Higher Education Support Amendment (VET FEE-HELP Student Protection) Bill 2018 Second Reading Speech

November 28, 2018

This Higher Education Support Amendment (VET FEE-HELP Student Protection) Bill 2018 is a really important bill. I am very pleased that, finally, this House is able to do something to support the students who have been ripped off by dodgy providers and been left with very significant debts. It is good to be able to do something to support vocational education here. I think this is probably one of the first opportunities I've had in the 2½ years I've been in this place to really focus on this issue in a positive way.


Just to be clear about what this bill does: it allows there to be recrediting of a person's FEE-HELP debt when it's established that there has been inappropriate conduct by a VET provider or their agents. That is something that has caught many students. Sometimes only when they've done their tax returns have they found out that they have a debt which they didn't realise they still had.


It is sensible that the secretary who makes this decision has to be clear that the student did not complete the requirements for the relevant VET units of study and that it is reasonably likely that the VET provider engaged in inappropriate conduct towards the person in relation to the unit or course. I will talk later about some instances in my own electorate of Macquarie where people have come to me, where clearly there has been inappropriate behaviour in terms of people applying for courses and signing up for courses. It was certainly a case of 'buyer beware' for many of them.


The core of this is a commitment to ensuring we have a vocational education system that has integrity, and that's something that has been sorely missing for many people. What this also does is raise the issue of the urgent need we have to make changes, so that we have a world-class post-high-school education and training system in this country. Sadly, what this legislation or any other legislation by this government fails to do is address the inequalities that have grown. As student loans have expanded, profit margins have increased and educational costs have been shifted onto younger people, including apprentices and trainees.


Earlier this year, researchers at the Mitchell Institute in Victoria warned that Australia faces a severe shortfall of educated workers by 2030—a little more than a decade away—unless there's a radical change in university and vocational education sectors. They found that, if enrolments in the VET sector stay on trend, there will be 66 per cent fewer people in vocational training, despite a huge rise in demand for trades. That is setting our economy up for a terrible shock. So the researchers at the Mitchell Institute have called on the government to urgently address falling VET enrolments and also to boost growth in the university uptake—something, of course, the Labor Party is very committed to doing. They say we need to do this so that we have the skills in our workforce to offset the costs of an ageing population. So what is the Liberal government's response to studies like these? And this isn't the only one; there has been a lot of research looking at what we're facing. And their response? Nothing. They have no sense of urgency. Well, in fact, it's clear that they are so completely obsessed with themselves at the moment that, as we have seen on energy policy, we have total policy inertia.


I had the opportunity to visit one of my local TAFEs—Richmond TAFE—a couple of times this year for its open day and for a visit with the shadow minister, Senator Doug Cameron. What a privilege it was to speak with the teachers and administrators about the courses that they offer there in the public TAFE system, which include child care, horticulture, computer skills, equine and animal care—a whole range of things. Actually you can learn to do everything from shoeing a horse—in fact, being a blacksmith—to caring for cats as a vet nurse, carving a feature stone wall or creating a water feature in the garden. They provide a lot of practical skills. Their horticultural courses are designed to skill workers to care for everything, from a racing track to landscaping      a public building to propagating plants. Richmond is an amazing TAFE and, like so many TAFEs around the country, it would benefit from capital investment in its facilities to bring them up to current industry standards so that students are well prepared for the conditions that they will face.



The courses at Wentworth Falls and Katoomba TAFEs, which skill up students for hospitality, outdoor adventure work, disability work and beauty therapy work, among other things, are also highly regarded in our community. The point I want to make is that there is a huge diversity of courses and they are surviving in spite of, not because of, government policy at the state and federal level, and it's time we had policy at a federal level that helps the sector rather than nobbles it—and that is the public sector of vocational education as well as the private sector.


So let's talk about the VET-FEE rorting that this legislation is designed to try and undo. Students should never have been expected to pay debts racked up by dodgy for-profit training providers who went rogue under the coalition's watch. But that is exactly what happened. The government knew how much money was rolling out, they knew that most of the students were not graduating and they knew how much money the rorters were making.


In 2014, then education minister Christopher Pyne was warned of the dismal completion rates under the scheme. However, the government just sat on their hands as providers continued to exploit vulnerable people and rip  off students—people who were trying to get themselves a better future; people who were taking the time out  of an existing career to develop their skills and train themselves up; people who were somehow juggling their childcare responsibilities or their caring for elderly parents to get some skills. The fact that nothing was done and that it's only being done now is an absolute outrage.


Under the coalition, VET FEE-HELP loans skyrocketed to $1.8 billion in 2014 and a staggering $3 billion in 2015, totalling $6 billion from 2014 to 2016—overwhelmingly to private providers. There has been absolutely no leadership on the VET rorting. I think that one of the worst things that has happened to vocational education students in the private sector has been this government's failure to stem the corrupt practices of unscrupulous for-profit training providers. Obviously not all private providers fell into this category, but there was a serious chunk of them who did, and we're seeing court cases and evidence of that playing out.


