Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

I table a revised explanatory memorandum relating to the bill and I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Higher Education Support Amendment (Extending FEE-HELP for VET Diploma, Advanced Diploma, Graduate Diploma and Graduate Certificate Courses) Bill 2007 will open up opportunities for students to pursue high level full-fee VET courses.

This Bill sets up the arrangements and appropriation to extend FEE-HELP assistance for students studying full-fee VET Diploma and Advanced Diplomas with registered training organisations such as a TAFE.

The Government believes it is important to raise the status of vocational and technical education to signal the significance the Government and the community attach to high level technical qualifications.  In turn this raises the self-esteem of those students undertaking these qualifications.

This initiative will assist students who wish to pursue higher level vocational education and training qualifications.  Many students are attracted to VET because of the specialist skills they learn while studying, but the high upfront fees acts as a deterrent.  Presently, these students cannot access student loan arrangements and are forced to pay their fees upfront or pursue an alternative higher education qualification if they need loan assistance.

Through FEE-HELP the Australian Government provides loans to ease the up-front financial burden for eligible students by assisting them to pay their tuition fees to their training provider.  This initiative will remove some barriers that exist for students who want to pursue further higher level qualifications through the VET system. It increases access to technical and vocational Diploma and Advanced Diploma courses. 

Training organisations will be encouraged to seek approval from the Australian Government to receive FEE-HELP for Diploma and Advanced Diploma students if they have an agreement with a university that their students could move (with appropriate credit transfer) into a related degree qualification.

This arrangement will ensure that VET students get appropriate recognition in any subsequent studies at university, and get credit for what they’ve already done. It will also encourage those already with trade qualifications to build on them. 

As this Budget measure is an extension of FEE-HELP in the higher education sector, this amendment is based substantially on the existing FEE-HELP mechanisms already in the Higher Education Support Act.  VET providers will be required to meet certain conditions including financial viability, quality and reasonable fees and student access arrangements.  The government insists on these arrangements as it is important to protect the interests of the students who take on responsibility for repaying the debt they incur from a provider.  These measures ensure that the provider is acting in the best interests of their students.

In addition, current FEE-HELP legislation requires providers to be corporate bodies and this is also a requirement for VET providers. 

This is the first introduction of a student loan scheme in the VET sector at the national level.  I am continuing consultation within the sector on the operation of the scheme, including the impact on state and territory training arrangements.  I introduce this amendment to demonstrate the government’s commitment to deliver this scheme in 2008 for the benefit of all Australians.

This arrangement covers full-fee courses.  Governments will continue to support training through public funding.  This measure is part of the suite of reforms and funding by the Australian Government for VET to remain as a world-class training sector.  States and territories will be expected to continue with their level of funding for training and to continue to provide public funding for training.

The Australian Government expects to loan around $221m to students over the four years to 2010-2011 depending upon the number of VET providers which seek approval to provide VET FEE-HELP assistance and the number of students they enrol.

In the coming decades, Australians with trade and technical skills will be in demand.  It is predicted that over 60 percent of jobs will require high quality technical or vocational qualifications yet currently only 30 percent of the population have these skills.

The Australian Government is a strong supporter of vocational education and training (VET).  Total Australian Government funding to VET, taking into account the 2007 Budget measures and the Prime Minister’s Skills for the Future package of last year, amount to $11.8 billion over the next four years. 

Loan assistance to students adds to the suite of programmes the Australian Government has developed, providing equity and choice for individuals.  Pursuing a trade or vocational qualification is just as important as pursuing a university education as a pathway to a productive career and future prosperity. Through this Bill, the government is offering students real choice in the study they pursue and builds the skills of the workforce.

This measure, combined with the suite of other initiatives already put in place by this government, represents a significant investment in the development of skills in the Australian population.

I commend this Bill to the Senate.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

I seek leave to incorporate my remarks on the second reading in Hansard.

Leave granted.

The speech read as follows—

Higher Education Support Amendment (Extending FEE-HELP For VET Diploma and VET Advanced Diploma Courses) Bill

Mr President, I rise to speak to the second reading of the Higher Education Support Amendment (extending FEE-HELP for VET Diploma and VET Advanced Diploma Courses) Bill 2007.

This bill, as its name makes clear, extends availability of the Government’s FEE-HELP loan scheme to certain courses offered in the vocational education and training sector.

These are full-fee courses at Diploma and Advanced Diploma levels that articulate through credit transfer with university undergraduate courses.

FEE-HELP loans, or any other type of loans, will not be available to government-funded students in TAFE, or to those undertaking apprenticeships.

