Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Hansard source

I rise today to speak on the VET Student Loans Bill 2016 cognate debate. In doing so, I begin by saying: finally we are seeing the government prepared to come into this House and take some action on an issue which has been growing and growing and being continually ignored under their watch. Unfortunately, we believe that these changes are too little too late, but I guess we do say 'Better late than never.' We should have seen legislation to improve VET FEE-HELP before the parliament years ago.

Let us just stop for a moment and consider what would have happened if the government had done their job when they should have—years ago. Years ago, if the government had acted sooner, billions of dollars—not millions, billions—could have been invested in apprenticeships and TAFE instead of being wasted on dodgy providers. We know that change is absolutely urgent and, now that the bills are finally before the House, I can offer Labor's in-principle support in the House as we await the outcomes of the Senate inquiry. But the reality is that the bills before the House today are only one part of the issue. We know that one incredibly important part of the puzzle is to close the loopholes in the VET FEE-HELP scheme but we also know that that is not the entire solution. The proposed changes do not do anything to turn around the decline in our public TAFE system. The government have stood by as unfair competition has run absolutely rampant, quality has declined and students have been squeezed out of our quality TAFEs and lured away by far too many shonks. We have seen the breadth and depth of TAFE courses decline; we have seen campuses close; we have seen fees rise. The bills before the House today do not fix the crisis that is currently being faced by TAFE, but it is a crisis that must be fixed. We on this side of the chamber will continue to stand up and fight for a quality TAFE sector across Australia because we know how incredibly important it is.

Not only do these bills not address the crisis, but from the middle of next year there is nothing in this government's budget to continue the national partnership that funds TAFE and skills—nothing. The Assistant Minister for Vocational Education and Skills has been on the record in the past week questioning whether there is even a need for a replacement agreement—essentially questioning the role of the Commonwealth government in supporting TAFE at all. That is extraordinary! Australians ask themselves time and time again: why does this government have such an ideological problem with supporting public education in this nation? And time and time again it is Labor, on this side of the House, who stand up and fight for public education. In this instance, it is Labor who will stand up and fight for quality TAFE and vocational education.

The tardiness in dealing with the billion-dollar blow-outs, the rorts and exploitation in VET FEE-HELP is, sadly, in line with the modus operandi of this Prime Minister and this government when it comes to policy. It seems to be the Turnbull template: they ignore a problem that is there in plain sight; they dither; they blame someone else; things get worse; and finally—sometimes, if the problem proves to be bad enough—they belatedly jump on board, try to copy Labor's policy and take the credit for it. The concept behind the bills before us today is no different. It is almost a carbon copy of the VET student loans policy that Labor announced in May and took to the last election. Of course, our concern is not necessarily with the concept. Our concern, when it comes to this government, is about the detail, the implementation and getting the delivery right. If history is anything to go by, there is nothing to suggest that they will not stuff those things up too.

We know that we were the ones who came forward and said we should cap student loans to stop rip-offs. In this legislation the government have copied that. We were the ones who said that we should crack down on the use of brokers. The government have come forward and copied that. We were the ones who said we should link publicly funded courses to industry needs and skills shortages, and here we see the government copying that too. We said providers should be required to reapply under new standards so that only high-quality providers could access the loan system. Here today—yes—we see that has been copied. And we were the ones who said that public funding should be linked to student progress and completion. That too has been copied here.

We have also advocated for an ombudsman for the system. There needs to be someone to hear student complaints, because far too many students have been the victims of government inaction in this area, and we will be moving some amendments towards that in the consideration in detail stage of the bill. Although I note that the government said last week that they would create an ombudsman—again, belatedly; again, copying Labor's ideas—there is nothing in this legislation that actually does that.

We know, of course, that mimicry is the sincerest form of flattery, and what is concerning here is not that they have copied Labor's ideas—that is fair enough; we wish the government would do it a whole lot more often—but the hypocrisy with which they have done it, after so roundly panning the very same proposals. It is a complete 180; it is a backflip of Olympic proportions. In May this year the Liberals were falling over themselves to criticise Labor's policy proposals. Today they are moving them in the Australian House of Representatives and trying to take the credit for them.

Let's just have a look at what they said on the record. When Labor announced a policy of capping student loans, the Treasurer, Scott Morrison, said it would 'pull the rug out from under the private education industry'. Today his government is proposing to do just that. The then minister, Scott Ryan, called it 'classist policy' and a 'thought bubble' that, he said, 'will lead to up-front fees for VET students'. He also dismissed Labor's suggestions as 'impulsive, ill thought through, ill-considered' and a 'sound bite'. Senator Simon Birmingham, now the minister, said they were: 'an ill-considered flat pack'. He also said a price cap—and I should point out once again that central to the legislation the government is putting forward here today is a price cap when it comes to vocational education—'would simply, in effect, establish a government sanctioned price'. He brushed off the concept, saying, 'When you set a price cap, everybody simply shifts to the price.' But in the bills we have here today the same senator is now proposing three different price caps, at $5000, $10,000 and $15,000.

