Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Hansard source

Thanks, Senator Leyonhjelm, for the question. The accounting of student loan debt is a complicated process in terms of the budget treatment because the government charges a 20 per cent fee on VET FEE-HELP loans, and will continue to do so under these proposals for VET student loan debts. That fee is accrued as a further asset to the Commonwealth on the pathway through. Because we are actually reducing the value of loans that will be written by the Commonwealth to students by a significant volume over the forward estimates, that means the government will not in essence be charging those fees and will not therefore be building an increased asset base of debt as a result of charging that 20 per cent fee on top of the loan.

That said, I do not want to be too cute about the accounting treatment. Of course, this is a more tightly controlled program that we are putting in place, and so we have committed additional resources to the implementation of the program and to the compliance measures that surround the program. Once it is firmly established and up and running, I do not anticipate that, in an ongoing sense, it should necessarily require more departmental expenditure than the VET FEE-HELP program did in the past, although it may be that, in relation to some of the compliance activities which were so hopeless in the past and allowed some of the rorting to occur, along with poor legislative provisions, there will need to be some increased investment there. We have applied, though, additional cost-recovery measures that will flow through into the future as well, to make sure that some of those actions are in a sense more closely netted out for the Commonwealth in terms of the assessment of the quality of providers and the information that they provide to us.