Labor supports this limited measure, though we have concerns about some of the ways the Government has sought to limit loan availability. I’ll return to those concerns later in my remarks.

We support the measure because it brings parity in access to FEE-HELP for full-fee students who choose to get themselves a university degree by first taking a path through the VET system, and moving to university for the later years of study.

These students will now have the same right of access to FEE-HELP as those who choose a full-fee degree program offered exclusively in the university sector.

That seems on the face of it a rational and fair adjustment to existing policy.

Of course, Labor has said that we will phase out full-fee undergraduate degrees if we are elected to government. We do not support favoured access to university for those who can afford to pay high fees. That is inequitable.

However, while this option remains available, full-fee students who choose a route through VET should not be disadvantaged by being denied access to a loan scheme to help them cover their tuition fees.

Concerns

I said that Labor has some concerns about the detail of this bill.

The first is a major one. The bill restricts access to FEE-HELP loans to students studying with a provider that is incorporated. In fact, this restriction means that those in full-fee courses in the public TAFE system in all states and territories except WA and Victoria will have no access to FEE-HELP.

This is because TAFE colleges in those states and territories are not incorporated.

The practical effect is that, aside from WA and Victoria, FEE-HELP in the VET sector will be available only to those studying with private providers. This is no more than yet another back-door means of privatising our tertiary education system by stealth—something this tricky Government has done with such alacrity over the last eleven years.

Why do I say this?

We only need to look at what’s been happening in the higher education sector since the introduction of FEE-HELP in 2005. The previous year, full-fee undergraduate students made up less than 2.5% of the undergraduate population. When FEE-HELP became available, full-fee undergraduates increased in number to over 4% of undergraduates. Many of these study with private providers.

In June 2007, there were 60 private higher education providers approved for FEE-HELP. Back in June 2005, six months after FEE-HELP became available, there were only 31 such providers.

Comparisons with international education sector

We have already seen what happened in the international education industry when private providers offering courses to overseas students suddenly mushroomed. We suffered huge problems in maintaining the quality and integrity of the system. Of course the reasons for the growth in this case are different, but the lesson is the same.

Despite a radical overhaul of the ESOS legislative regime that regulates the international education industry, many of the old problems remain.

I have recently had drawn to my attention a private provider in this sector in Melbourne, that claims falsely on its website to have existed for years and to have an excellent and long-standing reputation. In fact, the college was established only in April of this year, and it’s run by the same people who ran another college that went bankrupt last year, leaving a large number of students stranded.

I understand that at least one of the college’s operators is in Australia on a student visa himself.

The college’s premises are located upstairs in a small shopfront in the Melbourne CBD, and yet this college is registered to provide courses in automotive trades.

I mention this example simply to draw attention to the problems associated with regulating a fast-growing sector of education or training. It seems that, despite the existence of regulation and the vigilance of state and federal authorities, it is possible for dodgy and even fraudulent entities to slip under the net.

I would be extremely concerned if the measure contained in the bill currently under debate—to extend FEE-HELP loans to a potentially long list of private providers—threatened the quality and reputation of our Australian VET sector as a whole.

I am sure this is not the Government’s intention. But it is a danger.

Anomalies created by this measure

This bill extends eligibility for FEE-HELP loans to students in the VET sector undertaking certain fee-for-service Diploma and Advanced Diploma courses. Those courses have to have articulation into higher education. It’s easy to see the rationale for this move, but it does create some anomalies.

First, those studying in Diploma and Advanced Diploma courses that do not articulate into higher education—via credit transfer—will not be eligible for FEE-HELP assistance. These students will miss out on assistance, unlike their colleagues in eligible courses—whether or not those individual students intend to go on to higher education. One student who does a Diploma course in VET can get FEE-HELP, but another doing a similar-level course cannot.

This situation will create pressures to widen eligibility to all fee-for-service Diploma and Advanced Diploma students in the VET sector. And following that there will be pressures to broaden access to the scheme still further in the VET sector.

This trend could lead to pressures to open up the VET sector—specifically public TAFE—to HECS as well, for students in government-subsidised places. Some may oppose, and others may welcome, such a policy development. But it shouldn’t happen incrementally. It should only happen, if it ever does, after full public debate has occurred. This is a contentious matter in some quarters and Labor is well aware of that fact.

There is another anomaly associated with the measure contained in this bill.

The bill would extend FEE-HELP availability to certain VET Diploma and Advanced Diploma students, but ignores those studying for VET Vocational Graduate Certificates and Diplomas. Increasingly, these courses are offered on a tee-for-service basis.

These are specialised courses for graduates, as their name suggests. They are offered in the VET sector rather than in universities because, as it happens, VET and TAFE are the best providers to offer them—this sector has the relevant vocational expertise in the relevant niche area.

