House debates

Tuesday, 18 October 2016


VET Student Loans Bill 2016, VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016, VET Student Loans (Charges) Bill 2016; Second Reading

6:11 pm

Photo of Julian LeeserJulian Leeser (Berowra, Liberal Party) Share this | | Hansard source

Mr Speaker, I draw your attention to the measures included in this bill to protect students from unethical business practices and to ensure the quality of training providers accessing government funding. This bill bans the use of third-party brokers and agents to recruit students. This is an essential measure to bring integrity back to the system. It also limits subcontracting to third-party providers—a measure also designed to rebuild integrity and quality.

The new program introduces other strong compliance measures to ensure that training providers are held to account and held to the high standards that their students and the broader community expects from them. Providers will be subject to monitoring and investigation, civil penalties, infringement notices, enforceable undertakings and injunctions. And providers may even be suspended in urgent circumstances.

The new program will also see new training organisations be subject to oversight of their growth forecasts and results. This will prevent unproven businesses from building business models based on the exploitation of students. It will stop the news reports of training organisations with huge short-term profits followed by immediate bankruptcy. It will stop rogue operators from seeing the VET sector as an opportunity ripe for the picking with no intention of being there for the long term. It will put the focus back on students.

These are the measures we have needed over the past four years.

In conclusion, the VET Student Loan Program introduced by these bills will restore the faith of Australians in the VET sector and allow the sector to rebuild its reputation. It will see genuine students offered worthwhile study with reputable providers with strong links to industry and business. It will undo the damage done by Labor's irresponsible changes to the VET FEE HELP system. It will support budget repair by significantly reducing the level of gross government debt that needs to be undertaken. It will provide an affordable and sustainable loan scheme that will allow students to gain meaningful qualifications with a pathway to employment.

I commend the bills to the House.

6:13 pm

Photo of Julian HillJulian Hill (Bruce, Australian Labor Party) Share this | | Hansard source

This is actually the first time that I have risen to speak in this House on legislation. I decided to speak on the VET Student Loans Bill 2016 as I believe that reforms to the VET FEE-HELP scheme are urgent and overdue.

Now, it should come as no surprise to anyone that Labor supports these bills in principle, because, as we have just heard from the member for Berowra—the other Julian; it is a lovely name—the government has finally accepted, after four long years of inaction, the need to act to stop the rorts and the waste in the vocational education and training sector and to copy Labor's policies. For too long students have been ripped off, running up debts that they have no hope of repaying.

I think the sector is now graduating in the order of one in five students, which is a nonsense. If the government had acted more quickly, in just some of the last four years, as we heard before, then billions could have been saved. Indeed, successive coalition ministers have shovelled money out the door to dodgy private providers.

The government has had five ministers in three years. If you are running at an average of five ministers in three years—I did the calculations coming in here—then the current minister's job is going to be up in February, so he had better watch out. He will be due for replacement. If that does transpire, I predict that it will be implementation that brings him undone, as these changes are overdue and are now being rushed through. This is complex legislation, and the transition and implementation will be diabolically difficult to do by 1 January—so be this on the minister's head.

Now, it is not as if the government did not know. The VET FEE-HELP rorts featured daily in national newspapers and the national press. I know myself that institutions of longstanding good reputation were alerting the government—directly by providers and through peak bodies—to growing problems years ago and were beyond frustrated that successive ministers would not listen and would not act.

I will not break private confidences, but, given my links with the training sector, I was approached many times as a candidate for federal parliament by reputable providers begging me to raise the issue and do something. They showed me letters which they had written to coalition ministers, which were simply ignored—letters that outlined the rorts by brokers and agents, exponential growth in payments, growth in the number of providers.

There were a myriad of warning signs that would have sounded the red-alert alarms for any competent government. One of the most stunning statistics I found was that in 2014 the graduation rates of the 10 largest providers was under five per cent. That is $900 million in federal taxpayer money shovelled out the door for nothing—over $215,000 for every graduate they managed to produce.

We have heard from the previous speakers—and no doubt we will hear more—that this is all Labor's fault. The government effectively acknowledged their failure when bagging Labor year after year. But the biggest problem was that they did not do anything. The problems exploded on their watch.

Now, it is true that the scheme is not working as intended, as we kept saying publicly. But it is balanced comment, I think, to say that, with the best will in the world and with the most thoughtful analysis and policy design at a given point in time, it is almost inevitable that in new, complex areas of policy, particularly those interacting with the market, problems will emerge.

It is a truism of public policy, I would say, that when you hang out the shingle for public funding and the giving of public money away to the market then sharks will appear and feed. You try and anticipate these things. You try and get the policy settings right. But these problems that you did not predict will emerge, and you have to adjust.

So the issue, by 2015, and indeed the first half of this year, was not about what happened in 2012. It was what you do about reality as you find it. That is your obligation as a government. I know reality can be a difficult concept at times for some of those opposite challenged by the notion of evidence based policy: climate change—carbon is not real, then it is again; housing affordability—just get rich parents; nothing to see here. A government's obligation is to identify problems and to fix them. Goodness only knows what kind of market failure and get-rich-quick schemes we can expect when the government starts privatising Medicare and human services, which, as we know, is on their agenda.

There are two aspects of the impact that I want to touch on and one aspect of the bill, in particular. Firstly, one of the most disturbing impacts in my view is that our national reputation for quality and efficiency has declined. Even those opposite, I think, would accept that a highly skilled workforce is critical to our future national prosperity and requires a well-structured, effective training system—and that the lack of such holds back Australia's productivity and growth potential if money is wasted on substandard costly and badly targeted training.

There is a domestic angle to that, of course, but there is also the international angle, as others have touched on. To amplify: I know this previously from my work leading international education in Victoria, a sector worth in excess of $5½ billion—probably now over $6 billion—to the Victorian economy. Our skills and training sector used to be the envy of the world. I myself have led vocational training trade missions to many countries to explain and promote our VET sector with its focus on quality, industry-linked training, industry-driven standards and our diverse provider model. Australia has been up there in reputational terms with the best in the world—right alongside Germany, for example, who many say is the gold standard with their GTZ system.

There is huge interest all over the world in our model. This interest is not just academic. There are large export opportunities which abound in the Indo-Pacific and across the globe from India, China, right across South-East Asia, Latin America and the Middle East. That is from students coming here to study onshore—and all the economic value that that brings—transnational delivery for our colleges and providers delivering in other countries and also education services exports, whether that is curriculum advisory services and so on.

