Subject: VET FEE-HELP Reform


SIMON BIRMINGHAM: Well Jonathon look, I have concerns about elements of that. I’m particularly concerned about some of the reports that you’ve relayed from your listeners about the sign up tactics that are being deployed, the approach of free giveaways, the lack of transparency about the level of debt being incurred. These are issues that as a government we are moving to crack down on. A number of steps were taking last year and a number of further steps are currently being taken to really try to reign in this type of awful behaviour that is taking advantage of vulnerable people and of the federal taxpayer.

JONATHON KENDALL: Will your office be investigating the Australian Institute of Professional

SIMON BIRMINGHAM: We announced last week that some 23 providers who are authorised to give out VET FEE-HELP loans would be the subject of detailed audits by the national regulator, ASQA. Now I’m not revealing who they are at present because we, of course, want those audits to be a surprise to the people where they’re coming and that we can make sure we get a full picture of the type of activities they’re up to but, we are absolutely targeting major providers of VET FEE-HELP services, providers where there have been complaints for detailed an rigorous audits. We are also putting in place new legislation, tough new regulations and I’ve indicated there will be further changes to the way VET-FEE HELP works to make sure we stamp out these types of appalling practices. 

JONATHON KENDALL: Should training organisations, registered training organisations be allowed to offer incentives like that, say iPods or laptops, to get people to sign up to their courses? 

SIMON BIRMINGHAM: I have serious reservations about the offering of such incentives just to get people to sign up. I don’t that is appropriate. Not when you’re talking about a deferred loan that people only have to repay to cover their fees when they earn a certain level of income. Look, it’s really important that we have developed a system for people to be able to undertake vocational education and training that operates on a parred how people pay for their university fees. They can put their debt, their fees essentially on a federal government credit card and they only have to repay it when they earn a certain level of income, and that’s a wonderful acknowledgement that vocational education and training should be of equal value as university studies; but alongside that of course, comes the responsibility for the vocational education and training providers to be delivering courses of high standard, to be acting in a way that is entirely ethical and I do want to make sure that all of our policies and measures in place force them to have to act in that ethical way and ensure that people engaging in vocational training get value for money and the federal taxpayer gets value for money and certainly, anybody who has, any instances of what they think is dubious practice, I would encourage to ring the new National Training Complaints Hotline which we established only a few weeks ago which is 133 873 and people should, with any complaint about a training provider or people trying to sign them up to a training provider should give that hotline a call and their complaints to that will help to drive the types of audits that the national regulator undertakes. 

JONATHON KENDALL: But it is, at this stage, legal for training organisations to offer incentives. Should then, guidelines around that be tightened so that they can’t do things like that?

SIMON BIRMINGHAM: Well from the 1st April, firstly, it will be a requirement for training providers, existing training providers, to make clear exactly what students are signing up for, what the debt provisions are and any changes to those debt provisions in future. So, from the 1st April we have new regulations that will take effect that ensure people should understand the level of fees and how those fees will be put on to a VET FEE-HELP account in their name; but as I flagged before, I’m having a good hard look at tightening the VET FEE-HELP regulations, including in relation to the provisions of giveaways or incentives for students to sign up. I do have real concerns there and I’ll have more to say about that in the next few weeks when I’ve finished consultations with industry, with training providers, with consumer groups that make sure that we dot all the “I’s” and cross all the “T’s” so that reforms we make in this space work to give students the absolute confidence that the system is working for them.

JONATHON KENDALL: OK, we’ve been told that sales staff for the Australian Institute of Professional Education have tried to sign up people who don’t have basic English or literacy
skills. Should there be tests or minimum requirements for all diploma courses?

SIMON BIRMINGHAM: There certainly should be a certain level of prerequisite educational understanding before people are undertaking what is an advanced and higher level vocational
education qualification like a diploma or an advanced diploma; and once again, this is a factor that we are having a look at. So, the types of vocational education reforms that I’m looking at undertaking in relation to the VET FEE-HELP area, which the federal government funds, are comprehensive in terms of dealing with incentives, dealing with prerequisites, looking at the duration of courses and whether there is enough learning content or units of study within an individual course. So, we’re taking a fairly comprehensive approach to this because as a federal government we are seriously concerned that we have inherited a system that was ripe for rorting from the previous government and so we’ve been taking a number of steps over the last year to clamp down on this and that will come to culmination relatively shortly; but we’ve already given the national regulator $68 million to undertake more audits and get tougher in
terms of how it targets the bad providers. We’ve put in place new regulations that affect all training providers, but, to come, will of course be this new sweep of measures focussing on those VET FEE-HELP providers in particular. 

JONATHON KENDALL: Ok, are these problems that we’re talking about – sales staff going door to door trying to sign people up to courses – are they the results of relying on the private sector, which has profit as its priority, to deliver part of our education system?

SIMON BIRMINGHAM: Jonathon, I think we have to get the balance right in this space. TAFEs play a really, really valuable role in providing services especially. Services in areas where there is some type of market failure, where a course is not economically viable for private providers to operate, but equally we should understand that private providers have for a very, very long time, provided many valuable training courses right around Australia. It has not been the exclusive domain of TAFE. There is a role for both public and private providers here. What we have to make sure we have: a high quality standard that stamps out dubious marketing practices, that stamps out courses that are too short, that get rid of what I sort of dub as the “Weekend Diploma” and that ensures that whether it’s a public provider or a private provider, students, their families and the taxpayer can have confidence that everyone’s getting value for money; and certainly, together with governments like Victoria, we are working as one to try and
address these problems. I met with Steve Herbert the other week and we share similar concerns and are working to make sure our federal policies align with the types of objectives to stamp out bad practice.

JONATHON KENDALL: OK, thankyou Senator Simon Birmingham.

SIMON BIRMINGHAM: A pleasure Jonathon, anytime.