Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015. This is a very important bill as we have all seen a whole series of scandals in this area over the past two years. These scandals have been detrimental to students. We have seen so many reports about it that it is very much the case that now is the time to get tough on all of those very dodgy providers who have been exploiting so many vulnerable students. Speakers on this side have stated that, whilst we do support this bill, it does need to go further and the amendments moved by the shadow minister move to strengthen the protection for students.

Labor is calling on the government to appoint an industry-funded National VET Ombudsman and calls on the Auditor-General to conduct an audit on the use of VET FEE-HELP. The shadow minister has also put forward amendments which require the department to write to prospective students with a clear statement on the amount of debt that they are about to undertake and then it requires a student to reply to the department before the debt is in place. This is a very important measure to protect students so that they then know exactly what they are signing up for. Also, Labor will move to refer the legislation to a Senate committee to look at options to cap tuition fee levels for courses covered by VET FEE-HELP and lower the lifetime limit of VET FEE-HELP student loans.

The fact is that, over two years and three different ministers, the Abbott-Turnbull government have really just tinkered at the edges when it comes to the VET FEE-HELP loans. Indeed, they have skyrocketed from $699 million in 2013 to $1.7 billion in 2014. In this time, so many vulnerable students have been ripped off and exploited, and this really does need to stop. This government should stop playing the blame game and be willing to take some action. Labor is calling on the Turnbull government to agree to our amendments and put these stronger measures in place to stop the exploitation of vulnerable students.

The bill seeks to prevent some inappropriate enrolments and debts through a number of ways: firstly, with the introduction of the two-day cooling-off period between enrolment and the application for a VET FEE-HELP loan, so that the course enrolment is no longer confused with the loan application process; secondly, by introducing minimum prerequisites, such as literacy and numeracy, to ensure students can complete the higher level VET courses; and thirdly, requiring a parent or guardian signature before a student under 18 can a request VET FEE-HELP loan. The new requirements for VET FEE-HELP require approved training providers to develop and apply appropriate student entry procedure requirements. As I mentioned, it certainly would make a difference having those in place.

As we have said, there are so many disturbing reports of the very unscrupulous behaviour by some registered training organisations who have essentially preyed on vulnerable students, sometimes signing them up for very large VET FEE-HELP debts. We see it on many TV shows and right throughout the media, and it is very disturbing. In many cases, these organisations have been quite deceptive and manipulative in their dealings on this matter. As recently as yesterday, one of my local papers, the Echonetdailyonline, had this story titled: 'Scammers targeting Neighbourhood Centre users'. This related to some people who were behaving rather unscrupulously near the Mullumbimby and District Neighbourhood Centre. In this story, the Echonetdaily said:

At least two men have been loitering around the Mullumbimby & District Neighbourhood Centre (MDNC) touting a dodgy online course they claim will 'help people get a qualification and improve their standard of living,' according to centre manager Julie Williams.

Ms Williams, to her credit, contacted the paper so that they could make people aware of what was happening and urge them not to take up these dodgy offers. They said:

These guys aim to get people signed up to a course, assuring them that the costs are covered through the commonwealth government's VET FEE-HELP assistance scheme, and offering a free laptop computer.

The fact is that, no matter what the government might say, this is exactly what is happening on the ground; it was happening yesterday in Mullumbimby in my area. So there are a lot of concerns and we have seen some distressed students sometimes being completely unaware that they have actually even signed up for a particular course. Further adding to their distress is that they often find they have been saddled with a really significant debt. It is particularly unfair and that is why we need to have more action in place than just what the government has put forward.

In these reports we have often seen identified a real problem with people also being misled about the actual debt they will be incurring with the Commonwealth government through the use of VET FEE-HELP. Many of these stories have identified people with debts of sometimes over $20,000 without even finishing a course or even getting a qualification, yet they are saddled with this massive debt. That is why the amendment put forward by the shadow minister is so important: it requires the department to write to these prospective students with a clear statement on exactly what they are going to be signing up for and undertaking so that they know that it will really protect them, because it seems there are so many people who have signed up completely unaware of what they have actually committed to. We keep seeing that exploitation of people. These are people who want to get out there, want to improve themselves, want to get qualifications and want to get a job; but, unfortunately, we have seen too many instances of them being exploited in this situations. So we need to see some action taken to make sure that does not happen.

