BILLS;National Vocational Education and Training Regulator Amendment Bill 2015;Second Reading – 16 Mar 2015

I too rise to speak today on the National Vocational Education and Training Regulator Amendment Bill 2015.

Vocational education is an issue that I have had a particular interest in for many years, through my employment background as an early childhood educator—as mentioned by Senator Polley—and as a former member of the Senate Employment and Workplace Relations Committee, along with the now Deputy President, currently in the chair. I was also a member of a number of industry training boards when I represented workers through the Australian Services Union.

Labor believes that quality education is the way that we can improve the lives of individuals and communities. We also believe that a quality vocational education sector is vital to ensuring Australia’s future growth and for training our next generation of workers. In 2007, the Howard government extended the use of FEE-HELP to include the VET sector for approved diploma and advanced diploma courses. VET FEE-HELP commenced in 2009. Labor amended the legislation in 2012 to increase the coverage of VET FEE-HELP to all diplomas and associate diplomas, and conducted a trial to extend VET FEE-HELP to certificate IV courses. This was to allow the greatest number of students to gain worthwhile qualifications.

We on this side believe that access to education should not be based on your postcode. However, growth of VET FEE-HELP has exceeded all projections, with more than $1.6 billion allocated last year. In the 2014-15 budget, the government estimated that 172,300 VET FEE-HELP places were needed. However, in the Department of Education additional estimates statement this year the figure was revised to 225,500. The Grattan Institute has warned that 40 per cent of vocational loans would never be repaid. Obviously, this becomes a financial burden to the Commonwealth and it needs to be addressed.

Unfortunately, we have unscrupulous RTOs signing up people for near-worthless qualifications that they do not have the ability to complete. The number of RTOs—or registered training organisations—in Australia has grown over the past few years. Evidence given in Senate estimates earlier this year shows that as of 31 December the number of RTOs was 4,573, with the Australian Skills Quality Authority, or ASQA, regulating 3,898 of these. So it is important that we get the regulatory framework right, and that brings us to the bill we are debating today.

The bill contains amendments to the National Vocational Education and Training Regulator Act 2011. It supports ongoing reform measures. These measures include protecting the integrity of the VET system, giving the regulator capacity to respond to emerging issues and technical amendments to improve the efficiency and operation of the act and, consequently, the regulator. While Labor is supportive of the aims of this bill, what it fails to do is to address the damage to individuals that has already occurred or to propose any action to engage with the community to minimise future problems,

Under VET FEE-HELP, students are able to access up to $97,728 in total for most courses offered by eligible registered training organisations. This leaves students at risk of running up large debts for potentially worthless accreditations. Already, the actions of unscrupulous RTOs and brokers have had serious impacts on vulnerable individuals. My office was approached only last week by constituents who are concerned by the tactics of some registered training organisations in trying to sign up vulnerable people for qualifications.

Volunteers at the local Men’s Shed were approached by recruiters to sign up for courses. Tactics included telling the potential students that they would get $30 more per week because they would change from Newstart allowance to study assistance. They were told not to worry about the debt as, ‘You’ll only have to pay it back after you earn $53,000, so that won’t be a problem.’ Recruiters were evasive, particularly when one potential student asked to see the contract they were signing up to.

In addition to this case, there has been an explosion in media reports of unscrupulous RTOs preying on vulnerable students and signing them up for large VET FEE-HELP debts. In many cases the students were not even aware that they had signed up for a course, let alone a significant debt—often at around $20,000.

I would like to expand on one example that Senator Polley gave about a Tasmanian student. This was reported by ABC Online, on 23 December. The article reads:

Former student Jake Wright was excited when he signed up for a double diploma of business and management with Careers Australia.

But he was out of his depth and contacted a tutor who advised him to watch YouTube videos.

“I found them quite hard to understand and when I actually asked him if he could assist me at all he just told me to watch the videos and I said, ‘I’ve watched them, I can’t do the work’,” he said.