But our competitive advantage is and must always be our reputation for high quality. If that suffers, Australia's market disappears, because, frankly, we are a relatively high-cost, top-tier provider internationally for skills and training. Under this government this reputation has suffered, and these things are not easy to repair.

The other aspect of the bill that I want to turn my attention to is that in relation to education agents and brokers. The bill's attempt to finally deal with the shady part of the sector are welcome and, in my view, long overdue. For years we have heard legions of stories of unscrupulous agents signing people up to courses they cannot complete, of dodgy quality and that do not lead to a job.

Brokers that find students and churn them through, if you like, have been paid outrageous commissions. That is money which should have been going into the quality of education, the institutions themselves and the students but, instead, have been seen, because of this model, as a marketing or recruitment cost in a business model that relies simply on churn.

I know reputable private providers who have despaired at the inaction. How on earth can you compete? Just think about it: you are a business; you are out there; you have been there for many years; you are running a good show; you have a reputation for quality; you have found your niche in your sector in the market, and you have all these others around you focused on shoving students through, paying outrageous commissions with no regard to quality—and they push the price down. You cannot run a quality business in that environment, so many of the old hands scaled back their business simply waiting for the bubble to burst, as it has now.

I heard stories when doorknocking of students left with these debts. I have seen stalls at suburban shopping malls in my electorate recruiting students and people at stations in the morning and heard of brokers hanging around institutions, trying to convince students to swap from lower cost courses to those where they make a commission.

In relation to the bill's proposal, I would contrast the approach with Labor's election policy, which made clear that the approach of not directly regulating these brokers has failed and proposed regulation through ASQA, with a licensing fee, cost-recovery arrangement. The bill proposes to ban providers outright from using brokers or agents to interact with students in relation to VET student loans. Two important questions arise. I say these seriously as matters which I think should be considered in detail through the Senate inquiry. Firstly, given how rushed this legislation is and how entrenched this behaviour is, the Senate inquiry has to look at this aspect of things very carefully to be sure that the legislative provision as drafted is watertight to achieve the objectives. I urge the inquiry to hear directly from experts in the industry, from businesspeople who actually understand this model and this market, to make sure there are no backdoor loopholes, unintended consequences and that the behaviour stops. I am concerned on a plain reading that the way that clause 49 is drafted may still leave loopholes for unscrupulous behaviour, and this needs to be tested with industry—in particular, subclause (1)(a). I would also note that clause 49(2)(b) provides for arrangements to continue that are 'specified in the rules'. It is entirely unclear what sorts of circumstances the government may be contemplating here. Secondly, more broadly, the Senate inquiry must consider whether this approach is the most appropriate or whether further action is needed.

The regulatory impact statement, as I see it, indicates that the bill's approach is preferred to the regulation of agents. My experience of working with the sector is that the issue of agents requires much more attention and reform. The bill seeks to stamp them out in one part of the sector. It makes sense that, if you were going to pick one part of the sector to have a go at, it would be that which public money is actually pushed out in. It directly sheets home to the taxpayer; that makes sense. However, they remain an unregulated, concerning influence in other parts of the sector. Agents exist to support domestic students as well as international students onshore and offshore. They can play a useful role for some students, particularly for international students unfamiliar with countries on offer, but they are not regulated. There is no peak body or industry association, there is no clear code of conduct and there is no industry standard for self-regulation. There are too many reports still of dodgy agent behaviour in all other parts of this sector that will not be captured by this bill. Young people, of course, are particularly vulnerable consumers, but international students are especially vulnerable, with no legal norms, cultural norms, language or understanding of their rights. Reports continue, as I said, of agents hanging around train stations and universities basically trying to steal international students and tempt them to lower cost courses, for which they receive a large commission. Some changes in recent years to the student visa arrangements have gone some way to curtail this, but it remains a problem.

In terms of options, regulating offshore agents is incredibly difficult and there is doubt about legal capacity, but through existing arrangements in the ESOS Act framework there are some obligations placed on providers through a provider code. There are other bits and pieces of indirect regulation through various pieces of legislation and registration standards for TEQSA and ASQA in some states, but there is nothing comprehensive, fundamentally. If a dodgy agent—this is a fact—is sacked by a provider, the same person can pop up tomorrow working for another provider. The plausible deniability continues for providers to say, 'I knew nothing; it wasn't me; it was the agent' and the same agent is out there doing it again or, indeed, doing it again for the same company, under a different company name. There is no policing or regulation of the sort of person who is able to enter the agent industry and provide advice to vulnerable consumers, often on highly expensive products that will still lead to debt. The Productivity Commission's research paper on international education services provides a good overview of these issues. A 2015 Senate inquiry, in fact, recommended that ASQA be granted powers to directly regulate brokers or marketing agents in the domestic VET sector. In my view, there remains a strong case for proper regulation of agents, whether through licensing or accreditation, as operates for migration agents, real estate agents and many other industry specialists. If the individual does the wrong thing, they are kicked out of the industry.

We have heard about the impact on students, and I will not go through that again. I think they have been well made, and no doubt we will hear more. This bill does not go far enough. There is nothing in the bill to restore the $2.75 billion the Liberals have ripped out of TAFE schools and apprenticeships; nothing to protect TAFE; nothing to boost apprenticeships. There is nothing also, I might note, in this bill about the government's commitment in the second reading speech where we learnt that they are going to establish a VET loans ombudsman. We look forwarded to seeing how the government plans to make good on this commitment. I do have to point out that Labor moved in the Senate to establish this ombudsman over a year ago. It is another thing that the government has wisely, in this instance, chosen to copy from our policy, because this is not yet in the bill before the House. Perhaps it is another afterthought, or maybe they forgot to copy that bit of our policy and we will see it when it returns from the Senate. Perhaps it will be in a separate bill tomorrow, given there is not much of a legislative program and we seem to be currently splitting lots of little things into little bills so we all have some work to do.

Photo of Milton DickMilton Dick (Oxley, Australian Labor Party) Share this | | Hansard source

Or gag it.

Photo of Julian HillJulian Hill (Bruce, Australian Labor Party) Share this | | Hansard source

Nothing would surprise me. It is a strange world. In summary, the challenges of implementation, the policy direction, as I think we have made clear, is sound, because it is our policy which we have been suggesting. We do share the sector's concerns about the implementation of these changes, and, as I said, the minister's job in his future will rely on the successful implementation. It is an enormous task to get this bill, which has been rushed through, ready for implementation and transition for 1 January.

