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Education and Other Legislation Amendment Bill (No. 1) 2017



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BILLS DIGEST NO. 75, 2016-17 17 MARCH 2017

Education and Other Legislation Amendment Bill (No. 1) 2017 James Griffiths and Carol Ey Social Policy Section

Paula Pyburne Law and Bills Digest Section

Contents

Purpose of the Bill ............................................................... 3

Structure of the Bill ............................................................. 3

Background ......................................................................... 3

VET student loans .................................................................... 3

Initial design .......................................................................... 3

Expansion of the scheme ...................................................... 4

Emerging issues ..................................................................... 4

The new scheme—VET student loans ................................... 4

Calls for a VET Student Loans Ombudsman............................. 5

Committee consideration .................................................... 5

Selection of Bills Committee.................................................... 5

Senate Standing Committee for the Scrutiny of Bills .............. 5

Policy position of non-government parties/independents ..... 5

Position of major interest groups ......................................... 6

Financial implications .......................................................... 6

Statement of Compatibility with Human Rights .................... 6

Parliamentary Joint Committee on Human Rights .................. 6

Schedule 1—key provisions and issues ................................. 6

Establishing the VET Student Loans Ombudsman ................... 6

Functions ............................................................................... 6

Investigations and complaints ............................................... 7

Other powers ........................................................................... 7

Requirement of procedural fairness ........................................ 8

Date introduced: 16 February 2017

House: House of Representatives

Portfolio: Education and Training

Commencement: Sections 1-3 on Royal Assent; Schedule 2 on the day after Royal Assent; Schedule 1 on 1 July 2017

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at

March 2017.

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Reporting requirements .......................................................... 8

Investigations ........................................................................ 8

Key issue—consequences of investigation report ................ 9

Annual report ........................................................................ 9

Identifying information.......................................................... 10

Key issue—the complexity of the VET regulatory and review framework ............................................................... 10

Schedule 2—key provisions and issues ............................... 10

Concluding comments ....................................................... 11

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Purpose of the Bill The purpose of the Education and Other Legislation Amendment Bill (No. 1) 2017 (the Bill) is to amend the Ombudsman Act 1976 to establish the office of the VET Student Loans Ombudsman. In addition, the Bill amends the Australian Research Council Act 2001 to update indexation against appropriation funding caps for existing legislated amounts and includes an additional forward estimate amount.

Structure of the Bill The Bill contains two Schedules:

• Schedule 1 amends the Ombudsman Act to establish the office of the VET Student Loans Ombudsman. It also makes consequential amendments to the Ombudsman Act and the VET Student Loans Act 2016

• Schedule 2 amends the Australian Research Council Act to update indexation against appropriation funding caps.

Background The regulation of the vocational education and training (VET) sector in Australia and the administration of the previous VET FEE-HELP scheme have been subject to much Parliamentary and public debate and activity over the past decade. In particular, concerns have been raised about the quality of courses, and the recruitment practices of providers.1

VET student loans VET FEE-HELP was introduced in June 2007 by the Howard Government, as part of legislative amendments to the Higher Education Support Act 2003.2 At the time, it extended the existing government loan scheme for full-fee paying higher education students (FEE-HELP) to those vocational education and training (VET) students undertaking full-fee paying Diploma, Advanced Diploma, Graduate Diploma and Graduate Certificate qualifications. In part this was to redress a situation where students studying these qualifications at higher education institutions were eligible for HELP loans, while those studying in the VET sector were not.

The focus on full-fee paying students was in line with the existing FEE-HELP scheme; this was supposed to offer financial support to those students who would not otherwise receive subsidises to undertake a VET qualification, thereby expanding the pool of students who could access VET. States and territories typically offer various subsidies at a jurisdictional level, making it cheaper for students to undertake particular VET courses in line with determined skills needs, or because the student in question is deemed eligible for a concession fee.3

Initial design The initial VET FEE-HELP had very strict entry requirements for providers in the form of credit transfer arrangements. These required the VET provider to have a credit transfer arrangement in place with a higher education provider (for example, a university). This meant that the higher education provider had assessed the training offered by the VET provider and was willing to accept the VET qualification as credit towards a higher education qualification.

