Emma Husar (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

Labor supports this bill. We recognise there is a genuine risk, which has been thoroughly tested, that our higher education system could be targeted by unscrupulous providers. Labor believes in vocational training and education and in the people who rely on it to contribute to society. We have always stood up for TAFE and the vocational educational system because we know how life-changing these courses can be. As a proud TAFE graduate, I can attest to this. Unlike those opposite, we are in the business of improving the standard of living for ordinary Australians, not taking every single opportunity to reduce it. We are about ensuring that Australia's world-class higher education system, and our students, are properly protected. That is absolutely critical to its ongoing success.

The reforms that are proposed in this bill rightly acknowledge that there has been a surge in applications from vocational education providers to become higher education providers. We are seeing this surge because people want choices to skill themselves, choices other than just universities. Not everybody wants to go to university and not everybody needs to go to university to be successful. Sadly, the Turnbull government does not believe in vocational training. The runs are on the board for the conservatives: TAFE has been gutted, there are plummeting enrolments and 5,700 world-class TAFE teachers and support staff have been sacked since 2012—and I reiterate the support staff.

The government and New South Wales state Liberals have made an art form of killing the TAFE system, and the result has been an increase in private operators, resulting in shonky providers who think they can game the system. As I previously mentioned in this House, under the Liberals we have seen the sector ripped off and defrauded. Students have been signed up to fake courses; vulnerable people have been enrolled in completely inappropriate courses; and young people have been tricked into taking on significant debt with no personal gain or return, nor any ability to repay. People have been bribed with iPads. These are vulnerable people—young people, sometimes people with a disability—and they are made to sign up to courses that they have no intention of participating in or completing, nor do they have the ability to complete the courses. We know of vulnerable people tricked into enrolling in classes where the completion rate was less than five per cent. We know of employers who refuse to employ people who have certifications from certain institutions.

Without a strong and effective VET sector, many people in my electorate will not be able to reach their full potential and, therefore, will not be able to contribute to society as much as they otherwise would. That means we all lose. Businesses will have fewer skilled workers to employ and we will have more people relying on social benefits rather than participating in the workforce—two things those opposite continually bang on about in this place.

Good private providers are all well and good, but we know that the bottom line for some of them is profit, not good educational outcomes. The government needs to understand that education is an investment, not a burden. TAFE course fees are rapidly rising, and hundreds of thousands of people are being locked out of courses that could change their lives. Millions of dollars of taxpayer funds have been spent on courses where the qualification was not worth the piece of paper it was written on. I am pleased then to see that this bill will go some way towards making the safeguards and protections necessary for students, but I remain concerned about the impact on students already affected. You cannot have jobs and growth without investment in education; businesses know this and employers know this. Those of us who have been educated know this. But the government is silent on this. The Liberals are saddling our youth with debt and making them put their hand in their pocket even before they start earning more than the minimum wage. If it isn't TAFEs, then it's universities and public schools where the government also wants to hurt students.

The government will have your hand in your pocket earlier by charging higher fees and cutting university funding at the same time, not to mention stopping K-12 classrooms from reaching their full Gonski funding allocation and ensuring that every classroom, no matter the postcode, has the resourcing standards it needs. The Prime Minister and the government are only interested in increasing disadvantage. We saw that today through the MPI. We need opportunities for our young people. This can only be achieved with a strong VET system. We welcome the greater scrutiny but would like to see a restored TAFE sector, where everyone gets the opportunity to participate in our society.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

Just prior to question time I had the opportunity to go to my alma mater, the Australian National University. I was there to take part in the national day of protest that is taking place in every campus right across Australia to protest the attacks that this government has made on the higher education sector. These attacks have been sustained, they have been ongoing since the last government, and we saw them reach a heady height in 2014. But today was about the latest round of cuts taking place across our university campuses throughout Australia. Today we protested against the $3.8 billion of cuts to universities right throughout Australia, including $14 million at the Australian National University and $15 million at the University of Canberra over the next four years. The cuts are going to be taking place in universities right throughout Australia. There is not one university that is going to be immune from the Turnbull government's cuts.

But it is not just about cuts to funding; it is also about the other changes that this government has made. These changes, billed as 'reforms', are nothing but attacks on students, universities and our future. Higher education is one of the keys to a prosperous nation, a prosperous future. The attacks this government is making are attacks on the prosperity of this nation in the future. We were talking about these attacks at today's national day of protest at the Australian National University, which is in my electorate. As I said, there are cuts to the ANU, the University of Canberra and every campus right across Australia.

We are also seeing an attack on students living in the regions, which should be of significant concern to those in the National Party. But have we heard boo from the National Party in regard to the attack on regional students and their funding at the higher education level? No. We are also seeing cuts to Indigenous students' access to university. We are seeing an attack on those low- and middle-income families who are trying to gain a university education. Many of them are trying to be the first in their family to gain a university education. I was the first member of my family to be educated at university. My sisters and I were the first generation in my family—on both my father's side and my mother's side—to be educated at the tertiary level. That was thanks to the changes the Whitlam government introduced—free education—and also to my mother's tenacity and her commitment to seeing her girls educated beyond just the age of 15. But that's a whole different story.

