By Frank Chung, News.com.au, May 4

The federal government says it is willing to consider a wide-scale audit of training providers to weed out rorting of the $1.6 billion VET FEE-HELP loans scheme with inflated course fees. It comes as evidence emerges of massive pricing discrepancies between fee-for-service and VET FEE-HELP courses being offered by a number of registered training organisations (RTOs), with taxpayers forking out up to 400 per cent premiums to line the pockets of training companies with government loans, many of which will never be repaid.

The deregulation of the VET FEE-HELP scheme has led to a massive increase in for-profit, private education providers and an industry-wide decline in quality. According to the Education Department, just over one quarter (26 per cent) of students who enrolled in VET FEE-HELP courses in 2011 finished within three years. Completion rates for online diplomas were abysmal, with just seven per cent of students completing their course.

The government bill for VET FEE-HELP loans blew out by $315 million last year to $1.615 billion, representing 189,000 students at 254 training providers. Modelling by the Grattan Institute estimates 40 per cent of those loans will never be repaid as those students’ income will never rise above the repayment threshold of $53,000, meaning taxpayers will wear that cost.

According to a University of Sydney study, some of Australia’s largest RTOs are raking in profit margins of more than 50 per cent off of these loans. Under the deregulated system, private training colleges are free to set their own fees. In effect, they have been handed a blank cheque from the Australian taxpayer. In a perversion of a ‘pay what you want’ honour system, it’s become ‘charge whatever we can get away with’, critics argue. All the RTOs have to do is get students to sign up and keep them hanging around until the first census date, and the bulk of money goes straight into their pockets.

Under the Higher Education Support Act 2003, the government does not regulate tuition fees, but under the law a VET provider cannot charge different amounts for the same course based on whether the student pays upfront or through the VET FEE-HELP system. However, a news.com.au investigation has uncovered examples of RTOs apparently circumventing this restriction by operating under separate business names.

Two Cairns-based RTOs are both owned by the same man and operate out of the same business address. One, which is approved for VET FEE-HELP, charges $12,750 for a Diploma of Management. The other, which sells courses direct to students, charges just $3420 for the same diploma, for which much of the course material appears to be identical. A number of other diplomas are offered at different rates.

Asked to explain the pricing discrepancy, the owner told news.com.au the “journey of study and learning” was “quite different” for students of the two RTOs. “They are two separate Registered Training Organisations (RTOs). Some qualifications are offered by both, and descriptions will be similar as like most RTOs reference is made to the Training Packages for this information,” he said. “The journey of study and learning is quite different for students from each of these RTOs.”

He added that each RTO had a different learning management system and curriculum. “Students studying under the VET FEE-HELP loan scheme receive a more comprehensive and frequent support, mentoring and training service which are not available to the other students,” he said.

“These services are available to students upon access to the course they are enrolled into. It is also supported by a strong administration team, due to VET FEE-HELP procedures.”

In Sydney, a similar discrepancy exists between courses offered by two separate training providers owned by the same company, trading under the same RTO registration number. One provider offers a Diploma of Business for an upfront fee of $7000. The other charges $14,800 for its Diploma of Business — delivered online — under the VET FEE-HELP scheme. The company did not respond to requests for comment.

One industry insider, who did not wish to be named, said many RTO owners were “laughing in the government’s face”. “Back in 2013, these RTOs were all just starting to apply for the VET FEE-HELP program,” he said. “I was talking to these directors, and they were all saying to me, ‘We’re going to be doing these VET FEE-HELP courses and we’re increasing our prices.’ I was thinking it’s just bloody unethical. This is just a blatant rip-off of the taxpayer and the government.

“The taxpayers have a right to know how much money has been wasted on this program and how much money has been paid to these RTOs and their brokers.” While the industry regulator, the Australian Skills Quality Authority, has been given new powers to issue fines for a number of infringements, it does not have the power to regulate the fundamental issue of pricing.

Assistant Education and Training Minister Simon Birmingham, who has led the government’s efforts to reform the sector, described such examples of pricing discrepancy as “absolutely concerning”.

“I’ve written to and had communications with the ACCC with concerns about unscrupulous practices, not just in terms of sign-ups but also some pricing activity,” he said. Rod Camm, chief executive of the peak body the Australian Council for Private Education and Training, which represents around 28 per cent of RTOs and about half of all employees in the sector, described the pricing discrepancies highlighted by news.com.au as “predatory and inappropriate”.

