SIMON BIRMINGHAM: Ladies and gentlemen it's great to be here with you all and wow what a warm up act. As a humble politician, that's one hell of an act to have to follow. So forgive me at the outset. Although there are those who might suggest that there were some shark sightings in Canberra this week.
Anyway it's good to be with you and in particular, can I start by thanking the organiser of this incredible gathering of vocational educational in training professionals for their understanding and flexibility. This week I was scheduled to be with you yesterday and we've had to have a little bit of juggling as events and circumstances have changed during the course of the week so thank you for your accommodation of that and for the understanding. But it is good to finally make it home to Adelaide and here to my first ever VELG Conference.
Now we're in an interesting time of slight uncertainty for federal political ministers. Last week at around this time I was addressing the TAFE Directors' Conference down in Hobart and I said to them this is my first ever speech to the TAFE Directors' Conference and I hope and trust though that it will be the first of many as the Federal Government minister responsible for vocational education in training. Well this weekend the Prime Minister will make his phone calls, the new prime minister, and tell ministers whether they have a job and if they do what those jobs will be. So this could well be my last speech as the minister responsible for vocational educational in training. I hope not but who knows what the future holds.
So today I thought what I would do was reflect a little on what has been nine incredible months in terms of vocational education in training and what I have learned, seen and hopefully helped to accomplish in that time and where I see some of the priorities that we can go in the future. But to start with though I want to say I think it is an incredibly exciting time for the VET sector. Exciting, first and foremost because we are in the midst of a reform journey. A reform journey that we've been going through over the last couple of years but I think that will get even more exciting under the prime ministership of Malcolm Turnbull because Malcolm is a leader with such an optimistic and positive vision for Australia's future and Australia's place in the world. He's a leader who wants us to confront the reality, that digital disruption, technological disruption will change the type of jobs we have in the future. It will mean as CEDA and others have reported that many of the jobs of today will not exist in years to come and that we need to prepare our economy for that. That we need to enhance and grow industries like advanced manufacturing, like technology industries, like medical research happening just down the road from us here at the Adelaide Convention Centre at the magnificent SAMRI building.
We need to invest our time and energy and resources in growing all of those new sectors that a highly skilled wealthy economy like Australia should be able to excel in and should be able to be a world leader in. And with our well educated workforce that we have, we're well placed to do that but to make sure we succeed what is absolutely critical is that the skills sector, vocational education in training, education in training overall, is well equipped to adapt to that change and is well equipped to be able to give people and Australians the training and the skills they need for the jobs that will exist today and tomorrow but also the jobs that will exist in years to come. And it needs to be an incredibly adaptive vocational education in training sector to be able to do that.
Fortunately we have already begun that journey. Our government over the last couple of years in setting out our competitiveness agenda outlined four key pillars on which that competitiveness agenda would be built and the skilling of Australians, we identified and recognised as one of those. And that's why we've been taking the VET sector on the journey of some of the reforms that you've been witnessing to date and why we will continue to do that.
Importantly I have built that reform agenda over the last nine months around three key factors of my own: the need to ensure the highest quality of training in vocational education, the need to ensure that vocational education in training is as relevant to job and employment outcomes as possible and the need for us to lift and raise the status of vocational education in training.
On the first of those fronts- on the quality agenda we do face particular pressures. Many of you would've seen yesterday that I had a few things to say about at least one vocational training provider, one registered training organisation and one broker, the Phoenix Institute and the broker Education Circle, in response to some very serious allegations that were made on the front page of the Melbourne Age. Now proper processes and proper investigations will determine whether those allegations are correct, but the one thing that has dented my optimism, and the one thing that has concerned and indeed horrified me at times since taking on this portfolio is seeing that the good reputation that the people in this room should enjoy, that the people who are serious about delivering high quality vocational education and training is being damaged by the fact that there are others out there who are not serious about it. And there are others out there who are using the availability of government funds, of taxpayer funds, of student loans, to rip people off, to rip off the taxpayer, to target the most vulnerable and disadvantaged in our community, and to provide very little training benefit as a result.