Today the discussion at this national protest at the ANU and at every campus across Australia also focused on the fact that university students' fees are being hiked—they are going up thanks to this government—and also that university students are going to have to pay back their loan for their fees earlier. Does that make for a clever country? In a country that will need to compete, we will need people to be educated at the tertiary level and the postgraduate level to achieve the ambitions that we have as a nation to be able to compete in a global economy in a globalised world. We need a clever country to do that. And what's this government doing? Through these cuts to the universities and to students—including regional students, Indigenous students, women and low- and middle-income earners—it is essentially making the country less competitive in the future. And it's condemning students—particularly low- and middle-income earners, women, Indigenous students and regional students—to a debt sentence in terms of their higher education. This government is chasing the American dream when it comes to university fees. University fees are potentially $100,000 per degree. Is that what we want for our nation?

So I was at my alma mater, protesting these cuts and speaking to students and those from the academic staff who are very concerned about what this government's plans are for higher education. While I was there, one of the women who was there, who was doing the introduction before I spoke, mentioned the fact I was a former ANU student When I was at the ANU in the early 80s, which is a long, long time ago, only about five per cent of Australians went to university. I was a rare beast, a public schoolkid at university and living at a college there. I was a rare beast. In those days, as I said, about five per cent of Australians went to university. Thanks to the range of changes and reforms that Labor made over the course of the eighties, we saw significant changes in the accessibility of higher education and also the numbers and the percentage of Australians who were getting involved in tertiary education. So it rose from about five per cent in the early eighties to about 30 or 40 per cent, which I think it is now.

What this government is doing with these cuts to the higher education sector is essentially taking us back to those early days, when in my view too few Australians were participating in higher education and too few Australians had the opportunity to access the transformative powers of education. For me it broke intergenerational poverty. It broke three generations of disadvantage, of single mothers cleaning houses, theatres and hospitals. That's what tertiary education did for my sisters and me, in opening up a range of opportunities, and I want those opportunities to be provided to Australians throughout the country, in little country towns in remote parts of Australia, for Indigenous students, for Aboriginal students, for Torres Strait Islander students, for women, for students from low-income backgrounds and for students who have been brought up through the hardworking tenacity of their single mothers. I want them to have access to higher education, as I had that opportunity, because it transformed my life and the lives of my sisters.

Today at my alma mater I was also reminded of my former alma mater, the grand old Royal Melbourne Institute of Technology, the oldest workers college in the world and, in a way, probably the oldest TAFE in the world—the oldest school of vocational education in the world. I was also educated at that fine institution, which has made a significant contribution to vocational education in this country for more than 100 years. And this bill that we're talking about today does look at the vocational education environment. It strengthens the regulation of Australia's higher education system, the application standards of providers of higher education and the provision of the FEE-HELP loan program. These changes are necessary. We have heard from many speakers about what has happened in this area for quite some time, and change is needed.

We've heard evidence about the number of students that have fallen victim to unscrupulous marketing activities from providers—bribes of iPads, trips overseas and all sorts of things. We have also heard evidence of the unscrupulous tactics employed by providers in obtaining access to tax file numbers from the Australian Taxation Office which led to $2.2 billion being lost through the VET FEE-HELP system. The fact that $2.2 billion was lost raises questions about the effectiveness of the existing regulatory arrangement and highlighted the need for change.

This bill amends key legislation governing higher and international education to strengthen regulatory control and student protections in these sectors. Amendments to the three separate acts underpinning Australia's higher education framework will bolster enforcement powers and the oversight capabilities of relevant regulatory authorities. This will allow them to intervene as necessary to ensure that the unscrupulous events we saw happen with the VET FEE-HELP system don't happen again in any part of our higher education sector.

It is important we support a strong and healthy higher education regulatory system, and Labor welcomes greater scrutiny of the background of organisations that apply to operate in our higher education system. It is vitally important. This is a major export industry, and we need regulations in place to ensure that our reputation is not tarnished. It's a major export industry for Australia, and I know it is for Canberra. Today I spoke about the export opportunities that are provided by our fine institutions here in Canberra—the Australian National University, the University of Canberra and the Canberra Institute of Technology—as well as by a number of private outfits that are, in a small way, exporting their services around the region and the world.

The protection of our world-class higher education system and of our students is absolutely critical to the success of this export industry. It's an enormous export industry and it is growing. Our biggest provider of vocational education in the ACT is the Canberra Institute of Technology, which trains 80 per cent of the territory's government funded vocational education students every year, with some courses offering pathways into university.

Canberra also has excellent smaller training providers, like the Academy of Interactive Entertainment. The AIE is a specialist video games and visual effects educator that was established by industry 20 years ago. It's a not-for-profit institution that re-invests surplus funds into providing first-class equipment, facilities and support for graduates. The AIE has won awards in the training sector. It has won the Small Training Provider of the Year—not once but twice—as well as the Small Registered Training Organisation of the Year and the ACT Training Excellence Award.

The AIE has been in contact with me and is concerned about the rapid changes in this sector, particularly in relation to the VET student loans system introduced in January this year. One of the key concerns is the upfront costs that students face and the limitations of loan caps. The AIE said in a letter to me that AIE courses are expensive due to the technological and professional requirements needed to provide our students with the standard of qualification that industry expects. The advanced diplomas have an added difficulty, in that students study for two years. However, none of these factors are incorporated into calculations of loan caps. As a result of the system, which provides a maximum loan of $10,000, students presently have to finance nearly 75 per cent of their studies upfront.

