Louise Pratt (WA, Australian Labor Party, Shadow Parliamentary Secretary for the Environment, Climate Change and Water) Share this | Hansard source

I rise this morning to support the VET Student Loans Bill 2016 and related legislation. On this side of the chamber we do support the general direction of these bills, but—like with many of the important issues brought to this place by this government—sadly, once again, we see too little too late. We have seen far too little on this issue. For example, in Western Australia, in our home state, we have seen the biggest mining boom in generations, yet accompanying that was an absolute decline in training opportunities. We saw an absolute increase in dodgy private providers ripping off younger and older students, leaving them with massive debts. Now that the mining boom is over we are left with an economy that does not have the skills embedded right throughout the state economy in order to diversify. We have had people under financial stress in the boom and now in the decline they are left with debts instead of qualifications. It is an appalling situation.

Amazingly, the government has finally responded to the wreck that everyone else could see coming, and it has the gall to point to the highly-challenging implementation targets and rushed policies as evidence of its competency on these matters. It really is a shame. The truth, in my view, is that the government has struggled to grasp what is needed to ensure Australians have the very real opportunities they need to train for future market demands in our nation. We have seen five ministers in three years! What more evidence do we need to demonstrate this government's failure to deliver the training and apprenticeship opportunities and technical and vocational education that our nation needs? Where did the $2.75 billion ripped out of TAFE and vocational training actually go? The VET fee situation supposedly meant that students were cross-subsidising that withdrawal of money, but instead what we saw was a massive decline in quality outcomes for students. Why have we seen five ministers in such a short period of time? Is it they perhaps who need training? Why are industry stakeholders still unsure how these changes are going to be implemented in our nation? So much for effective consultation!

But all is not lost. As we all know, imitation is the best form of flattery. Finally this government has adopted some key policies Labor has been calling for which will be implemented in this legislation. The legislation will cap student loans to stop rip-offs; crack down on brokers; link publically funded courses to industry need and skills shortages; require providers to re-apply under new standards, so only high-quality providers can access the loan system; link funding to student progress and completion; and establish a VET loans ombudsman. All of these policies were called for by Labor and they have been copied from Labor. Funnily enough, all these policies all rejected by this government back in May.

So what are the future issues for our nation when it comes to education and training in the VET sector? We know that stakeholders have agreed that these reforms are urgently required. We also know that as a nation we are going to face incredibly significant challenges in transitioning into the new scheme, particularly given the proposed time frame that we have before us. We also know that the draft list of eligible courses has attracted significant criticism, particularly in relation to the performing arts and creative industry courses. This is an issue that has been raised with me by many stakeholders. I think it is a difficult issue because we do value the creative arts in our country and people do need to be able to access education and training. When you invest in the arts, there is an economic and social dividend, and it is one that sometimes our economy fails to count. So it is really important, when we look at the final eligible course list, that it is not part of these bills before us. The shadow minister has written to the minister about our concerns about this draft list. We need to continue to engage to ensure that people can access these courses into the future.

One of the key issues to note into the future is that, by restricting access to student loans, the bills are in fact significantly reducing investment in the vocational education system. Compared to the current system, we have $7 billion less being provided in student loans over the forward estimates, and $25 billion less over the decade. This makes the money that the coalition has already ripped out of vocational education and training all the more problematic.

I am concerned about the loan caps. While loan caps are really important, we do not want to see those replaced with significant increases in out-of-pocket costs for students. Unless other supports within our vocational education and training sector are adequate, those out-of-pocket costs are going to prevent students being able to access the education they want.

As a nation we also very much need a longer-term policy response regarding VET courses and TAFE—beyond the debate we are having today. We need to look at a quality national skills partnership. This is about the funding of TAFE and making sure TAFE has a very secure foothold in our nation. We cannot diversify the economy and we will not have the skills that our economy and community need without a quality TAFE sector. It has been of great concern to me how the proliferation of private providers—many of whom are of good quality but many of whom are not—have ripped away money from students and ripped away the reputation of what was a very important and effective sector. We know that TAFE funding expires in mid-2017. We know that the government is negotiating with the states. But what we need is a public commitment to replacing this agreement so that we can protect our TAFE sector.

This legislation also puts forward the establishment of an industry ombudsman, and that is a really important outcome. However, I am very concerned that, despite the passing of this legislation, many students will continue to be saddled with unfair debt because of the legacy of mismanagement of this issue. Providers have collapsed, and there is no entity for students who have such a debt, for courses they have not received, that they can pass that debt on to or settle it with. For us this is going to remain a really critical policy issue. I find it appalling that students who have been trying to advance their opportunities in the economy and contribute to the community, instead of being on a pathway to improve their lives, have been left without the qualifications they desire. In some cases they have done dodgy courses that have left them without the skills they wanted, and they have been saddled with large debts.