This government allowed the ripping off of students and the ripping off of taxpayer dollars long after it was clear that there was a problem and the system was being abused. It's sad to think that it's not actually over yet. A recent report that the Ombudsman received over 6,000 complaints about dodgy private training providers in the last 12 months should have been a wake-up call about VET student loans. Alarmingly, the Ombudsman expects this number to increase as students lodge tax returns, only to find they've been charged for courses that they haven't done. The Ombudsman's report states:


… many complainants first discover they have a student loan or discover that the loan amount is larger than they expected, when they submit their tax return.


It's a very rude shock. Described as 'one of the biggest rorts in Australian education history' by The Sydney Morning Herald, we certainly fear that many students remain unaware that they've been charged and have therefore not got around to reporting it yet. Let's remember what some of those practices were: signing people up without them even realising it and offering inducements, like laptops and iPads, to get people to sign up to a course that they may not have had the capacity to complete and that may not have been a course that was going to further their professional development.


One local Blue Mountains woman told me that she signed up for a counselling course with a private provider. She became suspicious of the quality of the provider, concerned when the materials that she was promised weren't provided and that there was very poor student service right from the start. She decided not to proceed with that course. It took weeks and weeks of multiple attempts before she was able to withdraw from it, and months later, when she was doing her tax return, she found she had a $12,000 debt for a course that she had not even started.


Another Hawkesbury local was one of more than 700 hair and beauty students caught in The Australasian College Broadway's collapse in 2016. Not only did the students lose their access to study as a result of the college's going into liquidation with a long list of creditors, none of the students could get access to their academic records to show what work they'd completed. The system had reportedly been hacked and student records were deleted and passwords changed. This meant that they were unable to transfer their credits to other colleges to study, and therefore couldn't complete their course. That was compounded by the fact that they ended up with a big VET FEE-HELP debt for an uncompleted course.


Sarah from Bilpin, who was in her late teens at the time, summed up her situation beautifully and brutally to me. She said, 'It's hundreds of students in limbo with huge fees, no qualifications and only half of their student records.' Two years on, she still had a debt of $24,000 related to her collapsed course. So, through no fault of



her own, this young woman carries a debt. I really hope that this legislation means that that will be able to be reversed. Another Winmalee resident had a similar problem, with a debt for a certificate III in aged care with a registered training organisation that had shut its doors and left this older man with a debt.


The Ombudsman's report earlier this year showed 5,193 complaints, of which half were yet to be resolved. The government's failure to act on these matters means many more people were affected than ought to have been. When an initial problem occurs it is our responsibility to act fast. It also resulted in a loss of confidence in the entire sector and has led to VET student enrolments continuing to fall.


I want to point out that it is not every private provider who deliberately sets out to rip-off taxpayers or students. Quality providers, quality private providers, have a role to play in vocational education. I want to particularly talk about the specialist providers who are still being excluded from their students being eligible for VET FEE loans. For instance music, dancing, acting and film schools that provide professionally focused training, often using professional standard equipment, with very small groups and high teacher/student ratios—a large number of teachers to students—do not deserve to be tarnished by the same brush as the dodgy mass providers. These courses may not meet the criteria that you need to demand from the more online delivery focused courses on offer, but they provide a vital role in skilling up our actors, dancers, musicians and filmmakers to be telling Australian stories.


Be in no doubt any abuse of the system in place by any provider should be acted on fast, and the vast majority of training should be delivered, I believe, through a public system. In contrast to the government's approach, Labor will ensure that at least two-thirds of all government funding for vocational education will go to the trusted public provider, TAFE. The balance will go to not-for-profit community and adult educators, and only high- quality private providers with demonstrated links to industry should be able to access it. There would, therefore, be less opportunity for bad operators in the private sector to take advantage of students.


We need a robust inquiry into vocational education in Australia, which Labor has committed to doing. We need to look at how the sector—the TAFE sector, the vocational education sector—interacts with the university sector as we prepare people for the careers of the mid-21st century. The Abbott-Turnbull government—and I should now add Abbott-Turnbull-Morrison government, because the practice continued—has stripped $3 billion from vocational education since they were elected. The vocational education system has been damaged by privatisation, poor regulation and unhealthy competition.


In the first hundred days of office Labor will establish a comprehensive inquiry into postsecondary education, ensuring secure consumer protection for students will be a key part of our review. When you think about the data on what's happened to TAFE and the VET system in the last five years it is a sad tale: $3 billion out of TAFE skills and training funding and a fall of more than 140,000 apprenticeships and traineeships, and that is still falling. In towns and regional centres across Australia TAFE campuses have closed, courses have been scaled back, fees have increased and teachers have lost their jobs. There has been a 30 per cent drop in government funded training happening at TAFE between 2013 and 2016 and the data keeps coming out and continues to be damning.


There have been so few initiatives by this government, but the one they have tried is the lamentable Skilling Australians Fund that depends on visas being issued to foreign workers. As the number of visas goes down, so will the funding for much needed skills development for Australians. There's absolutely no commitment by this government to training young people or retraining older workers.


TAFE needs to be many things. It needs to be financially and geographically accessible to people, it needs to be providing well-skilled people that meet employers' needs and it also needs to provide secure work for teachers. These aren't easy things and only Labor has the belief in TAFE and its importance to see it through.