In looking at the bill, we see that it will further protect students and taxpayers by making it easier for a student who has been signed up for a loan inappropriately to have their debt cancelled and for the government to recoup some of the cost from providers. We also see the introduction of a minimum registration. The trading history requirements ensures that new VET FEE-HELP provider applicants have a proven history of delivering quality training. It is very important in terms of the integrity of the scheme overall and the reputation of the sector to have in place measures like that.

Under VET FEE-HELP students are able to access more than $97,000 in total for most courses offered by eligible registered training organisations. This becomes a bit of a double-edged sword in that it provides access to education and training but can then become a very large incentive or large carrot for some of the dodgy or unscrupulous providers. In fact, some registered training organisations have further confused and compounded the situation through the use of brokers, and sometimes these brokers have embellished or exaggerated the products to sell them. The use of brokers currently allows registered training organisations to sometimes distance themselves from particular brokers who are behaving in such an unscrupulous way. Some of the amendments in this bill take steps to make RTOs accountable for the actions of the brokers that they encourage and engage to sell their products. But, indeed, as we have said, more needs to be done than what the government is proposing in this bill. With the Grattan Institute warning that almost half of all vocational loans will never be repaid, the financial burden on the Commonwealth continues to grow.

The bill will introduce infringement notices and financial penalties for breaches of the VET FEE-HELP guidelines, and the infringement and civil penalties scheme will support the enhanced compliance regime. Since the 2007 extension of FEE-HELP to include the VET sector for approved diploma and advanced diploma courses, many thousands of people have accessed higher education for the first time. At the same time we have also seen an explosion of dubious providers and exploitative practices, like some of those I referred to before, and very large debts, and this has exposed so many shocking and distressing tales.

In addition to the effect of these shonky providers is the concern for the overall reputation of the sector and making sure there are quality providers out there. It is important for all of us to know that there are many outstanding providers in this sector who do a great job. That is why the quality of the sector must be improved, because we are only seeing media reports of the dodgy or unscrupulous providers, and we know there are many good ones out there as well. That is why it is important to clean up this whole sector and make sure we have even greater action and more enhanced roles in terms of safety.

Despite the government introducing new national standards that came into effect in April 2015, the problems with the system are still occurring, as I talked about just yesterday in relation to Mullumbimby in my electorate. Whilst this legislation seeks to address some of the issues around VET FEE-HELP, it does not really go far enough. We need more action. Labor has consistently called for the government to crack down on the problems relating to VET FEE-HELP. The government has taken almost two years to propose legislation that might actually address some of these issues. Labor has also previously called for the Auditor-General to conduct an inquiry into the use of VET FEE-HELP. Over two years and three different ministers, we have seen some tinkering around the edges, but we really need to see some firm and solid action in this area.

Whilst we are talking about training and skills—and it is very important to have a focus on that in terms of younger people gaining opportunities into the future—I want to raise this government's dismal record when it comes to their lack of providing training and skills. In my state of New South Wales, the state government has an equally dismal record. We have seen many harsh cuts by the Abbott-Turnbull government when it comes to cutting programs in training and skills. We have seen $2 billion in cuts to skills funding, including $1 billion in cuts to apprenticeship programs. At both state and federal levels, the cuts that have been made to TAFE have been extremely harsh. We especially see that in regional and rural areas. We see how it impacts younger people and really devastates their opportunities to get decent training. Only recently it was reported that leaked cabinet documents from the New South Wales Liberal-National government showed they wanted to sell off 27 TAFE sites. The document showed that in 21 regional towns TAFE will be closed or reduced through a partial sale. This is really a disgrace when we look at how important TAFE is, especially in our regional areas.

In my electorate of Richmond on the New South Wales North Coast, this included the full sale of Murwillumbah TAFE, and the government have now admitted that is exactly what they intend to do—sell off the Murwillumbah TAFE. In nearby Ballina, soon to be within my electorate, there is the partial sale of the Ballina campus. There has been a huge community outcry in relation to this. The community do not want to see this happening. They know how important our TAFE is. I would especially like to condemn the North Coast National Party for these closures. It shows yet again in regional and rural areas that the National Party just cannot be trusted. As I constantly say, National Party choices hurt. In this case, their decision to sell of the Murwillumbah TAFE and parts of the Ballina TAFE will really hurt our community. TAFE plays an important role in our towns and TAFE means that so many local students can access the education and skills they need. It is especially important in regional areas, where we consistently see high levels of youth unemployment.