Allowing students to have the confidence to take on a debt to study is extremely important if we want the vocational education training system to grow and to provide quality education to students. But I hold concerns about the impact that the loan caps may have on certain training campuses and/or providers, as described by the AIE. The AIE have indicated that, unless the loan cap is extended or it's able to receive an exemption, they will be forced to reduce student numbers. They will have to lay off staff and they will have to provide less intensive, lower quality course content, which would be an extremely disappointing outcome for the AIE, which is an award-winning training provider in an innovative, growing and burgeoning industry.

It's perhaps to these escalating costs that the latest figures from the Productivity Commission for government funded vocational and educational training in the ACT can be attributed. The figures showed that the number of students in education and training programs had actually fallen from 45 per cent from 2011 to 2015 with the qualification completion rate estimated to be at 40 per cent, slightly higher than the national completion rate of 38 per cent. The increasing cost of higher education is a limiting factor for students and will ultimately hobble Australia's economic growth in the longer term and our economic success as fewer students complete higher education qualifications overall.

Labor knows that one of the best things we can do for our economy, for our nation, for our prosperity, for our society and for our future is to invest in our people. That's why we want early childhood learning, school, TAFE and universities for all Australians. Labor is committed to the full and proper funding of our education system. It is vitally important, as we go through a transition for the global economy and for the domestic economy, to invest in the future.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I rise with pleasure to support the Education Legislation Amendment (Provider Integrity and Other Measures) Bill 2017 as it strengthens integrity in vocational and higher education. It updates the 'fit and proper persons' provisions, strengthens processes around the assessment of provider histories and provides additional powers for the department secretary to share information with agencies and the Overseas Students Ombudsman. It prohibits unscrupulous marketing practices—we all remember the scandal of inducements such as free iPads and gym memberships—it stops cold-calling and it puts an end to barriers being imposed on students' desire to withdraw from study. The amendment also changes the definition of 'genuine student' for the purposes of accessing FEE-HELP, improves compliance arrangements and provider application requirements, and increases financial viability and financial transparency agreements.

Labor supports these measures because Labor wants a stronger vocational and higher education sector. Labor also fully supports a robust and rigorous higher education regulatory system. We welcome greater scrutiny on the background of organisations that seek the privilege of operating in Australia's higher education system. Indeed, Labor recognises the vocational and higher education sectors as vital to Australia's economic growth. Australia's economy is changing fast, and the skills that Australian will need to win well-paid and secure jobs are changing fast too. As a mining company executive told a hearing of the Joint Standing Committee on the NBN in Tasmania recently, he no longer needs people skilled with spanners, but people skilled in computing and diagnostics.

Australia needs to invest in education, skills and training that will drive 21st century enterprise, which makes the government's budget this year so inexplicable. In this year's budget the government is cutting another $600 million from TAFE and apprentices, $3.8 billion from universities—including $30 million from the University of Tasmania—and $17 billion from schools. Australia now has 130,000 fewer apprentices and trainees than when the government was elected. When it comes to higher education, this is a government that wants to increase students' fees at the same time as it slugs students' incomes and cuts investment in universities. Repayment of HECS fees is kicking in, I think, at $42,000 a year, which is well under the average weekly wage, so it's widening the income inequality gap that has been in so much talk recently. That's not a good thing when we want to invest in education. We are making it harder for kids from working class areas and regional and remote communities to get into university. We are making it hard for them to contemplate the very idea that university is an option for them; they won't even consider it with the high debt that they are expected to go into. Once again, we run the risk of university education in this country being the preserve of the upper middle class and the well-off—people with high incomes and access to capital—rather than kids from working class suburbs like the suburb I grew up in.

The cuts in public funding are expected to result in between 7,000 and 9,500 full-time equivalent job losses across our universities. These are jobs we can ill afford to lose. It's a classic case of pay more and get less—a bit like the NBN, I suppose. Another witness told the NBN committee that the NBN was costing $60 billion to roll out, but would be worth just half that on the open market. These are not results to be proud of. These are not the numbers of a government committed to an education sector designed to deliver the skills and training required for full participation in the 21st century. TAFE and vocational education funding and the number of supported students are all lower than they were a decade ago, and this is despite an increase in the number of jobs requiring vocational skills. Too much of the shortfall has been made up by the importation of workers on visas, and that is another issue Labor will address in government—that is, ensuring that a better balance is struck.

The next Labor government will reverse this government's cuts to skills and training, and invest in TAFE and apprenticeships by investing an additional $637.6 million into TAFE and vocational education—reversing the government's 2017 budget cuts in full. We will guarantee at least two-thirds of public vocational education funding goes to TAFE, restoring TAFE as the central pillar of Australia's vocational educational system. We will invest $100 million in a new 'building TAFE for the future' fund to re-establish TAFE facilities in regional communities, such as my electorate of Lyons in Tasmania, to meet local industry needs and support teaching for Australia's digital economy. Labor will set a target to ensure that one in 10 workers on all Commonwealth priority projects and major government business enterprise projects is an apprentice. We will invest in pre-apprenticeship programs, preparing up to 10,000 young jobseekers to start an apprenticeship—a real apprenticeship, not this 'job pathway' fraud that is being perpetrated on young people by this government. We will establish an advanced entry adult apprenticeships program to fast-track apprenticeships for up to 20,000 people facing redundancy or whose jobs have been lost.

