Stephen Smith (Perth, Australian Labor Party, Shadow Minister for Education and Training) Share this | Hansard source

The Higher Education Support Amendment (Extending FEE-HELP for VET Diploma and VET Advanced Diploma Courses) Bill 2007 amends the Higher Education Support Act 2003 to extend FEE-HELP assistance to full fee paying students in diploma and advanced diploma courses that are accredited as vocational education and training qualifications and where credit towards a higher education award such as a university degree is available. Labor supports the intent of the bill to extend FEE-HELP assistance to full fee paying students in diploma and advanced diploma courses accredited as vocational education and training qualifications.

Labor supports the bill because it attempts to do two things. Firstly, it attempts to provide relief of the up-front costs associated with diploma and advanced diploma courses. Secondly, by extending the eligibility to FEE-HELP assistance to those courses accredited as vocational education and training qualifications, it removes a possible financial barrier for people pursuing a vocational education and training field of study.

When it was first introduced in 2003, FEE-HELP provided that, commencing from 2005, students would be able to pay for undergraduate or postgraduate fees in full fee paying, non-HECS courses at eligible public or private higher education providers through an income contingent loan. This had the effect of extending eligibility of FEE-HELP to undergraduate students in public universities and, for the first time, extending the income contingent loan facility to private universities like Bond University and Notre Dame University.

It also had the effect of extending eligibility to other accredited higher education providers on the AQF register of recognised education institutions and authorised accreditation authorities, of which there are currently 60, such as the Australian College of Applied Psychology in New South Wales, the Australian Institute of Public Safety in Victoria and Avondale College in New South Wales. In my own state of Western Australia, it also includes the Perth Bible College and the Perth Institute of Business and Technology Pty Ltd.

Historically, Labor have not opposed FEE-HELP. We did not oppose it when it was introduced in 2003 and we did not oppose it when it commenced in 2005. Labor’s higher education white paper, released in September 2006, supported the provision of FEE-HELP to private providers. Prior to the commencement of FEE-HELP, students attending courses undertaken by private providers received little, if any, Commonwealth assistance. The introduction of FEE-HELP to students in these courses provided a means of increasing access to private higher education. However, access to the current FEE-HELP loan scheme is limited to full fee students undertaking studies at an accredited higher education provider. Students undertaking equivalent-level vocational education and training qualifications are not able to access this scheme and, as a result, often pay up-front tuition fees. Labor regard this situation as inequitable. It is also inconsistent with the emphasis increasingly placed on the importance of vocational education and training by business. Labor believe that FEE-HELP is an important instrument in providing assistance through deferred payment of up-front fees to students attending higher education courses at accredited private education providers.

This brings me to the detail of this bill. The bill extends FEE-HELP assistance to full fee paying students in diploma and advanced diploma courses that are accredited as vocational education and training qualifications and where credit toward a higher education award is available. The bill contains a number of proposed amendments. Clauses 1 to 16 and 18 to 55 are technical amendments that extend the act’s operations to the vocational education and training sector. It is expected that around $220 million in loans will be issued over the forward estimates, and the amounts loaned are treated as financial assets and therefore do not impact on the fiscal balance. Clauses 15 and 16 of the bill provide for the appropriation of this money.

Clause 17 is a substantive amendment, which inserts proposed new schedule 1A into the act. This schedule duplicates the relevant parts of the act and makes the necessary amendments to make the provisions applicable to the vocational education and training sector. The effect of this clause is to extend FEE-HELP to allow vocational education and training providers to be able to offer FEE-HELP assistance for diploma and advanced diploma courses. As I have indicated, Labor supports this measure. Unfortunately, the government’s approach to the scope of eligibility for FEE-HELP is too narrow. The effect of the government’s approach will be to restrict access to FEE-HELP to only those vocational education and training qualifications that may give credit to a higher education qualification. It also excludes from FEE-HELP the two most senior vocational education and training qualifications, the vocational graduate certificates and vocational graduate diplomas, by virtue of the fact that these qualifications do not lead to a higher education qualification.

