Interview on 891 ABC Adelaide Breakfast with David Bevan
Issues with Labor’s failed VET FEE-HELP; New VET Student Loans program; Family day care

David Bevan: Every Wednesday Matt and I gather three South Australian federal MPs. Don’t want to hear these fly-by-nighters from out of state, we want some good local people to discuss the national issues because they represent you in the Federal Parliament. Today we have Simon Birmingham; he is Liberal Senator for South Australia and the federal Education Minister. Good morning Simon Birmingham.

Simon Birmingham: Good morning, David, great to be back.

David Bevan: Kate Ellis is the Labor MP for Adelaide and Shadow Minister for Early Childhood Development, TAFE and Vocational Education. We’ll need to talk to her this morning, good morning Kate Ellis.

Kate Ellis: Good morning David, great to be with you.

David Bevan: And Sarah Hanson-Young is the Greens Senator for South Australia, she’s the spokesperson for industry and trade, good morning Sarah Hanson-Young.

Sarah Hanson-Young: Good morning, thanks for having me.

David Bevan: Alright now should I ask you upfront, all of you, do any of you have staffers who are overseas who feel the need to strip down and expose their underwear, displaying the flags of other countries, should Australia win a sporting event. Simon Birmingham?

Simon Birmingham: As far as I’m aware all of my staff are happily within Australia at present.

David Bevan: With all of their clothes on?

Simon Birmingham: So far as I’m aware.

David Bevan: Kate Ellis?

Kate Ellis: Yes, no my staff are also fully clothed and also in Australia.

David Bevan: And Sarah Hanson-Young?

Sarah Hanson-Young: Well I’ve got a very strict rule in my office that people have to keep their pants on at all times.

David Bevan: Really what prompted that rule? I would have thought that was just a given, Sarah Hanson-Young?

Sarah Hanson-Young: [Laughs] Should be.

David Bevan: It’s good to know. Simon Birmingham if we could come back to you, you’re the federal Education Minister; the national story today is that you’ve closed down the VET courses. Now these aren’t courses for people to become veterinaries, these are the vocational education training courses, which were set up under the Gillard Government in 2012 but your government has had carriage of them for the last three years, you’ve finally decided that there’s nothing that can be done except closing it down and starting again.

Simon Birmingham: In short order, that’s right, David, that the VET FEE-HELP scheme established by the Gillard Government saw topsy growth in fees, in rorting and in costs to taxpayer as well as to the reputation of the VET sector and to students. So having applied around 20 different measures over the last two years to try to bring this scheme into line and saved hundreds of millions of dollars as a result of the measures we have applied, the view is that the best way to fix it once and for all is to close down Labor’s failed scheme, start again and build a new program from the ground up.

David Bevan: Can you give examples of how people have been ripped off?

Simon Birmingham: I think the most appalling examples are examples where we’ve seen brokers acting on behalf on providers going into remote indigenous communities and signing up people with low literacy levels, to loan agreements that they didn’t understand or people in retirement villages, the elderly and the vulnerable there being targeted similarly for these types of [indistinct].

David Bevan: But for what sort of courses, I mean if you were somebody who was approached in an indigenous community with a low literacy rate or somebody who was in a retirement home, what sort of courses were they being signed up to do?

Simon Birmingham: The most rapid growth we’ve seen has been in the fields of diplomas in business or management, things that can be offered in an online format, but we have appalling completion rates of single digits in a number of those areas. We’ve acted along with the ACCC to get rid of a number of providers out of the system but the truth is they have us tied up in legal proceedings and otherwise to challenge that under the way the act was drafted by the Gillard Government so the simplest thing is to close the current scheme down, hit the reset button and start again with a new program, which we estimate will save about $25 billion in bad loans over the next decade.

David Bevan: Now were the people who signed up for these courses, did they just waste their time or were – did they actually lose money as well?

Simon Birmingham: Well they have a debt to the Commonwealth, now it’s like an old HECS debt that many listeners would think of these things as being so it’s an income contingent loan. They’ll never repay it unless they reach income levels in excess of $50,000 and in most of these cases that sadly won’t be the case.

David Bevan: But if they were ripped off… shouldn’t the Government waive their debt? Otherwise they’re the victim twice over, they have been the victim of being signed up and perhaps humiliated joining up a course that was a waste of time, but they’d also be facing a debt to the Commonwealth, and if you think they were the victims of shysters, shouldn’t you waive the debt?

Simon Birmingham: So David we have a number of debts that have been waived or repaid by providers as a result of the compliance action that has been undertaken and I expect we’ll see more of that over a period of time, of course there are people who knowingly and willingly signed up to these schemes, some of them before we took the action that we took in April last year to ban inducements so they signed up to get a free laptop or other things, but if they did all of that knowingly and with full awareness, then there’s nothing that can be done to necessarily waive that debt, in fact they’ve voluntarily agreed to it. With others who are really vulnerable, we’ve taken the steps along with the ACCC to prosecute and that is seen [indistinct].

