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

I thank all contributors to this debate on the VET Student Loans Bill 2016 and related bills. It is important to firstly remind ourselves why it is we are here and why it is we are doing this. We are doing this to close down the VET FEE-HELP scheme and to replace it with something far more targeted. As many have acknowledged, VET FEE-HELP has been a gigantic failure. We have seen enormous price rises, student growth jumping by 5,000 per cent, course costs tripling in some instances and the value of loans written against the Commonwealth blowing out from $26 million to $2.9 billion. The former Labor Attorney-General and now ASQA commissioner, Michael Lavarch, said during the Senate inquiry:

I have been in and around public life for a long time. I think I can fairly say that this was the worst piece of public policy I have ever seen.

VET FEE-HELP must come to an end. It must come to an end as soon as possible, and that is why the government has introduced this legislation to close this scheme down at the end of December.

We have, of course, taken action to try to fix it along the way. We have applied around 20 measures whilst in government to try to fix this program. Sadly, though, our decision is that a full reset is required. We have seen far too many brokers and far too many providers ripping off far too many students and taxpayers and destroying and hurting the reputation of the VET system at the same time. That is why on 5 October I announced the new VET Student Loans scheme as a replacement for VET FEE-HELP. It is a new scheme which will still provide financial support to enable genuine students to receive high-quality training—training that aligns with the skills needed in the workplace and the economy. There will be a higher bar of entry for providers; there will be tighter eligibility for courses and their relevance to the skills needs of the states and territories; there will be caps on loans that are related to the efficient cost of delivery of the courses; there will be restrictions on brokers; there will be tougher compliance and investigatory powers; there will be limits on third-party delivery of courses to approved providers; and there will be requirements in relation to student progression.

We want to ensure that students are getting what they pay for. We have inserted provisions to grandfather and protect those students currently in the VET FEE-HELP scheme to ensure that they are supported into the future to complete their studies. We have, of course, spent the last couple of days debating some very contentious legislation. To take a couple of stakeholders from that legislation and look at their views in relation to this legislation, we see broad agreement. Master Builders Australia, on the one hand, said to the Senate inquiry that they 'support the federal government's efforts to overhaul the flawed VET FEE-HELP scheme and believe the introduction of VET Student Loans will go further to protect taxpayers' dollars and students'. The ACTU, an opposite voice in some of the debates we have had in the last couple of weeks, equally said that they 'view the bills being considered as a broadly positive first step towards repairing the broken VET system and restoring public and industry confidence in the ability of the sector to deliver high-quality skills training'. We also have consumer advocates, such as the Consumer Action Law Centre, welcoming the government's package of reforms to the VET FEE-HELP loan scheme from a consumer protection point of view.

So, with industry, with unions and with consumer advocates all on side, I am pleased that this legislation looks like it will enjoy support across the parliament. I particularly thank the opposition for the constructive negotiations and discussions that we have had. I note that the government is bringing some amendments to this bill—amendments that we have worked on as a result of discussions with the opposition, particularly in relation to the adoption of an ombudsman advocated not only by the Labor Party but also by the Greens and, indeed, committed to some time ago by the government.

Our policy is different from that which Labor took to the election, despite what some in the chamber have said, and we have gone far further in restricting provider access, restricting courses to areas related to economic activity and ensuring that loan fees and loan caps are aligned to the cost of delivery of those courses. We have committed to a number of review mechanisms to make sure we get the methodology right in the future.

I note contributions particularly from Senator Hanson and Senator Leyonhjelm about repayment rates in relation to HELP loans. I would urge them to take note of comments I made that such matters are being considered in the context of higher education reform and can be considered at that time. I commend these bills to the Senate—bills that will clean up a great fraud and corruption in the VET system, which has rorted taxpayer dollars, hurt many vulnerable Australians and harmed the reputation of the VET sector, and that will instead give us a far more effective, far more targeted VET Student Loans program into the future.