With these comprehensive measures, Labor will reverse the decline in TAFE and apprenticeship programs and provide young Australians the pathways they need to contribute to Australia's economic growth in the 21st century. Currently those pathways are littered with shonks and rorters, and that is why Labor is happy to support this bill. It is a sad fact of life that public policymakers seem to always be surprised by the slyness of shonks, who are willing to damage other people in order to advance their own economic self-interest. If there is one lesson that can be learnt when it comes to developing public policy, it is to design much more defensively—especially when it comes to policies that involve public expenditure. Policymakers, whether in departments or in this parliament, need to role-play and cast themselves as crooks and conmen and seek to exploit their draft policies for personal gain so that they can plug those gaps that are identified.

Good people who wish to believe that others act only for the common good find it difficult to comprehend sometimes that well-intentioned policies can be misappropriated by cons and crooks. But the fact is there are people out there adept at sniffing out how to get their hands on public money. They find the loopholes, they exploit the policy weaknesses and they pounce. Sadly, this was the case when, with the best of intentions, access to VET FEE-HELP was extended to include diplomas and a broader range of providers. The shonks cottoned on that if they signed people up to courses they could be paid by the government for the placements. These bloodsuckers engaged agents on commission to trawl the outer suburbs of Australia's cities to sign up new students by using heavy selling techniques, like those they used on Bradley Smith from Clarendon Vale—a working class outer suburb of Hobart in Tasmania.

Despite having struggled at school, Bradley was told that, if he signed up for a three-year diploma in business management, he would get a free iPad. The small print was that it would cost $26,000 in fees, but he would not have to repay those fees until he started earning more than $50,000 in income. Luckily, Bradley's mum showed the salesperson the door before Bradley signed. But there are thousands of Bradleys across Australia who were not so lucky, who were signed up for courses they had little hope of attending, let alone completing, but who were then on the hook for the repayment if they ever earned enough to commence the repayments. Students were signed up in their tens of thousands across all sorts of providers, a number of them completely new to the sector.

Soon it became clear that far too often what was being offered bore little relation to what was being delivered. The training regulator pulled the reins and started demanding proof from providers that they were delivering the courses they were selling. Access to public funding was cut, unless proof was forthcoming. And, like dominos, they started to fall. Provider after provider was either ordered to cease trading or went bust. Careers Australia, Smart City, RGIT and Avoca are some of the bigger names to have fallen. The victims are the staff left without jobs and the students left without courses, diplomas or degrees but with fees still to repay.

The National Audit Office has been damning of the education department's handling of the issue. There was no concerted effort to deal with the emerging problems until after last year, when allocations under the scheme reached $2.9 billion. Now more than $2 billion has been essentially written off, has disappeared into the accounts of shonks, but the course fee debts have not been forgiven for students left without courses to complete. Staff without jobs and students without courses are the victims in all this. Labor is backing this bill because we need to ensure it does not happen again.

Phil Honeywood, chief executive of the International Education Association, is backing the changes, saying the inclusion of reporting on agent performance would 'promote greater transparency and accountability in educator-agent relationships in the wider sector'. While positive, he also cautions there is a need for ongoing vigilance to protect Australia's international education brand and to close the loopholes that wrongly motivate education providers. He said:

Even if providers abide by all existing legislative and regulatory requirements, in seeking to maximise their enrolments they can often encourage a 'race to the bottom' with abnormally low tuition fees particularly for business studies/accounting courses …

By the time these providers have paid large commissions to education agents their tuition fee structure is only sustainable if they cut corners on quality.

And quality is something we must not skimp on—for the sake of students, but also for the sake of our international education reputation and, more broadly, our economy. We must not allow the reputation of our education sector to slip. Last year, education export earnings generated $21.8 billion for the Australian economy. That level of earnings demands both serious investment from the government and serious regulation. We must ensure the sector is managed properly. Labor does support better protections for students, and a crackdown on dodgy practices. But we also have serious concerns about the implementation under this government. After all, this is not a government that covers itself in glory when it comes to competent management. Whether it is water, the NBN, the census, Centrelink or marriage equality, this government has shown it cannot be trusted to manage the details.

Students of failed institutions do have access to the VET ombudsman, if they are made aware of it, to assist with issues like transitioning their course to another facility. Establishing an ombudsman to help these students get justice was Labor policy at the last election, and we are pleased to have won government support in this parliament to see it established. Sadly, students accessing FEE-HELP at other providers have also been affected by the government's tightening of the VET sector. The government's decision to cull 478 courses from the list of those eligible for FEE-HELP assistance, whether students were partway through the course or not, has had real impacts. Students in affected courses have had to decide to either complete their course by paying the rest of their fees up-front, or to drop out and start something else while remaining liable for the FEE-HELP fees incurred for the abandoned course. There was no warning given and no time to make alternative arrangements. Teachers were affected too because their courses were suddenly up-front fees only, leading to massive drop-out rates. Some were left to carry the can, having personally invested heavily in expensive teaching materials. Irrespective of one's judgement of the value of a course, it's unfair to tell a student that their course is covered and then pull the rug out from under them. Our young people and our teachers deserve more respect than that.

Labor has repeatedly raised concerns over the jobs that will be lost, the students who will be disadvantaged and the career pathways that will be blocked if the government fails to implement reforms thoughtfully and with care. Labor is concerned that the methodology employed by the government to determine the eligible course list is too simplistic and blunt and the consequences for many students and providers are too extreme. The government needs to ensure that it continues to properly consult with the sector about the changes, and Labor is concerned that this is not being done. The government needs to ensure it is providing the higher education regulator with adequate resources to do its job. Labor believes the government has been negligent by failing to act on the rorting within the system for far too long. This bill goes some way to addressing that negligence, and that's why we are happy to support it.

