Shayne Neumann MP
Federal Member for Blair

Australian Labor
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Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015

09/11/2015

I rise to speak in relation to the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015.

Over the last 18 months we have seen truly troubling and major problems emerge in the Australian vocational education and training sector.

These problems have arisen as a result of quite scurrilous behaviour by some providers.

We have seen outrageous practices and as a federal member in a marginal seat I have to say that we always keep in tune with what is happening on the ground.

On the weekend, I did my 201st mobile office since the last federal election at the Fernvale markets.

Some of the things which keep coming to me and which I have seen over time are the flavours and the issues which really affect people. One of the things which has increasingly come to mind in my electorate office in Ipswich and across most of Ipswich and the Somerset region has been the issue of value for money and people being ripped off.

There has been some quite scurrilous targeting of Indigenous people, of people from culturally and linguistically diverse backgrounds, unemployed people and people on Centrelink payments.

One guy I saw in my electorate office came to see me after he had served time in prison, saying how he was ripped off by a scurrilous provider in relation to what was offered to him in his first time in prison and how he really felt betrayed by that provider.

His story is one of many I have heard.

Victims are frequently targeted by high-pressure and predatory sales practices, either by rogue RTOs or by third-party marketers known as brokers.

The recent Senate Education and Employment References Committee inquiry into the operation, regulation and funding of private VET providers heard many stories about the marketing practices in relation to courses. Particular concern was raised with the use of language, which obscured the fact that courses were funded by a loan from the government and there was an expectation, like all loans, that that loan would be repaid.

One of the submissions I saw was from TAFE Community Alliance, which told the Senate inquiry that there was an older woman in her 70s at Bankstown Central shopping centre having lunch with a Bible group when approached by a young man asking would they like a free laptop and a free diploma in community services. All they had to do was to sign up. They would never earn more than $50,000 a year, so this group of pensioners would not have to pay back the loan. How unscrupulous and disgraceful is that, to exploit people in those circumstances?

The Redfern Legal Centre reported RTO brokers were targeting people door to door, selling in public housing blocks or on the footpath outside Centrelink. These are very vulnerable people often and this is a disgraceful and disgusting act by many people who have been undertaking this form of marketing.

The Consumer Action Law Centre told the Senate inquiry:

'We are deeply concerned about aggressive marketing tactics that target consumers who do not have the aptitude or ability to complete VET courses. When offering courses, we have seen providers … and brokers exaggerate the ongoing support available to students and reassure computer illiterate consumers that they will be able to easily complete a course online.
We have received reports of education brokers in particular cold calling or door-knocking potential students and pushing them to enrol in unsuitable courses over the phone or on their doorstep'.

These are just some of the many stories that many members of this chamber have heard. I certainly have heard these stories from people who come into my electorate office.

Students often enrol in overpriced, low-quality courses, and fund their study with a Commonwealth VET FEE-HELP line. When enrolled, many find that they do not get the support they need and that the training is woefully inadequate.

It is no surprise how many fail to complete the courses.

When they do, they often discover that the courses they undertook did not correlate with their educational prospects and their potential employment in the future.

So they were misled.

Those who complete their courses often find that those studies have failed to improve their employment prospects at all, and they are still left with a crippling VET FEE-HELP debt.

I have heard story after story after story.

I have attended a number of providers in my electorate and met with just in the last couple of weeks a new one that came to my electorate. I have heard these stories from constituents, parents and students, and from people from very vulnerable backgrounds who have been exploited.

This issue was raised again last week. And I am glad the shadow minister for employment and workplace relations is sitting at the table here because he was with me in Ipswich just last week in my electorate where we hosted a jobs forum, and this issue came up during that forum.

The local media reported on issues in terms of mature-age workforce, youth employment and other issues germane to this particular issue that is relevant in the bill we are discussing in the chamber today.

More of these problems are emerging as the sector continues to explode.

In the 12 months between 2013 and 2014, the number of students accessing VET FEE-HELP increased by 103 per cent. The average amount of those loans increased by 24 per cent per student.

For the Commonwealth this is a 151 per cent increase in the cost of student VET FEE-HELP loans.

We have a situation where the value of these VET FEE-HELP payments to providers increased from $699 million in 2013 to $1.75 billion in 2014—a number of providers soaring by 44 per cent.

These are extraordinary figures. They are worth repeating.

A number of people repeat them and I am very happy to mention this because these are staggering figures.

It goes to show that the government has taken their eye off the ball in this area.

We have consistently called on the Abbott-Turnbull Liberal government to deal with the swindlers and charlatans ripping off students and taxpayers and damaging the reputation of reputable VET FEE-HELP providers in the sector.

For two years we have poked and prodded the government about this issue, asking them to get serious about the rorting in the VET sector.

We have called for the Auditor-General to investigate, to do an audit report.

We have asked for an ACCC education campaign to be undertaken.

We welcomed the news in late October that the ACCC launched its first prosecution of a VET FEE-HELP provider.

While not pre-empting the outcome of any case, can I say that we support strong action in the sector. Sadly, we are still awaiting strong action from this current government sitting in the Treasury benches.

Despite Labor's calls, the government has dragged its feet and, true to form, the government has tried to scapegoat us. We have heard that from speeches here.

But they have been in power for two years; two years and what have they done?

They have tried to blame us when they have been in power.

Ministers have shied away from talking about the problems in the VET sector.

They have shied away from doing anything to protect students and taxpayers and they have shied away from doing the work that is necessary.

