Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Hansard source

Labor supports the thrust of these bills but, in so many ways, it is a case of 'too little, too late'.' If only this incompetent government had acted sooner, billions could have been invested in apprenticeships and TAFE instead of being wasted on dodgy private providers.

The government was advised as early as 2014 about the serious problems that were emerging. Over the last three years, the coalition has shown they simply do not care about technical and vocational education, or about the TAFE system. They want to protect government grants to wealthy private schools while screwing public schools and the TAFE system. This mob sat on their hands while dodgy private providers ran rampant—while students were ripped off and were saddled with massive debts. The government have been missing in action, too consumed by their own internal divisions. And while they were consumed by their internal divisions, the crisis in the VET sector has been on the front page of every newspaper, and leading programs on every TV station. The cost of the VET-FEE HELP scheme has been blowing out—and the government were focused on how we could get rid of one dud prime minister and replace him with another dud. That has been the focus of the coalition. The ministers in this portfolio, including Ministers Pyne, Ley and Ryan, sat back in the hope that competition and the market would fix the problems. But competition and the market made the problems worse. There is nothing in this bill, the VET Student Loans Bill 2016, to restore the $2.75 billion the Liberals have ripped out of the TAFE skills and apprenticeship systems—there is nothing to protect TAFE, and nothing to boost the apprenticeships and reverse the 134,000 fall in apprenticeship numbers.

The government has so far failed to consult properly on the implementation of these changes. There are many important decisions for the minister yet to make. The time frames the government has set themselves for implementation are incredibly ambitious. We will hold this government to account, and make sure the rules and the determinations made by the minister are fair and effective. We will be standing up for students and for TAFE because, at the end of the day, the capacity of our nation to compete internationally by developing a highly skilled workforce is essential to both individual wellbeing and national competitiveness.

Before the election, and in response to the exploitation by business of vulnerable Australians, Labor proposed VET reforms. Now the government has copied them. Basically, the government has plagiarised Labor policy in this area: capping student loans to stop rip-offs—copied; cracking down on brokers—copied; linking publicly-funded quotas to industry need and skill shortages—copied; requiring providers to reapply under new standards so only high-quality providers can access the loan system—copied; linking funding to student progress and completion—copied; a VET loans ombudsman—copied, at last. This is another case of Labor leading the debate while the coalition concentrated on internal division and chaos. This is a complete 180 by this government. It is the mother of all backflips. In May, the Liberals were falling over themselves to criticise Labor's policy proposals; today, they are trying to take credit for them.

When Labor announced a policy of capping student loans, the world's worst treasurer, Scott Morrison, said it would, 'pull the rug out from under the private education industry'. It just shows you how much Treasurer Morrison knows about the industry or the operation of the market. Then Minister Scott Ryan called it 'classist' policy—that this was a class attack!—and he called it a 'thought bubble,' and said that it would lead to upfront fees for VET students. Senator Ryan also went on to call it 'impulsive,' 'ill thought-through,' ill considered,' and 'a sound bite'. Senator Simon Birmingham said it was 'an ill-considered flat pack'—whatever that means. Before the election, Senator Birmingham said a price cap 'would simply, in effect, establish a government-sanctioned price'. He said: 'When you set a price cap, everybody simply shifts to the price cap.' The same Senator Birmingham is now proposing three different price caps: $5,000, $10,000 and $15,000.

The system has fallen into crisis under the coalition's watch. In 2014, the graduation rate for the 10 largest private providers was under five per cent, and $900 million was spent in federal money—that is, over $215,000 for every graduate. Students were tricked into racking up massive debts for courses, with little hope of ever getting a job because of the courses that they had done. Ten thousand qualifications were cancelled in Victoria because they were not worth the paper they were written on. An explosion in short courses and online courses and a decline in quality—that is what the coalition presided over. It is estimated up to 40 per cent of VET-FEE HELP loans will never be repaid, and much of this is because of their inaction. There have even been reports of students being offered online training as a jockey—without riding a horse! Students have been signed up for loans without their knowledge. All of this under the stewardship of the coalition—but we needed a real steward there!

VET FEE-HELP loans have blown out from about $700 million in 2013 to a staggering $2.9 billion in 2015. Look at the figures for VET FEE-HELP loans, Mr Acting Deputy President: $700 million in 2013, $1.8 billion in 2014 and $2.9 billion in 2015.

At the Senate inquiry into these bills there was clear evidence that problems emerged in the VET FEE-HELP system in 2014 and the government knew about them. I will quote from the CEO of the Consumer Action Law Centre, who presented to the hearing:

… particularly during 2014 … we started to receive a spike in complaints related to the marketing of VET products …

So it was not a secret that there was a problem but there was still no capacity or action from this government to do anything about it.

The Australian Competition and Consumer Commission official said:

We started to see complaints in mid-2014 … They started to come out as a bit of a trend in that mid- to late 2014 period—

as I said, the period when the coalition were in government.

Both of the agencies, ASQA and ACCC, started to get concerns through the volume and nature of specific complaints towards the end of 2014. They talked to us at that time and they continued expressing those concerns into 2015. And that was the pattern for education and training officials at the Senate inquiry.

Senator McKenzie made one of her great interjections at that committee hearing. She asked an ASQA official, 'Did you advise the then government?' The Australian Skills Quality Authority official said, 'In the second half of 2014, yes, we did.' So this government were warned about the problem; this government knew about the problem; this government did nothing about that emerging problem. They were so consumed with fighting each other and jockeying for positions in the future that they did not deal with this emerging problem.