“I would have thought that’s some sort of breach of consumer protection laws,” he said. Mr Camm said part of the problem was that unlike in the tertiary education sector where price competition is fierce, vocational students don’t appear to be price sensitive. “You don’t see this sort of thing in the higher education sector, where if anything the competition is driving prices down,” he said. “So while it’s a loan and they have to pay it back, price doesn’t seem to be important to them.”

He called for greater requirements to be placed on providers to test the viability of their offerings and on the capacity of the student to repay.

“That’s a design issue within the system,” he said. “If you go to the MySkills website, for example, there are plenty of courses that show the projected income is lower than the repayment threshold.”

The regulator is currently investigating 23 private colleges — including six from Queensland, seven from NSW and six from Victoria — over allegations of unscrupulous sign-up activity. Businesses found to be in breach of fair trading laws face fines of up to $1.1 million and a cancellation of their registration.

An ASQA spokesman said the investigations were “underway and ongoing”. News.com.au understands an outcome is expected in coming weeks. 

See full story here.

By John Beshears and Francesca Gino, Harvard Business Review

All employees, from CEOs to frontline workers, commit preventable mistakes: We underestimate how long it will take to finish a task, overlook or ignore information that reveals a flaw in our planning, or fail to take advantage of company benefits that are in our best interests. It’s extraordinarily difficult to rewire the human brain to undo the patterns that lead to such mistakes. But there is another approach: Alter the environment in which decisions are made so that people are more likely to make choices that lead to good outcomes.

Leaders can do this by acting as architects. Drawing on our extensive research in the consulting, software, entertainment, health care, pharmaceutical, manufacturing, banking, retail, and food industries and on the basic principles of behavioral economics, we have developed an approach for structuring work to encourage good decision making.

Our approach consists of five basic steps: (1) Understand the systematic errors in decision making that can occur, (2) determine whether behavioral issues are at the heart of the poor decisions in question, (3) pinpoint the specific underlying causes, (4) redesign the decision-making context to mitigate the negative impacts of biases and inadequate motivation, and (5) rigorously test the solution. This process can be applied to a wide range of problems, from high employee turnover to missed deadlines to poor strategic decisions.

Please find full article here: https://hbr.org/2015/05/leaders-as-decision-architects

By Lina Caneva, Pro Bono News, Tuesday 5 May 2015

Savings made from any changes to Not for Profit employment benefits should be returned to the sector, according to a peak body, as speculation mounts that the Federal Government will end uncapped meals and entertainment tax concessions in next week’s Budget.  

CEO of the Community Council for Australia (CCA), David Crosbie, said many in the charities and Not for Profit sector recognise that the current concession system is unfair for most employees and some capping is inevitable, but any Government changes should see the savings kept within the sector.

“According to the ATO, the savings that can be achieved by capping the meals and entertainment card are well over $100 million per annum,” Crosbie said.

CCA says the concessions should be capped at $15,000 per annum, and the money saved should be used to enable all charities and Not for Profit organisations to offer tax deductibility for donations made by their communities. “ATO figures suggest this measure would be more than affordable with the savings from capping the FBT concessions, provided all schools and churches did not automatically qualify,” Crosbie said.

“It is important to understand that more than one million Australians work for charity and Not for Profit organisations in Australia, most at well below commercial rates of pay.

“Over 90 per cent of these employees do not use a meal and entertainment card (originally intended to help the sector attract and retain staff) and of those that do, most claim back relatively small amounts.  

“The reality is that there is a tiny minority within the sector that are very well-paid that can afford to spend and therefore claim tens of thousands in tax free income.  Capping the concession is fair, but the savings should be directed towards the original intent – supporting our charities and Not for Profits.

“To get tax deductibility in Australia is a ridiculously complex and time consuming process typically costing tens of thousands of dollars and often more than a year of effort, so only the bigger charities tend to go through the process.  

“We can make deductibility more transparent and equitable by using the now well established Australian Charities and Not-for-profits Commission determination of whether a charity should gain or retain their charity status as the basis for eligibility.  

“Why not allow all those with charitable status to receive tax-deductible donations?  This is much fairer for all charities, would encourage more donations and build stronger communities for all of us.”

The Federal Government’s recent discussion paper on tax reform specifically targets the Not for Profit sector asking if the current tax arrangements are appropriate - raising issues around the ongoing availability of Fringe Benefits Tax concessions and other foregone tax revenue.

The White Paper, entitled Re:think, Better tax, Better Australia, includes a separate section on the Not for Profit sector which points out that while existing tax concessions help increase the level of activity in the NFP sector, the value of revenue forgone from the concessions is significant and growing steadily.

