Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

I am speaking in support of the amendment moved by the member for Cunningham, which offers a very sensible and reasonable amendment to the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015 to ensure that we tackle the problem of burgeoning debt for people taking on VET courses in Australia.

I think one of the greatest shames of the combination of a federal Liberal government and a state Liberal government has been the debacle that they have made of our vocational education and training system in this country. In New South Wales, we have seen massive cuts to the TAFE system. In the community that I represent, 40 TAFE teachers have gone from the local Randwick TAFE. We have seen the cost of courses increase by 10 times on the amount that they were a couple of years ago. As a result, we are beginning to see the number of tradespeople and the number of people graduating with diplomas and associate diplomas from our TAFE system decrease. This is not going to be good for our economy in the future, particularly when we are talking about building the next generation of infrastructure for the country, transitioning away from a mining boom and supporting intelligent manufacturing in this country. Attacking the sector of the education system that provides you with that technical and trade competence to grow our economy is, quite simply, a dumb move. But that is exactly what the combination of a federal Liberal government and a New South Wales Liberal government has done.

Over the course of recent years, we have seen a large increase in the number of people who are enrolling in VET courses, vocational education and training courses, throughout the country. In fact, we have seen a large increase in the number of people taking on higher education. This should be a good thing. In 2014, domestic enrolments in universities and higher education providers reached one million in Australia for the first time. Online enrolments continue to skyrocket, while the higher education workforce is also increasing rapidly, with more than 50,000 people holding academic jobs.

Unfortunately, in the past two years, the higher education system and, more specifically, the VET FEE-HELP system—the government system which supports people to pay their fees to undertake vocational education and training courses—have been embroiled in some controversy and scandal. Between the years 2013 and 2014, the number of students accessing this VET FEE-HELP loan scheme has grown by 103 per cent. The amount of money that student loans in the VET sector have cost the Commonwealth has increased by 151 per cent. The average loan amount per student has increased by 24 per cent. The number of providers offering access to VET FEE-HELP has grown by 44 per cent.

Obviously, there is a cost to the Commonwealth budget associated with this. If the increase in the number of people taking on these courses and the increase in government support for people to take on these courses were sustainable and resulted in people graduating with qualifications from these courses, then it would be a positive development because we all know that the more education a person gets, the greater their value in the jobs market will be and, ultimately, the more productive our economy will be.

But over the past couple of years in particular, we have seen some scandalous and outrageous attempts by particular private providers in the VET sector to encourage almost predatory behaviour by some institutions to coax people into taking on courses that are beyond their means, into taking on a course that those providers, in some circumstances, also have a very good indication the person will not be able to graduate from.

One such example was well covered in Australian newspapers and outlined recently. A private Sydney college was accused of recruiting illiterate and disabled students to take out thousands of dollars in loans to fund courses that they were not told they were being signed up for. There have also been examples of very aggressive sales techniques where elderly or disabled people are telephoned or doorknocked and offered a free laptop or a loan for a course that they did not really want to sign up for or, in many respects, are not capable of undertaking.

We have seen some outrageous and unscrupulous behaviour by some private providers in this space over recent years. It outlines for me the importance of necessary and appropriate regulation when it comes to our education system. That regulation, unfortunately, must be there from the earliest years possible. It is important that we have standards in childcare centres throughout the country when we are talking about people educating our kids at the youngest of ages. When Labor were in government, we introduced new quality assurance standards for childcare centres. Unfortunately, they resulted, in one case, in a death within a childcare centre and severe injuries to children. So you do need appropriate regulation in the education sector. What is important is getting the balance right and ensuring that people cannot take advantage of vulnerable people and people whom they know will not be able to graduate from those particular courses at the end of the day.

This bill seeks to deal with some of those issues by putting in place some regulation to reduce the amount of unscrupulous activity that has been uncovered in this particular industry. It will do this by introducing a number of changes. Firstly, it will introduce a two-day cooling-off period between an enrolment and the application for a VET FEE-HELP loan so that course enrolment is no longer confused with the loan application process. Hopefully, the applicant will get a clear understanding that there is a difference between enrolling in the course and taking out the loan. Importantly, this will provide an opportunity for people to think about whether or not they want to take on what, in some cases, is going to be a heavy financial burden before they begin the course. The second element of these reforms is the introduction of a minimum prerequisite, such as literacy and numeracy, to ensure students can complete the higher level VET courses—diploma level and above—for which VET FEE-HELP is available. This is just plain common sense. It is common sense to ensure that, if someone is going to sign up for a particular course, they meet the necessary literacy and numeracy requirements and there is a reasonable prospect that the person will be able to complete the course. Providers and the government have an obligation to work together to ensure that there is the necessary support there for people to actually complete the course. The final element is requiring a parent's or guardian's signature before a student under 18 years can request a VET FEE-HELP loan to protect younger students.

