David Speers: Now this issue we’re going to look at now about private colleges and what students are paying, what the taxpayer is paying as well, has been well on the boil for a while. The Australian newspaper reports today that $1 billion in taxpayers’ money has gone to about 15 private colleges that have been found to be in breach of government regulations. Exactly what have they done and what is the Government doing to clean this up, not just for the sake of students but for the sake of the taxpayer as well?

The Education Minister, Simon Birmingham, joins me now. Minister, thank you very much for your time this afternoon. Before we get to all of that, I want to start by just getting your thoughts on the South Australian bushfires, your home state, does sound like weather conditions are easing which is good news. Nonetheless two lives have lost, extensive property damage, what is the Federal Government doing to help?

Simon Birmingham: Well David it is a very distressing situation, and it’s an area that I know well, it’s very close to where I grew up, and indeed I had family members evacuated yesterday. So, I’ve been following closely. I know that the Prime Minister, Malcolm Turnbull, spoke with Premier Jay Weatherill last night, and that there’s been regular communication between federal authorities and state authorities. We have a standard process in terms of the type of relief assistance that is available to individuals in these circumstances, and the authorities are talking to each other today to assess exactly which package that will be, and all of those details will be made very clear to individuals in the coming days who have been affected in terms of the emergency support that will be available to them, and some of the recovery assistance that may be available as well. I expect to go with Christopher Pyne and meet with the Premier tomorrow afternoon to talk about some of these measures, and make sure that the Federal Government is doing all we reasonably and sensibly can in the circumstances to help South Australia recover.

David Speers: Alright, let me turn to your portfolio now. These 15 private colleges that have been found this year alone to be in breach of government regulations, what more can you tell us about exactly what they’ve done?

Simon Birmingham: Look the breaches of regulations are on a variable scale, if we can say David. So some of those are more minor, and we shouldn’t necessarily take the story as being $1 billion all just gone to waste. But some of them are quite major breaches and indeed we have seen both the training regulator ASQA and indeed the consumer watchdog, the ACCC, take action against various training providers in recent weeks.

David Speers: [Interrupts] So what are some of those more major breaches?

Simon Birmingham: And some of those major breaches, the worst-case scenarios, are where providers have gone and directly targeted vulnerable Australians, mislead them into signing up for a training program, mislead them about the nature of the student loan that they were undertaking. These circumstances of course are ripping off vulnerable Australians, ripping off the taxpayer, and it’s completely unacceptable that this scheme, which was opened up by the previous Government, was opened up in such a way that it was so open to these types of rorts.

And look, we first identified the problem last year when we gave extra funding to the regulator; in March this year when I was the Minister directly responsible for vocational training as Assistant Education Minister I announced a suite of reforms which have been taking place through the course of this year, starting in …

David Speers: [Interrupts] Well I want to ask you about that, because they’re still not in place, they’re still not in place, the legislation hasn’t actually passed through the Parliament, doesn’t look like it will before January.

Simon Birmingham: Well some are in place. So we took action in April to ban inducements and to make sure that sign-up provisions were tougher. We’ve taken further action that’s applied during the course of the year. But you’re right, there is legislation before the Parliament, and a Senate committee due to report back on Monday. Now, I hope that the Labor Party will cooperate, and that we will get the reforms through this week, which will really tighten the sector up. Because at present, under Labor’s old model, a training provider could get paid the entire course fee within five weeks of a student starting. We’re putting in place reforms now that actually will be four payments through the life of the training program. So importantly, the incentive will go from just signing somebody up and then not caring about whether they do the course, to an incentive of actually progressing the student through the course. So it gets back to focusing on what’s really important, learning and training.

David Speers: Let me ask you though, I mean you hope that this will be passed in the final week of Parliament next week, otherwise presumably more students will be signing up to these colleges in the new year. In the meantime, why can’t you as Minister suspend any funding towards these colleges?

Simon Birmingham: Well that’s happened in a number of instances. So we have in fact suspended funding towards some colleges and we have now seen, as I said before, both ASQA and the ACCC take action, which has included removing the registration of some training providers. So, in that case …

David Speers:
But what about all of these 15 …

Simon Birmingham:
… if they no longer have access to the funding, they can no longer even operate as a training provider. As I said, in relation to the 15 …

David Speers: [Interrupts] But will all of these 15 that have been found to make breaches, will they all have their funding suspended?

Simon Birmingham: No David, because some of them are more technical breaches. 

David Speers: Right.

Simon Birmingham: So not all of them are necessarily breaches that go to the really egregious abuse of the program, and the egregious targeting of students. But we will keep a very firm eye on all the providers, and I hope that it is a clear warning to those out there that we’ve seen significant drops in share price values, we’ve seen de-registrations, which essentially removes the business opportunity for anybody to exist, occur. So these are significant regulatory imposts that have been put in place. I believe the legislation will pass, notwithstanding the delays that the Labor Party have put in. I’m confident we will get it through next week and that we’ll have a much better functioning model next year. 

But the Government is also looking at further reforms. We’re not necessarily convinced that this VET FEE-HELP scheme, even if we stop the rorting, is getting us the best training outcomes for Australia that trains people for jobs that are actually there. So we’re having a look at whether we can restructure the overall package.

