Thursday, 5 December 2019
Education Legislation Amendment (Tuition Protection and Other Measures) Bill 2019, VET Student Loans (VSL Tuition Protection Levy) Bill 2019, Higher Education Support (HELP Tuition Protection Levy) Bill 2019; Second Reading
Today I want to make a contribution on behalf of the opposition on the three bills before us, which we are considering together: the Education Legislation Amendment (Tuition Protection and Other Measures) Bill 2019, the VET Student Loans (VSL Tuition Protection Levy) Bill 2019, and the Higher Education Support (HELP Tuition Protection Levy) Bill 2019. We have here in the main bill tuition protection arrangements structured according to the three schedules. Schedule 1 proposes to amend the VET Student Loans Act 2016 to replace the current tuition assurance arrangements with a new VET student loans tuition protection scheme and to make minor consequential amendments to the Education Services for Overseas Students Act.
Schedule 2 proposes to amend the Higher Education Support Act 2003 to replace current assurance arrangements with a new higher education loan program tuition protection scheme. I note that schedule 3 does not specifically relate to tuition protection and proposes minor amendments to the VSL act provisions that require the secretary to revoke approval as a VSL provider at the request of that provider.
The two accompanying bills propose to formalise the terms of the levies. Labor has some remarks to make about that issue, as well as some of the issues that have been excluded from this bill. So we support this legislation and welcome today the practical effect of introducing protections for students with VSL HELP loans and simpler processes for decision-making, which will make student placement and VSL HELP loan for VSL HELP loan re-crediting.
Labor does strongly support the principle that students should be protected in instances of provider or course closure. The intention of this package of bills is positive overall, as they seek to address the impact of VET FEE-HELP, which has seen ongoing increases in course fees and, as a result, unrecoverable student debt.
We very much want to see a strong VET sector, with TAFE as the backbone of that. Labor wants to protect students from any adverse outcomes in the event of provider or course collapse. The bills were referred by the Senate to the Education and Employment Legislation Committee, and I'd like to thank Senator McGrath for the ability to hold inquiries. They've been very helpful to our deliberations on this legislation.
I'd like to highlight some of the submitters' remarks and evidence to the inquiry, noting that stakeholders in the VET and higher ed sectors were broadly supportive of the bills but did have some concerns, which we've been discussing with the government. I note that shadow minister Tanya Plibersek has had some successful negotiations and discussions around some of those issues. Submitters have raised concerns that students who pay their tuition fees up-front from personal savings or from the savings of a business are excluded from protection arrangements in these bills, potentially leaving them vulnerable. This was certainly highlighted in the evidence before the inquiry. I note that stakeholders are actively engaging in these discussions on an ongoing basis with government. They haven't had an opportunity to be clearly resolved in terms of this legislation, but we would like to keep the pressure on the government to see those issues resolved.
Labor notes in this context that private providers do already have a legal obligation to provide tuition protection for fee paying students and that those students might seek recourse via the Australian Competition and Consumer Commission. But we, like other stakeholders, are concerned that the scheme before us today, because it doesn't sit well alongside other schemes, entrenches complex arrangements where different students have different rights and protections. The Department of Education told the committee that students could seek recourse via the ACCC, but we believe this provides little comfort because of the simple fact of the kind of situation where the student needs to engage the ACCC to recover fees paid upfront. In those circumstances, the provider would be likely to be in administration, no longer operating and unable to provide the course refund protection.
Labor senators also note that providers that were using insurance products in this space that those insurance products have been withdrawn, weakening the diversity of protections available to those students. We think it's a missed opportunity to have looked at those issues in conjunction with this legislation. However, we appreciate that the time constraints in looking at those issues together may have proven difficult, and we'd like to keep the pressure on the government to resolve those issues.
Another major concern raised by submitters to the inquiry was that TAFE will be insuring their students, despite the fact it has such an extremely low risk that students would be left vulnerable in the event of course closure at TAFE. It was clear that there was a very real risk that students accessing student loans in order to attend TAFE for a VET qualification would be bearing a proportion of the insurance cost across the whole of the sector for students who have accessed a student loan to attend a private provider. I note that Mr Jackson, from TAFE Directors, gave clear evidence to the committee on this. He said:
It is partly setting up a scheme that only covers 14 000 students at a significant cost to the public sector, when in fact the public sector is already insuring its students by being state owned. So the question in some ways is around the economics of just having a scheme for 14 000 VET student loan students, when probably the greater risk is for those full-fee-38 paying students who are outside it, except full-fee-paying with TAFEs, who are actually guaranteed by their state government anyway.
