Karen McNamara (Dobell, Liberal Party) Share this | Hansard source

I rise today in support of the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015. I thank the Minister for Vocational Education and Skills, the Hon. Luke Hartsuyker, for his work on this bill. I also acknowledge the Minister for Education and Training, Senator the Hon. Simon Birmingham.

This bill seeks to strengthen the administration of the VET FEE-HELP loan schemes and these amendments seek to protect vulnerable students, taxpayers and the overall integrity of the entire vocational education and training sector. The amendments are a result of the actions of a small number of training providers or their agents who have unfortunately taken advantage of prospective students. The government proudly supports the VET FEE-HELP loan scheme as it encourages more training to be undertaken by more people. The students who utilise the VET FEE-HELP scheme often undertake training they would otherwise not have had access to due to the significant up-front fees.

The VET FEE-HELP scheme has been in a growth period since it was expanded by the then Labor government in 2012. Between 2013 and 2014, the number of students accessing VET FEE-HELP increased by approximately 103 per cent from just over 100,000 to almost 203,000 enrolled students. The total value of these loans more than doubled from $699 million in 2013 to $1,757 million in 2014. Since first made available to students in 2009, a total amount of $3.1 billion had been accessed under the VET FEE-HELP scheme by 2014. To an extent, the growth has been attributable to more providers entering the training market. Unfortunately, the industry has been scarred by a minority of opportunists taking advantage of vulnerable students. Due to the competitive growth in the market, unscrupulous conduct has included programs aimed at vulnerable people who are, as a result, left with large amounts of debt—and even, in some cases, an incomplete or useless qualification. This is simply not good enough.

This government has acknowledged the relationship between the growth in the VET FEE-HELP scheme and the marketing practices of a small group of training providers and has acted in response. A number of measures were introduced in March of this year by the then Assistant Minister for Education and Training, Senator Birmingham. Such measures included the banning of inducements such as free laptops, tablets, phones or even cashback offers to lure students under the VET FEE-HELP loan scheme. Marketing and recruitment practices have been tightened to ensure only appropriate marketing of the VET FEE-HELP loan scheme to potential students is undertaken. An education awareness component has also played a role with efforts to further explain how the VET FEE-HELP loan scheme works, as well as the rights and obligations of students under the scheme. Further measures included strengthening the debt waiver and revocation processes for students under the scheme and ensuring the debt incurred by students is in line with course delivery. Importantly, training providers are now prohibited from charging a withdrawal fee, which was a huge disincentive for students to withdraw from a course prior to the census date when the VET FEE-HELP loan would be charged—unfortunately an underhanded and dishonest method to fill the pockets of dubious providers at the expense of students.

The assessment criterion for training providers as well as scrutiny of these providers was also strengthened. Basic parameters were established in terms of literacy and numeracy requirements. This meant that prerequisites and prior education qualifications were introduced as a means of ensuring that the potential student is capable of completing the course in which they have enrolled. Perhaps the most noteworthy of the measures designed to crack clown on dodgy training providers is the clarification of training and outcomes information. Put simply, students will be informed about their choices in regard to training providers and courses. Further transparency has been implemented whereby providers are required to disclose who their agent or broker is and whether or not they are receiving a commission in return for enrolment. Some of these measures have already been implemented with appropriate changes to VET guidelines or products designed to communicate to students. Providers will soon be unable to levy the full cost of course enrolments for students in one hit, which provides a safety net of intermittent opportunities for a student to opt out of continuance in a course without carrying the full financial burden of the whole course fees.

The measures that have been implemented are a great start but this bill builds on all changes made to date and goes further to prevent inappropriate enrolments and debts through a variety of different methods. The introduction of a two-day cooling off period between enrolment and application for a VET FEE-HELP loan will ensure the impact of the decision regarding further debt is considered properly by the applicant. It also prevents past practices of dishonest providers who target the unsuspecting and obtain enough details to unwittingly sign them up to a debt they may never be able to pay. Further, ensuring students can actually complete the higher level of education is important, which is why minimum prerequisites are to be introduced. This measure, in particular, ensures the debt to be incurred is not going to be wasted with the student not being able to complete the degree or gain any real education training outcome from the course. We have all heard the stories of those less than 18 years of age being hoodwinked into a VET FEE-HELP loan. Amendments in this bill will require a parent's or guardian's signature before a student under 18 years can incur this level of debt.

The protection of both students and taxpayers has also been addressed in the amendments in this bill. Firstly, students will have an easier process to follow to have their debt cancelled if they have been signed up for a loan inappropriately. Secondly, the taxpayer will be protected as this amendment will see the course fee cost being charged to the provider in the event that a student signed up to a course under dubious circumstances or misinformation. A track record of delivering quality training outcomes is now a requirement in respect of VET providers entering the VET FEE-HELP loan scheme. This will ensure only those which have a proven history of training are registered. Breaches of the VET FEE-HELP loan scheme guidelines will also be accompanied by infringement notices attached to civil penalties with the changes in this bill.

