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VET News

Wednesday 30th of July 2025

 

Hello and welcome to VET News,

 

As always, there is a bit happening. This month I have a gripe about ASQA that I think you all need to be aware of. I want to address two issues that should be on everyone’s radar.

 

The first is the regulator’s recent use of significant civil penalties, fines that are now stretching well beyond what most RTOs would consider manageable. The second is the rollout of a new 2025 standards audit evidence request that, in my view, lacks basic clarity and risks setting providers up to fail. These are two separate issues, but they point to the same shift: increased compliance pressure, with less transparency and more consequence.

 

A Quiet Shift Toward Punitive Penalties

 

Earlier this month I came across a post on LinkedIn that caught my attention. It described an RTO that had received a civil penalty of over $19,000 for failing to comply with the conditions of its registration. The issue related to an RTO that had not submitted their annual VET Data on time. The fine was issued by ASQA under section 116A of the NVR Act, which allows them to impose an infringement notice as a fine without initiating court proceedings. To be clear, the Regulator is entirely within its rights to do this. Section 111(2) of the NVR Act allows for a maximum fine of 120 penalty units, which currently calculates to $37,560 for a breach of registration conditions. Section 116A gives them the discretion to settle the matter out of court by issuing an infringement notice. This has been part of the legislation for years.

 

What has changed is the size of the fines. Historically, infringement notices for these types of breaches have sat around $1,500. That was enough to flag the issue, but not enough to tip a business over. This recent penalty was more than ten times that amount, and there was no advance notice from the Regulator to indicate that fines of this scale were coming. No sector-wide update. No media release. No flagged policy shift. Just a quiet escalation. In addition to this, infringement notices under section 116A are not reviewable decisions under the Act. That means the RTO cannot request reconsideration. They cannot appeal to the AAT. Their only option, if they believe the penalty is unjust, is to refuse payment and face formal court proceedings a step few small providers are in a position to take.

 

This raises real concerns. A $19,000 fine issued without warning, without review rights, and without a court hearing is a serious hit. For many small RTOs, it could place financial viability at risk. I am not suggesting the Regulator is acting outside its authority. But I am saying this approach feels very punitive. It feels heavy-handed, and most importantly, it puts the entire sector on notice. I honestly think that everyone needs to take note of this and put in place systems and processes to make sure that you are absolutely complying with your obligations which includes complying with your conditions of registration and other important requirements such as notifying the Regulator of material changes.

 

Audit Requests Without Guidance: A Setup for Failure?

 

The second issue I want to raise is one I encountered firsthand this week. A client of ours received an evidence request as part of their performance assessment. On the surface, it looked straightforward: provide documents to demonstrate compliance with certain areas like “assessment validation,” “principles of assessment,” and “VET workforce management.”. But what was missing was any reference to the relevant clauses in the new Standards. There was no explanation of what specific evidence was required. Just topic headings such as “Continuous improvement and self-assurance” and a sentence at the top directing the RTO to refer to the Practice Guide.

 

I raised this directly with the auditor during a client meeting. I asked how the provider was expected to know what evidence to submit if the request gave no guidance. Their response was blunt “Refer to the Practice Guide.” When I asked for clarification, the same answer came back. No deviation, no deeper explanation, just “Read the guide.” Of course, I have reviewed the Practice Guide (several times) and while the guide includes some useful commentary about good practice, it does not identify the evidence that should be supplied to the Regulator. Personally, I find that the Practice Guides the National Regulator has issued are quite useless. At best they simply expand on the description already provided in the Standard and spend most of their time talking about what practices to avoid. They certainly do not act as a regulatory benchmark in the way that the National Regulator is referring to them in this process.

 

I think this presents quite significant challenges to training organisations to prepare and submit evidence that is going to satisfy what the National Regulator wants. It is almost like they do not know what you should be providing either, so the whole process is simply vague. Providers are being asked to prove compliance with no indication of what the auditor is looking for. They are left to guess. If they guess wrong, they risk serious consequences. Not the least of these will be increased audit costs, which can easily run into $20,000 to $30,000 or more. The audit cost is based on how long it takes the auditor to review the evidence and conclude their findings. If you do not provide the evidence they are looking for in the first round, then it requires an additional round of requested evidence assuming they do not just make you non-compliant straight up.

 

In my 20 years of being involved in VET regulation, this is probably one of the worst regulatory arrangements I have ever seen. I think it is going to result in a lot of non-compliance, and I can absolutely see how the administrative appeals process is going to rip it apart, to be honest. It smacks of unfair and even deceptive regulatory practices. It is like we are returning to 2015. I will certainly be providing some guidance on our website about how training providers might go about responding to these types of requests. I think if we can help each other, then we can build up a great capability to respond to what I think is very punitive and deceptive regulation.

 

Good training,

 

Joe Newbery

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