House debates

Wednesday, 22 August 2018


Education and Other Legislation Amendment (VET Student Loan Debt Separation) Bill 2018, Student Loans (Overseas Debtors Repayment Levy) Amendment Bill 2018; Second Reading

6:12 pm

Photo of Ross HartRoss Hart (Bass, Australian Labor Party) Share this | Hansard source

I rise to speak on the Education and Other Legislation Amendment (Vet Student Loan Debt Separation) Bill 2018 and the Student Loans (Overseas Debtors Repayment Levy) Amendment Bill 2018. It's important that we reflect on the gulf that exists between both sides of the House when it comes to addressing the issue of not just vocational education and training but also education and higher education generally. This side of the House understands that investment in education, whether it's in early childhood education, primary school, secondary school, higher education or vocational education and training, is vitally important so as to put the Australian economy on its best footing for an uncertain future. Not only is it vitally important for the entire country, for economic reasons, but it's also the best way that we can assist young individuals in making the best fists of their futures by giving them the opportunity to do what best prepares them for that uncertain future. In particular, when we talk about the future of work, we know that there are occupations that do not exist now but may exist in the future that will come to dominate the requirements in education in little more than five to 10 years in the future.

Having an education system which prepares our students for an uncertain future, a future where highly skilled people are more likely to be able to cope with change, is vitally important. Of course, we can talk in the abstract about the importance of education but we also need to consider the machinery which underpins that abstract discussion. We are talking about the funding and the debts that are left for students to pay after they've completed any course of study.

The principal purpose of this particular piece of legislation is to separate VET student loan debts from other forms of Higher Education Loan Program debts, otherwise known as HELP debts, and to establish VET student loans as a separate income-contingent loan administered under the VET Student Loans Act 2016—that is, the VSL Act.

Currently, all debts are treated the same. A debt under the HELP scheme can arise from HECS-HELP, FEE-HELP, SA-HELP, OS-HELP, VET-FEE HELP or VET Student Loans. From 1 July 2019, individuals who incur a VET Student Loans debt will access a separate statement of account for the VET Student Loans debt. From 1 July 2020, individual notices of assessment will display VET Student Loans repayment details.

The amendments in this bill operate together with amendments in the Student Loans (Overseas Debtors Repayment Levy) Amendment Bill 2018, which provides measures to ensure that persons who have a VSL debt who reside overseas will continue to make payments in respect of those debts. Together, these bills are a timely reminder of all the work that needs to be done to ensure that we have that world-class, post-secondary education and training system that's necessary to give students the skills for the future—for that uncertain future that I spoke of previously.

We are constantly reminded that this Turnbull government doesn't care enough or have the capacity to do the hard work that needs to be done to build that better post-school system. Tweaking the current system such as it is will not deal with some of the profound systemic problems within the VET system, nor will it deal with inequities that have arisen as student loans have expanded and costs have been shifted onto young people. Indeed, if you look at the introduction of the original system of providing for students to bear responsibility for the payment of their university fees, that system has changed remarkably over many years and most recently has resulted in accelerated repayment at, I think, a disappointingly low income threshold.

Labor will not oppose this bill in the House. However, this bill does raise several matters which will benefit from closer scrutiny through the Senate inquiry process. In particular that process will need to reassess what to do with income-contingent loans. As it stands, this government is given cover on questions around whether it is doing enough to enable accurate reporting of the debt in the VET FEE-HELP system, including assessments of unserviceable and unfair debt due to the amassing of debt into a single HELP pool.

I'll digress for a moment: I serve on the Public Accounts and Audit Committee. There have been inquiries around the significant level of student loan debt. This should not be a party-partisan issue. It's in the interests of the nation to understand the extent of that debt, the extent to which it's recoverable and whether that debt is being incurred responsibly for an appropriate level of education.

There are currently eight different active income-contingent loan schemes, and I've made reference to those previously. Some of those schemes feed into a single HELP debt pool, but increasingly in recent years, for accounting purposes, we have been creating separate debt pots. These bills create yet another debt pot. This will be the fifth separate pot created, proliferating the accounting task, proliferating the legislative provisions, making the system more complicated generally and increasing the potential for error.

Obviously, when we examine the evidence that's been presented at various inquiries, the matching of data between the taxation system and the education system makes this very difficult, even in the most simple system. But, obviously, with all these different pots it does become more than complex. An inquiry by the Senate Education and Employment Legislation Committee received a handful of submissions that raised concerns by key stakeholders as to whether alternative means of improving transparency were available without the need for this legislative change. In their submission, the organisation Open Colleges, for example, suggested:

Retaining all forms of such lending under the HESA but focusing on improved data management within and between the systems to deliver disaggregation capabilities would achieve the objective without need for legislative change.

