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

In respect of the VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016, I move the Australian Greens amendment (1) on sheet 7971:

(1) Schedule 1, page 8 (after line 16), after item 20, insert:

20A After subclause 46A(1) of Schedule 1A

Insert:

(1A) The *Secretary must also re-credit a person's *FEE-HELP balance with an amount equal to the amounts of *VET FEE-HELP assistance that the person received for a *VET unit of study if, as a result of information provided to the Secretary without the person applying for the re-credit, the Secretary is satisfied of the matters in subclause (1) (other than paragraphs (1) (d) to (f)).

(1B) Before making a decision under subclause (1A), the *Secretary must give the person and the *VET provider a notice in writing in accordance with subclause (3).

(1C) In deciding whether to make the decision under subclause (1A), the *Secretary must consider any submission received from the person, and from the *VET provider, within the 28 day period given for the person and the VET provider to provide submissions.

(1D) The *Secretary must give written notice of a decision under subclause (1A) to the person and the *VET provider. The notice must be given within 28 days after the day the decision was made.

There are a number of amendments that have been circulated. I have circulated an amendment that goes directly to the heart of this issue. We know that the system we are reforming with this bill is one that has been rorted, abused and exploited by those who have wished to make a lot of money and a private buck off the goodwill of vulnerable students and the willingness of this place, the parliament, to offer support to students who desperately want to get qualifications.

I said right at the outset of my speech in the second reading debate that a number of the Australian Greens, along with a number of other voices, warned at the time that if this sector was to be so deregulated people would take advantage of it and abuse it. That is exactly what we have seen unfold since 2012 to a point where now billions and billions of dollars are being wasted and pocketed by for-profit providers who have no interest in educating students and no interest in contributing to the welfare and a wellbeing of an educated workforce but are mostly interested in pocketing taxpayer money for running a sham type of learning facility. The stories are myriad on the type of exploitation and rorts that have been going on—the fraudulent behaviour of signing up students to courses they did not even know they were being enrolled in, bribing students to enrol in courses and, in fact, outright lying to individuals about the fact that they would be saddled with thousands and thousands of dollars worth of debt.

This amendment of the Australian Greens understands this system and says, 'This was abusive. A lot of students and other individuals were caught up in this and exploited through this process by these dodgy scumbags who tried to make money off the vulnerability of these people, particularly those from disadvantaged backgrounds. We do not want to see those students now saddled with thousands of dollars worth of debt in years to come.' I am sure we will hear the minister explain that the government is doing a number of things to claw back lot of the money that has been stolen, effectively, from the Australian taxpayer, but I want to make sure that it is those who have actively participated in this fraudulent behaviour and rorted the system who are punished, not the vulnerable students caught up in the middle of it.

The only way we can guarantee that it is not students who are punished for this terrible deregulation mess that has been created is by ensuring that anyone who was manipulated, exploited, abused or lied to automatically has their debt to the Commonwealth waived. It is essential, because all of the bluster about what a terrible, chaotic sham and mess the current VET HELP system has become will be meaningless if students are left with debt to their name. Of course, in years to come, the Australian Taxation Office will be coming after that money.

I know the government does not like to admit how much money is actually owing—how much money has been ripped off and stolen from the taxpayer—but we have to fess up here. We have to be honest with ourselves and with the Australian taxpayer that this system was destined to fail. This is what happens when you deregulate a system like this—when you start providing taxpayer funded profits for for-profit providers without proper regulation, rules, checks and measures. Of course people were going to rort the system. We do not want students to be the ones who have to suffer for it. I hope that we can get some support for this amendment. It is important that students are not punished and saddled with this debt. It was a mistake of successive governments to allow this kind of rorting to continue for years. It was right under their nose.

There are other questions to be asked about who exactly in the education department knew this was going on and why something was not done about this much sooner. There are a lot of questions yet to be answered in relation to this. Everyone accepts that it was a problem and now needs to be cleaned up, but no-one wants to take responsibility for it. Well, I do not want students to be the ones who end up carrying the can because governments of the day were too obsessed with the idea of letting the market rip. It has proven that the privatisation of our education system has been a mistake. It has created a fraudulent system, an abusive system and an exploitative system. It is time we cleaned that up and made sure that sure that students are at the heart of this system and that they are the ones that are protected as we try to clean this up.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I would just like to indicate that Labor will not be supporting this amendment. Labor is of the view that there are some good private VET providers out there. I take the view that to simply say everything must go through the TAFE system and that we would dismantle completely the private VET sector is not a practical proposition.

We want to work positively and constructively with the government and all the senators who share our desire to see people who orchestrated the VET FEE-HELP frauds and rorts being held accountable for their crimes. We are committed to helping students. We are clearly of the view that the establishment of a VET ombudsman to investigate student complaints is the way to go, as well as, with our amendments, introducing grandfathering provisions that would ensure that existing students who have not completed their studies by the end of 2017 can continue to receive VET FEE-HELP assistance.

I think you have to deal with practicalities. The practicalities are that we have a dual system. I do not think anyone would be more supportive of the TAFE system than I would be. I am probably one of the few senators in this place whose only qualifications come through the equivalent of TAFE in the UK. I am a tradesman, a fitter machinist, and I got all of my education after school in the equivalent of the TAFE system. So I am a very strong supporter of the TAFE system, as is Shadow Minister Ellis and is the Labor Party. We want to look at how we can strengthen the TAFE system into the future, but I am not sure that simply saying there is absolutely zero room for any of the private sector is a reasonable, rational or practical approach to where we are at the moment.

