Subjects: Vocational Education and training reform; Higher Education reforms.


JON FAINE: Senator, good morning to you.

SIMON BIRMINGHAM: Good morning John and good morning to your listeners.

JON FAINE: We’ve frequently discussed how this system is wide open to rorts and there is any number of them, what are the principle problems that you’ve identified and how are you going to fix them?

SIMON BIRMINGHAM: Well John I’ve been over the last month or so since taking on this portfolio, engaged in consultation with training providers, industry groups and students; trying to get a good appreciation of the issues in the sector and certainly everyone has a concern that there are a small number of training providers engaged in dishonourable activities from the manner in which they sign people up to undertake training through to the quality of the training course and I’m very determined to make sure that we take steps to stamp out those types of poor practice and ensure that the good providers don’t have their names tarnished by a rotten few.

JON FAINE: In this industry, everyone knows who the “shonks” are, but the public don’t. Why not expose them so that we all know what the inside industry experts know?

SIMON BIRMINGHAM: Well Jon look, that’s probably a good part of the answer, and that is to ensure that we have a more informed market, that we do more in terms of capturing student comment and student data and make sure that that is publically available so that students, when they go to enrol have easier access to information from which to compare one provider against another. But I also think we have to improve some of the standards that are applied to those providers in the first place. I’m concerned that I hear too many stories of people being signed up to what they think is a free course or a course where there’s an incentive, such as an iPad or something on the offering to them, and not realising that they accrue a HECS style debt through VET FEE-HELP in doing so. Now that’s no good for the people and it’s no good for
the taxpayer if that debt isn’t ultimately repaid.

JON FAINE: and that’s whether you finish the course or not, whether the course is any good or not, whether you get a job or not; you’re up for the same, well the debt is there anyway.

SIMON BIRMINGHAM: Well the debt is there anyway; of course it is a HECS style debt, so its income contingent, you have to earn around $53,000 or so to start paying it off. So it’s a very generous program the federal government now has in place to support people undertaking diploma and above courses through vocational education providers and that’s a great thing and it’s really positive that we are encouraging that level of take up in the VET sector; which does provide valuable support to around three million Australians every year but of course, it’s a terrible thing if someone is signed up to a debt unwillingly or unknowingly and it’s a very bad thing for them, if they are forced to pay it off without having had any benefit from it or for the taxpayer, if that person never reaches the income to pay it off.

JON FAINE: Exactly, the taxpayer ends up paying it off. We’re pouring millions of dollars into shonky education providers to do lousy courses for people who will never get a job from them and never repay the debt. So we’re just pouring money down these people’s throats. Why not prosecute a few? The prospect of going to jail is usually a pretty strong deterrent. 

SIMON BIRMINGHAM: Well the other aspects that I have flagged over the last week to the sector that I’ll be taking a close look at relate to entry requirements for courses and making sure that there is a tougher standard placed on the training provider to be certain that students
have met certain prerequisites for undertaking a course. That they have relevant literacy and numeracy skills before they’re enrolled, that there is a tougher standard in terms of the provision of information to people about the level of debt and when those debts are accrued as well as taking a look at the duration of courses. There are some diploma courses out there that people seem to be able to complete in a miraculously short time and I have my doubts about
the “weekend diploma” as such and certainly think that we should be seeing multiple units of study attached to diploma courses. Which then breaks down the level of fees across the duration; and all of those things to your point will allow the regulator to take a tougher hand because they’ll have clearer regulations to inforce on such providers.

JON FAINE: It’s partly your government’s, the Abbot government’s obsession with what you called “red tape reduction” that led to this problem; and in so many other areas you were determined to lift what you claimed was the regulatory burden on the business sector led to a removal of checks and balances. Which means there are people out there who immediately sense an opportunity to rort a government scheme and then you’ve got to bring back some of the public servants who provide the checks and balances that you got rid of.

SIMON BIRMINGHAM: Well Jon, on this one I take issue with that generalisation. We actually have already put in place some tougher regulations. My predecessor in the vocational education and training space, with Industry Minister Ian MacFarlane, brought down some tougher rules around the use of brokers but not only that; he actually provided additional funding to the quality regulator, ASQA and in doing so removed a requirement for ASQA to focus on becoming a cost recovery regulator that actually gave them the means to be able to, and the funding to be able to change their approach where they are being able to focus more on garter generation that allows them to hone in on who the bad providers are, rather than just undertaking tick-a-box compliance activities. What we want is an area where good training providers can earn a level of autonomy where they are left alone, to an extent, by the regulator; and those doing the bad thing who, as you say, many people around the sector know who they are, are targeted for rigorous and thorough audits and we’ve given some $68 million in extra funding to ASQA over the next four years to be able to get on and do that.

JON FAINE: Well that will be welcome and let’s see if somewhere down the track it has the desired impact of course. While I have you Senator, the Financial Review today reports that for the first time in nearly 40 years, the number of parents taking their kids out of government schools and putting them in to private schools has declined and more and more parents now are keeping their children in government schools, particularly for primary education. I have a theory as to why, do you?

SIMON BIRMINGHAM: Well I’d be interested in your theory Jon…

JON FAINE: Happy to share it with you, but I’d like to hear yours first…

SIMON BIRMINGHAM: I think we have, across the education sector, some outstanding government and non-government schools. I have two young, who are not yet at school and when I talk to my friends around the place I see a very wide mix of responses of what they are going to do. 

JON FAINE: Why for the first time in 40 years, would there be a change in community attitudes? I’ll suggest to you minister, it’s because of the reforms to university education fees that your governments introducing and parents are saying “well I can’t afford a private primary education, secondary education and now tertiary education at $100,000 fees; so you’re going to have to go without a private school education for primary school if I’m going to have to pay university fees at the other end”.

SIMON BIRMINGHAM: Well Jon, most people, since the introduction of the HECS scheme, have deferred payment on their higher education fees and there is nothing proposed in our reforms to tertiary education that would change someone’s ability to do that. So, it is one thing

JON FAINE: …Potentially no, but I’m saying in the market place what parents are doing, lots of parents take advantage of the discounts available for university fees by paying them upfront. I said to you, what I think might be happening is families are saying “well ok, if we’re going to cop fees of that level and try to pay for them at university level, we’ll go without a private education at primary school level”

SIMON BIRMINGHAM: Well Jon, I just want to make sure that it’s clear to all of your listeners, because there has been a level of misinformation about this, that nobody will face upfront fees as a result of changes to higher educational reforms to the tertiary sector. The opportunity to defer and put them on HECS…

JON FAINE: …Well thanks for the clarification, but what do you think of my theory?

SIMON BIRMINGHAM: I’d be very surprised if that is the case, but look there are a range of cost of living pressures that households are facing at present, which may well see people making that judgement call to think that they would rather save money for private education later on. It may be Jon, It may be the case that parents who are wanting to pay for their student’s university fees are considering the true life costs of education to some extent, but I would be surprised if that were really the case, given the opportunity to defer all of those fees on the HECS scheme which is what the vast majority of people have done, since its introduction.