We could talk at length, ad nauseam, about the hypocritical nature that copying these reforms, these Labor ideas, represent—and everyone has noticed. But that is okay because imitation, as they say, is the highest form of flattery. It is not the point either, because, give the seriousness of the issues, Australia cannot afford this kind of partisan incompetence again. When things go wrong, whoever is in government, whoever you are, we need a government that listens to good ideas wherever they come from, even from across the chamber. That was what we were promised at 'alt government'. Given the scale of the mess, it is unbelievable. We really have no practical ideas as to why it took so long to fix. I hope it was not crude electoral politics, but it is hard to be sure. The reason I say this in closing is that I was contacted by a student in my electorate during the campaign who was worried because his private provider had told him that they had to vote Liberal because Labor was going to crack down on the sector. Who were they acting to protect while failing to act while dodgy providers got rich? Certainly not our students or national interest. (Time expired)

6:28 pm

Photo of Melissa PriceMelissa Price (Durack, Liberal Party) Share this | | Hansard source

The Turnbull government has introduced the VET Student Loans Bill 2016 and related bills into the House to establish a new VET student loans program commencing 1 January 2017. This legislation was introduced to replace the utter failure that was the VET FEE-HELP scheme introduced in 2012 by the last Labor government. This scheme patched up by this government—us, on this side of the chamber—in 2015 is now set to be overhauled entirely before the start of the next semester for most vocational training providers beginning early next year. The need for this legislation was clear. The VET FEE-HELP scheme was a deeply troubled Labor government policy that the Turnbull government has taken steps to remove. Our new proposal, the VET student loans program, will be more accountable, more sustainable and more accessible than its woeful predecessor.

The failure of Labor's VET FEE-HELP scheme is truly something to behold. I will briefly outline for the House some of the figures from this Gillard government policy, which has proved to be an unmitigated disaster. The costings for the program in 2012 were $325 million. By 2015, the scheme was costing Australian taxpayers $2.9 billion a year. Incredibly, fees for courses covered by the VET FEE-HELP scheme had more than doubled within three years and student loans had increased by a staggering 792 per cent. This reform is badly needed. It will provide a win for both taxpayers and students. It is not often a scheme is so bad that its end is marked with praise from service providers, students and taxpayers, but that is exactly what has happened with the VET FEE-HELP scheme.

There are several key changes made in the proposed legislation. The new VET Student Loans program includes a range of measures to protect students and taxpayers and restore trust in the vocational education sector. Firstly, the Turnbull government will introduce an annual levy on approved service providers to decrease the overall cost of the program and to more closely audit unscrupulous service providers. The government will also limit course eligibility for VET student loans to courses approved by the minister. Courses will have a high national priority, will align with industry needs and will lead to employment, not just graduate outcomes. The course list will be updated regularly and subject to feedback as the changing needs of the country will need to be reflected in the approved course list.

The Turnbull government will also introduce a maximum loan amount for eligible courses. The initial loan caps will be $5,000, $10,000 and $15,000, indexed annually by the CPI. The minister will have several new powers, which include the power to exempt courses with high delivery costs, such as aviation, from the loan caps; introduction of new caps; and specification of which courses fall within each loan cap band. Loans caps are derived from actual VET FEE-HELP tuition data and data used to develop the New South Wales Smart and Skilled program. This is in stark contrast to the Labor government scheme which, instead of capping loans, seemed to encourage a veritable arms race between service providers to see who could charge the most for their courses whilst offering the largest incentive to encourage students to enrol. In many cases, students had enrolled in programs with absolutely no prospect of a job at the end of the course. We have seen enrolments skyrocket in courses like circus skills, fortune telling, belly dancing and interpretive dance. We want to create graduates who will grow our economy, not join a circus. This policy resulted in the disgraceful behaviour of some of the private training service providers, with young and vulnerable students saddled with debts from diplomas they were completely unqualified to study and had no hope of completing, with definitely no job at the end.

When the Labor Party attempts to feebly defend their economic record, one must only direct their gaze toward the complete failure of this policy. Not only did the scheme blow out to cost taxpayers some $3 billion a year but it also financially saddled young people from poor and disadvantaged areas as well as overseas students. Indeed, many of the service providers targeted Indigenous areas and populations, signing students up with the promise of a free up-front iPad or laptops so they could jack up their fees and make taxpayers pay for it. Absolutely shameful. This policy is by any measure an absolute failure. It is particularly abhorrent that the victims of this policy are in the main young and disadvantaged people who were simply attempting to better themselves and earn a qualification. It is simply heartbreaking for many of those young people.

A change will also be made with regard to the requirement of student progression for continued access to the loan, which is designed to protect vulnerable students. This is especially relevant for regional students in my electorate of Durack who have relocated for study as they often need to defer in order to work and save money before returning to their studies. We will strengthen compliance and payment arrangements via a range of measures built into this legislation, because of the woeful lack of safeguards included in the original legislation. These will include greater monitoring and investigation powers and enforcement provisions through the use of civil penalties, infringement notices, enforceable undertakings and injunctions. The government will also be able to immediately suspend a provider in urgent circumstances, if required.

The government will also ban the use of brokers or agents to engage or recruit students in relation to loans, and any unsolicited contact with students in relation to enrolling in a vocational training institution will also be prohibited. We will require approved providers to only subcontract training to other approved VET student loan providers or higher education providers approved by the Tertiary Education Quality Standards Agency. Individual subcontractors engaged to provide specialist expertise for part of a course will be allowed on a case-by-case basis. There is the introduction of an application fee for providers to apply to become a VET student loan approved provider and an annual levy on providers will be established through the accompanying VET Student Loans (Charges) Bill 2016. All existing VET FEE-HELP providers will have to apply to be approved under the new program. This will allow the government to weed out unscrupulous and predatory service providers that were allowed to flourish under the Labor policy. States, territories and employer groups have called for significant reform to protect the integrity of Australia's high-quality training system and to ensure the system delivers the skills needed for work. That is what we are delivering with these bills.

This bill must be passed quickly, otherwise there will be no government loan program to assist students for the first semester of next year, which of course will be an unmitigated disaster—a disaster so large that it may only be matched by the disaster that was the VET FEE-HELP scheme administered by the members opposite during their time in government.

This is the final part of this government's commitment to fixing Labor's mess in regard to student loans, and expands on the good work done on this program in 2015. We have already removed the cold calling and inducements from the program, where we saw predatory training providers luring vulnerable students into courses that they were wholly unsuitable for with bonuses, as I said previously, like iPads and laptops. This badly needed reset is necessary to encourage trust and support in our training sector—a sector that has been tarnished by endless scandal since the VET FEE-HELP program was introduced by those opposite in 2012.