In contrast to the action that we see with the National Party and their choices that are hurting regional areas, we see Labor committed to supporting TAFE. We absolutely support TAFE and understand how important it is in providing necessary training. We have said that we will make skills and training a national priority, and we will do that because we acknowledge that young people should be able to access it. A Labor government will back TAFE by guaranteeing that a portion of government funding for vocational education is dedicated to TAFE. We are committed to that because we know it is so important.

When we are talking about skills and training, again for regional and rural areas, one of the cruellest actions of this government is their plans for $100,000 university degrees. It means that younger kids in regional areas just cannot go to university. They cannot afford to get there or to pay these high fees. That is the reality. That is what parents and students tell me all the time. Whilst $100,000 degrees are unfair right across the country, they are particularly unfair when it comes to regional areas and to universities like mine, Southern Cross University. Their funding cuts are massive over a 10-year period and make it very difficult for them to sustain the provision of services without introducing very high fees. The reality under this government is that people will be paying $100,000 for university degrees.

We are seeing these cuts right across the board, whether in terms of university, TAFE or other apprenticeships. We see cuts to many areas of skills and training and to many youth programs as well. I have mentioned before the cuts to Youth Connections, which is a fantastic program. Many young people in my area have used that program. Wherever we turn, we are seeing cuts from this government when it comes to training. We on this side of the House want to see Australian students be able to start training and to finish their training with a quality accreditation. We believe that everyone should be able to access the training, jobs and opportunities of the future. As I have said many times, I do condemn this government for their cuts when it comes to training and I particularly condemn the National Party for their ongoing cuts to education in regional and rural areas. It is devastating.

In conclusion, in terms of this bill, it has taken a number of years for the government to actually take some action and we just have seen so many reports over that time about the shonky and dodgy providers out there and it is time to get tough on them. Whilst there are some measures that I have acknowledged in this bill, certainly the amendments moved by the shadow minister are vitally important, particularly for the future, or potential students as well, and making sure they have certainty and security around their needs in accessing training. We just have to get tough on these dodgy providers. I think it is important to be supporting our amendments to make sure we can take that extra action. Only yesterday, we have seen in my area some very shonky people trying to sign people up. It is only through harsh action and making sure that we have got a very strict regime in place that that will stop. We need to do that—from a number of perspectives—obviously from the perspective of Commonwealth expenditure in this area; first and foremost, it is about protecting our students and that is what we need to be focused on.

Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

Whilst the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015 goes part of the way to tightening the VET system, we believe that it could go a lot further and indeed should go a lot further. I will be supporting the amendments moved by the member for Cunningham in that regard. Those amendments, in particular, do two things that I feel are necessary with respect to what has been going on with the tax system: firstly, that a national VET ombudsman should be appointed to oversee the VET system throughout Australia; and secondly, that the Auditor-General should conduct an audit on the use of the VET FEE-HELP program in this country.

There are two areas of government policy that over the last few years have been extensively rorted. It is interesting that both of them have come before the House this week in different debates. Firstly, I believe the visa system throughout this country has not only been totally rorted; the government has lost control of the visa system that is currently in place in Australia. The second area is with respect to the VET system. With both of those areas, the rorting has been exposed not by government but, rather, by the media and the journalists and who have done their own investigations into those areas and brought to the attention of the government and this House what has been truly going. For those of us who are out there in and amongst our communities, it has been obvious for some time now, whether it is the visa system or the VET system, that something needs to be done. It is encouraging to see that finally something is being done. The truth of the matter is that it should have been done earlier and more can be done.

The figures with respect to the rorting, literally, speak for themselves. We saw a cost blow-out in terms of the HELP loans from about $325 million in 2012 to somewhere in the order of $1.7 billion in 2014. That should have rung alarm bells for the government. We then also saw that only about 24 per cent of students have completed their courses. Again, that should have rung alarm bells, because no student is going to take a loan, get themselves into some sort of debt, and then not want to complete the course that they have taken the debt out for. It just does not make sense. It only makes sense if something shonky is going on.

It is interesting to see that some of the state governments—who have some responsibility in this area as well—have already taken action to try to address the problems. I am aware of actions taken by the Victorian state government and also by the South Australian state government, my home state, where they have become aware that system is being exploited and they are in turn trying to control what has been going and shut down the rorting that has taken place.