David Speers: [Talking over] Are you flagging there that the whole thing … are you flagging there that the whole VET FEE-HELP system could be replaced with a new funding model?

Simon Birmingham: Well I think next year over the coming months we’ll have a look, and next year we’ll have more to say about how we can make sure that we won’t just have stopped the rort, but we’re getting value for money for taxpayers that is actually helping people into jobs. That’s got to be the outcome of training, not just training for training for training’s sake, not just training because somebody is interested in a topic, but training because it will get them a job.

David Speers: [Talking over] So should … just to pick up on the language you’re using right here, are you talking about tailoring the taxpayer funding to the job so that you only get the funding at the end of the training when you actually complete the course and get a job?

Simon Birmingham: No, look there would be circumstances where it’s appropriate that somebody is seeking training because they are upskilling for a better jobs, or upskilling to be better at the job they already have. So I don’t …

David Speers: [Interrupts] But it’s all about completing the course, isn’t it? Rather than starting something you’re never going to complete?

Simon Birmingham:
Well we certainly don’t want to see that unless people are going in for particular skills that have other outcomes. But the training system should be flexible enough to accommodate that. But look, we’re going to have a good, proper look at the VET FEE-HELP scheme in its entirety. That’s an important process to go through, but I’ve said that before. I’ve been clear that the Government was looking at additional reforms to those we’ve already announced. Because we want to make sure that not only do we stop the rorts, which is what all of our existing reforms are about, but that we also get the best training outcome to help Australians train for jobs today and into the future. 

David Speers: So this will now form part of your reworked higher education reform package as well? I mean, are we talking about the same sort of timeline on that next year?

Simon Birmingham:
Look, the two could come in in a similar timeline; they might be different. We have, of course, the Minister and Luke Hartsuyker who has been doing great work since the re-shuffle as the Minister for Vocational Education and Skills. He’ll be leading the work in terms of looking at the VET FEE-HELP scheme and how it operates. 

But of course, we want to make sure that there is consistency. And I’ve spoken before about the need to ensure that across higher education and universities and vocational education and TAFEs, we have as seamless an arrangement as possible for students who often cross over between the two different sectors. Increasingly some of those lines are blurred by some of the providers, and so we need to make sure that the experience for students is one that delivers learning outcomes, educational outcomes that lead to employability skills. That’s what really matters, and we need to make sure that the Government policies and funding mechanisms are easy for students to navigate, but are delivered in a way that guarantees quality educational outcomes.

David Speers: Let me finally turn to another aspect of your portfolio responsibilities – child care. You floated the idea of changing the way parents pay for child care from a daily fee to an hourly fee. The sector is a little mixed, but some nerves about what this might mean, particularly for disadvantaged families. Just explain to me your thinking on this.

Simon Birmingham:
Let’s be clear at the outset, because some of the media reporting earlier was not entirely accurate there. I’ve not flagged an hourly fee for long day care centres. What I’ve said is that I hope that child care providers under our very generous reforms to child care will think about the sessional hours they offer. So at present, many providers will only offer a 10, 11 or 12 hour session each day for a parent. What I’ve said is that where they tell me they’re providing a service that is particularly catering to parents who don’t work, whose children are there for early learning opportunities rather than child care to support their working arrangements, that I would hope in those circumstances they look at shorter sessions that are targeted to the learning abilities and potential of those three and four year olds in question. So, giving them two six hour sessions to use a 12 hour entitlement that may be available to the parent, rather than chewing up that 12 hour entitlement in one day when we know that the child won’t be there for a number of those hours, and yet the parent and the taxpayer are subsidising something that just isn’t being used. So it’s flexibility to the providers that I’m encouraging.

David Speers:
[Talking over] Alright, so you’re talking entirely about this being up to the … okay, so you’re saying this is up to the providers, the child care centre’s discretion to do this. Do you acknowledge a lot of them are stretched financially? That they would take a hit if they did this?

Simon Birmingham: Well look, some may be stretched financially. I’ve got to say, I think some in the child care sector are doing very well as well. So I don’t accept that as a blanket rule.

David Speers: True, true. 

Simon Birmingham: I think the child care sector, what I’m encouraging is for them to have a look at their business model, their purpose as well, what they’re there for. Whether it is purely providing long day care services for working parents, or whether in fact that they’re also wanting to provide early learning opportunities for children who may be in low income families, where parents may not be working, and actually providing better opportunities for those families. 

Ultimately the Government is making child care more affordable for working families, with more than $3 billion of extra funding over the next four years, and we want to make it more flexible. And what we’ve done for providers in that regard is we are proposing to remove the requirements on the number of hours per day they must operate, and the number of days per week they must operate. So that it’s flexible for them, they’ll still have to operate 48 weeks per year, but they can be more flexible in their business models and hopefully tailor better solutions for parents and children. Because in the end, that’s why we’re spending around $40 billion over the next four years in supporting child care and early learning – it’s to get solutions that work for parents and learning opportunities for preschool aged children and younger.

David Speers:
Education Minister Simon Birmingham. Thank you very much for joining us this afternoon.

Simon Birmingham:
Pleasure David. Thanks so much.