While it did not mean there was an entirely independent audit of the VET provider, the higher education provider had a reputational reason to ensure that it only recognised qualifications and students who were capable of meeting its own particular standards and articulating into one of its own courses.

1. For further detail, please see J Griffiths, Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015, Bills digest, 60, 2015-16, Parliamentary Library, Canberra, 2015, and J Griffiths, VET Student Loans Bill 2016 [and] VET Student Loans (Charges) Bill 2016 [and] VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016, Bills digest, 41, 2016-17, Parliamentary Library, Canberra, 2016.

2. Higher Education Support Amendment (Extending FEE-HELP for VET Diploma, Advanced Diploma, Graduate Diploma and Graduate Certificate Courses) Act 2007. 3. As an example, the Australian Capital Territory government maintains a Skilled Capital Qualifications List as part of its Skilled Capital training program, which indicates what VET units of study and qualifications it is willing to subsidise, the amount of the subsidy, the number of places

available (often capped in order to contain costs) and the maximum concession. The list is updated in line with skills needs to ensure there is not a glut of particular qualifications. See ACT Directorate of Education and Training, Skilled Capital qualification list, The Directorate, Canberra, 15 February 2017.

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Expansion of the scheme The take up of the initial scheme was very low: only 5,262 students accessed a VET FEE-HELP loan in 2009, and only 50 registered training organisations were authorised to be VET FEE-HELP providers.4 The combination of the credit transfer provisions and the restrictions on subsidised students accessing a VET FEE-HELP loan reduced the potential take-up.

As a result, VET reform was flagged in the 2010-11 Budget, with the announcement of a national entitlement to a training place, expanding access to VET FEE-HELP to further VET qualifications, transparent information for students, and a new national VET regulator.5

The new national VET regulator, the Australian Skills Quality Authority (ASQA) was given responsibility for regulating registered training organisations (RTOs) over which it had jurisdiction.6 This involved assessing a provider’s capacity against the relevant Standards, both for those organisations applying to be registered and become an RTO, and existing RTOs. Once a provider was registered with ASQA, it could then apply separately to the Department of Education and Training to be approved to offer VET FEE-HELP loans to its students. The VET FEE-HELP process was governed by a separate set of guidelines under the Higher Education Support Act 2003.7

Emerging issues The expansion of VET FEE-HELP was a significant change. The loan scheme was initially created to support full-fee students who had no state or territory assistance for their training; progressively it was opened to any VET student in a course meeting the Guidelines. The removal of credit transfer arrangements also allowed new providers without a track record of education delivery to enter the market. Unlike HECS-HELP or the original HELP, which operated in the higher education sector, fees were not regulated, so any RTO could apply to provide VET FEE-HELP loans, and if successful, they could charge the student any fees the student was willing to pay, with the Commonwealth providing funding.

The expansion was also reported as having changed the business model of the VET sector. As the loan involved an upfront payment to a provider, new providers had an incentive to enter the market and to build up their student numbers quickly. Private providers often were largely dependent on government funding from VET FEE-HELP loans.8 There were no penalties in place should a student fail to complete a qualification, nor would the provider have to pay back the loan amount. In order to entice more students—and get more funding, VET FEE-HELP providers started to utilise aggressive marketing techniques, including brokers, agents, inducements and potentially misleading advertising practices to direct students to their particular course offerings.9

Government reforms to address identified issues with VET FEE-HELP and the broader VET sector ensued through late 2014, 2015 and 2016. These reforms were essentially placeholders, as the Government announced it would undertake ‘a fundamental redesign of the scheme for 2017’.10

The new scheme—VET student loans Following consultations on possible changes to VET FEE-HELP in early April 2016, and the release of a discussion paper later that month, legislation for an entirely new student loan scheme was introduced in October 2016.11