Cathy O'Toole (Herbert, Australian Labor Party) Share this | Link to this | Hansard source

Finally we have seen some action taken to address this very serious issue. After months of Labor lobbying the Turnbull government, after months of students lobbying and after what feels like a lifetime of lobbying from TAFE, the Turnbull government has finally listened to our calls and is finally doing something. Protecting our students should not have taken this much effort and lobbying. The evidence of unscrupulous marketing tactics used by some dodgy registered training organisations is overwhelming and disgraceful. Action needed to be taken to protect the reputation of our vocational education and training system, and that is what the Education Legislation Amendment (Provider Integrity and Other Measures) Bill 2017 seeks to provide.

Education, and especially vocational educational training, is vital to the future of our country. We know that the jobs of the future will require new skill sets, and that can only be achieved by a strong and well funded vocational education and training sector. Identification of transferable skills and gap training will be essential in a fair transition for workers into new industries. As demand grows, there is always a growing potential risk that our higher education and TAFE systems could be targets for unscrupulous providers.

As a former TAFE teacher and curriculum designer I am proud to say that Australia has one of the greatest higher education systems in the world. I am particularly proud to have James Cook University in my electorate. It is ranked No. 1 in the world for two separate studies in the area of tropical sciences. This is something that no other university in Australia can lay claim to. Townsville is also home to Central Queensland University, where great educational facilities and programs are being developed and delivered. Ensuring our students have access to quality education is critical, and protecting our students from dodgy operators is also crucial to our ongoing success in providing quality education and training programs.

I have had students from former dodgy operators in the North coming to my office in tears because, through no fault of the students' own, an operator had closed its doors and simply disappeared overnight. These students are scared that they will have to start their courses again, as they do not know how to transition to another provider, if, in fact, they can. Some are angry about the extended periods of unpaid work experience and others are incredibly distressed about what it means when they have been accessing VET FEE-HELP. One student who came into my office had been trying for 12 months to get the last component of her Certificate III in Community Services—the field placement component—completed. She had been working for most of that 12 months in a voluntary capacity and she had a paid job waiting, but, sadly, she needed her completed qualification. It took me half an hour on the phone, with her in my office providing information, to sort out the mess that she was in. That was only possible because I have knowledge of the vocational education training sector. Her field placement was organised for the next week, her certificate is now completed and she is in paid work. No student should have to come to their local federal member to sort out a problem of this nature, because it should never happen in the first place.

Students who access VET FEE-HELP pay a 25 per cent loan fee, meaning that if they defer their fees they effectively defer 125 per cent of the cost of their course.

In many cases, the costs for full-fee higher education programs can range from $18,000 to $35,000 per year. Students who are willing to take on a debt in the hope of achieving a good job and a better life need every assurance and protection from the government. We need to provide these students with the confidence that there is a robust and rigorous higher education regulatory system.

Let me give you another example. As the CEO of a community managed mental health organisation with an office on Palm Island, I had staff and a person who was using the service signed up by a dodgy operator. The person that we were supporting in that service had an acquired brain injury and a complex mental health condition, and he had not been to high school, yet he was able to be signed into a double diploma of management and welfare work that he would be required to complete online. He was offered a free laptop and free internet, but sadly the internet provider that he was given did not operate on Palm Island. The staff working for me were also signed into the same dual diplomas.

When I asked the provider how they would do their four-week field placement, he informed me that Woolworths had offered spaces. There was no consideration for relevancy or the context of the learning environment, their accommodation or the fact that they would be away from home. This provider had simply gone to Palm Island and sold training qualifications to the locals with the offer of a free laptop and internet and no checks on educational history or capacity to undertake diploma level training. The students had no idea of the cooling-off period or the debt they were incurring regarding their VET FEE-HELP either.

For all of those students who have contacted my office and are victims of dodgy operators, I am proud to support the Education Legislation Amendment (Provider Integrity and Other Measures) Bill 2017. These are great examples of why I welcome any additional focus on greater scrutiny being placed on the background of organisations who wish to operate in our higher education sector.

The reforms proposed in this bill rightly acknowledge that there has been a surge in applications from vocational education and training providers to become higher education providers. The Tertiary Education Quality and Standards Agency has described the number of applications as a surge, with more than 70 per cent of new applicants to become registered higher education providers having previously been vocational education and training providers. These higher education providers, which are almost entirely private providers, once registered, can then apply to the department for access to FEE-HELP. And this is where the dodgy providers have been rorting our system. An audit report has been provided which says that the Australian tax office was handing out thousands of tax file numbers directly to providers. The Government Actuary has identified nearly $1.2 billion in VET loans that were inappropriately issued, and it is likely that unauthorised access to tax file numbers has been a significant contributor to this situation.

It is unconscionable that this has occurred, and that is what this bill seeks to put an end to. The provisions in this bill will stop providers being able to access tax file numbers from the ATO in the future, and it is also designed to prevent providers from completing any component of the student's request for Commonwealth assistance. I strongly support this vital change, and I am also strongly supportive of the range of civil penalties that have been included for all providers who choose to breach provisions.