The most damning assessment with respect to the rorting comes from the Senate Education and Employment References Committee report, which handed down its report, I believe, only last month. There were some 16 recommendations in that report. I have read each one of them and all of them, in my view, are appropriate recommendations and all of them go to the heart of addressing individual and separate concerns that have been identified within the system. I just want to read their very first recommendation, which I think sums up the issues relating to what has been happening to the VET FEE-HELP loans in this country. Recommendation 1 states:

The committee recommends that, given the evidence of rampant abuse, accelerating costs, and doubling of bad debt the government launches an immediate review into the operation and regulation of VET FEE-HELP.

That recommendation just highlights the serious state that we have reached with respect to the abuse of the VET system in this country. It is also interesting to note that the number of providers has also escalated in recent years. As of 1 January this year, my understanding is that there were 4,609 registered training organisations in Australia of which 3,440 were privately owned. How there could be so many registered training organisations across the country in itself should be raising questions as to how each of those organisations were accredited, how they got heir accreditation and what courses they were offering. It is bewildering to me. I am surprised, again, that the alarm bells were not rung when there were so many entities wanting to register as registered training organisations. It is heartening to see that much of that is now being contained and measures are being put in place, including some of the measures that are contained in the government's bill, to try and ensure that the rorting no longer continues.

In summary, the recommendations from the Senate committee refer to serious allegations of rorting and profiteering, abuse of the system, shonky practices, poor outcomes for the students who pay for the courses and then do not complete them—even if they do complete them, you wonder about the authenticity of the accreditation that they have been given. Even worse, there was exploitation of students and possibly fraud. I mentioned at the beginning of my comments the question of visa rorting and VET rorting and I believe that in some cases there may even be a link.

I do not have time to go into each one of those recommendations but, if time had allowed, I would have done so because the 16 recommendations in that report actually do address specific concerns that I have noted during my time as the member for Makin and, in some cases, concerns which have been brought to my attention. Indeed, I spoke to a constituent about this matter only in recent weeks, who gave me the name of two registered training organisations and who asked me if I could inquire into their legitimacy and in particular into their mode of operation. In one case, I noted that the organisation was charging somewhere in the order of $16,000 for a course that TAFE was offering for—in round figures—$1,000 or $1,500. That alone is concerning but it should also again have begged the question: how can one entity be charging so much more for what is effectively the same course? The truth of the matter is—and this is only anecdotal evidence—the owners of those the two organisations that the person brought to my attention, in both cases, have literally become multimillionaires in the space of a couple of years. They are not Australian nationals or, if they are, they reside overseas and much of the money that they have made, I am told, was transferred out of the country. It seems that it was an opportunity for those people who wanted to corrupt the system to do so not only to get rich but to exploit students along the way. We have heard many other examples of such practices from other speakers in this debate.

Registered training organisations that have become accredited in recent years have also undermined the viability of the TAFE system throughout Australia. We have seen, as a result of the RTOs coming into the market, TAFE having to shut down courses that were previously offered. We have seen thousands of jobs across the TAFE sector lost and we are seeing some campuses even close. That undermines, what I believe is, one of the core needs of our society—that is, the ability to properly skill up people in this country for jobs that emerge from time to time. Nobody was doing that better than TAFE yet we have seen TAFE totally undermined by the RTOs that have rorted and exploited the system. I am pleased to see that Labor leader, Bill Shorten, has made a very strong statement in respect to our commitment to support TAFE into the future. We understand the value and importance of TAFE, we understand that the TAFE courses are accessible to those people on lower incomes and we understand the need to have a training institution out there that is not only fairly priced but offers the courses appropriate to the needs of this country into the future.

I also want to speak briefly about the role of the national regulator—that is, the Australian Skills and Quality Authority. It is clear to me that the national regulator is under resourced. Perhaps, had the national regulator been properly resourced, much of the rorting that we now hear about may not have occurred. But it is important, if we are going to continue allowing RTOs into this country, that the regulator must be properly resourced, have sufficient powers and ensure that those people who apply for a registered training organisation licence are not only fit to do so but do not exploit the system.

