Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation and Apprenticeships and Training) Share this | Hansard source

Thank you, Madam Deputy Speaker Burke, and congratulations on your election to this high office. I am pleased to speak on the Higher Education Support Amendment (VET FEE-HELP Assistance) Bill 2008. In the 2007 budget the Howard government announced an extension of FEE-HELP to the vocational education and training sector. This was to improve an anomalous situation whereby the VET sector had some courses with high fees but was the only sector with postsecondary qualifications without an income-contingent loan scheme. On 21 June 2007 the Howard government introduced the Higher Education Support Amendment (Extending FEE-HELP for VET Diploma and VET Advanced Diploma Courses) Bill 2007. This bill provided an amendment to the Higher Education Support Act 2003 enabling FEE-HELP to be extended to the vocational education and training sector, specifically providing financial assistance to individuals undertaking full-fee diplomas and advanced diplomas, and this was later extended to graduate certificates and graduate diplomas following evidence given to the Senate committee examining the bill.

The intention of that bill was that VET FEE-HELP be available for diploma and advanced diploma courses; where full fees are charged; where there are arrangements for credit transfer for a higher education award; and only to VET providers that are corporate bodies. Unfortunately, due to a drafting error, the legislation did not allow for the writing of guidelines to reflect this intent. VET FEE-HELP will not commence until the second half of 2008—that was the intention—and so the problem will be easily fixed in time with this bill. The Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion carried on during the second reading speech as if she was the first minister who has ever had to amend a bill. I simply point out to the House that this drafting error was not picked up by either the then opposition or the Senate committee which examined the bill. It was not raised in submissions. It was found when the time came to write the guidelines. This is something that would have been corrected had the now opposition won the last election. It is something that is now being done by the current government. Having said that, the opposition appreciate that the full intent of our 2007 budget initiative to extend FEE-HELP to VET is reflected in this amended bill.

Extending FEE-HELP to VET courses has been welcomed by stakeholder groups and the VET sector. Submissions were sought for the initial bill, and there was strong support for the bill from the Australian Council for Private Education and Training, ACPET. However, along with the International College of Hotel Management, they encouraged expansion of the bill to encompass vocational graduate certificates and graduate diplomas. This amendment was taken up by the Howard government and will allow for VET FEE-HELP to be provided for these courses when all other eligibility criteria are met.

A Treasury working paper in April 2007 by Bruce Chapman, Mark Rodrigues and Chris Ryan entitled HECS for TAFE: the case for extending income contingent loans to the vocational education and training sector provides a sound economic argument in favour of extending income-contingent loans to VET students. Students should not be deterred from undertaking VET courses as a result of potentially short-term financial constraints preventing them from financing their further education. Higher education loans have been available since 1989 for Commonwealth-supported university courses—HECS-HELP—and in 2005 the coalition government extended this to include FEE-HELP for non-Commonwealth-funded courses at universities and eligible private tertiary providers. FEE-HELP was recognised in the Treasury paper as being an ‘important innovation in Australian higher education financing’.

Research undertaken by the National Centre for Vocational Education Research shows that in 2005 there were 833,700 students who undertook fee-for-service VET courses—that is, full-fee VET courses—equating to 12.6 per cent of VET revenue. The intention of the bill was to extend income-contingent loans to the vocational education and training sector—broadening the base from higher education, where FEE-HELP is available to assist students to pay up-front costs. Fees payable by full-fee-paying students vary between courses and training providers. One example provided in the TAFE futures survey 2006 is $13,000 a year for hairdressing and $6,060 for a diploma in multimedia, with high equipment and teaching costs impacting on the up-front fees required for each course. The general FEE-HELP loan limit is currently set at $80,000—with $100,000 for dentistry, medicine and veterinary science.

VET FEE-HELP offers a means of cost-sharing between governments and students. There is extensive research as to the benefits of cost-sharing, suggesting that, as there are benefits both to society and to the individual, cost-sharing offers an equitable solution for the financing of further education. However, as there may be a time lag before the student is able to realise the financial benefits of their education, government assistance in meeting the up-front fees for study may enable students to increase their qualifications, when without assistance there is a potential barrier to VET participation for some students. The TAFE futures survey of 2006 indicated that fees presented a major deterrent, particularly to those living in areas with a high dependence on social security and those in low-paid jobs. Particular note is made in this report of the increased difficulties faced by students in paying the additional costs associated with the higher level courses.

Under the previous coalition government, payments were made to encourage the uptake of VET courses. These payments included income support, training vouchers, skills vouchers for basic training and tax-free wage top-ups. For apprentices there was support for tool kits and fees. VET FEE-HELP furthers these measures, specifically targeting full-fee, higher level qualifications.

These payments are intended to assist in boosting the number of students undertaking qualifications in areas of skill shortages. Occupations facing skill shortages vary across Australia. However, in areas of high employment such as northern metropolitan Perth, shortages are evident for electricians, registered and enrolled nurses, motor mechanics, carpenters and childcare workers. Attracting people into these industries requires a multifaceted approach, improving incentives and addressing the reasons why people are reluctant to enter into these occupations. VET FEE-HELP removes the disincentive of up-front fee payment for full-fee students. This goes part of the way to boosting enrolments in these courses.

With increasing demand for skilled workers, there is a need to assist those who wish to undertake VET courses that can lead to future studies. Over the next 10 years it is expected that over 60 per cent of jobs will require high-quality technical or vocational qualifications. However, to date only 30 per cent of the population have these required skills. Monash University research has indicated that this will require a 1.9 per cent increase in the overall number of VET qualifications gained each year.

The courses eligible for VET FEE-HELP cover a wide range of industries, including hairdressing, construction, engineering and mining, electrotechnology, and hospitality and tourism. Skill shortages are apparent in a number of these areas across Australia and offering VET FEE-HELP to students wishing to undertake studies in these areas helps address these shortages.

Limitations have been placed to ensure that VET FEE-HELP is only extended to those courses for which higher education credit transfers are possible. These qualifications can then lead to further education prospects. This amendment provides a minor technical correction to the original legislation, ensuring that the extension of FEE-HELP is restricted to those originally intended to receive it, identified as eligible full-fee-paying students undertaking TAFE diplomas, advanced diplomas, graduate certificates and graduate diplomas with VET providers who have credit transfer arrangements with a higher education provider in place for each of their qualifications and providers who are corporate bodies. This was the original intention of the bill introduced by the former government and, as such, the opposition supports this bill.

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