I can understand the Greens' view on this. I can understand the Greens' position in terms of support for TAFE, because we want to support TAFE, but I do not think you achieve that by the views that are put forward in this amendment. The issues that I have outlined—our strong support for the TAFE system, our strong support for students, the need for more regulation in the non-TAFE sector, a proper balance between TAFE and the non-TAFE sector—are of importance. I think getting a balance would mean that there have to be more resources, more effective support for TAFE and more TAFE revival not only in the metropolitan areas but regional areas where they do such a great job. There are all of these challenges ahead of us. We support TAFE, but we cannot support this amendment.

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

Apologies for sounding a little bit too cute by half, but I just want to point out to Senator Cameron that I think he was speaking to the amendment in relation to stopping public funds going to private for-profit providers, which is the amendment we have already dealt with not the amendment that I spoke to here tonight. Just for the sake of anyone listening or reading Hansard, the Greens amendment that I have moved here tonight is in relation to waiving the debts of students who have been wrongly treated and enrolled in courses that did not exist or were fraudulent, and ensuring that those students are not the ones who are saddled with the debt in years to come.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I am trying to rationalise the amendment on sheet 7971 against what Senator Hanson-Young has said, but it is pretty difficult. I understand that 7971 is basically about the taxpayers paying for the frauds and rorts that have been perpetrated. We do not support that and we do not believe that that is the appropriate way to go. I just wanted to clarify, given what Senator Hanson-Young had indicated in her contribution on the issue of TAFE, that we still do not support her amendment on sheet 7971. We do not believe that that is the appropriate way to go.

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

The government will oppose this amendment, as the amendment fails to require a provider to repay moneys where a debt is re-credited to a student, with consequent financial impacts accruing to the taxpayer. Powers do already exist, which means we think this amendment is unnecessary, for the secretary of my department to remit VET FEE-HELP debts in relation to unacceptable conduct, with moneys automatically recouped from providers—and this measure will apply to the VET student loans provisions as well. With those existing legislative provisions, we can ensure decisions correcting inappropriate debt accrual are sound and evidence based, and do not create unrealistic expectations of departmental action where there is not necessarily supporting evidence.

Indeed, as I have outlined on many occasions, the department, ASQA and the ACCC are already pursuing actions against providers in relation to students who have not been enrolled, and, where these actions are successful, debts can and are being remitted for students, and the cost recouped from providers. The department has been successful in working on behalf of students to have providers commit to remitting millions of dollars in debts to students, and this work will continue alongside the ACCC's work in the prosecution of a number of providers. Importantly, the VET Student Loans Bill, in replacing the old VET FEE-HELP scheme, will strengthen student protection powers even further.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

The question is that amendment (1) on sheet 7971 be agreed to.

Question negatived.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

I have a number of questions that I would like to address to the minister before we consider any further amendments, mainly for information and to have some additional information on the record. Minister, your explanatory memorandum states that over the forward estimates period the measures in the loans program will have a cost, in underlying cash terms, of $13 million in administered funding and $58.6 million in combined administered and departmental funding. Can you therefore confirm that the bills will increase departmental expenses by $45 million over the forward estimates period?

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

Thanks, Senator Leyonhjelm, for the question. The accounting of student loan debt is a complicated process in terms of the budget treatment because the government charges a 20 per cent fee on VET FEE-HELP loans, and will continue to do so under these proposals for VET student loan debts. That fee is accrued as a further asset to the Commonwealth on the pathway through. Because we are actually reducing the value of loans that will be written by the Commonwealth to students by a significant volume over the forward estimates, that means the government will not in essence be charging those fees and will not therefore be building an increased asset base of debt as a result of charging that 20 per cent fee on top of the loan.

That said, I do not want to be too cute about the accounting treatment. Of course, this is a more tightly controlled program that we are putting in place, and so we have committed additional resources to the implementation of the program and to the compliance measures that surround the program. Once it is firmly established and up and running, I do not anticipate that, in an ongoing sense, it should necessarily require more departmental expenditure than the VET FEE-HELP program did in the past, although it may be that, in relation to some of the compliance activities which were so hopeless in the past and allowed some of the rorting to occur, along with poor legislative provisions, there will need to be some increased investment there. We have applied, though, additional cost-recovery measures that will flow through into the future as well, to make sure that some of those actions are in a sense more closely netted out for the Commonwealth in terms of the assessment of the quality of providers and the information that they provide to us.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Thank you, Minister; that is helpful. I do not think you addressed this: what are the current annual departmental expenses for VET?

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

For the benefit of the chamber and the clerks, I table a supplementary explanatory memorandum relating to the government's amendment to be moved to the VET Student Loans Bill.

In relation to your question, Senator Leyonhjelm, I am not sure I am in a position to give you the exact departmental operational expenditure as it relates to the VET FEE-HELP arrangements at present. If I can get something for you during the questioning or the debate, I will, but I am afraid I cannot do that right at this second.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Thank you, Minister. The regulation impact statement estimates that your proposal, the bill, will actually reduce annual regulatory costs over 10 years by $853,000. Is the regulatory saving generated by the fact that the proposal will reduce the size of the VET industry, with fewer providers and students?

