Darren Chester (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

I appreciate the opportunity to speak in relation to the Vet Student Loans Bill 2016. Before I commence I would like to acknowledge the young people in the gallery this morning and wish them well in their studies.

I would also like to recognise the students in Victoria who are approaching their Victorian VCE exams in the coming week—next Wednesday. I wish all the students well, and I am sure all members wish year 12 students around the nation well in this very challenging time in their lives. I offer a little reminder to students that a number, an ATAR score, on a piece of paper will never define them as a person. There are many, many ways of achieving success in their future careers. While the ATAR score is a measurement tool, it is important to remember that there are many pathways to future success. I know from personal experience as someone who never went to university, who went on to do a journalism cadetship, that it has not held me back in my aspirations for the future. I know you, Deputy Speaker, parted company with your high school under mutually agreeable terms—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Yes.

Darren Chester (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

and were perhaps encouraged to find another career option. I understand that you went on to become an apprentice shoemaker and have been wearing that shoe leather ever since. It certainly has not held you back in your career aspirations to be a state member of parliament and now the federal member of parliament for McEwen. I guess the lesson in that for all of us is that there are many pathways to success.

It can be a very stressful time for students who are approaching their VCE exams, but there is a great deal of support out there for them, whether that be through their own family, their network of friends or their teachers. I also point out that organisations like the digital mental health organisation ReachOut Australia, which is supported by the government and corporate donors, have resources to support year 12 students if they are finding things tough. I encourage young people going through this stressful time in their lives to make sure they reach out for assistance if they need it. Obviously, after their exams some students will go on to university but others will choose other pathways and pursue different options, and that is what today's bill is all about—it is all about protecting the integrity of an important education pathway, that being vocational education.

There is no doubt that the VET Student Loans reform which is before us today is well and truly required and, in some instances, is a response to some very inappropriate behaviour throughout our nation. The government intends to replace the failed VET FEE-HELP scheme with the VET Student Loans program from 1 January 2017. The scheme will include a range of measures to protect students and Australian taxpayers, and to restore some trust in the vocational education sector.

This is especially important, Deputy Speaker, for young people from regional areas. You and I know that, at this stage, students in our regional communities do not participate in tertiary education as much as students from metropolitan areas, but young people from regional areas do participate very strongly in apprentice courses and TAFE programs at a higher level. People from our regional communities want the opportunity to access reputable courses in their own community as much as they possibly can and for those courses to offer a pathway into full-time employment. People with honest intentions, who have participated in these courses expecting to land a job with their new qualifications, have been badly let down by the unscrupulous operators this bill seeks to address. The operators who acted in this unscrupulous manner—and I congratulate the Minister for Education and Training for recognising this—have effectively rorted the system. I think it is terribly important to recognise that they preyed on vulnerable students, who were the innocent victims in this process. The businesses of education providers who were doing the right thing were also affected during this time. I sincerely congratulate the minister for recognising the need to put in place new provisions which protect the legitimate operators but particularly crack down on those who were operating in an unscrupulous manner and rorting the previous system.

Not only were people ripped-off; the government's budget was blown out and taxpayers had to pick up the tab. The funding for VET loans blew out from a cost of $325 million in 2012 to $1.8 billion in 2014 and $2.9 billion in 2015. We have seen meteoric increases in student numbers in the order of 400 per cent. Fees more than doubled and loans increased by 792 per cent. The Turnbull-Joyce coalition government is taking steps to repair the system, including limiting courses eligible for VET Student Loans to those that align with industry needs and having a clear pathway for the students undertaking those courses. Three bands of loan caps—$5,000, $10,000 and $15,000—will be set for courses, depending on their actual delivery cost. And students will be required to log in to and engage with the VET Student Loans online portal to ensure they are active and legitimate enrolments and participating in that educational opportunity. Another change is a new application process for providers wanting to access VET Student Loans, which includes a much higher bar to entry. So the legitimate education providers will be able to participate but those who have unscrupulous intent will be weeded out. We will also strengthen legislative, compliance and payment conditions, prohibiting approved providers from using brokers or directly soliciting prospective students. That was a fundamental problem under the previous system, so it is a welcome change.

The minister has announced 347 courses that are expected to attract funding support under the new affordable, sustainable and student-focused VET Student Loans program. This remains open for consultation, which is an important point to make. I would encourage anyone who thinks a course has been left off the list but should be retained to engage in the consultation process. I know the minister is well and truly open to those suggestions.

I refer back to my comments at the outset about student pathways. I would like to raise another issue about student pathways which is directly impacting on my electorate of Gippsland. I have been approached by concerned students and teachers at Federation University, at their Churchill, Gippsland campus, about a pathway to graduate medical studies that now no longer exists for students in my community. Previously, students completing an undergraduate biomedical science degree at Federation University in Churchill were eligible to transfer to the Monash University graduate entry medical program.

To give context about why this matters to my community, Federation University's Churchill campus was previously the Monash Gippsland campus. Churchill is also the home of the school of rural health. It is the flagship student medical program for Gippsland and plays an important role in supplying medical professionals to our region. You know and I know—and many regional members have the same experience—that attracting and retaining GPs and health professionals in all forms in our regional communities is an enormous challenge. A very significant part of the answer to this problem is providing access for kids from a regional background to that training, because they are much more likely to return to their home communities in the future, having had that regional experience.

The history to this is important. In 2006—so 10 years ago—Commonwealth funding was provided to create the graduate entry program at Monash's Churchill campus in Gippsland. It was known at the time as the Gippsland medical school. Under this model, graduate students would achieve their degree in four years, rather than the five required by direct-entry students. The federal and state governments provided funding of $12 million for infrastructure upgrades at Churchill, creating the medical school base, and the clinical sites of the school.

The coalition government at the time—the Howard government—established extra Commonwealth support places in 2006, and there were additional places sourced in 2007 and 2008. Gippsland students were actively encouraged to pursue the graduate pathway to becoming a doctor. In 2007, it was marketed to the local community as a way of retaining doctors in Gippsland, because we knew then, as we know now, that many country-trained doctors will return to those rural areas to provide services to the underserviced populations that still exist today.

In early 2011, the Gippsland medical school was disestablished and the first year of the Graduate Entry Program at Churchill became the responsibility of the school of rural health. I am advised that in 2013 a review was conducted by Monash University into the graduate entry program. Monash University made a decision it would only accept students into its graduate entry program from Monash undergraduate courses. So, if you completed your undergraduate subjects at Churchill, the pathway to Monash University's medical program is now closed. This has caused great concern among the staff at Federation University. It has also caused huge concern for students and prospective future students. I believe—and I make no apologies for being as blunt as this—Monash University is failing my community.

Monash has closed the door on a pathway to becoming a doctor for students studying at Gippsland's only university campus. With respect to the university, it has provided an explanation to my office, because I did write to them formally on this issue. Its reason was: to produce students with 'the required ability and knowledge to be able to cope with clinical years' of the graduate program.

I recognise Monash University will quarantine some spaces for students from Gippsland in their graduate medical program. But these will only be open to Monash undergraduate students, not the students studying at Federation University in Churchill now or in the future. So what does this mean if a student has young children, or if they do not have the financial capacity to move to Melbourne, or if they quite simply would rather stay in their home community and study?

We should not be saying to our students who are completing year 12 this year that they have to move to Melbourne to access the Monash graduate medical program when we had an existing pathway in Gippsland. This is an enormous step backwards and, I would say, it is against the spirit of the intention of the original funding from the Commonwealth and state governments to establish the program at Churchill in the first place.

I am concerned Monash is effectively forcing talented people away from Gippsland, when they want to study in their own region and later become a doctor in their home region. It is likely now that those students will go onto other universities where they can gain entry to a graduate medical program. Who knows? Having been to Sydney or another university in Victoria, the question is who knows whether they will ever make it back to Gippsland to provide those services which are much needed in my community?

While I respect that Monash can make these decisions and that they want to preserve the integrity of their course, I cannot accept the notion that a student studying biomedical science at Federation University in Gippsland who achieves the required marks cannot find a direct pathway to a Monash graduate entry program.