The VET Student Loans program will see stronger course eligibility criteria, mandatory student engagement measures and a stronger focus on students successfully completing courses. All of this is designed to benefit the students. For far too long our training providers and our higher education services have focused on the numbers of students we are producing. But this government is committed not to bulk tonnage of students, but to the quality of the graduates our institutions are producing. This is an important part of our election commitment to a more robust and flexible economy, and I firmly believe that this economic future rests on the backs of high-quality, skilled graduates. These young people will be responsible for driving our innovation economy and filling skilled roles in our economy for decades to come.

Australia cannot afford another VET FEE-HELP debacle. The vocational students of this country deserve better. The hard-working teachers and trainers deserve better. And the taxpayers of Australia deserve better economic management than what has been offered up by the Labor government and the VET FEE-HELP scheme. I commend these bills to the House.

6:39 pm

Photo of Milton DickMilton Dick (Oxley, Australian Labor Party) Share this | | Hansard source

I rise to support the second reading amendment of the VET Student Loans Bill 2016. It is very important for me to place remarks on the record, because in my electorate of Oxley we not only have a high youth unemployment, we have high general unemployment. It has only got worse since this government has come to power. One of the issues that residents continually raise with me is the issue of training and access to quality higher education, whether that be through the university sector, the vocational education and training sector or, of course, the TAFE sector, which I will be speaking about tonight.

Listening to the member for Durack, once again we are seeing a masterclass in hypocrisy from those opposite—big on lectures, little on responsibilities. That is the standard method of operation from those opposite. So I do want to contribute to the debate on the three VET student loan bills tonight. As the shadow minister, Kate Ellis, outlined in the House earlier today, we will be supporting these bills in principle and we will be awaiting the outcome of the Senate inquiry.

I want to be very clear on the record this evening to say that the three bills implement Labor's pre-election commitments to capping student loans, cracking down on shonky brokers, linking publicly funded courses to industry need and skills shortages, requiring providers to reapply under new standards so that only high-quality providers access the loans system, linking funding to student progress and completion and, as we have heard, appointing a long overdue VET loans ombudsman.

Let us be clear: those opposite have sat on their hands and done nothing. We heard nothing about this during the election campaign. Not a peep—in fact, the minister drove through my electorate on the way to Ipswich during the campaign and proudly proclaimed that the system was working; proudly said that there were no problems at all. What happened straight after the election? Despite enormous warnings by the industry itself; despite enormous warnings by the victims of some of these predatory operators; and despite people in the TAFE sector warning and setting off alarm bells, the government simply ignored the problem.

So we have seen the Turnbull-Abbott government slow to take action with a standard procedure of more delay. That is what happens when you have a government more interested in fighting amongst themselves. Sadly, this sector has had five vocational education and training ministers in just three years. I am not sure if it is a bit of a dumping ground for those opposite, but tonight I want to place on record my thanks to Labor's former spokeswoman, the member for Cunningham, Sharon Bird, for her outstanding work and leadership in highlighting a number of these issues. I was very fortunate during the election campaign to see the member for Cunningham visit my electorate to meet with some of the students involved with the issues that we are debating tonight and have a chat with some of their families and also some of the providers as well—doing that hard work of listening, leading and raising those issues. We are only sad that it has taken a number of years for this government to take action. I want to note that it has been 12 months since the Senate inquiry into the VET system released its recommendations.

We all know on this side of the chamber that if we had seen a government more committed to the sector and more committed to stronger policy initiatives we could have saved taxpayers billions of dollars. Let's go through the list. Three billion dollars in unrecoverable VET loans. Graduation rates for the 10 largest service providers under five per cent, costing around $215,000 per graduate. I note only last week there was some media commentary which described taxpayers footing the bill for $9 million diplomas as the scheme was shut down. Taxpayers paid $9 million per graduate in one year at a private Sydney college. An analysis of Department of Education and Training figures shows that 10 colleges received $900 million in taxpayer funding, despite those colleges graduating only 4,200 students in 2014. That is the average I was speaking about of $237,000 a diploma. If that was not enough of a warning bell, I do not know what would be. A diploma typically takes two years to complete. The analysis of the 2014 data reveals that one of the biggest beneficiaries in the sector was a Sydney based training centre, and it had a completion rate of just 0.12 per cent, earning $46 million while it graduated fewer than five graduates. It cost the public purse, I say again, $9.2 million per diploma.

We know that there have been a number of issues in the sector for some time, and the Australian Chamber of Commerce and Industry has despaired at the current distortions and poor outcomes. A former director of Skills Tasmania said:

The once high reputation of VET has now been trashed by the behaviour of unscrupulous VET operators and the arguable naivety of senior government bureaucrats.

The Australian education system has been turned into a competition for students, with slick TV, online and radio marketing promising to transform people's lives. TAFEs have been defunded and downsized, with some TAFE colleges forced to hire out premises to private providers. TAFE's market share has plummeted nationally from 74 per cent in 2004 to 52 per cent by 2014, and it is still falling. I know that the member for Burt, as a proud Western Australian, is also fighting against the Barnett government's unfair huge fees that have been introduced. The New South Wales government has massively increased TAFE fees and abandoned many courses deemed unsuitable for a commercial business plan. TAFE students also were being directed to VET FEE-HELP to fund their courses. The Australian Education Union have criticised the commercialisation of the vocational education sector. Tonight, I also want to place on record in this place my strong commitment to those educators—those people who give so much to train our young people. In the assistant minister's second reading speech last week, she said:

Australia's economic prosperity depends upon the quality of our graduates, the outcomes of the training they receive and whether they are skilled in the way employers need them to be skilled.

I agree with the member for McPherson and Assistant Minister for Vocational Education and Skills; I only wish we did not have to wait through three years of inaction under this government to see improvements.

The industry itself has raised concerns. The peak body, the union representing the industry and the skilled professionals have also raised concerns. On the issue of apprenticeships, the ACCI have indicated that there were 308,000 apprentices and trainees in training in mid-2015 compared to almost 400,000 a decade ago, from a high of 446,000 in 2012. So what we have seen over the last couple of years is a 30 per cent drop in volume. That is a huge concern for my electorate. In the federal seat of Oxley, which I am privileged to represent in this chamber, the number of apprenticeships has fallen by a massive 53.6 per cent, from 3,203 in December 2013 to 1,486 in December 2015. So there has been a huge collapse in apprenticeships—and it is not just in my electorate. Apprenticeship numbers in capital city seats are also in crisis, with numbers in Sydney, Brisbane, Melbourne and Adelaide all decreasing by up to 51.4 per cent. Right across Australia—let me be very clear—apprenticeship numbers have fallen by 136,000 places. We hear a lot from those opposite about jobs and growth. We need more than slogans to deal with the unemployment issues in this nation. The statistics show that in September 2013, when Labor left office, there were 415,000 apprentices in training. So we have seen a sharp decline in the number of apprenticeships under this government.