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

That would really be a question for the Office of Best Practice Regulation in terms of the way they account for the regulatory impact. However, I think it is fair to surmise that that is probably the way in which the reduced regulatory impact has been calculated. But that is not something undertaken by my department; it is simply an outcome of the processes tabled by OBPR.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Thank you, Minister. I did not realise the OBPR was responsible for that assessment, so some of my questions are no longer applicable. I am also wondering why the regulatory impact statement did not assess the clear, alternative option of requiring earlier and faster loan repayments.

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

When I announced the new VET Student Loans program and the cessation of VET FEE-HELP, I did at that time indicate that the government was continuing to consider the sustainability of the overall HELP program, which looks at support for the payment of university fees as well as trade support loans and these VET FEE payments. The government's examination of this is quite openly known and was highlighted in the paper we released in the budget this year, Driving innovation, fairness and excellence in Australian education, which on page 19 details discussions about when and at what rate people should repay their HELP loans. For example, to quote from this paper, we do highlight that in the UK students are required to make repayments once their income reaches 21,000 pounds, roughly equivalent to $39,000, and in New Zealand students are required to begin making repayments when their income exceeds NZ$19,084, roughly $17,000—at least at the time of printing.

Work in relation to finalising higher education reform is ongoing. I expect to have that finalised early next year such that, if we are legislating reforms, that will occur by the middle of next year. But my view and the government's view in bringing forward these VET reforms was that we should get the VET support structure for the payment of student fees via an income-contingent loan effectively established. If there need to be changes to the way in which all student loans are repaid, we should maintain the consistency of that process for the sake of administrative simplicity and taxpayer simplicity across all student loans. Therefore, it ought be best considered in the context of the higher education reforms because that remains where the overwhelming majority of those loans are accrued.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Thank you, Minister. That is interesting. Let me put two questions to you at once for you to answer. Do you anticipate this new regulated environment which these bills will create will be permanent or temporary? I think I understand that it will be temporary. And, if temporary, what will replace it? I understand there is a review commencing in February. What is the purpose of the review, and what is the expected outcome?

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

I and the government have, essentially, taken a belt-and-braces approach to the way we have structured the new VET Student Loans program because of the enormous wastage, rorting and failure of the old VET FEE-HELP scheme. It would be my hope that, over time, the successful administration of this new program might enable some of those elements, in a belt-and-braces approach, to be relaxed in recognition of the fact that we have the fundamentals more accurately put in place than was the case under the previous program. I do not want to say that means we would be unwinding in the foreseeable future, but what we are committing to do is to review, starting in February next year, the methodology behind the list of eligible courses and the methodology underpinning the loan caps that have been established for those eligible courses. Those reviews may recommend a more relaxed approach to how an eligible course is determined or a more relaxed approach in some way to how it is a that a fee cap is determined, but we certainly intend to maintain very high standards in terms of who is eligible to offer these loans on behalf of the government.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I have a list of amendments in front of me that I am keen to move to. Senator Cameron.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

by leave—I move opposition amendments (1) to (4) on sheet 7962 together:

(1) Clause 8, page 9 (line 10), before "The amount", insert "(1)".

(2) Clause 8, page 9 (after line 17), at the end of clause 8, add:

(2) However, if the loan amount is for an approved course provided by a body mentioned in subsection 16(1A) before 1 January 2019, the amount of the loan must not be greater than any of the following:

  (a) the amount that would reduce the student's FEE-HELP balance to zero;

  (b) the tuition fees for the course.

(3) Clause 13, page 12 (lines 2 to 4), omit the clause, substitute:

13 Approved courses

(1) To be an approved course, the course must meet the requirements of this Division or be a course covered by subsection (2).

(2) A course is covered by this subsection if:

(a) the course was provided on 1 January 2017 by one of the following bodies (taken to be approved course providers under the VET Student Loans (Consequential Amendments and Transitional Provisions) Act 2016):

  (i) a body established to provide vocational education or training under one of the following:

(A) the Technical and Further Education Commission Act 1990 (NSW);

(B) the Education and Training Reform Act 2006 (Vic.);

(C) the TAFE Queensland Act 2013 (Qld);

(D) the Vocational Education and Training Act 1996 (WA);

(E) the TAFE SA Act 2012 (SA);

(F) the Training and Workforce Development Act 2013 (Tas.);

(G) the Canberra Institute of Technology Act 1987 (ACT);

  (ii) a training organisation owned by the Commonwealth, a State or a Territory;

  (iii) a Table A provider within the meaning of the Higher Education Support Act 2003; and

(c) the course is provided before 1 January 2019.

(4) Clause 16, page 13 (after line 9), after subclause 16(1), insert:

(1A) However, the Minister may only determine a maximum loan amount, or method for working out maximum loan amounts in relation to courses provided by the following bodies on or after 1 January 2019:

(a) a body established to provide vocational education or training under one of the following:

  (i) the Technical and Further Education Commission Act 1990 (NSW);

  (ii) the Education and Training Reform Act 2006 (Vic.);

  (iii) the TAFE Queensland Act 2013 (Qld);

  (iv) the Vocational Education and Training Act 1996 (WA);

  (v) the TAFE SA Act 2012 (SA);

  (vi) the Training and Workforce Development Act 2013 (Tas.);

  (vii) the Canberra Institute of Technology Act 1987 (ACT);

(b) a training organisation owned by the Commonwealth, a State or a Territory;

(c) a Table A provider within the meaning of the Higher Education Support Act 2003.