The three major changes that this bill seeks to rectify are correctly identified across a number of acts and will strengthen the regulation of the higher education system. Schedule 1 amends the Education Services for Overseas Students Act 2000 to strengthen a range of provisions including updating the fit-and-proper-person test provision, changes to reporting requirements, and providing additional powers to the Secretary of the Department of Education and Training to share information with the Overseas Students Ombudsman and other agencies.

Schedule 2 amends the Tertiary Education Quality and Standards Agency Act 2011 to strengthen processes around assessing provider history, extends the fit-and-proper-person test for providers at application and also makes a number of technical amendments.

The amendments in Schedule 3 to the Higher Education Support Act 2003 will strengthen student protections by prohibiting unscrupulous marketing practices and barriers to withdrawal from study. The amendment bill also changes the definition of 'genuine student' for the purposes of accessing FEE-HELP, improves compliance arrangement and provider application requirements and increases financial viability and financial transparency agreements.

This protection is vital to students in Herbert, where a number of students were not fully aware of what they were signing up to except for the marketing tactic of a free iPad or laptop. As I have demonstrated earlier in this speech, that is exactly what has been happening in my electorate of Herbert. Consequently, I am pleased to see that providers of this nature have gone. But, sadly, they have left behind devastated students in their wake.

Whilst I am strongly supportive of a robust and rigorous higher education regulatory system, I want to note a few sections in this bill that I am concerned about—especially under the Turnbull government. In particular, sections 16 to 60 and section 26. Sections 16 to 60 are new provisions that may allow the minister unfettered power to decide which courses are funded and which are not. I am confident that if the minister for education were the Hon. Tanya Plibersek MP in a Shorten-led government, I would know that funding for quality education and funding for students to access education would be in very safe hands. Sadly, that is not the case right now, as we have an LNP Turnbull government and the Minister for Education and Training is Senator the Hon. Simon Birmingham. Quite frankly, this government's track record regarding meaningful industry consultation, funding for education and the general attack on students concerns me greatly.

There is also section 26, which means that students who fail units of study may lose their eligibility to access FEE-HELP. Adequately addressing this section will require very good consultation with students and well-thought-out consideration before decisions are made to penalise students. My experience has taught me that there are often many significant and valid reasons as to why a student has failed a subject. There could be serious financial stress, family issues, unemployment and the list simply goes on. A student cannot have financial assistance one day and none the next and perform well under assessment conditions. This could further add to any stresses currently occurring in that person's life. As a government we should be working to ensure that everybody has the ability to access further education, and consultation will be critical to this section.

The objective of this bill is to strengthen application standards for providers in higher education and to strengthen provisions for the FEE-HELP loan program, which is critical in protecting the integrity of our higher education system. Labor will always protect our education system. As elected representatives it is up to us to ensure that our proud tradition of an excellent higher education sector is protected, and, as such, we must enact legislation that does just that. I am proud to support this bill to ensure that no-one is ever a victim to a dodgy private training provider again.

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

I rise today to speak on the Education Legislation Amendment (Provider Integrity and Other Measures) Bill 2017. This bill makes changes to key legislation in order to strengthen the regulation of Australia's higher education system, including the Higher Education Support Act 2003, the Tertiary Education Quality and Standards Agency Act 2011 and the Education Services for Overseas Students Act 2000. Its objective is to strengthen application standards for providers in higher education and to strengthen provisions for the FEE-HELP loan program.

It has become clear in recent years that unscrupulous vocational education providers have taken advantage of this system and of students, and, insofar as this bill acts to reduce the risk to students and taxpayers, Labor will be supporting it. This legislation is designed to address the risk that education providers may choose to target higher education as an alternative to vocational education. There is, in my submission, a systemic risk that without attention to the regulation of the sector that bad practices, which have been address in the VET sector, may be allowed to propagate in the higher education sector. Indeed, there is a suggestion that action to address unscrupulous practices in the VET sector has resulted in a surge of VET providers, including some who have had their VET FEE-HELP approval revoked, seeking to transition their operations into the higher education and international education sectors.

Ensuring that Australia's world-class higher education system and our students are properly protected is absolutely critical to its ongoing success. The amendments contained in the bill increase the enforcement powers and oversight capability of relevant regulators, enabling them to intervene as necessary to prevent malicious practices across the higher and international education sectors. Labor fully supports a robust and rigorous higher education regulatory system.

It's very important to note that the higher education sector is Australia's largest service export, worth $21.8 billion in 2016. Indeed, it's very important for us to note the importance of higher education generally. There is, as has been reported in a number of economic reports, a spillover benefit to the Australian economy which arises merely from the presence of university graduates and higher education graduates in our economy. This is important because it drives the growth in the Australian economy. It results in additional employment. For example, for every 1,000 university graduates entering the workforce, over 120 new jobs are created for people without a university degree. In 2014-15 the effect of new graduates entering the Australian workforce created 25,000 additional new jobs for people without a university degree. So you can see it's vitally important that we continue to invest in the higher education sector, and the maintenance of high standards is an investment in reputation which bolsters and sustains the sector and Australia's reputation for high-quality education. Domestic and international students should be able to plan and consume these services with confidence that malicious practices and unscrupulous providers are subject to appropriately stringent controls.