Perhaps all of this is a symptom of the fact that there has been a revolving door in the government when it comes to responsibility for technical and vocational education. It shows just how little they think of this sector that each of the five ministers who have held the portfolio over the last three years—that is right: five ministers in just three years—has been focused more on politics than on policy.

This has not been a priority and the sector has suffered gravely as a result of that.

I fully anticipate that during the course of this debate what we will see from the talking points issued to those opposite is that one after another they will do what they always do. They will stand up and they will say that this is all Labor's fault, like everything else in this place—'It's all Labor's fault'. Blaming Labor for the blow-outs and the mess that have occurred under their watch is just not going to wash. The minister's own media release when he announced these reforms and his belated discussion paper made it clear that the annual value of VET FEE-HELP loans was about $700 million in 2013. In 2014, when they were in government, it jumped to $1.8 billion, an increase of around 250 per cent in just one year, a 250 per cent increase under their watch.

The next year, 2015, we saw the loan book balloon again, to about $3 billion, another massive annual increase, of around 160 per cent. In just two years, between the Liberals coming to government and the latest figures, the VET FEE-HELP scheme blew out, incredibly, by more than 400 per cent. To preside over this is not an indictment of Labor. It is an indictment of absolutely each of the five ministers who have held this portfolio and who have failed to act.

Listening to the government, I am sure that we could be forgiven for thinking that the crisis facing technical and vocational education was new, that the bills before the House were a quick reaction to an emerging problem. But, as I have just established, it is not. This is not a new or emerging problem. The alarm bells have been ringing for years about this issue. They have not been silent. They have been splashed across the front pages of papers. They have been exposed by Senate inquiries. They have been brought up time and time again by victims, teachers, experts and by Labor, who have been urging the government to act. The problems have not suddenly emerged; they have been around for years. And no policy is ever a success unless the government of the day is diligent, sober and responsible in managing its implementation and operation. No-one builds a hospital and then forgets about it. But that is exactly what seems to have happened to the VET FEE-HELP scheme.

By looking to place the blame on changes made in 2012, rather than taking responsibility for the scheme over the last three years, the government is admitting that they took their eye off the ball. They sat back, they wrote cheques and they failed to pay any attention to their responsibility for administering government programs. The department would have been making payments to providers on an ongoing basis throughout 2014 and 2015. Why wasn't this exponential growth trend properly addressed as it emerged? Did no-one tell the minister? Did the minister simply fail to read their briefs? Did the minister know what was going on, but fail to act? If trends and issues were identified, why wasn't effective action taken then? Those are the questions that we demand answers to. And those are the questions that Australian taxpayers demand answers to, after seeing billions of their hard-earned dollars wasted in this space.

Perhaps it was because the minister changed so regularly. Were they never in the seat long enough to understand the issues and do anything about them? One of these explanations has to be true. We just do not know yet which one it is. None of them is acceptable. And it does not matter which one is the truth, because they are all equally damning. They are all equalling damning on the government that sits at the table today.

There is one final and fatal logical flaw in the government's argument that Labor somehow caused the VET FEE-HELP program to blow-out under their watch. If they knew something was wrong on day 1, why didn't they fix it on day 1? It does not matter which way you look at the facts, the government is guilty of abdicating their responsibility for the careful use of taxpayers' money, and for protecting students from exploitation, because it is students as well as taxpayers who have suffered greatly as a result of the government's incompetence.

We know there are many facts that have been put forward that the government chose to ignore. In October 2014, the ABC reported that the Department of Education had received reports of students being signed up to courses without their knowledge. But there was no government response. Why didn't the government take action at that point to stamp out these practices?

The same report, in October 2014, showed inappropriate student enrolments and the blow-out in costs under some private providers, compared to TAFE. The government's own figures show that average VET FEE-HELP tuition fees have grown from $5,900 in 2012 to over $14,000 in 2015. Why didn't the government stop the price gouging when it was first identified, when it was pointed out clearly to them?

One of the many extraordinary stories of blatant misuse of this scheme was reported by the TAFE Community Alliance in the course of last year's Senate inquiry. They reported how a woman in her 70s, who was having lunch with her bible group at Bankstown central shopping centre, was approached by a broker and offered a 'free' laptop and what was explained was a 'free' diploma of community services. She was told she should not worry about signing up, because she would only have to repay the fee if she earnt over $50,000.