Leave granted.

The TEMPORARY CHAIR: Before I go there, it is the wish of the committee that the statements of reasons accompanying the request be incorporated into Hansard immediately after the request to which they relate. There being no objection it is so ordered.

The statement read as follows—

Statement pursuant to the order of the Senate of 26 June 2000

These amendments provide that the Minister cannot specify a maximum loan amount for a course provided by a TAFE until on or after 1 January 2019 and that courses provided by a TAFE on 1 January 2017 are taken to be approved courses until 31 December 2018.

On the basis that this will result in increased expenditure under the standing appropriation in clause 115 of the bill, these amendments should be moved as requests.

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

The Senate has long followed the practice that it should treat as requests amendments which would clearly, necessarily and directly result in increased expenditure under a standing appropriation.

If, as stated, the amendments would result in increased expenditure under the standing appropriation in clause 115 of the bill, it is in accordance with the precedents of the Senate that those amendments be moved as requests.

This amendment will exempt TAFE from course restriction and loan caps for one year until the end of 2017. This amendment is designed to ensure that high-quality public providers, TAFEs and dual-sector organisations like Charles Darwin University that provide technical training for the community are not disadvantaged because of the behaviour of some dodgy private providers. When it comes to TAFE, Labor makes no apologies for backing our quality public VET providers. TAFE is the backbone of the system and, along with innocent students, TAFEs and TAFE teachers have suffered the most in recent years from Liberal cuts and mismanagement at state and federal levels.

The National Partnership Agreement on Skills Reform, which funds TAFE, is set to end in the middle of next year but the government still has not committed to replacing it at all. This uncertainty is crippling for TAFE and for TAFE students. That is why we are moving an amendment to exempt TAFE from the eligible course list and loan caps for one year until the end of 2017. This would allow time for the government to strike new funding deals with the states, if indeed they are going to do that at all. TAFE has not been part of the VET FEE-HELP problem. Over 95 per cent of the quality complaints to the Australian Skills Quality Authority about quality relate to private providers. Public providers, including TAFEs, make up less than five per cent of the complaints. TAFEs have significantly higher unit completion rates than private providers—that is, 77 per cent compared to 59 per cent.

The RIS for this bill also points out clearly that TAFE has not been price gouging. The tuition fees for the most popular diplomas in 2015 are just $5,654 at TAFE compared to $18,580 with private providers—a clear indication that TAFE is not responsible for price gouging and the problems in the scheme. TAFE students are not the ones being saddled with unfair and unreasonable debts. While private providers claimed VET FEE-HELP loans of $2.5 billion in 2015, TAFE only claimed $400 million.

The TAFE Directors association has called for this transition arrangement. Labor backs it because we back public TAFEs and our TAFEs students. We note that some not-for-profit providers will also be hit hard and have deep concerns over this. We also note that the government has stated it will not be supporting this amendment. This is unfortunate because TAFEs are the innocent bystanders in this problem. TAFEs should not be the victims of this issue. They are the quality backbone of the system. We believe this amendment should be supported by the government, by the Greens and by the crossbench. These requests are reasonable and they should be supported.

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to 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.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

This is pretty typical of the coalition. They try and find some area where there is a problem and then they say that applies across the industry. Well, it does not apply across the industry. We see the coalition do this for the trade union movement. They try and find a problem and then they say that is the issue across the whole trade union movement. It is pretty typical of how that mob over there operate.

If you want to talk about fees, let us talk about fees at former Senator Bob Day's college in Adelaide, which you have provided with $2 million. At $90,000 per student, it took $2 million to train 20 students over four years. If you want to talk about rip-offs then I think you should have a look closer to home and not attack the TAFE system. There is a lot more to come out about that, as you are well aware. To stand there and attack the TAFE system when you are involved in an absolute rort with your former mate, former Senator Bob Day, I think beggars belief. Do not stand there holier than thou—than anyone—on the basis of the TAFE system having a problem when you are establishing problems in the training system yourself. Two million dollars to guarantee votes in the Senate was what you were about, and what the coalition were about, and money was no object in terms of that. So I am not going to have the TAFE system slandered by a minister who is prepared to pay anything to guarantee a vote in this place.

You have actually indicated yourself that TAFE would get special treatment because they were not the big part of the problem, so, in my view, this request that we are putting forward is consistent with what you have said. TAFE are not the problem. You are about creating problems, not fixing them. We stand by these requests, and we think it is the appropriate and proper thing to do to back the community sector system, to back the state systems, to back the system that has proved its worth over decades in this country and to make sure that we give them an opportunity to operate effectively and that the students in the TAFE system are properly looked after.

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

I would like, very briefly, to highlight the point that, far from giving a couple of select examples, I gave a rather comprehensive analysis of the overall growth in enrolment numbers and fees across the TAFE system right across the nation and then highlighted individual cases of poor completion rate and phenomenal fee growth or enrolment growth, not across one or two TAFEs but across the entire system in three different jurisdictions.