We welcome the additional focus and the greater scrutiny placed on the background of organisations who wish to operate in our higher education system. For example, the Education Services for Overseas Students Act 2000, the ESOS Act, is amended to update the 'fit and proper person' test provisions, changing reporting requirements and providing additional powers to the Secretary of the Department of Education and Training to share information with the Overseas Student Ombudsman and other agencies.

This bill allows also for the strengthening of processes around assessing provider histories, extending the 'fit and proper persons' test for providers at the point of application, and also making a number of technical amendments to the Tertiary Education Quality and Standards Agency Act 2011. These particular amendments will enhance the TEQSA's compliance capability and introduce more stringent provider application requirements to better equip the TEQSA to implement robust student protection mechanisms.

I'm very pleased to note that among the amendments contained in schedule 2 there are additional financial viability and transparency requirements, which include requiring general-purpose financial statements for providers of a certain size, and amending the definition of 'qualified auditors' to ensure the auditor of a higher education provider's financial statements must be a registered auditor for the purposes of the Corporations Act 2001, or otherwise someone who is approved by the regulator. Further, we see that the Higher Education Support Act 2003 is amended to change the definition of 'genuine student' for the purposes of accessing FEE-HELP to ensure compliance arrangements and provider application requirements and to increase the financial viability and financial transparency of agreements.

Perhaps most importantly, the HESA is also amended to strengthen student protections by prohibiting unscrupulous marketing practices and barriers to withdrawal from study. Aggressive recruiting tactics by some private VET providers saw students persuaded into unsuitable courses with a promise of free iPads, gym memberships and more. The extent to which unreasonable and unscrupulous behaviour infected the VET sector has been well documented. Nevertheless, it is vitally important to reflect on just how corrosive and insidious these practices became, particularly when they were entrenched across a sector. Labor supports early attention to ensure these practices do not transmit to the higher education and overseas education sector.

When ASQA reviewed the marketing and advertising practices of the VET sector in 2013, it discovered widespread departures from reasonable standards. Specific breaches of the standards found in the review of marketing practice amongst registered training organisations examined in that review included: 59.3 per cent marketed qualifications in unrealistically short time frames or time frames that fell short of the volume of learning requirements of the Australian Qualifications Framework; 32.3 per cent had websites which enabled the collection of tuition fees in advance, and half of a sample of these websites allowed RTOs to collect fees in excess of the amounts allowed by the national standards and 60 per cent did not mention the RTO's refund policy; 11.8 per cent advertised superseded qualifications and 8.6 per cent engaged in potentially misleading or deceptive advertising, such as guaranteeing a qualification from undertaking their training, irrespective of the outcomes of assessment, and guaranteeing a job outcome from undertaking training, even though an RTO was in no position to ensure that somebody would get a job as a result of undertaking training.

Providers had been able to attract millions of dollars in loan support for domestic VET students, with little or no consideration given to the circumstances or the capability of these students to complete their courses. The introduction, therefore, of a 'genuine student' test is very important. For a student to be and remain entitled to FEE-HELP, they must be a genuine student in that they have been assessed as academically suited to undertaking the relevant unit of study and have had a reasonable unit completion rate.

There are, of course, other considerations which are relevant. For example, if a student does not have adequate English language skills to undertake higher education, this may affect their academic suitability to undertake a particular course. Australia's reputation for undertaking high quality education and training, as well as a moral imperative, requires regulation to ensure that debts, either through the FEE-HELP system or privately incurred, do not arise for units of study which are beyond a student's particular academic capability.

The experience of many in the VET sector is still instructive. My electorate office has been contacted by several constituents over the past 12 months who have been induced to enrol in VET courses. When they found themselves unable to complete the course, through no fault of their own, they were left with significant debts and facing an almost impossible withdrawal process. It is pleasing to note that there are integrity measures surrounding the completion of applications for Commonwealth assistance which are required to be completed by the student and also on withdrawal from the courses. The measures are intended to prevent and countermand issues which arose again in the VET sector and in the context of VET student loans, where unscrupulous providers at one extreme and the less scrupulous at the other, completed student requests for VET assistance without the student being fully aware of the details or their loan commitments. Similarly, there are provisions relating to students withdrawing from units of study.

The higher education provider guidelines will be permitted to prescribe, amongst other things, that fees are not charged by higher education providers for withdrawal, either generally or in specified circumstances. These should specify the requirements to be met in relation to a re-enrolment after a process of withdrawal and in relation to establishing and operating processes and procedures relating to students for withdrawal from units of study. This is all necessary to ensure that higher education providers will not create financial barriers for students withdrawing from a course. The guidelines will be amended to prescribe the processes and procedures that a provider must have in place for a student to withdraw from a course of study. These processes must not involve financial, administrative or other barriers to the withdrawal.

I need to make some general observations with respect to this side's commitment to higher education. As I indicated earlier, we, on this side, believe in and have an absolute commitment to investment in higher education for economic reasons. We believe that investment in higher education and education generally has a significant economic benefit to the nation. But it's not just an economic benefit. We believe that, when we invest in higher education, we are investing in the health of our communities and in transforming communities.

In the context of my electorate of Bass, and in the context of northern Tasmania, we know that we have an underperformance with the Tasmanian economy. We have communities that are mired in disadvantage in part because of the lack of educational attainment and in part because there's been an underinvestment in ensuring that people go on to either technical and further education or higher education. I have already referred to the economic flow-on effects that arise from investment in higher education. We know that simply the presence of higher education graduates in a market is a benefit to everyone within a community. We know that the evidence is that this creates jobs.