Did I mention that this was a woman in her 70s at her local bible group? We know that this was an example of misuse. She was then offered $400 as a spotter's fee if she was able to sign her friends from the Chinese community so they could also be a part of this scam. Just like in so many other cases, there was nothing free about this. Every cent of it was taxpayer's money. And there was nothing fair about this. In fact, it is an absolutely clear-cut case of exploitation. Why weren't brokers banned earlier, when these stories were publicly coming to light?

In 2014, the graduation rate for the 10 largest private providers was under five per cent: $900 million in federal money, over $215,000 for each graduate. Why wasn't something done then to re-accredit providers and make sure students completed courses? When some changes were made to the scheme last year, and Labor at that point warned they were inadequate to deal with this situation, why didn't the government take the opportunity to work with us to fix the situation properly?

Unfortunately, there is a very clear pattern of too many questions and not enough answers in the way the government has managed—or, indeed, entirely mismanaged—the VET FEE-HELP scheme.

Looking forward, though, we know that students must be the priority, for the government and this parliament, in restoring the quality, the reputation and the integrity of Australia's technical and vocational education system. We must work together to make sure that it does meet the needs of students, employers and the economy. And, more than anything else, we must make sure that students are protected from the kinds of exploitation that we have witnessed all too often in recent years.

The House will be familiar with some of the worst examples: shonks waiting outside Centrelink to take advantage of people facing difficult circumstances by signing them up to dodgy training and bad debt; brokers travelling to remote Aboriginal communities and convincing locals to sign up en masse. The minister's own discussion outlines a 650 per cent increase in Indigenous VET FEE-HELP enrolments since 2012, a 500 per cent increase in students from very remote communities, a 180 per cent increase for students with a disability, and a 172 per cent increase in students with low socio-economic backgrounds. All of these vulnerable groups have been over-represented, and there is no doubt that this is a consequence of the unethical selling which has been so widely reported, yet which the government have failed to act on. As a result, many disadvantaged students now carry significant debt—and, as independent analysis shows, a significant proportion of them will probably never ever be in a position to repay it. Across the board, there are too many students whose hopes have been crushed by dodgy providers, and who have been left with big debt and no qualification to show for it.

So, whilst Labor does support the bills before the House in principle, we also have a number of concerns. In particular, we have concerns about the lack of available information at this stage on how the re-accreditation process will work for providers and on the ability of the department to assess providers against complex criteria in such a short period of time.

At this stage, the new standards have not been published, and they will contain a great deal of important information about how the new accreditation framework will operate. We hope that the Senate inquiry will provide an opportunity for the parliament and for stakeholders to consider these important elements.

It will no doubt be a significant challenge for the department to develop methods of assessing the suitability of providers in such a short amount of time—and with so little opportunity to consult on or to trial the methodology that they intend to use. It will also be an enormous challenge for the department to be able to rigorously assess hundreds and hundreds of providers against the standards in the available timeframe. We sincerely hope that the government ensures that there are adequate expertise and resources deployed for this task, because we know that the VET sector simply cannot afford for this process to fail.

Labor also wants to see the government engage meaningfully and constructively with the sector in finalising the approved course list. I hope that the minister is seeking expert advice about the demand for skills, the employment and business prospects of students as a result of courses, and the transferrable skills that students acquire.

While it is really easy to get headlines by striking some courses from the list, we know that it is predominantly courses in management and business administration that have caused the blow-out in VET FEE-HELP. It is really important that the minister gets the course list right and that he does not throw the baby out with the bathwater.

On this side of the House, we have already been contacted by good-quality and longstanding providers that have fallen foul of the government's proposed course list—particularly in some creative industries. The government needs to make sure that they do not use this opportunity in order to pursue some ideological crusade on what they consider to be 'worthy' study and that instead they use this opportunity to deal with rorting and exploitation.

Of course, the course list is not contained in the bills that we are debating here today; it will not be voted on in the House at this stage. But we do put forward that we have heard concerns, that we have significant concerns and that the minister needs to make sure that he gets it right. He needs to make sure that they recognise that there are many courses with value, and many good providers with a proud history. There are many courses which improve the skills, employability, work readiness and job prospects of Australians, and we need to make sure that we do not inadvertently limit those prospects.

We also have a particular concern about how the transition to the new scheme will impact on students—in particular, students who might, for whatever reason, need to extend their study under the VET FEE-HELP scheme past the end of 2017 when the grandfathering provisions in this bill expire. If the student needs to repeat units, or if they have been ill, or if they have had to undertake their studies part-time or to defer part of their course, for whatever reason, it would be incredibly unfair if they had to face large and unexpected gap payments as a result of this measure. More alarming still, they may be left liable to pay full course fees up-front because the provider or course is not approved under the new scheme. These circumstances, should they occur, would not be the fault of those individual students, and we believe that students have paid the price for this government's mismanagement in this sector too much already. We will be standing, looking and working very carefully to make sure that this does not occur again.

