Crown Law advice has cast a shadow over the legality of the funding model the State Labor Government is using for the Skills for All training program.
The Crown Law advice shows the Department of State Development sought legal guidance on its Skills for All funding model as it considered reducing the amount of funding available to Registered Training Organizations (RTO’s) as part of the Skills for All program.
The Crown Law advice warns that because TAFE SA does not sufficiently separate its community service obligations from its commercial operation and funds TAFE courses at 2.5 higher than private RTO’s it is legally exposed.
In particular Crown Law advised:
Skills for All funding appears to be contrary to the principles of competitive neutrality, exposing TAFE SA to possible investigation by the Australian Competition and Consumer Commission;
TAFE SA and the Minister are potentially at risk of prosecution and penalties under the Competition and Consumer Act as well as enforcement action by the ACCC; and
TAFE SA is directly at risk of a competitor(s) taking legal actions for damages
“This raises some very serious questions about Labor’s Skills for All funding model,” said Shadow Training Minister David Pisoni.
“Crown Law has warned the Weatherill Government that TAFE SA’s ability to access greater levels of funding than private competitors may be assisting it to price its training courses at below cost and warns this is potentially an abuse of market power which is prohibited under the Competition and Consumer Act
“Labor’s lack of due diligence and poor management of Skills for All funding now threatens South Australia’s entire training system and has exposed TAFE and taxpayers to more costs and financial penalties.”
Last month the Labor dominated Economic and Finance Committee rejected a Liberal Party motion to investigate the Weatherill Government’s Skills for All funding model.