So I respectfully, call on Monash University to reconsider its decision and to consider the consequences of its actions on regional students in the Gippsland Latrobe Valley region. I make the simple point that it is not too late for them to fix this. This graduate medical program is an important pathway for Gippsland students, and I would encourage Monash University to re-engage with my community, a community which is facing some significant economic and social challenges at the moment, and to not forget the people of Gippsland at this time.

When we are talking about student pathways, it is important that governments do everything they can to ensure people have access to an education. And that is what the VET Student Loans Bill intends to protect. As the minister has said, we simply need to 'hit the re-set button' on this issue. We need to restore trust in vocational education, and I believe this bill goes a long way to achieving that. With these measures, we can continue to protect and strengthen this important student pathway for students. I commend the bill to the House.

Ross Hart (Bass, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the VET Student Loans Bill currently before the House. This bill will introduce a new VET Student Loans program to replace the VET-HELP scheme from January 2017.

Certainly, I agree with the major stakeholders that the existing VET FEE-HELP scheme requires urgent reform. Several improvements have been proposed with these bills: capping student loans, linking funding to student progress and completion, linking publically funded courses to industry need and skills shortages, and requiring providers to re-apply under new standards so only high-quality providers could access the loan system.

I particularly welcome the commitment made by the government in the second reading speech to establish a VET loans ombudsman, a proposal that Labor moved in the Senate almost a year ago. Funnily enough, when Labor proposed these very reforms prior to the last election, the Liberals could not criticise them enough. On capping student loans, the Treasurer said that it would pull the rug out from under the private education industry, whilst the minister for education stated that the policy was 'an ill-considered flat pack'. At the time, the minister further criticised a price cap, saying it would simply, in effect, establish a government sanctioned price. He is now himself proposing three different price caps: $5,000, $10,000 and $15,000. What we have now is a complete change of direction from the government—another backflip from the Liberals, who are trying to take credit for reforms that have been Labor policy for months.

However, I would also suggest that these bills do little, if anything, to provide redress for students who have been the victims of dodgy providers and those who have been left saddled with unfair VET FEE-HELP debts. The vocational education system has fallen into crisis under this Liberal government's watch. With five ministers in three years and a blow-out in the cost of the VET FEE-HELP scheme, it is clear that this government simply does not care about vocational education or, significantly, about TAFE.

In 2013, VET FEE-HELP loans were sitting at around $700 million. This has skyrocketed in the last two years to a staggering $2.9 billion in 2015, and it is estimated that up to 40 per cent of VET FEE-HELP loans will never be repaid.

We hear that some students have been tricked by unscrupulous providers into racking up massive debts. We also hear that thousands of qualifications in Victoria have been cancelled because they are not worth the paper that they are written on.

Where was the government when all this was happening under its watch? How can it possibly justify to taxpayers its failure to do anything about this until now?

With these bills before the House, given that the government has finally taken action, what the government faces now is the challenge of implementation. In particular, I look forward to seeing how the establishment of a VET loans ombudsman is to be achieved, given that there is no provision for that important office in these bills. It is absolutely critical that the ombudsman has the resources and the powers it needs to seek redress for students and to protect their interests.

I would also hope that the government ensures that students and reputable providers are treated fairly in the transition process. Just last week I received an email from a local vocational education provider who, under this legislation, will be precluded from applying as a VET Student Loan course provider. This particular provider has received several national awards that reflect their high standards of governance and their community contribution. They presently employ 64 staff and have around 1,200 VET FEE-HELP students enrolled in their courses. This legislation requires them—and another 12 training providers, acting as body corporates to a trustee—to almost immediately implement a change to their organisational structure.

I certainly understand that it is appropriate for accountability purposes to make such changes so as to restrict the operating entity to ensure that directors are liable for the administration of their operating entity and, hence, that an interposed trust is not an appropriate vehicle for governance purposes. Whilst I understand that some changes to the structure of the industry were raised some time ago, they have advised me that at no stage was this particular reform canvassed in any industry consultation and that such a change will have a detrimental impact upon their ability to continue to deliver quality educational services, or, in the alternative, will require a restructure of the business operating entity, requiring taxation and legal advice, and transfer of staff and assets—not to mention that staff redundancies might occur as current students complete courses, with the provider being unable to take on further students without restructure.

It must be of concern to all in this House that industry participants claim inadequate consultation on such a fundamental change in the operation of a business. It speaks to this government's failure to consult—or to inadequate consultation—that participants in this industry are able to complain that changes first proposed some years ago have not been adequately explained to the industry.

Labor understands the urgency of these bills. But yet again, as with the backpacker tax backflip, it is an urgency the government has brought on itself. We hope that the Senate inquiry into the bill will give the stakeholders a chance to properly examine these issues, because the government did not consult, or has not consulted adequately, with students or the sector on the details of these changes.

I am also particularly concerned that the creative and arts communities are being disadvantaged by the Turnbull government's cuts to the VET Student Loans program. Of over 70 creative arts courses previously eligible for funding through the VET Student Loans program, only 13 are now available, according to the government's new published criteria. In announcing the funding cuts, Minister for Education and Training Simon Birmingham stated that:

VET Student Loans will only support legitimate students to undertake worthwhile and value-for-money courses at quality training providers.

I would like to question the minister as to why the Liberals are effectively imposing a restriction based upon assumed 'value' or 'worth' of the creative arts in higher education for the community. I am genuinely concerned that the government's neo-liberal ideology is damaging for our community, and that this short-sighted and short-term thinking is indicative of a government that is out of its depth rather than embracing the cultural positives for the community associated with arts funding in all of its forms.

The moment you decide that only wealthy people can afford to be trained in the performing arts because certain areas will not be publicly supported, you have effectively decided that merit does not matter or that particular artistic areas are less worthy. The government should not be dictating to the arts community which higher education courses should or should not receive funding on the basis that artistic endeavours are too esoteric to lead to employment. It is creative and artistic endeavours that are crucial for facilitating the innovation and new ideas that drive economic growth and industry achievement. This Prime Minister lauds the idea of Australia as the 'innovation nation', but with policy such as this before us I wonder if he knows what it takes to be truly innovative. The tests that this education minister is using to decide which course are 'worthy' of government support are, I believe, quantitative in measure. This seems certainly true of arts and creative courses.

I would like to take a moment to highlight the fact that some of our greatest thinkers and some of the greatest innovators of our time—individuals whose contributions to science, technology, engineering and mathematics have underpinned some of the most important discoveries of our time—were first and foremost creatives whose innovations stemmed from their artistic pursuits. Sir Isaac Newton, for example, regarded as the modern father of what we now know as physics, was set on his path to learning not through science but with a Bachelor of Arts degree, which he earned in 1665. In fact, Newton owned more books on humanistic learning then he did on maths or science. An interesting fact about Albert Einstein, surely one of the greatest thinkers of our age, is that he was an amateur musician. He declared:

Life without playing music is inconceivable to me ... I live my daydreams in music. I see my life in terms of music. I get most joy in life from music.

Futurist Nikola Tesla dedicated his scientific work to finding ways in which the earth's energy sources could be made available to all. He believed that:

… we can water the energies, such as positive mental energy. They are in the music of Bach or Mozart, or in the verses of great poets.

And of course there is Leonardo Da Vinci, whose pursuits in science, invention, architecture, sculpture, anatomy, geology and engineering are among the greatest examples of the creative spirit driving innovation. It is exactly this type of innovation that the government may stifle with its cuts to the VET student loans program.

I recently had the pleasure of attending Junction Arts Festival in my electorate of Bass. Situated in and around Launceston, in public and private spaces throughout the community, this annual five-day event is a mix of performance and visual art. The festival revenue is generated through sponsorship and government funding, with a particular focus on free audience experiences. The positive social impacts of participation in the arts in regional communities are many. Accessibility to the arts has been identified as a key driver for social cohesion in communities such as my electorate of Bass and facilitating the retention of young people in our community. Events such as the Junction Arts Festival provide the spark which engages young people into a career in the arts or other creative and innovative industries. Junction is a perfect example of how investment in the arts and creative industries can facilitate social cohesion, innovation and economic drivers in local communities.

