Monday, 14 July 2014
Trade Support Loans Bill 2014, Trade Support Loans (Consequential Amendments) Bill 2014; Second Reading
): The Trade Support Loans Bill 2014 purports to implement a coalition election commitment. Indeed, it might be said that it was the only policy on skills and training in the Real Solutions manifesto that the then opposition touted during its campaign. This is a policy that promised that a coalition government:
… will provide better support for Australia's apprentices.
Of course, it sounded good, but the detail was particularly hazy. What was not mentioned in that manifesto was that the coalition as a government intended to scrap the $1 billion Tools For Your Trade program—which is a Labor program—and this has now been done as a result of the government's budget measures.
This is a kick in the guts for apprentices. What the program allowed for was $5,500 grants to be made for apprentices for the cost of tools, books and equipment. What is replacing it is the government's initiative of debt of $20,000. That is what the Trade Support Loans program established by this bill provides for—that is, a concessional, income contingent loan with a lifetime limit of $20,000, repayable when the individual's income reaches the HECS-HELP threshold. This bill provides for a 20 per cent discount on the loan on successful completion of the apprenticeship. If the loans, even with the discount, are promised then the claim that it was a 'better support for Australian apprentices' certainly looks, in my view, very limited in terms of any beneficiaries that would actually take advantage of this program.
Opposition senators and members have been inundated with messages from apprentices who are anxious about what these new debts mean and what they will involve for people over their working lives. In particular, those who started their apprenticeship before the election are angry that the goal posts have been moved and that they will go into debt to buy tools and other equipment they need for their training, which is not what they understood would be the case when they actually started their apprenticeship. This strikes me as another example of where the coalition was content throughout the election to give people the impression that something would occur that was in complete and sharp contrast with what actually has occurred in government. So I would ask for the simple meaning in the English language of 'better support'. Is it reasonable to interpret the term 'better support' to mean that apprentice electricians would no longer be able to buy expensive voltage-testing equipment and safety gear without taking out a loan? Would it be reasonable to assume that 'better support' would mean that apprentice chefs would no longer be able to buy the expensive knives that they need without taking out a loan? Would it be reasonable to assume that hairdressers would no longer be able to buy their scissors, hairdryers, straighteners and curlers without taking out a loan? Would it be reasonable to assume that apprentice plumbers and mechanics would no longer be able to buy their expensive tool kits without having to take out a loan?
While Labor will not oppose the bill, we will, however, make it very clear that we only do so because there is no other financial support that is being provided to support apprentices. We will be proposing two second reading amendments—one that I will be moving and one that Senator Lines will be moving—which would address some of our concerns. I now move:
At the end of the motion, add:
but the Senate notes that the Government has failed to:
(a) advise apprentices before the election that they would be abolishing the Tools for Your Trade program, thus leaving Trade Support Loans as the only form of assistance for the purchase of tools;
(b) adequately ensure that clear and easily understood explanations of the loan, the indexing and the repayment requirements are provided to all apprentices in a consistent format, in particular for school-based apprentices;
(c) put in place adequate privacy protections for the large volumes of information that will be acquired through the Trade Support Loans Program; and
(i) fair and reasonable transition arrangements for current apprentices; and
(ii) apprentices the option of lump sum payments in order to purchase expensive items.
This second reading amendment seeks to have the Senate acknowledge that this government failed to advise apprentices before the election that it would be abolishing the Tools For Your Trade program, thus leaving Trade Support Loans as the only forms of assistance that are available for the purchase of tools; secondly, adequately ensure that clear and easily understood explanations of the loan, the indexing and the repayment requirements are provided to all apprentices in a consistent format, in particular for school-based apprentices; thirdly, failed to put in place adequate privacy protections for the large volumes of information that will be acquired through the Trade Support Loan program; and, fourthly, failed to offer fair and reasonable transition arrangements for current apprentices and the option of lump-sum repayments in order to purchase expensive items.