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

I rise to put on the record the Greens' support for the opposition's requests for amendments here. These are amendments that reflect the recommendations that the Greens made as part of the Senate inquiry into this bill. I think it is absolutely reasonable to allow TAFE providers to have that extra amount of time to ensure that students do not fall through the cracks during this transition period. In fact, it is essential, because otherwise some students are going to be hit with a double whammy—being thrown out of some courses and left without the ability to finish and, indeed, being then left with years and years of debt, the extent of which some of them would perhaps not even have been aware of.

Senator Cameron is absolutely correct: TAFE are not the enemies or the providers who have messed this system up. This has actually been the doing of bad government policy from the beginning—and then we had bad people, people who wanted to rort the system and take advantage of it. It was not the TAFE providers and it was not the students; it was the government thinking, in the space of education, 'She'll be right; let the market rip and everything will work out A-OK.' Well, it has not. It has been found to be an absolute fiasco. It is the biggest cock-up in education this government, parliament and country have seen for a long time and, in order to clean it up, we need to make sure that there is a proper transition period that helps students be able to graduate from their courses.

The CHAIR: The question is that amendments (1) to (4) on 7962 be agreed to.

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

by leave—I move government amendments (1) to (25) on sheet GX140 together:

(1) Clause 6, page 4 (before line 3), before the definition of approved course provider, insert:

approved course: see section 13.

(2) Clause 6, page 4 (after line 3), after the definition of approved course provider, insert:

approved external dispute resolution scheme: see section 42B.

approved external dispute resolution scheme operator: see paragraph 42B(c).

(3) Clause 6, page 6 (after line 12), after the definition of officer of an approved course provider, insert:

officer of an approved external dispute resolution scheme operator means:

(a) an officer or employee of an approved external dispute resolution scheme operator; or

(b) a person who performs services for or on behalf of an approved external dispute resolution scheme operator.

(4) Clause 6, page 6 (after line 14), after the definition of officer of a Tertiary Admission Centre, insert:

officer of a tuition assurance scheme operator means:

(a) an officer or employee of a tuition assurance scheme operator; or

(b) a person who performs services for or on behalf of a tuition assurance scheme operator.

(5) Clause 6, page 8 (line 8), at the end of the definition of VET officer, add:

; (e) an officer of an approved external dispute resolution scheme operator.

(6) Clause 15, page 12 (line 26), omit "accredited", substitute "registered".

(7) Clause 17, page 14 (line 22), omit "request the student to".

(8) Clause 17, page 14 (line 23), before "provide", insert "request the student to".

(9) Clause 17, page 14 (line 25), omit "may".

(10) Clause 25, page 21 (line 19), at the end of subclause (2), add:

; and (h) be a member of an approved external dispute resolution scheme.

(11) Clause 25, page 21 (lines 20 to 22), omit all the words from and including "the" to the end of subclause (3), substitute:

either or both of the following:

(a) the requirement in paragraph (2) (g) to be a party to an approved tuition assurance arrangement;

(b) the requirement in paragraph (2) (h) to be a member of an approved external dispute resolution scheme.

(12) Clause 28, page 23 (line 7), omit "request the applicant to".

(13) Clause 28, page 23 (line 8), before "provide", insert "request the applicant to".

(14) Clause 28, page 23 (line 10), omit "may".

(15) Page 31 (after line 21), after Division 4, insert:

Division 4A—External dispute resolution

42A Minister may specify external dispute resolution scheme

(1) The Minister may, by legislative instrument, specify a scheme that provides for investigation and resolution of disputes relating to the following:

(a) VET student loans;

(b) compliance by approved course providers with this Act;

(c) VET FEE-HELP assistance (within the meaning of the Higher Education Support Act 2003);

(d) compliance by VET providers (within the meaning of the Higher Education Support Act 2003) with the Higher Education Support Act 2003.

(2) The Minister must specify the operator of the scheme in the legislative instrument.

Note: The rules may provide for matters that the Minister may or must have regard to in deciding to specify a scheme: see subsection 116(3).

42B Meaning of approved external dispute resolution scheme

A scheme is an approved external dispute resolution scheme if the scheme:

(a) provides for investigation and resolution of disputes as mentioned in section 42A; and

(b) is specified in a legislative instrument made under section 42A; and

(c) is operated by the person (the approved external dispute resolution scheme operator) specified in the legislative instrument.

42C Approved course provider must comply

An approved course provider must comply with the requirements of the approved external dispute resolution scheme of which the provider is a member.

Note: The rules may set out additional processes and procedures in relation to external dispute resolution: see section 48.

(16) Clause 46, page 34 (line 11), at the end of the clause, add:

; (e) the operator of the approved external dispute resolution scheme of which the provider is a member.

(17) Clause 49, page 36 (line 6), omit "a course provided by the provider", substitute "an approved course".

(18) Clause 49, page 36 (lines 7 to 12), omit paragraphs (1) (a) and (b), substitute:

(a) enrol students, or accept applications for enrolment, in the course;

(19) Clause 63, page 46 (line 10), after "course", insert ", or enrol the student in a course".

(20) Clause 63, page 46 (lines 15 and 16), omit subclause (2), substitute:

(2) Subsection (1) does not apply in circumstances specified in the rules.

(21) Clause 92, page 66 (line 14), at the end of subclause (1), add:

; (d) an officer of an approved external dispute resolution scheme operator.

(22) Clause 93, page 67 (line 4), at the end of subclause (2), add:

; (e) an approved external dispute resolution scheme operator.

