Amendments to the NVETR Act – impact on the VET sector
Amendments to the NVETR Act were passed in both houses last week, and once Royal Assent has been granted (which will be any day now), the amendments will be in full force.
There were some minor changes from the original bill recommendations, however, most of the amendments as documented in the bill have been passed.
ASQA has produced a summary of these changes here.
So, what are the main changes and what do they mean for the VET sector?
Key amendment: Automatic lapsing of registered training organisations (RTOs) that have not delivered training and assessment for 12 months.
The intent behind this amendment is to address the integrity risks of dormant or shell RTOs who do not have genuine commitment to vocational education and training. This amendment means that if an RTO has not delivered training and/or assessment for a period of 12 consecutive months, their registration will automatically lapse. This applies on or after 1 January 2023.
The amendment also includes a provision that makes RTOs submit an application to ASQA at least 90 days before their registration lapses. ASQA is required to consider the application and can then extend the RTO’s registration for up to a maximum period of 12 months with certain conditions. ASQA is likely to only extend registration if it considers that there were “significant extenuating circumstances” as to why the RTO did not deliver training and/or assessment. Natural disasters such as fire, flood or pandemic events are examples of “significant extenuating circumstances”.
Note that for RTOs whose registration would lapse on or within one month of the commencement of the amendments (1 July 2024), they will be able to apply to ASQA within 60 days before their registration lapses. Penalties apply if RTOs do not follow these provisions.
ASQA’s decision regarding granting or not granting extensions are reviewable which means there is both an internal and external review option.
What it means for your RTO:
RTOs who have not delivered nor assessed since 1 January 2023 should ideally develop a plan for commencing training and assessment at the earliest possible opportunity. This could also mean adding additional courses to scope in areas of need.
Key amendment: Preventing new RTOs from expanding their scope of registration within the first 24 months of their registration.
The purpose of this amendment is to ensure that those who are new to the sector can focus on delivering quality training and assessment in the industry areas that they selected for their scope when applying to become an RTO. An RTO will only be able to apply to add new training products after it has been registered for 24 months or more at the time of the application.
This will apply to applications made on or after the day the Bill receives the Royal Assent. As of the day of writing, (27 March 2024) Royal Assent has not been granted but it is expected that this will occur very soon.
What it means for your RTO:
If you’re registering an RTO, you will need to be certain that your chosen courses will be financially viable and meet industry standards for the first two years of your initial registration. This can present challenges given the changing nature of skill needs, thus will require a long term vision. Reviewing the relevant Jobs and Skills Councils workforce insights will be helpful starting point, as well as identifying occupations relevant to the skills in demand visa.
Key amendment: Providing the Minister for Skills and Training with the power to direct ASQA to not accept or process initial applications for RTO registration for a period of up to 12 months.
This amendment means that the Minister has the power to stop ASQA taking applications for a maximum period of up to 12 months. The intention behind this amendment is that this power would only be exercised sparingly and in circumstances where the Minister has concerns relating to the integrity of the sector or parts of the sector.
It is also noted that the Minister could only use this power after consulting with ASQA and getting the agreement of the Ministerial Council.
What it means for applicants:
As stated above, this power is intended to be used sparingly and is only likely to occur when there is a sudden influx of certain types of applications. A good illustration of this has been referred to in a previous example where hundreds of RTO/CRICOS applications were made all with the Diploma of Business on scope. These could be applications which are halted.
If you are genuinely wanting to set up an RTO, the above amendment shouldn’t necessarily stop you from achieving your goals and ambitions. However, it would be wise to future proof yourself, for example, by carefully considering your scope and by making sure you have a financial buffer in place in the event that you need to pay rent for a longer period of time until applications re-open.
Key amendment: Allowing ASQA to consider the order in which to process initial applications for registration.
This amendment gives ASQA the ability to prioritise certain applications and not others. Essentially it means that ASQA does not need to process applications in the order that they are received (although this is already happening in any case as ASQA prioritises applications received after 1 July 2023 so that it can meet its own service standards!).
What it means for applicants:
If you have a unique offering or are offering qualifications that meet acute skill needs, there is a good chance your application will be prioritised. Otherwise, the same lengthy waits could be expected.
Key amendment: Extending the period for ASQA to conduct internal reviews to 120 days.
This key amendment gives ASQA more time to consider reviewable decisions. The timeframe has increased from 90 – 120 days.
What it means for your RTO:
If you have already submitted an application in relation to a reviewable decision and a decision was not made before the bill receives Royal Assent, the longer time frame for consideration will still apply.
Key amendment: Clarifying provisions relating to false and misleading advertising of an RTO’s operations.
These amendments expand what is considered to be false and misleading advertising of an RTO’s operations and include:
- Publishing false and/or misleading descriptions and images of an RTO’s training locations, premises and facilities
- Falsely claiming or misleading potential students to believe that the RTO offers student services such as work integrated learning when it does not
- Falsely claiming that the RTO has associations with, and/or endorsements by, esteemed and reputable institutions and/or people
- Fabricating testimonials
Larger penalties for false and misleading advertising also now apply.
What it means for your RTO:
RTOs have always been required to meet marketing requirements under various regulatory requirements, such as the SRTOs 2015 and the National Code 2018. However, with the expansion of what is considered to be false and misleading advertising plus bigger penalties, it is important to make sure that all marketing meets industry requirements. Systems should be in place to make sure that marketing is accurate and factual.
Key amendment: Increasing maximum penalties by five times.
Heavy penalties under the Act now apply. These have been increased by five times the original amount with the intent of deterring providers from breaching their obligations. These penalties are designed to deter and punish the worst case offenders i.e., those who deliberately sought to wrong the system.
What it means for your RTO:
As stated above, the penalties are designed to deter and punish worse case offenders. However, as always it is important for RTOs to ensure they meet regulatory requirements and have sound quality and compliance systems in place.
RTO Works can offer a range of services to assist you with the impacts of the above changes:
- Strategy sessions for new RTOs to assist you to decide if you want to register an RTO.
- Strategy sessions for existing RTOs to assist you to commence your training and assessment.
- Retainer package to assist with ongoing compliance consulting.
- Express marketing audit to ensure your marketing meets requirements.
- Additions to scope for eligible RTOs services
If you’re worried about what these changes may mean for your RTO, get in touch with a compliance expert by emailing hello@rtoworks.com.au as we’re here to help. We partner with our clients to help them navigate the ever-changing regulatory landscape and have a team of RTO consultants ready to support you and your RTO.
