2GB Sydney Drive with Michael McLaren

Michael McLaren: Well, we’ve got the relevant minister on the phone, Simon Birmingham, the Federal Education Minister. Simon, Merry Christmas, thanks for your time.

Simon Birmingham: G’day Michael, great to be with you and Merry Christmas to you and your listeners, too.

Michael McLaren: I suppose Christmas is a convenient time in some respect for these sort of reports to be released because they don’t get all the attention they deserve, but this is hardly the kind of report you want lumped on your desk, one that shows a system, a scheme, absolutely a disaster.

Simon Birmingham: Well, I do want to be clear there and I would’ve thought an experienced journalist like Tim would recognise this that the Australian National Audit Office conducts its reports completely independently of the Government. We don’t have any say as to what goes in their reports or when they’re released. So, the timing of the release of this report is something completely up to the Audit Office. It undertakes its review, it puts it out there, and yes I could think of better things a few days before Christmas than to be talking about this. Although, actually I’m quite busy these few days before Christmas as we are putting the replacement program for this flawed and failed VET FEE-HELP scheme in place to clean up the big mess the Labor Party left us with.

Michael McLaren: This is one of Julia Gillard’s great legacies, wasn’t it? The thing I don’t understand – and, look, this is probably a free shot for you but anyway have a crack at it – Julia Gillard goes around the world as an education expert. You look at the results in Australian educational attainment from the time that she was the Education Minister and then Prime Minister, we’ve only gone down since she had the reigns of education. They threw money around everywhere, all we got were overpriced canteens and libraries – often libraries when schools didn’t want them – we had the whole laptop thing, we’ve had the VET HELP scheme, which is going to cost the taxpayers billions in unrecovered and never to be recovered debts. How is it that Julia Gillard can go around the world beating her chest as an education expert and get paid to do it?

Simon Birmingham: Well, I’ll probably let Julia Gillard try to justify that one. [Indistinct] …

Michael McLaren: [Talks over] Well, I’ll give you a tip; she’s not going to come on and chat to me so you can have a go Simon. [Laughs]

Simon Birmingham: But it is- I mean, it is remarkable and this VET FEE-HELP scheme has been something of a sleeper compared to the wasteful programs like school halls, like the problems with the laptops program, like pink batts; all of those things that have caused us all enormous waste and mismanagement. But this program really is right up there with the best of them unfortunately, or the worst of them. And what we have seen is enormous rorting, vocational education and training take a real hammering in terms of its reputation, vulnerable students being ripped off, and taxpayer money being wasted.

Now, we’ve taken as a Government, through the Abbott, Turnbull Government, about 20 different measures to try to fix the program and when the 2016 data is finally revealed, people will be able to see that the different reforms we put in place throughout 2015 drove down the rate of loans against this program by hundreds of millions of dollars. So, we did act from late 2014 onwards when we got information and advice and contained the program, but subsequent to this year’s election, Malcolm Turnbull and I took the decision that even though our measures were having an impact, we just needed to rip it up, close it down and start afresh, because really it had so many flaws, and there were so many dubious providers who had been let in in the first place that we just needed to build it again from the ground up. 

Michael McLaren: Obviously you, and now the Prime Minister Malcolm Turnbull, have had a focus on this and have started to wind it back, but when Christopher Pyne was the Education Minister not a lot really was done, was it? I mean, the money kept going out.

Simon Birmingham: Well 2014 was the first year when you started to see real growth, and it was at the end of 2014 and the start of 2015 that some problems became apparent. And it was from April and July of 2015 that we started to put in new conditions and measures, and those types of actions continued into the start of this year, which as I say all had the impact of reducing the rate of borrowing against the program by hundreds of millions of dollars. The final figures will be out sometime next year, once we’ve managed to reconcile that, but it is very clear that we had a big impact. But to my reckoning, and the Prime Minister’s and the Government’s, it still hadn’t translated into turning what was a flawed program into a credible program.

So Labor’s VET FEE-HELP scheme will close on 31 December and exist no more, and from 1 January a new VET student loans program will take off. And what we have put in place there are much stricter criteria about who can offer the loans, the quality of the training providers, their history, the history of completions that they had; a much stricter list in terms of the qualifications that are eligible for loans, fee caps – or loan caps, I should say – to limit the amount of loans that can be taken out for a particular qualification, which will put downward pressure on fees …

Michael McLaren: [Interrupts] What about this issue of up-front payment of the HECS money?

Simon Birmingham: So that’s a change that we did make, it’s one of the 20 changes we made over the last couple of years to end up-front payments. And certainly, there will be under the new program a requirement that payments are staggered, but also a further requirement to have much clearer evidence of student engagement with the training they’re undertaking, so that we can be very clear that not only are those payments staggered, but they can only be paid if we have those clear metrics that students are logging in, engaged, and authorizing them at multiple junctures.

Michael McLaren: Just finally then, there seemed to be a focus that in this scheme the unscrupulous providers – maybe 10 per cent of the providers are unscrupulous, I’d say 20 of 200 or whatever – they seem to be focussing, preying if you will, on the disabled, the vulnerable, the unemployed, indigenous communities, and all sorts of dodgy practices going on in order for the money to come up-front. From what you’re saying, a lot of those loopholes have since been closed; the ability to prey on the vulnerable has been lessened.

Simon Birmingham: Well look, certainly we are confident that the new scheme has put in place a whole bunch of safeguards [indistinct] approach to ensuring the credibility of the new program. A number of the measures we put in place, like banning the offering of inducements, such as laptops – which I gather one of your callers referenced earlier – are changes that applied from April of last year. So we’ve certainly been applying greater and greater restrictions. 

We’re working very closely with the ACCC to prosecute some of those who we can ping for breaches of consumer law and for wrongdoing. We’ve had many millions of dollars that have been repaid already, or debts waived for students where we’ve been able to identify those instances. And certainly, if people are clear-cut in believing that they were falsely signed up to a course, then they should absolutely get in touch with us, and investigations can still take place into those matters.

Michael McLaren: We’re out of time this afternoon, but I thank you for yours, Simon Birmingham. Really appreciate it.

Simon Birmingham: Thanks very much Michael, and again, all the best to you and the listeners for Christmas. 

Michael McLaren: And to you, thank you. Simon Birmingham there, the Education Minister.