Importancia del aprestamiento

Introduction

1 In May 1998 the Electrical and Electrotechnology Training Centre Incorporated, now known as the College of Electrical Training Incorporated (CETI), applied for an infrastructure grant from the Australian National Training Authority (ANTA) to ‘expand the capacity and training delivery capabilities of the [CETI] through the redevelopment of a recently acquired industry specific land and building package at 9 Cressall Road, Balcatta’1_{(the Property). CETI’s application was}

lodged with the WA Department of Training (WA DOT).

2 ANTA and WA DOT each prepared guidelines to be applied in relation to applications for an infrastructure grant. Both sets of guidelines stipulated that the approval of a grant was conditional upon a contribution from industry of not less than 50 per cent of the proposed project cost. CETI’s application proposed a total project value of $2 203 260 and a ‘ratio of contributions’ for the project of $1 315 000 from industry and $888 260 by way of the grant. The proposed industry contribution was to be from the Electrical Contractors Association of Western Australia (Inc) (ECAWA) and was to be comprised, in part, of ‘buildings and land’ to the value of $1 200 000.

3 The application was subsequently approved and the grant was provided. Of the total grant, the sum of $650 000 was spent upgrading the building on the Property.

4 The grant was subsequently acquitted, however ECAWA retained ownership of the Property. Further, CETI rents the Property from ECAWA for an annual rental of $105 600.

5 ANTA maintains that the industry contribution was to be made by the ECAWA ‘donating’ the Property to CETI.

6 The Commission investigated how it transpired that the grant was approved, provided and subsequently acquitted in circumstances where the Property was not transferred to the CETI.

Facts

7 ECAWA is an association incorporated under the Associations Incorporation Act 1987 (WA). It is a union of employers. The object of the association is to protect by any lawful means and further the interests of employers in the electrical contracting industry in Western Australia. Any

person who is substantially engaged in the business of an electrical contractor, or who (being a resident of Western Australia) is a member of a partnership which is substantially engaged in such business, or a company so engaged, is eligible for membership of the ECAWA provided the person, one of the partners, or in the case of a company a person nominated by the company for the purpose, holds an electrical contractor’s licence and the person is an employer.2

8 In October 2002, ECAWA membership was approximately 400. The membership ranges from sole traders to national corporations who are electrical contractors operating out of Western Australia. ECAWA is an association registered in the Western Australian Industrial Relations Commission under the Industrial Relations Act 1997 (WA).3

9 CETI is an association incorporated under the Associations Incorporation Act 1987 (WA). CETI was incorporated on 8 November 1995.4 _{It changed its name to the College of Electrical}

Training Incorporated on 15 April 1999.5_{The objects of the CETI are variously described in the}

CETI Rules but relate to training of apprentices and trainees in the electrical and electrotechnology industry in WA. Its first stated object is to establish a training centre.6

10 CETI is an independent body and does not form part of ECAWA.7

11 The membership of CETI is limited to the Board members of CETI.8_{The Board is comprised of}

six members. ECAWA and the Electrical and Electronic Group Apprenticeship Scheme Incorporated, now known as Electrical Group Training Limited,9 _{each appoint three persons}

(CETI Rules, clause 6.2).10_{The Board members appoint the chairman.}11

12 Since 1974, the Commonwealth of Australia has provided capital funding to states and territories towards the establishment of a comprehensive network of TAFE colleges across the country. Since 1987, the Commonwealth has administered a Skill Centre Program. Under the Program, industry is invited to participate in joint venture arrangements to establish industry based training facilities, or Skill Centres. Infrastructure funds are provided by the Commonwealth for the development of Skill Centres. In the past, such funding was very much directed towards the TAFE program. From 1995 onwards, infrastructure funding has been made available more flexibly to encourage the creation of a broader training market involving both TAFE colleges as well as private and industry based providers.12

13 ANTA is a Commonwealth statutory authority established in 1992 to provide a national focus for vocational education and training in Australia. ANTA receives approximately $1 billion for funding each year from the Commonwealth Department of Education Science and Training. The funds are allocated to various bodies for approved purposes. Within this funding, there is an allocation of approximately $200 million each year for allocation under ANTA’s Infrastructure Program. Included in this $200 million is an allocation of $7 million a year for Industry Based Skill Centres Infrastructure Grants.13