Now we've delivered already many reforms for the VET FEE-HELP scheme. There will be further legislation introduced into the parliament in the next sitting week which will give effect to the final wave of reforms that take effect from January 1 next year. Yesterday I made clear that I've asked the Department of Education and Training to give consideration to whether they can revoke the status of Phoenix Institute as a provider of VET FEE-HELP courses. I've asked the Australian Skills and Quality Authority to bring to a conclusion as quickly as they reasonably can their investigations into Phoenix education, and in doing that to consider whether they should suspend or terminate their registration as a training organisation. And I've asked ASQA and my department to take a look at all of the other RTOs who may use Education Circle as a broker, and to give consideration to any activities that they might be engaging in. Because perhaps the most important of the reforms we've made in the course of this year is to put into law the reality that RTOs are responsible for the actions of their brokers.
Now I said when I announced the package of VET FEE-HELP reforms earlier this year that I hoped those reforms would break the business model of some brokers. Now we appear to have, according to allegations, some who are breaching those reforms – not just in spirit but seemingly in the letter of the law. And that means I'm happy not only to break the business model of the brokers but to put the RTO out of business if that's required. If what it takes to make sure people get the message and understand is to execute one so we can educate many, as Mao may have said, then that is exactly what we will do.
Overall I believe we deliver great quality training, and it has disturbed me that the reputation of the training sector suffers damage from these types of stories time and time again. And that's as much as anything as much as a desire to protect vulnerable people, as much as a desire to protect taxpayer's money, I am driven by a desire to protect the reputation of the rest of our training providers.
So in terms of those quality reforms, you all know the types of measures we've pursued to tighten VET FEE-HELP. I'm not going to go through them in detail today. I know some of them come with additional administrative costs and burden to all of you – that unfortunately is a necessary regulatory cost that we will have to wear to be able to make sure we have a quality program that is safeguarded from people who would do wrong.
Elsewhere on the quality front we have of course been providing funding and support to ASQA to hopefully lift the regulatory burden on many of the people in this room, because I trust you are all good providers doing a good job, and our reforms of ASQA give them extra funding which enable them to undertake the risk profiling activities so that they can let those who have high quality track records get on with the job of providing their training with less of a regulatory burden. Less of a burden when it comes to updating the information they have to provide to ASQA from time to time.
And that's an important reform because it will also free ASQA up to be able to spend more time looking at the high risk providers and more time assessing them. And similarly, the legislative reforms been brought in earlier this year to align the re-registration period with that of university providers and those regulated by TEQSA of seven years from the five year period that it was, once again means that all of you who are good quality providers, don't have to worry about your re-registration for another couple of years. You get that seven year period instead between re-registrations. That's less time and paperwork and bureaucracy for all of you and again frees ASQA up to not be doing audits and assessments at a fixed point in time when an RTO knows they'll come a-knocking but to be able to actually go and target those who are assessed of being of high risk.
So, our quality agenda is about having a stronger regulator and is about making sure that that stronger regulator has stronger laws both laws applying to all RTOs through the RTO standards as well as specific laws applying to government-funded programs like VET FEE-HELP.
More importantly for the long term, quality of course is critical for the long term, but I hope we can bet that down, get rid of the shonks and the fraudsters and actually focus on the positive agenda for the long term and the positive agenda for the long term, I think, lies in the relevancy of VET and making sure that the qualifications you are teaching, the training you are delivering is as job relevant as possible. And the reforms we're making to training packages and how they're developed in future is about trying to make sure we have a model that is responsive to industry and to employers and where Australian industry and business thinks their businesses are going and believe the jobs will be needed in the future.
Though in that space, as you would know, we are going through a process of replacing the old model of industry skills council with a new model not of 12 different industry skills councils but of one Australian Industry and Skills Committee, established with the agreement of all of the states and the Commonwealth. And then under that, a range of employer and business committees that will guide and determine what it is that needs to go into training packages for their business.
They'll have to work out in advance a bid for when they need to review their training packages, when they need to update them, when they need to create new qualifications. But they have to make the case through that process, as to why and when they do this work rather than having a perpetual line of funding going into an ISC that can self-generate the work of those reviews.
So, I hope it will be more efficient in terms of not seeing unnecessary changes to training packages but also be more efficient in terms of making sure that the drivers and determiners of when a training package is changed or when it's updated and what that update is well and truly employers- because it should be employers who know best the skills they need in their business. They will be encouraged to consult, to consult with training providers, to encourage to consult with employee representatives and unions, to be encouraged to consult as widely as necessary to make sure they get the content of those training packages right but at the end of the day, they're the ones generating the jobs, they're the ones who should know what is required.