The bill will also further protect students and taxpayers by making it easier for a student to have their debt cancelled where they have been signed up for a loan inappropriately and for the government to recoup the cost from providers. This importantly introduces that incentive for providers to undertake some level of scrutiny and accountability in respect of the people they are signing up to their courses and ultimately coxing into taking on VET FEE-HELP loans. Another element is the introduction of minimum registration and trading history requirements to ensure new VET FEE-HELP provider applicants have a proven history of delivering quality training. There is also the introduction of infringement notices and financial penalties for breaches of the VET FEE-HELP guidelines and technical amendments to strengthen the department's administration of the scheme and its partnerships with the Australian Skills Quality Authority to monitor and enforce compliance.

Labor supports these amendments. I support these amendments. They are sensible amendments that will introduce a greater level of scrutiny with respect to the selling and the signing up of people to vocational education and training courses by private providers in Australia. I lament the fact that it has taken the government almost two years to come up with these sensible amendments and proposed legislation to address these issues. As I mentioned earlier, there has been many anecdotal cases presented to the government over the course of the last couple of years about some of the outrageous activities that have been undertaken by some providers in this area. Nonetheless, the government has acted and we support those measures. However, Labor believes that these measures are manifestly inadequate, that more could be done to ensure that people are not rorting this system, signing up people to courses which they have a very good understanding the applicant will never be able to complete. Our concerns are that there are no efforts to control the spiralling costs for students, with loans having grown in value from $5,890 in 2012 to $8,666 in 2014.

The two-day cooling off period could prove to be easy to manipulate by providers printing out enrolment forms with one sign date and VET FEE-HELP applications with a date two days later. There is a concern that that particular amendment could be manipulated. There is no effort to re-examine previous approvals for providers and there is no debt relief for students who have already been defrauded by dodgy providers.

In response to these issues, which have been uncovered by numerous inquiries—and I must say uncovered by the work of the shadow minister the member for Cunningham, who has done a wonderful job consulting throughout the country not only with providers but also with students who have been affected by some of these unconscionable practices. The shadow minister has also offered a number of further reforms which we believe will provide the right balance and will strengthen this legislation and the operation of this system to ensure that many of the rorts and many of the unscrupulous activities which have been outlined throughout the course of this debate and have been highlighted throughout Australia do not occur again and that the system is sustainable into the future, that students are taking on courses they know they can complete and, importantly, that the burden on the government in terms of providing the funding for those loans but also importantly having to chase them up when people may not be in a position to pay for them at the end of the day because they have not graduated from the course and they have not increased their earning capacity, that we are reducing that burden on the Australian taxpayer.

So Labor has suggested a number of measures. They include a national vocational education and training ombudsman and support for Labor's call for the Auditor-General to conduct an audit of the use of VET FEE-HELP throughout the country. Labor believe it would be sensible to offer transparency and accountability in the operation of this system, both initially through an inquiry, an audit conducted by the Auditor-General—at the end of the day we are talking about the expenditure of millions of dollars of taxpayers money in a system where there is cogent evidence that there has been unscrupulous activity by particular providers and there is ample justification for the Auditor-General to conduct that inquiry—and then to have that system overseen by an ombudsman, so that if there were allegations of inappropriate conduct, people involved within the industry, most notably students and their families, had somewhere to go to seek advice and redress.

Labor has also put forward an amendment which requires the department to write to prospective students with a clear statement on the amount of debt that they are about to take on and require the student to reply to the department before a debt is raised. In many cases, students were not aware that they were taking on such large debts when they were signing up for these courses and being induced by the offer of laptops and other trimmings, that they will get a clear indication from the department that is offering them the loan about what they are taking on in terms of a financial burden. This is a sensible amendment and reform that will ensure people have a clear picture about their studies and their future. Finally, Labor will refer this legislation to a Senate committee to look at options to cap tuition fee levels for courses covered by VET FEE-HELP and to lower the lifetime limit on VET FEE-HELP student loans.

All in all, the bill has some positive elements but in my view it does not go far enough. There are further sensible reforms in the form of an ombudsman, in the form of an Auditor-General's inquiry and in the form of writing to prospective students that would strengthen this bill.

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