It has taken the government almost two years, and they have tap-danced around this issue for long enough.

During those two years what has the government done?

They ripped $2 billion from the skills portfolio.

The government trumpeted the new national standards that came into effect in April this year but we have seen many of those problems persist.

The recent Senate inquiry into the operation, regulation and funding of the VET FEE-HELP sector noted with concern that, despite the 2015 standards, it received evidence that some of those practices, such as offering inducements to enrol, had not been stamped out. The report noted:

'While the new Standards explicitly forbid inducement-based marketing, the committee notes that their introduction has not had the effect of eliminating this behaviour by all RTOs. The committee therefore suggests that more rigorous enforcement and tighter regulations around RTO marketing practices are required'.

And I say amen to that.

It is about time the government did something about that.

In evidence to the inquiry, the Yarraville Community Centre reported that banned tactics had continued to be practiced by some RTOs after commencement of the new standards.

The Yarraville Community Centre, for the record, offers an English program to about 250 students at eight venues across the city at Maribyrnong.

In terms of the role of third-party brokers, submitters to that inquiry expressed concern that the new standards applied exclusively to the RTOs and not to the brokers. The Redfern Legal Centre stated:

'Currently the standards and the regulations apply exclusively to RTOs, but it is the conduct of the brokers and the marketing agents which really leads to this whole mess in the first place. They are the ones with the incentive to get high volume sales without any real focus on what happens after that.'

We are concerned that the standards do not go far enough.

We are concerned about this bill.

For example, this bill introduces a two-day cooling off period between the signing of a course for enrolment and the application of the associated VET FEE-HELP line. The intention is to provide some separation between the two applications forms to reduce confusion between the two documents.

There is nothing, however, to prevent a shonky, scurrilous provider skirting around the cooling-off period simply by printing the loan application form with the date two days after the enrolment application.

More broadly, nothing in the bill will address the soaring cost to students, costs that have seen the average student VET loan grow from $5,890 to $8666 in 2014—two years after the figure I mentioned before in 2012.

This bill will provide no remedy or debt relief to students already ripped off by any rorting RTOs.

We need to go further, and I call on the government to protect students, taxpayers and the reputable providers in the sector.

That is why Labor has proposed a national VET ombudsman, to give the regulator some real teeth. The establishment of an ombudsman is the recommendation of the report of that recent Senate inquiry I referred to. The report noted that numerous witnesses at the inquiry voiced their support for an ombudsman to help domestic students resolve their complaints with VET providers.

The Consumer Action Law Centre noted a key feature of the student remediation framework should be a national industry ombudsman that would independently resolve disputes between students and training providers at no cost to students or the taxpayer.

An ombudsman is strongly supported by the Australian Council for Private Education and Training.

We call on the government to do the right thing, listen to what Labor has had to say and listen to that Senate inquiry and the recommendations.

We support the revitalisation of our TAFE system, which is so critical to the VET sector. At the jobs forum last Thursday, which I mentioned before, there was a great cheer in the room when the shadow minister spoke of Labor's commitment to TAFE. It really was spontaneous, straight-from-the-floor applause.

Australians recognise that TAFE is a trusted provider of vocational education and training.

We also know that TAFE has been under attack from conservative governments across Australia.

In Victoria the former Baillieu government cut $300 million from the state TAFE system, forcing closures, cancellations, job cuts and campus closures.

Fortunately, Victorian voters rejected that government and turfed them out.

In my home state of Queensland the truly lamentable former Premier Campbell Newman—an appalling premier almost as bad at Joh Bjelke-Petersen—cut TAFE funding and forced fees up as soon as he was elected.

There was speculation in the media that his government intended to merge the Bremer TAFE in my electorate with TAFE in Toowoomba or the Gold Coast.

There was no connection with the Gold Coast at all.

We are seeing this pattern across the board from coalition governments.

At the time, Premier Newman said, 'TAFE is being re-focused so it meets the needs of employers so we create jobs.' That was quoted in the Brisbane Times on 23 June 2014.

His government achieved absolutely neither, and the Queensland opposition vowed to rescue TAFE from the LNP.

The new Labor government of Annastacia Palaszczuk is doing just that.

You cannot trust the coalition when it comes to TAFE and the VET sector.

In two years the Abbott-Turnbull government have cut $2 billion from skills and training, with $1 billion from apprentices alone. In the two years since this Abbott-Turnbull Liberal government was elected, we have lost 100,000 apprentices in this country.

It is a disgrace.

These are cuts which the current Prime Minister says he supports unreservedly and wholeheartedly, so there is no difference whether it is the member for Warringah or the member for Wentworth who sits in that chair. It is a disgrace.

Labor has put forward some very sensible proposals.

We are ready and willing to fight for TAFE.

I believe we are the only party that Australians can trust in relation to fostering and nurturing TAFE.

Forty-one years ago Gough Whitlam increased Commonwealth investment in TAFE infrastructure, quality improvements and staff development in response to a government report.

In the 1980s the Hawke and Keating governments continued to foster the links, and I am proud to be part of a former Labor government that when we were in office increased VET funding by 25 per cent in real terms with a $19 billion investment over five years.

The government should look again at what they are doing.

They are not doing enough.

They should rededicate themselves to TAFE.

In relation to this bill they should listen to Labor's amendments and concerns and support Labor because only Labor backs TAFE and only Labor backs the VET FEE sector.