On the status front in terms of lifting the status of VET, I hope that we can create over time a much better informed marketplace for training in Australia. We have done our first update of the My Skills website but I certainly have more in mind and I know the department does as well. To make sure that it becomes the central venue for students, teachers, parents, families to be able to go and directly compare course outcomes but over time, we make maximum use of the total VET activity reporting data and the data we can glean from the universe and student identifier.
Big reforms that have come in place this year make sure we use all of that extra information so that people can go on and directly compare the relative value and merits of doing the same or different courses at different providers, being able to see the cost of those courses, the average time to complete those courses, the employment outcomes, the student satisfaction, all of those different factors that should form an informed marketplace decision for students. And I think that is a big area for continued work over coming months and years because what we need to get to is a market where students are the ones- students and employers are the ones who are driving the market in vocational education and training, not providers.
Providers, registered training organisations should be responding to the market of students and employers, not driving the market to fill places themselves.
And it's a very important turnaround we need, particularly in the areas of publicly funded places. So I'm confident that we are well advanced in our journey of getting the highest quality training, the highest quality course content, and much better acknowledgement and awareness of the importance of vocational education and training.
There are some big opportunities that lie ahead to advance this further, and perhaps the most important and significant of those is the debate around reform of the Australian Federation, and the agreement that was made several weeks ago now between the former Prime Minister and premiers to have a look at whether vocational education and training should be funded under a consistent national model. We of course made the decision many years ago to set up the Australian Qualifications Framework and have nationally recognised qualifications. The decision was made a few years ago to set up a single national regulator through ASQA and to have single – and to have uniform national approach to RTO standards and how they are regulated.
Paul Keating tried back in the 90s to similarly go down a path of saying well if we're going to have a national qualifications system well surely we should fund subsidies and loans for vocational education and training in a similar national way to how we fund subsidies and loans for university education.
The HECS scheme has been with us for several decades, working for universities alongside student subsidies in certain cases, and has provided a degree of consistency and certainty for the university sector. It's well understood by parents, school counsellors, teachers, students, as to how it works.
Compare and contrast that with the VET sector where across every different state we have completely different models that are applied to decisions around what courses should be subsidised, how they should be subsidised, to what value they should be subsidised, how many places should be subsidised. Each jurisdiction coming up with their own determinants and decisions on those key questions, and in doing so certainly driving national employer groups batty in the process as they try to work out how to navigate the training system from one jurisdiction to the next.
But making life much harder for training organisations that work across different jurisdictional boundaries as well, and because of that lack of not only consistency across state borders, but as we've seen in this state recently with the backwards and forwards movement in relation to contestability on how training places are subsidised and offered, there's a lack of consistency within state borders as well. And it stands in stark contrast to what as I say has been a high degree of consistency over several decades in how university funding is undertaken. So it's little wonder that people struggle to navigate the BEDS system.
So the Federation debate provides an exciting opportunity, to have a look at just as how universities were migrated across to a national funding model decades ago, could we do the same in the BEDS space? Could we come up with an intelligent and sensible way to answer those questions of how we subsidise training, to what extent we subsidise it, where we use student loans, and to what value? How we make sure that the student puts a premium on what it is that they're taking out a loan for or paying for so that they are driving sensible market decisions within the training environment.
I look forward to that discussion continuing because it is critical to making sure we have a highly functioning training market, and in having that highly functioning training market it will feed into that vision that our Government has, that Prime Minister Turnbull has, for the future of Australia as a well advanced economy that is adaptive to the circumstances of our global environment.
I am optimistic. I'm optimistic that Australia will meet the economic challenges we face, and I'm optimistic that our training sector will be able to rise to that challenge as well.
I'm particularly driven by that optimism because I know that overwhelmingly, despite the areas of criticism we have to date, we have great training providers delivering some of the highest quality training in the world that is an example that is looked up to elsewhere in the world. And I know that's the case because people vote with their feet. Around 3 million Australians participate in vocational education and training each and every year, and around half of those people aren't subsidised at all by state and Federal Governments, they pay for it out of their own pockets, or their employers pay for it. And we know that the great value people put on something is when of course they're the ones forking out for it. So those people are a demonstration that there is high quality, value for money training taking place for millions of Australians every single year. And we just need to take a great system and make it even better and more adaptable to the future, and I'm sure with gatherings of people like this giving thought to these challenges that we will be well placed to do so.
Thanks so much for the chance to join you today, and all the best.
Senator Birmingham’s media contact:
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