I did want to say that the changes in the bill to ban brokers are welcome, and, in the course of the Senate inquiry, we hope to get the full details about what this will mean in practical terms. The bill bans brokers from having a role in the VET student loan scheme, but it is unclear at this stage what this will mean for brokers more broadly.

I also note that concerns have been raised by the TAFE directors association and others that the bills do not go far enough in delivering the governance reforms that are needed to permanently clean up the sector. Again, I hope that this is something that can be clarified in the course of the Senate inquiry.

We understand the urgency of these bills. We have been arguing for them for years. But it is an urgency that the government have brought upon themselves. A consequence of this rushed process now has been a lack of consultation and a lack of scrutiny of the details of the proposed policies. I understand that many in the sector were promised that they would see a second discussion paper on these reforms and would have the opportunity to comment on detailed proposals. This promise has not been fulfilled, making it all the more important that the government presents full and accurate information to the Senate inquiry so that stakeholders can at least get across the detail of these changes in that contract.

Most importantly, the bills before the House will hopefully restore the integrity of the VET loans system but they will do nothing to fix the broader crisis. The government needs to recognise this. The government needs to recognise that Australia needs a healthy, strong and diverse vocational education sector. By the government's own account, as a result of this bill, there will be $7 billion less in federal funding going towards vocational education in just the next four years—$25 billion in the next 10 years. The government needs to ensure the long-term sustainability of this sector. The government needs to ensure that we have strong and healthy TAFEs. While we will work with the government to try and close loopholes and stop rorting in VET FEE-HELP, the government needs to come on board and work with us when it comes to standing up and fighting for TAFE and public education. The government needs to work with us when it comes to ensuring the long-term viability of a sector that is so central to our economic future. The government needs to stand with us when it comes to investing in skills, in traineeships and apprenticeships.

And the government will have the opportunity to do that because in just over six months time a new national partnership with the states and territories will be required. I can place the government on notice here today that Labor will be standing up and ensuring that this national partnership guarantees the strength of the sector. We will be standing up and ensuring that this national partnership reinvests in TAFE—that we prop up the TAFE system, which has suffered incredibly badly in recent years. Our overwhelming concern is that nothing in these bills will help to rebuild and restore our TAFEs.

We know that a lack of action on this front is not surprising from a government that has had such a poor attitude when it comes to TAFE. But we were shocked that just last week the senior minister, the member for McPherson, question whether the national partnership for skills was even needed in the future. She said she was meeting with the states to 'determine whether there are reforms to VET that warrant a new agreement'. This is deeply concerning. The current national partnership expires in the middle of the next year. What does this mean? It means over $500 million in Commonwealth support for TAFE and skills is on the line—and the minister does not seem to know whether they will need a new agreement to replace that at all!

Labor is absolutely clear: we back public TAFE. That is why we took a TAFE funding guarantee to the last election. We know that that is where people get the technical and semi-professional skills that they need for growing industries. We know that that is where the skills that are being demanded by industry are and it is where the skills that Australia needs to be competitive with other countries are. Generations of Australians know just how important TAFE is to our community and to our economy. They know the first-class skills and opportunities that going to TAFE can provide. Well, we need the government to know that too; and, more than that, we need the government to step up and act in that area. VET, TAFE and apprenticeships are crucial to jobs in our economy. They are crucial to the incomes, the wellbeing, the hopes and the dreams of so many Australians.

I genuinely hope the government has turned a corner from here—that after years of inaction and years of incompetence they will do what is best for students, employers and the sector. I genuinely hope they work to get the implementation of these changes right. But there can be no doubt that this government's maladministration of the VET FEE-HELP is one of the most egregious examples of waste and incompetence in the history of federal government; it is extraordinary. No amount of finger pointing, no amount of huffing and puffing from those opposite will be able to change that. It stands on the record. It stands on the record of the five ministers in three years who sat by and did nothing. But it also stands as a burden to every single member opposite who just did not think vocational education was worth standing up for, who did not think it was important enough to have a look at the information that was publicly available and ask some questions of their own government, who did not think it was important enough that they protect taxpayer dollars which were clearly being misused in the most ridiculous fashion. It is because of that that I move:

That all the words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House condemns the Government’s failure to properly administer the VET FEE-HELP scheme, leaving taxpayers and students to deal with the consequences of their mismanagement.”

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