This was confirmed during the inquiry of the Senate Standing Committee on Employment, Workplace Relations and Education into the legislation. Of the seven submissions to the inquiry, a majority were critical of various elements of the bill. The Australian Council for Private Education and Training, ACPET, which is the national industry association for independent providers of post-compulsory education and training for Australian and international students, including higher education and vocational education and training, noted that, while it was supportive of the overall intent of the legislation, the legislation, in ACPET’s view, did not go far enough. ACPET noted that the effect of the legislation as currently drafted would be to inhibit the intended objectives of the legislation. In ACPET’s view, allowing diploma and advanced diploma courses only as subsets of university degrees will lead to students proceeding to degrees rather than filling the workforce shortages that are seen to exist at the diploma and advanced diploma qualification level. In other words, if the intention of the new measure is to increase the number of students taking diploma and advanced diploma courses as courses which provide access to employment in areas of need then those undertaking qualifications should also be eligible for FEE-HELP.

ACPET was concerned that restricting FEE-HELP eligibility in this way has the effect that only those diplomas and advanced diplomas which have direct equivalent qualifications in a university will be approved. As ACPET stated in its submission:

This is likely to limit the number of new courses substantially because many Diploma/Advanced Diploma level courses have no obvious equivalent or pathway in a university. In many cases there will be no existing university degree courses at all because they will have been areas traditionally covered by the VET sector.

ACPET also expressed concern that the effect of the legislation will be to exclude the two most senior vocational education and training qualifications from FEE-HELP—as I said, the vocational graduate certificates and vocational graduate diplomas—which are part of the Australian quality framework and are regarded as being equivalent to higher education qualifications at the diploma level. The legislation should be relaxed to allow for FEE-HELP to apply to those higher qualifications without the requirement to articulate to a university degree.

In another submission to the Senate inquiry, the International College of Hotel Management was particularly concerned that the proposed changes would mean that students would be able to access FEE-HELP for their first and second years of study because these courses would lead to articulation into a diploma or advanced diploma but would not be able to access funding for their third year because of the exclusion of vocational graduate diploma courses. As the International College of Hotel Management submission stated:

With the changes proposed in the above Bill … Australian students will be able to borrow in their First Year and Second Year, as these courses lead to a Diploma and Advanced Diploma respectively … based on the legislation as presently intended, students would not be able to apply for funding in the Third Year, as Vocational Graduate Diploma courses are not covered by the Bill … the idea that students could borrow for Year 1, Year 2, and Year 4, but not Year 3 is bizarre. It looks like someone overlooked the qualifications of Vocational Graduate Certificate and Vocational Graduate Diploma.

Other organisations had a number of other concerns. Significantly, the state of Queensland, through the Queensland government, expressed concern over the criteria for eligible vocational education and training providers. The Queensland government argued that proposed subdivision 3A of clause 17 defined a vocational education and training provider too narrowly. As currently drafted, the legislation defines a vocational education and training provider as a ‘body corporate’.

The Queensland state government expressed concern that this definition, either advertently or inadvertently, excluded Queensland TAFE institutes, which are not currently, but will be in due course, constituted as corporate bodies. The state government of Queensland submission proposes that the definition be amended to include all TAFE institutes as eligible vocational education and training providers, and that, in the absence of this, there be a minimum three-year phasing-in period to ensure that Queensland students are not disadvantaged. Failing to amend this measure will exclude the more than 7,000 domestic fee-for-service vocational education and training diploma and vocational education and training advanced diploma students in Queensland TAFEs who could potentially benefit from the extension of the government’s FEE-HELP scheme. These students will be excluded by definition if the government does not address this issue.

The government has effectively neglected a significant portion of the non-university higher education sector, namely the VET student body. To reflect these concerns, I will formally move a second reading amendment at the conclusion of my remarks, along the following lines:

... whilst not declining to give the bill a second reading, the House:

(1)

welcomes the extension of FEE-HELP but notes it has been unnecessarily restricted by requiring eligible providers to be corporate entities thereby excluding more than 7,000 VET students in Queensland TAFE Institutes, and secondly by limiting eligibility to those courses that give credit for higher education or University qualifications; and

(2)

notes the Senate Inquiry into this legislation also shared Labor’s concerns through their recommendation that the Government consider the practical examples raised regarding the exclusion of the vocational graduate certificate and vocational graduate diploma to ensure the legislation adequately meets its stated objectives.