In plain language, what that really means is the fact that the data gateways between the tax office, for example, and the education system are currently broadly incompatible. They're actually not providing the data in a flow between the two organisations in both directions so that we can make policy decisions based upon the material that we're seeing in a live manner.

In their additional comments in the committee report, Labor senators noted:

… the government continues to fail to address the inequities that have grown as student loans have expanded, rent seeking—

which we've spoken about in this place previously—

has increased and educational costs have been shifted onto young people, including to apprentices and trainees.

I note that this is a particular concern, especially in the context of a Universities Australia report released recently which found that about one in seven students in 2017 regularly went without food and other necessities because they could not afford them.

The Abbott-Turnbull government has ripped more than $3 billion out of TAFE, skills and training funding over the past five years. That government has presided over a fall of more than 140,000 apprenticeships and traineeships. Nationally there was a 30 per cent drop in government funded training, whether occurring at TAFE or elsewhere, between 2013 and 2016. Since the Liberals came to power, there have been more than 443 fewer apprentices and trainees in my electorate of Bass.

This is in addition to the outrageous rorting of the VET FEE-HELP system that has occurred and been identified, where profiteering and dishonest private providers targeted students and saddled them with unfair debt. Evidence has been received by various inquiries as to the offer of free laptops, iPads and other incentives for very low-value training. As I said in my opening, it's in the interests of the broader economy and the community generally that we support good-quality vocational education and training but not low-quality vocational education and training.

In one particular case, a young lady had been self-funding trips to a provider campus in Queensland on the promise of graduating with a dual diploma in early childhood education and school-aged children's education. She was abruptly advised after 12 months of study that the provider was closing down, going into voluntary administration. With some intervention by my office and facilitation from the Australian Council for Private Education and Training, to whom I'm most grateful, this student was eventually able to get her qualification recognised.

But we know that there are thousands of students who've not been that fortunate. The government sat on its hands whilst corrupt for-profit training providers reeled in hundreds of millions of dollars of taxpayers' money.

Effective vocational education and skill formation is essential to our national economic and social prosperity. Despite its critical role in providing the conditions for prosperity, this government has not made the investments it should have made in vocational education and training. It has cut $3 billion from vocational education and apprenticeships, with additional cuts in the 2018-19 budget of $270 million over the forward estimates.

In contrast to this, in the first 100 days in government, should there be a Labor government elected, Labor will establish a once-in-a-generation commission of review into postschool education. It will examine and make recommendations about how our vocational and higher education systems address the country's economic and societal needs. The review will be inclusive and commence with an inquiry into the structure of the vocational education and training system, including curriculum, pedagogy, assessment, funding and quality assurance. Critically, it will examine the role of TAFE, which Labor has committed will be at the centre of Australia's future vocational education system. This inquiry will look at every aspect of the vocational and higher education systems to ensure that they can best respond to the needs of Australia's economy and society.

Labor have stated that we will place TAFE at the centre of our agenda for vocational education. TAFE has educated and trained millions of our citizens. It delivers critical education and training services to regional and rural Australia. Labor's commitment to TAFE is unequivocal. TAFE is the backbone of our skills and training sector and has been for generations. TAFE will play a vital role in our skill formation system. It sits at the forefront of the 21st century challenges. It is essential to Australia's future prospects and its domestic and international competitiveness. Labor has guaranteed secure funding for skills and TAFE and has made the commitment that at least two-thirds of public funding will go to the TAFE sector.

Only Labor will guarantee secure and stable skills and training funding, by reversing this Prime Minister's $637 million cut to the skills budget and investing $100 million into rebuilding TAFE. This investment will mean the re-establishment of TAFE facilities in regional communities that have lost campuses or course facilities. Investment in TAFE infrastructure will ensure that Australians have access to the best possible preparation for the rapidly changing world of work I referred to earlier. TAFE is the custodian of quality in our vocational education system. Skilled workers help the economy grow and make us all more prosperous. TAFE provides pathways for millions of Australians to fulfilling work and further study. Labor will reverse the decline of TAFE and make sure that quality vocational education is available in our suburbs and regions.

For generations, Australians have followed the trusted path into decent work through an apprenticeship. They provide young people with the opportunity to build prosperous working lives as well as retraining for experienced workers seeking to reskill throughout their careers. After all, that future of uncertain work means that people will be going back to retrain on multiple occasions throughout their careers. Labor will ensure, as the member for Lyons has said, that at least one in 10 jobs on Commonwealth funded projects is done by an apprentice. Labor will only fund projects where major contractors have an apprenticeship and training plan that links in with local TAFEs and provides skills to workers living locally. This is a challenge for our future. Our economic future depends upon investment in vocational education and training.


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