On Monday Assistant Federal Treasurer, Josh Frydenberg confirmed the Government was looking at capping concessions in a bid to create a fairer system.

“Leaders in the Not for Profit sector...including Tim Costello from World Vision have all said that this one should stop,” Frydenberg said.

Chair of CCA and CEO of World Vision Australia,Tim Costello  said that “the current concessions favour the richest employees in our sector”.  

“While we need to retain concessions to attract the best and brightest to our sector, I would prefer the concession was capped at a reasonable level, and that all the savings were used to strengthen the sector, not just be redirected into consolidated revenue,” Costello said.

Figures released previously suggest that a number of Not for Profit employees, including medical specialists employed at public hospitals, have claimed over $50,000 in tax free concessions in one year by using their meals and entertainment card to pay for personal expenses such as overseas travel and the cost of weddings. 

“These practices have become more widespread in recent years, particularly amongst the small minority of more highly paid employees of charities,” Costello said.

See more at: http://www.probonoaustralia.com.au/news/2015/05/budget-target-nfp-tax-concessions#sthash.G18IqB5W.dpuf

The benefit from millions of dollars of taxpayer-funded research subsidies may be heading straight offshore.

A boat building firm owned by Team Oracle's founder, American billionaire Larry Ellison, drug giant Bayer, Nasdaq-listed Fiserv and global software firm SAP are all recent recipients of research and development grants from Callaghan Innovation, the government agency charged with administering the money.

But the Government says it has no idea whether any of its investment is actually benefiting New Zealand.

Any company domiciled in New Zealand and spending at least $300,000 a year and at least 1.5 percent of its revenue on research and development in this country can claim up to $17.25 million in reimbursements over a three year period.

Callaghan Innovation has given out more than $140 million worth of grants over the last two years.

Labour Party spokesman on innovation, research and science, David Cunliffe, said he was not against foreign-owned companies receiving the subsidy but the Government should know whether it was money well spent.

"Nobody is asking the question or tracking the results 'Is it good for New Zealand?'. I believe that's something they'll give thought to in the future, but it's not in place yet and Callaghan's been going for nearly three years.

"It should have been something that was thought about before they started spending the taxpayer's money, not afterwards."

Mr Cunliffe said Callaghan Innovation admitted to MPs on the Science and Innovation Select Committee who visted the organisation last week that it had more work to do in that area.

Mining companies eligible

Green Party science spokesman Gareth Hughes believed Callaghan's funding criteria was too broad. That meant two mining companies, Chatham Rock Phosphate and Trans-Tasman Resources, were eligible for grants.

"It's hardly innovation just sucking up the seabed, as these two proposals were. The fact is neither of these two companies managed to get a consent, yet they were eligible for considerable sums of taxpayers' money."

"The Government really should be investing in true innovation for the coming century's economy, not just for drilling, mining and fracking," he said.

Mr Hughes also questioned why German pharmacutical company Bayer was eligible for funding.

The firm posted profits of 5.5 billion euros last year, but its New Zealand arm has filed four years of losses.

Bayer declined to be interviewed but in a statement said recent discussion about research funding had not been "fair and balanced".

Bayer said it was a good corporate citizen and it had invested more than $1 million in New Zealand charities, schools and community groups in recent years.

Better assessment years away

Callaghan Innovation chief executive Dr Mary Quin said the aim of research and development funding was to encourage more jobs and research to be carried out in New Zealand, irrespective of who owned the company, or the type of industry it worked in.

She said the organisation was trying to improve the way it measured the impact of its funding, but it could take up to 10 years to see results.

That was because it could take a long time for companies' research and development programmes to bear commercial fruit.

However, New Zealand Association of Scientists president Dr Nicola Gaston has warned that intellectual property created by foreign-owned firms using taxpayer money is being lost overseas.

Funding contracts state that all intellectual property created during the grant period is retained by the company.

"Intellectual property is one of the key things that you're trying to generate. It's really where all the value is in R&D," she said.

"If we want to be moving into the high tech, high value manufacturing industries and creating value for New Zealand from that then a model that explicitly denies any interest in keeping that IP in New Zealand is concerning.," she said.

Japanese-owned appliance manufacturer Rinnai is one the newest recipients of a Callaghan Growth Grant.

The company's head of design, Ben Hawkins, said the money would be used to employ two more engineers next year, and he had to report quarterly to Callaghan on how the money was benefiting the country.

