Explanatory Memorandum
(Circulated by authority of the Minister for Employment, Education and Training, the Hon. John Dawkins, MP)GENERAL OUTLINE
The Training Guarantee Bill 1990 and the Training Guarantee (Administration) Bill 1990 impose a requirement on employers resident in Australia to spend a minimum amount on structured training every financial year starting 1 July 1990.
The aim of the Training Guarantee scheme is to increase and improve the skills of the Australian workforce thereby improving the productivity and competitiveness of Australian industry. This is to be achieved by requiring non-exempt employers to spend a minimum amount on training. The measure is aimed at improving the efforts of those employers who currently spend little or nothing on structured training. Employers who already invest above this minimum will not be penalised.
Public and private sector employers whose annual national payroll is above a threshold ($200,000 in 1990-91 and indexed annually to average weekly earnings) will be required to spend the equivalent of 1 per cent of payroll on structured training in 1990-91 rising to 1.5 per cent in 1992-93 and thereafter. Employers are free to spend the required minimum amount according to their needs within the definition of training. Exemptions are granted to public benevolent institutions (other than public hospitals), religious institutions in relation to their pastoral activities, international organisations, diplomatic staff and non-resident employers.
Employers who do not spend the required minimum amount on structured training will incur a charge equal to the shortfall. This will be collected by Government and, after deducting administrative expenses, will be used to fund additional industry training.
The expenditure that will count towards the minimum requirement (the eligible training expenditure) comprises all outlays directly attributable to eligible on and off-the-job training programs which are structured and provide employment related skills.
Employers will self-assess as to their obligation under the legislation, and, if they incur a shortfall are required to submit a statement to the Commissioner of Taxation after the end of the financial year. The Commissioner of Taxation has administration of the legislation.
The Minister will issue guidelines from time to time to help on the interpretation of the definition of eligible training programs through disallowable instruments. A training advisory body will be available to provide advice on eligible training programs to the Commissioner of Taxation on the more difficult cases that arise.