I now turn to the question of prosecutions. In fact, recommendation 7 of the Senate committee's report suggests that prosecutions of those who have rorted the system should be pursued. Firstly, prosecutions should be pursued and severe penalties should apply if anyone is found to have rorted the system. Secondly, the message needs to be made absolutely clear not only to registered training organisations but to anyone who contracts services that are paid for by the government that if they are going to rort the system, it is not acceptable. Thirdly, we need to do what we can if at all possible to recover funding that has been paid to some of these organisations if it can be found that they received that funding by fraudulent means. That needs to be pursued, and I hope the government does that as part of its ongoing management of the VET system in this country. We need to have a VET system in which the community has confidence. No-one is going to enrol in a VET course if they believe that the certificate they get, at the end of the day, is not worth the paper it is written on. Again, that means that we need to ensure that the RTOs who are accredited are reputable and are doing the right thing.

Whilst there has been a lot of criticism about RTOs in this country, it does not apply to all. There are many good RTOs in this country, in particular the industry run registered training organisations, who quite often are very clear about the training that is required by the students that go through their courses, know exactly what skills the employers require, and structure their courses accordingly. Some of those training organisations in my own home state, I believe, do an excellent job and indeed they ought to be supported but, as I say, they are predominantly what I call the industry registered training organisations.

I do not know how many of the registered training organisations, of the 4,600 that I referred to earlier, are individually owned. I suspect that in many cases it is probably the same people running two different entities—maybe using someone else as a front for them. I would not be surprised at all if it is a system that has been manipulated in that way. I would hope that if anyone is found to have corrupted the system in any way, or to have run a shonky training organisation, withdrawing their licence does not leave them any opportunity to reapply under a different name, or a different company name, and then allow them to continue to go on with the rorting of the system that by then they would have almost perfected.

The last point I make is this: I am aware that there has been a hotline and people are encouraged to call in and dob in and anyone who is doing the wrong thing. My concern, with respect to the hotline, is that many of the people who have been drawn into the VET system under the rorting that I and others have referred to, are not the sort of people that are likely to ring the hotline. In many cases I suspect that they have very little interest in the system. They have signed their name onto a sheet of paper somewhere without even knowing what they have got themselves into, and they are totally unaware of the exploitation that was done using them as part of the racket. With those comments, once again, I support the amendments moved by the member for Cunningham.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I rise to support the bill and the amendments moved by the member for Cunningham. This is an important area of public policy because it deals with how we equip our future workforce with sufficient skills to, firstly, enable them to have good, decent, quality jobs and, secondly, ensure that we grow our economy and remain a successful nation and a successful society.

It is a very important area that, I would argue, over the recent years has not been attended to as well as it might have been. There is no doubt that the decisions that have been made, both federally and at the state level, have not always served vocational training well. This matter, of course, goes to reforming the VET FEE-HELP area, but I think it is important, just in by way of context, to talk about how important vocational training is and about the absolute need to reform this area. The acquisition of the skills that are required to properly match the emerging demand in our rapidly changing labour market in this country is critical. There could hardly be a more important thing to be discussing today. This is something that Labor wants to see improved, and that is why there are amendments being moved by the shadow minister. Certainly I believe that Labor, when last in government, undertook some very significant reforms after close examination. Whether through the Bradley Review of Australian Higher Education or the Gonski review on education, there was very significant work undertaken after proper examination of the deficiencies of our education system. What I think we need to do further is to properly examine vocational training. We have got to get this right because there are too many deficiencies with the system. I think many of the speakers who have contributed to this debate have outlined those deficiencies.

There is no doubt that very significant rorts have existed within the system. It is fair to say that the vocational education sector has exploded as open market policies and the rorted loan scheme have fuelled mass enrolments hidden from regulatory scrutiny. So says John Ross in today's The Australian, where he quotes Martin Riordan, chief executive of TAFE Directors Australia, who is very significant contributor and expert in the field. Mr Riordan said:

Private, for-profit providers have collectively exploded as an industry, with the data showing they now deliver to two-thirds of the vocational education and training student population.

More than half of the federal funding for VET and VET FEE-HELP has been allocated to providers without the scrutiny and data disclosures required for other commonwealth programs.

Mr Ross further stated in the article:

Until now, the government had tallied only publicly funded vocational education and training. This included training by TAFEs and the other institutions—including private and community colleges, and training arms of companies—that had managed to secure government contracts. Under this approach, there were fewer than 1.8 million VET students counted last year.

The new report, released yesterday by the National Centre for Vocational Education Research, is the first to capture privately funded training as well as public. It found that 4,600 providers around Australia—including 2,865 private colleges—attracted 3.9 million enrolments last year. This compared with fewer than 1.3 million students at universities.

