Robert Simms (SA, Australian Greens) Share this | Hansard source

The VET FEE-HELP system is broken and rotten to its core. What was originally designed as a model to expand access to training for Australians has now become an untameable beast that is ripping off students, ripping off taxpayers and corroding the integrity of our entire VET sector. Since the full transition to this demand driven entitlement, VET FEE-HELP has exploded in cost, rocketing from $300 million in $2012 to $650 million in 2013, and then almost tripling in 2014 to nearly $2 billion of taxpayers' money—$2 billion of taxpayers' money; $2 billion of student money. Current estimates put it at $3 billion to $4 billion for the year 2015. What a huge amount of money.

What do students and taxpayers get for this huge investment? What do they get? Well, they get a never-ending conga line of rip-offs and scandals and rorts. If you are in any doubt about that, Mr President, just pick up the newspapers and watch the news. This is a scandal. In fact, the Prime Minister himself has described it as a scandal. It seems everybody in this country recognises what a scandal this is and recognises that we need to take action.

Let me recount a few of the incidents that have been reported to the chamber. Only last week we found out that third-party brokers were posting fake job ads. When applicants inquired and applied for the job, they were told they would need a further qualification to be able to take up the role—a qualification which would handily be provided by the RTO employing the broker. Earlier this year, reports surfaced about brokers signing up some people with intellectual disabilities—signing them up to five-figure loans to study courses they did not understand they were enrolled in. They were signed up when they did not understand the terms of the agreement, the complexity of the HELP system and income contingent loans, or the expectations that students would have of their education providers.

Indeed, it has become clear that that is the business model of some of these unscrupulous operators—preying on people who do not understand the terms of the agreements, getting them to sign along the dotted line when they do not understand what they are signing or what the implications are. What disgusting and unethical behaviour! This is the kind of behaviour that has been fostered by the lack of regulation and the hands-off approach that the government has taken—but, of course, it was the Labor Party that set this system in motion. I am absolutely disgusted by this sort of behaviour and furious that this was ever allowed to occur within the VET model. Indeed, the Greens have been speaking out against this for some time.

In my home state of South Australia, the company iEducate has been going around to schools, particularly some of those in lower income areas, offering inducements to direct students to study their courses. A letter that my office obtained shows iEducate offering students money for signing up to their courses. Part of the letter reads:

There is no limit to the number of students you may enrol, therefore we would pay your school a $5,000 grant should you successfully enrol ten students, provided they pass the census date.

'Provided they pass the census date, there is no limit to the number of people we will enrol—just sign up.' They also offered potential students free laptops.

This vulture-like behaviour is just another example of the unethical business model being practised by these huge providers—luring students away from school and saddling them with huge debts even before they turn the age of 18. How scandalous that is. There are further stories of students being drawn in by inducements like laptops and iPads, even after the government's latest round of reforms. I say 'reforms', but they fell pretty flat in terms of addressing the needs of the sector. While before the reforms students were told they were free, now they are told that the laptops and iPads are simply loans that the RTO would never attempt to recover. So it is kind of an unlimited loan: 'Here's a laptop—don't worry about paying it back.'

Hundreds of students have signed up to a class action against Evocca College for providing substandard courses and using unethical and non-transparent market practices. Students would be routinely told that degrees would cost half of what they would actually cost. Evocca had the gall, the hide, to say in their submission to the committee inquiry into this bill that students are intentionally misusing the system and that one way to fix it is to lower the repayment threshold. This is blaming the victim, of course. They do not take any responsibility for their unethical behaviour. Madam Acting Deputy President, can you imagine giving a $40,000 student loan to someone living on $30,000 a year—right on the margins of being able to make ends meet? What nonsense that is. That really is victim blaming at its absolute worst.

Despite the scandals and despite the rorts, what sorts of outcomes are we getting? If we put those things aside, what sorts of outcomes are we getting? We are seeing plummeting graduation rates, plummeting levels of skills training and exploding student debt, much of which will fall on the taxpayer. It is the taxpayer who is going to be carrying that burden.

