Melissa Price (Durack, Liberal Party) Share this | Hansard source

The Turnbull government has introduced the VET Student Loans Bill 2016 and related bills into the House to establish a new VET student loans program commencing 1 January 2017. This legislation was introduced to replace the utter failure that was the VET FEE-HELP scheme introduced in 2012 by the last Labor government. This scheme patched up by this government—us, on this side of the chamber—in 2015 is now set to be overhauled entirely before the start of the next semester for most vocational training providers beginning early next year. The need for this legislation was clear. The VET FEE-HELP scheme was a deeply troubled Labor government policy that the Turnbull government has taken steps to remove. Our new proposal, the VET student loans program, will be more accountable, more sustainable and more accessible than its woeful predecessor.

The failure of Labor's VET FEE-HELP scheme is truly something to behold. I will briefly outline for the House some of the figures from this Gillard government policy, which has proved to be an unmitigated disaster. The costings for the program in 2012 were $325 million. By 2015, the scheme was costing Australian taxpayers $2.9 billion a year. Incredibly, fees for courses covered by the VET FEE-HELP scheme had more than doubled within three years and student loans had increased by a staggering 792 per cent. This reform is badly needed. It will provide a win for both taxpayers and students. It is not often a scheme is so bad that its end is marked with praise from service providers, students and taxpayers, but that is exactly what has happened with the VET FEE-HELP scheme.

There are several key changes made in the proposed legislation. The new VET Student Loans program includes a range of measures to protect students and taxpayers and restore trust in the vocational education sector. Firstly, the Turnbull government will introduce an annual levy on approved service providers to decrease the overall cost of the program and to more closely audit unscrupulous service providers. The government will also limit course eligibility for VET student loans to courses approved by the minister. Courses will have a high national priority, will align with industry needs and will lead to employment, not just graduate outcomes. The course list will be updated regularly and subject to feedback as the changing needs of the country will need to be reflected in the approved course list.

The Turnbull government will also introduce a maximum loan amount for eligible courses. The initial loan caps will be $5,000, $10,000 and $15,000, indexed annually by the CPI. The minister will have several new powers, which include the power to exempt courses with high delivery costs, such as aviation, from the loan caps; introduction of new caps; and specification of which courses fall within each loan cap band. Loans caps are derived from actual VET FEE-HELP tuition data and data used to develop the New South Wales Smart and Skilled program. This is in stark contrast to the Labor government scheme which, instead of capping loans, seemed to encourage a veritable arms race between service providers to see who could charge the most for their courses whilst offering the largest incentive to encourage students to enrol. In many cases, students had enrolled in programs with absolutely no prospect of a job at the end of the course. We have seen enrolments skyrocket in courses like circus skills, fortune telling, belly dancing and interpretive dance. We want to create graduates who will grow our economy, not join a circus. This policy resulted in the disgraceful behaviour of some of the private training service providers, with young and vulnerable students saddled with debts from diplomas they were completely unqualified to study and had no hope of completing, with definitely no job at the end.

When the Labor Party attempts to feebly defend their economic record, one must only direct their gaze toward the complete failure of this policy. Not only did the scheme blow out to cost taxpayers some $3 billion a year but it also financially saddled young people from poor and disadvantaged areas as well as overseas students. Indeed, many of the service providers targeted Indigenous areas and populations, signing students up with the promise of a free up-front iPad or laptops so they could jack up their fees and make taxpayers pay for it. Absolutely shameful. This policy is by any measure an absolute failure. It is particularly abhorrent that the victims of this policy are in the main young and disadvantaged people who were simply attempting to better themselves and earn a qualification. It is simply heartbreaking for many of those young people.

A change will also be made with regard to the requirement of student progression for continued access to the loan, which is designed to protect vulnerable students. This is especially relevant for regional students in my electorate of Durack who have relocated for study as they often need to defer in order to work and save money before returning to their studies. We will strengthen compliance and payment arrangements via a range of measures built into this legislation, because of the woeful lack of safeguards included in the original legislation. These will include greater monitoring and investigation powers and enforcement provisions through the use of civil penalties, infringement notices, enforceable undertakings and injunctions. The government will also be able to immediately suspend a provider in urgent circumstances, if required.

The government will also ban the use of brokers or agents to engage or recruit students in relation to loans, and any unsolicited contact with students in relation to enrolling in a vocational training institution will also be prohibited. We will require approved providers to only subcontract training to other approved VET student loan providers or higher education providers approved by the Tertiary Education Quality Standards Agency. Individual subcontractors engaged to provide specialist expertise for part of a course will be allowed on a case-by-case basis. There is the introduction of an application fee for providers to apply to become a VET student loan approved provider and an annual levy on providers will be established through the accompanying VET Student Loans (Charges) Bill 2016. All existing VET FEE-HELP providers will have to apply to be approved under the new program. This will allow the government to weed out unscrupulous and predatory service providers that were allowed to flourish under the Labor policy. States, territories and employer groups have called for significant reform to protect the integrity of Australia's high-quality training system and to ensure the system delivers the skills needed for work. That is what we are delivering with these bills.

This bill must be passed quickly, otherwise there will be no government loan program to assist students for the first semester of next year, which of course will be an unmitigated disaster—a disaster so large that it may only be matched by the disaster that was the VET FEE-HELP scheme administered by the members opposite during their time in government.

This is the final part of this government's commitment to fixing Labor's mess in regard to student loans, and expands on the good work done on this program in 2015. We have already removed the cold calling and inducements from the program, where we saw predatory training providers luring vulnerable students into courses that they were wholly unsuitable for with bonuses, as I said previously, like iPads and laptops. This badly needed reset is necessary to encourage trust and support in our training sector—a sector that has been tarnished by endless scandal since the VET FEE-HELP program was introduced by those opposite in 2012.

The VET Student Loans program will see stronger course eligibility criteria, mandatory student engagement measures and a stronger focus on students successfully completing courses. All of this is designed to benefit the students. For far too long our training providers and our higher education services have focused on the numbers of students we are producing. But this government is committed not to bulk tonnage of students, but to the quality of the graduates our institutions are producing. This is an important part of our election commitment to a more robust and flexible economy, and I firmly believe that this economic future rests on the backs of high-quality, skilled graduates. These young people will be responsible for driving our innovation economy and filling skilled roles in our economy for decades to come.

Australia cannot afford another VET FEE-HELP debacle. The vocational students of this country deserve better. The hard-working teachers and trainers deserve better. And the taxpayers of Australia deserve better economic management than what has been offered up by the Labor government and the VET FEE-HELP scheme. I commend these bills to the House.

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