4. Department of Education, Employment and Workplace Relations, 2009 VET FEE-HELP statistical report, Department of Education, Canberra, 28 November 2013. 5. J Gillard (Minister for Education), Budget 2010: Australians to receive a National Entitlement to a Quality Training Place, media release, 11 May 2010. 6. Victoria and Western Australia maintain their own regulators, who are responsible for regulating providers who only operate within those

jurisdictions, and do not have any overseas students. 7. For the latest version, see Higher Education Support (VET) Guideline 2015. 8. K Loussikan, ‘Evocca weighs options for growth’, The Australian, 1 October 2014, p. 23; J Ross and D Kitney, ‘Vocation buys into college

system’, The Australian, 1 May 2014, p. 19; T Dodd, ‘How deregulation opened floodgates’, The Australian Financial Review, 1 November 2014, p. 17. 9. Australian Skills Quality Authority (ASQA) first identified this as an issue in a strategic review published in September 2013. See ASQA, Marketing and advertising practices of Australia’s registered training organisations: report, ASQA, Melbourne, 20 September 2013. 10. M Hartsuyker (Minister for Vocational Education and Skills), Stronger protections for VET students commence, media release, 1 January 2016. 11. See S Ryan (Minister for Vocational Education and Skills), Nationwide VET FEE-HELP consultations start today, media release, 4 April 2016;

S Ryan (Minister for Vocational Education and Skills), Release of the Redesigning VET FEE-HELP Discussion Paper, media release, 29 April 2016; Department of Education and Training (DET), Redesigning VET FEE-HELP, Discussion paper, DET, Canberra, 27 April 2016; and Parliament of Australia, VET Student Loans Bill 2016 homepage, Australian Parliament website.

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The new scheme, VET Student Loans, was a radical departure from the policy design of existing student loans in Australia. Previously, student loans schemes, including VET FEE-HELP, had been authorised under the Higher Education Support Act, with any additional requirements set out in guidelines. VET Student Loans were established under a separate statute, which utilised the repayment framework in the Higher Education Support Act but added onerous requirements on loan providers. These included granting the Secretary of the Department powers to require providers wishing to offer new VET Student Loans to provide evidence of their experience in providing education, and the ways in which their curriculum was aligned to industry need.12

Calls for a VET Student Loans Ombudsman The HELP student loans scheme does not have an external review process established as part of the scheme. In part, this was because it was initially only available to students at public higher education institutions, which are covered by the relevant state and territory Ombudsman. In addition, fees in higher education are regulated and there are few concerns about the quality of education provided.

Most of the concerns about dubious practices around VET FEE-HELP were directed at private providers, where recourse to the Ombudsman was not available. Some complaints have been lodged with the Australian Competition and Consumer Commission (ACCC) under the Australian Consumer Law,13 while others have been directed to the Department of Education and Training.14 However, the lack of clarity about the options for raising complaints has been raised as an issue in several inquiries.

For example, in 2015 a Senate Committee inquiry into the operation of private VET providers recommended the establishment of a dedicated VET sector ombudsman, funded by the industry, to assist with dispute resolution for students with complaints against RTOs.15 The Committee suggested that the role of the ombudsman be modelled on the Overseas Students Ombudsman, which had been established in response to similar concerns about private provider malpractice in relation to overseas students.16

In the second reading speech introducing the VET Student Loans Bill 2016, Karen Andrews, the Assistant Minister for Vocational Education and Skills, advised that to ‘further strengthen student protections, the government intends to establish a VET student loans ombudsman…’17 This move was supported by the Senate inquiry into that Bill, with a recommendation that ‘the Government establish a VET Ombudsman and work with key stakeholders to ensure that the Ombudsman operates in a way that is fit for purpose.’18

Committee consideration Selection of Bills Committee At its meeting on 16 February 2017, the Selection of Bills Committee decided to defer consideration of the Bill to its next meeting.19

Senate Standing Committee for the Scrutiny of Bills At the time of writing this Bills Digest, the Senate Standing Committee for the Scrutiny of Bills had made no comment about the Bill.

Policy position of non-government parties/independents During debate of the VET Student Loans Bill 2016, Kate Ellis, the Shadow Minister for Education, proposed an amendment to the Bill to include the establishment of a VET Student Loans Ombudsman, but the amendment