Examples of these courses include Adult Literacy Teaching; Architectural Digital Illustration; Indigenous Advocacy and Counselling; and Sales Management.

If the courses were to be offered instead in universities, the students would have access to FEE-HELP. On the face of it, it would seem reasonable to make FEE-HELP available to these students. The Government should explain its reasoning for not including Vocational Graduate Certificate and Diploma courses in this bill.

Underlying policy agenda

Finally, I return to the issue of incorporation of VET providers. As I noted earlier, this bill will open up FEE-HELP access only to students whose provider is an Incorporated body.

One might ask the reason for this restriction. To the jaundiced eye—after eleven long years of a tricky Howard Government—it might seem that there is an unstated, ulterior motive at work here: a push to turn public TAFE systems into loose groupings of stand-alone entities that essentially compete like businesses. The aim might be to get TAFE institutions to compete both with each other and with the private sector—a sector, as I have pointed out, given quite a fillip by this bill.

This current Government is uneasy with state TAFE systems that are centrally coordinated and managed—a choice which is, after all, one for the states alone. The Commonwealth has tried to force the states to bend to its will in this regard, but most have refused to play along. This bill is quite likely a back-door attempt to have its way on this contentious issue.

It remains to be seen how the states will respond.

If the Government’s intentions on this matter are not as I describe, perhaps it can explain to the Parliament what its actual intentions are.

Chubb’s comments on higher education

I want to take this opportunity to make a few comments about some views expressed recently by ANU Vice-Chancellor Professor Ian Chubb.

He has slammed the Government over its higher education funding policies, particularly those on research and research infrastructure.

Professor Chubb pointed to the slide in research performance and spending over the last decade. He made the point that Australia needs to perform at “the highest international standards”. This is particularly true in basic research.

He said that international corporations are increasingly seeking out centres with strong basic research capacity. These are the places where they want to invest. But Australia’s expenditure on basic research has fallen sharply in recent years – from two-thirds of university R&D spending in 1990-91 to just half in 2004-05.

This is despite the Howard Government’s much-trumpeted Backing Australia’s Ability packages 1 and 2.

Professor Chubb said that Australia was “pretty much alone” in that both our Business and our Higher Education R&D are directed heavily to applied research. The United States, in response to data indicating that its research competitiveness was falling, has doubled its spending in three major programs.

China now spends $170 billion per annum on R&D and last year became the world’s second biggest R&D investor. It spends ten times what Australia does.

Labor is committed to lifting our R&D performance. We have as our goal to double overall R&D expenditure—across public and private sectors within ten years.

We are also committed to addressing another of the worries expressed by Professor Chubb—the urgent need to renew our research workforce. We will increase the number of higher degree research student places and establish new programs to attract and retain early and mid-career researchers in our universities.

Professor Chubb asked whether Labor remained committed to the concentration of research capacity and a “hub and spokes” model for shared access to research critical mass and state-of-the-art infrastructure.

Yes, we are committed to those policies. Labor will scrap the Howard’s Government’s seriously flawed Research Quality Framework, but we will replace it with a streamlined and transparent funding and Quality Assurance model that will direct research funds to high-performing universities and researchers.

Labor in Government will revitalise Australia’s university research environment. This is a vital part of our plan to forge a future for the nation based on innovation.

Summing up

Equally important to our nation’s future is the creation of a highly-skilled workforce at all levels and in all fields. Our TAFE institutes and other training providers are central to that task.

That’s why Kevin Rudd and Labor have placed a training agenda at the centre of our Education Revolution.

To sum up on this bill, I have said that Labor does not intend to oppose it.

In so far as the bill clears up what is essentially an anomaly in the availability of access to FEE-HELP loans, then the bill is to be welcomed. If it means that students enjoy additional study options, and can use pathways from the VET sector into higher education, without facing upfront fees—that’s a good thing.

However, I’d like to remind the Senate that Labor has expressed a number of concerns about the intent and potential implications of this bill. And I have asked the Government a number of questions about its reasons for choosing the precise category of students that it has, in terms of eligibility. Answers to those questions would be appreciated.

Finally, I want to stress that Labor has committed to phasing out full-fee undergraduate degrees in Australian publicly-funded universities. If Labor is elected to office, that is precisely what we will do.

Labor is committed to an Education Revolution for our nation. We will lift Australia’s performance in education, training and research, starting with early childhood.

As part of that radical shift, we will end the inequity of the Howard Government’s policies in higher education financing, so that all young Australians have the same opportunities. There can be little that’s more important than that.

Question agreed to.

Bill read a second time.