Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation and Apprenticeships and Training) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker Burke, and congratulations on your election to this high office. I am pleased to speak on the Higher Education Support Amendment (VET FEE-HELP Assistance) Bill 2008. In the 2007 budget the Howard government announced an extension of FEE-HELP to the vocational education and training sector. This was to improve an anomalous situation whereby the VET sector had some courses with high fees but was the only sector with postsecondary qualifications without an income-contingent loan scheme. On 21 June 2007 the Howard government introduced the Higher Education Support Amendment (Extending FEE-HELP for VET Diploma and VET Advanced Diploma Courses) Bill 2007. This bill provided an amendment to the Higher Education Support Act 2003 enabling FEE-HELP to be extended to the vocational education and training sector, specifically providing financial assistance to individuals undertaking full-fee diplomas and advanced diplomas, and this was later extended to graduate certificates and graduate diplomas following evidence given to the Senate committee examining the bill.

The intention of that bill was that VET FEE-HELP be available for diploma and advanced diploma courses; where full fees are charged; where there are arrangements for credit transfer for a higher education award; and only to VET providers that are corporate bodies. Unfortunately, due to a drafting error, the legislation did not allow for the writing of guidelines to reflect this intent. VET FEE-HELP will not commence until the second half of 2008—that was the intention—and so the problem will be easily fixed in time with this bill. The Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion carried on during the second reading speech as if she was the first minister who has ever had to amend a bill. I simply point out to the House that this drafting error was not picked up by either the then opposition or the Senate committee which examined the bill. It was not raised in submissions. It was found when the time came to write the guidelines. This is something that would have been corrected had the now opposition won the last election. It is something that is now being done by the current government. Having said that, the opposition appreciate that the full intent of our 2007 budget initiative to extend FEE-HELP to VET is reflected in this amended bill.

Extending FEE-HELP to VET courses has been welcomed by stakeholder groups and the VET sector. Submissions were sought for the initial bill, and there was strong support for the bill from the Australian Council for Private Education and Training, ACPET. However, along with the International College of Hotel Management, they encouraged expansion of the bill to encompass vocational graduate certificates and graduate diplomas. This amendment was taken up by the Howard government and will allow for VET FEE-HELP to be provided for these courses when all other eligibility criteria are met.

A Treasury working paper in April 2007 by Bruce Chapman, Mark Rodrigues and Chris Ryan entitled HECS for TAFE: the case for extending income contingent loans to the vocational education and training sector provides a sound economic argument in favour of extending income-contingent loans to VET students. Students should not be deterred from undertaking VET courses as a result of potentially short-term financial constraints preventing them from financing their further education. Higher education loans have been available since 1989 for Commonwealth-supported university courses—HECS-HELP—and in 2005 the coalition government extended this to include FEE-HELP for non-Commonwealth-funded courses at universities and eligible private tertiary providers. FEE-HELP was recognised in the Treasury paper as being an ‘important innovation in Australian higher education financing’.

Research undertaken by the National Centre for Vocational Education Research shows that in 2005 there were 833,700 students who undertook fee-for-service VET courses—that is, full-fee VET courses—equating to 12.6 per cent of VET revenue. The intention of the bill was to extend income-contingent loans to the vocational education and training sector—broadening the base from higher education, where FEE-HELP is available to assist students to pay up-front costs. Fees payable by full-fee-paying students vary between courses and training providers. One example provided in the TAFE futures survey 2006 is $13,000 a year for hairdressing and $6,060 for a diploma in multimedia, with high equipment and teaching costs impacting on the up-front fees required for each course. The general FEE-HELP loan limit is currently set at $80,000—with $100,000 for dentistry, medicine and veterinary science.

VET FEE-HELP offers a means of cost-sharing between governments and students. There is extensive research as to the benefits of cost-sharing, suggesting that, as there are benefits both to society and to the individual, cost-sharing offers an equitable solution for the financing of further education. However, as there may be a time lag before the student is able to realise the financial benefits of their education, government assistance in meeting the up-front fees for study may enable students to increase their qualifications, when without assistance there is a potential barrier to VET participation for some students. The TAFE futures survey of 2006 indicated that fees presented a major deterrent, particularly to those living in areas with a high dependence on social security and those in low-paid jobs. Particular note is made in this report of the increased difficulties faced by students in paying the additional costs associated with the higher level courses.

Under the previous coalition government, payments were made to encourage the uptake of VET courses. These payments included income support, training vouchers, skills vouchers for basic training and tax-free wage top-ups. For apprentices there was support for tool kits and fees. VET FEE-HELP furthers these measures, specifically targeting full-fee, higher level qualifications.

