Chris Hayes (Fowler, Australian Labor Party) Share this | Hansard source

Over the past 18 months or so we have seen dozens of media reports about unscrupulous VET providers targeting vulnerable Australians to sign up to shonky diploma courses, certificates and even so-called advanced diplomas for the purpose of having people access Commonwealth funded VET FEE-HELP loans. These unethical practices have resulted in hundreds of disadvantaged people, including people who are disabled and some who are illiterate, entering into courses that they do not understand. But, more importantly, it has saddled them with thousands of dollars of debt. While the Liberal government has now introduced legislation concerning national standards for registered training organisations, the RTOs, which require them to declare commercial relationships with sale brokers and that allow the regulator to hold the RTOs accountable for the actions of their sale brokers, the problem with the VET system is still occurring.

The Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015 is an attempt by the government to address some of these issues around VET FEE-HELP including the introduction of a two-day cooling-off period between enrolment and the application for VET FEE-HELP loan, the introduction of minimum prerequisites such as literacy and numeracy skills and the requirement of a parent or guardian's permission before a student under the age of 18 can request a VET FEE-HELP loan. These are sensible propositions—they may be a little late, but nevertheless they are sensible—particularly in relation to the issue about prerequisites, because that has been one of the biggest concerns. People have been signed up even though they do not have the prerequisite skills to allow them to complete a particular course of study. If you are the private provider, it is not necessarily within your purview to ensure that your students actually graduate. The main thing is people being able to access the government funded loans.

While these proposals might address some of the concerns that people have about the VET FEE-HELP loans, I for one do not believe they go far enough. My concerns relate to a couple of things. Firstly, there is currently no effort to control the spiralling costs for students undertaking a VET course. With the average loan per student increasing by 24 per cent over the last year—in real terms, from $5,890 in 2012 to $8,666 in 2014—that is a significant jump in terms of a vocational education course. Course fees are accelerating well beyond inflation, but they are doing it within a pretty lucrative vocational education market. Since the introduction of VET FEE-HELP in 2008, the system has grown exponentially from $25 million in 2009 to $1.7 billion in 2014. Largely, this is attributable to the fact that there is an increasing number of students accessing VET FEE-HELP. That has grown by 103 per cent, and that is largely due to the increasing number of VET providers in the market and also to the way the VET providers are going about marketing their courses and signing up potential students. This has not only increased the amount of money that a student loan in the VET scheme is costing the Commonwealth but also increased the average loan per student by 24 per cent. This is particularly concerning given that reports have estimated that 40 per cent of all VET FEE-HELP loans will never be repaid as the recipients will never earn the threshold of $53,000 required to trigger the repayments. In many instances—and we will come to a few of them in a minute—many students do not complete the courses. For many of the private providers that is not what they are in business to do—that is, to ensure that people actually attain graduation. They are in business to make profits out of their courses, and that is what they are doing; they are simply selling the education.

My second concern relates to practices of, for want of a better term, shonky providers in the VET sector. As of October this year, the Australian Skills Quality Authority, ASQA, an industry regulator which was established by Labor in 2011 to regulate course training providers, has received widespread complaints of inappropriate marketing practices, poor standards and rorting of the lucrative VET FEE-HELP loans scheme. Of the 21 RTOs that have now been ordered by ASQA this year, eight have now had licence conditions imposed on them, while another six are still subject to ongoing investigation. We do not want a repeat of what we saw in the Unique International College, a private college located in Granville, which had its registration cancelled by ASQA on the basis that it was offering potential students up to $2,000 to sign up to documents that, in many instances, they could not read or, if they could, did not understand but that they signed up to in order to take out a Commonwealth loan of up to $25,000.

That is not insignificant, particularly when they are targeting a certain group of people in that respect. Therefore, this unconscionable conduct was clearly targeted at some people who would be regarded as falling into the category of being illiterate—many were disabled. But the college went on to offer students a $500 bonus if they were able to refer a friend to take up one of its courses as well. These are unscrupulous marketing practices. We have all heard about them offering the iPads and laptops. This is very much an extreme continuation of all that. It came only a week or so after reports in the media about the Melbourne based Phoenix Institute, which was told its registration would be cancelled following very similar complaints of students.

