Karen Andrews (McPherson, Liberal Party, Assistant Minister for Vocational Education and Skills) Share this | Hansard source

I start by thanking the honourable members who have contributed to the debate on these very important VET student loans bills. Before I turn to some of the specific issues raised, I want to remind the House of the purpose of these bills. They are to establish a strong, robust and sustainable program that provides important financial support to students to enable them to get the skills that they need for a job or to get a better job. They set the bar higher for training providers to be able to offer courses covered by the loans. They align loans to skills needs in the economy, so students and taxpayers are not left with debts for courses that have no prospect of being paid off. They require students to actually progress in a course before they have further debt levied. Under Labor's arrangements providers were enrolling a student on the same day as they applied for a loan and tried to claim the whole tuition fee in one hit, regardless of whether the student ever attended a class or logged into an online course.

The VET student loans bills introduce loan caps that send a strong signal to students about the amount it costs to deliver a course and limit what the Commonwealth is willing to pay, to stop the exorbitant fee increases we have seen under Labor's scheme. They ban brokers from engaging with or recruiting students in relation to VET student loans. They require training that is being paid for by a VET student loan to be delivered by a provider who has met the high bar set by either this new program or the Tertiary Education Quality and Standards Agency. Under Labor's scheme providers could sign up students for VET FEE-HELP loans for thousands of dollars but deliver little, if any, of it, thereby selling access to VET FEE-HELP and its inflated prices to training organisations who would not otherwise qualify.

These new bills strengthen compliance and ensure that, where a student has been wrongly signed up for a loan, the government can remit that debt and recoup the costs from the provider. Under Labor's scheme students were signed up for thousands of dollars in loans for courses they did not need or could never complete or which had no link to employer or skills needs in the economy. We have heard examples from the members for Hinkler, Berowra, Durack, Forrest, Dunkley and Gippsland of how their constituents had, unfortunately, been targeted by these unscrupulous providers or brokers and why action was needed.

The member for Cowper, the former Minister for Vocational Education and Skills, outlined the strong actions he and the government have taken to date to stop these rorts and to stop the growth in the scheme while the government consulted on a complete redesign for VET FEE-HELP. He outlined some of the 20 measures the government has already introduced, which have already had an impact on improving Labor's failed scheme. The Department of Education and Training has advised that student enrolment numbers and loan amounts for 2016 will be significantly lower than in 2015 as a result of the changes the government has already made. This is already saving students and taxpayers millions of dollars in debt that would otherwise have gone out the door under Labor's arrangements.

These bills establish a program that will restore integrity to Australia's vocational education system and confidence in Australia's high-quality training organisations. This is what Labor should have done when it established VET FEE-HELP and this is what Labor should have done before it opened up access to the rorters and the shonks. Those opposite want to shirk responsibility for their failed schemes, but Australians know that while Labor creates problems, like the failed home insulation scheme and school hall blowouts, it is the coalition that actually steps in to fix things. That is why, in providing support for these bills, the government is investing a further $45 million over the forward estimates to boost the department's capacity to manage the new program, including to monitor, investigate and take action against providers found to be doing the wrong thing. The department has been given the resources it needs to deal with the tight transition period and with the establishment and ongoing administration of the new scheme.

Members have raised issues about the courses that will be eligible for a VET student loan. These bills provide the power for the minister to approve a course list. That list is not part of this bill; it will be a separate disallowable instrument. As announced by the Minister for Education and Training last week, the proposed list has been released for public feedback, with submissions invited by 23 October. The list assesses courses on the basis that they are included on at least two state or territory skills needs lists or are a national priority in terms of science, technology, engineering, maths and agriculture. The courses included on the list include around 95 per cent of students who are currently enrolled in VET FEE-HELP courses.

I encourage stakeholders with concerns to have their say during this feedback period, but I would like to address some specific concerns raised in this place. Some members and stakeholders have raised concerns about arts courses. The proposed eligible course list includes 13 arts related courses: the Diploma of Graphic Design, the Advanced Diploma of Graphic Design, the Diploma of Screen and Media, the Advanced Diploma of Screen and Media, the Diploma of Visual Arts, the Advanced Diploma of Visual Arts, the Diploma of Live Production and Technical Services, the Advanced Diploma of Live Production and Management Services, the Advanced Diploma of Creative Product Development, the Diploma of Furniture Design and Technology, the Diploma of Photography and Photo Imaging, the Diploma of Music Industry and the Advanced Diploma of Music Industry.

The member for Mayo raised a number of courses which are not on the proposed eligibility list, including courses relating to community health, Aboriginal and Torres Strait Islander education, oral medicine, home economics education, building design, building surveying and dementia care. I can confirm that not a single one of these courses is subsidised by more than one state or territory and, of the eight, six had no enrolments in 2015. The government is unapologetic about aligning loans for VET, which is after all about vocational training, with workplace requirements. If there is a course that is not covered, members and other stakeholders should be asking the states and territories why it is not considered a high enough priority to be on their skills needs list. They can also provide their feedback through the consultation that is currently open. There will also be opportunities each year for stakeholders to provide their views on the eligible course list, which can then be adjusted to meet emerging and changing workplace and economic needs.

