VET Student Loans

13 September 2017

House of Representatives

Wednesday 19 October 2016

I rise to speak on the VET Student Loans Bill 2016. The Central Coast is a region with a high stake in vocational education and training. In the electorate of Dobell, on the New South Wales Central Coast, the number of people who leave school to pursue a trade is 10 per cent higher than the national average. In Dobell, 58.6 per cent of students have undertaken vocational education compared to the national average of 46.7 per cent. This is a region where the traditional pathway of leaving school, earning a trade and getting a job is common. Whilst our population is growing and rates of higher education are leading to increased university enrolments, including at the Central Coast campus of the University of Newcastle, for many people on the Central Coast getting a trade is a ticket to getting a job.

Only half of the high school students on the Central Coast complete their studies at school. Not every school leaver wants to go to university and people looking to upskill or return to study need to have practical, affordable and local options to obtain the skills they need. For an area with stubbornly high unemployment rates, particularly for young people, the opportunity to get the training needed in order to enter the workforce is critical. It is unacceptable that regions like ours have been affected by the appalling lack of regulation in the VET sector that has occurred under the coalition government. Combined with the gutting of TAFE at a state level, it is regions like ours that have and will suffer more as a result of the conservative ideology which undermines public education and training.

So, whilst Labor support these bills in principle, we are disappointed in the way that this has been handled by the government. We have been raising these issues for too long and the government's delays and failure to act have meant more students are ripped off by dodgy providers. There are too many cases of vocational education providers whose questionable practices have left students with large debts and no qualifications. For some time it was common to see a provider set up a stall in the local shopping centre, approach young people and other prospective students and offer inducements such as a free laptop or an iPad. Worse still, we know that this led to more dubious methods of recruitment, such as fraudulent applications or targeting of vulnerable people to increase sign-up rates. The government knew this was happening and did not take action and, all the while, more students were caught out.

Arguably, the largest private provider of vocational education and training courses on the Central Coast, Evocca College, opened with great fanfare in 2013. Its Gosford and Wyong campuses offered local students courses in areas such as business management, leadership, youth work, justice, community services and counselling. According to media reports, Evocca received around $200 million under the VET FEE-HELP scheme last year, making it the second-largest recipient of taxpayer funds under the scheme. However, completion rates through the college have been far too low. Only around a quarter of students finish their courses. As poor as these completion and graduation rates are, they are not the worst performers in this sector. It is clear that this is a sector that needs reform. Too many students are signing up for courses they are either not in a position to complete or are not suitable for, and this must stop.

The Australian Financial Review cites costs for Evocca courses: a diploma of community services course costs $16,500; a diploma of beauty therapy course costs $24,750; a diploma of information technology course costs $24,750; a diploma of business course costs $16,500; and a diploma of leadership and management course costs $16,500. In March this year, after entry requirements were amended and Labor released their comprehensive election policy to tackle misuse of VET FEE-HELP loans and restore TAFE as the public provider in the sector, Evocca announced the closure of several campuses, including in Gosford on the Central Coast.

At some institutions, graduation rates have plummeted, leaving students with massive debts for courses they may never complete. It is completely unacceptable that dodgy providers are able to pocket the equivalent of $215,000 per graduate, or more than $900 million overall, in federal money. No self-respecting provider could look at graduation rates as low as five per cent and be satisfied with that outcome.

To know that you are funded to skill up a willing group of students and are supported to run courses, yet only a small percentage are leaving with qualifications, should be enough to make some providers look at themselves and the models that they run and want to change. Yet that is not the message they are receiving and it is not the message from the government. This governmentthe government of lifters and leaners; the government punishing low-income earners and boosting big businesshave sat by and let these rorts continue. They have watched as the VET FEE-HELP debt jumped from $700 million in 2013 to $2.9 billion in 2015. That is $2.9 billion in debt, 40 per cent of which will never be repaid, that is hanging over the heads of thousands of people on the Central Coast and potentially hundreds of thousands of Australians across the country. Where were the government when this was happening? How can they possibly justify to taxpayers their failure to do anything about it?

The Liberal government, despite the bluff and bluster, cannot be trusted to look after our economy or our communities. We run the risk, without these reforms, of creating a skills crisis. Ten thousand students in Victoria have already had their qualifications cancelled because they were not worth the paper they were written on. That is unacceptable and cannot be allowed to continue. We have to bring credibility back to the sector for the sake of the economy and the people who rely on sound educational institutions.

Labor has long called for regulation. More than a year ago, Labor proposed the establishment of an ombudsman to oversee the sector. The ombudsman would have the power to intervene and resolve disputes, ensuring that students are getting a fair go from their provider. If the government had agreed to this when it was first proposed, many of the failures of the VET FEE-HELP scheme would have been prevented. The New South Wales government has embarked on deregulation of the sector through their so-called 'smart and skilled' reforms, which in reality have left students with massive fees and fewer study options.

My brother Eddie is one of the many students caught out by this. He trained as a plumber at Wyong TAFE 20 years ago and now runs a local business. Recently, when he decided to upgrade his qualifications, he learnt that he could not undertake this study locally and instead would need to travel to North Sydney. The course was eight weeks long, with only two contact nights per week, yet this cost Eddie $2,000. Trades people like my brother Eddie must be able to access local and affordable training, and this is not happening under the government.