Nearer to home for me, you would recall there were press reports this year that a college that operates within my electorate and in many other places for that matter, the Evocca College, barely graduated one in 1,000 students as a result of the assessment scheme. It was attributed also to the inaccuracy of its marketing. Clearly that college or company received a significant number of complaints. When it was investigated, it was found that its policies and procedures were largely non-compliant with industry standards. These are just a continuation of serious concerns in the VET sector, where people are undertaking courses of vocational education but not receiving what they think they are going to get, which is a qualification that will lead them to employment.

For two years now Labor has been calling for action from the regulators including the ACCC. We do need to send a strong message to the VET sector. We have also consistently called for the government to crack down on the rorts in the VET FEE-HELP system. However, it has taken the government a little over two years and three ministers to develop these half measures, which we do not believe fully address the issues. Students, TAFE colleges, taxpayers and good quality private providers are all victims of what has been occurring here, these scandals. They all deserve better. They all deserve to have comprehensive safeguards put in place. I have been working closely with Phil Chadwick, the president of the New South Wales TAFE teachers association, who is also a good friend and an electrical trades teacher at the Miller TAFE College. Phil has consistently spoken about the impact that some of these shonky providers like Unique International College are causing to the reputation of providers in the VET sector as well is the impact that they are having on the quality of courses being offered.

The idea of vocational education is to get people up to being job ready or to enhance job opportunities; it is not to sell a piece of paper, a certificate, a diploma or whatever you want to call it. It does not have much value unless it is going to achieve the result that everyone thought it was going to when they signed on—that is, being a pathway to employment. Regrettably, all this is occurring at a time, particularly in New South Wales, when TAFE is under sustained pressure from government. Colleges including the TAFE college in my electorate of Fowler are experiencing serious funding cuts from various traditional trade based courses including plumbing, carpentry, electrical courses. All of this is undermining the reputation of vocational education. This is why Labor will be moving a number of amendments to the Higher Education Support Amendment (VET FEE-HELP Reform) Bill, to strengthen the existing measures and to protect vulnerable students. In particular, Labor will be referring the legislation to the Senate legislation committee to look at the options to cap tuition fee levels for courses offered under VET FEE-HELP and to lower the lifetime limit on VET FEE-HELP student loans. This will ensure that students are not entering into financial arrangements that could result in the prospect of anything up $100,000 debts as a result of signing on with some of the shonky providers.

In conjunction to this, Labor is also putting forward an amendment which will require the department to write to prospective students a very clear statement on the amount of debt that they will be undertaking as a consequence of signing onto a particular course so that they will know in advance what it is that they are actually agreeing to. Furthermore, we will be calling on the government to appoint an industry funded national VET Ombudsman as well as require the Commonwealth Auditor-General to conduct an audit of the use of the VET FEE-HELP loan scheme. I think these are all good things which will go to assisting the VET sector generally but, more importantly, they will assist those who are reliant on genuine vocational education for the very clear purpose of having a pathway into employment or for improving employment opportunities.

I believe the amendments that will be proposed by Labor will deliver greater protection not only to students but will also offer the taxpayer and the economy generally greater efficiency and a greater use of taxpayers' dollars when it comes to vocational education. Under Labor, we will guarantee TAFE funding into the future by working with state and territory governments on a comprehensive national priority plan that clearly will define the role of TAFE and clearly establish TAFE as being in the front and centre of public funded vocational education in this country. TAFE is a body which, regrettably, has been much maligned. I think TAFE offers quality vocational education to students. It offers great opportunity for business to ensure that business has available to it the skill sets of employees they need for the future. I support the legislation and I commend Labor's amendments as trying to make a genuine effort to improve vocational education in this country.

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