These payments are intended to assist in boosting the number of students undertaking qualifications in areas of skill shortages. Occupations facing skill shortages vary across Australia. However, in areas of high employment such as northern metropolitan Perth, shortages are evident for electricians, registered and enrolled nurses, motor mechanics, carpenters and childcare workers. Attracting people into these industries requires a multifaceted approach, improving incentives and addressing the reasons why people are reluctant to enter into these occupations. VET FEE-HELP removes the disincentive of up-front fee payment for full-fee students. This goes part of the way to boosting enrolments in these courses.

With increasing demand for skilled workers, there is a need to assist those who wish to undertake VET courses that can lead to future studies. Over the next 10 years it is expected that over 60 per cent of jobs will require high-quality technical or vocational qualifications. However, to date only 30 per cent of the population have these required skills. Monash University research has indicated that this will require a 1.9 per cent increase in the overall number of VET qualifications gained each year.

The courses eligible for VET FEE-HELP cover a wide range of industries, including hairdressing, construction, engineering and mining, electrotechnology, and hospitality and tourism. Skill shortages are apparent in a number of these areas across Australia and offering VET FEE-HELP to students wishing to undertake studies in these areas helps address these shortages.

Limitations have been placed to ensure that VET FEE-HELP is only extended to those courses for which higher education credit transfers are possible. These qualifications can then lead to further education prospects. This amendment provides a minor technical correction to the original legislation, ensuring that the extension of FEE-HELP is restricted to those originally intended to receive it, identified as eligible full-fee-paying students undertaking TAFE diplomas, advanced diplomas, graduate certificates and graduate diplomas with VET providers who have credit transfer arrangements with a higher education provider in place for each of their qualifications and providers who are corporate bodies. This was the original intention of the bill introduced by the former government and, as such, the opposition supports this bill.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Higher Education Support Amendment (VET FEE-HELP Assistance) Bill 2008. Largely what this bill does is to lend support to the original intention of the VET FEE-HELP provisions when they were introduced into the Higher Education Support Act 2003. Like any parent these days, we all want the best for our children. In my instance, I am very fortunate that two of my sons have progressed through the vocational education system. I know that as a parent we do want the best and also realise that not everyone is going to want to access tertiary education. Therefore, we need to have varying pathways to guide young people in the direction of a career. I think it is very important that we have proper pathways for students who wish to continue with further study and, as I say, do not simply have, or seem to have, only the option of tertiary education.

The bill before us lends support to the original intention of VET FEE-HELP, and that is to assist students with the up-front costs of full-fee VET courses. However, the way it was originally drafted could see VET FEE-HELP being provided much more broadly than was originally intended. This bill helps direct the VET fee assistance in relation to both full-fee courses which are offered under the VET system and courses which go on to give higher education credit transfer, which is very important when we are talking about increasing the skills and abilities of students. Hopefully, in undertaking these courses, having the ability to transfer credit will lend itself to higher educational attainment as well.

I think it is important that we reflect on the developments that have been made in the VET system. For most people, vocational education once meant TAFE colleges. These days a revolution has occurred in vocational education, and private providers are providing a very significant service in vocational education. The intention of this provision is to make sure that those private providers provide all the information that is required by the Minister for Education in order to attract up-front VET fee payments for students undertaking those courses.

These are matters which probably should have been taken care of when this was originally dealt with in the last parliament, but something that I think is common ground to both sides is that we want the system to work. Moreover, not only do we want it to work, we want it to work in the manner that was originally intended, and that is like what occurs with FEE-HELP. VET FEE-HELP is there to assist to some extent the decision-making process of students going to undertake courses to increase their skills and who, as a consequence, have to shoulder the burden of up-front fees. This is what the scheme is designed to do. It is one that should probably have been looked at more fully when it was originally put forward, but it is one which we are certainly prepared to now commit to and finalise. It will provide opportunities not only for young people but also for those students who are committed to increasing their skills, particularly with a view to being in a position to compete in the ever-changing modern job market.

As I understand just from the research that has been conducted in my electorate of Werriwa, it is predicted that, in the not too distant future, over 60 per cent of the positions which will be made available for localised employment will require some form of technical or vocational educational qualification. Certainly they may not always be at diploma or advanced diploma level, but it is interesting that people are now looking to the future, planning the recruitment of skilled labour and making assessments at this stage that they will be looking for people to have VET qualifications as a prerequisite for employment. If that occurs in Werriwa, I imagine that it will not be far from the mark in the electorate of anybody else in this House. I am happy to stand here and support the bill. It will at least bring this matter to a proper conclusion so that VET FEE-HELP can be brought to bear to assist those people who it was originally intended to assist and to apply to those courses to which it was originally intended to apply. To that extent, I support the bill.

Tony Smith (Casey, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

In following the member for Boothby, who spoke earlier, I will just very briefly make a couple of points in relation to this debate. Obviously the Higher Education Support Amendment (VET FEE-HELP Assistance) Bill 2008 is a technical amendment to the reforms that were announced by the previous government in the last budget to extend FEE-HELP to the vocational education and training sector. The legislation came in in June and passed through the parliament. There was a technical problem with the legislation and, consequently, the new government is now amending it. I share the views of the member for Boothby, who pointed out quite eloquently that, when the Minister for Education introduced this bill, she seemed to be acting as though the need for a technical amendment to correct an error is something that has occurred one or two times since Federation. I say in a friendly manner—she will know that is certainly my nature—that she should prepare herself for many more amendments in the years to come.