12. See VET Student Loans Rules 2016, as made 21 December 2016 and compare with Higher Education Support (VET) Guideline 2015, as made 18 December 2015. 13. The Australian Consumer Law is located in Schedule 2 to the Competition and Consumer Act 2010. 14. Department of Education and Training (DET), ‘VET FEE-HELP debt complaints’, DET website, 7 December 2016. 15. Education and Employment References Committee, Getting our money's worth: the operation, regulation and funding of private vocational

education and training (VET) providers in Australia, The Senate, Canberra, October 2015, p. 81. 16. Ibid., p. 79. 17. K Andrews, ‘Second reading speech: VET Student Loans Bill 2016’, House of Representatives, Debates, 13 October 2016, p. 1856. 18. Education and Employment Legislation Committee, VET Student Loans Bill 2016 [Provisions] [and] VET Student Loans (Charges) Bill 2016

[Provisions] [and] VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016 [Provisions], The Senate, Canberra, November 2016, p. 61. 19. Selection of Bills Committee, Report, 2, 2017, Senate, Canberra, 16 February 2017.

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was not passed.20 Therefore, it is likely the Labor Party will support the Bill given its similarity to this earlier proposal.

The Greens also welcomed the announcement of the Government’s intention to establish a VET Ombudsman, although their support appears to have been for a more general remit than just student loans.21

Position of major interest groups There has been widespread support among interest groups for the establishment of a specialised VET ombudsman. When providing evidence to the Senate inquiry into the VET Student Loan Bill, a number of groups expressed their support, including entities with regulatory responsibility such as ASQA and the ACCC, and advocacy groups such as the Consumer Action Law Centre. Industry representatives including Technical and Further Education (TAFE) Directors, the Australian College for Private Education and Training (ACPET), and the Academy of Interactive Entertainment have also supported the move, with ACPET noting that an ombudsman ‘offers the vast majority of providers the protection of knowing that those who do the wrong thing will be weeded out.’22

Financial implications The establishment of the VET Student Loans Ombudsman is expected to cost $7.8 million over four years, while the amendments to the ARC spending caps will allow additional spending of up to $752.4 million over the same period (mainly through the funding of an additional year).23

There may be additional administrative burden on VET providers and on other VET regulatory agencies associated with the creation of an additional office with oversight of the VET sector.

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.24

Parliamentary Joint Committee on Human Rights At the time of writing this Bills Digest the Parliamentary Joint Committee on Human Rights had made no comments about the Bill.

Schedule 1—key provisions and issues Establishing the VET Student Loans Ombudsman Item 4 of Schedule 1 to the Bill inserts proposed Part IIE—VET Student Loans Ombudsman into the Ombudsman Act. The person who holds the office of Commonwealth Ombudsman will be the VET Student Loans Ombudsman.25

Functions The Bill provides that the VET Student Loans Ombudsman has the following functions:

• to conduct investigations, and make recommendations and other reports, about VET loan assistance and compliance by VET student loan scheme providers with their statutory requirements

• to give VET student loan scheme providers advice and training about the best practice for the handling of complaints made to them by VET students about VET loan assistance

• to develop, promote and to review from time to time, a code of practice26 and

20. K Ellis, Proposed amendment, VET Student Loans Bill 2016, House of Representatives, 17 October 2016. 21. S Hanson-Young, Greens secure VET Ombudsman for exploited students, media release, 13 October 2016. 22. Education and Employment Legislation Committee, op. cit., pp. 57-61. 23. Explanatory Memorandum, Education and Other Legislation Amendment Bill (No. 1) 2017, p. 3. 24. The Statement of Compatibility with Human Rights can be found at pages 4-9 of the Explanatory Memorandum to the Bill. 25. Ombudsman Act, proposed subsection 20ZL(2).

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• to perform any other function conferred on him, or her, by any Act or legislative instrument.27

The term VET loan assistance means a VET student loan within the meaning of the VET Student Loans Act or VET FEE-HELP assistance within the meaning of the Higher Education Support Act 2003.28 A definition of the term VET student loan scheme provider is inserted into subsection 3(1) of the Ombudsman Act by item 2 in Schedule 1 to the Bill. It means an approved course provider (or former provider) within the meaning of the VET Student Loans Act or a VET provider (or former provider) within the meaning of the Higher Education Support Act.