But events such as this cannot flourish unless they are appropriately supported by government. The loss of federal government funding for some 60 arts diplomas as the result of these changes to eligibility will be a significant detriment to individuals looking to pursue a career in the artistic or creative industries. The Liberals have deemed a variety of courses—such as screen acting, art therapy, jewellery making, social media marketing, animation, dance and many others—as lacking employment opportunity and therefore not worthy of subsidising. This is hugely insulting to educational providers, arts festival and arts program coordinators and indeed the wider arts community in Australia as a whole. Talented students with the passion and drive to pursue creative careers, especially those students from disadvantaged backgrounds, will be left without any access to study in their chosen field, limiting their employment opportunities and ability to contribute to their community. I am thinking in particular about the thriving arts community in Northern Tasmania. It has events such as Junction, Ten Days on the Island and the Festival of Voices; professional companies such as TasDance, Stompin and Design Tasmania; exhibition centres such as QVMAG, the Academy Gallery and our many National Trust sites; and myriad niche artists and boutiques that are absolutely unique to the region.

Without adequate support in their educational endeavours, the very people whose passions and talents are the driving force behind our artistic achievements will lose the opportunity to share their skills and knowledge with like-minded individuals and the wider community, meaning the creative industries and the arts will inevitably struggle. VET, TAFE and apprenticeships are crucial to jobs and our economy.

I would add myself to the list of those are worried about the questions being asked by the Assistant Minister for Skills as to whether the national partnership for skills was even needed in the future and her plans to meet with the states to determine 'whether there are reforms to VET that warrant a new agreement'. Given that the current national partnership expires in the middle of next year, leaving over $500 million a year of government funding essentially up in the air, it is extremely concerning to me that the minister is seemingly unclear on the need for a new agreement to keep supporting TAFE. Labor knows that TAFE is the backbone of our apprenticeship and technical skills education system, which is why we took a TAFE funding guarantee to the last election. There are 28,000 people in Tasmania currently enrolled in TAFE. We need to support our TAFE system.

Chris Crewther (Dunkley, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the VET Student Loans Bill 2016 and the two supporting bills in the package—the VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016 and the VET Student Loans (Charges) Bill 2016. Along with many Australians, I understand the importance of vocational education and training and the role that education providers play in ensuring that Australia has the skilled workforce it needs to drive innovation and economic growth. As policy makers of this country we need to be ensuring that there is a better and brighter future for all Australians.

Good quality education is a strong part of ensuring our future prosperity. This is particularly important for my electorate of Dunkley, in which around 10 per cent of the population of Frankston city and slightly higher, at around 12 per cent, of the Mornington Peninsula Shire council area have bachelor degrees or qualifications above that—and I hope to grow this further, particularly through local universities and TAFE providers like Monash University Peninsula campus and Chisholm Institute.

Several wonderful staff members in my electorate office each undertook courses through higher education providers prior to becoming a part of the office. I am pleased to have a team which has been educated through various means, making up a diverse team that is able to assist me in serving the constituents of Dunkley.

Just like my own team, many businesses rely on the skills developed through training and education which are offered through vocational education and training. Last year, around 4.5 million people participated in the Australian vocational education and training system, including around 24,800 people in my own electorate who participated in training and education at great education providers such as the Chisholm Institute of TAFE, which I mentioned before. Fifteen thousand students participate in training at that institution across a number of campuses, including a very substantial campus in Frankston.

Pragmatic Training, Nepean Industry Edge Industry Training and SAI Home and Community Care, which have recently moved into a wonderful new building in Frankston, are all doing great work to prepare many in my electorate for their futures and for their participation in the workforce—and there are many others in my electorate and beyond that do a similarly great job.

Participants in my electorate undertook training in courses such as management and commerce; engineering and related technologies; architecture and building; society, culture and health—just to mention the top five fields of study. In fact, VET delivers training to more than 24,800 students, as I mentioned before, with 1,000 trade Australian apprenticeships and 494 non-trade Australian apprenticeships in train within Dunkley.

The future of our economic prosperity relies upon the quality of our graduates, the outcomes of the training they receive—and by ensuring they are skilled in the way employers need them to be skilled. That is why supporting high-quality vocational education and training is central to the Turnbull government's economic growth and jobs plan. Vocational education and training is key to Australia's economic growth and competitiveness and is central to ensuring innovation and productivity.

The role of the VET system in Australia is to provide individuals with the skills and qualifications needed to participate effectively in the labour market and contribute to Australia's economic future. It provides training to cover entry-level jobs through to highly technical occupations. The VET Student Loans Bill 2016 aims to achieve better outcomes for higher education for people studying under vocational education and training providers.

Over the past two years, the government has implemented or commenced a number of key reforms designed to strengthen the quality of the system, build connections between VET and industry, streamline governance and regulations and improve the status of the VET system. In Dunkley we have a growing industry sector, with a number of job opportunities, and it is important to link what our education providers are doing with the industries and jobs available in Dunkley and beyond.

In early 2014 the government announced the first in a series of reforms to protect students, taxpayers and the reputation of the VET system as a whole. These included: tightening marketing and recruitment practices, including banning inducements for students to enrol in the scheme and constricting what is communicated about the scheme to prospective students; improving the understanding of how VET FEE-HELP operates and students' rights and obligations; prohibiting the charging of withdrawal fees—and many other changes.

In December 2015, in the face of continuing growth in enrolments and quality concerns, the government made further changes, including: strengthening the debt remission process for students under the VET FEE-HELP program; ensuring student debt is incurred in line with course delivery; establishing minimum prerequisite and prior education qualifications; introducing new entry requirements for training providers wishing to offer VET FEE-HELP loans; supporting altered payment arrangements in arrears of census dates for certain providers; and freezing the total loan limit for existing providers at 2015 levels.

The VET Student Loans Bill 2016, along with the two supporting bills in the package before us today, will ensure the Australian government can hit the reset button on Labor's flawed VET FEE-HELP scheme, so that Australians can start to rebuild their trust in vocational education and so that taxpayers can ensure their money is not rorted. This is a win-win for students and taxpayers that will restore integrity to Australia's vocational education and training sector by placing an emphasis on quality and by holding providers to account.

The majority of training providers do the right thing already, but this new program will protect prospective students by banning brokers from acting on behalf of providers or directly soliciting them. Subcontracting training will also be limited. We will end the free-for-all subsidies Labor started that has seen providers burden students with tens of thousands of dollars worth of debt for courses that offer poor employment prospects.

The focus will instead be on courses that have a high national priority, align with industry needs, contribute to addressing skills shortages and, importantly, lead to employment outcomes. Courses like, for example, the Diploma of Fashion Styling, Diploma of Veterinary Chinese Herbal Medicine, Advanced Diploma of Therapeutic Arts in Counselling and Diploma of Energy Healing will receive limited attention under this program.

VET student loans will protect students and taxpayers and restore integrity to the vocational education sector through tougher barriers to entry for providers, properly considered loan caps on courses, stronger course eligibility criteria aligned to industry needs, mandatory student engagement measures, and a stronger focus on students successfully completing courses. There will be 347 courses receiving funding support and 478 knocked off the list. Those knocked off the list will have the opportunity to be reconsidered if strong employment outcomes can be demonstrated. This is a good thing because it is a clear statement that we will have no place for those who think they can offer courses, particularly to overseas students, under the guise of educational opportunities that will lead to careers. However, many overseas students in particular have wasted their time and investment, and they are now unlikely to have employment opportunities arise from these courses.

These courses can diminish the quality of education in Australia, and, as we are aware, education is a very key export for our nation. Of importance to me in my electorate of Dunkley is ensuring that every individual who is undertaking a course, believing that they will be able to improve their own future and employment prospects, will indeed be able to do exactly that. We have seen some impressive economic growth in my electorate. According to a recent report by SGS Economics & Planning, Dunkley topped the state with economic growth of 3.6 per cent—the fastest growing economy of any Victorian federal electorate in the 2014-15 financial year. We have experienced a rapid improvement in unemployment figures, which have recently gone down from 8.3 per cent to around 6.1 per cent. The improvement in local economic growth and better employment figures is what I am looking to support and what I believe these bills will help achieve.

