Stirling Griff (SA, Nick Xenophon Team) Share this | Hansard source

I rise to briefly speak to the VET Student Loans Bill 2016 and related bills. This package of reforms is aimed at scrapping the existing VET FEE-HELP program and introducing, in its place, a sustainable loans program. According to the Minister for Education and Training, these reforms will deliver an estimated reduction in total outstanding HELP debt of more than $7 billion across forward estimates, and $25 billion over the next 10 years. This is a very significant budget saving. But, given that these reforms are necessary due to the mass rorting of the current system, you have to ask why absolutely nothing has been done since the last raft of reforms in 2012.

Many billions of dollars of taxpayer money has been wasted due to inaction from both Liberal and Labor governments—particularly over the last four years. Looking at figures provided by the Minister for Education and Training, the scheme blew out from costing $325 million in 2012 to costing a staggering $1.8 billion in 2014 and an even more mind-blowing $2.9 billion in 2015. What will 2016 show? Over the same time, student numbers jumped by almost 400 per cent, student fees doubled and student loans increased by a whopping 792 per cent. When we go back just a few years earlier and compare the number of students accessing VET FEE-HELP then to the number accessing it in 2015, we see a jump of 5,000 per cent. That is an increase in student numbers from just over 5,000 to 272,000.

There is absolutely no question that much of this increase—and the resultant cost to taxpayers—is due to wholesale rorting by unscrupulous training providers and brokers. This certainly has to stop. That is, of course, the reason for the bills, but it does not excuse this government's failure to address the wholesale rorting sooner. Another result of this rorting is that many students are now left with significant debts which will, in many cases, probably never be repaid. Some were signed up for thousands of dollars of loans for courses they did not need or would never complete. Some deceitful providers and brokers even signed up Indigenous Australians in remote communities, elderly people living in retirement villages and people with disabilities—sometimes without their knowledge. Why was the government asleep at the wheel with this issue? Why did the Department of Education and Training not have effective auditing in place? Does it now truly have effective auditing in place?

Vocational education and training is pivotal to ensuring effective employment outcomes and qualifications for students. Vocational education and training must take into account the future needs of our economy. According to government, under the new scheme course eligibility will be focused on courses that have a high national priority, meet industry standards, contribute to addressing skill shortages and align with strong employment outcomes. The minister will have the power to approve and/or change the course list through legislative instrument.

The Senate Standing Committee on Education and Employment has urged the government to give consideration to expanding the number of approved courses where sufficient justification is provided. It would like to see course eligibility expanded to include areas where there are skills shortages and a need to provide specialist training, always ensuring courses align with strong employment outcomes. These recommendations are consistent with the views expressed by the majority of stakeholders who provided evidence during the committee's inquiry process, and the stakeholders that I and my colleagues have met with individually.

During my briefings with the government, I sought feedback in relation to the rationale behind all of the courses the government proposes to cut from the eligible course list. According to the information provided to me by the minister's office, 506 courses have been superseded and deleted; 364 courses have been superseded but are equivalent to a current course; 1,468 courses have been superseded, with no equivalent current course; and 478 current courses have been excluded on the basis that they do not meet the new criteria. To meet the new criteria, courses must be on at least two state and territory skills lists or be required for specific licensing requirements or be STEM related—that is, science, technology, engineering and mathematics related. The government has justified the criteria relating to the two states' skills lists on the basis that there are a few areas where two states would not share the same industry needs. For example, in my home state of South Australia, if South Australia requires particular skills in ageing, the same is likely to be true for Tasmania or another state. Equally, if Western Australia requires specialised mining skills, Queensland is likely to require them as well. The fact that the addition and/or removal of eligible courses will be dealt with by way of regulation and therefore be subject to disallowance should, according to government, assist in ensuring appropriate course listing and funding.

I also note that the government has adopted the committee's recommendations to establish a VET ombudsman. This is certainly a welcome development and should provide further recourse for students in terms of resolving disputes that arise under the existing scheme as well as the new scheme. It should also provide an opportunity for ongoing reviews and, importantly, public disclosure of information relating to the operation of the VET student loans program.

At this stage I would like to note two concerns around the proposed time frames that apply under the main bill. The first is in relation to students. As we know, the VET FEE-HELP scheme ceases on 31 December this year, and those students that are currently receiving VET FEE-HELP loans will fortunately have access to grandfathering arrangements for a further 12 months. Students undertaking eligible courses under the new scheme will be able to access it from 1 January 2017. The obvious problem with this is that we have somewhat tight timing, which will be very difficult for some students, who will be caught by the changes because they have to deal with things over the coming four or so weeks. This is very much a tough ask, and we look forward to hearing from the minister how the department intends to effectively communicate with students.

The second concern relates to TAFEs, publicly owned RTOs and Australian universities that are approved VET FEE-HELP providers. Whilst these providers will not be required to apply for approval under the new scheme, the scheme timing will still impact them and their students. Indeed, TAFE has sought a further 12-month exemption from the new scheme in order to ensure a smooth transition and to make sure the 140,000 students currently receiving VET FEE-HELP are able to move to the new scheme without disruption. This would of course mean exempting TAFEs from the proposed eligible course list and loan caps for a further 12 months. Given that TAFEs make up around 15 per cent of student loans, there is certainly some merit in this position, and my colleagues were all supportive of the amendments proposed by the opposition, provided that TAFEs are subject to appropriate transparency and accountability measures, which we also considered to be extremely important.

It is also worth noting that the same sorts of concessions have been sought from other providers and, again, we were keen to hear from government in relation to any concessions that could have been provided to them, particularly given the dire ramifications that many of them are now facing. Of course, we know that there is no prospect of any of the amendments or concessions I just mentioned getting up, because the government and the opposition, who are equally responsible for the rorting mess, have come to a cosy arrangement to let the bills go through really without any significant change. Neither want to take responsibility for it; instead, they are only interested in pointing the finger and laying blame at each other's feet. This is an absolute disgrace that will be to the detriment of tens of thousands of students.

Unlike the government and the opposition, my colleagues and I remain committed to a considered debate on a later start date to ensure, as far as possible, that students in particular are not adversely impacted by the government's proposed changes. As such, I foreshadow that I will be moving an amendment to postpone the implementation date of the scheme, something that the government or the opposition should have done themselves. I urge the opposition to put aside the petty politicking and support this amendment for the sake of these students. Really, there is no point standing back after the fact saying, 'I told you so' when you have the opportunity to fend off that threat right now.

There is absolutely no question that reform in this space is well overdue. The fact that the existing scheme has blown out to a mind-boggling $2.9 billion because the government has been asleep at the wheel is evidence enough of this. There are some key elements of the new scheme that will go a long way towards providing value for money for students and taxpayers alike, and stamping out the shonky practices of dodgy training providers and brokers is extremely important. But we must ensure that these changes do not come at the expense of community and industry needs and potential employment outcomes. Similarly, we must ensure the changes do not come at the expense of those course providers that continue to do the right thing, of which there are many. There also needs to be an emphasis on appropriate reporting and transparency to ensure any identified issues are addressed sooner rather than later.

In closing, again, I wish to place on the public record our disappointment that the government and the opposition have seen fit to do a deal that effectively constrains any sort of worthwhile debate and further changes. Both have the opportunity now to support the amendment that I will be moving shortly and ensure that the scheme is not a complete disaster. If this amendment is not supported, there is absolutely no doubt that innocent training providers will hit the wall; their businesses will collapse, and the tens of thousands of students they enrol will be left significantly out of pocket.