Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I rise to speak on the VET Student Loans Bill. On the back of that last contribution, I think one of the things we need to make very clear at the very start of this process is that the coalition government is actually fixing up a dreadful mess that was designed and implemented by Labor. Let us make no mistake about that—it is a disgraceful mess that was designed and implemented by Labor when they were in government. We are actively showing our support for the sector by fixing Labor's unmitigated mess. That is exactly what it was. It was another, just the latest, of Labor's unmitigated messes in portfolio after portfolio that we saw when the coalition came into government. Of course we on this side are very strong supporters of the vocational education and training sector. We see so many intelligent, practical, capable people who are very much part of Australia's economic growth. Business opportunities and employment outcomes are what we want for students.

We know that last year about 4.5 million people actually participated in the vocational education training system. Not only does Australia's economic prosperity depend on those great people but it also depends on the quality of graduates and their ability to integrate successfully into the workforce. It is not just about the training part and the education part but about how well have they actually transition into the workforce. But it is not only that; Australia's economic prosperity also depends on the quality of our vocational education institutions and providers.

I will just mention South Regional TAFE in Western Australia, which has campuses in my part of the world, and its direct connection to local industry. Providing courses that are relevant in your community, particularly if you live and work in rural and regional Australia, is really important. It is very important that the courses offered reflect regional needs and future needs. I look at the courses available in Bunbury, Busselton, and in Harvey through the South Regional TAFE such as automotive servicing. There is a state-of-the-art service centre that was built by the state Liberal government in Western Australia and it is a fantastic facility. The students get to work in very productive circumstances and their experience is fantastic. The centre reflects the workplace and it is a great opportunity. I look at the great job the TAFE is doing with education, with building and construction, and with nursing—there are so many different courses. South Regional TAFE is doing a great job in providing the people we need to help grow what is one of the diverse electorates in the south-west of Australia. We need diversity and we need quality education. We need links to the business sector and to the industries that will need that capacity. And that is why supporting high-quality vocational education and training is central to the Turnbull government's economic growth and jobs plan. I congratulate Minister Birmingham for attempting to sort out the dreadful mess that was left to us.

Around 45 per cent of the financial assistance the Commonwealth invested in vocational education and training in 2015 supported income-contingent loans for students undertaking diplomas and above qualifications through the VET FEE-HELP scheme. The government supports income-contingent loans through VET FEE-HELP, which is one part of the Higher Education Loan Program. HELP ensures that students are not faced with access barriers due to up-front costs and that is important for young people, particularly in rural and regional areas. Sometimes they face far greater challenges than those who live next to a facility in a metropolitan area.

VET FEE-HELP requires repayments when a student has the capacity to do so. The Commonwealth pays the student's tuition fees directly to their training provider and the student then incurs the debt with the Commonwealth, which is collected via the tax system. For practical purposes, that is how it works. It is available for diplomas, advanced diplomas, graduate certificates and graduate diplomas. The amount the student is required to repay depends on their income and currently commences at $54,126. Without these particular loans, thousands of students and, I would say, so many of our young people in rural and regional Australia would not be able to afford to pay up-front fees—they simply could not—and would miss out on a tertiary qualification. And we in the regions would miss out on their skills, on their knowledge and on their capacity to help grow the region for the future.

It is also true that there were students enrolled in courses under the Labor scheme that delivered no benefit. Like some of the other famous failed Labor policies, the disastrous VET FEE-HELP scheme implemented by the previous government was wickedly poorly designed and clearly, from what we have seen, open to rorting. Labor introduced VET FEE-HELP in 2012 in a way that allowed unscrupulous providers and brokers to take advantage of vulnerable students and to rip off taxpayers as well, so it was a double whammy. Of course this was very reminiscent of the Labor pink batts plan. I know of students who were signed up for loans for courses they did not need or could never complete. In fact I am aware that many so-called providers were cold calling and door-to-door selling VET courses that were unsolicited and un-needed. My office reported such incidences to the minister and has been able to have the practice stopped where applicable.

But the very fact that telephone marketing and door-to-door sales of the courses were occurring should surely have alarmed and outraged any right-thinking person. As a result of Labor's scheme, the number of students accessing VET FEE-HELP jumped by 5,000 per cent. The average course cost tripled and the value of loans landing as debts to students and as Commonwealth borrowings blew out from $26 million to $2.9 billion. The additional number of providers increased from 46 to 275 and completion rates have remained persistently low for VET FEE-HELP students, with only 22 per cent of students completing their course in 2014—just after Labor had lost government.

