Explanatory Memorandum
(Circulated by the authority of the Minister for Skills and Training, the Hon Brendan O'Connor MP)OUTLINE
The Trade Support Loans Act 2014 (Act) establishes the Trade Support Loans Program (Program). The Program helps people complete qualifying apprenticeships by offering them access to income-contingent loans.
For the purposes of the Act, a qualifying apprenticeship is, among other things, an apprenticeship through which a person is undertaking a qualification that leads to an occupation or qualification specified on the TSL Priority List, a legislative instrument made under the Act. That list:
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- specifies occupations and qualifications for which, in the opinion of the Minister, skilled persons are a priority; and
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- because the program is about 'trade' support, has only ever specified priority occupations and qualifications in the Australian and New Zealand Standard Classification of Occupations (ANZSCO) 'technicians and trade workers' major group (as of May 2023, the ANZSCO could be accessed at: www.abs.gov.au/statistics/classifications/anzsco-australian-and-new-zealand-standard-classification-occupations).
The Trade Support Loans Amendment Bill 2023 (Bill), among other things:
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- causes the TSL Priority List to lapse;
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- amends the Act to empower the Minister to, by legislative instrument, determine, having had regard to any relevant advice given to the Minister by Jobs and Skills Australia, a new Australian Apprenticeships Priority List; and
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- amends the Act to provide that a qualifying apprenticeship is, among other things, an apprenticeship through which a person is undertaking a qualification that leads to an occupation or qualification specified on the Australian Apprenticeships Priority List.
These changes will mean the Minister can expand the Program's access to people who, through their apprenticeship or traineeship, are undertaking qualifications that lead to occupations experiencing skills shortages in other ANZSCO major groups, such as occupations in the aged care, disability care and childcare sectors. The Bill amends the Act's title and short title, as well as many terms used in the Act, to reflect this expansion.
The Bill also provides greater administrative flexibility by allowing the Secretary to extend the day by which an application for a particular payment instalment period may be made.
The Bill makes minor consequential amendments to several pieces of legislation to update references to the Act's short title and defined terms.
The Student Loans (Overseas Debtors Repayment Levy) Act 2015 (Levy Act) imposes a levy so, consistent with section 55 of the Constitution, the Student Loans (Overseas Debtors Replacement Levy) Amendment Bill 2023 (Levy Bill) makes separate consequential amendments to the Levy Act to update a reference to the Act's short title.
The changes outlined above will mean that, amid rises in the cost of living, more people can access immediate financial support to help them complete apprenticeships or traineeships leading to occupations in Australian workforce sectors currently experiencing skills shortages. This will help to address those shortages, delivering skilled workers for a stronger Australian economy.
CONSULTATION
Consultation on the Bill and the Levy Bill has occurred with relevant agencies within government (the Attorney-General's Department, the Treasury and the Australian Taxation Office). Consultation with parties outside of government was not undertaken. This is because:
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- these amendments are beneficial in their nature. Parties outside of government are likely to welcome the improvements the Bill makes to the Program's accessibility, particularly the expanded access to occupations experiencing skills shortages in all Australian workforce sectors; and
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- consultation was undertaken before the Act was introduced.
FINANCIAL IMPACT STATEMENT
The Bill and the Levy Bill would have minimal financial impacts beyond the Program's existing financial impacts. The Program offers income-contingent loans to people undertaking qualifying apprenticeships, so the long-term financial impacts will only arise where more people who are paid loans under the Program complete their qualifying apprenticeships. Such a person's debts are partially discharged by an amount called a 'completion discount'. A completion discount is 20 per cent of the total amount of loan instalments that were paid to a person. It is not possible to provide an exact estimate of the long-term financial impacts due to the demand driven nature of the Program's take-up.
IMPACT ANALYSIS
The impact analysis is included as an appendix at the end of this explanatory memorandum. The reforms proposed in the Bill are summarised at page 31 of the impact analysis.