In my home state of Queensland, where the TAFE system plays such a critical role in getting people in training, under the experiment that was the Campbell Newman government we saw a knife taken to higher education and vocational education, with TAFE teachers sacked. Of course, with its the privatisation agenda, the former government wanted to privatise our TAFE system, just as they wanted to sell off our essential assets, but the Palaszczuk government, under the leadership of the Attorney-General, Minister for Justice and Minister for Training and Skills, Yvette D'Ath, has begun the rebuilding of the TAFE sector and the training sector in Queensland. We need our state governments to be partnering and working hand in glove with the federal government to deliver training to job-ready people, particularly young people and people in long-term unemployment, so that we can see productivity increased and the unemployment rates drop.

One of the things the Newman government did was to axe a successful program called Skilling Queenslanders for Work. I am proud to support the state Labor government, which has made a $60 million investment to help approximately 8,000 Queenslanders get the qualifications and skills they need. Skilling Queenslanders for Work is a four-year, $240 million initiative that will provide training for up to 32,000 jobseekers across the state. This is already paying dividends in my own electorate. I have been to a number of graduations, where I have met and spoken with long-term unemployed people who are reaping the benefits of this successful training program. An axe was taken to the program by the Newman government. It is little wonder that they were turfed out because of their toxic policies, but we are now seeing that sector being rebuilt. That framework goes a long way to making sure that we see improvements in training opportunities for young people.

In Queensland, we are seeing student support services that were gutted under the former government reintroduced, and we are also seeing the expanding and improving of regional support programs. So that is providing jobs not only in the sector but also in our region, as well.

We have seen a great deal of hypocrisy from the government regarding these bills. We had the Treasurer of this nation say that capping student loans would 'pull the rug out from under the private education industry'. And, of course, we are now seeing caps being introduced. We had one of the former ministers—I mentioned five before—Senator Ryan say Labor's policy was 'classist' and 'a thought bubble'. Now, we are adopting that exact policy this evening. The current minister, Senator Birmingham, said capping student loans was an 'ill-considered flat pack'. So what does the minister do? Does he stand by those words? No, he adopts Labor's strong policies regarding these issues.

So we know that under the Liberals the VET system had fallen into crisis. The other issue which we are watching closely is the National Partnership Agreement on Skills Reform, which expires in June 2017. I say to the assistant minister and to the government: there has been zero funding for Queensland coming forward for vital skills and training in my home state. We have seen a cut of $105.4 million less from the Commonwealth government in the training and skills budget.

We know that in a matter of weeks the Ministerial Council meeting will be convening. I certainly call on the federal government to lay its cards on the table and enter into those serious negotiations with the states. We have to have the federal government—and this federal government—working closely with the states to make sure that we have a strong vocational educational training system. We have to make sure that we have a strong TAFE system. Ultimately, our responsibility here is to provide that leadership for jobs and training for our young people. (Time expired)

6:54 pm

Photo of Keith PittKeith Pitt (Hinkler, National Party, Assistant Minister for Trade, Tourism and Investment) Share this | | Hansard source

I rise to speak on the VET Student Loans Bill 2016, which will overhaul the VET-FEE HELP system so that it is affordable, sustainable and more student focused. It will also undo the damage caused by Labor's failed VET-FEE HELP scheme in the first place. After Labor made these changes to the VET HELP loan scheme in 2012, unscrupulous training providers were allowed to flourish. I can tell you, Mr Deputy Speaker Kelly, as someone who used to own and operate a registered training organisation, that was most certainly the case. I am sure many of my colleagues heard similar stories in their offices as I did in mine. There were examples where providers preyed on vulnerable people and offered sweeteners, like a free laptop or a free iPad, if you signed up for a course—a course of dubious quality, a course that you did not actually want, a course that you did not need, a course you would never complete and a course that you would never ever pay for.

A constituent contacted my office after his son applied online for what was advertised as, and for what he thought was, a vacant job in warehousing with a contract labour hire firm. But instead he has contacted by a registered training organisation. Their email confirmed that he was registered to attend an induction session to enrol in a certificate III in logistics and warehousing. There was, of course, no job vacancy. I share his concern that these online job advertisements were completely misleading. What was also concerning was that the email from the RTO contained all of the documentation that the job seeker would need to provide for enrolment, but did not disclose any information about the course, the course content, the course outcomes, the course costs or the course cancellation fees.

Another constituent raised concerns that there were some RTOs who were flaunting the laws that we were supposed to be upholding for their own profit and gain. Can you imagine that: someone who flaunted the law for their own profit and gain! This gentleman in particular was incredulous that students could pass a course for high-risk work after a five-day course when he runs three days of formal training in his operation and his students then need to obtain 120 logbook hours before even being assessed. He said that people had contacted him to say how 'hopelessly inadequate' the training was and also that they themselves were not, in any shape or form, confident in their ability. These are not the outcomes we need in the industries of Australia. These are everyday people, and they are being left massively in debt—a debt the majority will not pay—and they have no qualifications to show for it.

There are some interesting stats. The changes made by Labor's schemes resulted in student numbers jumping by almost 400 per cent. Fees more than doubled. Loans increased by 792 per cent and jumped from a cost of $325 million in 2012 to $1.8 billion in 2014, followed by $2.9 billion in 2015. The VET Student Loans Bill 2016 will hit the reset button. It will hit the reset button so that Australians can start to rebuild their trust in vocational education and so that taxpayers can be assure that their money is no longer being rorted.

I previously spoke in this place in support of the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015, which was part of the measures that the government introduced a try and fix this problem. The coalition government banned inducements being offered to students to enrol in courses for which they needed a loan and tightened recruitment and marketing practice to make it clear to the students themselves what they were signing up to. While these measures were necessary—and they have made an impact—a reset is needed; a new scheme is needed.

The new VET Student Loans program will limit courses eligible for VET student loans to those that align with industry needs. What a novel approach, Mr Deputy Speaker! We will train and provide for people in the areas that we need—the areas where there is a shortage. These will be selected based on analysis of employer, state and territory, and Commonwealth data to ensure that they lead to good employment opportunities. What another novelty! We will train people for employment for jobs that are available.