David Bevan: [Talks over] So who – if you’re a victim of this, who do you contact to plead that you are a victim, a genuine victim and you weren’t just trying to get a free laptop?

Simon Birmingham: Sure look I would urge people to get in touch with authorities, there is a hotline number that people can ring: 1800020108 or indeed simply get in touch with my office and we can help put people through.

David Bevan: Alright we’ve got a text here, in a moment we will come to Kate Ellis and Sarah Hanson-Young but just to get some basic facts out for our listeners, a text here asks what will it mean for all the high schoolers doing VET courses in year 12 and a follow up question to that one, Simon Birmingham, is are all the VET courses rorts, were some of them actually genuine?

Simon Birmingham: So second question, no there are of course many genuine courses out there, all courses should in fact be genuine, there are some providers who are dubious but I don’t want to tarnish all providers either, there are many high quality providers out there and we want to make sure that they can survive into a new program.

And the first question, it’s important to appreciate that this only relates to high level VET qualifications, diplomas and advanced diplomas. So, in high schools, students are usually studying certificate 2 or 3 type courses so this program has not been applied to them.

David Bevan: Okay, they should be fine. Alright now, Kate Ellis, this scheme, it was set up under the Gillard government, do you carry some blame for this?

Kate Ellis: Well, I think that the figures that Minister Birmingham’s put out himself show that the blow outs in this scheme occurred under the Liberal Government and I mean, we are very pleased to see some level of action finally today. This government has been absolutely asleep at the wall – at the wheel when it comes to this. We’ve seen them more worried about their own internals, we’ve seen five different ministers have coverage of this portfolio and now we’ve seen that there’s going to be an announcement about action to crack down on it and we would welcome that and we look forward to seeing the detail of it.

This is something that we announced policy to address and, just in May, the Liberal Party were falling over themselves to criticise our policies. Now they want to take credit for them today.

David Bevan: Although, Simon Birmingham says look, we’ve tried and we had 22 attempts at trying to fix it up and people would have signed up to this thing so you’ve got to take them into account and in the end, we’ve just had to close it down. It was a dog of a deal from the beginning. You take any respon…does the Labor Party take any responsibility for this mess?

Kate Ellis: We don’t take responsibility for the fact that for three years, this government has done nothing and if we actually have a look at the figures, in 2012 when we were in government, this scheme cost 325 million. Now, obviously there was a change of government in 2013, in 2012 it had blown out to 1.8 billion and in 2014 $2.9 billion. This is not just tens of hundreds or even millions of dollars, this is billions and billions of dollars and for three years, this government has done absolutely nothing effective …

David Bevan: [Interrupts] Simon Birmingham, she makes a pretty good point doesn’t she? I mean, three out of the four years, your government’s been at the steering wheel.

Simon Birmingham: Well David, the point that Kate has overlooked there is that it was in 2012 the Gillard government opened this scheme up to a whole raft of additional providers, additional courses that previously weren’t available. So, of course the growth took off from 2012 and that is when the Gillard/Labor government actually opened the scheme up and we have been grappling with that. As I said, we will have hundreds of millions of dollars that have been saved from the measures we’ve put in place to date …

David Bevan: Well, you say grappling – perhaps you were fumbling, I mean, you’ve had three years to close down something that you thought was a bad deal.

Simon Birmingham: Well, ideally we would have made it work because ideally you wouldn’t have the disruption of basically tossing out the good providers and saying they have to go through the process of applying for entry again which is what’s going to happen, you wouldn’t have the disruption and confusion for students of completely changing the program and all of those types of factors. So, we’ve tried to fix it, fixing it has proven to be very, very difficult. Labor went to the election with a one trick policy which was to say they would cap all courses $8000. We’re proposing much more sweeping reform which will have tough barriers to entry for providers, will restrict the courses to only those with good employment outcomes and will actually make sure that loan gaps relate to the cost of delivery of the course. Some will be less of $8000, some will be a little bit more.

David Bevan: Okay. Greens Senator Sarah Hanson-Young, do you accept that the scheme had to be closed down?

Sarah Hanson-Young: Look, yes absolutely and I must say I think it’s a bit of a pox on both houses here and Labor opened this up and the Liberals have continued it and it’s taken until now to clean it up and that’s if – we’re yet to see the legislation. You know, we’ll go through the process of getting an official briefing about how all of those things may work but really what this shows is the pitfalls of the privatisation of something so fundamental to both Australia’s education system but also our getting people ready for the job market system in terms of the broader economy and the truth here is we’ve been spending public money on for-profit  providers and it hasn’t worked and I would be saying right now that all of those people in the TAFE sector and the educational experts who in 2012 warned against this type of money being put into this system, flood the market to make this education a for-profit sector, they said that this would happen and they’ve been proven right.

