Commonwealth Numbered Regulations - Explanatory Statements

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TRAINING GUARANTEE (WOOL INDUSTRY) REGULATIONS 1991 NO. 308

STATUTORY RULES 1991 No. 308

Issued by the authority of the Minister for Employment, Education and Training

Training Guarantee (Administration) Act 1990

Training Guarantee (Wool Industry) Regulations

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, 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 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.       Subsection 4A(1) of the Act provides that if, under the regulations, a person is taken to be covered by a recognised alternative training levy scheme, that person is not an employee for Training Guarantee purposes. Employers of such persons have no Training Guarantee obligation based on the salary or wages of those persons.

5.       Subsection 4A(2) of the Act enables regulations to be made empowering the Minister for Employment, Education and Training to recognise alternative training levy schemes and their coverage.

6.       For some years the Australian Wool Corporation (AWC) has conducted a Shearer Training Service financed by proceeds from the wool tax. This role has been re-affirmed in the recently enacted legislation to restructure the wool industry's operations.

7.       Shearing and related employees of both wool growers and shearing contractors undertake AWC levy funded courses

•       this reflects the industry's position that while growers pay the actual levy, shearer and related training is conducted on behalf of the total 'shearing' sector which includes both growers and contractors.

8.       Additionally, shearing contractors and wool growers incur training expenditure from their own resources. Contractors meet salary or wage costs of trainers and trainees during on-the-job induction training. Growers and contractors meet the salary or wage costs of persons undertaking courses run by the AWC.

9.       Since the industry as a whole carries the responsibility for appropriate levels of quality training, it would be both pointless and onerous if individual employers were required either to spend more on training, purely for the sake of meeting their minimum Training Guarantee obligation, or alternatively, to pay a training guarantee charge.

10.       The following key condition must be met before a decision is made to recognise the status of the industry's training levy scheme and the employees covered by that scheme:

•       the minimum training rate under the Training Guarantee Scheme is less than or equal to the ratio of industry training levy scheme revenue to industry payroll expressed as a percentage (ie the industry training rate)

-       this condition has been met by the 'shearing' sector in 1990/91 based on training expenditure and payroll data provided by the industry.

11.       It is proposed that, while the exemption provisions will be in force from 1 July 1990 to 30 June 1995, the actual exemption will be determined each year subject to the minimum training rate condition.

12.       The Regulations set out the conditions for the salary or wages of shearers, shed hands, wool classers, wool pressers and (shearers') cooks to be excluded from the payroll of growers and contractors for the purpose of determining their Training Guarantee obligation.

Details of the Regulations are attached.

13.       The Regulations are retrospective to 1 July 1990 to coincide with the commencement of the Training Guarantee Scheme. The retrospectivity does not offend s.48 of the Acts Interpretation Act 1901 since no individual is prejudiced or suffers liabilities.

Commencement

14.       The Statutory Rules will take effect from 1 July 1990.

Notes on the Regulations

15.       Subregulation 3(2)

For the purpose of these Regulations the wool industry training levy scheme is described as the "AWC scheme". The AWC scheme is a composite scheme providing for funds to be expended on training wool industry workers by the AWC and employers of wool industry workers.

16.       Regulation 4

The annual expenditure estimates for the Employer factor and Payroll factor are derived from AWC survey data.

The annual expenditure estimate for the Contractor factor is derived from survey data collected by the shearing contractor associations.

17.       Regulation 7

The AWC may apply for Recognised Alternative Training Levy Scheme (RATLS) status for the AWC scheme each year by the "relevant date" as defined in Regulation 3(1).

The relevant date for 1990-91 and 1991-92 is 30 November 1991 to allow the AWC reasonable time to apply for RATLS status for each of these years following the tabling of the Regulations. In subsequent years the relevant date is 30 September.

18.       Regulation 8

(1)       With the exception of 1990-91, the AWC application for RAMS status must provide details on the Levy, Employer, Payroll and Contractor factors for the "preceding" year. As the AWC application for 1990-91 will be made retrospectively, details of the Levy, Employer, Payroll and Contractor factors relate to that year.

(2)       It is possible that none, or only some, of the Contractor factor expenditure will need to be counted for the AWC scheme to meet the conditions for the granting of RAMS status. Accordingly the need for certifying statements or audit certificates in respect of Contractor factor expenditure may be assessed following receipt of the RAMS application.

19.       Subregulation 9(4)

This provides for the situation in which the wool industry training rate is only marginally less than the minimum training rate and the overall performance of the AWC scheme is such that it may be reasonable to grant RAMS status.

20. Regulation 11

Some wool industry workers may be employed in other activities for part of the year. During such periods these workers will not be covered by the AWC scheme and will be counted as "employees" for Training Guarantee purposes.

21. Regulation 12

Subregulation 3(1) defines a "change in circumstances".