Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I previously started my speech on these bills, but, as I only had 30 seconds, I might just take it from the top, if that is okay. The VET Student Loans Bill 2016 and related legislation, of course, have been a long time coming. We have known for quite some time that the VET students loans scheme is a program that has been rorted consistently since its beginning back in 2012. We know that despite warning that deregulating this type of loan scheme across providers—particularly those who were set to make profit from these training programs at the expense of students—would lead to rorting the system. There was a lot of warning about it, and that is what we have seen. It is a core principle of the Australian Greens that all Australians have access to high quality and well funded public education, from childhood through to university, and vocational education and training is an essential part of that learning future and direction. We will continue to work tirelessly in the parliament to guarantee access to high quality university and VET training for all Australians.

The rampant rorting of the VET system since it was deregulated just a handful of years ago is one of the most extraordinary and damning examples of failed privatisation that Australia has ever seen. Experts warn that funnelling money into the private education system would have disastrous results, and that is exactly what has happened. The current system is unworkable, and the Australian Greens support reforming the vocational education and training sector—in fact, we have been calling for it for a number of years. The road to recovery for the VET sector will be a long and difficult one. The damage done by years spent abusing the trust of the Australian community cannot simply be wound back easily. The onus is now on the sector to adopt reform, and on the Labor and coalition parties to accept the mistakes of the past, to clean up now the extraordinary mess they have made and to ensure—this is very important—that there is proper independent oversight that has teeth.

Sadly, however, it is students and vulnerable Australians who are caught up in this chaos. They are the ones who have suffered the most. With that in mind I am pleased to see that the government has finally come to support the establishment of an ombudsman for the VET sector. This is something that the Australian Greens have campaigned for long and hard, and we are thankful that common sense has been realised in the minister's office and that the government will move to establish an ombudsman in the early New Year. This is a much needed reform that has taken far too long to reach reality.

At the core of the issues around the deregulation of the VET sector is the fact that public money should never have been given to private for-profit education providers. The government should instead be properly funding our TAFE colleges, making our education and training available to everybody and not just using taxpayer funds to prop up private for-profit education providers, many of which have shown they simply cannot be trusted. TAFEs are and should always be the backbone of the VET sector. Recognising that, and the important role that they will play in the wake of these reforms being made for the for-profit sector, I also believe that TAFEs should be given greater flexibility to provide ongoing education to students whose courses are no longer available due to colleges closing and providers going out of business. If your business model relies on abusing and exploiting students then it should not exist at all. A 12-month exemption from the VET student loans eligible course list and the proposed fee caps would allow TAFEs to provide ongoing education to students who would otherwise be left in the lurch. There are amendments, of course, to be discussed in this chamber and which no doubt we will get to next week which go to dealing with some of these issues.

I still have serious questions about what will happen to the students who have been caught up in the scams and the rorting of this dodgy system. We will continue to work to make sure that no-one is left with massive unfair debt. It is simply not okay for students who have been the victims of these rorting schemes to left saddled with debt while the government simply wipes their books clean. Students who were enrolled into courses that were worthless or effectively did not exist, or courses which they could never have been expected to complete, should have their debts to the Commonwealth forgiven. It is not the students' fault that this system of deregulation has ended in such a debacle and expensive mess to the Commonwealth. The fact that warning signs were not listened to much earlier on shows that the onus is now on the government and the education department to fix this and to ensure that students are no longer saddled with this disaster.

I foreshadow that I will move two second reading amendments to this bill, supporting the arts and the creative industries in Australia, because I solemnly believe that they must be included on the course list, and also outlining our opposition to this spending of public money on private for-profit education providers. The Australian Greens are doing this because we believe that our public education institutions and our artistic communities and industries are too important not to back and to not invest in. We must clean up the rorting of the VET sector—that is essential—but it should not come at the cost of arts courses or education providers who were doing the right thing.

Under this government, the arts are consistently under attack, and they need to be defended. Over and over again, we see this government taking an axe to the creative industries or simply leaving them out of the very important discussion about what the jobs of the future are. We have a Prime Minister who says that he is the Prime Minister of innovation—the innovation Prime Minister of the innovation employment future—yet we have absolute silence from his government when it comes to investing in the creative industries, even though, as everyone who understands these issues knows, having a strong, creative arts sector and a strong, creative arts industry sector means that innovation is more likely to thrive.

Our creative industries employ thousands of people across Australia, and to help build the social fabric of our community they must be supported properly. Stripping almost all the arts courses from the VET student loans eligible course list is not an acceptable way forward, and I hope that, when we get back next week, the Senate will see sense and back the amendments that I have today foreshadowed.