(23) Page 73 (after line 12), after clause 103, insert:

103A Secretary must publish information relating to operation of the VET student loans program

The Secretary must publish the following information within 42 days after the end of the period of 6 months beginning on 1 January and 1 July in each year (the reporting period):

(a) the number of approved course providers who operated during the reporting period;

(b) for each of those providers:

  (i) the name of the provider; and

  (ii) the value of VET student loans approved by the Secretary for approved courses offered by the provider during the reporting period; and

  (iii) the number of students who undertook approved courses offered by the provider during the reporting period and whose tuition fees for the courses were paid (whether in whole or in part) using VET student loans; and

  (iv) the number of such students who completed approved courses during the reporting period; and

  (v) the amount of tuition fees charged to such students by the provider during the reporting period;

(c) any other information in relation to VET student loans prescribed under the rules.

(24) Clause 114, page 77 (lines 17 to 19), omit subclause (1), substitute:

(1) The Secretary may, in writing, delegate any or all of his or her powers under this Act to:

(a) an APS employee; or

(b) an officer of an approved external dispute resolution scheme operator.

Note: For this Act, see section 6.

(25) Page 77 (after line 25), after clause 115, insert:

115A Alternative constitutional basis

Without limiting its effect apart from this section, this Act also has the effect it would have if each reference to an approved course provider were expressly confined to a corporation to which paragraph 51(xx) of the Constitution applies.

I indicate that a supplementary explanatory memorandum has been circulated for these amendments. Very briefly, these amendments deal with some matters that were raised by the opposition during debate in the House of Representatives and were discussed, at the government's request, by the Senate inquiry. In particular, they recommend methodology for the establishment of an ombudsman for the VET student loans program. They provide much tighter restrictions to ban broker type activities in the new market, they provide restrictions around third-party contact lists and their usage, and they adopt a range of data reporting and transparency measures. I commend the amendments to the Senate.

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

The Greens will be supporting these amendments. We think it is about time that we established an ombudsman for the VET sector. We look forward to the foreshadowed legislation. Perhaps the minister could put on the record tonight when he believes the government will release a draft of that legislation to the parliament. Are we expecting it in the new year? It is time that we got on with it, and we look forward to seeing the legislation when it comes forward.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I rise to indicate that Labor will support these government amendments. They will allow for a VET ombudsman to be established and for increased transparency and accountability through public reporting of the loan scheme every six months. These amendments reflect the amendments that Labor moved in the House, and we are pleased the government has come on board with them.

Shadow minister Ellis has written to the minister and received an assurance that the VET ombudsman will be up and running by 1 July next year and that further bills to establish the ombudsman under the Ombudsman Act will be brought forward next year. We will hold them to that commitment.

The amendments will allow the minister to make more effective rules to ban brokers. These are necessary because of the evidence presented to the Senate committee about brokers circumventing the rules in the bill or dodgy practices like kickback and commissions moving in-house providers. Labor wants to stop the terrible trail of student victims. We want brokers to be effectively and totally banned and the predatory marketing to stop. We support these changes and will be watching carefully to make sure the government keeps the promises they have made to shut brokers down.

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

To respond to Senator Hanson-Young, as Senator Cameron has indicated to the Senate, it is the government's commitment to introduce amendments via the Commonwealth Ombudsman legislation in the first half of next year for establishment of the ombudsman in the middle of next year. In the interim, increased resources and focus will be applied within the department to assist with student complaints.

The CHAIR: The question is that amendments (1) to (25) as moved by the minister on sheet GX140 be agreed to.

Question agreed to.

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

I seek leave to move the amendments on sheet 8019 and sheet 8028 together.

Leave granted.

I move:

(1) Clause 2, page 2 (table item 1), omit the table item, substitute:

(2) Clause 116, page 78 (lines 28), omit "calendar year", substitute "financial year".

(3) Clause 116, page 78 (lines 29), omit "calendar years", substitute "financial years".

And:

(1) Schedule 1, item 20, page 7 (line 23), omit "1 January 2017", substitute "1 July 2017".

(2) Schedule 1, item 20, page 7 (line 25), omit "1 January 2018", substitute "1 July 2018".

(3) Schedule 1, item 20, page 7 (line 27), omit "1 January 2017", substitute "1 July 2017".

(4) Schedule 1, item 20, page 8 (line 2), omit "1 January 2017", substitute "1 July 2017".

(5) Schedule 1, item 20, page 8 (line 6), omit "1 January 2017", substitute "1 July 2017".

(6) Schedule 2, item 1, page 11 (line 8), omit "1 January 2017", substitute "1 July 2017".

(7) Schedule 2, item 1, page 11 (line 9), omit "30 June 2017", substitute "31 December 2017".

(8) Schedule 2, item 2, page 11 (line 19), omit "1 January 2017", substitute "1 July 2017".

(9) Schedule 2, item 2, page 11 (line 20) to page 12 (line 26), omit "1 January 2017" (wherever occurring), substitute "1 July 2017".

(10) Schedule 2, item 5, page 13 (line 22), omit "1 January 2017", substitute "1 July 2017".

(11) Schedule 2, item 6, page 13 (line 30), omit "1 January 2017", substitute "1 July 2017".

(12) Schedule 2, item 8, page 14 (lines 9 to 12), omit "30 June 2017" (wherever occurring), substitute "31 December 2017".

