Senate debates

Monday, 16 March 2015


National Vocational Education and Training Regulator Amendment Bill 2015; Second Reading

7:37 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | Hansard source

Senator Conroy knows a bit about sanctimony!

But I will touch on some of the issues that those opposite have raised, because I would hate for anybody who pained themselves to read the Hansard of contributions to this debate to be misled as some of the Labor senators have clearly sought to do through their contributions. Firstly, Senator O'Neill has given a speech that was mostly a speech about the New South Wales election campaign. She is welcome to do that; that is not an unusual thing in this place when a state election campaign is underway. I am not going to go over all of the aspects of New South Wales policy, but I think it is important to put on the record that the policy reforms of the New South Wales government in relation to vocational education and training have created additional opportunities for students in New South Wales and that there are more than 60,000 additional students who are able to be trained through the vocational education and training system in 2015 than would have been the case without the reforms of the Baird government.

You hear often in some of these debates, it seems at present—we have heard it in several state elections—this argument of TAFE versus private providers, this seeming argument from those opposite that contestability is the problem with the system today. Contestability is not new and private providers are not new. Private providers have been in existence for decades in the vocational education and training market, and contestability has been part of the New South Wales VET market for the last 20 years or so, so it is not a new thing that has been brought about; it is a change in the way some of these policies have been managed.

The New South Wales government's policy—Smart and Skilled, as I understand it is known—includes significant additional support for students with special needs, quite to the contrary of what Senator O'Neill was claiming and including generous fee exemptions, concessions and loadings to providers to fund additional support needs. Once again, it is important to note here that, when TAFE is the body providing support for those students with special needs, TAFE gets the additional loadings, fee exemptions and concessions flowing through to TAFE. If it is a private provider providing those extra services, they presumably get exactly the same level of support under that scheme. There is as well additional community service obligation funding provided to TAFE and adult community education to provide support services, specialist staff and hire equipment costs, once again notice that the government in New South Wales has acknowledged that there are some courses that require more expensive equipment, that are more expensive to run, and therefore there is support in place for that.

You would also be forgiven for thinking that the only fee increases ever seen have occurred in the last four years in New South Wales, yet under the previous New South Wales Labor government fee increases in excess of 200 per cent were seen over all award levels and certificate IVs had increases in excess of 500 per cent. So it is quite the height of hypocrisy for Senator O'Neill to come in here and claim that fee increases are something new.

But we are not here tonight to debate the New South Wales election campaign. Senator O'Neill can do that in an adjournment speech if she wants to. We are here to deal with some legislation that is before the House which is part of a number of reforms our government is taking to strengthen the operation of vocational education and training in Australia. But I do want to make sure that those reforms are put in context and that we acknowledge the point that we started from firstly in relation to the debate around contestability and secondly in relation to VET FEE-HELP.

The situation around contestability of training services in Australia is one that has been informed most markedly in recent years by the 2012 national partnership agreement that was entered into between the Commonwealth and the states. It was that 2012 national partnership agreement that set in train waves of reforms relating to contestability and indeed provided funding that encouraged such activity. And who was in government in 2012 when those arrangements were put in place? It was the former Labor government that existed—the government that Senator O'Neill, Senator Bilyk, Senator Brown and other contributors to this debate were all members of. They put in place the framework around contestability that has been applied in recent years. Contestability is not a bad thing, but it is how you do it and how you regulate it that matters most to making sure you get the optimal outcomes for students and for our training system.

In the space of VET FEE-HELP, the income-contingent, HECS-style loan that is available for vocational education and training students operating at a diploma or advanced diploma level, it is, of course, an even more contemptible approach we have seen from the Labor Party. While it was the Howard government that established VET FEE-HELP in 2007, it was established with very tight parameters and regulations around it. It was established in a way that you could only access VET FEE-HELP for courses where there were established credit transfer arrangements in place to ensure that your diploma or advanced diploma work would be recognised by a university were you to proceed on to university. It was a perfectly sensible and correct policy decision to step away from credit transfers as the only test for VET FEE-HELP, and in that sense I support the policy decision taken by the previous government to abandon the link to credit transfers. The problem was that, in taking away that link, the previous government left absolutely no regulatory safeguards in place whatsoever in relation to VET FEE-HELP.

