Wednesday, 21 November 2012
Higher Education Support Amendment (Streamlining and Other Measures) Bill 2012; Second Reading
I rise today to make some remarks regarding the Higher Education Support Amendment (Streamlining and Other Measures) Bill 2012. The coalition will not be opposing this bill. We are certainly very supportive of legislation that streamlines, that makes things easier and more efficient, and that indeed is the case with this particular piece of legislation. The Higher Education Support Amendment Bill (No. 1) 2012 will amend the Higher Education Support Act 2003. The bill aims to strengthen and streamline the administration of the government's higher education loan schemes—HELP schemes—FEE-HELP and VET FEE-HELP. VET FEE-HELP was announced by the Howard government in the 2007 budget and it extended FEE-HELP to the vocational training and education sector. This move by the coalition recognised there was a need to encourage students to take up higher level skill qualification by reducing financial barriers and it addressed the unfair situation where the VET sector had courses with high fees, but was the only sector with postsecondary qualifications without an income-contingent loans scheme. VET FEE-HELP plays an important role in ensuring Australians have access to affordable education. VET FEE-HELP is a government loans scheme which helps eligible students pay their tuition fees for higher level vocational education and training courses—VET courses undertaken at approved VET FEE-HELP providers.
It is useful to make a few comments about how it works for those that do not necessarily have an understanding in this area. To be an approved provider, registered training organisations—or RTOs—must apply to the Department of Industry, Innovation, Science, Research and Tertiary Education and satisfy a range of eligibility requirements. RTOs must:
be a body corporate …;
be an RTO as listed on the National Register …;
be financially viable and likely to remain financially viable;
carry on business in Australia with central management and control in Australia;
offer VET accredited diploma and advanced diploma courses … ;
be a member of an ap proved tuition assurance scheme …;
have administrative procedures and the capacity to meet reporting requirements.
VET FEE-HELP can be used to cover all or part of a student's tuition fees. The government pays the loan amount directly to the approved provider. Students repay the loan gradually through the tax system once their income reaches the compulsory repayment threshold set by the ATO. The threshold is currently $49,095. VET FEE-HELP is available for courses at approved providers at the level of diploma, advanced diploma, graduate certificate and graduate diploma. The amendment bill before the chamber came about because of a post-implementation review of VET FEE-HELP undertaken in 2011. The review was commissioned in 2009 and found that VET FEE-HELP was administratively complex and, as I said at the outset, the coalition is supportive of those measures that will reduce complexity when it comes to administration. The review also found that overall there is strong support for the scheme by the VET sector, particularly in relation to the scheme's role in providing greater equity and accessibility for VET students. The review did however find that the scheme was increasing at a slower than anticipated rate in terms of student enrolment and approved VET FEE-HELP providers, but there were positive signs for further growth. The bill is the first stage of implementation of those changes made in the post-implementation review. We certainly welcome the practical measures in the bill which reduce red tape and that aim to increase the number of VET FEE-HELP providers and, in turn, students accessing vocational education courses.
It is important to point out the importance of VET courses. Over many years we have seen a lot of focus on the higher education system when it comes to university. It is pleasing to see, increasingly over recent years, the focus that has been placed on the VET sector and the important role that it provides our students, particularly those in regional areas. It is also very pleasing to see a number of collaborative arrangements starting to take place—indeed, they have been for some time—between the university sector and the TAFE sector. I am very supportive of those arrangements, where they are in place, and know that there is a real benefit in there, particularly for regional students. We welcome any attempt to increase the access of students to further education, both VET and tertiary, although I must note that over recent years it has not always been the case that this government has put in place measures that have done so. I refer to the changes in early 2010, changing the arrangements for the independent youth allowance, which severely disadvantaged some regional students, and was very pleased to see after a lengthy period of time that the government did do a backflip, recognising the inequity that they had created for regional students.
It is vitally important that our regional students have equity of access to education. There is no excuse for regional students to have anything less than that equity when it comes to accessing education.
The RIS completed by the government states that the take-up of VET FEE-HELP by RTOs, and therefore students, has been below government expectations. However, I note that there are positive signs with data showing that the number of students accessing VET FEE-HELP is increasing over time. A total of 39,124 students accessed VET FEE-HELP during 2011. That is a 50 per cent increase in the number accessing assistance in 2010 and an increase of more than 600 per cent since VET FEE-HELP was first made available. The increase in the number of students accessing VET FEE-HELP assistance corresponds to an increase in the number of VET providers offering VET FEE-HELP and also the number of students eligible for VET FEE-HELP assistance.
Of particular concern to me is the low take-up rate of VET FEE-HELP by students in regional and remote areas. This is referred to as an issue of concern in the RIS. In 2011, 18.2 per cent of students accessing VET FEE-HELP were from regional and remote Australia. Clearly, that is a figure that we would like to see improved. The complex administrative policies and processes of VET FEE-HELP are noted as major contributing factors to the low participation rate of this group. It is, however, slightly promising to see that the percentage is increasing. The figure of 18.2 per cent is an increase of about 86 per cent from 2010. So, while the figure is still unacceptably low, we note that it is increasing.
We need to ensure that the participation figure for regional and remote students continues to increase. World-class education is the right of every Australian and a vital investment in the people, opportunities and prosperity of our nation, regardless of where you live. However, we know that where you live does have a big impact on the ability to access both VET and tertiary education. An increase in the number of RTOs in regional locations would help to increase participation by regional and remote students. According to VET FEE-HELP data collection in 2011, there were 230 campuses of approved VET providers. We note that some providers operate at multiple campuses. None were located in remote or very remote regions. In New South Wales, for example, there are 74 campuses of approved VET providers: 57 are in major cities, 15 are in inner regional areas and only two are in outer regional areas. In Queensland, there are 31 in major cities, one in an inner regional area and one in an outer regional area.