In the context of the investment in the university relocation project in Bass, we know that the ongoing jobs and employment that will be created within my community are very, very significant. In fact, the investment of some $300 million will drive jobs and growth for the next 10 or more years.

But what is this government's response with respect to investment within the higher education sector? Despite the fact that this government is quite appropriately investing in the university relocation project in Northern Tasmania—something which is vitally important for my community—we see that the University of Tasmania is receiving less funding. Its growth in funding over the next five to 10 years is severely reduced. I submit that that's as a result of this government's wrong priorities. They have prioritised cuts to income tax and cuts to corporate taxation instead of investing in education. When they talk about investment in education through Gonski 2.0, they are actually short-changing many communities throughout Australia, particularly the communities that are served by the member for Solomon, my friend, and also those within Tasmania. We know there is an underinvestment within those disadvantaged communities within the Northern Territory and Tasmania.

So, despite the obvious imperative to invest further in higher education, we have a government that is putting less money in expenditure in the higher education sector and increasing the rate at which graduates are required to repay their student loans when they graduate. I have said before that it is vitally important, particularly for disadvantaged communities like my community in Bass, that we see people take up the opportunity for higher education, that they invest not just in their future but in the future of our community. Any steps by this government to place barriers in front of people taking on higher education is a retrograde step.

Karen Andrews (McPherson, Liberal Party, Assistant Minister for Vocational Education and Skills) Share this | Link to this | Hansard source

I will start by thanking those who made considered and sensible contributions to the debate today. There were, however, a number of remarks made by some of the members opposite that I would actually like to correct by putting some facts clearly on the record. The Turnbull government is clearly committed to vocational education and skills. I would dispute the remarks from the previous Labour government because when they were in office they implemented nine successive cuts to employer incentives, totalling $1.2 billion. The result of that was that in their last year in office there was a significant decline in the number of apprentices—a drop which I believe is the single biggest drop in numbers. The number of apprentices dropped 110,000 in their last year in office.

We as a government have had to take some fairly considered and direct action to reverse those terrible cuts and the damage that those cuts made to vocational education and to apprenticeships in particular. The previous Labour government negotiated a deal with the states and territories: a national partnership agreement that ran from 2012 to the end of June 2017. It was a $1.75 billion agreement of which $1.15 billion went to harmonisation of structural issues within vocational education. Only $600 million of that went to direct training outcomes. During that time, we saw a significant decline in the number of apprentices. So coming off the 22 per cent, there was upwards of a 45 per cent drop in the number of apprentices in training. That was as a direct result of the action that the former Labor government took. It's important to note that, under that national partnership agreement, contestability was introduced into the system. During that time, TAFE enrolments declined from about 60 per cent to the high 40 per cents—a direct result of the action Labor took under the agreement they negotiated with the states and territories, the 2012-17 national partnership agreement.

It is interesting to sit here and listen to Labor speak about TAFE cuts when in fact the damage to TAFE was caused under their leadership, under their stewardship, under the agreement they negotiated. They would also be aware that the states and territories have responsibility for TAFE and for TAFE funding. But the changes that they implemented directly targeted TAFE's market share. It is time those opposite recognised that the damage that's been done to vocational education skills in this country was a direct result of the actions that they took in their last year in particular in government.

I have heard Labor talk about VET-FEE-HELP. It is fair to say that what we inherited was a dog's breakfast, that there were significant problems with the system that Labor designed and implemented. Over a number of years, we sought to make some changes to VET FEE-HELP to try and stop the rorting of the system that had been implemented by Labor. We did that until it became very clear that what he had inherited was actually so poor that we needed to replace the system in its entirety, which we have done. I am very pleased to say that the changes negotiated by the Turnbull government and specifically under the leadership of Senator Simon Birmingham as the minister responsible have meant that issues of integrity are being increased within the vocational education sector and there is now an optimistic outlook for a sector that had been gutted by the former Labour government.

The bill that we are debating today is the Education Legislation Amendment (Provider Integrity and Other Measures) Bill 2017. I'd like to put some comments on the record specifically in relation to that bill. Students looking to expand their skills and capabilities are fortunate to have a diverse range of high-quality higher education providers from which to choose. Continued demand from students, both domestic and international, is a vote of confidence in the opportunities afforded by Australian education providers. However, the system is only as strong as its weakest link and, as we have learned from the experience of the poorly designed VET FEE-HELP scheme, there are those who would seek to exploit students and taxpayers for their own gain.

The recent increase in interest from providers seeking to enter the higher education sector underpins the importance of acting now. The Turnbull government took decisive action to stop the VET FEE-HELP rorts and has decided to act now to apply similar measures to the higher and international education sectors. These measures will ensure we are able to identify, monitor and prevent the sorts of unscrupulous behaviours exhibited by some VET FEE-HELP providers. Together they will enhance protections in place for students, strengthen the monitoring framework for international education providers and non-university higher education providers, and act to limit the risk to taxpayers. For the majority of providers who operate with integrity and in the best interests of their students, these measures will require little change and they will be free to continue to do what they do best. But the few who seek to gain at the expense of students should be on notice. We will not tolerate unscrupulous behaviours that harms students, exploits taxpayers or tarnishes the reputation of the Australian international and higher education sectors. I commend the bill.

Question agreed to.

Bill read a second time.