Andrew Giles (Scullin, Australian Labor Party) Share this | Hansard source

I rise to make a contribution to the debate on the National Vocational Education and Training Regulator Amendment Bill 2015. I note that the previous speaker touched on the relationship between Labor and the TAFE sector. That was of course a very significant issue in the recent state election in Victoria, as you may well recall, Deputy Speaker Broadbent, as may the Parliamentary Secretary to the Prime Minister, who is at the table. There is no doubt in the minds of the Victorian community who the friend of the TAFE sector and, indeed, vocational training is. It is the Labor Party and it will continue to be.

The purpose of this bill is to amend the National Vocational Education and Training Regulator Act 2011 to protect the integrity of the VET system and to give the regulator capacity to respond to emerging issues. It also makes some technical amendments designed to improve the efficiency and operation of the act and consequently the regulator. The bill would also extend the period of registration able to be granted by the regulator from five to seven years.

I note that the member for Cunningham has moved a series of amendments to this bill which would have the effect of amending the proposed registration period so that the extension from five to seven years would be granted only to existing low-risk providers at renewal of registration. It is a sensible amendment, which I support. The further amendments introduced by the member for Cunningham are similarly sensible and worthy of the support of all members of the House in so far as they call on the Australian government to act with greater urgency to ensure that the protection of students is prioritised—that is a matter that many contributors to this debate have touched upon—to immediately seek a consumer protection information campaign through the ACCC, including advice for people who need to seek redress, and consider other mechanisms which might be available to strengthen consumer protections, and also to support Labor's vital call for the Auditor-General to conduct an audit on the use of VET FEE-HELP.

A little bit of context is important in this debate. When we debate the future of vocational education and training we need to think about the present high unemployment rate, particularly the high youth unemployment rate. We also need to acknowledge the very significant cuts that have been made to a range of relevant programs that are denying people access to the training that they need.

In recent weeks we have seen a spate of disturbing media reports and some powerful stories recounted by contributors to this debate. I think of the contribution by the member for Shortland, earlier, who detailed the travails of a constituent of hers. These reports are, I am sure, concerning to everyone in this place and highlight the importance of proper regulation and of the enforcement of that regulation. We have seen some shocking cases of exploitation, often of very vulnerable people. Indeed, just last night on 7.30 there was yet another story about a registered training organisation, Evocca College, allegedly doing the wrong thing. What is especially concerning about this story is that it is not about one of the so-called fly-by-night operations that we hear about from time to time. In fact, this is one of the largest registered training organisations in Australia. The ABC reported that Evocca College has a graduation rate of about 10 per cent despite claiming more than $290 million in government funding via VET FEE-HELP

The ABC's figures go on to suggest that, out of 38,000 students who signed up to its diploma courses in the past four years, only 2,000 were handed diplomas by October last year. There were over 16,000 students who officially cancelled and almost 4,000 who timed out of their courses. The college says about 15,000 are still on track to graduate. I was pleased to hear that the Australian Skills Quality Authority is investigating this college, although I note that the allegations contained in the 7.30 report last night were not matters it was aware of.

Last night's report featured a student, Dylan Palmer, who has Asperger's syndrome and is enrolled to study digital gaming at Evocca's Brisbane campus. It appears he was referred to the course by a friend who received $100 cash from Evocca, and Dylan received a free laptop. He now has a $27,000 VET FEE-HELP debt to go with it, and he still has not finished and is struggling to finish this course. This is, sadly, one example of many whereby RTOs have, it appears, actively targeted vulnerable members of the community. I note that other contributors to this debate on both sides of the House have highlighted these shameful practices. There have been a slew of stories in the media of this nature. They are deeply concerning.

I note that this bill will do nothing for Dylan and people in his situation as it does not address the damage to individuals that has already occurred or propose action to engage with the community to minimise future problems—hence the amendments moved by the member for Cunningham. The actions of unscrupulous RTOs and their brokers have had serious impacts on vulnerable people. The reports of people being left with large debts and no qualifications or useless qualifications, as we have heard in this debate, must be addressed. The government must act with greater urgency to ensure the protection of students is prioritised.

But we have heard instead the minister and government members continue to blame Labor for supposedly allowing RTOs to behave in this manner. I note, in passing, that this government has now been in power for 18 months, as we await the beginning of good government, but still blames the Labor Party for everything. What did the former minister, who is now, rather ominously, the Minister for Health, do on her watch? Very little, it would appear. Those opposite conveniently forget that it was the Howard government that extended the use of FEE-HELP to include the VET sector for approved diploma and advanced diploma courses. It is true that VET FEE-HELP commenced in 2009 and that Labor amended the legislation in 2012 to increase the coverage to all diplomas and associate diplomas and also conducted a trial to extend VET FEE-HELP to cert IV courses; but it is also true that, in order to maintain quality in the VET sector, in 2011 Labor established a national regulator, the Australian Skills Quality Authority. When the Howard government first extended the use of FEE-HELP to VET, it should have done what Labor did in government and establish the regulator—appropriate regulation for a sector in receipt of very large sums of Commonwealth funding. In government, Labor had to react to a situation that had already begun to show signs of problems arising, in large part, from major changes to the VET market in Australia. This is why those RTOs that are doing the right thing will benefit from greater oversight and accountability in their industry—it is in their interests as much as the general public's for these cowboy operations to be reined in.