The estimated cost for a regional student to relocate and attend university is said to exceed $30,000 per year in study costs, accommodation and living expenses. The cost to relocate for VET would be a comparable amount. The cost of relocation is a huge barrier to regional and remote students taking up VET FEE-HELP places. An increase to providers in these areas would surely assist in breaking down these barriers. Again, there is the inequity that exists for our regional students who are faced with the burden of the cost of relocation—a burden that does not sit with our students, by and large, in metropolitan areas. One of the key issues that we on both sides of this chamber must continue to grapple with is to make sure that we have equity of access for our regional students. When I talk to parents in the regions, they say they simply cannot afford it, even in spite of the measures the minister has put in place that he says are assisting regional students. I will give credit where credit is due: in some areas, that is indeed the case. But, by and large, there are still a number of regional families who are not sending their students away to tertiary education because of the cost.
In light of the skill shortage facing the agriculture industry, I am also concerned to see the low take-up rate—that is, the proportion of fees deferred through VET FEE-HELP assistance for agricultural, environmental and related studies. Of all the disciplines, agriculture had the lowest take-up rate at 40 per cent. This is in comparison to areas such as food hospitality and personal services, which had the highest take-up rate of 94.3 per cent. Why? This is attributed to the lack of access to education and training in regional and remote areas. These areas also have limited access to the internet and lower rates of broadband use, limiting the option of online study.
Unfortunately, Minister, things just do not happen quickly enough, do they? Minister, if you had not overbeaten the egg, we might be a little closer to having some broadband for those areas. Between 2009 and 2011, the number of VET courses in agricultural, environmental and related studies has increased from 25 to 45, which is welcomed. Anything we can do to encourage and make it easier for more students to enter agricultural training at any level, be it tertiary, VET or short courses, is to be encouraged.
The Senate committee report on higher education and skills training in agriculture and agribusiness, released in June, revealed the agriculture industry needs 4,000 graduates a year to fill vacancies, yet there are currently only 700 graduates. This is an issue I continue to implore the government to focus on, in terms of future sustainability of the agriculture sector in Australia When we have figures such as those in front of us, it is simply not good enough that more is not being done to address this issue, increase the participation rate and ensure that our young people understand the very bright future for them in the agriculture sector. Reasons for the decline in agriculture and agribusiness education in Australia are complex, but they include an ageing workforce, competition from the mining industry and the high cost of education.
Since 2001, there has been a trend of declining enrolment in higher education qualifications in ag science and related fields, leading to a shortage of qualified professionals in the agriculture sector. This is alarming, particularly in light of the fact that the on-farm agriculture sector is forecast to lose at least 30 per cent of its workforce over the next 10 years, mostly due to ageing. As one of those farmers in regional areas who is ageing, I think I am part of that figure now. It really is something we need to be aware of. We need to ensure that we encourage the next generation to be on the land and be involved in the agriculture sector, given the contribution agriculture makes to the economy, the nation and our society. Studies have shown that educational attainment in agriculture is generally low compared to other industries. However, the gap in attainment is greater for bachelor degrees than for VET qualifications, and for lower level VET qualifications agriculture has a higher proportion than overall, demonstrating a preference for VET training rather than tertiary studies.
Provision of education through VET training as an alternate pathway to tertiary courses is of increased importance in light of the government's axing of the popular Farm Ready program earlier this year. Courses of a shorter duration have traditionally been popular with farmers and their employees. While short courses may not achieve certificates, diplomas or degrees, they are essential to encourage knowledge sharing and skills in the industry. As we know very well, primary producers are time poor, with many unwilling to commit to extended periods of training. Farm Ready helped to fill a gap in the skills market and was axed despite there being 469 approved courses at the end of May 2012, including computer mapping, introduction to no-till, succession planning, use of computerised financial packages, production change, whole farm planning, management integrated crop and pasture production, pasture and animal production, strategic management and permaculture design.
The VET FEE-HELP scheme has the potential to assist many more Australians to access further education. Moves to remove barriers to participation in the scheme, which will hopefully assist in addressing inequities faced by regional and remote students, are certainly welcomed, and the coalition will not be opposing the bill.
The Greens support some aspects of the Higher Education Support Amendment (Streamlining and Other Measures) Bill 2012 which take a risk-managed approach to administrative compliance. We do however have concerns about the VET FEE-HELP scheme, which we outlined in additional comments made to the Senate Standing Committee on Education, Employment and Workplace Relations' review of this legislation. The Greens do not support the proposed government amendments that will delay the indexation of Student Start-up Scholarships, which are awarded to students from lower socioeconomic backgrounds to assist them with the start-up costs of commencing full-time tertiary study.
Overall, the Greens support the provisions of this bill that allow a risk-managed approach to approvals and administrative compliance. It makes sense that the low risk posed by institutions, such as publicly funded TAFEs and universities, is recognised when the minister is approving their applications as a VET provider. After all, our public education institutions are effectively underwritten by government and subject to public scrutiny via their public funding in a way that private corporations are not.
The requirement that the minister must regard a wider range of financial information when making a decision about an applicant's financial viability is appropriate, especially when we remember the number of dubious private providers going bust in 2009, leaving students in the lurch and leaving the government to pick up the financial pieces. We also remember the damage it did to our international reputation. The seeking of full information from TEQSA or a relevant VET regulator when approving, revoking or suspending a higher education or VET provider's eligibility around VET FEE-HELP and FEE-HELP is also a due process.