In performing his, or her, functions the VET Student Loans Ombudsman may inform himself, or herself, on any matter in any way he, or she, thinks fit, consult with anyone he, or she, thinks fit and receive written or oral information or submissions.29 In doing so, the VET Student Loans Ombudsman is not required to act in a formal manner—unless any Act or legislative instrument requires it.30

Investigations and complaints A VET student, or a person acting on behalf of a VET student, may make a complaint about a VET student loan scheme provider.31 The VET Student Loans Ombudsman may conduct an investigation either in relation to such a complaint or on his, or her, own initiative.32 If the VET Student Loans Ombudsman considers that another body that could deal with a complaint more effectively or conveniently, he or she must refer the complaint to that body.33

The VET Student Loans Ombudsman may decide not to investigate, or not to further investigate, a complaint, if he or she is of the opinion:

• the complaint is frivolous or vexatious, or was not made in good faith

• the complainant does not have a sufficient interest in the subject matter of the complaint—or has not raised the complaint with the VET student loan scheme provider

• an investigation is not warranted having regard to all the circumstances

• the action came to the complainant’s knowledge more than three years before the complaint was made or

• the complainant has, or had, a right for the matter of the complaint to be reviewed by a legally constituted court or tribunal but has not exercised that right.34

Other powers Proposed section 20ZS of the Ombudsman Act operates so that certain existing provisions of the Ombudsman Act will also apply to the VET Student Loans Ombudsman. These include, but are not limited to:

• the definition of authorized person35

• the manner in which complaints may be made36

• making preliminary inquiries to determine whether the Ombudsman is authorised to conduct an investigation37

26. Proposed subsection 20ZM(3) of the Ombudsman Act which is inserted by item 4 of the Bill provides that the code of practice is not a legislative instrument. In addition, proposed subsection 20ZM(2) requires the VET Student Loans Ombudsman to consult with specified stakeholders when developing or reviewing a code of practice.

27. Ombudsman Act, proposed paragraph 20ZM(1)(d). 28. Ombudsman Act, proposed subsection 20ZM(4). Also see item 2, Schedule 1 of the Bill. 29. Ombudsman Act, proposed subsection 20ZN(2). 30. Ombudsman Act, proposed subsection 20ZN(1). 31. Ombudsman Act, proposed section 20ZP. 32. Ombudsman Act, proposed section 20ZO. 33. Ombudsman Act, proposed subsection 20ZQ(1). 34. Ombudsman Act, proposed subsections 20ZR(a) to (f). 35. Ombudsman Act, subsection 3(1). 36. Ombudsman Act, section 7. 37. Ombudsman Act, section 7A.

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• rules about investigations and the disclosure of information obtained by the Ombudsman during an investigation38

• determining whether to make an arrangement with the Ombudsman of a state (or Ombudsmen of more than one state) to undertake an investigation into matters that involve Commonwealth and state departments or authorities39

• the power of the Ombudsman to make an application to the Federal Court of Australia for the determination of a question as to the exercise of his, or her, power or the performance of his, or her, functions—provided that the Ministers administering the Ombudsman Act and the VET Student Loans Act are first advised in writing of the reasons for the proposed application40

• requiring the complainant and the VET student loan scheme provider to be informed as soon as practicable where the Ombudsman decides not to investigate, or continue to investigate, a complaint41

• the power to examine witnesses42

• the power to enter premises—being a place that is occupied by a VET student loan scheme provider; or a place that is occupied by a VET student loan scheme officer of a VET student loan scheme provider43 predominantly for the purposes of carrying out the officer’s powers, duties and functions as an employee.44

Requirement of procedural fairness The Bill requires the VET Student Loans Ombudsman to comply with the rules of procedural fairness when exercising a power under the Ombudsman Act.45 The three rules of procedural fairness are:

• the hearing rule—that is, a decision maker must afford a person whose interests will be adversely affected by a decision an opportunity to present his, or her, case. A breach of this principle by the decision maker is a denial of procedural fairness. A decision that has been made in breach of this principle will be held void46

• the rule against bias—that is, a decision maker must not have an interest in the matter to be decided, or bring to the matter a prejudiced mind. The rule has its origins in the maxim ‘justice should not only be done, it should be seen to be done’47

• the no evidence rule—that is, an administrator’s decision must be based on logically probative evidence.48

The requirement for VET Student Loans Ombudsman to comply with the rules of procedural fairness is consistent with the terms of some of the ‘other powers’ which are listed above.

Reporting requirements

Investigations The Bill imposes a number of reporting requirements on the VET Student Loans Ombudsman.