Jake’s mother Lexia Brown helped him un-enrol, but not before he had racked up a VET debt of more than $8,000.

“Even under supervision he would not be able to do it. He can do many other things but not a double diploma in business and management,” she said.

Students deserve a lot better—a lot better—than to be told to watch YouTube videos for a course they are racking up debts of thousands of dollars for. And RTOs have a responsibility to make sure that the students they enrol have the ability to undertake the course they are enrolled in. I am pleased to say that after this story was broadcast the RTO responsible contacted Jake and agreed to waive his debt, although there are thousands of students who have not been so fortunate.

Unfortunately, Jake is not alone; media reports seem to indicate that low-socioeconomic areas in Tasmania in particular are being particularly targeted by unscrupulous RTOs. The problem is exacerbated by RTOs employing brokers to recruit students on their behalf and then attempting to distance themselves from the actions of the brokers. Potential students have been offered inducements by brokers like laptops, iPads, meal vouchers and other tangible goods for signing up. This bill takes some steps to put responsibility on the RTO for the actions of their brokers. There is also a change to allow more rapid response to quality standard issues by the minister and the regulator. These are worthwhile aims, and build upon the work done by Labor when we were in government.

In order to maintain quality in the VET sector, in 2011 Labor established a national regulator—ASQA. ASQA is working hard to clean up the sector. ASQA Chief Commissioner, Mr Chris Robinson, said the regulator has cancelled, suspended or refused the registration of 350 colleges since 2011. Mr Robinson said:

We’ve been very busy and we’ve taken strong actions against that minority of RTOs that are poorly compliant with the required standards. I would say the training sector is in better shape than it was in the past.

Even though this government has a habit of cutting funding, in this case they allocated $68 million in additional funding in October 2014 to support the important work of ASQA.

However, I am extremely disappointed that the Abbott government has abolished the Australian Workforce and Productivity Agency, which was established in 2012 by the former Labor government, replacing Skills Australia, to provide expert, independent advice to government on current, emerging and future skills and workforce development needs. AWPA brought together the peak national bodies, such as ACCI, AiGroup and the ACTU, to achieve industry leadership. It also took a tripartite approach to skills and training where industry, training providers and unions had a strong voice. Labor is also deeply concerned about the Abbott government’s plans to further narrow down access to advice by completely abolishing Industry Skills Councils.

Last year shadow ministers Kim Carr and Sharon Bird called on the Auditor-General to investigate VET FEE-HELP to ensure that skills funding is being used in accordance with the intent of the legislation. I am pleased to say that the Auditor-General has requested that a performance audit be included in the Australian National Audit Office’s 2015-16 work program. In addition, at Senate estimates, ASQA indicated they were going to conduct an investigation into a further 23 providers.

The Abbott government’s new national standards for registered training organisations will come into effect on 1 April 2015. The new standards will require RTOs to declare sales relationships with sales brokers and allow the regulator to hold RTOs accountable for the actions of their sales brokers. A national training complaints hotline was established by the Abbott government in January 2015.

The bill contains amendments to the National Vocational Education and Training Regulator Act 2011 that supports ongoing reform measures, including: protecting the integrity of the VET system, giving the regulator capacity to respond to emerging issues, and technical amendments to improve the efficiency and operation of the Act and consequently the regulator.

The bill also extends the period of registration able to be granted by the regulator from five to seven years. Specifically, schedule 1 of this bill would make amendments to the NVETR Act to address a range of issues, including: extend the operation of penalty provisions to trading corporations; create a new offence of prohibiting a person from advertising or offering to provide all or part of a VET course without including the name and registration code of the responsible registered training organisation; extend the period of registration able to be granted by the regulator from five to seven years. And there are other areas in that schedule.

On 5 March 2015, in the House, Labor moved a second reading amendment to this bill. The amendment would have: immediately sought a consumer protection information campaign by the ACCC, including advice for people who need to seek redress, and considered other mechanisms available to strengthen consumer protections; supported Labor’s call for the Auditor-General to conduct an audit on the use of VET FEE-Help. But this was voted down by the government, who used their numbers to block Labor’s sensible amendment.