More timely revocation of a higher education or VET provider's approval as a VET provider when they have been found to present a financial risk or do not meet quality standards or other responsibilities is clearly needed. Students need protection from such providers. The time between the minister's decision to revoke such approval and the time that revocation takes effect must be minimal so that students are not duped into enrolling with institutions that are about to lose their licence to provide VET courses. We cannot risk public money following such enrolments disappearing along with the institution itself.
The delegating to non-public servants to ensure the business of all departments administering funding or programs under the act will continue, despite changes in government or administrative arrangement orders. We can see that this is sensible. The consolidating of four existing sets of guidelines—the VET provider, the VET FEE-HELP, the VET tuition fee and the VET administration guidelines—into one set of VET guidelines also makes sense. The Greens note the concerns raised by a number of providers that much of the detail will be effected through the VET guidelines. This means those details have not been available for examination or assessment, and we do support the call for the government to continue to consult with stakeholders in formulating the VET guidelines provided for in this bill.
The bill allows the minister's power to expand the VET courses applicable for VET FEE-HELP to include certificate IV courses and above. This is in schedule 1, and this change is very troubling. We note the concerns raised by TAFE Directors Australia and RMIT University that VET students currently do not have equitable access to FEE-HELP loans. The Greens agree with the National Tertiary Education Union that:
… it is an abrogation of the Government's responsibilities to rely on the provision of [income-contingent loans] as the primary policy instrument for improving education participation amongst underrepresented groups of Australians.
The NTEU have set out very clearly the problems here. The Greens do not support the shifting of costs for vocational education and training onto the student via TAFE student fees. This in turn necessitates students raising debts to participate in VET through the VET FEE-HELP system.
TAFE is an important entry point into further education and training or into employment for a large proportion of students from low socioeconomic regional and rural regions outside capital cities. Indeed, up to nine per cent of students entering university come from vocational and educational training pathways. This is a huge contribution and it clearly needs to be fostered. With large numbers of disadvantaged students traditionally accessing TAFE, it is wrong that those students should be burdened with HELP debts before even entering the workforce—or before even embarking on basic university study. What type of substantial HELP debts do such students accumulate by the end of their basic university degree? That still is not fully clear.
In 2011 the Prime Minister spoke about an approaching shortage of about 36,000 tradespeople by 2015. We so often hear talk about this problem and the need for Australia to be able to bring forward more skills training so that we can be the 'innovative nation'—which is put in so many policies these days.
This government states that it recognises an increase in higher qualifications for disadvantaged Australians is imperative if we are to successfully compete in a future global economy. If we are to succeed in having 20 per cent of undergraduate students coming from low-socioeconomic backgrounds to meet the looming skill shortages, we should not be burdening disadvantaged students with a HELP debt that is needed to pay rising TAFE fees. This is an anathema to any notion of equity or the idea of removing barriers to participation in further education and training, and it could obviously be somewhat of a roadblock to achieving that skilled nation that we all say we are committed to. For this reason, any extension of the VET FEE-HELP scheme is noted with concern as moving in the wrong direction by pre-empting even higher student fees.
The Greens believe that a fee-and-charges-free TAFE system should be pursued. We need to prioritise and increase VET funding to the TAFE system to ensure a high quality, accessible and viable public VET system.
I also rise to speak on the Higher Education Support Amendment (Streamlining and Other Measures) Bill 2012. Higher education is the means by which millions of Australians improve their opportunities. By training for a qualification they gain the means to engage in the labour market and to be active and productive to the fullest extent. The broader economy also gains extra capacity to grow in an increasingly competitive global economy, bringing benefits to the whole community.
I would like to remind the Senate of the comments made earlier this year by the Minister for Tertiary Education, Skills, Science and Research, Senator Chris Evans:
Skills determine access to jobs and can transform lives. Too many Australians are locked out of the workforce because they do not have the skills they need. Inaction is not an option. Failure to address this shortfall will leave the economy short of the skills it needs to be successful well into the 21st century.
I could not agree more. Skills Australia has estimated that, in the five years to 2015, Australia will need an additional 2.1 million people in the workforce with higher vocational education and training, or VET, qualifications. Currently it is expected that there will be a shortfall of 500,000 skilled workers. This is particularly relevant for my home state of Tasmania, with Skills Australia research showing that, from now to 2015, Tasmania will need an additional 11,000 people with qualifications at certificate III/IV level and an additional 8,000 people with qualifications at diploma level. The government understands the importance of ensuring that this need is met and that the higher education system is configured correctly to best meet the needs of Australian students, the higher education sector, and the broader Australian economy.
The issue of higher education is one of particular relevance to Tasmania. Like Australia more broadly, Tasmania faces issues of demography and of a changing global market. With an ageing population, Tasmania faces the issue of a consequently lower workforce participation rate for the foreseeable future. Competition between skilled workers is high, and a lack of skilled workers leads to slower growth and lower productivity. Combined with this, there is anecdotal evidence of a reduction in the number of apprenticeships and traineeships being supported by industry. With slowing demand for Tasmanian products, it is vital that we support individuals to adapt to changing employment opportunities through their working life, as well as supporting individuals to develop new markets. Tasmania must work smarter rather than harder, and an increase in VET education will help to allow Tasmanians to do that.
This bill will introduce a number of measures that will strengthen and streamline the Higher Education Support Act 2003, resulting in more effective and efficient administration of two of the Australian government's Higher Education Loan Program schemes, namely FEE-HELP and VET FEE-HELP. The VET FEE-HELP assistance scheme was introduced in 2008 and provides income contingent loans to full-fee-paying and certain subsidised students undertaking eligible VET diplomas, advanced diplomas, graduate certificates and graduate diplomas.