As we know, the deregulation of the VET FEE-HELP scheme under the previous, Labor government led to a massive increase in for-profit private education providers and an industry-wide decline in quality. There is story after story after story about the abuse, exploitation and just plain rorting of the system. There are so many stories to point to. The fact that this was going on right under the nose of our education department bureaucrats is beyond belief. Minister after minister was warned that this was happening, and still it has taken this long for anyone to act.

Under the deregulated system, private training colleges were free to set their own fees. Well, you couldn't see that being rorted, now, could you, Mr Acting Deputy President Ketter! Hansard, I say that with tongue firmly planted in cheek. Of course it was going to be rorted from the moment for-profit providers were allowed to set their own course fees, with basically a guarantee of a loan payment from the Commonwealth. There are people out to make money at the expense of students and the taxpayer, and that is exactly what they did. In effect, they were handed a blank cheque from the Australian government, paid for by the Australian taxpayer. As long as they could get students to sign on the dotted line, everything was A-OK.

Many young and vulnerable people were pressured to enrol in courses that were effectively worthless, did not exist or were ones that they could never be expected to complete. It has been a rort and it is time that it was cleaned up. Completion rates for courses and online diplomas are abysmal as a direct result of the rorting that has taken place, and that is just the tip of the iceberg. Victims of this system have included those with intellectual disabilities, people in Aboriginal and Torres Strait Islander communities and very vulnerable young people who did not even understand what they were being asked to sign up to.

I will give you a couple of examples, Mr Acting Deputy President, just to illustrate how pathetic and abusive the parasites in these private for-profit providers were and how they preyed on people. One couple with intellectual disabilities, living in a housing commission unit in Victoria, were doorknocked by a salesman representing Melbourne's Phoenix Institute. The salesman was told about their disabilities, but that did not deter him from pressing and pressuring these young people further. In the comfort of their living room, he offered them a free laptop and a free qualification. When they struggled with literacy and numeracy tests, he gave them all the answers. It was Exploitation 101.

In another case, 80 people from a remote Aboriginal community in Queensland were signed up in just one day without even being told the courses would cost them any money. Those people are now saddled with thousands of dollars worth of debt. In another case, salespeople authorised by the Phoenix Institute signed people in remote committees up to multiple online diploma courses which cost $18,000 each, even though some of them did not even have access to the internet. How on earth they could be expected to complete online diploma courses when they could not even use the internet is beyond me. This is the type of disgraceful, exploitative and parasitic behaviour by these for-profit providers, desperate to make money out of this situation, and the tactics that they use to do it. High-school students who were enrolled in a trades VET in Schools program had to learn how to use hand tools by looking at photographs, without ever actually seeing or being able to hold or touch them, let alone learn how to manage them in real life.

There were blatant examples of providers charging students using the loan schemes much more money for courses identical to those that were costing fee-paying students much less. One example of this was two Cairns based RTOs, both owned by the same person and operated out of the same business address. One, which was approved for a VET FEE-HELP course, charged $12,750 for a diploma of management. The other, which sells courses directly to students, charged only $3,500. This was a massive mark-up at the cost of the Australian taxpayer—all under the nose of the Australian government. These are just a handful of the many stories that have emerged as the scale of disaster has become more and more apparent. These students suffered a great deal. Many of the teachers were abused in this situation as well. In many cases, these students have been lumped with debts of many thousands of dollars. It is time we forgive those student debts. It is time we look after those providers who are doing the right thing. It is time we severely punish those who absolutely screwed the Australian taxpayer and their students and who took the Australian government—this government and the former Labor government—for absolute mugs.

As I said at the beginning, this is one of the most explicit examples of how deregulation and privatisation, in this case of our education system, has become a disaster. It never should have been allowed to happen. It happened under the nose of many ministers. Thank God it is now being cleaned up. We need to reform the VET sector—there is no question about it—but it is going to take more than just this bill. We must change the culture and the attitude towards the incentive to make a profit out of educating some of our most vulnerable and disadvantaged young people in this country. We have a jobs crisis. In my home state of South Australia, we have an increasing youth unemployment rate—as it is across the country. If we want people to be engaged in training and education and to skill up for the future, we need to make sure it is in a safe environment that offers quality training and education and that we are not just opening the door to people who want to make big bucks out of other people's vulnerability and disadvantage—all at the expense of the Australian taxpayer.

The Australian Greens will be supporting this bill, and we will be moving the foreshadowed second reading amendments and other amendments in the committee stage.

Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Senator Hanson-Young, you foreshadowed two amendments to the bill. Is it your intention to seek leave to move those amendments now? Your choice is to move one amendment now or to seek leave to move both amendments together.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

by leave—I move:

At the end of the motion, add:

", but the Senate is of the view that public funds should not be provided to private for–profit vocational education and training providers.".

I also move:

At the end of the motion, add:

", but the Senate calls on the Government to recognise the importance of the Australian arts industry and community by giving greater representation to artistic and creative courses on the VET student loans eligible course list.".

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Tonight we are considering a package of three bills to replace the VET FEE-HELP loan scheme with the student loans program. The bills also: provide that student loans are approved only for eligible students for approved courses; limit course eligibility for loans through a courses and loan caps determination; impose stronger eligibility requirements for qualification as an approved course provider; ban providers from using brokers or agents to interact or engage with students in relation to the loans; and provide for monitoring and investigation powers and enforcement powers, such as civil penalties, infringement notices, enforceable undertakings and injunctions.

We all know that there are unscrupulous and dodgy providers operating in the vocational education and training sector who have been ripping off students. Private vocational education providers have been using aggressive recruiting tactics to get students into courses with highly inflated fees. Often when students enter these courses they are not properly supported to graduate.

To illustrate the problem I will tell the chamber about a couple of stories of constituents who have spoken with my office about their experience. One constituent came to my office to report that recruitment agents for a vocational college approached a local men's shed to sign up potential students. The recruiters encouraged him to sign up on the spot and said he would receive an increase in his government payments and, to top it off, threw in a free iPad to sweeten the deal. Thinking that the offer was too good to be true, my constituent told the recruiters he would take some time to consider it. And wasn't it a good thing that he did? The recruiters had emphasised that he would not pay any money up-front and focused on the up-front benefits and glossed over the debt that he would incur.

I have heard similar stories from other VET students who have accepted the recruiters' advice and signed up to private colleges with VET FEE-HELP loans for tens of thousands of dollars. Some students signed up to courses where they were given little administrative support and absolutely terrible customer service. One constituent told me the paperwork she sent to a provider frequently went missing, as did documents the provider posted to her, because they had recorded her address details incorrectly. When they told her how much the fees would be for the course, they failed to mention the 20 per cent loan fee that would be applied on top. Like the other constituent I mentioned, she was offered a free iPad. Unfortunately, her iPad died after two months and the provider would not give her any advice about where she could go to get it repaired or replaced. Added to all these problems was a general lack of communication from the provider, even when the provider changed their name. They simply started sending out correspondence under the new name rather than formally notifying any students of the change.

While the experiences that have been reported to my office have been pretty bad, there have been much worse stories around the sector, such as the 10,000 qualifications in Victoria that were cancelled because they were not worth the paper they were written on. Also, there were the students who were offered online training as jockeys without even having to ride a horse! There were even students who had been signed up to loans without their knowledge. Throughout the sector there has been an explosion in online and short courses and a decline in quality, and students have racked up massive debts without any hope of getting a job or paying them back. It is estimated that up to 40 per cent of VET FEE-HELP loans will never be repaid. For those students who have failed to graduate or whose qualification is of little or no value, this money has just been flushed down the toilet. So much for a government that promised to end of the waste!

In 2014 the 10 largest private training providers received $900 million in government subsidies, yet only five per cent of their students graduated. VET FEE-HELP loans have blown out from $700 million in 2013 to $2.9 billion in 2015. Some colleges have cost taxpayers $1 million to produce a single graduate. This is clearly unacceptable.

Labor made a commitment before the election to introduce reforms which would crack down on these dodgy providers and restore integrity to Australia's VET sector. To give you an idea of how much these loans have blown out over time, it is estimated that these bills will reduce outstanding loans by $7 billion over the forward estimates and $25 billion over the next 10 years. We support these bills the government have introduced today as we want to see effective measures to address the crisis in the VET sector.

Anyway, how could we possibly oppose them when the government have copied our policies? The provisions contained in these bills are almost a carbon copy of what Labor were proposing prior to the last election. Just look at what the government have included in their VET reforms—capping of student loans, cracking down on brokers, linking publicly funded courses to industry need and skill shortages, requiring providers to reapply under new standards so only high-quality providers can access the loan system, linking funding to student progress and completion, and a VET loans ombudsman. And what do all these measures have in common? Every single one of them was copied from Labor's policies. They say that imitation is the sincerest form of flattery, and these bills are very flattering indeed.

Stephen Parry (President) Share this | Link to this | Hansard source

It now being 6 pm, the debate is interrupted.