I have heard from Natalie, another small-business owner from the Central Coast, who made the decision to study fashion design as a mature-age student and pursue her dream of dressmaking in the dance industry. She undertook took a cert III course in order to enrol in diploma studies this year, only to be told that the course had been cut as a result of funding cuts to TAFE.

Despite their gross failings in the VET sector and a dismal level of support for TAFE, the New South Wales Minister for Skills and Industry has described his federal Liberal colleagues' handling of the sector as 'unbelievable'. He said:

I think they have made errors that I would not have ever believed from a government How have we allowed a private provider in one year to have $300,000 in funding go to a hundred million in funding?

If the government had acted when Labor first brought these issues to the forefront, billions could have been saved from going into the pockets of dodgy private providers and invested back into our TAFE and apprenticeships system. There is nothing in this bill to restore the $2.75 billion the Liberals have ripped out of TAFE, skills and apprenticeships; nothing to protect TAFE; nothing to boost apprenticeships.

Labor knows how important VET and TAFE are for so many young peoplepeople looking to return to work, upskill or retrain. This is in stark contrast to those opposite, who are not even sure if a new national partnership on skills is needed. The Assistant Minister for Vocational Education and Skills, the member for McPherson, said when she was meeting with the states 'to determine whether there are reforms to VET that warrant a new agreement.' With the agreement running out in the middle of next year, that is not comforting news for the thousands of students nationally who rely on the $500 million in federal funding to keep their courses running, keep building their skills, or even keep the lights on in their local TAFE, like that at Wyong.

Labor has been absolutely clear: we back public TAFE. That is why we took a TAFE funding guarantee to the last election. All the while, apprentice numbers are in free fall under the Liberals. They are down 30 per cent since this government came to power130,000 fewer under this government.

People on the Central Coast know just how important our TAFE and skills sector is. Locals know they can turn to these trusted educational institutions for the technical skills they need for growing industries and to be job ready. We are now at a point on the Central Coast where a student cannot study for the HSC at either Wyong or Gosford TAFE. Courses have been stripped away from TAFE while the federal government continues to plunge nearly a billion dollars into private providers. At state and federal level the Liberals have an ideological problem with TAFE. TAFE is the backbone of the skills training system, and the government should support it as such.

There are registered training organisations in this sector who do a great job, and their reputations should not be damaged by others who seek to exploit students. Organisations like Training Wheels, based in Wyong and at Rutherford in the Hunter, do an amazing job and are industry leaders in high risk work licensing. They offer real world, practical courses for students in topics ranging from forklift driving to working at heights and working in confined spaces, ensuring that their graduates get the tickets they need to get into work and know how to be safe and productive employees.

These reforms are long overdue, but they should not be as urgent as they have become. With just over 10 weeks until these changes are set to be introduced, the implementation of these reforms can only be described as rushed. This should have been done sooner, but just because the administration of student loans has been utterly botched by this government, this is no excuse for further failing. It is entirely understandable that stakeholders are concerned. Whilst Labor will support these measures, it is with a very important qualification: students must not be further disadvantaged and access to education opportunities, particularly in low socio-economic areas, must not be limited for those who want to train and learn.

Labor has been pushing for these reforms for three years, while the government has been asleep at the wheel. In the last term of government, Labor proposed VET reforms that the government ignored. Now we see that they have copied nearly every single one of them. Stopping the rip-offs by capping loans? That was a Labor idea. Cracking down on brokers? That is another one of ours. Linking courses to skills shortage areasLabor. Linking funding to completion ratescopied. Deregistering low-quality providersLabor suggested it. What we see is that Labor is the party of skills and training, and the only party committed to ensuring the strength and future viability of the industry for the betterment of our students and our communities.

In May the Liberals were falling over themselves to criticise Labor's policy proposals. Today they are trying to take credit for them. While Labor is trying to improve the sector, the Turnbull government has been sitting on its hands. These reforms are too little too late. Over the last three years the Liberals have shown they simply do not care about technical and vocational education or about TAFE. They have churned through five ministers in three years, and that revolving door is leaving people who want to improve their skills and opportunities suffering through an unfair system. As successive Liberal Prime Ministers have shuffled and reshuffled their ministries to reward supporters and punish detractors, the sector and students just want the government to get on with the job and provide the services and support that the industry needs. Infighting and unrest in government is plastered on the front pages of newspapers nearly every day, yet the issues plaguing our skills and VET industry do not get a mention. This government has one priorityitselfand the vocational education sector has fallen into crisis.

I am proud to be a member of a party that is now, and always has been, committed to ensuring that our skills sector is well resourced, well supported, and fair. Generations of Australians know how important a strong skills training industry is when they want to change careers or get back into the workforce. We have a duty to ensure that all Australians are given every opportunity to expand their education and their opportunities. I genuinely hope the government has turned a corner and from here on they will do what is best for students and employers in ensuring that a qualification is more than just a piece of paper, but something that students can be proud of and that will put them in good stead for their careers.