We have concerns about the methods for achieving the approval for parents and guardians of apprentices under the age of 16. We may well see situations where 16-year-olds are required to take out loan arrangements, especially in the case of school based apprentices at the point of signing up for loans. Senator Lines will be taking up these concerns with her contribution. Paragraph (a) of the amendment acknowledges the lack of openness and honesty in the legislation and that the government did not tell—just simply did not tell—apprentices that it would be axing the Tools For Your Trade program. It duped them by promising better support while intending to lump them with a massive debt. This is a low trick. It is in fact indicated by a number of apprentices who have understood what is going on and have advised the opposition, accordingly.
Paragraph (b) of the amendment emphasises the need for apprentices to be given clear and easily accessible information about the new loans. You would expect normal consumer protection arrangements would provide better arrangements than these—talk laden with terms such as 'concessional interest rates' and 'indexation to the CPI' is neither clear nor easily accessible for most people. That is what we want to know. In simple and direct terms, I think we are entitled to know—and I expect to pursue this through the committee stages—what are the repayments? How are they going to be calculated? What is the effective interest rate and how will it be calculated? The government has failed to explain these measures, and it is information that apprentices have a right to know before they take out a loan. Instead, what we have heard from the Minister for Industry is that he has chosen to admonish apprentices. Without offering any proof whatsoever he has accused apprentices of spending their Tools For Your Trade programs on tattoos and mag wheels.
In estimates we asked for the evidence that supported these extraordinary accusations, but we could get nothing; neither could the department provide any evidence. We learned from the media reports—for instance, from The Courier Mail, 7 July—that the minister has 'collated a wide-ranging list from employers and training providers' that he believes justifies the replacement of the grants with loans. The accusations have varied in the alleged object of spending, although not in substance. Instead of mag wheels and tattoos, we have been told that apprentices allegedly spend their grants on surfboards, parties and hotel rooms. The newspaper reports have given no indication of the alleged number of people who are rorting the system. Even if the allegations are true, there has been nothing to substantiate the claims that the rorters are numerous, let alone typical apprentices. But the government would like us to believe that they are typical. To win support for the trade loans bill, it has now sprung these claims, just as it sprung these odious measures through this particular bill.
The truth of the allegations is that this is about sneering, appealing to a class-based prejudice and trying to generate support for stereotypical prejudice against blue-collar workers. It is shameful language for the minister to use and he should retract it, and the government should apologise. Australian apprentices, the skilled workers of the future, deserve to be treated with a bit more respect. Yet rather than do so, the minister preferred to take unsubstantiated cheap shots at them. He continues to avoid giving clear and concise information about the liabilities that apprentices will face under these new loan arrangements.
Paragraph (c) of Labor's second reading amendment deals with the concerns about privacy, which have been raised by the ACTU in its submission to the Senate Economics Committee, which looked at this particular legislation:
Under clause 75 of the Bill, a person only has to take an oath or affirmation to protect information they receive from apprentices. There do not appear to be any repercussions for a breach of these provisions of failing to adhere to an oath or affirmation. By contrast, under the Higher Education Support Act 2003 the person/officer dealing with personal information has more onerous obligations to meet and the penalty is two years jail.
The bill's explanatory memorandum notes:
A large amount of personal information will likely be acquired through the operation of the Trade Support Loans Programme …
Apprentices will be required to provide tax file numbers and other sensitive information to apprenticeship centres. Yet there are no repercussions for breaches of privacy under this legislation. The issue has been raised on numerous occasions but the government has failed to address those concerns or to put any necessary protections in place.
Paragraph (d) of the amendment concerns the plight of apprentices who based their financial plans on the Tools For Your Trade program and the decision that the loans should be paid in monthly instalments. The apprentices who made their plans expecting that the Tools For Your Trade program would continue did so in good faith. Of course, we now know that it was not justified because this is a government that has no good faith. This is a government that said in opposition during the election it would do one thing and in government said completely the opposite. In fairness, the government should have put transitional arrangements in place for the affected apprentices.
Senator Seselja interjecting—
You doubt that? Do you doubt the fact that this is a government that has throughout its campaign told lies.