In summary, under the current arrangements, FEE-HELP is available to all students in a course of study leading to a higher education award with an approved higher education provider. Those higher education providers include public universities, private universities, private higher education providers and TAFEs, but only if they are already approved higher education providers. The courses which are eligible are all higher education awards, including doctorates, masters, graduate diplomas, graduate certificates, bachelor degrees, associate degrees, advanced diplomas and diplomas. FEE-HELP is not currently available to TAFEs that are not accredited higher education providers.

Under the proposed new arrangements FEE-HELP will be available to students in a vocational education and training course of study leading to a university qualification with an approved vocational education and training provider that is a corporate entity, all VET providers that are corporate entities, including TAFEs—but only if they are corporate entities—and private vocational education and training providers. The courses which qualify as vocational education and training qualifications include advanced diplomas and diplomas.

I am unsure from the second reading speech of the Minister for Vocational and Further Education as to whether those difficulties to which attention has been drawn are advertent or inadvertent. I simply request the government to examine these measures to enable consideration to be given to them either in this place or subsequently in the Senate. As a general proposition, we support the bill because it moves in the right direction, but we do see a number of unnecessary restrictions which the government might consider or contemplate.

One aspect of this bill goes to full fees for domestic undergraduate university students. I would like to make some remarks about that matter, both generally and in the context of the bill. As the House would know, Labor has a longstanding and well-known position to phase out full fee, domestic undergraduate places in our public universities. This approach, of course, does not apply to full-fee-paying places in private universities, which Labor has never disturbed and does not intend to disturb. In our view, a student should be able to access higher education in a public university according to their merits and not according to their financial means. As a consequence, Labor will phase out all full fee undergraduate places at public universities commencing from 1 January 2009 and will compensate those public universities financially affected as a consequence. Accordingly, in due course, if that policy is implemented on the election of a Labor government, FEE-HELP will not be required for undergraduate places in Australian public universities by virtue of the fact that there will no longer be such full fee places at public universities for undergraduates. Full fee degrees for undergraduate domestic students are these days a costly reality. In 1999, the Prime Minister said:

The Government will not be introducing an American-style higher education system. There will be no $100,000 university fees under this Government.

A quick flick through the latest 2008 Good Universities Guide, published yesterday, shows that there are now 104 domestic, full fee university degrees that cost in excess of $100,000 and two domestic, full fee university degrees at public universities that cost in excess of $200,000. One of them gets close to the current average mortgage for an Australian—in the order of $245,000.

When the government authorised public universities to charge up-front full fees for domestic undergraduate university students, the government required only that a so-called gentleman’s agreement keep entrance rankings for full fee degrees within five per cent of their Commonwealth supported HECS equivalent place. This agreement was never enforced by the government and has effectively been honoured in the breach. There is a simple reason for that. The Howard government has failed to adequately invest in our universities. By not discharging the obligation that the Commonwealth has, our universities have been forced to rely on income from other sources, including from full fee undergraduate domestic students.

The facts generally speak for themselves: Commonwealth recurrent funding to universities has fallen by a third, from 0.9 per cent of GDP in 1996 to 0.6 per cent today; and Commonwealth grants to universities as a proportion of total revenue have decreased from 57 per cent in 1996 to 40 per cent now. The consequence is that there is today a significant disparity between the tertiary entrance score for HECS places and their equivalent full fee counterpart. By way of illustration, I will cite 2006 entry levels. In 2006, the Deakin University Bachelor of Exercise and Sport Science had a 19.75 point difference, from 62.45 for a full fee student to 82.20 for a HECS place; the University of Adelaide Bachelor of Engineering (Aerospace) had a 18 point difference, from 80 for a full fee student to 98 for a HECS place; the Deakin University Bachelor of Nursing had a 14.95 point difference, from 60.20 for a full fee student to 75.15 for a HECS place; and the University of Sydney Bachelor of Behavioural Health Science had a 17.10 point difference, from 71.00 for a full fee student to 88.10 for a HECS place.

Debate interrupted.

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