I rise today in support of the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015.
This bill builds on legislation that passed in April, legislation that aims to strengthen the integrity of our VET sector. As we know, over the past 18 months—actually, it has been going a bit longer than that—the VET sector has been in the headlines for all the wrong reasons.
Far too many vulnerable students are ending up with high debts, quite often with a qualification that is not recognised by employers because of quality issues.
In fact, a recent investigation by the Australian Skills Quality Authority, a national regulator established by Labor, found problems with two-thirds of the private training providers that it audited. That is a significant sum —two-thirds. In some cases, students are ending up with large debts and no qualifications because they were enrolled inappropriately in courses that were never going to meet their needs. I have heard some shocking stories, as we all have. I have just been talking to my colleague about some shocking stories from her electorate. I have heard shocking stories of students being offered iPads, laptops and shopping vouchers to lure them into signing up to a course. And I have seen news reports about $200 spotter fees being paid to people to sign up to courses costing up to $25,000.
Not only are these issues affecting students poorly they are also affecting all Australians through the impact on the Commonwealth budget. The ballooning of the VET FEE-HELP debt from almost $699 million in 2013 to $1.7 billion in 2014 is extremely concerning, particularly when combined with shockingly low completion rates. Between the end of 2013 and 2014 the number of students accessing VET FEE-HELP grew by 103 per cent. The average loan amount per student has increased by 24 per cent and the number of providers offering access to VET FEE-HELP has grown by 44 per cent. Clearly, these numbers are not sustainable.
Aside from the financial impact, dodgy providers and exploitative practices are also having a devastating impact on the reputation of the sector. And this is a really important sector. It is a really valuable sector, and not just for Australians: it is also, potentially, a very lucrative export market. I know this—I have just been to India for the inaugural Australia India Leadership Dialogue. Prime Minister Modi has an enormous agenda to rebuild that nation: to build universities, schools and roads. They need skills and they need tradespeople of every description, and they need education to be able to get those tradespeople. So this is an enormous opportunity for the VET sector in India, and we also know there is enormous opportunity in China and in the region.
Most people in this House know that I am a huge fan of vocational education and training. My concern is that these dodgy providers and exploitative practices are having a devastating impact on the reputation of the sector. I am a graduate of the wonderful Royal Melbourne Institute of Technology—a very proud graduate of that institution. I was actually union president of that institution too; it is where I cut my teeth on politics. RMIT, as many know, was established over 100 years ago, when access to education was limited only to the wealthy. It is the oldest workers college in the world—a very proud tradition. It currently opens up opportunities to people from lower socioeconomic backgrounds—from working-class backgrounds—and it has been doing that for more than a century. I am talking here not just in terms of trades but also in opportunities to access a range of learning in a range of sectors.
I also had the great pleasure, just before I entered this life, of tutoring out at the University of Canberra. Again, I got to see firsthand the benefits that students get from vocational education. Now, as the member for Canberra and just by going out into my community, I see what the Canberra Institute of Technology is doing across a broad range of areas. I have been out with the shadow minister for a number of visits around the electorate, most recently to the CIT down in Fyshwick, where I met with a number of young Canberrans and also Canberrans who are midcareer—in their 40s or 50s and wanting to update their skills. They had gone through their trade training in the seventies or eighties and the world has completely changed—particularly in automotive skills. So these men and women are now updating their skills to ensure that they can keep abreast of change and that they can stay competitive in the market. I have met not one but two family units at the CIT, with fathers and sons studying a trade together.
The member beforehand was saying that TAFEs, in his view, are not up to date, are not flexible enough, are not responsive enough to what is happening in the market and are not keeping up to date with technology. I disagree entirely. In a number of visits I have made to CIT at Fyshwick, I have been amazed by the way in which the teachers and educators are constantly looking at ways to innovate when it comes to teaching tools, learning tools and assessment tools. When I was there just recently, I met a plumbing educator who showed me how, with the beauty of an iPad, he can now take photos of the work that the students are doing, and that can be part of their assessment. So he has a visual representation of their assessment throughout the course, so he can actually track, through images on the iPad, the achievements and progress of the students. So I disagree entirely with the former speaker. TAFE is innovating, keeping abreast of changes and ensuring that it is constantly changing and evolving and constantly flexible so that its graduates can be competitive.
I have also had the opportunity to go and visit many, many trade training centres in my electorate. Just recently I went to the Trinity College trade training centre, which was funded by Labor and opened by the current ACT Liberal senator. I find it rather ironic that Senator Seselja has opened a number of trade training centres in Canberra despite the fact that his government has actually abolished all funding for trade training centres. But I have been to a number of trade training centres, and all are working incredibly well, and the schools that they are attached to are incredibly grateful. As I said, just recently I visited Trinity College. They have a beautiful new trade training centre for child care—cert III and IV, I think. St Mary MacKillop College has an extraordinary trade training centre for hospitality, carpentry, architecture and a range of other skills. That centre is allowing students to have a pathway, and it opens up a range of options to them for their careers. Erindale College has a fantastic hospitality centre, all thanks to Labor.
