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

Senator Cameron is correct. The government does not support these amendments. But it does support and recognise the contribution that TAFEs make and that they have a lower risk profile and a central role within the sector. That is why the government has determined that TAFEs, Australian universities currently approved as VET providers, and training providers owned by the states and territories will be granted automatic approval to the new VET Student Loans program.

However, the amendment moved by Senator Cameron on behalf of the Labor Party would mean that TAFEs not only have automatic approval into the program but also, for the next 12 months, are not bound by the eligible course list that would apply to all other providers and that they face no fee caps over the next 12 months. In essence, TAFEs would be able to continue to operate exactly as they do currently under the current VET FEE-HELP scheme. Let us be clear: the Labor Party's amendment is to say, for a large part of the market, they want to extend the failed, rorted, abused VET FEE-HELP scheme for another 12 months.

Senator Cameron said, 'TAFE has not been part of the VET FEE-HELP problem.' Let me go through some information to indicate that though TAFE may not have been the worst offender there have been problems, indeed, in the TAFE sector and they have been prone to abusing the VET FEE-HELP program, sadly, like many others in the sector. That is why the government believe that although we want to keep them in the system and give them automatic entry, we are not proposing that they should have to meet lesser standards than other providers once they are there.

For example, the 2016 South Australian Auditor General's annual report identified over 90 instances where students at TAFE in South Australia had withdrawn but still recorded a pass grade. Complaints against TAFE SA were up nearly 80 per cent on the previous year, with more than one-third related to service quality or delivery. Over at Melbourne Polytechnic, one of the TAFEs in Victoria, VET FEE-HELP student numbers grew between 2012 and 2015 by 174 per cent. But total tuition fees from those students grew by nearly 900 per cent during that time, showing extraordinary fee growth in the deregulated environment that they were operating in. At the same time, their three-year completion rates dropped from just under 40 per cent over the three years to 2013 to less than a quarter in the same period to 2015. So we saw enrolments go up, fees go up even higher, but completions go down.

They were not alone. New South Wales TAFEs' average three-year completion rates were, between 2011 and 2013, and between 2012 and 2014, less than eight per cent. Evidence given to the Senate inquiry confirmed TAFEs, including New South Wales TAFEs' OTEN arrangement, was the equivalent of using a broker to enrol students, particularly in online courses where completion rates were particularly bad.

My department has been successful in having commitments from a number of TAFEs to remit millions of dollars in student debts, which have been related not only to private providers but also to public providers. Just last week, a student called in to Triple J radio having discovered that she was charged $12,000 by a TAFE for an online course from which she had withdrawn—because she was unhappy with the course—before the census date, yet she was still charged for that. The department has been in touch, subsequently, with the student and with TAFE NSW who, like many other private providers where these challenges have been made, have happily agreed to remit that debt.

TAFEs also do not universally offer qualifications aligned to economic need, and yet this amendment would ensure it was free-range—to continue to offer unlimited numbers of enrolments and loans across reflexology or aromatherapy or a number of the courses that are not on the current list. Overall, between 2012 and 2015, the number of TAFE VET FEE-HELP students grew by more than 250 per cent—phenomenal growth, in terms of enrolment in TAFEs. The number of TAFE VET FEE-HELP tuition fees grew by 375 per cent, from $85 million to $404 million, significant growth and growth in fees well above the growth in enrolment numbers. VET FEE-HELP loan amounts grew by nearly 300 per cent.

The government oppose this amendment because we do not think it is fair or reasonable to say TAFE has not been part of the VET FEE-HELP problem. TAFE has not been as big a part of the VET FEE-HELP problem as those who have clearly targeted vulnerable Australians and rorted them. But TAFEs have clearly inflated prices, and have clearly pursued enrolments—and enrolments of students who were not likely to complete their courses in a reasonable or expected period of time. Therefore, we think it is only reasonable, in transitioning to a new program, that TAFEs meet the same standards we expect of private providers. They are getting a free pass into the new program because we recognise that they have had fewer compliance issues, in general, than private providers, but we see no reason they should have lower compliance standards once in the new program than anybody else who gets admitted to that new program.