There is a bigger issue here that needs to be discussed, and that is the orthodoxy of allowing a totally deregulated marketplace to operate unfettered by government oversight but accompanied, of course, by much government largesse, where the only real winners are those RTOs who get money regardless of the education they provide and regardless of the outcome for students. What we have seen is fees go up and quality go down. I am very grateful for the work that has been done on behalf of the Australian Education Union in research into just how much money some RTOs are making, despite the limited information that is available.

Those opposite will no doubt continue to trot out their ideological world view that the market will respond negatively to dodgy operators and that those that provide a good quality education will prosper. But I ask members opposite: how is that going? We have had more competition but, oddly enough, vastly increased profits—extraordinary levels of profit. This does not add up until you look at the lack of quality being delivered by so many RTOs.

Mr Tudge interjecting—

It is pretty clear where they are making their super-profits. I am very glad that Labor introduced a regulator to oversee this industry, but now it is time for this government to stop being an opposition in exile and start acting appropriately to address all of these matters.

I note for the benefit of the parliamentary secretary that this is occurring in Victoria under the Andrews Labor government, which recently announced a review of quality assurance in Victoria's VET system. This will feed into the Mackenzie review, which is anticipated to recommend a model of sustainable, high-quality training right across the training sector. This year the Victorian Registration and Qualifications Authority will conduct regulatory campaigns targeting specific qualifications and occupations and will be on the lookout for inadequate supervision, work or duties that do not match the qualification an apprentice is enrolled in and employers who do not release apprentices to attend training or pay them to attend training. Once again, Labor is setting an example of what to do. I remind the House that in Victoria we had four years—four long years—of a coalition government engaged in brutal TAFE funding cuts and issuing carte blanche to RTOs. Frankly, judging from what I have heard from constituents and what we all see in the media, it has been a mess for many students, taxpayers and the community more generally. This was, of course, a major issue in last year's state election right across Victoria but also locally, with the sell-off of the Greensborough campus of NMIT and the overall starving of funding to these providers in Melbourne's north being very major issues.

This is not limited to Victoria. Nationally, the regulator has cancelled, suspended or refused registration for 350 colleges. The reports we have been discussing in the course of this debate suggest that this is just the tip of the iceberg.

It is worth asking the question: what is wrong with supporting TAFE more effectively, as this government presses on with extending very, very significant Commonwealth subsidies to higher education private providers? I anticipate that those opposite will make the point that TAFEs are a state government responsibility—and of course they are—but, when students of private operators are allowed access to large Commonwealth government backed loans, the TAFE system and its integrity are under threat. This is because the standards and qualities of TAFE are generally much higher than many RTOs, meaning that in many cases, again, the costs are higher too. I just do not accept the furphy that private operators, through sheer competitive force, have driven costs down. The evidence is not there to support that in any event. The only thing which has been driven down is quality, and that is something we will all pay for. Unfortunately, we have seen less and less money spent on a per-student basis while RTOs prosper—prosper to an extraordinary degree. Surely, it is not in the interest of students that this continues.

I referred, briefly, to work done on behalf of the AEU looking at the profit and practices of a range of RTO operators. In considering the structure of vocational education and training in Australia, we would do well to return to the objectives that were set out in the 2012 National Partnership Agreements on Skills Reform, which included improving training accessibility, affordability and depth of skills; encouraging responsiveness in training arrangements; assuring the quality of training delivery and outcomes; and providing greater transparency through better information to ensure consumers can make informed choices and governments can exercise accountability. This bill, of course, goes some way to achieving these objectives, but it was too little and too late. The amendment moved by the member for Cunningham obviously picks up on some of these issues.

What is at stake for students? We are seeing more and more students, in this sector, loaded up with debt they will never repay, and often with qualifications that will not get them a job. I mentioned Dylan Palmer earlier in my contribution. It is worth noting that Dylan is still keen to finish his course, but his disability makes this difficult. That Dylan travelled three hours a day to attend his course in Brisbane is a strong indication of his dedication. Students like Dylan are not at fault here. There is not an independent source of information where they can find out beforehand about the provider, the course on offer, or the likely job prospects.

Increasingly, the prospective and current students that RTOs are targeting are not sophisticated consumers. They do not speak English, they may have a disability, and, in many cases, they are financially illiterate. That VET students have access to VET FEE-HELP loans is problematic at many levels. This encourages the RTOs to advertise, 'Study now, pay later.' However, FEE-HELP loans were originally designed for university students with the fees and loans being calibrated at the likely lifetime earnings of a university graduate. This has very limited application to many of the VET courses being provided—in particular, in fields of endeavour like child care. I ask: where is the equity in this approach? It is not something which is readily transferable. The vast majority of graduates of RTOs simply will never earn sufficient money to pay these loans back. This dashes the dreams, confidence and aspirations of these students to engage positively in our community.

It does not stop with the individual students. Taxpayers are also the losers in this situation, as we are all left with a bad debt that will not be repaid. The Grattan Institute's recent research puts these bad debts at 40 per cent. I would not be surprised if it turned out to be higher. More broadly, we end up with a society where unemployment remains high because the training does not meet the needs of today's labour market, much less the needs of tomorrow's labour market. So, we have, in this environment, a very small group of winners—big winners—with the current system. And then there is the rest of us—students and the community at large—picking up the tab for years to come. So much for intergenerational fairness.

Education remains one of Australia's biggest exports. We, have a mostly good reputation, but this reputation is being damaged when dodgy RTOs are allowed to operate. I strongly support students getting a vocational education. It is essential we ensure RTOs are delivering the quality that we are all directly or indirectly paying for. It is what these students deserve and what Australia needs.

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