Last month the National Centre for Vocational Education Research established that in the early days of the scheme only 21 per cent of students eligible for a VET FEE-HELP loan completed their courses—just 21 per cent. How embarrassing that is. For those doing full-time online courses in management or commerce, the graduation rate was just eight per cent. What an appalling indictment on our training system that is. What an embarrassment that is. But unfortunately these incredibly low graduation rates are just the beginning of this sordid tale. Such is the lack of confidence in the current VET sector that often the degrees are worth less than the paper they are written on. Businesses know students are not being equipped with the necessary skills to graduate, and students are then coming out and floundering around with huge debts, worthless degrees and job prospects that are being damaged rather than enhanced.

The collateral damage from this VET FEE-HELP experiment is enormous. The human cost is enormous. There is expected to be over $1 billion in dodgy loans that will be unrepayable and which will now be footed by the Australian taxpayer, and that is only for students who are expected to never earn enough to meet the income threshold. Those who are unlucky enough to earn over $54,000 per annum must now repay tens of thousands of dollars for their worthless qualifications—qualifications that have not even contributed to their skills or employability.

VET FEE-HELP has failed. The two national agreements which were part and parcel of the VET FEE-HELP rollout espoused the following aims. They said they would improve training accessibility, affordability and depth of skills. They said they would encourage responsiveness in training arrangements. They said they would assure the quality of training delivery and outcomes, with an emphasis on measures that give industry more confidence in the standard of training delivery and assessment. They said they would provide greater transparency through information to ensure consumers could make informed choices and governments could exercise accountability.

Well, how did they do? How did they meet these aims? Is training more affordable? No, not for the taxpayer, and certainly not for students, with the blow-out in unregulated course fees. Is training more responsive? It is responsive to the demands of the for-profit rent seekers perhaps—responsive to the needs of this for-profit industry—but certainly not responsive to the needs of the students and certainly not providing higher-quality education. The sector has never been held in greater disrepute. Even many in the private VET industry are now calling for further regulation and greater transparency so that consumers can make more informed choices. Even people in this sector—dodgy providers—are coming out and saying they want more accountability, because even they recognise that it is not working. How laughable.

The measures before the Senate today are like putting a new coat of paint on a car that has a cracked engine. The car is broken, and it does not matter how many racing stripes you paint on it; it will not do what is was designed to do—in fact, this car really is a bomb. The government needs to tear the system down, go back to the drawing board and start again. Labor's amendments are an improvement, but they will not fix a broken system. This is the result of a flawed incentive structure, where a demand driven entitlement is combined with lack of information and then a profit incentive. You can try to regulate it, you can try to provide more education, but the for-profit shonks will always find the gaps. If there is an incentive there, there is always an incentive for people to do the wrong thing. Neither Labor nor the coalition has their hands clean here. We need to stop playing politics with our students' future. We need to rethink how we supply skills training in this country. We need to put a stop to this broken system and start again.

The Greens are committed to seeing the end of the VET sector being used as a political football. We want to actually fix this broken system. While the Labor and Liberal parties have been scoring political points off each other over who is more to blame—Labor set it up while the Liberals have sat on their hands; we know all of this—at the end of the day it is students who are being caught in the crossfire; it is students who are being duped out of getting the quality education they thought they signed up for. They are not getting what they paid for. Many more have been lured into courses they never wanted or never needed, and even more are now straddled with debt and worthless degrees.

While we recognise that this bill will not come close to solving all the problems, we do believe that it will address some of these unethical practices, and we believe it is important that we give students some level of clarity heading into the new year. The system needs to be redesigned from the ground up, and hopefully this bill will provide the breathing space to allow that to happen. But the position of the Greens has always been that we do not want to see mere window dressing; we want to see substantial changes to this broken sector. That is why we have been calling for an end to public money going to for-profit providers. It is not accountable. The Australian taxpayer has no oversight over how the money is being spent, and we cannot control the education outcomes. That is a broken model. Once you start giving public money to for-profit providers to start rolling out education, you are really playing with fire. That is the position the Greens have been taking in this debate, and we are the only voice pushing that argument in this debate as the Labor and Liberal parties continue to clamour towards privatisation of our education system.

But we do welcome what the government has put forward in this legislative response. It is a move in the right direction in terms of reining in a broken sector, but we need to go much further than this. We need to end public money going to for-profit providers, and only if we do that will we achieve what Senator Carr has talked about: turning off the tap. We need to turn off the tap for the for-profit providers to ensure that we have a quality education system in this country.