The introduction of the VET FEE-HELP scheme made it easier for students to access higher education, and the increased participation numbers since the introduction of the scheme are testimony to that. The information collected on the VET FEE-HELP assistance scheme and the feedback received as part of the post implementation review of the scheme indicates that there are positive achievements to date and positive signs for continuing growth into the future. These achievements include increasing trends in student enrolments, the number of approved VET FEE-HELP providers, the number of eligible VET courses, participation by students from identified demographic groups and funding to the VET sector.
The review made recommendations to improve the scheme, and this bill will position the government to act on the recommendations arising from the review and its commitments under the April 2012 COAG National Partnership Agreement on Skills Reform, particularly the redesign of VET FEE-HELP. The bill enhances the quality and accountability framework underpinning the schemes through strengthening the suspension and revocation provisions. Decisions to revoke or suspend an approved provider will now take effect on the day the notice is registered on the Federal Register of Legislative Instruments. The amendments will ensure that notices of revocation will take effect in a more timely manner and will also give the provider greater clarity about the date the revocation will take effect.
The integrity and transparency of the HELP schemes will also be improved by allowing reports from the national and non-referring jurisdiction education regulators to be considered for both applicants and approved providers. This is expected to result in improved decision making and, in particular, will enhance the capacity to identify low-quality providers. The bill will provide a risk management approach to approvals and compliance for low-risk VET FEE-HELP providers through amendments that allow the minister to determine a category of providers when approving an application. The review noted:
Student access to VFH loans is largely dependent on the number of RTOs that become approved VFH providers (and the courses that they offer). There is considerable room to encourage greater participation by the VET sector beyond the current 95 approved VFH providers.
It is expected that by taking this approach, the administrative burden placed on low-risk applicants and providers will be reduced and this will encourage increased uptake by quality VET providers and ultimately students.
The bill also provides for the consolidation of the following existing four guidelines. They are: VET Provider Guidelines, VET FEE-HELP Guidelines, VET Tuition Fee Guidelines; and VET Administration Guidelines. The consolidated guidelines will simply be called the VET Guidelines. These guidelines are expected to reduce duplication of requirements and improve the accessibility, clarity and transparency of the obligations of approved providers. We know that technology and the needs of employers often change rapidly, so VET providers need flexibility when creating courses.
The bill also makes changes regarding the census date for courses. The census date for courses determines the point at which students are deemed to be enrolled in the course for the purposes of FEE-HELP or VET FEE-HELP. The current provisions are based on the higher education arrangements, whereby the census date is deemed to be not less than 20 per cent of the way through the unit. This is to allow students to withdraw from courses early in their study without incurring a HELP debt. However the PIR noted that, given the flexible nature of VET courses, the 20 per cent rule meant that providers may have multiple census dates resulting in a considerable administrative burden. The inclusion of the census date provisions in the legislation also limits flexibility. This bill removes the current 20 per cent restriction and provides for a census date for each unit of study to be determined in accordance with the Administration Guidelines under FEE-HELP and in accordance with the VET Guidelines under VET FEE-HELP.
The bill will also strengthen a number of definitions and other technical amendments to better support VET FEE-HELP. The definition of a VET course of study will be amended in order to provide for a managed trial of certificate IV qualifications as committed under the 2012 COAG National Partnership Agreement on Skills Reform. Lastly, further streamlining of administration to reduce duplication and increase efficiency will be achieved through the consolidation of three sets of legislative guidelines into a single set of guidelines.
The Senate referred the bill to the Senate Education, Employment and Workplace Relations Legislation Committee, of which I am a member. The committee heard evidence from a number of organisations, including the Tasmanian Department of Education, the National Tertiary Education Union, RMIT University, and TAFE Directors Australia recommending that the bill be passed.
I would like to quote from the Tasmanian Department of Education, which in its evidence to the committee said:
Tasmania is supportive of measures to improve the accessibility of higher level qualifications. We would support measures that would streamline and simplify student access to VET FEE-HELP. In particular, we would support measures that would enable legislation to allow specified Certificate IV level qualifications to be eligible under VET FEE-HELP.
Benefits of introducing VET FEE-HELP in Tasmania for Diploma, Advanced Diploma and specified Certificate IV level qualifications will include allowing us to prioritise government subsidies to the areas of greatest needs such as foundation skills and pathway qualifications in Tasmania's priority industries and occupations.
The changes made in this bill will give students greater choice, and greater access. It will streamline processes for higher education service providers, making the delivery of higher education more cost efficient. By simplifying the administrative aspects of the VET FEE-HELP scheme, we will also see a further increase in the number of training organisations that will offer courses under the scheme. It will help drive the training that we require to meet our current skill shortages and meet our future skill needs.
Future prosperity is dependent upon increases in productivity. Increasing the skills possessed by Australian workers will help drive increases to productivity and, consequently, an increase in the standard of living for all Australians. Increasing the skills possessed by Australian workers will broaden the opportunities available to those workers and help them to participate in the economy to the fullest extent. I commend the bill to the Senate.
I am pleased to rise to contribute to the debate on the Higher Education Support Amendment (Streamlining and Other Measures) Bill 2012. The bill aims to strengthen and streamline the administration of the Australian government's higher education loan program schemes, FEE-HELP and VET FEE-HELP.
I draw attention to the fact that it was under the Howard government in 2007 that VET FEE-HELP was first announced and then FEE-HELP was extended to the vocational education and training sector. The coalition strongly supports, as do all of us in this chamber, any move at all which encourages students to take up higher education skills qualifications. If that reduces their financial barriers then that is to be applauded, and I will speak in some more detail about that.