Measures that mean providers will need to meet tougher entry criteria to become, and to remain, an approved course provider are obviously encouraged. They include being a 'fit and proper person' to enrol and having to satisfy provider suitability requirements around stronger governance, industry engagement and quality training; these will be specified in the rules. Again, it is over to the 'responsible government', the coalition government led by Prime Minister Malcolm Turnbull to make the decisions and changes which will ensure that instances such as those that have occurred with providers like Phoenix Institute will not be common practice in the future. On 3 March 2016, the department revoked the VET FEE-HELP approval of Phoenix Institute on the basis of use of prohibited inducements, ASQA's finding that Phoenix failed to demonstrate compliance with the standards for registered training organisations and the VET quality framework, as well as non-compliance with the tuition assurance requirements. My understanding is that the graduation rate for Phoenix was around four per cent, which is a terrible outcome and what we do not want to see. Some of the inducements offered were things like laptops, vouchers, cash or similar things. The government rightly banned this organisation from 1 April last year.

It is important to make these changes to support local organisations in Dunkley such as Pragmatic Training and the many other local training providers who are trying to do the right thing. Organisations like Phoenix and others who are not doing the right thing make it harder for those who are doing the right thing to operate and get through the processes set out by ASQA—in particular, there are the delays caused by the regulatory requirements needed to be gone through for organisations to be approved and to remain approved because of shoddy operators. As we know with any regulatory changes, when people are doing the wrong thing it can make it harder for people who are doing the right thing. So it is very important for me and for Dunkley that we make these important changes.

Some other notes I would like to add are that inducements like laptops, vouchers, cash or similar things offered by Phoenix led to terrible outcomes, particularly for those overseas students who were trying to do the right thing and who were putting significant time and effort into these courses. I do not want to see this occur again, particularly when we are trying to encourage overseas students to come to places like Dunkley. Last week, I met with Pragmatic Training, who are currently in Dunkley looking to attract overseas students to the area. Pragmatic Training have offices not only in Frankston, which is where their head office is, but in the centre of Melbourne, Brisbane and elsewhere. They have gone through a long process with ASQA to get approval for overseas students. Much of this is related to the difficulties which we have experienced with organisations such as Phoenix, who have made it much more difficult for organisations like Pragmatic Training to operate.

In Dunkley, as I have noted throughout my campaign, I am a strong supporter of local education providers such as Chisholm Institute and the Monash University Peninsula campus. I announced some funding recently to expand enrolment in the Monash University Peninsula campus, by extending the Metro Rail services down to Leawarra station. I think this will have a positive outcome for the university, and the university have indicated to me it will result in more than a 20 per cent increase in enrolment. So I do support these bills today. I am proud to talk about these bills, and I acknowledge the government's work in this regard.

Emma McBride (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the VET Student Loans Bill 2016. The Central Coast is a region with a high stake in vocational education and training. In the electorate of Dobell, on the New South Wales Central Coast, the number of people who leave school to pursue a trade is 10 per cent higher than the national average. In Dobell, 58.6 per cent of students have undertaken vocational education compared to the national average of 46.7 per cent. This is a region where the traditional pathway of leaving school, earning a trade and getting a job is common. Whilst our population is growing and rates of higher education are leading to increased university enrolments, including at the Central Coast campus of the University of Newcastle, for many people on the Central Coast getting a trade is a ticket to getting a job.

Only half of the high school students on the Central Coast complete their studies at school. Not every school leaver wants to go to university and people looking to upskill or return to study need to have practical, affordable and local options to obtain the skills they need. For an area with stubbornly high unemployment rates, particularly for young people, the opportunity to get the training needed in order to enter the workforce is critical. It is unacceptable that regions like ours have been affected by the appalling lack of regulation in the VET sector that has occurred under the coalition government. Combined with the gutting of TAFE at a state level, it is regions like ours that have and will suffer more as a result of the conservative ideology which undermines public education and training.

So, whilst Labor support these bills in principle, we are disappointed in the way that this has been handled by the government. We have been raising these issues for too long and the government's delays and failure to act have meant more students are ripped off by dodgy providers. There are too many cases of vocational education providers whose questionable practices have left students with large debts and no qualifications. For some time it was common to see a provider set up a stall in the local shopping centre, approach young people and other prospective students and offer inducements such as a free laptop or an iPad. Worse still, we know that this led to more dubious methods of recruitment, such as fraudulent applications or targeting of vulnerable people to increase sign-up rates. The government knew this was happening and did not take action and, all the while, more students were caught out.

Arguably, the largest private provider of vocational education and training courses on the Central Coast, Evocca College, opened with great fanfare in 2013. Its Gosford and Wyong campuses offered local students courses in areas such as business management, leadership, youth work, justice, community services and counselling. According to media reports, Evocca received around $200 million under the VET FEE-HELP scheme last year, making it the second-largest recipient of taxpayer funds under the scheme. However, completion rates through the college have been far too low. Only around a quarter of students finish their courses. As poor as these completion and graduation rates are, they are not the worst performers in this sector. It is clear that this is a sector that needs reform. Too many students are signing up for courses they are either not in a position to complete or are not suitable for, and this must stop.

The Australian Financial Review cites costs for Evocca courses: a diploma of community services course costs $16,500; a diploma of beauty therapy course costs $24,750; a diploma of information technology course costs $24,750; a diploma of business course costs $16,500; and a diploma of leadership and management course costs $16,500. In March this year, after entry requirements were amended and Labor released their comprehensive election policy to tackle misuse of VET FEE-HELP loans and restore TAFE as the public provider in the sector, Evocca announced the closure of several campuses, including in Gosford on the Central Coast.

At some institutions, graduation rates have plummeted, leaving students with massive debts for courses they may never complete. It is completely unacceptable that dodgy providers are able to pocket the equivalent of $215,000 per graduate, or more than $900 million overall, in federal money. No self-respecting provider could look at graduation rates as low as five per cent and be satisfied with that outcome.

To know that you are funded to skill up a willing group of students and are supported to run courses, yet only a small percentage are leaving with qualifications, should be enough to make some providers look at themselves and the models that they run and want to change. Yet that is not the message they are receiving and it is not the message from the government. This government—the government of lifters and leaners; the government punishing low-income earners and boosting big business—have sat by and let these rorts continue. They have watched as the VET FEE-HELP debt jumped from $700 million in 2013 to $2.9 billion in 2015. That is $2.9 billion in debt, 40 per cent of which will never be repaid, that is hanging over the heads of thousands of people on the Central Coast and potentially hundreds of thousands of Australians across the country. Where were the government when this was happening? How can they possibly justify to taxpayers their failure to do anything about it?

The Liberal government, despite the bluff and bluster, cannot be trusted to look after our economy or our communities. We run the risk, without these reforms, of creating a skills crisis. Ten thousand students in Victoria have already had their qualifications cancelled because they were not worth the paper they were written on. That is unacceptable and cannot be allowed to continue. We have to bring credibility back to the sector for the sake of the economy and the people who rely on sound educational institutions.

Labor has long called for regulation. More than a year ago, Labor proposed the establishment of an ombudsman to oversee the sector. The ombudsman would have the power to intervene and resolve disputes, ensuring that students are getting a fair go from their provider. If the government had agreed to this when it was first proposed, many of the failures of the VET FEE-HELP scheme would have been prevented. The New South Wales government has embarked on deregulation of the sector through their so-called 'smart and skilled' reforms, which in reality have left students with massive fees and fewer study options.

My brother Eddie is one of the many students caught out by this. He trained as a plumber at Wyong TAFE 20 years ago and now runs a local business. Recently, when he decided to upgrade his qualifications, he learnt that he could not undertake this study locally and instead would need to travel to North Sydney. The course was eight weeks long, with only two contact nights per week, yet this cost Eddie $2,000. Trades people like my brother Eddie must be able to access local and affordable training, and this is not happening under the government.

I have heard from Natalie, another small-business owner from the Central Coast, who made the decision to study fashion design as a mature-age student and pursue her dream of dressmaking in the dance industry. She undertook took a cert III course in order to enrol in diploma studies this year, only to be told that the course had been cut as a result of funding cuts to TAFE.

Despite their gross failings in the VET sector and a dismal level of support for TAFE, the New South Wales Minister for Skills and Industry has described his federal Liberal colleagues' handling of the sector as 'unbelievable'. He said:

I think they have made errors that I would not have ever believed from a government … How have we allowed a private provider in one year to have $300,000 in funding go to a hundred million in funding?