The sheer scale of the disaster and the corruption became apparent and so the coalition took action. In 2015, the government banned inducements being offered to students to enrol in courses for which they needed a loan and also tightened recruitment and marketing practice to make it clear to students exactly what they were signing up for. On 1 January this year, the government brought in a student entry requirement to access loans to ensure that prospective students were academically suited for a higher level of vocational training. We have also required loans to be levied along with the student's progression in the course, rather than up front—practical, you would think—and instituted civil penalties for providers that breach the requirements. We increased protections for students under the age of 18 and introduced a two-day gap to separate a student's enrolment decision from their application for a loan. And we introduced a loan freeze to stop escalating growth while we undertook consultation to design a new student loan arrangement that had students and their training and employment outcomes—all three—at its centre. It is what you get at the end of it and what the employers get at the end of it that really matters. As a result of these actions we expect that the value of loans in 2016 will be hundreds of millions of dollars less than the equivalent in 2015.

That is not enough, however. This is another mess we have to fix and keep fixing. We are debating a redesigned program that will give students the best opportunity. That is what it should be about: giving students the best opportunity and give the best quality training at the end of their training itself. Under this bill, VET providers will need to meet far tougher entry criteria to become, and remain, an approved course provider. It is not set and forget. They will be subject to much tougher compliance measures, and on the back of what we have heard that is a very good part of the design of this. There will also be ongoing reporting requirements as provided under the Regulatory Powers (Standard Provisions) Act 2014. The bill also provides a new power to immediately suspend a provider in urgent circumstances. It also for the first time imposes personal liability on executive officers of providers in relation to contravention of civil penalty provisions or the commission of any offences. The bill also introduces new measures to allow the Commonwealth to cap an individual provider's loan amounts or restrict a provider's scope of delivery in order to control non-genuine growth in enrolments or unreasonable fee increases. These are practical ways of managing this.

Most importantly from my perspective, providers will be banned from using brokers or marketing agents to interact or engage with students in relation to VET student loans. This disgraceful process has resulted in the taxpayer funding inappropriate courses for students who neither wanted nor needed them. The bill before us today will ensure that approved providers may subcontract training only to other approved VET student loan providers or higher education providers registered by the Tertiary Education Quality and Standards Agency. Individual subcontractors engaged to provide specialist expertise for part of a course will be allowed on a case-by-case basis.

Importantly, the new VET student loans program will limit courses eligible for a loan, which is really, really important and something we see in rural and regional areas. It will therefore focus on courses that have a high national priority; align with industry needs; contribute to addressing skills shortages—it cannot get simpler than that—and lead to employment outcomes. I spoke about the need to align locally and regionally with industry needs, and that is what we are doing. Everything our people do, from the time they enter kindy through primary school and high school to formal higher education or the VET system, is about their ultimate employment. That is the process. What we are trying to do is get people to a point that will lead to employment outcomes.

The bill also provides the power for the minister to set loan caps, to help protect students from rapidly rising course costs and to set a ceiling on the maximum amount the government is willing to lend to a student for a specific course. Three maximum loan caps proposed for the start of the program are $5,000, $10,000 and $15,000 per course. However, the government recognises that there are some courses, such as aviation, which cost more to deliver than the proposed caps. We know that the training of pilots is an expensive business but is essential for regional development, especially in isolated areas and across the vast areas of Western Australia and much of Australia in general. The bill will therefore enable the minister to amend the caps to provide exemptions where needed. However that will be on a considered case-by-case basis; it will not be ad hoc. The government has made clear that this will be the exception rather than the rule. That is another check and balance.

The program of VET education proposed by the government in this bill is a massive step forward in accountability, as it should be. It also represents—again, as it should—value for money for taxpayers, while providing a valuable education for the people who not only want it and need it but will use those skills in the workforce. In my part of the world that means helping to build and develop my region and add to my regional economy.

Once again it has taken a committed coalition government to repair the damage done by the ALP, something, unfortunately, we have had to get far to used to doing. If only things like budget repair or cleaning up the building industry in Australia could follow suit. I live in hope.

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