Given the explosion in these areas and given the lack of standards, particularly amongst many of the private providers, the government needs to take action to improve this sector to ensure quality training for people, particularly young people, who are entering these courses, and to ensure that the training is of a sufficient standard to enable people to find work. I think it is fair to say that we need a sector that is more sensitive, as I said earlier, to the emerging areas of demand in our rapidly changing labour market. We do not believe this has been undertaken too well by this government, and there needs to be a lot more done.

That is why, whilst we support the bill, there are amendments, and I think there are even further amendments that need to be debated. Labor is calling upon the government to appoint an industry funded national VET ombudsman and support Labor's call for the Auditor-General to conduct an audit of the use of VET FEE-HELP. Labor also proposes an amendment in detail requiring the department to write to the student with a clear statement on the amount of debt that they are about to undertake, requiring the student to reply to the department before the debt is raised.

We have too many students either in debt—which is bad enough—or even unaware that they have accumulated a debt, because of the way in which the government have mishandled this whole area. We know what they did when they came into office. Despite our very strong reservations and protestations, they removed the support for providing tools for apprentices, and they introduced a loan scheme which would appear now to have left vulnerable thousands of students who are in debt up to their eyeballs. These are young, vulnerable Australians accumulating a debt which in many cases they are not even aware of. For that reason, the government deserve a heavy censure.

We need to see an improvement here. The member for Cunningham has been vigilant in articulating Labor's position in respect of these matters because we are going to stand up for those young people in particular who may not have ever entered into a loan arrangement before and who have found themselves vulnerable as a result of the failure by the government to properly provide support for them and the proper advice required when someone so young may be entering into a very, very significant debt by way of a loan.

The bill we support. It does not go far enough. We call upon the government to accept the amendments that are being proposed by the opposition in order to redress what are clearly significant problems within the sector. It is my view that there have been some very bad decisions in this area, such as the former Victorian government ripping out hundreds of millions of dollars from TAFE in Victoria. It happened in Queensland—I think it did—under Campbell Newman. It has happened at a cost for those young people who lost their opportunities to acquire skills they needed to enter the labour market.

We have an unemployment rate of young people in excess of 14 per cent. That is 16- to 24-year-olds. For teenagers it is even higher, and for some parts of Australia, of course, we are seeing unemployment rates north of 20 per cent—25 per cent and more in some parts of Australia—partly because these young people do not have the requisite skills to enter the labour market. We do know that the labour market is changing. There has been the disappearance of entry-level work as a result of a number of factors, including technological change. Also, those older workers who may have been made redundant in some sectors of our economy are competing with young people for jobs that were hitherto usually occupied by young people. There is a combination of reasons why it is harder for young people to enter the labour market. Certainly one of the problems is the failure to deliver proper, quality training to them and provide sufficient support so that not only do they acquire the proper accredited training but they also complete that training—they complete their apprenticeships or their certificates.

Further, there is no doubt in my mind that the experiment of having a sort of laissez-faire attitude towards the provision of training—which does pre-date this government; I am not going to attack the minister for that—has led to some really substandard providers being in the system. I think many reputable private providers agree with us and would agree with the government if they were to say that we need to clean that up. There have been too many shonky providers, too many bottom feeders, who have been exploiting young people. In some cases they have even been involved in gaming immigration. This sort of behaviour, this conduct, needs to stop. It brings this country into disrepute. It brings our vocational sector into disrepute. Most importantly, it really does undermine the future prospects for too many young Australians, and we need to do better for them.

This is a bill we can support, but there are some very significant and genuine amendments that the government should be acceding to. If they are absolutely fair dinkum about wanting to provide quality care and they want to ensure that young people and participants in the vocational sector generally are not to be exploited then I think they will listen carefully to the opposition and to the compelling arguments by members on this side, in particular the member for Cunningham, and accept these amendments because they will improve the bill. Upon enactment, it will improve the law, which will strengthen the sector, which will make it harder to exploit young people and participants in the vocational sector generally. It will clean up much of the problem that we need to clean up in order to have a first-class vocational sector.

As I say, there has been great work in recent years with the Bradley review and with the Gonski review. I think we need a closer examination of this vital sector for our economy. This legislation could be a start, particularly if the government accedes to the amendments being proposed by the opposition. I support the bill and in particular support the amendment moved by the member for Cunningham.