First, proposed section 20ZV of the Ombudsman Act requires that, upon completion of an investigation the VET Student Loans Ombudsman must make a written report49 to the relevant VET student loan scheme provider giving reasons, if both of the following are satisfied:

38. Ombudsman Act, section 8. 39. Ombudsman Act, section 8A. 40. Ombudsman Act, subsection 11A(4) and table item 7 at proposed subsection 20ZS(1) of the Ombudsman Act. The relevant Ministers are specified in the Administrative Arrangements Order.

41. Ombudsman Act, section 12. 42. Ombudsman Act, section 13. 43. Proposed subsection 20ZS(4) of the Ombudsman Act defines a VET student loan officer of a VET student loan scheme provider as a person who (a) is employed in the service of the provider; (b) is a member of the staff of the provider, whether or not the person is employed by the

provider; or (c) performs services for or on behalf of the provider. 44. Ombudsman Act, section 14. 45. Ombudsman Act, proposed section 20ZT. 46. Kioa v West (1985) 159 CLR 550, [1985] HCA 81. 47. R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256. 48. Butterworth's Concise Australian Legal Dictionary, 3rd edn, LexisNexis Butterworth's, Sydney, 2004, p. 347; Justice Robertson,

Natural justice or procedural fairness, speech, 4 September 2015.

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• the VET Student Loans Ombudsman is of the opinion that the action by the provider appears to have been contrary to law; was unreasonable, unjust, oppressive or improperly discriminatory; or was otherwise, in all the circumstances, wrong and

• some particular action could be, and should be, taken to rectify, mitigate or alter the effects of the action taken; a policy or practice should be altered; reasons for the action taken were not given or any other thing should be done.

The VET Student Loans Ombudsman may ask the relevant provider to give him, or her, within a specified time, particulars of any actions proposed to be taken in response to the report.50 The VET Student Loans Ombudsman must give the Secretary of the Department responsible for administering the VET Student Loans Act a copy of the report and any comments in response to the report that have been given by the relevant provider.51 A copy of the report and related provider comments may also be given to the Minister.52

Proposed section 20ZW of the Ombudsman Act applies if the VET Student Loans Ombudsman has given an investigation report to a VET student loan scheme provider but the VET student loan scheme provider has not taken action that is adequate and appropriate in the circumstances in relation to the matters and recommendations included in the report within a reasonable time. In that case, the VET Student Loans Ombudsman may give a copy of the report to the Minister and request the Minister to lay a copy of the report and any comments before each House of the Parliament. Where the VET Student Loans Ombudsman makes such a request, the Minister must comply within 15 sitting days of each House after the request is received.

If the VET Student Loans Ombudsman forms the opinion, either before or after completing an investigation that there is evidence of a VET student loan officer of a VET student loan scheme provider having engaged in misconduct, the VET Student Loans Ombudsman may bring the evidence to the notice of the principal executive officer of the VET student loan provider.53

Key issue—consequences of investigation report The proposed Ombudsman has the power to make reports and recommendations, and providers are required to co-operate with investigations. While it appears likely on a reading of the VET Student Loans Rules 2016 that a report or recommendation might be taken into account by the Department in considering the suitability of VET Student Loans providers, this is not explicit.54 Even if an RTO becomes disqualified by the Department for VET Student Loans, it may continue to be registered with ASQA, receive subsidies through state and territory VET programs, and enrol students. Yet issues with governance, quality, and appropriate representation to students of the cost involved in their study, as potentially found by the Ombudsman, are likely to resonate beyond the VET loans schemes and depict a more systematic issue with a given provider.

Annual report The Bill requires the VET Student Loans Ombudsman to give an annual report to the Minister on the operations of his, or her, office during the financial year as soon as practicable after the end of each financial year.55 The annual report is to be laid before each House of the Parliament within 15 sitting days of that House after the Minister receives the report.56 The report must include information about each of the matters which is prescribed in proposed subsection 20ZX(7) of the Ombudsman Act.57

49. The report must include reasons. In addition, the report may include recommendations. Ombudsman Act, proposed subsection 20ZV(3). 50. Ombudsman Act, proposed subsection 20ZV(4). 51. Ombudsman Act, proposed subsection 20ZV(6). 52. Ombudsman Act, proposed subsection 20ZV(7). 53. Ombudsman Act, proposed section 20ZY. 54. VET Student Loan Rules 2016. 55. Ombudsman Act, proposed subsection 20ZX(1). 56. Ombudsman Act, proposed subsection 20ZX(5). 57. Reporting includes the number of complaints, investigations, referrals and ombudsman reports. Actions taken, trend statistics and reporting

of broader issues may also be reported.