I do not say that with any disrespect to her officials who are here, but bills do get amended. Whilst I can understand the minister hyping up the fact that the amendment is necessary and that there was an error made at the time, and blaming the previous government for that and everything else she can think of on any other issue, it is the case, and she knows it—and let the Hansard show that the minister, who is at the table, is smiling—that she will face many amendments to her own legislation. It might not be for a few weeks or months, but the minister will be back in here, I presume consistently, attacking herself for the technical errors in future bills. We are very, very glad to hear that and we will be the first to give her praise if she does not ever have to pass an amendment to any bill that she introduces, be it in workplace relations, education or social inclusion. We are very glad to hear that there will not be any errors. She made that declaration in the first week of parliament. She looks relaxed; her officials look slightly less relaxed, and I can understand that. They cannot agree, but rest assured that they know that, just as this bill is being amended, there will be many other amendments.

My understanding is that this was perhaps picked up in the explanatory memorandum but not the bill. But the important point that the member for Boothby made was that this was always going to be picked up. In fairness to the departmental officials, who now work for a new government, I certainly believe that this technical error was always going to be picked up with an amendment. It was picked up in good time, because these new measures—which are very welcome and will have a major benefit to the vocational education and training sector—start in the second half of this year, so hyper claims about cost blow-outs and major catastrophes with regard to the need for the amendment do not really apply. We are here in the second week of the sitting in February supporting the amendment, and it will go through very quickly. You will have many months before the new scheme actually starts. By then, I am sure that she will personally be going through other legislation that she introduces—and she has a very busy load with workplace relations, education and social inclusion; we accept that—line by line to ensure that there are no technical errors made or amendments needed.

But these amendments to the substantive bill illustrate the importance of the measures announced by the former minister during last year’s budget which were legislated through the parliament. They will make a major contribution to vocational education and training. They were very much welcomed by the sector at the time. I do not specifically recall the Labor Party, when they were in opposition, demanding that FEE-HELP be extended to the vocational education and training sector—they may well have, but I do not recall that being something that was regularly spoken about by the then opposition. I am glad that they support the initiative that we introduced during last year, that they support it wholeheartedly and that they realise that these reforms, which were the past government’s reforms, will make a very major contribution to the sector. So we are supporting this amendment bill.

We will support the other amendments that the minister will need to bring forward in the future years as well, if they are of a technical nature. We will be happy if they do not come forward—because she has announced that there will never be another amendment. That is fine. But if it turns out that, due to no fault of her own, these things slip through, then we will be there to play a bipartisan role on technical matters.

Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Link to this | Hansard source

in reply—I thank every member who has contributed to this debate. I thank the shadow minister for education for his contribution. Clearly, he is a forgiving man, and I think that is a delightful personality trait! I would hope that I will not have to rely on his forgiving nature too much in the future. But, should I ever need to rely on that, clearly he is someone who, by dint of personality, will be forgiving should that time come.

In relation to the Higher Education Support Amendment (VET FEE-HELP Assistance) Bill 2008, as I indicated at the start of this debate, it completes the arrangements consistent with the original policy intent of the VET FEE-HELP legislation introduced last year. These amendments were necessary to allow the legislative guidelines that sit under the VET FEE-HELP legislation to be drafted in line with the intent of extending the higher education FEE-HELP arrangements to the VET sector. If one were being unkind, one would say that the failure that this amendment bill seeks to rectify was caused by the previous government’s ineptitude; if one were being a more generous soul, one would say it was in the nature of things. But, whatever analysis one brings to it, clearly there were flaws in the original legislation and we need to make sure that they are rectified, and this has been given a very high priority by the Rudd government. It is essential to bring this legislation forward to assist students studying in high-level VET programs this year.

VET FEE-HELP assistance will be restricted to full-fee-paying students while requiring credit transfer arrangements for diploma and advanced diploma courses that can be assessed on a course-by-course basis. This will provide the greatest degree of flexibility to the sector while ensuring that VET students get appropriate recognition for subsequent studies in higher education and receive credit for what they have already done.

Aligning student financing arrangements between vocational education and higher education in this way will reduce the administrative burden on dual-sector providers—and I know that you, Madam Deputy Speaker Burke, are familiar with the operation of those in Victoria, as am I in my local electorate—and will help improve the movement of students between the sectors. It will underpin the move to higher skill levels in Australia’s tertiary education system, a key contribution to improving productivity.

Once again I thank all members who have participated in this debate. I thank the opposition for their support for this legislation and their quick processing of it. I commend the bill to the House.

Question agreed to.

Bill read a second time.