It is a pretty tough environment for young Australians at the moment when it comes to the employment market. In my own home state of Western Australia, youth unemployment is increasing. We are asking students to spend their time studying, engaging in the vocational education and training sector, so that we can diversify our economy and so that they have an opportunity to improve their skills and help us diversify the economy. But under this government there has been a complete abandonment of those students who are trying to do the right thing.

On the other hand, I have been really pleased to see, coming from this side of the parliament, the commitment to greater integrity when it comes to these issues. We have put forward an integrity package to stop the massive waste of taxpayers' money, to prevent price-gouging of students and to improve training outcomes. That is our vision that we put forward some time ago, and the government is only now playing catch-up on that initiative.

Last May, in Labor's budget reply speech that Bill Shorten gave in the parliament, MPs were told that under the Liberals the VET FEE-HELP loan scheme had escalated from $699 million in 2013 to $1.7 billion in 2014. That was a massive escalation when we already knew that there were problems. We needed intervention sooner, but I guess I am pleased that we have the opportunity to pass this legislation before the end of the sitting year this week, because it is urgent. But the priorities of this government are absolutely galling when you look at the fact that it prioritises the passing of the ABCC legislation over and above an important bill like this one. We have thousands of students in our country who are absolutely loaded up with a massive debt for irrelevant qualifications sold to them by dodgy providers—all of that at great cost to the taxpayer as well as to these students. It is these students who are paying the price for the government's mismanagement.

The real question is: what is the government going to do in the long term about the debt that these students have been saddled with in exchange for these dodgy qualifications? Do we really expect them to pay back that money, for qualifications they have not received? We have seen students ripped off by unscrupulous colleges and dodgy providers, with taxpayers being forced to pick up the tab. Some colleges are costing taxpayers more than $1 million in VET FEE-HELP loans to produce a single graduate. It has been an appalling situation. We have seen students at private colleges paying fees of up to $32,000 for things like salon management, $29,000 for project management and $28,000 for marketing diplomas. It is appalling to see these organisations, private companies, that have set up some of these dodgy training providers pocketing massive profits at the expense of students. I was particularly dismayed to see the likes of John Dawkins involved in some of these dodgy practices, particularly given his history in the higher education sector.

We know that in New South Wales you can get an equivalent government provided course in its TAFE sector for things like salon management, project management and marketing diplomas for a little over $6,000. That is what we should be striving for: cost-effective, government provided courses that have a modest fee attached to them that mean that people can get quality education that is matched to the needs of local industry and the community. We do not want to see thousands of Australian students being loaded up with this massive debt but not the qualification they need to find a job.

We also know that in this environment many providers under this scheme preyed on students in appalling ways. In 2014, we saw that the largest private training colleges in Australia were paid $90 million in government subsidies, and yet less than five per cent of their students graduated. That was certainly of great concern and outrage from our shadow higher education minister, at the time, Senator Kim Carr. We saw just 4,181 students at an average cost of more than $200,000 per student. We are now asking questions in this parliament about where that money went. We need to make sure that now and into the future we can stop this terrible waste of taxpayers' money and, indeed, the exploitation of students. What we see here are massive subsidies from the taxpayers to these companies but, at the same time, students being saddled with massive debt. It is extraordinary when you think about where all the money has gone.

It is time to stop the terrible exploitation of students. We need integrity in our system and we need to continue to clean out dodgy providers who have been ripping off Australians, both students and taxpayers, for too long. We have had brokers who have preyed on students, offered free computers and laptops, signed them up to expensive courses and made taxpayers in our country pay the bill. It is why we believe that it is reasonable to put limits on course loans in same way that limits are already in place for university degrees, as was put forward by Sharon Bird, who was the shadow vocational education minister when Labor put forward its election policy earlier this year. It is about Labor putting the interests of students and taxpayers first over and above the interests of companies and other vested interests. We know that under the coalition there has been one winner and that has been unscrupulous colleges. While that was happening, apprenticeship numbers plummeted, all because Malcolm Turnbull slashed a billion dollars from apprenticeship support and programs. We know that this masked massive cuts in the VET FEE-HELP scheme and it also masked massive cuts from our vocational education and training sector. We need to continue to rein in taxpayer subsidies to private companies and restore integrity to our vocational education and training sector. It is a critically important thing to do.

What we in the Labor Party want to see is caring for people and their jobs rather than corporate profits in vocational education training companies. If you look at the government's so-called accomplishments in this portfolio, we have seen the graduation rate fall. In the largest 10 private providers, the graduation rate was under five per cent. That represented over $900 million in federal money. We have seen students tricked into racking up massive debts with little hope of finding a job, we have seen an explosion in short course and online courses that are not worth a cracker, we have seen an estimated 40 per cent of VET FEE-HELP loans never being repaid and much of this is because of their inaction.

We know that in this place we have heard all of this before. But you will continue to hear this over and over again from this side of the chamber because we care about people, we care about jobs and we care about quality education and training. In the end, this is about ensuring that all Australians have an opportunity to gain access to quality, market-relevant education and training. We need trust and confidence that training is worth something and that it is affordable. Thank you.