Once again, the Abbott government has come late to the party on this important issue. Labor has been warning about shonky operators for almost 18 months. But, only now, after their bill has passed the House, has Senator Birmingham announced legislative and other changes to better protect students.

From Senator Birmingham’s media release of 12 March the government will now: ban providers from offering inducements or incentives to students—like cash, meals, prizes or laptops—to get them to sign up to courses that they do not need; make it impossible for providers to levy all fees in a single transaction up front, giving students more opportunity to consider their options before VET FEE-HELP debts can be incurred; ban miraculously short diploma or advanced diploma courses, instead requiring a minimum number of units of study; protect vulnerable students by requiring providers to properly assess students for minimum prerequisite educational capabilities before enrolment; eliminate insidious practices like nursing home enrolments; stop marketing agents and brokers freelancing to sign up as many students as possible, without the training provider being held responsible for their actions; give students clear information that helps them understand that VET FEE-HELP loans are real debts that impact their credit rating and are expected to be repaid; ensure students sign off on high visual impact statements making it explicit the total debt they will incur should they proceed with a particular course; and further issues.

I am glad that the government has finally heeded our advice to help protect vulnerable people. But, had they really cared about this issue, the changes that require legislative action would be in the bill we are debating today, not some future bill for this place. It is disappointing that they have come to agree with Labor for the necessity of these changes only at the eleventh hour, and after their legislation has already passed through the other place. It is another sign of this disorganised and dysfunctional government. This government is so focussed—and they probably need to be—on their own internal leadership squabbles that they cannot sort out their legislative program. Those legislative changes could have passed the House almost two weeks ago, had they got their act together.

This government has demonstrated a clear disregard for vocational education during their time in government. The Abbott government has cut almost $1 billion from support for apprentices. They have abolished the Tools for Your Trade program which provided up to $5,500 in direct assistance to apprentices to help them purchase tools, equipment, uniforms and vehicles for their trade. The Abbott government has also cut mentoring and access programs and are in the process of abolishing Joint Group Training—all of which help apprentices to start and complete an apprenticeship.

Older apprentices have been dealt a devastating blow by the Abbott government abolishing their payment under the Support for Adult Australian Apprentices program which was put in place to encourage upskilling for adult workers over the age of 25. Under the now axed program, adult apprentices studying a certificate III or IV could receive $150 per week, or up to $7,800 per year, in the first year, and $100 per week, or up to $5,200 per year, in the second year of their apprenticeship. The government has also cut the Apprentice to Business Owner, or AtoB, Program, which provided training in a nationally recognised qualification in small business management and included business mentoring support for up to 12 months. Many tradespeople act and operate as subcontractors, sole operators or small businesses. To establish a successful business, in addition to their trade-specific competencies they need to develop small-business management skills to ensure they meet business and employment regulations. But, now that the AtoB Program has been cut, they will find it a lot harder to run their businesses effectively. So much for a government that allegedly cares about small business.

The Abbott government has also axed $43.8 million from the Skills for Education and Employment, or SEE, program, abolishing over 10,000 training places. The SEE program helps job seekers to develop speaking, reading, writing or basic maths skills to improve their chances of getting and keeping a job. The Abbott government has abolished the Workplace English Language and Literacy Program, which provided English language and literacy training to help workers meet their current and future employment and training needs. In its first budget, the Abbott government abolished the National Workforce Development Fund, which was a matched dollar-for-dollar partnership between government and employers to help employers upskill their workers to face the challenges of the future and to improve productivity. The list of cuts that the government has made shows it cares little about skills and training.

Labor support the changes in this bill and the other changes announced recently, albeit belatedly, as I said, by the minister. We support changes that improve the quality of RTOs and we support changes that help students to be protected from unscrupulous practices. But it would have been nice if the government could have got its legislative program in order so we could pass those changes today.