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Identifying information The VET Student Loans Ombudsman must not, in referring to an investigation in an investigation report, an annual report or any other report, disclose the name of a complainant who is an individual, or any other matter that would enable such an individual to be identified, unless it is fair and reasonable in all the circumstances to do so.58

Key issue—the complexity of the VET regulatory and review framework Schedule 1 of the Bill establishes the VET Student Loans Ombudsman. While there has been widespread support for this, the addition of another player in the VET regulatory system has the potential to create additional confusion in an already fragmented regulatory environment; without resolving the underlying issues in the sector.

The large number of entities in the VET sector means there is no single entity with regulatory responsibility. ASQA is the national regulator, but its fitness for purpose was questioned by the 2015 Senate Inquiry.59 For RTOs which only service domestic students in Victoria and WA, state-based regulators still apply. The Department of Education and Training runs the VET student loans programs, but its capacity to properly investigate and administer breaches has also been questioned.60

Students attending government VET providers, such as TAFEs, already have access to the relevant state and territory Ombudsman for the resolution of complaints. All VET students in South Australia have recourse to the Office of the Training Advocate, while apprentices and trainees have other appeal arrangements.61

The addition of a designated Ombudsman does not clarify this framework, but adds another layer of administrative complexity.

It should also be noted that the new Ombudsman only has responsibility for VET student loans complaints. Presumably this complaint mechanism will only be available in relation to courses and students eligible for VET student loans, not for other concerns about VET providers more generally. Some of the support expressed by interest groups for the establishment of an ombudsman appears to have been anticipating a wider role which could consider issues in relation to the whole VET sector.

A 2016 review of the operations of the Overseas Student Ombudsman (on which the proposed VET Student Loans Ombudsman is modelled) identified similar concerns with students having multiple avenues to raise complaints. The review found that these arrangements could be complex and confusing, and that students were ‘often not aware of what assistance was available to them and who to contact’.62 The report also noted that there was a lack of consistent, sector-wide data about complaints and appeals to reliably inform governments and policy makers about international students’ experience with their education providers.63

It would appear likely that the same issues will arise in relation to the VET Student Loans Ombudsman, unless additional arrangements are put in place to ensure co-ordination between all the relevant agencies and consolidated reporting mechanisms.

Schedule 2—key provisions and issues Australian Research Council (ARC) funding caps for approved research programs are set under statute, allowing governments to extend funding in line with budget announcements. These funding caps are updated, usually annually, to take into consideration indexation and budget decisions, and to add an additional year for the forward estimates. The ARC’s funding is currently authorised until the end of the 2018-19 financial year.64

58. Ombudsman Act, proposed section 20ZU. 59. Senate References Committee on Education and Employment, op. cit., p. 72. 60. See for example M Warburton, The VET FEE-HELP debacle: helping its victims and lessons for administration, LH Martin Institute, December 2016.

61. ASQA, ‘Before you make a complaint’, ASQA website. 62. Overseas Students Ombudsman, Consultation report: safeguarding the student experience: external complaints avenues, Commonwealth Ombudsman, November 2016, p. 2. 63. Ibid.

64. Australian Research Council Act 2001, section 49.

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Education and Other Legislation Amendment Bill (No. 1) 2017 (No. 1) 2017

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Schedule 2 updates the funding caps for each of the years 2016-17 to 2018-19, and adds in the funding cap for the 2019-20 financial year.

Concluding comments The establishment of a VET Student Loans Ombudsman does provide an avenue for students to complain about issues in relation to VET courses which are eligible for a student loan—an area which has been subject to considerable malpractice in recent years. However, it is unclear whether the addition of another supervisory body, particularly one with coverage of only a section of the sector, will add much additional protection for students or whether it will just increase the confusion about overlapping responsibilities.

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