(13) Schedule 2, item 9, page 14 (line 14), omit "1 July 2017", substitute "1 January 2018".

(14) Schedule 2, item 9, page 14 (line 17), omit "1 July 2017", substitute "1 January 2018".

(15) Schedule 2, item 11, page 15 (line 13), omit "31 December 2017", substitute "1 July 2018".

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

I will quickly indicate that the government does not support these amendments. Frankly, it is bad enough that the Senate has just proposed that a large part of the market will continue to effectively operate under the VET FEE-HELP scheme for the next 12 months, which is something that the government does not support and will continue to oppose. But these amendments from NXT would delay commencement altogether of the scheme, ensuring that the VET FEE-HELP scheme itself did continue to operate for a prolonged period of time, which would see yet more waste of taxpayer dollars, targeting of vulnerable Australians and damage to the reputation of the vocational education sector.

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

I will just indicate that the Australian Greens will not be supporting these amendments either. We believe that so much evidence has been brought before this parliament about the extent of the rorting and the fraudulent behaviour. It needs to be cleaned up. We need to draw a line somewhere, and we think we need to get on with it. Too many students and particularly vulnerable Australians have been exploited. Taxpayers are being exploited—ripped off—because of this out-of-control privatisation of the VET sector. We are glad the government is now acting. We are disappointed that it has taken so long, and we do not want to see any further delays.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Labor will not be supporting these amendments, even though we understand and have some sympathy for the NXT approach on this. I think the key issue for us is that we need an assurance that the government is willing and capable of enacting these reforms within a short time frame. The sector has waited too long, and the botched reform effort would be devastating. So, Minister, can you give us an assurance that these will be acted on very quickly?

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

Very briefly, the government is working quickly to ensure that all of the regulatory aspects of the new VET student loans program are in place and ready to roll as soon as legislation is carried and given assent. We have already finalised and published the intended list of eligible courses. We have already finalised and published the criteria for admission of providers into the interim program. We have already commenced the receipt of applications for assessment of providers seeking to enter that interim program, all of which of course will be then legally finalised as soon as we can bring those regulations about.

As a salutary reminder to the Senate, I will just point out that when I first sought to bring in a range of measures to tighten activities in relation to the operation of the VET FEE-HELP scheme, during that period between 2014 and 2015, we saw enrolment growth that was some 44 per cent higher in August 2015 than in August 2014 as people were seeking to get in ahead of the announced start date for changes. That is why, frankly, it is necessary to make sure that we bring in a rapid-fire start date here, because there are already providers out there who are spruiking that you should get in fast before the end of the VET FEE-HELP scheme and that any delay would only see increased rorting of it.

The CHAIR: The question is that the amendments moved by Senator Griff—(1) to (3) on sheet 8019 and then (1) to (15) on sheet 8028, which is the consequential bill—be agreed to.

Question negatived.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

by leave—I move opposition amendments (1) and (2) on sheet 7958 revised, together:

Incorporation:20161130:Opp amendments (1) and (2) on sheet 7958 revised

These amendments will allow the minister to grandfather a student under the current VET FEE-HELP scheme after the end of 2017 in circumstances in which this is fair and reasonable, such as illness or caring responsibilities where a student studies part-time or where a student is simply studying a course that will go for more than one year, as many reasonably do.

By the minister's own estimate, over 140,000 students will need to be grandfathered in the VET-FEE HELP scheme next year so they can finish their courses. It stands to reason that many of the students will not finish their studies by the end of 2017 when the grandfathering abruptly ends. It could be because they study part-time, because they have to take time off for illness or family, because their provider or course is not going to be eligible after next year, or simply because they are studying one of the many courses that runs for more than 12 months. The impact of this dead stop to grandfathering at the end of 2017 will be huge for students. They will be faced with having to pay the full cost of the course fees up-front if they want to finish. That is completely unfair. This is set to be yet another wave of VET students that the system will turn into victims, through no fault of their own. The outcomes are easy to see: students will not finish their courses, they will be left with debts but no qualifications, and they will simply be discouraged from further study.

It is very concerning that the minister has not provided anything in these bills to help these students, when it is abundantly clear that tens of thousands of students will be in this position. Labor is moving this amendment because we want to protect students—because it is wrong that students are again coming last in this debate. Students deserve to know, when they start their studies next year, that they will be able to afford to finish them. Of course, extending grandfathering is no excuse for dodgy providers signing on more students or charging inflated fees into the future. That is why this amendment gives the minister the powers he needs to prevent that.

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

I indicate that the government will support these amendments. We think they are appropriately targeted. We do not believe that they are likely to heighten the risk of exploitation of the scheme, given that they simply piggyback on top of the grandfathering arrangements which the government has already proposed.

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

I would like to indicate the Greens' support for this amendment. This is one of the issues that have become clear through looking at this legislation. Students, in a number of courses and for a number of reasons, may need to have their time extended, whether that is part-time students, or students who have had exceptional circumstances in their lives. It is only fair that we make sure those students are looked after, and not punished because of the rest of the mess that is unfolding under this scheme, which is not their fault or under their control. We support this amendment and—now that we have government support—we look forward to seeing the bill go forward.

The CHAIR: The question is that amendments (1) and (2) on sheet 7958 as moved by Senator Cameron be agreed to.