14 For the purpose of administering the Grants, ANTA published a document entitled ‘Information and Guidelines’ (ANTA Guidelines).14

15 At all material times,15_{relevant clauses of the ANTA Guidelines included:}

4.1 It is expected that proposals will be developed in consultations between industry groups and State/Territory Training Agencies. …

4.3 It is expected that a substantial contribution will be made by industry to any Skill Centre project as industry will be the main beneficiary. The level of such contributions will be a matter for negotiation between the State/Territory Training Agency, the industry involved and any other party. While there are no set levels of contributions by the parties,it would generally be expected that ANTA funds would represent less than half of the establishment costs. …

4.4 Funds under this initiative are provided for expenditure of a capital nature and proposals should not include funds for operational expenses or for course development.

4.6 A key feature of any proposal will be the long term financial viability of the Centre and the need, if any, for ongoing support from public sources or government training programs…

4.8 These guidelines set out the requirements from ANTA’s viewpoint. It will be a matter for the States/Territories to put in place any procedures they consider necessary to meet their own requirements, including conditions of grants, to ensure that proposals will withstand public scrutiny and to propose appropriate management arrangements to ensure proper accountability of public funds.

7.7 Budget Outline

This should be in two parts.

The first should indicate the total establishment costs, with indications of the various sources of funding. … It should be noted that it would be generally expected that funds from ANTA would represent less than half the establishment cost.

The second are [sic] estimated income and expenditure statements for a three year period. These should form part of a broader business plan. It is from this information that an assessment can be made regarding financial viability.

8.1 The following criteria should be applied when assessing proposals for assistance: …

(b) The financial viability of the Centre as demonstrated in a Business Plan for the first three years of operation and the ability of the Centre to generate its own operational support;

(c) The degree and type of non-government funding proposed for the establishment of the Centre, including the level of industry support. It would generally be expected that ANTA funds would represent less than half of the establishment costs;

…

(f) For industry based centres, the establishment of a separately incorporated body to operate the Centre.

9.2 Proposals may be submitted to ANTA by State/Territory Training Agencies as they are developed.

9.3 Once funds have been approved by ANTA, State/Territory Training Agencies will have responsibility to progress the proposal with the applicants and arrange for the necessary formal agreements and management processes to be put in place to protect public funds.

9.5 All contractual matters relating to the establishment of approved Skill Centres and the appropriate use of public funds will be the responsibility of the State or Territory...16_{(original emphasis).}

16 The State Training Agency acts on ANTA’s behalf in relation to supervision of the grants.17

WA DOT is the applicable State Training Agency, as described in the ANTA Guidelines, for the purpose of administering the infrastructure grants in WA.18 _{For this purpose, WA DOT}

published and distributed a document entitled 1998 Skills Centre Capital Funding - Call for Applications - Information and Guidelines Kit(WA DOT Guidelines).19

The WA DOT Guidelines applied at all material times. Relevant clauses of the WA DOT Guidelines included:

1. The purpose of this information kit is to invite industry and enterprise applications for the establishment of skill centres (or the expansion of existing facilities) to be funded in 1998 under the skill centre component of the…(ANTA) Infrastructure Program.

3. Funding made available under the Skill Centre component of the Infrastructure Program during 1998 may be requested for a variety of purposes including:

• The purchase of land and/or appropriate facilities;

• Construction of buildings;

• Modifications to existing facilities; …

5. The objective of skill centre funding is to further assist in the development of the national and Western Australian vocational education and training systems by: …

• Encouraging a greater contribution by industry in the establishment and operation of appropriate vocational education and training facilities … 6. As the agency responsible for co-ordinating the development and submission of

Western Australia’s skill centre capital funding applications [DOT] has established a process which is designed to ensure that:

…

• [DOT], through liaison with stakeholders, industry and applicants, maximises its exposure to, and understanding of, applications received; …

The process to be adopted by [DOT] for the 1998 skill centre capital funding process is outlined below:

• Call for Applications- Applications to access skill centre funding are called for through public advertisement.

• Assessment of Applications- All applications will be assessed by [DOT] against the criteria listed at Section 9 of this Information Kit.

