Press conference, Hobart
Topics: Redesigning VET FEE-HELP; AFP investigation and parliamentary privilege; Australia’s economic future; Tasmania school ages for entry and graduation.
25 August 2016

Simon Birmingham: I’m delighted to be here at the ACPET National Conference today talking in particular about the VET FEE-HELP Scheme. VET FEE-HELP is a program introduced in 2009 but dramatically changed in 2012 by the then Labor government which has seen sadly a flourishing of providers who are rorting this generous government system and taking advantage of vulnerable Australians in the process of doing so, leaving them lumbered with student debts which many of them never pay off and qualifications that many never achieve. We’ve seen the VET FEE-HELP Scheme balloon from costing just a few hundred million dollars to costing nearly $3 billion per annum, and yet the actual results we’re getting seem to be getting poorer all the time.

It’s unacceptable to let this scheme continue and the Government’s made a firm commitment that we will replace it with a new model in 2017 that will have high barriers to entry for providers to access it, that will restrict it to areas where we actually know that we can get strong employment outcomes and will restrict the ridiculous levels of growth in price in the sector. These are reforms that we’re finalising at present, that we’re committed to getting introduced as soon as possible so that we can end the bleeding of taxpayer money, give better protection to vulnerable Australians and ensure our quality vocational education and training sector stops having its reputation trashed.

Question: Do you think a cap on loans is a good idea? I know Labor has suggested that and I believe the Coalition doesn’t agree with that policy?

Simon Birmingham: Labor went to the last election with a flat $8000 cap on loans. The problem with that is it ignores the reality that a number of different qualifications are probably more costly than $8000 to deliver. Areas like agriculture which is critical to the Tasmanian economy where we are at higher cost of delivery and if you just cap it at $8000 as Labor proposed, you will shut access off to students who can’t afford to pay any more than that if the fees end up being more than that.

So, we’re looking for a more flexible solution that does absolutely stop ridiculous price rikes- hikes and stops providers from being able to rip off students in terms of the scale of fees that are charged but is also flexible enough to recognise that some courses cost more to deliver than others.

Question: So what’s going to happen with all the debt that’s been accumulated? Will there- students have debts waived or?

Simon Birmingham: There are some instances where students are having debts raise- debts waived as a result of action being taken by the ACCC or undertakings being made by providers who accept and acknowledge that they’ve done the wrong thing. Unfortunately there are limited legal provisions to waive the debts that have been put in place under the legislation that Labor established this scheme under. So, in most instances, debts will stand and of course that is to the detriment of both the taxpayer who will wear the cost of those debts that are not repaid and the student who will carry a higher debt loading which impacts their credit rating and other factors through their lifetime. But what we’re focused on is the future and how we fix this scheme to make sure we don’t see these abuses ever happen again.

Question: So, the Government can’t step in with any sort of compensation for those that have been affected?

Simon Birmingham:         People have under the law signed up for student loans. Now, in some instances, they may not have exactly intended to ever complete the qualification but they have met and ticked every legal aspect of signing up for those loans in the instances that we know about. There are other instances that, as I say, the ACCC are working with my department is prosecuting providers and in those instances we would expect to recoup money and that debts will be waived as a result of that.

Question:     What kind of providers are you prosecuting? Are these private colleges that have little experience, taking advantage of students and the Government HELP Scheme?

Simon Birmingham:         Those who are being prosecuted tend to be providers who have grown the size of their student loading by astronomical numbers, have gone out often and targeted vulnerable people to sign them up and where they’ve been caught out, where they know as a result of evidence that’s been taken, the statutory declarations that have been offered, that people were misled into signing up so clear breaches of consumer law because misleading or deceptive practices in the conduct of those providers has occurred.

So, where we can use the law to take action we are, but the focus really is on how we end the broken system, fix it and ensure we have a better system in place for the future.

Question:     The debt’s still been growing while you’ve been in government. Do you think you’ve acted quickly enough to address these issues?