If the government had acted when Labor first brought these issues to the forefront, billions could have been saved from going into the pockets of dodgy private providers and invested back into our TAFE and apprenticeships system. There is nothing in this bill to restore the $2.75 billion the Liberals have ripped out of TAFE, skills and apprenticeships; nothing to protect TAFE; nothing to boost apprenticeships.

Labor knows how important VET and TAFE are for so many young people—people looking to return to work, upskill or retrain. This is in stark contrast to those opposite, who are not even sure if a new national partnership on skills is needed. The Assistant Minister for Vocational Education and Skills, the member for McPherson, said when she was meeting with the states 'to determine whether there are reforms to VET that warrant a new agreement.' With the agreement running out in the middle of next year, that is not comforting news for the thousands of students nationally who rely on the $500 million in federal funding to keep their courses running, keep building their skills, or even keep the lights on in their local TAFE, like that at Wyong.

Labor has been absolutely clear: we back public TAFE. That is why we took a TAFE funding guarantee to the last election. All the while, apprentice numbers are in free fall under the Liberals. They are down 30 per cent since this government came to power—130,000 fewer under this government.

People on the Central Coast know just how important our TAFE and skills sector is. Locals know they can turn to these trusted educational institutions for the technical skills they need for growing industries and to be job ready. We are now at a point on the Central Coast where a student cannot study for the HSC at either Wyong or Gosford TAFE. Courses have been stripped away from TAFE while the federal government continues to plunge nearly a billion dollars into private providers. At state and federal level the Liberals have an ideological problem with TAFE. TAFE is the backbone of the skills training system, and the government should support it as such.

There are registered training organisations in this sector who do a great job, and their reputations should not be damaged by others who seek to exploit students. Organisations like Training Wheels, based in Wyong and at Rutherford in the Hunter, do an amazing job and are industry leaders in high risk work licensing. They offer real world, practical courses for students in topics ranging from forklift driving to working at heights and working in confined spaces, ensuring that their graduates get the tickets they need to get into work and know how to be safe and productive employees.

These reforms are long overdue, but they should not be as urgent as they have become. With just over 10 weeks until these changes are set to be introduced, the implementation of these reforms can only be described as rushed. This should have been done sooner, but just because the administration of student loans has been utterly botched by this government, this is no excuse for further failing. It is entirely understandable that stakeholders are concerned. Whilst Labor will support these measures, it is with a very important qualification: students must not be further disadvantaged and access to education opportunities, particularly in low socio-economic areas, must not be limited for those who want to train and learn.

Labor has been pushing for these reforms for three years, while the government has been asleep at the wheel. In the last term of government, Labor proposed VET reforms that the government ignored. Now we see that they have copied nearly every single one of them. Stopping the rip-offs by capping loans? That was a Labor idea. Cracking down on brokers? That is another one of ours. Linking courses to skills shortage areas—Labor. Linking funding to completion rates—copied. Deregistering low-quality providers—Labor suggested it. What we see is that Labor is the party of skills and training, and the only party committed to ensuring the strength and future viability of the industry for the betterment of our students and our communities.

In May the Liberals were falling over themselves to criticise Labor's policy proposals. Today they are trying to take credit for them. While Labor is trying to improve the sector, the Turnbull government has been sitting on its hands. These reforms are too little too late. Over the last three years the Liberals have shown they simply do not care about technical and vocational education or about TAFE. They have churned through five ministers in three years, and that revolving door is leaving people who want to improve their skills and opportunities suffering through an unfair system. As successive Liberal Prime Ministers have shuffled and reshuffled their ministries to reward supporters and punish detractors, the sector and students just want the government to get on with the job and provide the services and support that the industry needs. Infighting and unrest in government is plastered on the front pages of newspapers nearly every day, yet the issues plaguing our skills and VET industry do not get a mention. This government has one priority—itself—and the vocational education sector has fallen into crisis.

I am proud to be a member of a party that is now, and always has been, committed to ensuring that our skills sector is well resourced, well supported, and fair. Generations of Australians know how important a strong skills training industry is when they want to change careers or get back into the workforce. We have a duty to ensure that all Australians are given every opportunity to expand their education and their opportunities. I genuinely hope the government has turned a corner and from here on they will do what is best for students and employers in ensuring that a qualification is more than just a piece of paper, but something that students can be proud of and that will put them in good stead for their careers.

Nola Marino (Forrest, Liberal Party) Share this | Link to 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.

Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

It must be tough for those on the other side to have the VET student loans bills come before the House as pretty much a carbon copy of many of the policies that we have put forward—sadly not all of our policy but a number of things that need to happen—to stop the rorting of the VET FEE-HELP scheme.

Sadly, the fact that the government have had to come to it kicking and screaming means that billions of dollars has been rorted from the system by dodgy private providers. That is billions of dollars that should have been invested in TAFE and apprenticeships—money we just won't see again—and in young people who will have simply missed out on the chance of a good start.

What is it like inside these operations? I have seen inside the operations of some of these big providers. They are big marketing machines, actively and aggressively recruiting potential students. And that is not just the bad ones. The good ones do that too. The difference seems to be the level of student support, the integrity of the course material and whether there is a genuine commitment to just getting bums on seats or to graduating students. I think graduation rates are a key indicator of whether a provider is serious or not. In 2014 the graduation rate for the 10 largest private providers was less than five per cent. That means 95 per cent of students who were signed up for a course did not graduate.

One of the things that concerns me is that the good private providers are now tarnished by the behaviour of those bad private providers. In my own electorate of Macquarie there are very reputable long-term private providers. I have been speaking with one provider for more than two years about her concerns on the way other operators are working. She knew that fly-by-night organisations, new on the scene and with no track record of course delivery, were taking advantage of the government's failure to crack down on the sector by offering high-fee, high-loan courses that gave little or no face-to-face student time and so were operating at a huge profit margin. No doubt the good providers will be very pleased to finally see some action on this. But, at the same time, they themselves will have suffered enormously.

Let's look at the measures in this bill. One is on capping student loans to stop rip-offs. That would be our policy. Not one student should be asked to take out a loan for something they are not receiving. It should be fair value. Official data revealed the average tuition fee for a diploma of information technology from some private education course providers has soared from $2,779 in 2011 to more than $18,000 in 2014. Some private education providers are still charging students an average of $15,500 for a diploma of business management that cost $4623 in 2013. So they have clearly seen an opportunity, and that opportunity remained for so many years that they grabbed it.

Cracking down on brokers is something else in this bill. That would be our policy, too. We all know the stories of brokers who have unscrupulously signed up elderly people, people with disability and people who do not speak English. Those sorts of brokers should have been out of business a long time ago.

Linking publicly funded courses to industry need and skills shortages is contained within this bill. That would be our policy. There is no doubt we should be prioritising public funding to areas where skills are most needed. Business courses, including diplomas in hair salon management and training for 'fitness business professionals', now account for 50 per cent of the $1.7 billion that students borrowed for vocational training courses in 2014. There should have been action sooner.

Requiring providers to reapply under new standards so only high-quality providers can access the loan system is a measure in this bill, and that would also be our policy position. It is important that that is in this bill. Our concern, though, is that there is no information yet about how that accreditation process will work in time for 1 January next year. That goes to the heart of this bill—that it is coming so late and there is so little time to see what the implementation will actually look like. How quickly will departmental staff be expected to develop and implement the new standards? Yet again, more pressure has been placed on hardworking public servants. They are being asked to do something in an unreasonable amount of time.

Linking funding to student progress and completion is something that I think needed to be government policy long before now. The government's failure to act has led to a scheme of charging whatever they can get away with for some dodgy providers. All the dodgy training company has to do is get students to sign up and then keep them hanging around until the first census date and the bulk of money goes straight through to the provider. After that, they do not really care if the students learn anything. We also support a VET loans ombudsman. Again, that was our policy and it is long overdue.

There is one area of concern, though, that I hope will be looked into by the other chamber. Private drama, film and performing arts schools around the country are reeling from what I hope are unintended consequences of this legislation. The Media Entertainment and Arts Alliance, of which I am a member, says the next wave of Australian acting talent is being put at risk by the government's decision to axe hundreds of courses. Around the country, only 12 courses in the screen, music, media and design areas look like retaining eligibility unless changes are made. These are highly credible courses that provide professional training for stage, television and film performers and makers. Many students depend on access to fee help to ensure that they can get in. That means we have a diverse pool of talent applying for these very elite courses. But they are elite based on talent, not on bank balances. We do not just want to see rich kids from the north shore and eastern suburbs of Sydney filling these courses. Like everyone, the MEAA supports the need for fee-gouging operators and substandard courses to be brought to account. But let's not lose incredibly talented students because they happen not to be wealthy.

