SIMON BIRMINGHAM: Well thanks very much for coming along today. Today is an important step in a series of rolling announcements in reforms to strengthen vocational education and training in Australia – especially to strengthen the quality of vocational education and training and to ensure that those who may wish to rort or abuse the generosity of Government support for vocational education and training are pushed out of the industry and shut down for their unethical practices.
Today sees an end to the insidious practice of incentives or inducements to sign people up to student debt. No more will people be signed on for a student loan on the basis that they get a free ipad or a free lap top or a meal voucher or a cash giveaway.
What we want is for people to sign on to undertake vocational education and training purely because of the quality of the course, the content of the course and the price of the course not because they’re being given some sort of giveaway as part of the process.
Ultimately the Federal Government is providing around $1.6 billion per annum in support for vocational education and training student loans – for loans through VET FEE Help. That’s a significant contribution to help students pay the fees associated with undertaking a VET course and we want to continue this program that gives equal access to people undertaking vocational education as you have for people undertaking university studies. That they can charge the fees associated with their studies to a loan against the Commonwealth taxpayer and only pay it back when they make a certain amount of earnings over around $53,000.
It’s a very valuable support we provide but sadly it’s been abused by people who have been using it as a means to sign people up to debts for courses they are ill equipped or not even planning to complete and the taxpayer is carrying a heavy burden as a result of that.
The series of reforms that we are implementing are estimated to save $16 billion over the next ten years in unnecessary loans – that’s $16 billion that people won’t have charged up as debt, $16 billion in bad debts that the taxpayer won’t have to be paying for. So it’s very good news in terms of support for the taxpayer, support for vulnerable Australians and ensuring the quality and integrity of our training system.
The message today is very much one of if you are offered an inducement or incentive to sign up for a vocational education training course, that it is now against the rules and you should report that person immediately.
JOURNALIST: Has ASQA got the resources to be able to police this effectively because there have been a lot of complaints over the past few years?
SIMON BIRMINGHAM: We’ve given some $68 million in additional funding to ASQA the national regulator to empower them to undertake more auditing to strengthen their capacity to target those training providers who might be doing the wrong thing and we will be providing an additional level of funding specific to VET FEE Help so that there’s extras auditing around the student loans process.
JOURNALIST: Can you talk us through some of the other practices that you get reports of in the industry. In particular, what is the nursing home advice?
SIMON BIRMINGHAM: We see some terrible practice out there we have seen vulnerable Australians in nursing homes, in aged care facilities, in retirement villages being targeted to sign up for a student loan when it’s clearly the case they will not be completing or undertaking that course. And so we want to make sure there is a strong test in place that somebody has to have the ability and the capability to undertake the course and complete the course and work in the field that the course relates to.
These are reforms that will be rolling out during the course of this year and we’re putting in place a working group that will have strong consumer representation on there, consumer law advocates, state consumer affairs officials to make sure the rules around VET FEE Help are as strong as possible in protecting both vulnerable Australians and the Australian taxpayer.
JOURNALIST: What sort of penalties are we looking at for people who break these rules?
SIMON BIRMINGHAM: The ultimate penalty is that we can either disqualify a provider from offering VET FEE Help loans or we can de-register a training organisation. They are the ultimate penalties but we are also putting in place extra arrangements to strengthen the range of financial penalties that ASQA could apply to training providers and I’ll be rolling out later this year legislation that will allow us to more easily waive debts that students may have signed on to that could be against the VET FEE Help rules and importantly recover that funding from the training provider.
JOURNALIST: So will that help the people that have already been stuffed around by some of these organisations because there are people carrying huge debts now?
SIMON BIRMINGHAM: Unfortunately the rules that the Labor Party put in place around VET FEE Help were so wide open you could drive a truck through. We’ve seen a whole raft of unethical practices as a result of that. They may be unethical but sadly they were lawful at the time and people have been lawfully signed on to debts that unfortunately they now carry and they carry against their credit rating that impacts their capacity to borrow for cars or homes, etc. A very clear message for students or people considering a VET FEE Help program is that it is a real debt, you are expected to repay it and it has consequences even if you are not financially earning enough to repay it at this present time.
JOURNALIST: So would that legislation later this year in some way help those people?
SIMON BIRMINGHAM: The legislation won’t be retrospective so it cannot deal with those that have a acted within the law to date but we are strengthening the laws and strengthening the rules to make sure these unethical practices cannot and do not occur in future.
JOURNALIST: At a state level we’ve seen an issue of a lot of people enrolled in training courses but never complete those training courses and not go on to work in those industries. Will any of these reforms prevent that or seek to eliminate that practice where you’ve people doing training courses for no real benefit?
SIMON BIRMINGHAM: We hope to create a more informed market place to make sure that students have far better information about the student satisfaction with a course, the employer satisfaction with the course, the employment outcomes from the course so there’s greater transparency via the My Skills website and via the information students get for them to make informed decisions and that by making informed decisions which see people only sign up for courses that have a greater prospect of improving their employment outcomes.
In SA we provide at present around $130 million per annum to the state system and I certainly encourage the state government to be structuring their subsidies and incentives in a way where they are supporting programs and courses that have direct employment outcomes.
Thanks very much.