I'm delighted that the government has responded to urgings by the shadow minister, Tanya Plibersek, to amend the legislation to address the issue of TAFE, because this is important. The latest data from the Department of Employment, Skills, Small and Family Business on VET student loan uptake by student, by provider or by state or territory government shows that providers enrolled 43,970 out of the 57,874 VET VSL students for 2018. So they have the vast number of enrolments. We were concerned that state and territory government-owned providers would be underwriting 76 per cent of the administration of the domestic Tuition Protection Service without those students having a material benefit.
Demonstrating the case that TAFE students have no significant risk of losing coverage of their loans, the Department of Employment, Skills, Small and Family Business confirmed to our hearing that the department has managed interim tuition assurance arrangements from 1 July 2018. They told the committee that during this period no TAFE students sought court assurance or were eligible for a re-credit for any part of their loan.
From Labor's point of view, the effect of overzealous application of competition policy and privatisation in the VET sector, as well as chronic underfunding on the part of this government, has had a very negative effect on the sector. It is an unfortunate reality for some students that they do sometimes unknowingly enrol with a dodgy provider which is overloaded with students in order to turn a quick profit. The provider goes under, the student is left in the lurch with their course and they are out of pocket. The failure of the system in these cases lies with the government, but we are pleased that today the Tuition Protection Service will provide students some comfort in the future. We also urge that the quality of these providers very much needs to be held to account through government processes.
Predominantly, as I highlighted, our concerns have been around students attending public TAFE but wearing the cost of the course or business failure in the private sector. As I also highlighted, our other concerns have been around the lack of protection for students who have paid their fees upfront. I wish the government well, and we'll certainly continue to talk to stakeholders ourselves about the progress in addressing these issues. In Labor, we want to see the best interests of students and publicly funded TAFE education upheld and addressed. We've called on the government to address the issue of TAFE with an amendment to the VET Student Loans (VSL Tuition Protection Levy) Bill 2019, which is before us. We're very appreciative of the fact that the government has been cooperative in this matter and has circulated a request to be sent to the other place for amendment.
We very much want to make sure that students are protected from the operation of dodgy providers and we support the bill.
The existing Tuition Protection Service, or TPS, protects international students, placing them in equivalent courses or providing a refund when providers collapse. The bills before us today expand the TPS to cover students with VET student loans and HELP loans and, in doing so, the existing Tuition Protection Service's director will become the director of the new the new VSL and HELP schemes. And the remit of the Tuition Protection Fund Advisory Board will expand to take in the two new funds.
The Greens recognise the need to protect students, particularly those at risk from some dodgy education providers who put profit ahead of quality. We recall all too well the appalling tactics used by unscrupulous providers in the past. Students fell victim to targeted doorknocking, with salespeople offering inducements to sign up to expensive courses they never received. Thousands of students were overcharged for poor-quality training, a legacy that continues. Just this month, we saw Unique International College fined $4.2 million for enrolling people from remote New South Wales communities in online courses costing nearly $27,000, by offering them free laptops. While much of this behaviour has been rightly banned, we know that dodgy providers will still do anything they can to turn a profit, so it's important to have in place tuition protection arrangements that appropriately safeguard students, which is why we support these bills.
While these bills make some effort towards that goal, in typical Liberal-National fashion, they manage to continue to degrade TAFEs and ignore the rot at the heart of the conservatives' approach to education. A publicly owned and properly funded TAFE system plays an essential role in building an economically and socially just society by offering lifelong educational opportunities and skills development. But these bills, as they stand now, slug TAFEs that are already egregiously underfunded with an administrative levy that is entirely unwarranted. In the inquiry into the expansion of the tuition protection scheme, the Australian Education Union put the situation well when they said:
… students taking out loans to undertake vocational education should be protected and assisted in the case of provider or course closure, but TAFEs should not be punished for the failures of the mass privatisation of vocational education in Australia nor for the lack of quality and rigor of some private RTOs.
Fundamentally, if you're setting up a scheme to ensure against the impact of defaults, the cost of that scheme to providers should match their risk of default. Quite rightly, this is reflected in the exemption from the TPS administrative levy of low-risk table A providers, like our public universities, which leaves us, as well as unions and student groups, wondering why TAFEs were not similarly exempted in the bill as it stands now.