There are a number of objectives. Firstly, the bill will amend the Higher Education Support Act to achieve the following: strengthen the quality of the loans program schemes themselves, which in itself is laudable; improve information sharing and transparency with national education regulators; improve arrangements for early identification of low-quality providers—hopefully, then to either improve the standard of service of those providers or cause them to exit the market; and, finally, position the government to better manage two areas: the risk to students and public moneys. All of us in this chamber and all those who are listening would always applaud the opportunity—even the obligation of government—to better manage public moneys.
The overview of the bill can be briefly described. Schedule 1 aims to increase the take-up of VET FEE-HELP by quality registered organisations and thus by students. This is an area for enormous and tremendous improvement which I hope to come back to. It will allow the minister to specify different approval requirements for those organisations, particularly those that present a low risk to the government and, by inference, a low risk to students and their families who may be supporting them.
Schedule 2 ensures revocations of approvals are undertaken in a more timely manner and that of itself must be beneficial to everybody in the industry. Schedule 3, a streamlining measure, will act to reduce complexity and duplication through consolidating and streamlining four sets of VET legislative guidelines into a single set, and we would support that. Schedule 4 adjusts the specific date requirements for census dates to the guidelines, so each of those then is a matter of importance.
Coming back to participation, there are some 5,000 registered training organisations in Australia and they would then be divided into the public sector, principally TAFEs in eastern Australia, and the private sector.
It was stated—at least in 2010—that there were some 2.4 million students participating in skills training at this level, of whom around 75 per cent were under the direction of publicly funded RTOs, and about 600,000, or 25 per cent, in the private sector. Where is the federal government's contribution, given the fact that most of the training in this sector is in fact state and territory funded? In 2010-11 the federal government contributed $1.7 billion to the states and territories, and there has been an allocation of a further $1.75 billion over four years in the current out-year program.
There are, however, a couple of areas that we need to draw attention to. The first is that the two states of Victoria and Western Australia have not yet come into participating. I was part of the committee process that examined the reasons for that last year. I have always been of the view that, had there been perhaps a more prolonged dialogue and a greater degree of flexibility in dealing with Victoria and Western Australia, we may well have seen a circumstance in which all of the states and territories would be participants.
The second area to which I will draw your attention is the Australian Skills Quality Authority, ASQA. I point to the fact of the serious underfunding of that organisation. Its role is to both register and to regulate the majority of RTOs. You would think that that in itself is a significant process and challenge given the number that there are—some 5,000. Yet the last figures that I saw said there were only six investigators tasked with ensuring compliance by those RTOs. I think that is an area in which we certainly have some more work to do.
I draw attention then to the VET FEE-HELP process. I mentioned earlier the number of students who are participating in the VET sector. In 2011 there were only 39,000 students who had availed themselves of the loan scheme under the VET FEE-HELP program, and that in itself was a doubling from the previous financial year. Even more concerning is that, of the number of RTOs that I have quoted, being some 2,000, in 2011 there were only 112 who were actually registered. Therefore the provision of that facility for students in those programs would necessarily be limited. I will be urging that a lot more attention be given to promoting both the institutions themselves—the RTOs—and students to avail themselves of that loan scheme.
We know of course that repayment under the loan scheme only commences when a graduate or recipient of the loan scheme is earning just in excess of $49,000 per year; therefore, it should be a tremendous incentive for people to take up that loan scheme, if indeed it is the barrier to them participating in skills and higher education training.
Indeed, there is a 20 per cent loan fee—I would call it an impost—which has been estimated by the government actuary to take account of interest which may accrue through administration and other costs. But, of itself, you would have thought, given the benefit of attaining those skills, having them in the workplace and being able to achieve a higher level of remuneration as a result, that that was a very cheap form of gaining that higher education and skills and training.
I believe Senator Nash, in introducing the coalition's side of this debate, would have spoken eloquently because she is a great apologist and defender of rural and regional education. It is the case, as I understand it, that only 18 per cent of those participating in the VET FEE-HELP process are coming from the rural and regional areas of Australia. I would like to reflect for a moment on the very wide gap that exists between urban Australia and rural Australia when it comes to the tertiary education sector and the postsecondary skills sector.
I will compare 1984 with 2009. I refer to tertiary qualifications. In 1984 the urban communities were represented by some 10 per cent of their citizens who had tertiary qualifications. By 2009, that 10 per cent had jumped to 25 per cent—a 250 per cent increase. That is the urban community.
I now turn to those with tertiary qualifications in the rural, remote and regional areas. While it was 10 per cent in the urban communities in 1984, it was four per cent in the rural and regional areas of Australia. Lamentably, that four per cent from 1984 to 2009 only went up from four per cent to seven per cent, while the wider community had gone up to 25 per cent. That is a figure that we cannot be proud of in this country. In other words, a four per cent to seven per cent increase was a less-than-doubling at a time when the wider community increased by some 250 per cent.
I will now draw your attention to the postsecondary sector, which is more relevant, I admit, to this particular bill. The wider community in 1984 was represented by some 46 per cent with postsecondary qualifications, and that jumped from 46 to 67 per cent in 2009 for the wider community. I now go back to the rural community: that 46 per cent in 1984 for the wider community was less than half, only 27 per cent, in regional communities. That 27 per cent only went up to 42 per cent in that time. That is still a 25 per cent difference between those in the urban and those in the rural and regional communities with postsecondary qualifications. We on this side have spoken many times of the barriers to people getting into the skills and higher education sectors.
