Commonwealth Numbered Regulations - Explanatory Statements

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TRAINING GUARANTEE REGULATIONS 1991 NO. 59

STATUTORY RULES 1991 No. 59

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

TRAINING GUARANTEE 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. As from 1 July 1990, employers with a payroll of $200,000 or more per year 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 1/2 per cent in the third year.

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.       Legislation has been passed by the Tasmanian Parliament to establish a State based building and construction industry ,training levy scheme. The scheme provides for a levy of 0.2 per cent of the estimated cost of building or construction work to be paid into a fund administered by the tripartite Tasmania Building and Construction Industry Training Board. The scheme commenced on 1 March 1991. The industry levy revenue is to be used to improve the quality of training and to increase the level of skills in the State's building and construction industry.

5.       Similar legislation to establish a building and construction industry training levy scheme has been passed by the Western Australian Parliament and has been tabled in the Victorian Parliament.

6.       Implementation of such levy schemes means that there is a double counting situation in which the industry in the relevant State or Territory is effectively paying twice for training. It is not intended that employers covered by an appropriate industry training levy scheme should have a Training Guarantee Scheme obligation in these circumstances.

7.       For employers in an industry to qualify for an exemption from the Training Guarantee Scheme, the following key condition must be met:

•       the industry levy scheme revenue (added to the value of apprentice and trainee training not funded by the levy), expressed as percentage of industry payroll, is at least equal to the minimum training rate under the Training Guarantee Scheme.

8.       For practical reasons, it is desirable that a building and construction industry request for an exemption of its employers from the Training Guarantee Scheme is determined promptly before a double counting situation occurs. This means that it will be necessary to make a prospective assessment of whether the exemption condition is likely to be met using available relevant data.

9.       Subject to the industry in a particular State/Territory meeting the "exemption" condition, it is proposed that the initial exemption period will be from the date of enactment of the relevant State/Territory legislation to 30 June 1992

•       exemption for a further period will be subject to a review of the industry training levy arrangements, including an assessment of whether the key exemption condition is being met, sometime before 1 July 1992.

10.       The proposed Regulations set out the conditions for the granting of an exemption under the Training Guarantee for building and construction industry employers in a relevant State/Territory.

Details of the Regulations are attached.

11.       The proposed Regulations are retrospective to 1 March 1991, as the Tasmanian levy scheme commenced on that date. The retrospectivity does not offend s.48 of the Acts Interpretation Act 1901 since no individual is prejudiced or suffers liabilities.

Commencement

12.       The Statutory Rules will take effect from 1 March 1991.

Notes on the Regulations

13.       Regulation 2A(1)

The Act (s.4) includes a provision for a prescribed person not to be included as an employee for the purpose of the provisions of the legislation. As the salary and wages of a prescribed person are not included in payroll for Training Guarantee purposes, this has the effect of exempting an employer from the Training Guarantee charge in respect of those employees who are prescribed persons. This in turn provides a mechanism for linking the exemption provisions to a particular industry.

14.       Regulation 2A(1)(b)

(1)       Not all building and construction industry employees are registered under State/Territory long service leave schemes. Those employees not registered include workers employed offsite in, for example, technical and clerical activities.

(2)       The relevant State/Territory tripartite industry training body will be able to provide advice on classifying building and construction workers when an employer is uncertain whether an employee is a prescribed person under the provisions of the Act (s.4).

15.       Regulation 2A(2)

(1)       The commencement of the exemption period, is defined in a way to ensure that building and construction industry employers covered by a prescribed industry training levy scheme do not pay twice for training through the levy scheme and the Training Guarantee.

(2)       The initial 'exemption period' is limited (16 months in the case of Tasmania and less for WA and any other State/Territory depending on the date of enactment of the relevant State/Territory legislation). This will enable an early review of the exemption arrangements to be undertaken before a longer term exemption period is considered. It also provides an early opportunity to assess the industry's capacity to maintain its training levy revenue at a level sufficient to match the increase in the minimum training rate under the Training Guarantee from 1 July 1992.

16.       Regulation 2B(1)(b)

For technical reasons the key "exemption" condition (paragraph 7 above) has been expressed in a slightly different way in Regulation 2B but the meaning is unchanged.

17.       Regulation 2B(2)

The statistics used for estimating the factors in the formula under Regulation 2B(1)(b) refer to the period from 1 October 1987 to 30 September 1990. The estimates for 'Levy', 'Training' and 'Payroll' Factors will refer to this period which is the most recent three years for which quarterly survey data published by the Australian Bureau of Statistics (ABS) is available.

18.       Regulation 2B(2)(b)(i)

In making an estimate of the amount spent on employment related training ('Levy Factor') use can be made of the ABS quarterly survey data at State/Territory level on building and construction activity (value of work done).

19.       Regulation 2B(2)(b)(ii)

The number of apprentices employed in work regarded as building and construction work, under a law of that State or Territory, on 30 June each year is available from the relevant State/Territory training authority. Similar statistics on the number of trainees are available from the Commonwealth Department of Employment, Education and Training. (See reference to numbers of apprentices and trainees under 'Training Factor').

20.       Regulation 2B(2)(b)(iii)

The salary or wages paid by building and construction industry employers ('Payroll Factor') can be estimated using ABS quarterly survey data at State/Territory level for total earnings (payroll) for the building and construction industry.

Attachment

Proposed Training Guarantee (Administration) Regulations

Regulation 2A describes a person as a prescribed person if, during the exemption period, (1) he or she is

•       eligible under a prescribed building and construction industry training levy scheme for employment related training and

•       registered as an employee under a long service leave scheme for building and construction industry employees set up under a State or Territory law

or

employed, directly or indirectly, in work regarded as building and construction work under a law of the State or Territory in which he or she works, and where

(2)       the 'exemption period' begins on the day on which a prescribed building and construction industry levy scheme commences under a law of the State or Territory and ends on 30 June 1992.

Regulation 2B describes a prescribed building and construction industry training levy scheme

(1)       a scheme set up under a State or Territory law and in which the minimum training rate is less than or equal to the percentage rate worked out in accordance with the formula:

             100 x Levy Factor + Training Factor
                                  Payroll Factor

based on the Minister's estimates of these factors for the year commencing 1 July 1991

'Levy Factor' being the amount to be collected under the scheme for employment related training

'Training Factor' being the average number of apprentices or trainees in the State or Territory

•       who are employed, directly or indirectly, in work regarded as building and construction work under a law of that State or Territory and

•       whose training is not to be paid for by the scheme multiplied by the minimum allowable apprentice or trainee amount'

'Payroll Factor' being the total salary or wages to be paid by building and construction industry employers in that State or Territory and in which

(2) the Minister's estimates are to have regard to

•       the relevant State or Territory law

•       any available relevant statistics published by the Australian Statistician for all or part of the period from 1 October 1987 to 30 September 1990

(3) 'building and construction industry' for a State or Territory is regarded as the building and construction industry under a law of that State or Territory.