As members have highlighted, the VET Student Loans (Consequential Amendments and Transitional Provisions) Bill provides for current VET FEE-HELP students to opt in to be grandfathered under their current arrangements, with their current provider, until the end of 2017. The Department of Education and Training will seek to contact all students with a VET FEE-HELP loan who have not completed their course to advise them on the changes and invite them to opt in, should they wish to do so. Students will have until early next year to do so, after which time the department will have more accurate information about which students are genuine and when they are likely to finish. It is expected most students will have completed their studies before the end of 2017. Where courses have been included on the course list, continuing students will be able to continue their studies using a VET student loan. Their previous access to VET FEE-HELP will not preclude their access to a loan under the new program. It is not the government's intention to penalise genuine students who, as a result of unforeseen circumstances or illness, will not be able to complete by the end of 2017. However, VET FEE-HELP needs to close and, as the minister has stated publicly, the department will help students who have not completed by the end of 2017 to make the transition to the new program and is taking those situations on a case-by-case basis.

On the issue of trusts, the government changed the VET FEE-HELP legislation last year to require all new approved providers to not be a trust. This was to reduce financial risk to the Commonwealth and increase financial transparency. Although this requirement was not applied to existing VET FEE-HELP providers that had already been approved, some have already sought information on how to address this requirement, no doubt expecting the change in the redesigned program. Where it is clear that the same entity continues but no longer acts in the trustee capacity, it will not change the department's ability to assess the entity's track record as a training provider. The department has briefed the stakeholder bodies TAFE Directors Australia and the Australian Council for Private Education and Training on this issue and will provide this advice to any organisation requesting information. I encourage any concerned provider to contact ACPET, TDA or the department to discuss their individual situation.

The opposition has raised questions about banning brokers and what this means for the broader sector. Labor allowed brokers into the scheme in the first place by opening it up in 2012 without putting in place any dedicated compliance arrangements and with insufficient oversight or regulation. This government has taken all the steps to tighten arrangements for brokers, first by making training providers responsible for the actions of their brokers through the VET FEE-HELP scheme, and also by strengthening the Standards for Registered Training Organisations, and now by banning brokers relating to VET student loans. Labor did nothing in its years in government to address the issue of broker behaviour other than incentivise them to get into the VET FEE-HELP scheme in the first place.

The member for Bruce mentioned agents in other parts of the VET sector, including international education. The member has previously served as an official in the Victorian department responsible for international education and I acknowledge his strong support for Australia's reputation for high-quality international education. So I remind him that it was the coalition government again, under the Leader of the House when he had the education portfolio, which provided funding to enable the International Education Association of Australia to develop an industry led quality assurance framework to help institutions manage their international education agents. Labor did nothing for Australia's reputation in international education except smash $3 billion from the value of Australia's largest services export.

It is clear that doing nothing is precisely what those opposite have in mind across the board for VET. During the high and mighty rhetoric from those opposite, the Labor Party did not provide a cent in their so-called fiscal plan for a new national partnership agreement on skills. It is quite interesting to look at a document, the Labor Party's pre-election fiscal plan, and what they actually promised on the matter of TAFE. We have heard those members opposite talk for a very long time about their guarantees and their support for TAFE, but I had a look at Labor's fiscal plan, which was released before the election. On page 22, headed 'Education and skills', dealing with costing issues, we see the point 'Provide guaranteed TAFE funding'. That is the first column. The second column gives the 2016-17 figure, and that figure is zero. I looked at 2017-18, and that figure is zero. I looked at 2018-19, and that figure is zero. I looked at 2019-20, and that figure is zero. So there were four years, 2016-17, 2017-18, 2018-19 and 2019-20, with no money under 'Provide guaranteed TAFE funding'—absolutely zero. Labor do not have a plan for apprenticeships. They do not have a plan for TAFE. They have no plan for the future of work. They have no plan for meeting the skills shortages of this country. Instead, they want a review.

Those opposite also have an appalling record on apprenticeships. When the member for Blaxland addressed this House in 2009, he talked of the 35 per cent drop in apprenticeships on Labor's watch during the 'recession we had to have', which most people remember vividly. It was left to the Howard government to rebuild apprenticeships, as the member acknowledged in his speech. When back in government in the Rudd-Gillard-Rudd years, Labor cut employer incentives nine times between 2011 and 2013, a total cut of $1.2 billion. Due to Labor's cuts, 25 per cent fewer apprentices took up training between 2012 and 2013. This huge drop continues to affect the numbers of apprentices in training today.

The coalition government, by contrast, has a proud record on vocational education and training. We understand it and, as this bill demonstrates, we intend to back our beliefs with action. I commend the bill to the House.

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