Yes, we would all support those moves to ensure that people from low socioeconomic areas have the opportunity to get into skills and higher education training. I make the point again, as indeed was made to me by Professor Alan Robson, then the Vice-Chancellor of the University of Western Australian and the chairman of the national universities sector of Australia, that over time it has been demonstrated that those with the greatest barrier to getting into postsecondary and particularly tertiary education have been those from regional, rural and remote areas of Australia because of that tyranny of distance, that need to have to move from their homes to another location along with all the costs associated with relocation, reestablishment and the maintenance of themselves. In fact, I am one of them. I had to travel from Perth in Western Australia to Brisbane in the 1960s to do a veterinary qualification. Had there not been some limited support at that time through a bonding system with the Western Australian Department of Agriculture, I would not have had that opportunity.
What is the outcome of all of that? It is not the subject necessarily of this program today but we have spoken in the past in this chamber of the very wide gap—the deficiency—between the demand for higher education and skills training, particularly in the agriculture-agribusiness sector in Australia and the actual supply. The figures we quote are those from Dr Jim Pratley from the Australian Council of Deans of Agriculture. I have no reason at all to dispute the figures that he produces, which are that this year alone we will graduate fewer than 700 students in agricultural sciences around Australia when there is a demonstrated need for some 4,000 positions. That is a different challenge, but it has its relationship here.
I make the point because of the recent publicity given by the Prime Minister to Australia in the Asian Century, talking about these very laudable objectives of Australia becoming the food bowl for Asia. As we all know, we will be feeding 1.9 billion more people in this region alone by 2050. We will do it with less land, less fertiliser, less fuel, fewer pesticides, less water and an ageing population. One of the areas that Australia can expand its provision of services to international students, which at this time is the third-largest income earner for this country, is to make sure that we extend that into education opportunities in rural, regional and remote Australia.
Members of the committee that reviewed the bill before us were in China in July this year. I had the opportunity, along with Senator McKenzie, Senator Bilyk and Senator Marshall, to ask people those very questions: was there a demand in rural and regional areas—in this case in China—for students to be educated and trained? Of course, there was a very strong demand. At this moment we are not addressing ourselves to it. I would have thought that under the auspices of the legislation we are discussing today we would see those opportunities. I am not speaking just about those opportunities in the agriculture and agribusiness areas, I am also speaking about others that affect regional and non-urban communities.
I conclude with some comments about the appropriateness of education beyond the secondary level. We are at risk in this country of promoting and of focusing on tertiary education when quite rightly for many people we should be focussing on the VET sector—the skill sector. Why do I say that? For numbers of reasons. Having been associated for some years teaching at an agricultural university in Western Australia, I saw many instances of substantial differences or barriers against young people participating in tertiary education, when the right place for them was the postsecondary and VET sector. I speak of gender differences: at the age of 17, young women very often are more mature than young men. Young men are not ready to focus on the discipline and the rigour of a tertiary qualification when at that stage they may well be interested in the more practical nature of VET sector training.
Socioeconomics is a factor, and we are addressing it in this bill. Personal circumstances are among other factors. There are students who sometimes cannot be released for full-time study either because of family circumstances or they may be required in their own family's or other businesses on a full-time basis. But they could actually participate part-time, and VET sector training is more appropriate for those people.
One of the concerns I have is that there is all too much emphasis on people necessarily having to get a university degree. In fact, it may be far more appropriate for them to make a career for themselves in the trades areas from which they will have obtained qualifications in the VET sector. The other plea we would all make, and I concur with Senator Evans and others in this area, is that unlike the 1970s and eighties and nineties we are seeing now a more seamless movement from those who, for whatever reason, start their postsecondary training in the skills area and then develop an interest in learning. I have seen many instances of young men who have gone into the VET sector, have developed some skills, and then have developed a love of learning. They may have been told when they were kids that they were dumb and thick and could not study, but all of a sudden they have discovered that they love learning. We need to see that seamless movement into the tertiary sector and even into the post-tertiary sector of higher qualifications. I can speak of many instances of young people who we had to fight to get into the VET sector and who subsequently not only got degrees but also went on to get very good doctorates in their areas.
Those are the areas upon which I want to focus. As I said, I support the thrust of this legislation. I support any opportunity for a young person to be able to take a loan under the HELP provisions, if that is necessary. But it is not adequate to just get somebody into the postsecondary and tertiary sectors, what we need to focus on is them graduating—passing, completing and moving forward. I will give all support to those policies, those philosophies and that legislation which will achieve it.
I join with other coalition regional senators passionate about education, Senator Nash and Senator Back, to speak on the Higher Education Support Amendment (Streamlining and Other Measures) Bill 2012. This bill was referred to the Senate Standing Committee on Education, Employment and Workplace Relations for inquiry on 11 October this year, on which a report was tabled in the Senate. With Senator Back, I sit on that committee.
A report released this month from the National Centre for Vocational Education Research identified that my home state, Victoria, provided a third of all state and territory investment in training delivery and support in 2011, and provides a million more subsidised enrolments in vocational education than any other state. So, when the other side likes to point the finger at those of us in the coalition from Victoria and make commentary around our state's commitment to the vocational education sector, it would be good for them to also note that we provide more subsidised enrolments than any other state. Given that international education is Victoria's largest export sector, worth $4.8 billion to the economy, it is a most worthwhile investment.
The bill at hand seeks to strengthen the VET FEE-HELP scheme, based on recommendations from the 2011 post implementation review prepared on behalf of the Department of Education Employment and Workplace Relations, and the Department of Industry, Innovation, Science, Research and Tertiary Education's redesign discussion paper, released earlier this year. A significant proportion of the evidence base stems from the trialled extension to VET FEE-HELP in my state, Victoria, as part of an agreement between state and Commonwealth governments to reform the TAFE sector.