The Minister for Education and Training, Senator the honourable Simon Birmingham, will have the power to approve a course list by legislative instrument for courses and loan caps determination. The list of 347 courses proposed to be eligible for a VET student loan from 1 January 2017 is currently open for consultation, and the coalition government wants to hear your views on the eligible course list. You can have your say by providing feedback by email to That feedback must be provided by this Sunday—October 23. The determination will give the minister the power to change the list and ensure that it remains flexible to meet changing workplace skills needs. By limiting the courses eligible, the new loan program will be closely aligned with industry needs.

We need to end the free-for-all subsidies that Labor started that have seen providers burden students with tens of thousands of dollars worth of debt for courses that offer poor employment prospects. Examples are the Graduate Diploma of Veterinary Chinese Herbal Medicine and the Advanced Diploma of Therapeutic Arts in Counselling, to name just a couple.

The new scheme also include three bands of loan caps for courses, set at $5,000, $10,000 and $15,000, depending on their delivery cost. These caps were chosen based on an analysis of the course prices set under the New South Wales Smart and Skilled program and validated against the average VET FEE-HELP fees prior to the exorbitant rises in course fees in recent years. I tell you, Mr Deputy Speaker Kelly, I experienced much of this before I came into this place, and the capacity for someone to actually quadruple or increase by a factor of 20 the cost of one of the courses they atypically deliver was outrageous.

The minister can review the cap rates at any time in the first 12 months of the scheme, and there will be a compulsory review after the first 12 months of VET Student Loans to ensure it is working as intended. Students will be required to log into, and of course engage with, the VET Student Loans online portal to ensure their enrolments are active and legitimate.

From 1 July 2017, a student engagement and progression requirement for continued access to the loan is expected to apply. Students will be required to log in periodically to confirm active and legitimate enrolment in the course. This provides greater protection for students by shifting the ability to access the loan away from the approved provider, to the student. It does this by removing the provider's ability to re-enrol failing and absent students without their knowledge. The Commonwealth will have the discretion not to pay the loan amounts if the student is not genuine.

A new application process for providers wanting to access VET Student Loans will include a much higher bar to entry by assessing their relationships with industry, their student completion rates, the employment outcomes of their courses and their track records as education institutions. All existing VET FEE-HELP providers will have to apply for approval under the new program. The VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016 will provide for certain bodies, such as TAFEs, to be exempt from the re-application process.

Providers will need to meet the new course-provider requirements to be eligible for approval as an approved course provider. Critically, providers must continue to meet these requirements for the duration of their approval. The requirements include having to be a fit and proper person and having to satisfy the provider suitability requirements. The details of these new requirements will include student outcomes, such as completion rates; industry links; experience in providing vocational education; financial performance; strong management and governance; as well as having regard to the provider's course scope, tuition fees and modes of course delivery.

It will continue to be a requirement for approval that a provider be a party to a tuition assurance arrangement. This will provide greater protection to students, because they are the ones that need the protection, in the event of a provider ceasing to provide a course, by imposing obligations on the organisation that has agreed to provide the tuition assurance. It is anticipated that applications for provider approvals will be considered only on an annual basis, and an application fee will apply.

The bill also introduces a limit on the duration of a provider's approval—a maximum of seven years. Thereafter, the provider will have to apply again. Seven years aligns with the maximum length of registration as a registered training organisation under the National Vocational Education and Training Regulator Act 2011 and as a higher education provider under the Tertiary Education Quality and Standards Agency Act 2011. Having been through two of those, I can tell you they are incredibly thorough and difficult.

The bill will prohibit approved providers from using brokers or directly soliciting prospective students, including cold-calling and so-called lead generation, and limiting the subcontracting of training.

This new legislation will mirror and retain many of the important student protection reforms to the VET FEE-HELP scheme introduced through the Higher Education Support Amendment (VET FEE-HELP Reform) Act 2015, including the measures such as the ban on prohibited inducements, the requirement to have a parent or guardian's signature for students under the age of 18, and enforcement provisions.

The bill introduces a new ban on providers using brokers or agents to interact or engage with students in relation to VET student loans. This includes prohibiting brokers and agents from enrolling students in courses for which the tuition fees will be covered by student loans; assisting students to complete applications for student loans; or providing information or advice to students in relation to the VET student loans. Providers will be required to meet the ongoing information requirements; retain any documents or information, such as student records; and provide students with certain prescribed information.

The bill will also require providers to determine tuition fees in accordance with the rules. This measure will continue to enable the Commonwealth to ensure fees are spread across the duration of a course. The fees must be published. Importantly, a provider cannot require a student to pay for tuition fees that are to be covered by a VET student loan. We will also strengthen legislative, compliance and payment conditions, including the ability to cap provider loan amounts and student numbers, and to limit course scope; and powers to suspend poor-performing providers from the program, cancel their payments and revoke their approval.

So what will the impact of the VET Student Loans Bill be on the students themselves? There will be greater protections provided for students by shifting the ability to access a loan away from the provider to the student. Student loans will be approved by the Commonwealth, but only if the student is eligible and it is for a course that is an approved course. The bill provides the Commonwealth with the discretion not to pay a loan where it is satisfied a student is non-genuine or where it suspects the approved provider is not complying with the conditions on its approval or the provisions in the bill. In circumstances such as unacceptable conduct by a provider, or if the provider's noncompliance has adversely affected the student, or if it is shown that the student is not eligible or not genuine, the secretary has the discretion to recredit the student's FEE-HELP balance without the student having to apply.

Existing VET FEE-HELP students will have the option of staying with their current provider under the old VET FEE-HELP scheme until 31 December 2017, or transitioning to the new VET Student Loans program. Students starting study in 2017 will have access to the new program only. Throughout 2017, students will be assisted to move to an approved course at an approved provider. Over the coming weeks and months, the Department of Education and Training will be communicating with students to ensure they understand the changes and what they need to do.

Most importantly, these reforms place a much stronger focus on students successfully completing courses, because quality providers delivering quality courses aligned to industry needs will be a strong driver of completion rates. Ensuring that only high-quality providers with strong track records and industry links are approved to offer the program will have a positive effect on student support and performance.

The bill will also have a number of other impacts on providers. While TAFEs and public providers will automatically transition to the new program, they will still face identical new conditions on scope of enrolment, enrolment numbers, loan caps and student participation. These providers are low risk, they have not abused the VET FEE-HELP scheme, and they have significant numbers of state funded students. Granting them entry to the new program minimises transition and administration costs and provides greater certainty to students. Private providers, however, will be required to meet a range of quality measures to be granted an initial six-month trial period under the new program. Current private VET FEE-HELP providers will need to apply later in 2016 to access the new program on a transitional basis from 1 January 2017. They will then need to apply in 2017 to seek formal approval for entry from 1 July 2017.

