Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Hansard source

Thank you, Mr Acting Deputy President, I will endeavour to do so. The VET FEE-HELP loans have skyrocketed from $699 million in 2013 to $1.7 billion in 2014. In 2014 there were 202,776 students, an increase of 367 per cent, and fees had shot up to $8,666 per student, an increase of 147 per cent. The bill before us seeks to introduce changes in addition to those that were introduced in April this year to address these rising debts and inappropriate enrolments that have been spoken about in the many contributions that we have heard today on this bill. Labor will support the measures in the bill but the bill is not strong enough and we call on the government to do more to address what has become a major national scandal impacting on students and the Commonwealth budget and threatening the reputation of our vocational education sector.

It seems that not a week goes by without media revelations about dodgy providers, exploitative practices and large debts. Last month, it was reported that Cornerstone Investments was paid $46 million for VET FEE-HELP in 2014 for 4,000 students. But, as has already been articulated by Senator O'Neill in her contribution, only five of those 4,000 students graduated. Last week, it was reported that one private college is going into voluntary administration, four have been deregistered by the industry regulator and the Australian Competition and Consumer Commission is launching legal action against a further two colleges. Many of these stories were raised in this place earlier this week in the context of the debate on the education services for overseas students amendment bills.

While I stress that not all, or even a majority, of providers in this sector are dodgy, it is clear that we have recently seen escalating problems with shonky providers that have brought the sector to a crisis point. With the collapse of Vocation Ltd, a private college that has been placed in voluntary administration, up to 12,000 students across Australia are in limbo. It is time that those opposite took action to protect students and quality providers rather than removing protections. It is clear that Australia's international reputation as a quality education provider is now in jeopardy after two years of reports of shonky colleges taking advantage of students and abusing the system and with little action from the government.

We have also seen the ACCC launch legal action in the Federal Court against Phoenix Institute for false, misleading and unconscionable conduct, and it is seeking the repayment of $106 million in Commonwealth funding provided through VET FEE-HELP. At the time, the ACCC stated that it was investigating nine or 10 vocational colleges. But, yet again, we have seen no action from the government. The shonks and the sharks are destroying the reputation of the whole vocational education sector. The Turnbull government is determined to bury its head in the sand, tinker at the edges and just hope that the shonks and sharks will magically disappear. The unprecedented crisis in this sector has escalated over the last two years and, in my view, those opposite are really only offering a weak response. While this bill is a belated start, the measures in it are simply insufficient to stop the dodgy providers and protect vulnerable students. TAFE Directors Australia said in their submission to the Senate inquiry into the bill:

Put simply, there is a culture of private ‘for-profit’ providers who have exploited—and without stricter legislation will continue to exploit—any and every loop hole or weakness in the VET FEE-HELP guidelines and legislation.

TDA cautions that current legislation and policy settings appear to be insufficient, and that far stronger control and governance of the VET FEE-HELP loan scheme is warranted in the face of incontrovertible evidence of abuse.

Rather than tinkering around the edges, the government needs to turn off the tap of government VET FEE-HELP assistance for the dodgy providers who are suspected of unconscionable conduct. For this reason the Senate Education and Employment Legislation Committee inquiry into the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015, which we are discussing here today, has proposed tougher amendments to deal with this issue. Labor senators on the committee have recommended that the Senate support tougher amendments to deal with the issue such as capping tuition fees, reducing lifetime VET FEE-HELP loan limits and improving measures to strengthen student protection when entering into a VET FEE-HELP loan. In line with this, Labor will move amendments which will strengthen this bill by capping tuition fees for VET courses eligible for VET FEE-HELP; lowering the lifetime limit for VET FEE-HELP loans, halving the limit from just over $97,000 to $48,864; and ensuring loan applications for students are handled by the Department of Education and Training rather than by a private college or broker.

Strong action is needed to address the growing crisis in the VET sector. For this reason, I urge those opposite to support Labor's common-sense proposals that will protect students, taxpayers, the economy and the reputation of the sector. In addition to the amendments that Labor will move, we also call on the government to implement a number of other measures which will help ensure the integrity and quality of our VET sector. Specifically, Labor is calling on the Turnbull Liberal government to ban or restrict the use of brokers to recruit students to courses funded by VET FEE-HELP, give the minister the power to suspend payments to a private college under investigation and establish an industry funded VET ombudsman to help protect vulnerable students from exploitation by shonky training colleges.

So far, this government has failed to stop dodgy training colleges from targeting vulnerable students, and taxpayers are paying the price. In spite of clear evidence that dodgy providers are targeting people with intellectual disabilities, people in Aboriginal communities and people in low socioeconomic areas, according to recent media reports shonky brokers and training companies are going from door to door in Queensland targeting vulnerable Australians with offers of free laptops.

Earlier this year it was reported that brokers were targeting elderly people and people with disabilities, in public housing in the suburb of Prahran, with inducements like iPads. Taxpayers and students are being left to foot the bill for the government's inaction. Other reports have revealed that jobactive clients are being referred to brokers to sell diplomas, with a sales target of one diploma per day. Unemployed Australians who are jobactive clients of the Department of Employment can lose their benefits if they refuse work or are fired from their employment. This places them in a very difficult position, when they are asked to do such work.

These reports prove why the government should be supporting Labor's proposals for a VET ombudsman and a requirement for a stricter opt-in application system for students taking out a VET FEE-HELP loan. The VET stakeholders, including the Australian Council for Private Education and Training, have been calling for a VET ombudsman to help protect students and restore the reputation of the sector. Yet the Liberals have refused to support these common-sense amendments.

Under this government, hundreds of millions of dollars have been wasted on training, with low completion rates and low quality, and the reputation of the sector has suffered. The minister must take action—urgently—so students signing up for courses in the new study year can have the confidence that they are receiving good quality training for their future employment. This bill is a belated but still inadequate step to address a crisis in our VET sector.

As Labor senators' additional comments to the Senate committee report on this bill state:

1.1 The Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015 seeks to play catch-up in terms of regulating the operation of VET FEE-HELP and providing some measure of redress for the victims of the shonks and shysters who have been perpetuating a scam on students and the Australian people.

1.2 This Bill—

While welcomed—

is expressly inadequate. It continues this Government's practice of addressing the symptoms, but not fixing the underlying problems, that plague the VET FEE-HELP system and vocational education across the country.

Apparently, now even the government recognise this and are seeking to make a number of amendments to their own bill at this late stage. It is time the minister started to work with Labor to put in place strong measures to protect students and the sector. Students, the taxpayers and quality VET providers can no longer afford this government's inaction. Tough talk is not going to drive the shonks out of the sector. It is going to take real common-sense action—as proposed by Labor.