As I said, I am a big fan of vocational education. It gives people valuable, tangible skills that they can use to get a great job and have a wonderful career. I really cannot sufficiently underscore how vital the vocational education sector is to Australia's prosperity. So I am pleased to support this legislation today to address some of the issues surrounding VET FEE-HELP, because we must protect vulnerable students from shonky providers.
The bill is in addition to previous changes that were made in April 2015, and it seeks to prevent inappropriate enrolments and debts by introducing a two-day cooling-off period between enrolment and the application for a VET FEE-HELP loan so that course enrolment is no longer confused with the loan application process. It also introduces minimum prerequisites such as literacy and numeracy to make sure that students can complete the higher level VET courses at the diploma level and above for which VET FEE-HELP is available, and it requires a parent's or guardian's signature before a student under 18 can request a VET FEE-HELP loan, to protect younger students. The bill will further protect students and taxpayers by making it easier for a student to have their debt cancelled where they have been signed up for a loan inappropriately and for the government to recoup the cost from the providers. It also introduces minimum registration and trading history requirements to ensure new VET FEE-HELP provider applicants have a proven history of delivering quality training. It introduces infringement notices and financial penalties for breaches of the VET FEE-HELP guidelines, and it also introduces technical amendments to strengthen the department's administration of the scheme and its partnerships with the Australian Skills Quality Authority to monitor and enforce compliance.
As I said at the start of my speech, Labor welcomes any opportunity to strengthen the integrity of VET—we are great fans of VET—and to crack down on shonky providers. The measures in this bill that I have just outlined will go some way to achieving that, but Labor believes they do not go far enough. Despite the introduction of new national standards, which came into effect in April, the problems and rorts within the system are still occurring. We are particularly concerned that there are no efforts to control the spiralling costs for students, with loans having grown in value from $5,890 in 2012 to $8,666 in 2014. That is a significant increase in just two years. The two-day cooling-off period could prove to be easy to manipulate by providers printing out enrolment forms with one signing date and VET FEE-HELP applications with a date two days later. There is no effort to re-examine previous approvals for providers, and there is no debt relief for students who have already been defrauded by dodgy providers.
Before I detail Labor's amendments to this bill, I might just point out that the Labor Party has a very proud track record when it comes to vocational education and training. I just mention the significant investment that we made in trade training centres. It completely changes the opportunities for young Australians, providing them with pathways so they can get their year 12 certificate, still continue to study French and also get a cert I or II in carpentry at the same time. The $3 billion we provided for the Building Australia's Future Workforce program provides some 130,000 new training places for apprentices. In 2011 we established a national regulator, the Australian Skills Quality Authority, as I mentioned earlier. We then amended the legislation in 2012 to increase the coverage of VET FEE-HELP to all diplomas and associate diplomas and also to conduct a trial to extend VET FEE-HELP to certificate IV courses. This meant that any Australian could have access to vocational training, no matter what their background or their financial position. So I find it frustrating to hear the government falsely claiming Labor in government failed to protect students and taxpayers from unscrupulous providers and wasted billions of dollars, because this is completely false. Labor has a strong record on investing in skills and helping students and workers to obtain the skills they need to participate and compete in the modern workforce, as well as introducing regulation and quality assurance.
Now to Labor's amendments, and I will be brief. Firstly, we are calling for the establishment of an industry ombudsman. A national VET ombudsman would add some real strength to the regulator. This has been backed up by the Australian Council for Private Education and Training, along with the report from the Senate inquiry into the operation, regulation and funding of private VET providers in Australia which also recommended a national VET ombudsman. An ombudsman would give students direct access to a complaint-resolution process —somebody on their side to get the issues resolved for them.
Secondly, Labor is calling on the government to have the Australian National Audit Office look closely at the operation of the VET FEE-HELP scheme. This is a view the Labor Party has had for some time. In fact, last year, the shadow ministers called on the Auditor-General to investigate VET FEE-HELP to ensure that skills funding was being used in accordance with the intent of the legislation. The Auditor-General has requested that a performance audit be included in its work program for this financial year.
Finally, the last amendment requires the department to write to the student with a clear statement on the amount of debt that they are about to undertake and for the student to reply to the department before a debt is raised. We will also refer the legislation to the Senate legislation committee to look at options to cap tuition-fee levels for courses covered by VET FEE-HELP and lower the lifetime limit on student loans.
Students, TAFEs, taxpayers and good quality providers are all the victims of this scandal. A Shorten Labor government will guarantee TAFE funding into the future by working with premiers and chief ministers on a comprehensive national priority plan that defines the role of TAFE and places it squarely as the public provider within the sector. Vocational training is a vital sector. I support it wholeheartedly. We must protect students, we must protect the integrity of the sector and we must ensure VET FEE-HELP is sustainable.
I commend this bill to the House.