David Bevan: Okay, Kate Ellis, if we can come back to you, front page of The Australian today, $1.6 million handed to daycare business operator without proof of kids. This looks like another rort which began under the Gillard government. In fact, I think you were the minister responsible for child care. This story reports in the 16 months after Ruben Majok Aleer Aguer ran a family daycare business from his Canberra home, he received $1.6 million in federal government money even though multiple officials sent to do some compliance checks never spotted a child confirmed to be in care. This is just one example of many where the child care system has been rorted over the last two, three, four years. This was I think the gun under your watch again. Do you accept any responsibility for what’s happening in child care?

Kate Ellis: Well this is another example of us seeing that Simon's a bit of a one-trick pony. All he can come up with was it's all Labor's fault. Now I'll say a few things about the example you've given. If somebody is claiming child care subsidies without having children in their care, they are breaking the law and they should face the full force of the law. There is no doubt about that. What we have seen is a huge growth in the family day care sector, and we have seen a number of examples of fraud and of rorts, and they need to be clamped down on …

David Bevan: [Talks over] Well according to The Australian, there's no explicit requirement in the federal legislation for a care provider to actually look after children. When you set the system up, did you make sure that you had to look after kids to get the money?

Kate Ellis: Well obviously if you are claiming child care subsidies there is a requirement that you are caring for children. But there's a bigger issue here. There was something really odd that was in the front page story of The Australian yesterday, and that is where Simon has tried to say that the rorts that are happening in the family day care sector are Labor's fault and are a result of the National Quality Framework. There is absolutely no truth in there. There is absolutely nothing in the National Quality Framework that has opened the door for this to be able to occur, and it is a shameless example of either being dishonest or not knowing your own portfolio if you're going to suggest that there is some sort of link there. There is not. Now we have supported the Government in ways that we can try to crack down on rorts in the family day care sector when the Greens have sought to oppose them. We have worked with the Government and we will continue to work with the Government to make sure that we clamp down any rorts in the system, but …

David Bevan: [Interrupts] We'll cut to Sarah Hanson-Young in a moment, but Simon Birmingham, again, your government has been at the helm for – what is it, three years? You're in your fourth year now, aren't you? Do you accept responsibility for this?

Simon Birmingham: David we've taken a lot of action and have action underway there, and I hate to burst Kate's bubble but I haven't linked these problems to the National Quality Framework. But that aside, to the actions we've taken already are estimated to save around $421 million by stopping child swapping and dubious practices in family day care. I announced new regulation a few weeks ago that will stop dubious practices of people claiming care for looking after siblings or transporting children, which are estimated to save around another $27 million. And we have comprehensive wholesale reform to child care subsidies before the Federal Parliament at present, new legislation which will actually strengthen the capacity of the Federal Government to block providers from claiming funding in the future.

David Bevan: Well according to The Australian, this fellow was getting $100,000 a month in child care benefits. And they couldn't find any kids.

Simon Birmingham: And this is part of the problem, which is why we need to see a new legislation passed, and why we've brought it into the Parliament and are taking action in that regard.

David Bevan:Well did – did …

Simon Birmingham: Because we have an odd arrangement at present where state and territory governments are applying these compliance checks; they're not actually providing, with the type of regularity they should, information back to us to be able to take action [indistinct] …

David Bevan: [Talks over] Does the law require you to actually look after kids, or do you get the payments just for having qualifications?

Simon Birmingham: Well the federal law actually subsidises families, not providers, so that is the part of the way the system is built. So we subsidise the costs of families rather than providers themselves, but providers of course are the ones who ultimately see the money. But we absolutely need stronger laws. We have them in the Parliament right now, and I hope and trust that they will pass soon, and we also have a number of discussions I've been having with the state and territory ministers about better sharing of data and information so that the almost half a billion dollars of savings we've realised to date can be built upon by clamping out any of these practices.

David Bevan: Sarah Hanson-Young, will the Greens support changes to crack down on this? It does sound like an enormous rort.

Sarah Hanson-Young: Yes, yes we absolutely will, and there are a number of instruments before the Parliament which, my understanding will take effect in the next couple of days, actually. But I think really what we see here is there is an awful lot of money being put into the child care system, and it's not necessarily – and the rorting story is proof of this – always going to where it's needed most. And one of the reasons why family day care, for example, has become quite popular is because it is delivering – it's the type of … it's one of those services within the child care system that delivers a bit more flexibility when it comes to hours, and I think we need to be looking at the needs of parents and families. If it's not in family day care that we want those kids, how do we deliver flexible and quality care so that families can meet their job requirements but also that those kids are getting good quality care and education as well.

David Bevan: Sarah Hanson-Young, thanks for talking to us, Greens Senator for South Australia. Before that Simon Birmingham, he's the Liberal Senator for South Australia and Education Minister – Federal Education Minister – and Kate Ellis is the Labor MP for Adelaide and Shadow Minister for Early Childhood Development.