There are also technical amendments to be made to strengthen the Department of Education and Training's administration of the VET FEE-HELP loan scheme. These technical amendments also apply to the interaction the Department of Education and Training has with the Australian Skills Quality Authority to monitor and enforce compliance with the VET FEE-HELP loan scheme. These are common-sense changes The students who are genuinely seeking training with the assistance of the VET FEE-HELP loan scheme should be able to do so with accurate information which will in turn lead to informed choices. Also, the minority of providers who are intentionally misleading prospective students should not be permitted to continue this shameful practice. This bill does introduce additional regulations on those training providers approved under the VET FEE-HELP loan scheme; however, it is only those regulations necessary to protect students and taxpayers which are to be introduced. The vulnerable students who have been led astray under the current system, the taxpayer who has footed the bill and the integrity of the vocational education and training sector in Australia will all benefit from the amendments to this bill.

As usual, once again this government is ensuring accountability that was clearly lacking under the former Labor government. In this instance the measures outlined in this bill are necessary given the failure of Labor to ensure compliance arrangements were in place for operators under the VET FEE-HELP loan scheme. Had they been, perhaps Peta, a constituent in my electorate of Dobell, who was approached by a training provider in a shopping centre about a so-called government-sponsored training course, would have been spared unwelcome debt. Upon filling out a few details on an inquiry form she later discovered she had unknowingly incurred a FEE-HELP debt as a result of basically unconscionable behaviour. It is appalling to think there are phony education providers, even in Dobell, who are preying on the naive in our community and putting them into debt to make a quick dollar for themselves. While the previous government knew of these problems and did nothing to put a stop to them, I am satisfied that the Turnbull coalition government has taken these vital steps to clean up this mess and spare thousands from this ruse.

The compliance measures missing from the former government's implementation would have ensured dodgy providers or their agents would not have been able to take unfair advantage of vulnerable students. Both students and taxpayers have been severely let down by the failings of the previous Labor government. Despite numerous complaints to the Department of Education and Training in 2011 and to the Australian Skills Quality Authority in 2013, Labor did nothing. Put bluntly, the Labor Party failed to anticipate the growth in this sector from dodgy providers looking to capitalise and failed to ensure compliance arrangements to protect students.

Concerns about the abuse of the VET FEE-HELP have not gone unnoticed by the media either. Earlier this year, The Age reported that the media had been flooded with complaints about shonky operators signing up vulnerable people to overpriced, unsuitable training courses—people including recent migrants, whose English was poor, or the long-term unemployed and people who were unaware at the time of what they were signing up to. The article points out the disparity between the debt incurred and the likelihood of the consumer to ever earn above the $53,345 income threshold at which they would then be required to begin repayments. ABC News noted late last year that one provider was charging $11,000 for a diploma of early childhood, but the median wage for an early childhood worker is $49,000. This wage is lower than the income threshold, and, therefore, it is unlikely that the loan will ever be repaid. The taxpayer then foots the bill.

Even in such cases, though, the fact is that many may not be aware that undertaking a VET FEE-HELP loan affects borrowing capacity in the future for credit cards, personal loans and home loans. It can have a sustained effect, and this is why it is so important to protect and inform potential students while appropriately monitoring and holding providers and their agents to account.

In December 2014, New South Wales Fair Trading issued a statement warning consumers about scammers and training marketers who were pretending to be government officials in order to get people to hand over their personal details. These scammers have used the temptation of incentives like cashbacks, vouchers, iPads or laptops in return for signing up to a course under the guise that it will be government funded. It is unethical and underhanded behaviour, and it is reassuring to see that the coalition government has taken vital steps to stop these practices from occurring.

It is true that the majority of training providers and agents have acted in good faith and have shown due diligence in all aspects of their recruitment practices. It would certainly be unfair to put all providers in one basket and call it rotten. Marketing is a natural occurrence throughout all business sectors, whether it be a local cafe or a training provider, and most act responsibly and ethically. Training organisations are vital to our local community. They provide essential training and retraining, delivering opportunities across a broad spectrum of students—from the young person who wishes to train to enter a specific industry or move from welfare to gain employment to the single mother who wants to upskill to work to support her family, from the new migrant who wishes to contribute and integrate into their new community to the semiretired person who wants to learn new technologies and stay up to date. The Turnbull coalition government is committed to providing every resource and assistance possible to help our unemployed, underemployed or underskilled gain meaningful employment.

These changes are especially important in supporting the Dobell electorate. Unemployment and jobs growth in Dobell have always been pressing issues. I will continue to fight to ensure constituents in my electorate have access to the best possible training, which will, in turn, give them the best possible opportunity to gain employment. The provision of the VET FEE-HELP scheme is an essential component to prospective students gaining access to the necessary training in order to enter the workforce in their desired field. In Dobell, approximately one in two students obtain a year 12 certificate. Only 24 per cent of residents over the age of 15 have obtained certificate-level qualifications, and only 18 per cent of residents over the age of 15 have an undergraduate or a postgraduate degree. These figures are a case in point for the importance of the continued provision of quality training organisations.

I commend the Minister for Vocational Education and Skills for his ongoing commitment to safeguarding both prospective students and taxpayers through the delivery of this important piece of legislation. I am confident that the integrity of the VET FEE-HELP scheme will be strengthened by its passage, and it will, overall, ensure the outstanding quality of education and training in Australia will continue.

I commend this bill to the House.

See this speech in context