Alannah Mactiernan (Perth, Australian Labor Party) Share this | Hansard source

Of course, both sides of the House support the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015. Indeed, we on this side of the House have for the last 18 months been drawing attention to the rapidly escalating problem that has been occurring in the VET FEE-HELP area as more and more unscrupulous operators sought to take advantage of the loan scheme. I do find that last contribution really quite extraordinary. I mean, you have been in government for over two years now. This has been a matter of great public record with report after report. Part of a report into vocational education by a committee for which I was deputy chair was to show that these scams were escalating. There was also a very good report by the University of Sydney, entitled The capture of public wealth by the for-profit VET sector, as well as a very comprehensive report by the Auditor-General of Western Australia into what was going on with the standard checking.

It is quite bizarre that a government that has been in place for two years is considering a matter that has been the subject to a great deal of commentary, where we have seen the debt levels spiral. In the last year alone the debt level has gone from $699 million to $1.7 billion, and the $699 million was a doubling of the previous year. We have seen this problem grow out of all proportion. We thought that, when we got rid of the previous PM, we would have a little rationality and balance brought into the debate. I accept the current minister is working to attend to this problem, but there is no doubt that under the previous administration, under the Abbott government, that this problem was left to blow out of control.

The measures that are being introduced in this legislation are going to provide some protections. There will be some prerequisite entry requirements for enrolments and there will be a two-day cooling-off period. For students under 18 the signature of a parent or guardian is required before a contract has any force, as well as a variety of other provisions. But we know, for example, that the two-day cooling-off period is an insufficient provision because many people are unaware that they have signed up to a particular training program until quite some time afterwards, when they are advised that they have accumulated a debt. For those who are unaware that they have signed an agreement to enrol in a particular course and an agreement to take out a loan to fund the provider, it is a highly unsatisfactory control mechanism.

We have moved a series of amendments which we seriously ask the government to entertain. We do accept that the government is wanting to move to address this problem, because it is entirely unacceptable that we have so many young people who are accumulating absurd amounts of debt for qualifications that, in many instances, are quite meaningless and will not enhance their ability to find employment. These are programs that are fundamentally driven by unscrupulous profit taking. We do accept that the government wants to take some steps here, but we do say that, if you look at provisions such as the cooling-off period and at the sort of rorting which has been going on in the system, you will see that that is not really going to bring home the bacon in placing some very rigorous controls around the sector.

I want to talk very briefly about some of the findings that have come out of Western Australia. Although we have kept our own Training Accreditation Council, we do nevertheless apply the national standards. The WA auditor-general did a very interesting report on the standards of the RTOs in Western Australia; he was looking specifically at the checks undertaken by the Training Accreditation Council. What he revealed was primarily directed towards the RTOs, but he also expressed concern about whether the Training Accreditation Council was a sufficient mechanism to provide rigour in the system. When the number of non-compliant organisations is around 35 per cent, there is very genuine cause for concern that the mechanisms to regulate the RTOs are not strong enough to give us confidence that this system will deliver much-needed vocational training. In WA the auditor-general found that more than half of those organisations which were checked were non-compliant and around 35 per cent of the non-compliance was significant or critical. We are not simply talking about stuff at the margin such as 'You haven't completed the paperwork,' but really critical things like lack of evidence of student assessment, unqualified trainers, no assessment of the practical application of skills as required and allowing students to pass despite their written assessments showing incorrect or incomplete answers. We did see that sanctions were applied to suspend, vary or cancel around nine RTOs, but the numbers engaged in non-compliance are much greater than that.

I also want to say that part of this problem with the VET FEE-HELP liabilities that have been accumulating has been the massive increase in the cost of vocational training provided by state governments. In Western Australia, there has just been a huge increase in the fees for TAFE for the government provided services, which in return has created many, many more opportunities for opportunistic RTOs of questionable capacity and questionable intention to flourish because the public sector is being priced out of the reach of many.

We have a number of problems here that have come together in a perfect storm—the massive increase in fees and what we could only say is a problematic regime of regulation. If we have a system that shows that half of the organisations that are operating are noncompliant and 35 per cent of those are significantly noncompliant, then I do not think that we can say that we have a rigorous and strong system in place. These little pieces of amendments that have come in today are going to go a very small way to trying to bring some of the worst excesses under control; but they are not really going to the fundamental heart and the more critical problem, which is how we are going to make the for-profit RTO sector more rigorous and more reliable—because a 50 per cent noncompliance rate obviously is completely unacceptable.

Interestingly, we need to be looking at what we are seeing happen in the United States. As we are now merrily moving away from a very heavily subsidised and free provision of TAFE education to a more and more expensive TAFE education, I think it is very interesting to note that the number of states and jurisdictions within the United States of America that have actually decided that this is a pathway to economic doom. Indeed, they are reversing a decades-long practice of charging fees and in the key and critical areas of industry that they want to encourage within their states—within those areas that represent the industries that we want to encourage in the 21st century—they are in fact getting rid of technical and vocational education fees. They are moving towards a system where the government provides the funds for young people to embark on those careers and perhaps for older people to retrain in those critical areas, because they are recognising that this is a fundamental investment that is required for the promotion of industry. It is every bit as important as any of the other industry assistance schemes that we engage in in order to encourage a business formation around our country.

I make this plea, and we are supporting this legislation. This legislation is a very modest and somewhat belated attempt to deal with what is a very significant problem, but we do need to do more. We need to be looking at how we give more teeth and grunt to our regulatory regime so that we can have greater confidence and so that next time we do a review of compliance we would expect to see that the level of compliance is far higher and that the number of organisations where there are significant departures are significantly less. We need to take out the incentive for those people that are coming into this space simply to profiteer without delivering a worthwhile product. We support the legislation, but we di urge the government to seriously consider the important amendments that we are proposing to this legislation.

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