New approval arrangements will: assess applicants' relationships with industry, assess student completion rates and employment outcomes, evaluate any articulation with higher education providers, and appraise a provider's track record of delivering education and training. Suitability against the application criteria will need to be maintained across the entire period of a provider's approval. There will also be a stronger focus on compliance, with the education department working with the Australian Skills Quality Authority, ASQA, who I have worked with many times, and the Australian Competition and Consumer Commission to closely scrutinise providers.

The coalition government's decision to implement the new VET student loans program follows comprehensive consultation with the sector and takes into account the views of a broad range of stakeholders, including: providers, peak bodies, students, individuals and government bodies. The submissions—which included contributions from providers, peak bodies and students—showed that stakeholders strongly agree that change is needed, and they have been an important part of helping the coalition government redesign the scheme. There is strong support for ensuring we have a high-quality program with a strong reputation for delivering results. Stakeholders agree that completion rates need to improve. These rates have been too low for too long, and we cannot let this continue. They also agree that course costs do need to be addressed. The new program will stop providers from charging students exorbitant fees which are then underwritten by the taxpayer.

The VET Student Loans Bill will be a big win for local students, particularly in my electorate, as well as taxpayers. It will ensure public funding is used only to support high-quality vocational and skills courses. I commend the bill to the House.

7:09 pm

Photo of Rebekha SharkieRebekha Sharkie (Mayo, Nick Xenophon Team) Share this | | Hansard source

I rise to speak on the VET FEE-HELP reforms. I must say that it is high time the government introduce reforms to the VET FEE-HELP program. For too long the current system has been abused by shonky providers and vulnerable students have felt the brunt of that abuse. The scheme has seen a massive blowout in expenditure, unsustainable increases in course costs, and, most critically, the rise of malicious providers who have used tactics such as offering laptops to vulnerable students as an incentive to sign up, knowing full well they would not be able to complete the course. These students now have large debts hanging over their heads, and some of them might not even know it.

Change was necessary, and the government was right to ban the practice of offering inducements last year. But that did not put a stop to the massive amount of taxpayer funded courses that were being provided unchecked. Many, many courses were offered, with little oversight as to what the course involved and how it was taught. Thankfully, the government has finally made a decision to act. The government likes to point out that the scheme was introduced under a Labor government, but that does not give any excuse for the inaction over the last three years. When the reforms were introduced by the Labor government in 2012, the then shadow minister, Sussan Ley, criticised them for not having the skills or the know-how to implement VET fee programs. Four years later we sit here with a government that has shown that they cannot effectively administer a VET program. How many students now unknowingly have debts due to the delayed response from this government? What is the government doing for those students?

My strongest fear is that we have many vulnerable students—particularly Aboriginal and Torres Strait Islander students—who are unaware of the loans they have hanging over their heads. The Minister for Education and Training, through his department, has not confirmed that the government will be able to reach out to all of the students who were duped into signing up for the loans. If these students are unaware that they even have a loan, how can they get that loan waived? These are students who had little understanding of what they were signing up for, who were misled and who in many cases are the most at-risk members of our community. With big debts, how will they get a loan? How will they get a car in the future? That debt will stay with them—possibly for the rest of their life. The government needs to protect these students and reach out to as many as possible to let them know about the debts that they have. The burden of proof in relation to this must be reversed.

Who will regulate this new scheme? According to the Minister for Education and Training, it is a job that the department can manage, but we have seen how hard it is for the program to be regulated already. It would simply be a monumental task for the education department to administer, and I hope that there is more consideration given to a third party being in charge.

As this House knows, 478 courses have been excluded from the VET FEE-HELP scheme. I believe that the eligible course list is too restrictive and ignores some of the future needs for our country. Australia needs a progressive VET sector, not one based on old data and ignorant of job creation and future projections. Of course we need to crack down on these shonky providers, but what the government is doing with its defunding of so many important courses will mean that good, honest, well-run private providers will also suffer through the funding cuts. How is this fair? These providers have done the right thing, and they are being punished for the actions of wrongdoers.

The government's choice to focus on the state skills needs list and prioritise STEM disciplines sounds practical and efficient, but it means that some very valuable course have been defunded. One in 63 students in Australia is diagnosed with autism. The government is removing funding from Diploma of Teaching Students with Autism Disorder. Surely this is a need, given there is one student in nearly every two classrooms who suffers from autism and teachers are saying that they do not know how to best specialise and manage these students so that they can have a solid education experience. The government is also introducing massive cuts to creative arts courses. Our aspiring actors, directors, screenwriters and producers will suffer. Our film and television industry will suffer.

Australia is built on every person in our community contributing—not every person in our community contributing to a STEM discipline. We need the arts. We need teachers who are willing to teach students with disability, and who have the specialist skills to do so. We need health treatments for our elderly. Vocational education provides pathways for people to pursue in those very important areas. So I urge the minister to consider a very quick review of the planned culling of courses in legitimate areas.

I will give some examples of the narrowing of available courses. We have excluded courses in architecture and building, like the Graduate Diploma of Building Design and the Graduate Diploma of Building Surveying. No-one could say that that is a shonky profession to get into. We know that there will be jobs there in the future. In education, we are cutting the Diploma of Education (Aboriginal and Torres Strait Islander) and the Graduate Diploma in Home Economics Education. These are important areas where we need to ensure we have specialist skills. In health, we are cutting the Advanced Diploma of Oral Health (Dental Hygiene), the Diploma of Community Health and the Graduate Diploma of Oral Medicine. They will no longer be courses where VET assistance can help a student. And we are cutting the Diploma of Dementia Care Leadership. With our ageing population, surely this course needs to be included.

In my electorate we do not have any universities, so vocational educational is the most accessible form of further education for our young people. Australia does need a thriving vocational education sector, and we need it to work hand-in-hand with our higher education sector to prepare the next generation for their future. These reforms will strengthen the VET industry, which is why they have my support, but I hope this time around students are protected and they can focus purely on learning the skills needed to contribute to our communities.

7:16 pm

Photo of Andrew WallaceAndrew Wallace (Fisher, Liberal Party) Share this | | Hansard source

I am a proud graduate of Holmesglen College of TAFE, where I attended and completed my qualifications for my carpentry and joinery apprenticeship in the mid- to late 1980s. I have listened to the speeches of those opposite in the debate on the second reading of this bill and am dumbfounded at the hypocrisy of those opposite.

Australia's vocational education and training sector, VET, is one of the central pillars of our economy and our future. At a time when Australia is competing with the formidable economic power of many North Asian countries, which have highly skilled labour, we must ensure that our vocational educational sector is strong and secure. Our nation's economy and our future depend upon it.