I take this opportunity to note that the Minister for Tertiary Education, Skills, Science and Research, Senator Evans, is on record just last month as saying that Labor's student demand-driven system of allocating places has not worked and is failing to meet the needs of employers. I welcome that admission, as one has to recognise a problem before they can start to rectify it. Indeed, Labor's system in Victoria produced an absolute explosion in lifestyle type courses such as personal training. I have a sports science degree. I am not adverse to personal training. I encourage everyone: if you cannot get out there and do it yourself, get someone with the qualifications to help you.
Senator Edwards interjecting—
Senator Edwards, I know you are pounding the pavement at the moment, heading into the Christmas break.
However, when we think about the training sector, it is about being able to deliver skills to our employment sector. I am not sure we need as many personal trainers in Victoria—I know we have a little bit of an issue down south—as were being produced under the Labor government's demand-driven system. The coalition government has been working on fixing that. The Victorian coalition government's commitment to change VET for the better will support the courses that provide high-level training—for example, apprenticeships—and target support to areas of identified skills shortages—and, let me tell you, personal trainers ain't one of them—or those that make an important contribution to the state's economy and Victoria's chances of gainful employment.
Getting back to the legislation at hand, schedule 1 of the bill removes the need for providers to be a body corporate, to try to increase RTO uptake of the scheme. It also introduces different compliance requirements based on the provider's compliance risk level. I note that, in its submission to the Senate committee inquiry, the Australian Council for Private Education and Training raised concerns about:
… a distinct lack of detail around how risk will be determined and applied and how this will in turn influence the Minister’s approval and reporting requirements.
It is a very important query, one I am sure all providers would like the government to respond to. If the minister has an opportunity in her closing remarks, it might be a great time to comment on ACPET's issues.
Part 2 of schedule 1 relaxes the restriction on VET FEE-HELP to courses at the diploma, graduate diploma and graduate certificate level. It will enable other appropriate courses to be covered by the scheme, such as certificate IV courses set as prerequisites for further education. Consequently, this measure will meaningfully assist prospective students who may have found the costs of such prerequisite courses prohibitive. I welcome this sensible amendment as a measure to assist and increase participation of those who have been unable to complete year 12.
Continuing on the theme raised by previous coalition speakers, year 12 completion is a particular issue in regional areas. We have lower rates. In urban areas the rate of completion of year 12 is 81 per cent of students. In regional areas, it is 67 per cent. This means that those certificate IV courses that students can attend are actually a stepping stone for them to be able to access higher education, something that we are passionate about increasing. We are also obviously interested in ensuring that more young people, whether they are from regional or urban areas, take up the great careers that are afforded by skills training.
Schedule 2, part 1, puts protections in place regarding revocation of approvals. As the bill currently stands, organisations can continue to enrol and offer students VET FEE-HELP, despite being advised that their approval is about to be revoked, until the often protracted parliamentary process, being across 15 sitting days, has concluded. These particular amendments offer some degree of protection to students as well as to taxpayers' money in such circumstances, as the minister's decision will take effect on the date the notice is registered.
The second part of schedule 2 seeks to improve information sharing with the sector's regulators, including the Australian Skills Quality Authority and Tertiary Education Quality and Standards Agency, to help streamline the approval process and sooner identify low-quality or high-risk providers. Given that the post implementation review revealed approvals were averaging 200 days and the maximum time taken was a staggering 851 days—a couple of years; nearly three—I can appreciate providers' calls for streamlined approval and compliance processes and see how the present arrangement might act as a barrier to new providers participating in the scheme. I congratulate the government on working to streamline that.
Minimising the compliance requirements of quality providers makes sense. Similarly, identifying and dealing with low-quality providers is essential for our students and the integrity of the system as a whole, not only for domestic students but for our international reputation.
Put simply, dodgy providers must be weeded out. In the 12 months to August, the Victorian Registration and Qualifications Authority cancelled the registration of 75 registered training organisations in the state. The Australian Skills Quality Authority, the national body, deregistered 12 providers, three of which were in Victoria. One might wonder if the Australian Skills Quality Authority is adequately resourced to meet its regulatory responsibilities.
I want to briefly mention a story in the Age from May this year that goes to the heart, I think, of why these are important measures being delivered today by the government and not opposed by the coalition. In the story, a retired TAFE administrator was recounting his experience with dodgy course providers. Mr Brian MacDonald had discovered a local college that had supposedly closed due to inclement weather but in reality had closed due to financial collapse. Further investigation revealed that the 61 students picked up by the Northern Melbourne Institute of TAFE from the collapsed college had not studied a particular subject for which every single one had been certified as having passed and met the legal requirement, and that it had not even been taught. The article in the Age stated:
Mr MacDonald … blames the Brumby government for starting the strife in the sector.
… … …
MacDonald believes this scheme—which the government thought would save it money—bled TAFE funding dry and left the present government with little choice but to try to rein in costs.
So it seems only fair that we are all assisting the state coalition government clean up the mess of previous ALP state governments.
Schedule 3 of the Higher Education Support Amendment (Streamlining and other Measures) Bill allows for the consolidation of several existing VET guidelines into a single instrument to increase transparency and reduce duplication of requirements. However, a number of submitters to the EEWR inquiry such as Victoria's RMIT University felt they could not duly appraise the impact of this and other aspects of the bill given the lack of available detail. This lack of detail was raised in discussion around the water amendment bill and other pieces of legislation that we are being asked to examine. RMIT evidence to the committee stated:
… most of the practical detail will come into effect through the proposed new VET Guidelines. Without seeing these Guidelines, RMIT must reserve its judgment on the changes, as the detail is required to enable institutions to make an informed assessment of its implications.
We keep asking irrigator bodies, universities, TAFE providers and the community to make judgement calls on how particular pieces of legislation will impact their business, impact their industry and impact them personally, yet we do not give them the actual detail to allow them to do that. It appears RMIT is rightly conscious that, as with so many things this government promises, the devil is in the detail.