The Actors Centre in Leichhardt are one of those who are shocked at the legislation and at the announcement of courses that will not be eligible for fee help. They are concerned that acting courses have been lumped in with dodgy business courses and that this puts at risk the viability of the acting schools. I commend the director of the Actors Centre, Dean Carey, for speaking out on this on behalf of the whole sector. He has said that the whole performing arts centre will potentially be impacted on. With that, of course, go the hopes and dreams and sweat and tears of a whole generation of future performers whose job it will be to keep our Australian cultural independence alive. I note that this legislation allows for exemptions, and I think the performing arts sector's voice needs to be heard. When they are a school with a patron of the calibre of Hugh Jackman, it is great to see they are willing to speak out about this and talk to us. Let's hope that the other side listen. I should also disclose that my own daughter completed the three-year diploma course at the Actors Centre, thanks to VET FEE-HELP.

Another school that has been in contact with me is the Sydney Film School. Similar concerns exist for them. They have been operating for more than a decade. This film school will have its fees capped. I know a lot of people make movies on their iPhones, but in fact learning to be a filmmaker and how to work in the professional environment of international film and television involves using expensive equipment and a lot of hands-on work. It is not a cheap course to run. These are professional courses run by professional people, with industry standards taught by industry professionals. So capping fees at $10,000 per year, much like with pilots, will make it a prohibitively expensive course for the average budding filmmaker. But let us remember that these are not just your average filmmaker; these are hotly contested courses—you do not just apply and get accepted. They certainly do not offer you a free iPad to sign up. These courses turn people away because the standards have to be high. The Director of Education of the Sydney Film School, Kathryn Milliss, is an award-winning filmmaker, and she tells me that the most impacted students will be Indigenous students and low socioeconomic students. The Blue Mountains Aboriginal film festival was held for the first time this year, and in fact it featured a film by one of the new graduates of the Sydney Film School. These are young people exploring a medium to express not just their culture but who we are as Australians. They deserve a chance, and we as a nation deserve to have this sort of work being done.

Let us be clear about the economic benefits of this sector. This is an industry that generates jobs and revenue. The Victorian government has found that creative industries in that state make up eight per cent of the economy, contributing almost $23 billion and 220,000 jobs. And the industry in New South Wales is bigger—some estimates have it at almost twice the size. We know that nearly five per cent of the population works in creative industries. In my electorate, the Blue Mountains Economic Enterprise group has found that 7.6 per cent of the total population is employed in the creative industries. Blue Mountains Economic Enterprise also estimates that they are the third-largest contributor to the Blue Mountains gross regional product. The total output of Blue Mountains creative industries is estimated to be $592 million. And that is just half my electorate. I am sure we would see equal data coming from the other half of my electorate, the Hawkesbury side. So future workers in this industry, the creatives who move the industry and influence our culture, need to be nurtured just like any other profession.

All this is fixable. It is not too late. It is not completely locked in by this legislation, but we need the Senate to inquire to make sure there is consultation. The minister can amend the course list so creative industries are not crushed alongside dodgy courses by dodgy providers. The minister can negotiate a national partnership that ensures adequate funding for the creative arts. The big problem with this legislation, and in fact with this government, is procrastination. It is all happening late, at the eleventh hour, after much delay. Right now, kids who are thinking seriously about what they will do next year, who are sitting the HSC and making decisions, are being left in limbo. The government seems determined to undermine the confidence right now of an entire sector. It reminds me of the eleventh-hour decisions that impacted so heavily on the community sector on a Christmas Eve not so long ago—another example of the government failing to talk to people before making announcements.

I urge the arts training industries to raise their concerns directly with the minister, but, more importantly, I urge the minister to really listen and make sure the creative future of Australia does not disappear. What consultation has taken place with the arts industry? None that we can ascertain. Does the government understand the need to evaluate the fees that a course charges in relation to the people it employs to deliver those courses? If it did talk to the performing arts sector, it would realise these courses account for a tiny proportion of the spend on training. They are usually courses that might have 300 people audition, with maybe two dozen accepted annually. They go through intense face-to-face training—you cannot learn these things online—and most of the people running these schools are doing it for the love of the industry and for the love of nurturing the next generation, running at a very low profit margin.

My concern is that, without consultation, we will be in trouble. The government have redefined the meaning of the word 'consultation'. For them, it means, 'Let's make a decision finally, eventually, and then let's tell people about it.' That is what they think consultation is. All the arts sector is asking for is to have a conversation. We need to make sure that, in our bid to stop the rorting of the private fees and vocational education and training, we do not throw the baby out with the bathwater. My concern is that, without decent consultation, the government will oversee a new dynamic, where we do not produce the best actors and performers from a cross-section of our society but we produce the best actors and performers from wealthy families—only those who can afford to pay.

Having had the privilege of watching a diverse group of first-year students evolve into an equally diverse and impressive group of final-year graduates, I can only implore the government to consult with this sector. And let us keep in mind that, sure, not all these students will end up as the next Cate Blanchett, but the vast majority of the particular cohort that I have had the privilege to see are working in the industry, or in closely related industries where their skills have been transferable, and they are contributing economically to this society. That is to all our benefit. Let us hope that this legislation stops people from being signed up for courses that they should never be signed up for, that they will never complete, that they are only being signed up for so that someone makes money off them. Let us make sure that we do not lose the essence of what VET student loans are about, and that is helping people access the education they need to make Australia a better place.

Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Link to this | Hansard source

I support the passage of the VET Student Loans Bill 2016, the VET Student Loans (Charges) Bill 2016 and the VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016, which deal with the ballooning cost of providing vocational education and training student loans throughout Australia as a result of shonky and unethical providers pushing courses on potential and active students that are not in their best interests, which they know they will never be able to pay back.

These bills will introduce a new VET Student Loans program to replace the current VET FEE-HELP scheme from 1 January 2017. Loan caps will be introduced for eligible courses, with caps initially set at $5,000, $10,000 and $15,000. The minister will have the power to exempt courses with higher delivery costs as well as amend and index the caps. Caps will apply to individual qualifications and are not annual. The Commonwealth will have the ability to spread loan payments for students to providers across the duration of a course, as opposed to the current system, where the whole lump sum has been provided to the vocational education institute on the census date and often up-front. This has resulted in many of these private providers signing up to courses people they know will never be able to complete them, signing them up for a loan paid for by the Commonwealth, and getting the payment once the census date is reached, usually after one year of the course, and then not giving a damn about whether or not the individual completes the rest of the course.

To be eligible for loans, a new eligibility criteria will be introduced and students will need to, firstly, be assessed as academically suitable for the course; and, secondly, periodically log in to a portal to confirm that they are active and legitimate students—removing the ability of providers to re-enrol failing or absent students without their knowledge. The Commonwealth will also have the power to immediately suspend a provider or withhold loan payments if it is suspected they are noncompliant.

These measures have been made necessary over the past few years as the VET FEE-HELP debacle has gone from bad to downright disastrous. As this coalition government has sat idly by, asleep at the wheel, the sector has been filling with shonky providers who, rather than provide valuable educational experiences and opportunities to students across the country, have been dishing out pain and suffering through massive, crippling debt to thousands of Australians trying to forge a better life for themselves through quality education.

Stories of deceit and debt have been filling our newspapers and media outlets, revealing the lengths to which private providers will go to secure government subsidies at the expense of often vulnerable people. On 7 October, Fairfax media reported on the sad story of Helen Fielding. Ms Fielding, who grew up in foster care and suffers from an intellectual disability, was targeted by the Australian Institute of Professional Education. She says mandatory tests were forged by salespeople from this institution, who signed her up to a $19,600 diploma of human resource management when they came doorknocking on the door of her housing commission flat in Newcastle. In 2014 alone, this particular institution, Australian Institute of Professional Education, took in $110 million in public funding and has since gone into voluntary administration, leaving up to 16,000 students in limbo. Unfortunately, these types of shonky schemes have been allowed to flourish under the coalition government.