Science and Innovation Minister Steven Joyce said he had no concerns if some intellectual property was lost offshore.

He said funding should be open to all companies willing to spend money on research and development in New Zealand, regardless of ownership or industry.

"The New Zealand government wants to incentivise R and D to take place. Much of it will be in New Zealand. Some of it won't be.

"But what we do know is as the research and development system grows, we get a lot more people, a lot more companies and some very high tech industries growing as a result of it," he said.

This article was sourced from Radio NZ

The Australian Centre for Philanthropy and Nonprofit Studies nonprofit sector legal almanac provides summaries of legal cases involving nonprofit organisations, or of relevance to the work of nonprofits, particularly from Australia, but also New Zealand, the United Kingdom, Canada and the United States. It also summarises legislative changes that relate to nonprofit organisations in all Australian jurisdictions, and includes short articles on relevant topics: mergers of not for profit organisations; public ancillary funds; charitable housing; and dispute resolution.

Please find a copy of the Australian Nonprofit Sector Legal Almanac 2014 here.

Reprinted with permission. Copyright, ACPNS: Australian Centre for Philanthropy and Nonprofit Studies, April 2015, Brisbane, Australia.

It’s a tight market these days.  Everyone, from large organisations right through to small, Not-For-Profit associations are feeling the pinch and ensuring that your membership base doesn’t wither away is more important than ever before.  But how do you ensure that you attract and hold onto those precious members?

Every day we are inundated with adverts, emails, faxes, SMS and many other marketing communications. In fact, so many that most messages actually miss their target, even if they do add value and deliver what we are looking for.  Compare your own ‘inbox experience’ to the audience you are trying to engage with and you can safely say you’re just another voice in the crowd which is most likely being drowned out.

So how do you cut through the clutter and ensure your communications aren’t another casualty of the Monday morning inbox purge?

It comes down to choosing a communication partner who can work with you to determine the best communication method for your membership base.  That’s what it’s all about in the end.  Not how you want to send your message, but how your audience wants to receive it!

Do you really know what your members want from your association?  What is their idea of value for money when they pay their membership fees?  Is the value perceived or are there tangible services on offer?

We performed a survey of 5000 associations in 2013 and the key issue and challenge back then was that associations must provide value for money for their members and communicate relevant and timely information.  

Move along two years, the landscape for NFP’s has not changed.  It is all about engaging members via the channel that they choose and with the right information.  That is the path to membership base retention and ultimately growth.

But tools that offer multiple communication channels can be expensive, right?  Sophisticated CRM systems and web solutions often come with high price tags, making them out of reach for tight budgets.  And moving from a simple excel spreadsheet with basic contact information to an enterprise database system can be a leap to far for many NFP’s.  

Finding that solution that sits right in the middle, with the tools on hand to offer users a multi-channel approach to their communication and experts who will guide you towards better member engagement is the key to solving the problems of today’s NFP’s.

Look out for the next article which will demonstrate some real-world association examples – Associations who are creating insightful communications with their audiences. 

Want to know more?  Contact PRODOCOM on 1300 132 739 or visit http://www.prodocom.com.au/.  

PRODOCOM is a Digital Messaging Service Provider, including Mobile Applications, Email, SMS, Fax, Voice Casting, Web, Competitions and Surveys

Simon Wallace has been appointed the new Chief Executive of the New Zealand Aged Care Association (NZACA). Currently Policy & Insight Manager with the Tourism Industry Association New Zealand (TIA), Mr Wallace will take up his new role on 2 June.

"We are delighted to have recruited a Chief Executive from a membership organisation and who has such strong policy and lobbying skills," says NZACA Chairman Simon O'Dowd.

"Simon has headed up TIA's policy and insight activities for almost nine years, and more recently has helped lead development of the New Zealand tourism industry's long term growth strategy, Tourism 2025.

"His previous experience as a ministerial advisor in the health sector and his networks within government agencies and other business groups will also be very valuable in his work with NZACA."

Mr Wallace says he is excited to be taking on the role at a time when the aged care sector is experiencing strong growth. "I am keen to get out and meet NZACA members and engage with the wider sector to understand the opportunities and challenges that growth brings, such as investment, recruiting and retaining staff. I'll also be talking with members and the NZACA team to identify new ways to promote the great work people and businesses in this sector do."

He says immediate priorities will be getting up to speed quickly with some of the big issues facing NZACA members and focusing on the upcoming Annual Conference in Auckland, 8-10 September. Mr Wallace is replacing Martin Taylor, who has taken up a position in the Office of the Leader of the Opposition.