The final schedule of this bill, schedule 4, includes amendments to census date requirements, with the intent of affording providers greater flexibility to respond to student and industry needs, as the sector was designed to do. This amendment recognises that the initial one-size-fits-all approach to administering this scheme did not accommodate the inherent market differences between universities and VET providers. Whilst I am talking about one-size-fits-all policy, I draw the Senate's attention to some concerns that the Australian Council for Private Education and Training expressed around the risk based approach in the legislation. They were concerned that the approach outlined in the explanatory memorandum would automatically deem public providers to be either low-risk or high-risk providers. In evidence, they stated they were of:
… the firm view that the VET sector has a sophistication and complexity beyond a simple dichotomy of the public/private divide and therefore this dichotomy should not play a significant part of the risk assessment process.
We saw this yesterday with our conversation about the equal employment for women in the workplace bill. There seems to be a desire to simplify the argument to public/private, rich/poor or big/small when we are actually dealing with complex systems and industries, and it is lazy.
With little time remaining to speak, I wish to draw attention to a pertinent point made in the National Tertiary Education Union's submission to the EEWR inquiry. Their submission testifies:
… we strongly question the assertion made in Section 2 of the Bill’s Explanatory Memorandum which states (in relation to potential students from specific demographic groups including Indigenous Australians, students with disabilities and those living in remote and regional Australia) that:
Increased student take-up of VET FEE-HELP is key to lifting VET participation amongst these groups nationally.
It further asserts that:
income contingent loans—
as the primary policy instrument for improving educational participation amongst underrepresented groups of Australians.
I think that is a very good point well made.
Amongst the great breadth of subjects offered within the VET sector is agricultural skills and training. With Senator Back, I participated in an inquiry looking into our agricultural education sector and the issues around the provision of courses and the taking up of those courses. Anything we can do to assist that to occur is to be welcomed. I say that because today the Victorian coalition government will hand down its report into agricultural education.
If we are to fulfil the desires of the government around the Asian century, as outlined in their white paper, and to take advantage of the growing middle-class and their demand for more protein and for the high-quality agricultural produce that we are so good at producing in this country, we are going to have to ensure we have the skilled workforce.
Agriculture competes with mining for a particular type of skilled individual. Wherever I go through regional Victoria, producers, whether they are growers up along the Murray looking for skilled labour, particularly around harvest time, dairymen down south or even wheat growers to the west, are lamenting the lack of skilled workers available in their local communities. The streamlining and simplification measures within these bills need to be welcomed.
I also thank the organisations who submitted to the EEWR inquiry. It was conducted in quick time and I join them in encouraging the government to work cooperatively with the vocational education training sector in developing the necessary detail related to this bill. Clearly, there is much more work to do and I look forward to doing whatever I can to assist the current government and future governments in ensuring equitable provision of education and training in this country and , specifically , increasing measures that increase participation for regional and rural Australians.
I thank the senators who spoke on the Higher Education Support Act 2003. The act provides the legislative authority for the Australian government's Higher Education Loan Program, or HELP. The HELP schemes—HELP FEE and VET FEE-HELP—assist individuals to access higher education and higher level vocational education and training by providing students with an income contingent loan to assist in paying their tuition fees.
As an income contingent loan, students do not have to make any repayments until their income reaches a minimum threshold, currently $49,095. The bill will enable the government to act on recommendations made in the post-implementation review of the VET F EE- HELP Assistance Scheme final report, September 2011, and its commitments made under the April 2012 COAG National Partnership Agreement on Skills Reform. The amendments position the government to deliver timely improvements to the scheme and, in doing so, create a more accessible, transparent, responsive and robust tertiary sector.
The amendments strengthen a number of provisions to better support access to, and administration of, the schemes. The amendments reduce complexity and duplication through consolidating three sets of legislative guidelines into a single set of guidelines. Importantly, the amendments will allow the minister to determine a category of providers and financial reporting requirements for applicants and approved providers that represent a low risk to the government. Further, the amendments enable the tertiary sector to deliver education and training in a more responsive and flexible manner by moving consensus state requirements to the legislative guidelines. This will allow the sector to be more responsive to student and industry needs without onerous administration.
The amendments also allow for a managed trial of the V ET F EE- HELP for C ertificate IV level qualifications. The amendments strengthen the government's ability to protect the integrity of the HELP schemes and minimise risk to students and public moneys. Specifically, the amendments enhance the provider revocation provisions for approved providers. The amendments enhance the quality and accountability framework underpinning the HELP schemes through new provisions that allow the minister to consider investigation reports from the national and non-referring jurisdiction education regulators when making a decision to approve or suspend an education provider under the HELP schemes.
Responding to Senator McKenzie's remarks, I note the ACPET comments to the committee. The risk management approach for approvals on ongoing compliance of providers puts in place mechanisms to identify those providers that may pose a higher risk to government moneys and to students. This will increase participation in the scheme of low-risk providers, maximising the reputation of the VET sector as a whole.
Finally, the government has proposed further amendments to the bill. The government amendments to the bill will amend the Social Security Act 1991 to allow a freeze of indexation on a student's start-up scholarship for the period 1 January 2013 to 31 December 2016. Consequently, the maximum amount payable under the student start-up scholarship will remain at the 2012 rate of $2,050 until 1 January 2017. This amounts to savings of $82.1 million over four years as part of the recent MYEFO statement.
Overall, I commend the bill to the Senate for its purposes to strengthen and streamline the government's income contingent loans programs and to achieve savings for the government.
Question agreed to.
Bill read a second time.