Luke Hartsuyker (Cowper, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

In summing up, I would like to thank those who have contributed to the debate on this very important bill, the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015, and to thank the opposition for their constructive attitude and contribution towards our efforts to ensure that we have a high-quality VET sector.

The Australian government introduced this bill because we are determined to uphold the integrity of the VET sector and, in particular, VET FEE-HELP. We want a strong VET sector that helps students to develop the skills that they need for the jobs of today and to adapt to the work of the future. And we want students to be able to access VET FEE-HELP so they can undertake quality training that helps them into a job or helps them to develop their careers.

Unfortunately, the changes introduced by the former Labor government have allowed unscrupulous VET FEE-HELP providers to flourish at the expense of students and taxpayers. As we have heard during the debate, this has seen students enrolled in courses that they did not want and lumbered with a debt they did not need. It has cast a pall over the entire VET sector and unfairly tarnished the reputation of those VET FEE-HELP providers who are doing the right thing. This bill is necessary to address Labor's failure with regard to VET FEE-HELP and to restore the public's confidence in VET FEE-HELP.

The government has acted swiftly to stamp out unethical practices amongst those providers doing the wrong thing. In March this year, Minister Birmingham announced a suite of eight reforms to enhance protections for students and taxpayers. The first of these commenced on 1 April 2015, when the use of inducements by providers and their agents was prohibited—no more laptops or cash for signups. Further amendments were implemented by the government on 1 July 2015. These included making providers accountable for the actions of their agents, requiring written contracts between providers and their agents, requiring providers to list their agents on their websites and prohibiting providers and agents from using particular language when describing VET FEE-HELP, such as 'free' or 'government funded' when we all know that they are not. The changes also removed unfair withdrawal fees and required providers to provide full and accurate information to students before enrolment.

This bill builds on the reforms that came into effect in April and July this year. I note the support of those opposite for the bill, and their intention to refer it and the proposed amendments which they have to the Senate legislation committee.

With regard to Labor's substantive amendment, I can advise the House that the Department of Education and Training is already working on a new electronic application system for VET FEE-HELP loans. This approach will come into effect on 1 January 2017, and will address the concern raised by Labor's proposed amendments. It will set up an opt-in process. Essentially, students who wish to apply for VET FEE-HELP loans will need to register directly with the Department of Education Training. Students will then receive details at an email address of their choice from the department as to where and how to complete their request online.

As part of the application process, it will be made clear to students that they are requesting a Commonwealth loan and that the loan will need to be repaid once their income reaches a certain threshold. This way, the department can ensure that all students receive the same information about VET FEE-HELP loans in a clear and user-friendly manner. Once the student has completed and submitted the electronic form to the department, both the student and the training provider will be provided with a copy for their records.

This will remove the potential for providers to misrepresent VET FEE-HELP loans to students, or to pressure students to sign forms. This process is in train and will be ready to roll out, as I said, in 2017. It will help to ensure that students are very clear about how much they are borrowing for their studies and when and how it will need to be repaid. Additional measures to be implemented in 2016 will also provide students with clear information of their debt by unit. From 1 January 2016 providers are required to provide students with VET FEE-HELP invoices before each census date, clearly outlining the debts to be incurred. Students can withdraw before the census date without incurring a VET FEE-HELP debt.

Providers must also provide students with a two-day gap or cooling off period between enrolling and applying for a loan, further separating study and payment decisions. When seen together, these reforms will have the same effect as Labor's proposed amendments. For these reasons, the government does not consider it necessary to support Labor's amendments, but I certainly acknowledge the spirit in which these amendments have been put forward.

The reforms have been widely canvassed within the sector and have been acknowledged as timely and necessary in order to restore the confidence in the scheme and the sector's reputation more generally. I trust those opposite are assured that the work the department has in train will give effect to its substantive amendment. I am happy to work with those opposite to ensure its implementation is in keeping with the intent of their proposed amendments.

In conclusion, this bill implements a number of important reforms to strengthen VET FEE-HELP. As I have said on a number of occasions in recent weeks, I am keeping a very close eye on the VET FEE-HELP program and am determined to ensure that the money being provided by taxpayers is directed to quality training that helps people into real jobs. In closing, I again welcome Labor's support for these measures and commend the bill to the House.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the amendment moved by Ms Bird be agreed to.