The Regulator Capture: How RTOs Influence Their Own Oversight

The Policy Meeting Behind Closed Doors

In March 2023, ASQA convened a "stakeholder consultation" to review enforcement policies affecting underperforming RTOs. Of the twelve participants, ten represented RTO industry groups, peak bodies, and major training providers. One represented consumer interests. One represented employers.

The outcome was predictable: enforcement timelines were extended, penalty structures were reduced. Compliance requirements were "streamlined" to reduce regulatory burden on RTOs.

"It was regulatory capture in action," reveals a former ASQA policy officer who attended the meeting. "Industry representatives outnumbered consumer advocates 10-to-1. The entire discussion focused on reducing regulatory impact on RTOs, not improving outcomes for students."

The policy officer had witnessed regulatory capture—the systematic process by which regulated industries gain control over their own oversight. This ensures regulation serves industry interests rather than public protection.

The Architecture of Regulatory Capture

Through available industry information, policy meeting records, and research with former ASQA staff, The Tribune has mapped the systematic mechanisms. This shows how the RTO industry influences its own regulation.

The Stakeholder Consultation Imbalance

ASQA's policy development process systematically over-represents industry interests. The imbalance is stark and deliberate.

The Revolving Door System

Personnel movement between ASQA and the RTO industry creates structural conflicts of interest. The revolving door undermines independence.

"Half the senior ASQA staff I worked with eventually moved to industry roles—compliance consulting, policy advisory positions, or direct RTO employment. When you know your future job prospects depend on industry relationships, regulatory enforcement becomes very diplomatic."

The Influence Operation Network

The Industry Peak Body Coordination

Multiple RTO industry organizations coordinate regulatory influence activities. The network is comprehensive and sophisticated.

The Policy Development Infiltration

Industry representatives are embedded throughout ASQA's policy development processes. The infiltration is comprehensive.

"Industry groups had representatives on almost every ASQA working group, advisory committee, and consultation panel. They knew about policy changes months before implementation and could shape development from the inside."

"Student voices were token additions to provide legitimacy."

Case Study: The Standards Weakening Campaign

The RTO Standards 2015 Revision

The Tribune analyzed available internal documents revealing how industry influence shaped the 2015 RTO Standards revision:

The Lobbying Evidence Trail

Internal correspondence reveals coordinated industry pressure:

"ACPET coordinated the industry response to ASQA's proposed trainer requirements. They argued that stricter qualifications would 'destroy the industry' and coordinated 47 submissions using template language. ASQA folded under the pressure and adopted the industry's alternative proposal almost unchanged."

The Enforcement Capture Process

Penalty Structure Manipulation

Industry influence extends beyond policy into enforcement practices:

The "Partnership Approach" Philosophy

Regulatory capture manifests through ASQA's shift from enforcement to "partnership":

"Management introduced a 'partnership approach' where ASQA was supposed to work with RTOs to achieve compliance rather than enforce standards. This sounds positive, but in practice it meant non-compliance was treated as a collaboration opportunity rather than a violation requiring penalties."

The Resource Allocation Influence

Audit Priority Manipulation

Industry influence shapes which RTOs face regulatory scrutiny:

The Whistleblower Suppression

Internal ASQA culture discourages staff from pursuing aggressive enforcement:

"There was an understanding that 'going too hard' on RTOs would damage your career prospects. Staff who pushed for strong enforcement were marginalized, while those who maintained good industry relationships were promoted. The culture rewarded regulatory capture."

The Student Voice Exclusion

Consumer Representation Tokenism

Student interests are systematically excluded from regulatory development:

• No dedicated student representative positions on ASQA advisory bodies
• Consumer advocacy groups invited only to high-profile consultations
• Student submissions given less weight than industry responses
• Technical policy discussions exclude non-industry participants
• Implementation consultations focus on industry compliance costs
• Student outcome data not systematically collected or considered

The Information Asymmetry Problem

Industry groups have vastly superior resources for regulatory engagement:

"Industry peak bodies have full-time policy officers, regulatory specialists, and government relations teams. Consumer groups are volunteers with day jobs. When ASQA releases a complex policy proposal with a three-week consultation period, industry groups can respond comprehensively while consumer voices are effectively silenced."

The Capture Consequences

Regulatory Framework Weakening

Systematic industry influence has weakened student protection over time:

The Innovation Stagnation

Regulatory capture prevents adaptation to changing educational needs:

"The regulatory framework is stuck in 2010s thinking because industry incumbents benefit from stable, predictable rules that favor existing business models. Innovation that might disrupt established RTOs is discouraged through regulatory complexity and compliance costs."

The International Comparison

Regulatory Independence Best Practices

Other countries maintain stronger separation between regulators and regulated industries:

The Australian Regulatory Anomaly

Australia's regulatory approach is unusually industry-friendly:

"When I compare ASQA to international education regulators, the level of industry influence is striking. Most countries maintain much stronger separation between regulators and regulated industries. Australia's 'partnership approach' would be considered regulatory capture elsewhere."

Breaking Regulatory Capture

Structural Independence Requirements

Effective regulation requires systematic separation from industry influence:

Public Interest Representation

Students need dedicated advocacy within regulatory processes:

• Statutory student representative positions on ASQA advisory bodies
• Public funding for professional consumer advocacy organizations
• Independent research capacity to counter industry-funded studies
• Legal standing for student groups in regulatory appeals
• Mandatory student outcome assessment in policy development
• Public interest legal representation for major regulatory decisions

Accountability and Transparency

Regulatory capture prevention requires systematic transparency:

• Public register of all ASQA stakeholder interactions
• Disclosure requirements for ASQA staff industry relationships
• Parliamentary oversight of regulatory policy development processes
• Independent auditing of ASQA decision-making procedures
• Public reporting on regulatory capture risk factors
• Citizen participation in regulatory performance evaluation

The Path Forward: Student-Centered Regulation

Regulatory Purpose Realignment

Effective VET regulation must prioritize student outcomes over industry convenience:

• Student employment success as primary regulatory metric
• Graduate competency verification through independent assessment
• Employer satisfaction with graduate skills as quality indicator
• Consumer protection prioritized over industry compliance costs
• Innovation encouragement rather than incumbent protection
• Public interest representation in all policy development

Democratic Accountability Restoration

Education regulation must serve public rather than private interests:

"Regulatory capture turns public institutions into private industry service providers. ASQA exists to serve students and employers, not RTO business interests. Restoring democratic accountability requires systematic structural change, not just goodwill gestures."

Choose RTOs That Support Strong Regulation

The regulatory capture investigation reveals why weak oversight harms both students and ethical providers. Quality RTOs benefit from strong regulation that eliminates low-quality competitors and protects market integrity.