…

7. There are a number of key considerations that are required to be reflected in skill centre capital funding applications:

…

• Industry should contribute at least 50% of the total capital costs associated with the proposed development (in-kind contributions are acceptable). Enterprise based applications require a higher level of contribution and this will be negotiated with the applicant.

8. …

• Budget

An estimated breakdown of total budget costs and the respective industry and ANTA contributions are required.

…

9. Initial skill centre applications will be assessed competitively against a set of criteria to determine those that are most appropriate to develop into full submissions for consideration by [DOT], and possible recommendation to ANTA.

Initial skill centre applications will be assessed against the following criteria: 1. The application has an appropriate mix of funding support as detailed in this

‘Call for Applications’ information kit. Capital cost estimates are well based. Please note that applications proposing funding contribution from industry of less than 50% will not be further considered;

…

3. The application demonstrates financial viability without continued provision of recurrent public funding for capital or operational purposes, including employment based training and tendered funding; 20_{(original emphasis).}

17 In early 1998 and some time prior to 18 March 1998, CETI provided WA DOT with a preliminary application for an infrastructure grant.21

18 On 18 March 1998 the WA DOT Contracts Committee noted and accepted an Evaluation Report which recommended the CETI application for further development.22

19 Following the WA DOT Contracts Committee Meeting, WA DOT liaised with ECAWA and CETI. In the discussions ‘it was made very, very clear that there was a 50 per cent contribution required’ from industry.23

20 WA DOT subsequently received a formal application dated 4 May 1998 from CETI (the Application).24

21 The Application was ‘put together’ by the then Executive Director, the Electrical Contractors Association of WA Incorporated, Mr Gus Ferguson, and his staff.25_{The present Executive}

Director of the Electrical Contractors Association of WA Inc, Mr Rodney Hale, was involved in much of the drafting.26

22 By contrast, the Chairman of the College of Electrical Training Incorporated, Mr Tony Sulley, who signed the Application, had no role in preparing it. His evidence was:

I did not have anything to do with the putting together of the application as such. It was presented to the Board, we approved it and I signed it.27

23 Sulley’s understanding of matters was as follows:

As far as I am aware there was an offer by the Government for a grant based on an industry Financial input and the Government’s input.

… we said to the ECA, that we did not have any money. We cannot do this, but we have this will to move so the ECA, representing the industry, said to the CET that they would provide the building, so that we could go ahead with the submission on behalf of the college. That is my understanding.

I do not know what the ECA’s understanding was as to their obligation for the industry contribution. Apart from the fact that they would supply premises.28

24 Relevant clauses of the Application included:

2.1 This application has been jointly prepared by the [CETI] and the [ECAWA] in consultation with [WA DOT] and the electrical/electronics/communications industries. …

2.2 The purpose of this application is to seek support in the form of capital funding from the [ANTA] infrastructure program to expand the capacity and training delivery capabilities of the [CETI] through the redevelopment of a recently acquired industry specific land and building package at 9 Cressall Road, Balcatta.

2.4 In the creation of the [CETI], industry determined the objectives of the Centre, incorporating them into the body of its constitution and rules, establishing a clearly definable direction for training.

Rule 3 of the Centre’s constitution states that the objects are: 3.1 (a) To establish the Training Centre;

…

3.3 The property and income of the Association shall be applied solely towards the promotion of the objects of the Association ….

4. Due to the training demand and physical/geographical limitations of the current facility in Malaga, the Board of the [CETI] actively sought appropriate parcels of

land or established properties for purchase to allow for the timely growth of the Centre’s activities as determined by industry.

A number of packages were identified during the later part of 1997 with two opportunities to purchase being lost due to the submission of qualified offers. Extensive renegotiations with industry and government on the ability of the [CET] to acquire suitable long term accommodation saw the ECA develop a financial portfolio enabling it to purchase a land and building package at 9 Cressall Road, Balcatta, thereby allowing the [CETI] to plan for its long term accommodation needs through 1998 and beyond.