Aggressive sales tactics have been a common factor in the sector, with stories of salespeople regularly targeting housing commission areas with suitcases full of laptops to act as inducements for people to sign up to courses they do not need and have no realistic prospects of ever completing. Aboriginal communities have also been targeted. In November 2015 Fairfax media again uncovered the story of an Indigenous family in a Queensland public housing estate that had been targeted numerous times by shonky providers looking to get rich. The mother of this family, Lenore Lutanichi, signed up to a course with Melbourne's Phoenix Institute in July last year and received a free laptop. She then encouraged other members of her family to think about courses with this provider, and all of her children and all of their partners did the same thing. They all received their own free laptops. Looking back on her enrolment and subsequent hefty HECS-style debt, Ms Lutanichi said, 'It was the most expensive laptop ever.'

People have been targeted in my electorate of Kingsford Smith. Just recently I received an email from a young women named Angela who lives in Coogee, who said that, while searching for a jobs, she had been targeted by shonky course providers bombarding her with emails with what she described as 'private courses being falsely advertised as jobs'. She said course providers had attempted to lure her to pay thousands of dollars for 'self-employment' opportunities or 'careers development' courses that she said were 'not worth the paper they are written on'. These stories are not unique.

VET FEE-HELP loans have blown out from about $700 million 2013 to a staggering $2.9 billion in 2015. But, in the face of such wastage and human suffering, this government has done little more than sit back, do nothing and observe the chaos, before belatedly adopting Labor's course of action that we announced in the lead up to the last election. Before the election, Labor proposed VET FEE-HELP reform. The policy that we released was in a form of a number of changes to the current system, including capping student loans to stop rip-offs; cracking down on brokers; linking publically funded courses to industry need and skills shortages; requiring providers to re-apply under new standards so only high-quality providers could access the loan system; linking funding to student progress and completion; and a VET FEE-HELP loans ombudsman. I notice that there is nothing in these bills about a VET FEE-HELP loans ombudsman, but I understand it was a deal that the Greens had done with the government to gain their support for this. It will be interesting to see whether or not this VET FEE-HELP loans ombudsman ends up in the eventual legislation. This is something that the Labor Party obviously supports.

The Liberals' initial response to measures such as capping student loans was dismissive. They did not want to have a bar of it when Labor proposed this policy at the last election. Some of their senior cabinet ministers were quite dismissive of what Labor and the shadow minister, the member for Cunningham, had proposed. Scott Morrison, the Treasurer, said it would 'pull the rug out from under the private education industry'. Then Minister Senator Scott Ryan called it a 'classist policy' and a 'thought bubble' that 'will lead to up-front fees for VET students'. Simon Birmingham, the current minister, said it was an 'ill-considered flat pack'. That was the view of the government prior to the election when Labor announced this policy. What do you know? They have suddenly done a 180-degree backflip, changed their tune and adopted most of Labor's policies. So the government has come to the party and basically copied all of the measures that Labor proposed prior to the election.

The government have thoroughly let down those students who have been ripped off and they have done so partly due to their own debilitating obsession with internal politics rather than what is in the best interests of this industry. Rather than get to the bottom of the issue, determine a course of action to contain the blowout and pursue dodgy providers taking advantage of thousands of young and vulnerable people, the government has been busy chopping and changing the minister who has responsibility for this issue. I note that in the last three years the government has had five ministers for this issue.

Meanwhile, the future of TAFE remains in the balance as the national partnership put in place by Labor expires in the middle of next year and the minister is seemingly unsure about whether a new agreement is needed to keep supporting TAFE. I have to say that what this government and state Liberal governments have done to the public vocational training system through TAFE colleges has been nothing short of a disaster and nothing short of outrageous. We are seeing their lack of support for public vocational education and training in this country reflected in the absolute roller-coaster in the number of people taking on apprenticeships in this country.

TAFE is the backbone of the adult apprenticeship system. Unfortunately, this fact is not accepted by the coalition government, which has cut almost $2.5 billion from skills and training, including $1 billion from apprenticeship programs and the Tools For Your Trade program since 2013. The $1 billion cut to apprenticeships has seen apprentice numbers across Australia plummet from 417,700 apprentices in September 2013 to 295,300 apprentices in September 2015. That is 122,400 fewer apprentices in training across this country.

They talk about alleviating skill shortages and building the infrastructure of the future to boost our economy, but apprenticeships are vitally important to ensure our nation has the skills base to take on this building task. In my electorate of Kingsford Smith apprentice numbers fell from 3,211 in 2014 to 2,137 in March 2015. That is over 1,000 fewer apprentices who are currently in training in the community in my electorate of Kingsford Smith. That is a disaster for the future of the local economy and our national economy when it comes to training people to deliver the skills of the future. The wheels have fallen off the Turnbull government when it comes to education and training and putting people in courses that deliver the skills to provide the workforce of the future. VET, TAFE and apprenticeships are crucial to jobs in our economy.

With these bills it is good to see that the government has finally got its act together. It is good to see that the government has listened to the Labor Party and taken on the leadership that Labor has shown in this area. I congratulate the previous shadow minister, the member for Cunningham, Sharon Bird, for crafting this policy. She did a lot of work, consulting throughout the country, to craft this policy that the government has ultimately accepted.

With these bills Labor genuinely hopes that the government has seen the light and will manage to do what is in the best interests of students and employers. There is a long way to go and it is incumbent upon this government to get its act together and oversee the successful implementation of these changes. You can bet your life that the opposition, the Labor Party, will hold them to account for these changes and make sure that the proposal is adopted and we do see an improvement in VET student loans in this country and ultimately, hopefully, a boost in the apprenticeship numbers. The government does need to get its act together on TAFE because its approach to TAFE and public vocational education and training has been nothing short of a disgrace.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

As previous speakers on this side of the House have highlighted, it is great that the government have finally caught up and are actually putting forward these VET student loans bills that seek to address the exploitation, the gouging and what is going on in the VET student loan area, VET FEE-HELP. In the last term Labor put together some comprehensive reforms and on several occasions raised this very issue—and it was not just Labor but people within the sector, students, media and concerned people in the community. Alongside the exploitation of temporary workers this is the other issue that got a lot of coverage in the last three years. Labor is asking the government to support our amendment to see an ombudsman introduced in this space. Whilst these reforms will clean up some of the mess, we still have a lot of work to do to make sure it is cleaned up properly, and an ombudsman would assist with that.

In highlighting how bad it has got I can go no further than what happened in my own electorate. I wish to share with the House the story of the Karen refugees who have made Bendigo their home. We are very proud to have a large Karen population in Bendigo. They are working hard. They do the jobs that other Australians would not do. They take on cleaning jobs and food-processing jobs. If they arrive in this country at a younger age they do very well at school and are engaged in education. They are volunteers in our CFA and are involved in soccer. They are contributing to our community.

We were quite shocked to learn that they had been manipulated and tricked by one of these dodgy colleges into signing up for childcare and disability courses. It was not until they were halfway through the course that they found out via a text message that they would incur a debt of $17,000 for the course that they had been told would be free. It was not until they received this text message that they started to talk to me and to their Neighbourhood House about it. We worked closely with the community and with the department to see these debts waived. They are a group of new Australians—all of them have since become Australians—who were taken advantage of by a college provider and were not aware of the nature of the system. And it was not just one or two people; 52 Karen Australians were tricked into signing up for a course they thought was for free. It was a lot of work to get the debt waived, but we worked hard to make that happen—which is, I guess, another reason why we need to ensure that we have an ombudsman overseeing the reform in this area.

The sad thing is that those Karen refugees are not alone. There have been incidents such as this experienced by people with a disability who were signed up to courses that they in no way had the capability to complete. People were signed up on a 'Get a free iPad and get yourself into debt' basis. It is a demonstration of how, because it did not have the proper safeguards in place, a system became rorted at the expense of vulnerable Australians, who quite often ended up with a debt. We also know now that a number of those people will never pay back the debt. It is bad debt that this government and every government will inherit. It reminds me of the HECS debates that we have about how some women will never pay back their HECS debts because they simply will not earn enough. This is even worse. We are talking about people who are on fixed incomes and will, literally, never pay back the debt that they have incurred through this system. So we need to continue to look at reform in this space. That is why Labor has been speaking about this for quite some time. We know, through talking to people in our communities, what has happened in many states of Australia, including my state. Because state Liberal governments have gutted TAFE, we have seen dodgy providers marching in to try to fill the gap.