Since the government were told about the problem in the VET FEE-HELP system Minister Pyne, Minister Ley, Minister Hartsuyker, Minister Ryan, Minister Birmingham and now Minister Karen Andrews have all had responsibility for this portfolio—a revolving door of ministers in the coalition. There has been no capacity for continuity in the system, no capacity for any continuity of ministerial oversight. No proper action was taken to deal with this because no-one had their feet under the desk long enough to even read their briefs. They were all too consumed by the disintegration that was taking place in the Abbott government.

The parliament is now considering rushed reforms years too late. The coalition simply do not value TAFE and vocational education. The coalition like to pretend that VET FEE-HELP was a problem created by poor program design. They should remember that it was former Prime Minister John Howard who first introduced VET FEE-HELP and they voted for its expansion in 2012. If they were always so certain about the problems, why did they invent it, why did they support its expansion, and why didn't they fix it on day one back in 2013? The truth about their failed oversight of the scheme is a deeply inconvenient one. The truth is a combination of incompetence, internal division and ideological commitment to market forces.

One of the proposals that we support—one of our proposals that has been copied by the coalition—is for an ombudsman and for transparency. Labor has been calling for an ombudsman for a long time. Almost a year ago in the Senate the minister, Simon Birmingham, gave an undertaking that he would establish one, but when the bills were presented to the House there was no provision for an ombudsman. The minister was at that stage probably too busy handing public money over to former Senator Day for a rorted scheme in South Australia. There was no provision for an ombudsman despite the regulatory impact statement for the bills declaring the idea of an ombudsman to be the most popular idea put forward by the government in their VET FEE-HELP discussion paper. The best idea that came up was a cloned idea from Labor, yet they could not even get it into their bill in the House of Reps. That is why Labor moved amendments in the House to establish an ombudsman.

Having an ombudsman is a practical way to help students who have been ripped off, students who have been left with huge debts and nothing to show for them. Ultimately, the point of the ombudsman must be to help students clear unfair debts and get redress for their exploitation. We cannot give students their hopes and dreams back. We cannot give them their time back. The least we can do is to make sure there is help at hand so they can get their money back—money that was ripped off under this incompetent government. It is a relief that at last the government are acting on their word and moving amendments today that will allow for an ombudsman to be set up. Labor will continue to hold the government to account to make sure that the legislative changes needed to establish an ombudsman with the right powers to protect students are brought forward by the government with urgency. The shadow minister has written to the minister and sought an assurance that the ombudsman will be up and running by mid-2017 and that it will be properly resourced.

We are very pleased that the government is bringing forward a version of the transparency and reporting amendment moved by Labor in the House. This amendment will make sure the VET FEE-HELP debacle can never happen again. If a minister is not doing their job—even if five ministers are not doing their jobs and even if they are incompetent coalition ministers in power—information about the operation of the scheme will be made public twice a year. The sector, academics and the parliament will be able to keep a close eye on what providers are doing and what is happening to taxpayers' money. It is a sensible amendment and Labor is pleased that the government has decided to support it.

We also welcome the changes the government is bringing forward in light of the Senate inquiry finding to strengthen the regulation of marketing practices and the banning of brokers. The inquiry heard disturbing evidence about the risks of exploitative marketing practices moving in-house at training organisations and about brokers finding ways to circumvent the proposed ban. This must be stopped and we will support the government in stopping it. The details will be in ministerial rules yet to be released, but Labor's position is clear: we want brokers to be banned and we want dodgy marketing practices like commissions and kickbacks to be stamped out. We will be watching closely to make sure the minister's rules are thorough and effective in stamping out rorters and shonks. It is great that the coalition have suddenly found that you do need proper regulation and that you do need so-called red tape when the market is plunging in there to rip off students.

The Labor amendments that we will be moving in the Senate will be allowing the minister to grandfather VET FEE-HELP students past the end of 2017 and exempting TAFEs from the proposed course and loan caps for determination for one year until the end of 2018. By the minister's own estimate, over 140,000 students will need to be grandfathered in the VET FEE-HELP scheme next year so that they can finish their courses. It stands to reason that many of these students will not finish their studies by the end of 2017 when the grandfathering abruptly ends. It could be because they are in part-time study, they have to take time off for illness or family reasons, their provider or their course is not going to be eligible after next year or simply because they are studying one of the many courses that run for more than 12 months. The impact of this dead stop to grandfathering at the end of 2017 will be huge.

When it comes to TAFE Labor make no apologies for backing our quality public VET provider. TAFE is the backbone of the system and, along with innocent students, TAFEs and TAFE teachers have suffered the most in recent years from coalition cuts and mismanagement at a state and federal level. The national partnership agreement on schools which funds TAFE is set to end in the middle of next year, but this incompetent government still has not committed to replacing it at all. This uncertainty is crippling for TAFEs and TAFE students. That is why we are moving an amendment to exempt TAFE from the eligible course list and the loan caps for one year until the end of 2017. This will allow time for the government to strike new funding deals with the states, if indeed they are going to do that at all. TAFE has not been part of the VET FEE-HELP problem. Over 95 per cent of the complaints to the Australian Skills Quality Authority about quality relate to private providers. Public providers, including TAFEs, make up less than five per cent of the complaints.

This is a bill that we will support. We will push these amendments and it is absolutely essential that we protect students and that this incompetent government gets on with the job. (Time expired)