Last week the Minister for Education and Training announced sweeping reforms to Australia's VET system. The purpose of the VET Student Loans Bill 2016 is to replace Labor's failed VET FEE-HELP loan scheme from 1 January 2017 and introduce a vastly improved student loan program for vocational education and training. These reforms are essential to safeguard the long-term relevance and integrity of vocational education in this country. They will protect the honest players in the industry and give value for money to both students and, importantly, taxpayers.

At the outset, I want to make it clear that I firmly believe that not all VET private suppliers are shonky, but many of them have been proven to have acted inappropriately, and that is something that this government has called out. The need for reform is obvious. In its current form, Labor's VET FEE-HELP scheme has a list of more than 800 courses, including many that have been superseded or are lifestyle focused with little relevance to Australia's workforce requirements. Since Labor expanded the scheme in 2012, all diploma-level courses have been automatically eligible for funding under the Labor scheme, leading to unsustainable growth and widespread rorting in the sector. What is more, far too many courses that will never lead to meaningful or paid work are being subsidised by the taxpayer. This has left many students with large debts and, in some cases, little to no training outcome or work prospects.

The key statistics tell a sorry tale of waste and rorting that must raise the eyebrows of even the most diehard Labor supporter. From a cost of $325 million in 2012, Labor's VET FEE-HELP scheme exploded to a staggering cost of $1.8 billion in 2014 and a whopping $2.9 billion in 2015. Student numbers jumped by 5,000 per cent from 2009. Course fees tripled and loans increased by 11,000 per cent from 2009. Modelling by the Grattan Institute estimates that 40 per cent of Labor's VET FEE-HELP student loans will never be repaid because the students' incomes will never rise above the repayment threshold of $53,000. What does that mean? It means the taxpayer is going to pick up the cost. According to a University of Sydney study, under Labor's deregulated system, where private training colleges are free to set their own fees, some of Australia's largest registered training organisations have profit margins of more than 50 per cent, enabled by loans funded by the Australian taxpayer.

The coalition takes very seriously its responsibility to ensure taxpayer dollars are spent wisely, and that includes funding education and training programs that have the maximum chance of leading to jobs. To this end, the government has taken a responsible and measured approach to reforming the VET sector by running a test over all of the available diploma-level and above qualifications to ensure they are on at least two state and territory skills needs lists.

The government has also looked at other areas of high economic need, such as science, technology engineering and mathematics—the so-called STEM subjects—skills or agricultural skills, to make sure the list meets out national economic priorities. As a result, the government has announced 347 courses that are expected to attract funding support under the new government's affordable, sustainable, student-focused VET Student Loans program.

The government's new student loans program will protect prospective students by banning brokers or agents from engaging or recruiting students in relation to loans; prohibiting contact with students regarding the availability of loans, unless the student has expressly consented to contact by the particular provider; and broadening the circumstances for which student loans may be recredited.

The government's new loans program will mirror and retain many of the important student protection reforms to Labor's VET FEE-HELP scheme, introduced through the government's Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015. This includes measures such as the ban on prohibited inducements and cold calling, the requirement to have a parent's or guardian's signature for students under the age of 18, and relevant enforcement provisions. The government's new program will raise the bar for entry by providers to the program to ensure providers have robust governance and management arrangements and maintain acceptable student outcomes and, importantly, with industry links.

The program will introduce an application fee for bodies to apply to become approved course providers, imposing an annual levy on providers. It will link loans to courses that meet industry needs—fancy that: a course that will meet industry needs!—and will also address skills shortages and improve the quality of the course delivery by only enabling providers to subcontract training to other approved course providers or higher education providers.

It will toughen entry requirements for providers, with 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. It will strengthen compliance, governance and payment arrangements, including by triggering relevant regulatory powers from the Regulatory Powers (Standard Provisions) Act 2014.

It will limit eligible courses to those that align with industry needs and are based on analysis of employer and government data to ensure they lead to good employment opportunities. It will include three bands of loan caps, set at $5,000, $10,000 and $15,000 for courses, depending on their delivery cost, putting downward pressure on fees and addressing cost blow-outs. It will require students to log in and engage with the VET Student Loans online portal to ensure they are active and legitimate enrolments. The new program will feature a new application process, with a much higher bar to entry for providers wanting to access VET Student Loans, including examining student completion rates, the employment outcomes of courses offered and their track record as education institutions.

As part of these important reforms, the government will also strengthen legislative, compliance and payment conditions, including the ability to cap provider loan amounts and student numbers and to limit course scope. The government will also assume powers to suspend poor-performing providers from the program, cancel their payments and revoke their approval.

While TAFEs and public providers will automatically transition to the new program, private providers will be required to meet a range of quality measures to be granted an initial six-month trial period under the new program. Private providers will then need to apply, later in 2016, to access the new program from 1 July 2017. Providers that are not successful will not be able to access the new program.

There will also be a stronger focus on compliance, with the education department working with VET regulator, the Australian Skills Quality Authority, ASQA, and the Australian Competition and Consumer Commission to closely scrutinise providers. These measures will reduce the value of new student loans being issued by more than $2.4 billion per year by the end of the forward estimates in 2019-20. This will in turn lead to an estimated reduction in otherwise total outstanding HELP debt of more than $7 billion by June 2020 and by more than $25 billion by June 2026.

The Turnbull government wants to get the balance right and is consulting with stakeholders to finalise the list of courses to be funded from next year. If a case can be made that a course has very strong employment outcomes, then it will be reinstated. Alternatively, if a course that is included on the revised list should not be, we will reconsider that also.

VET Student Loans hits the 'reset button' on Labor's flawed VET FEE- HELP scheme, so that Australians can start to rebuild their trust in vocational education and taxpayers can ensure their money is not wasted. VET Student Loans will only support legitimate students to undertake worthwhile and value-for-money courses at quality training providers.

I call on my parliamentary colleagues to work with the government to help us ensure the new VET Student Loans program is legislated in time for commencement on 1 January 2017.

7:29 pm

Photo of Sharon BirdSharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | | Hansard source

In the very short period I have, I will indicate that I have a significant amount to say, so I will certainly be seeking to extend my comments when the debate reconvenes at a future date. It is particularly important, I think, for the parliament to consider the amendment to this bill that has been moved by the shadow minister. I will seek the opportunity when I have more time to speak in the debate to go through a bit of the history of what has happened to the VET FEE-HELP scheme and to discuss some of the proposals that the government has put forward.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

Order! The member for Cunningham will have leave to continue her remarks at a later hour.