recent expenditure, by the business, to the equivalent of at least 2% of the payroll of the business, in payments allocated to an industry training fund that operates in the same industry as the business.”

But DIBPS website, PAMs and FAQs generally encourage funds be directed to TAFEs, with PAMs specifically setting as follows:

“To meet the requirements of Training Benchmark A, the applicant can show evidence of having made a contribution to a recognised scholarship fund that is operated by an Australian university or TAFE college that supports education or training for Australian citizens or permanent residents in a course related to the business of the applicant.”

and

“If there is no statutory industry training fund operating in the same sector as the applicant for approval, for the purposes of meeting Training Benchmark A, the department will accept evidence of contributions made to:

•             a recognised industry body who provide training opportunities or

•             a recognised scholarship fund operated by an Australian university or TAFE college.”

However, recently, the Victorian Training Market Half Year Report revealed the following:

• TAFEs’ share of the training market dropped from 48 per cent in the first half of 2010 to just 27 per cent in the first half of 2014.
• Enrolments in regional Victoria dropped by 12 per cent, and traineeship enrolments dropped by 25 per cent in the same period.
• The Auditor-General has assessed five of the 14 standalone TAFEs as at high financial risk, eight at medium risk, and only one at low risk in 2013.
• • Government subsidised enrolments continued to decrease for the first half of 2014, with a five per cent drop from the same time in 2013.

Liana Allan of Migration Alliance has written in to Senator Michaelia Cash, Assistant Minister, DIBP and Kim Vance, Director, Program Delivery DIBP with these facts and the concern that employers are being encouraged to send funds to institutions that may be at financial risk.

“I do not think it is appropriate for the DIBP to encourage private entities / sponsors to send their money to high financial risk institutions at this time.” Liana Allan noted in the letter.

Perhaps it’s about time that DIBP warns sponsors that some TAFEs are in dire straits and that they should consider their options more carefully and ensure that their FAQs and PAMs are not out of line when compared to the wording of the instrument.

Ironically, RMAS have reported that DIBP seem to have instead stepped up on its Training Benchmark B verification checks with training institutions chosen by employers being asked to verify that they conducted that training as indicated by employers in their sponsorship applications.