Question agreed to.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I move the amendment on sheet 8029 in my name. This amendment is to help the debt incurred on the government, by requiring students to make loan repayments from the amount of $22,000, regardless of where the income is coming from. Under the current system, with a VET repayment loan, students are actually having to make repayments from $54,800 at four per cent. My amendment is a responsibility placed on the student which says that, 'you have incurred a debt to the taxpayer; you are responsible for that debt'. If we bring it in at $22,000, a percentage of that—I am saying two per cent, from $22,000 up to the $54,800—that means that you are paying back a two per cent loan and you are repaying your loan back to taxpayers—who were gracious enough to give you that loan so that you could do your course. And then after that, from $54,800 it then goes to the government's loan repayment scheme.

I believe that people have to start taking responsibility for their own actions. This is a privilege that is given to students by taxpayers, so that they can further their education. I think they have a responsibility. Too many people are actually taking advantage of this: they are doing their courses, they do not finish their courses, and it is a huge expense. As I said earlier, by 2025-26 these debts are going to be a cost of $186 billion to the taxpayer—that is, by 2025-26, it is going to be over 46 per cent of our national debt. That is why we must start reining this back in. People will be responsible for their own actions. If they want to have further education, it is up to them to repay the loan to the taxpayers. I therefore move this amendment in my name.

The CHAIR: Senator Hanson, would you also like to join amendments (1) and (2) on sheet 8804?

by leave—I also move amendments (1) and (2) on sheet 8804 standing in my name. This amendment says:

The Secretary may only approve a loan for a student for a course of study if the Secretary is satisfied that:

  (a) the student is a genuine student; and

  (b) the student is reasonably likely to repay the loan.

We have seen too many people who sign up to these courses with no intention of wanting to go on to further their studies or to seek employment with that study. They have been coerced into doing the course, and are signing up for it purely because they get a laptop. That has to be vetted very strongly by the department, by the Secretary, and then we can allow this to happen. If people were made aware that, 'if you sign up to this course, you are going to be responsible for repaying the taxpayer'—I think that is very important. Again, I will go back what I said earlier: people have to be responsible for their actions.

It is not up to the taxpayer to continually pay for this. I am not against further education by all means, but we cannot afford it and there are many other areas I would like to see the taxpayers' dollars spent, whether it be in health, the aged or many other areas, but not in this. So I believe there needs to be tightening. In 2009, the VET loans were at $25 million. They have gone up since 2009 till now, to $6.34 billion. There was only $21 million up-front. It has been ripped off. We have been taken like mugs. The whole system is totally wrong. We have agents out there pushing their agenda to make a lot of money out of this at the expense of the taxpayers. There has to be a responsibility based on it. If we tighten up, people will think twice about signing up to this, because they will be responsible to the taxpayer. And that is what I am very concerned about. So I have moved these amendments in my name.

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

Briefly, the Australian Greens will be opposing these amendments. I just want to put it on the record how appalled I am to see One Nation kicking some of the lowest paid workers and professionals in this country. The fact is we need people working in our aged-care system. Where on earth are we going to get those trained people to work in our aged-care system if we do not give them the opportunity to get the qualifications? Some of our lowest paid workers are working in our child-care and early education system. If this amendment were to pass, these are the people who will get slugged. One Nation say one thing in Queensland about standing up for the lowest paid workers and the most vulnerable. When they get to Canberra, they side with the elites and they stick it to some of the lowest paid workers in this country. It is time that the Australian people woke up to the sham and the fraud that is One Nation.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Briefly—I am looking at the time—I just want to indicate that Labor does not support these amendments.

Jacqui Lambie (Tasmania, Independent) Share this | Link to this | Hansard source

The JLN does not support these amendments, because our policy is simple: when you finish year 12 and you are prepared to go and do a degree, we believe that this country is rich enough that every student, every young child and every teenager out there should have their first degree for free. That would make for a smarter nation. But hitting them at $22,000 is not a smart move.

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

The Nick Xenophon Team senators do not support this motion.

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

The government does not support this amendment or these amendments either. I draw Senator Hanson's attention to the answer I gave to Senator Leyonhjelm earlier. In fact, the government is considering the affordability of the student loans program overall. We discussed this on page 19 of our higher education discussion paper released earlier this year. Such matters are being considered in the context of higher education reforms that are not before the Senate at present and certainly not in the context or the specifics with which you have proposed these amendments.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

Through the chair, I am just gobsmacked at Senator Hanson-Young attacking me over aged care. That is not the whole point. The whole thing is that people have to be responsible for their debt to the taxpayer. People are abusing the system, and it is quite apparent in the rising cost and the debt that we have in this country. If you are going to study for a degree and you actually have a degree in an area then you are actually going to be at $22,000. That is the amendment. New Zealand brings it in at $19,000. That is when you actually start paying back the taxpayer. If you want money for your environmental issues—which are a waste on the taxpayer as well—it has to come from somewhere, so start reining in. I would love to know where all this money is supposed to come from. We are in debt. We are paying $40 million a day in interest alone. So I would say, 'Wake up, the Greens,' because we cannot keep going. All I hear is that we are going to pay out more handouts and all the rest of it. Who is going to pay for it? Someone has to pay for it in the long run.

The CHAIR: The question is that amendments (1) on sheet 8029 and (1) and (2) on sheet 8004, as moved by Senator Hanson, be agreed to.