Simon Birmingham:         We’ve taken a range of steps over time and we took steps that we hoped could address and fix it without needing to completely remodel the program. This year we’ve accepted that we do though have to remodel the program, that no matter- no number of small measures can address issues such as the offering of inducements or the way in which payments are made, the types of reforms we’ve made to date can provide a fundamental fix. What we need to do is go back to first principles, look at what the qualification level should be for a provider, public or private to be offering loans in this space, what qualifications and courses are relevant for the support of the taxpayer and ultimately how much should be charged.

Question:     What impact will this have on Tasmanian students? 

Simon Birmingham:         Well I hope for Tasmanian students they will ultimately have more confidence in the VET system. There are good providers, there are good TAFEs, there are good private providers doing good work out there and it’s their reputations we want to enhance so that more students enrol in the quality courses offered by those providers that can give them the best possible chance of getting a job in future.

Question:     Are you aware of many Tasmanian students that have been caught up in the situation that’s obviously happened in the bigger states with dodgy education providers?

Simon Birmingham:         I have previously met with consumer representatives and advocates in Tasmania who have highlighted problems that have occurred in Tasmania. Media outlets have exposed some of those problems and they form part of the basis for some of the court actions that are underway.

Question:     I’ve just got one on the NBN events if it’s alright. Do you think the Senate should endorse Labor’s claim of parliamentary privilege over the documents?

Simon Birmingham:         Parliamentary privilege is just that. It’s a privilege and like all privileges or rights they come with responsibilities and limitations. So privilege should always be exercised with caution and the Senate in considering whether parliamentary privilege applies to certain documents needs to consider the precedence that existed over hundreds of years of history, needs to consider the instances which are there. In no way should parliamentary privilege be used simply to cover up illegal activities or basic leaks of information that don’t have a higher order of public good attached to what’s occurred. So we’ll look at the claims carefully I’m sure, but ultimately we need to make sure that parliamentary privilege is used for special circumstances, not just for cover ups. 

Question:     [Indistinct] concern that Australia’s continued economics success has been steadily growing into complacency. What’s your view on that?

Simon Birmingham:         Well, we have lived through an unprecedented period of economic growth, but we also live in some of the most challenging economic times. We do see in the collapse of commodity prices, in economic growth rates around many of our trading partners that are much, much lower than ours in the developed economy – a lot of challenges that we face in the Australian economy. Those challenges flow through into the levels of revenue that the Government has been receiving which have exacerbated the budget pressures that we have to deal with as a result of some of the excessive spending that Labor left us. So there are a lot of difficult decisions that need to be taken and Australians do need to recognise that we aren’t still living in a period of boom times, we are living in a period where Australia fortunately still enjoys strong economic growth relative to many comparable nations but it is a circumstance where government finances are over-stretched and restraint is required.

Question:     Senator, just on a local angle as well. The Tasmanian government last week announced it’s going to drop its school age to- for kindergartners and can start at about three to five-years-old, do you think that that’s too young?

Simon Birmingham:         The Tasmanian government’s reforms are largely proposing to bring Tasmania into line with pretty much every mainland state. So I think the Tasmanian government under Will Hodgman and Jeremy Rockliff, has undertaken reforms in the education here that really are about trying to raise the expectation of what Tasmanian students can and should achieve. And that is a welcome ambition from them. And I welcome the fact that in terms of school starting age they are looking to align school starting age in Tasmania more closely with other states. I welcome the fact that they are addressing the problem that under existing starting ages and leaving ages in Tasmanian schools all too many Tasmanian students received around two years less education than students on the mainland. That’s not good for Tasmania. If Tasmania is to be a high income, high performing economy and part of Australia in the future, it needs students to have high levels of education attainment. That means great levels of accomplishment in schools and more students going on to study in the tertiary sector in quality vocational education and training or at universities like UTAS.

Thanks everybody. Cheers.