Just as when they decided to roll out home insulation across the country and basically said, 'Free money to install home insulation systems around the country,' it seems they did the same when it came to providing diplomas or advanced diplomas through vocational education institutes. They basically put up a flashing sign that said: 'Free money. Come and take as much as you want under whatever terms if you happen to sign somebody up to start a vocational education diploma or advanced diploma.' No matter whether that person had the capabilities to do it and the intention to complete it or whether the diploma was of sufficient standard to be able to be completed, they just put in place an open honeypot to which they encouraged all the bees to come and take as much seemingly as they wanted.

We have taken steps to address this and taken steps to address real concerns about the quality of training in Australia at present. Overwhelmingly, it is my view and the government's view that private training providers, public training providers and not-for-profit community sector training providers are providing high-quality training in the vast majority of instances, giving millions of Australians worthwhile qualifications to take through their employment careers and lives. But there are a number who have been rorting the system who are not producing sufficient high-quality outcomes, and we are taking action to fix that. The reason we have this problem is due to the complete inadequacy and incompetence of those opposite in setting up the training systems that this government have inherited.

We have not been sitting around doing nothing until my announcements in relation to VET FEE-HELP last week. This government have taken a series of steps to make sure that we strengthen quality in our training system, that we protect the taxpayer from waste of money and that we look after vulnerable Australians and ensure that they are not taken advantage of. Firstly, when the Minister for Industry had responsibility for the skills portfolio, he put an additional $68 million of funding into the Australian Skills Quality Authority, ASQA, the national regulator. He did that to step them away from what the previous government had said needed to be a self-funding model. If it had been a coalition government that had said that ASQA needed to move to a self-funding model, in making her contribution in this debate, Senator O'Neill would say: 'That's the difference between the Labor Party and the Liberal Party. The Liberal Party just think that you need to self-fund all these things and will not invest in quality. The Labor Party believe that you should invest in quality, that funding should not be taken out and make them self-funding.' Of course, the Labor Party were the ones that took funding out of ASQA and said: 'You must become self-funding. You must focus on how you can charge fees through the training system and on how you can generate revenue. They are the priorities you need to worry about, National Regulator.'

We have said that we think there is a problem in the system and that the national regulator needs to be funded to focus on auditing problem areas, that it needs to direct its resources wherever it possibly can to risk-based approaches—generating the datasets where they can identify where high-risk activities are taking place and undertake the auditing and assessment in those high-risk areas. That is why this government have proudly put an extra $68 million into ASQA to make sure that they have the resources required to stamp out bad practice.

Minister Macfarlane also recognised that there was a significant problem in the sector where brokers and third-party agents were representing training providers and those representational arrangements had no transparency around them. So he put in place new regulations which commenced on 1 January this year for new providers and will commence from 1 April this year for existing registered training organisations. Those new regulations require that they have a transparent, contractual arrangement between any third party broker and any registered training organisation so that the public, the regulator or anybody else is able to identify very clearly who a broker is acting on behalf of and who is ultimately responsible through the training system for those actions—namely, the registered training organisation. Those are two significant reforms this government have already taken. The third is the legislation we are debating today to which I will return shortly. The fourth are the reforms to VET FEE-HELP that I announced last week.

The reforms to VET FEE-HELP attempt to break the business model of those who are rorting the VET FEE-HELP system. I am quite unashamed about the fact that I hope that those reforms will drive some third-party brokers and agents out of the system, and potentially out of business, and drive out of business as well any RTOs registered for VET FEE-HELP who are overly reliant on dodgy marketing practices and who are offering inadequate training. We have taken a strong stand there.

We will have in place by 1 April complete bans on up-front incentives and on free giveaways—no more free iPads, no more free laptops, no more meal vouchers and no more cash incentives to sign up. There will no longer be the ability for a broker, a third-party agent or an RTO to doorknock at the homes of vulnerable people and say, 'Just sign on here, you'll never have to pay off that loan' or 'This is actually a free grant and you'll get a free iPad or some other giveaway.' If Australians are signing on for a VET FEE-HELP loan, if Australians are signing on to register in a training course then the only thing they should expect to get from that training course is quality training, not any giveaway as a result. We will outlaw the giveaways effectively from 1 April.