TAFE's extremely low risk of default means that they're exceeding unlikely to trigger the new tuition protection scheme. The consequence of this is that TAFE's participation in the scheme, established by these bills, will be primarily as a second provider, accepting students from providers who have defaulted on their obligations to students by shutting down or cancelling a course. Despite this, TAFEs aren't exempt from the administrative levy in the bills before us and face, according to the evidence provided by TAFE directors Australia, around $670,000 a year just in administrative fees. This would really amount to TAFEs being forced to use funding that could otherwise have gone to training to subsidise a scheme their students are unlikely to benefit from. I find it absolutely absurd that anyone could look at the burden these bills place on TAFEs to subsidise the administration of the scheme their students wouldn't be benefiting from and think that that's okay.
TAFEs and government owned providers ought to be exempt from any levy under the new TPS and the Greens have circulated Committee of the Whole amendments to effect this. We have now seen exactly the same amendments from the government to amend their own bill. Thankfully, the government has seen sense and listened to stakeholders on this issue. In addition to burdening TAFE with the administrative levy, it does nothing to remedy the disturbing lack of tertiary knowledge expertise, to fund the VSL and HELP advisory boards to provide advice to the board for setting the risk levy. TAFE directors Australia expressed to the inquiry:
Current members with education background, apart from the chair, are not experienced in tertiary education, especially vocational education and would not be alert to the inherent risks in the sector’s schemes and volatility around closures.
In fact, the government's neglect of the advisory board is much worse than that. The board can have up to seven non-government members, but, as at 30 June 2019 only four non-government members have been appointed. They have left chairs empty where experts could be sitting. Among the four who have been appointed, the sole member with relevant tertiary education experience is the chair, Ms Helen Zimmerman. Who are the rest? Good old Liberal Party mates, of course.
In a typically disgusting doing of favours, the Liberals have stacked the board with two former party advisers and a two-time Liberal Party election candidate, each collecting up to $584 each day they work in the role. None of them, as far as I am aware, have the kind of sector-specific tertiary education experience needed to evaluate risk in the sector and evaluate providers, in order to levy tens of millions of dollars. And the minister hasn't kept the appointments middle of the road, either. Among the Liberal pals appointed to the board is Dr Kevin Donnelly—the same Kevin Donnelly who last week used the N-word three times in a speech promoting his new book at a launch attended by Mr Tony Abbott and the same Kevin Donnelly who was chief of staff to Kevin Andrews when he was a minister and raves publicly about PC ideology destroying childhood.
The bills before us call for qualifications or experience relevant to the job, b what we get is Liberal Party hacks receiving favours. The Liberals need to end this disgraceful game of mates. They need to guarantee real expertise and tertiary education experience—make sure that it is present on the board. In recognition of their long-standing expertise in tertiary education and their role as second providers to students from providers in default, the Australian Greens believe the advisory board should have at least one representative from TAFEs amongst its membership, as well as other members with experience in the sector. I will be moving amendments to fix this mess.
That that these bills do nothing to address the destruction the Liberal-National government has wrought on public VET in Australia is, I think, a real shame. Skills and training have been underfunded by tens of millions of dollars in the last year alone. We saw, recently, Labor and Liberals team up to abolish the $4 billion education infrastructure fund. In the last year alone, TAFE student numbers have been allowed to drop by 1.9 per cent, while subject enrolments have dropped by 5.7 per cent and training hours have dropped by 6.4 per cent. More disturbing still is that the number of students in nationally recognised programs dropped 16.2 per cent from 2015 to 2018, while we have a national shortage of skilled workers in 27 of 33 technician and trade categories.
Labor ought not to escape that blame. Their indulgence of for-profit providers and introduction of contestable funding helped push public provision of VET to the edge. Even with new tuition protection arrangements in place, students will continue having to handle prohibitive loan fees and the severe disruption that any provider closure entails. It is clear, as the National Union of Students told the inquiry, that for vocational education to become a more secure and attractive option for students, more must change in the public discourse and national strategic policy spaces. No expansion of tuition protection measures can mitigate the systemic risk introduced by the ongoing shift of public funding for training from low-risk TAFEs and public institutions to high-risk, for-profit providers, as detailed in the AEU submission. When extending tuition protection, it is vital that the parliament be mindful not to give students a false sense of security in commencing education with for-profit providers, which are at greater risk of default.
We can do so much better by students and so much better by society. To support students, the government must reverse its underfunding of skills and training and restore publicly owned, fully funded providers to the centre of the VET system. I refuse to just fiddle around the edges or allow the ongoing privatisation of education to erode our future. Students leaving university or TAFE now face greater pressures than ever before, including high youth unemployment and record housing and living costs. Being saddled with tens of thousands of dollars in student debt that takes decades to repay is unsustainable and unfair. That's why the Greens' plan for free TAFE and uni for everyone, for all their lives, is the bold change we need to build a more equal and just society.