How well do you follow company policy for business travel?

Achieving travel policy compliance is more difficult than simply changing booking guidelines. Acquiring long term savings often requires changes in buying culture and regular enforcement of company policy. If traveller compliance isn’t measured effectively, improving your company’s travel performance and bottom line becomes much more difficult.

What’s the value of compliance?

Professionally designed travel policies deliver value through consolidation, use of preferred partners and increased time efficiencies. Regular non-compliance delivers a larger overall travel bill, reduces flexibility in itineraries and increases time spent on making travel arrangements.  

Companies can use a number of strategies to boost compliance such as policy consulting, traveller training and incentive based rewards for compliant behavior. Non-compliant bookings can impact your bottom line by:

Missing advance purchase savings - businesses can pay up to an average of 39 per cent more for airfares booked fewer than 21 days from their departure date.

Buying unrestricted airfares – travellers who purchase flexible fares knowing their plans are unlikely to change can increase airfare spending by up to 10 per cent.

Ignoring preferred suppliers – ignoring preferred suppliers can affect negotiated discounts and pricing that would otherwise deliver savings. 

Using mandated booking channels – booking outside mandated channels reduces spending visibility and increases the time spent on reconciling accounts.

How to counteract non-compliance

Companies that experience widespread non-compliance can take measures to counteract rogue bookings and lost savings. Travellers should be educated on policy requirements, savings and time efficiencies. Ultimately, a travel policy’s effectiveness directly corresponds to how seriously it is enforced. Employees should be regularly updated on policy changes or revised guidelines. Your Corporate Traveller Manager can assist in designing a strategy for enforcement that is tailored to your corporate culture.

AuSAE Members have access to an exclusive offer with Corporate Traveller. Click here for further information [Login Required]

The Good Governance Principles and Guidance for Not-for-Profit Organisations (Principles and Guidance) have been created by the Australian Institute of Company Directors (AICD) as part of our commitment to the not-for-profit (NFP) sector and its directors. Designed to assist boards in determining what constitutes good governance practice for their organisations and to achieve better outcomes through good governance.

AICD are committed to promoting world-leading performance of Australian boards and directors. The objective is to share with the NFP community some key principles that we believe are a useful starting point for NFP boards when considering what constitutes good governance practice (with regard to their particular circumstances).

The Principles and Guidance are an extension of our commitment to the NFP sector and demonstrate how we seek to support organisations and their directors to achieve better outcomes through good governance.

Access the document here.

This blog post is written by Amanda Kaiser from Smooth The Path and is sourced directly from her blog here.

We hold our place in conversations with filler words which act as a bridge between coherent thoughts. Most commonly these words are ah, um, er, and, so, you know. We slide in filler words to indicate to others that we’re still talking, hold on, we mean to say, I’m thinking and I’ll be right back with you. Filler words over the course of our lives become a habit and we hardly even know we are using them.

Unfortunately our unconscious use of filler words hurts our ability to make a point, to persuade and to influence.  This habit picks away at our credibility just a bit. Professional public speakers know this and they learn early to curb their use of filler words. Take a look at some of the best TED talks and you’ll see one or two, maybe no filler words. Count filler words in your average conference session and you may find 40 or 50. You’ll find that the speaker without filler words is more persuasive and more captivating.

If people use filler words in their communications do organisations use the equilivant of filler words in their marketing messaging? What little signals are associations unintentionally sending that make them less credible and trustworthy?

Abandoned social media channels hurt our credibility

In a frenzy many associations decide that we are going to do social media. So we open accounts on Twitter, Facebook, and LinkedIn. Maybe also Instagram, Pinterest and Google+. We work really hard at consistently posting for a month or two and find that it is fairly unrewarding because nearly no one likes, retweets or +1’s our posts and fewer follow. Eventually these channels are abandoned or infrequently used. For members who care about Twitter or another channel, seeing social media lay fallow makes them wonder how credible the organisation is.

Fact-based marketing hurts our credibility

Fact-based marketing follows a 3 step formula. This is who we are. This is what we do. Now that you know who we are and what we do won’t you please purchase, join or attend? Most marketing is fact-based marketing. It doesn’t work because it doesn’t connect our member’s needs with our solutions. Members get the sense from our marketing that our focus is on the association’s bottom line and not them, this hurts our credibility.

Policies can hurt our credibility

Members want to see messaging about what they can do. Not a bunch of language about what they can’t do. Policies are developed to protect the association from its members and members know it. Policies can hurt our credibility.