There are a couple of things that I want to highlight in this contribution. I am disappointed that the money the government will save—and they are big on saving money—is not being reinvested into TAFE. Labor has made a TAFE guarantee. I am concerned that, if that money does not get invested in TAFE and the government does not partner with the states to help rebuild our TAFE system, we are going to leave areas of regional Australia without skilled education providers. To highlight that, another example from my electorate is the Bendigo TAFE. The former Liberal government gutted the Bendigo TAFE. They laid off hundreds of educators and teachers. Lots of courses were closed, including basic, common trade courses like construction. You cannot learn carpentry through a TAFE placement in Bendigo; you have to travel to Shep or Ballarat, and some are travelling as far as Geelong. We lost a number of courses. One young apprentice told me that, because of the cuts in staffing and delivery at the local Bendigo TAFE, they said, 'Look, try to do your welding on the screen. Just touch the screen and that will help you understand welding.' You cannot learn how to weld on a touchscreen computer—that is just madness—but this was the state of TAFE in Victoria. We almost lost our Bendigo TAFE and would have if not for the election of the Labor government, which put some money forward for a rescue package to try and save the TAFE so that they could start rebuilding.

In acknowledging that state and federal governments have got the delivery of skills and vocational skills wrong in the past, this is an opportunity for the federal government to reinvest in skills. What we are not seeing from the government is them restoring the $1 billion that they have cut from apprenticeships and TAFE. They are not reinvesting in the apprenticeship scheme. Apprenticeship completion rates at the moment in this country are appalling and there is not enough being done by the government to improve them. We need to start looking at vocational skills and training in a serious way and at how we can rebuild the TAFE sector in this country. I invite and encourage the government, with the money they are saving from these measures, to partner with the states to rebuild our TAFE sector—particularly in the regions. In the regions, you have smaller numbers of students putting their hands up. At Bendigo, even though they had 15 students on the books for a certain course, because they could not get 20 students the course was not going to break even, so they cancelled the course. Those 15 students had no other option but to go to Melbourne. That makes it very hard on young apprentices and trainees, particularly if they do not have their driver's licences or are driving or travelling on public transport. So we need the government to partner with the states and look at how we deliver trades in the regions. If there is not the volume of students that there is in the city, courses just are not being run—and that is happening currently. Instead, we have these dodgy providers trying to trick people and fill the gap. It is good that we are seeing reform on this, but we need to see much more reform and much more investment. It is the reality of the city versus regional situation. We should subsidise regional TAFEs to deliver quality training services. If we want to have people living in the regions and we want a skill base in the regions, what a great legacy it would be for this government to invest in skill based training in the regions.

I am inundated by employers and businesses around the regions who say, 'We just don't have the skills we need.' For example, there is only one provider of pattern making courses left in Victoria, RMIT, but Keech Australia are not looking for pattern makers for dress clothing; they are looking for pattern makers for 3D printing. It is an innovative, exciting business. They are now 3D printing body parts such as hips for surgery and replacement, yet they cannot get people through the trades sector. They are not just looking for engineers; they are looking for people with trade qualifications and are willing to partner with TAFE. Where is the government putting the money on the table to help Keech Australia to do that? The money that we are saving in this area needs to be reinvested in TAFE to help rebuild the TAFE sector.

Australians love TAFE for a very good reason: they know it works. Older people are constantly shocked when you tell them: 'The apprentices that you had available just don't exist today.' Take Bendigo Thales, for example. Where it was owned by the Australian government, it was known as the Ordnance Factory. They had 100 apprentices in a workforce of 1,000. There was a team of them—25 in each cohort each year. Granted the business was much bigger back then, today this company is down to four apprentices. Even with the new Hawkei contract that is coming on—and it is great to get that $1.6 billion investment—it has not brought on any new apprentices with that new work. It is a disappointment to our local young people that they cannot follow the pathway of their fathers or mothers into an apprenticeship. But it is also a reflection of the fact that Thales is not quite sure whether there are enough educators locally to be able to partner with its apprentices.

It is great to see the government catch up to Labor and the community on this and move these reforms on student loans. But it is disappointing that, with all of the time and the delay that they have had in bringing this in, they have still failed to get the consultation right. I have been contacted by people in the arts sector that feel that they have been targeted by this government. There are some courses in creative industries which the government may call niche, but they actually do generate artists and creatives who go on to have professional careers. It is disappointing that the government has not consulted with that sector properly. Yes, there are rogue people. But, rather than going after the rouges, they have gone after everybody.

I want the government to particularly take note of other courses that are delivering higher skills, like for pilots—not just airline pilots but also marine pilots. There are a number of skilled, professional-based training organisations that are currently using this scheme as a way to give opportunity to people within their organisation's businesses and industries to skill up. We do need to make sure that we are consulting with them. It is why I am glad this will be referred to a Senate inquiry—so those industries can say, 'Hey, look, we're legit. We should be quarantined from these reforms.' It is true that a lot are not legit. The Karen example that I had earlier today—of the Karen community from my electorate—is just one of many that I have highlighted. In this space we need to ensure that anybody that is taking out a student loan is getting a great and quality education. We have not seen that so far in the VET sector.

We need to ensure that we are doing more to invest in TAFE. We need to ensure that we are doing more to rebuild public education and TAFE skills. It would be great to see some of the money being saved in this area be invested in our schools, whether it be the Gonski, TAFE or our universities, particularly in the regions. If you do not have a decent public provider that is willing and able, and has the resources to deliver the training that is required, we will be left with skills gaps in the regions worse than what they are now.

Young people in the regions are looking for those opportunities. Youth unemployment figures are out. It is in our regions where we have some real spikes in youth unemployment. If we are genuine about reform and genuine about delivering skills and making sure that people have a good education, we should see rapid investment into public education—particularly our TAFE sector—to give those young people an opportunity to get the skills to get the jobs that we have in our country.

Susan Lamb (Longman, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak to the importance of a fair and effective VET sector—a sector with sufficient checks and balances and a sector that strikes the right balance between public and private institutions. I concur with the member for Cowan's view that not every Australian needs to complete tertiary studies. Indeed, such an expectation is likely to be counterproductive, placing undue pressure on many young Australians. What I strongly believe and what I do expect is that our educational institutions provide value for money and facilitate a well-trained workforce. Unfortunately, though, many VET institutions, including some unscrupulous private providers, have failed to meet this basic threshold. In fact, it is fair to say that the system has fallen into crisis under the Liberals' watch.

I will return to the Liberals' maladministration shortly, but before I do I would like to talk about my electorate of Longman and what a reliable, fair and quality VET sector means for the constituents of Longman. The National Centre for Vocational Education Research's most recent data reported that the number of VET students in the Longman region was 10,203. The ABS data shows that, at 17.1 per cent of those student, technicians and trade workers represent the highest occupational category. For these reasons, access to a quality and affordable VET sector is just crucial to my electorate.

While Labor supports these bills in principle, it really is a case of too little, too late. This government talks about transparency, but only after thousands of students have accrued significant debt for courses with little hope of leading to a job. The government recognises a need for reform that they should have acted on sooner. Yes, delayed action is better than inaction, but we should not offer unqualified support for these bills simply because they decided to act.

I previously mentioned the maladministration that characterises the Liberals' approach to the VET sector. Over the last three years the Liberals have shown they simply do not care about the sector, including TAFE. It has taken three years for this government to recognise the systemic problems within the sector. Although, I might add, these issues were not originally systemic, they were caused by the government's unfair and almost arbitrary funding cuts.

Why have there been such delays? How did they justify these cuts to a sector that is already struggling for funding? The reality really is: they did not need to justify anything, because you do not justify action when you just do not care about the issue.

Without doubt, reform of the sector is essential. Labor understands this, and that is why the government have essentially copied Labor's policies. If only they had acted sooner so billions could have been invested in apprenticeships and TAFE—

Mark Coulton (Parkes, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.