We are also taking steps through the VET FEE-HELP reforms to make sure that those who offer miraculously short courses are no longer able to do so. If it is transparently obvious to anyone that the competencies and skill sets that should underpin a course cannot be met within the time then that will not be possible. In particular, there must be multiple units of study attached to a course and, with that, there must be multiple options for a student who is not progressing or does not wish to progress through each of the units of study to opt out before incurring a debt with the other units of study. No longer will it be possible for somebody to have the entire cost of their diploma or advanced diploma billed up-front to their VET FEE-HELP account. The fact that it ever was is quite a remarkable oversight by those who originally designed the system. It is worth noting that complaints about some of these practices were received way back in the days of the previous government, who failed to act in any regard. Those opposite have said: 'The coalition have acted belatedly in this area. They have not taken action fast enough. We are pleased to see they have adopted the Labor Party's approach.' The Labor Party's approach is an inquiry by the Auditor-General. I welcome that inquiry. I look forward to what it says. It may provide further ideas about how we make sure that this sector is regulated adequately.

Before the announcement I made last week, however, never had I heard the Labor Party say it was their policy to ban up-front inducements or incentives. Never had I heard them say that they were going to make changes to deal with the levying of fees in one hit up-front. Never had I heard them say they would eliminate the miraculously short courses. The Labor Party had a policy for an inquiry—but no courage to deliver the necessary reforms.

Senator O'Neill also tried to make light of the fact that, in announcing these reforms, I had said we would have a rolling campaign to implement them. I promised her that I would explain that statement. It is a fairly simple explanation. Some of the reforms I announced last week, such as the banning of inducements, can be put in place through changes to the VET FEE-HELP guidelines. They can be enacted quite quickly. Some of them require changes to regulations, which will take a little longer as they require some legal drafting. Finally, there is the tougher penalty regime I want to put in place. This regime will ensure we have a suite of penalties available to us. At present, we have only the relatively crude options of either saying to the RTO, 'You have been a naughty boy—please correct your behaviour', or deregistering them, which means throwing out all the students who are studying there. In between those options, we need some financial penalties and we need to be able to ensure that all the laws are enforced. Those changes will require legislation—which, as all in this place know, can take a little while to get through. That is the rolling campaign. But I am determined that all of the reforms announced last week will be in place by 1 January next year, with the last, I expect, being those components that require legislation.

That brings me back to the legislation before the parliament tonight. This is the third of the government's four pillars of reform to strengthen quality in vocational education and training. The reforms in this bill are relatively straightforward. Firstly, the bill will provide for the minister of the day to make a quality standard. The quality standard will allow far more rapid responsiveness in relation to RTOs than do the current arrangements. At present you have to go through a cumbersome process of getting formal agreement from all of the states before a regulation can be adopted. We will of course consult with the states about the making of any quality standard, but this provision will allow faster action on any identified problems.

Secondly, this bill will strengthen arrangements relating to brokers and third parties. It will make sure that they have to clearly identify the RTO that is providing the qualification. Thirdly, it will extend the registration period for registered training organisations from five years to seven years. This will enable ASQA to spend less time undertaking reregistration audits, which are entirely predictable and which RTOs can plan for, and more time dedicating the extra resources this government has given them to targeted, risk based audits in areas they believe to be of high vulnerability. Finally, there a range of minor consequential amendments.

This government is committed to the vocational education and training sector. We will spend about $6 billion this year supporting VET activities. It is a record sum when you include the income-contingent loans that are being made available and it will continue to grow over the forward estimates—even with the changes we have made today to ensure we stamp out the rogue operators and those who are doing the wrong thing. We know that VET can change people's lives and that some three million Australians access VET courses every year. Our determination is to make sure that, unlike those opposite, we provide quality in the system and the appropriate regulation to guarantee that quality—to ensure that everyone who is in training receives quality training that benefits their future employment prospects and our economy. (Time expired)

Question agreed to.

Bill read a second time.


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