SUBJECTS: VET FEE-HELP
LEON BYNER: We often talk about training on this program, and we know that whether you’ve got a Liberal or Labor government federally, both governments are pretty keen that you should either be studying or working, unless of course there’s some incapacity from which you suffer. Now, there’s a lot of money spent on training in Australia; billions of dollars. And investigations that I have previously done on this program over years tell me that a lot of these courses that are funded are sometimes dinky, to say the least. But we now have a situation where training colleges are going to be banned from offering laptops, prizes, and other inducements to attract students. Now what is really amazing about this story is that the mere front of some of these so-called institutions to go into – listen to this – mental health units and get people in retirement to do courses, irrespective of whether they might finish them or even qualify to do them, just to be able to access the business. Now let me tell you that the ACCC is preparing to prosecute serious allegations of bad behaviour among some vocational education and training providers. So there’s going to be a crackdown. Let’s talk to the Assistant Minister for Education and Training, Senator Simon Birmingham. Simon, how long have you known about this?
SIMON BIRMINGHAM: Well good morning Leon and listeners. I’ve been in this role since just before Christmas, so for me it’s a relatively short duration, but it’s become evident very clearly and very quickly that this is a problem in relation to the VET FEE-HELP scheme that we have to tackle. This is the Federal Government scheme whereby students can get a HECS-style loan where they can charge the fees associated with their training for diplomas or advanced diplomas to the Commonwealth Government, and they only have to repay that when they reach a certain income threshold. And it’s become clear to me that there is significant rorting of this programme, and that’s why we’re announcing a suite of measures today.
LEON BYNER: How do they rort it? What do they do?
SIMON BIRMINGHAM: So the rorting is quite remarkable. You’ve obviously picked on the most insidious aspect of it, which is, I think, relatively few and far between, but sadly we do see examples whereby people have targeted those in aged care facilities, or otherwise vulnerable individuals, to sign them up for courses. More frequently it’s been the case where third-party agents and brokers acting on behalf of training organisations have offered inducements and incentives to sign people up – free iPads, free laptops, meal vouchers, even cash giveaways have been offered to get people to sign up to a training course. And all too often those individuals either have little intention of undertaking the course, or are poorly equipped in terms of their capacity to actually do so in terms of educational prerequisites. And that’s bad news all round, because it means the individual is saddled with a student debt, which ultimately is a loan like any other in that it goes against their credit rating and impact on their capacity to get credit cards, home or car loans in the future, bad for the taxpayer because frequently these loans will never be repaid, because some of these most vulnerable individuals will never actually reach the income threshold for repayment, and it’s bad for the training system generally, which overall serves Australia incredibly well, but whose reputation is being tarnished by this sharp practice of a few individuals.
LEON BYNER: I don’t know how few it is. Because I can tell you, if you spoke to Gary Collis, who used to be an employee ombudsman, and a few other people that I connect with professionally on this program, they will tell me – and they’ve told me often – that a lot of these companies promise the world, they’ll give you a free iPad, really the whole point of going to the vocational training is to get a job. And I wonder whether, if we actually did an audit, and had a look at sign up versus outcome versus job, what kind of hit rate we would get.
SIMON BIRMINGHAM: So Leon, part of what we’re doing is indeed that. I want to create a much more informed marketplace for students and their families to choose where they go to undertake courses. So the reforms today, perhaps the sexiest part and most hard-hitting, is banning these inducements and these free giveaways, and making sure that we can recoup money from training providers if they engage in future in these sorts of unethical practices. But we also want to get better data and information about the student satisfaction with the course, the employer satisfaction with graduates from that course, the job outcomes from different courses, and make all of that publicly available through the MySkills website to ensure that people are able to choose their provider more carefully, and that government decisions in future are better informed about the training outcomes of different service providers. I think the majority of training institutions in Australia do a good job and are trying to provide quality qualifications and outcomes for their students. But I don’t disagree that the scale of unethical behaviour at present is quite large. I think most of it occurs through these brokers and third-party operators.
LEON BYNER: Isn’t it – but we’re talking here – I mean, you’ve got these people sending their brokers to nursing homes, mental health units, and even Centrelink offices. I mean, this is outrageous!
SIMON BIRMINGHAM: Oh, it is completely outrageous. And the reforms today by banning these types of practices, I hope, will shut down these business models – that they will put out of business a number of these brokers and third-party agents. And if there are training providers who are overly reliant on this type of practice, then it may well put them out of business as well. And if that’s the case, because they’ve been doing …
LEON BYNER: Alright.
SIMON BIRMINGHAM: … the wrong thing, then that’s a good outcome.
LEON BYNER: Let’s say you want to upskill – because it’s not just young people coming in to the work profession, it’s also people that are maybe – have been in the workforce for a while or even longer. So how do you know – give me – from your standing point as Minister, Assistant Minister for Training and Education, what are the three things to look for to ensure that you get a course that’s actually going to deliver you a job? I mean, how do you know – because sometimes when you pay upfront, and a lot of these – and I understand that in your legislation you’re going to stop that, where a lot of these companies are charging all the amount up front.
SIMON BIRMINGHAM: That’s right.
LEON BYNER: But how do you know whether the course you’re going to take on is actually going to deliver you work?
SIMON BIRMINGHAM: So [indistinct] we will stop training companies from being able to levy against the taxpayer the entire charge of the course upfront, and make sure there are multiple units of study and multiple opportunities for students to exit if it’s not the right course for them, without incurring the full debt. But in terms of advice to people undertaking a course, what I would say firstly is to get in touch with an industry association or major employer in the area of your interest, and perhaps seek their advice about who they regard to be a good training provider in their sphere. I’ve met recently with the Hairdressing Council, and they are actively accrediting as a body …
LEON BYNER: Yeah.
SIMON BIRMINGHAM: …those training institutions who they regard to provide high quality graduates for their industry. And I think that’s a really valuable thing for them as an industry body to be doing, but what would be good is for students to know that that’s going on, and to be able to go and touch base with those institutions. Check, of course, the information on the MySkills website, which we are providing more information and we will really develop that over the next couple of years. I’m sorry that I’ve inherited a system that was sort of set free in 2012 in a very unregulated way, and by setting it free and opening it up we’ve seen a reaction just as we saw in the home insulation scheme …
LEON BYNER: Yeah.
SIMON BIRMINGHAM: …which [indistinct] have some responsibility for the clean up of, and in opposition the identification of the problems – the same sorts of problems.
LEON BYNER: Sure.
SIMON BIRMINGHAM: A great big honeypot of government money that people have just gone after. But the MySkills website will start to provide better information on student satisfaction, employer satisfaction, job outcomes; and they’re really valuable things for people to have a look at as well. Look, the third piece of advice …
LEON BYNER: Yeah?
SIMON BIRMINGHAM: … really would be to – when you go to enrol, really scrutinise the training provider about the hours of study involved. If it seems too good to be true, or if it looks like it’s going to be undertaken in too fast a timeframe…
LEON BYNER: Yeah.
SIMON BIRMINGHAM: …then the qualification may not be worth the paper it’s written on. Now…
LEON BYNER: Okay. Well…
SIMON BIRMINGHAM: …[indistinct] stamp that out.
LEON BYNER: Yeah.
SIMON BIRMINGHAM: But students need to take some responsibility for it themselves as well.
LEON BYNER: Simon, thank you. That’s the Assistant Minister for Education and Training.