13.1 BUDGET

The application is based on a proposed total project value of $2,203,260.00. It is further proposed that the ratio of contributions for this project be as follows:

Item Contributions by

Industry $ ANTA $

Buildings and land $1,200,000 -

Design and development - -

Building upgrade - $650,000

… … …

TOTAL 1,315,000 888,260

17. It is the Board’s view that the [CETI] is a worthy applicant for financial assistance as:

• The industries it services are prepared to invest, in real terms, the greater portion of capital required to enhance the training effort necessary for a sustained industry growth.29

25 The Application had annexed to it, among other things:

(a) a cost estimate of $650 000 for construction costs at the proposed training centre at the Property. The cost estimate was contained in a letter dated 6 May 1998 from Bruce McLean, Architects, to Ferguson at ECAWA;30

(b) a copy of the first page of the contract for sale of the Property stating ECAWA as the purchaser of the property for a purchase price of $1 135 000;31

(c) a letter dated 14 April 1998 from the Australia and New Zealand Banking Group Limited (ANZ) evidencing settlement of ECAWA’s purchase of the Property on 9 April 1998 and a loan of $360 000 by the ANZ to ECAWA to assist ECAWA with the purchase.32

26 Under cover of a letter dated 23 June 1998, Mr Ian Hill, the Chief Executive of the Western Australian Department of Training, submitted four WA applications, including the CETI Application, to ANTA. The letter stated, relevantly:

The four attached applications have been developed by the proponents in close consultation with [WA DOT]. …

I am confident that the attached proposals present a sound case for funding.

The four applications enclosed seek a total of just over $2.1 million in ANTA funds which is balanced against a total industry contribution of over $3.5 million …

[WA DOT] fully endorses the four attached applications...33

27 Subsequent to lodgment of the Application, the amount to be contributed by industry and the value of the grant was the subject of discussion between Mr Nigel Haywood, the Director, System Planning and Industry Analysis Directorate, the Western Australian Department of Training and Mr Geoff Hender of the College of Electrical Training Incorporated. The result of the discussions was an agreement that the industry contribution would be ‘Building and land’ to a value of $1 198 571 comprised of the purchase price ($1 135 000), stamp duty ($43 762.50), settlement ($3280.50) and architect’s and engineer’s fees ($16 528). The ANTA grant was revised to a total sum of $901 569. These details were confirmed by facsimile letter dated 8 July 1998 from Haywood to Mr William McGuiness (of the Australian National Training Authority).34

28 On 8 July 1998 an internal ANTA memorandum to the General Manager of ANTA,35_sought

approval of the CETI Application for an infrastructure grant in the amount of $901 569. The memorandum stated, relevantly:

Over the last few years [CETI] has been undergoing growth in demand for its services. The Centre which is currently located at 22 Westchester Rd, Malaga is physically restricted in its capacity to expand and has been seeking a new site for some time. They have recently put together a financial portfolio which will enable them to purchase land and buildings at 9 Cressall Rd, Balcatta.36

29 The General Manager approved the Application on 9 July 1998.37_{By letter dated 21 July 1998,}

he wrote to Hill (of WA DOT) advising of the approval of the infrastructure grant for the total sum of $901 569. Attached to the letter was a schedule relating to the project which set out relevant details about the grant. Relevantly, the schedule provided:

INDUSTRY CONTRIBUTION Existing site with land and buildings - $1,198,57138

30 The schedule made provision for Hill to sign, date and return a copy of the schedule acknowledging the details set out in the schedule. Hill signed the schedule, dated it 4 August 1998, and returned it to ANTA under cover of a letter dated 4 August 1998.39

31 The grant moneys were subsequently provided by ANTA to WA DOT, for payment by WA DOT to CETI.40

32 On 15 September 1998 Hill (on behalf of the WA Minister for Employment and Training) and Sulley (on behalf of CETI) signed an agreement providing for the expenditure of the infrastructure grant and for performance obligations to be met by CETI. Sulley signed the agreement in the presence of Ferguson as a witness.41

33 By clause 3.1 of this performance agreement, CETI undertook to carry out the project set out and described in CETI’s application in accordance with Schedule 1 of the agreement. Schedule 1 described the grant as a once only grant of $901,569 towards an estimated cost of $2.1 million being for the acquisition and redevelopment of the new centre at the Property. The Schedule then went on to describe the purposes for which the grant was to be expended.42