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Education and Employment Legislation Committee
25/10/2016

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LAMBERT, Ms Jenny, Director, Employment, Education and Training, Australian Chamber of Commerce and Industry

[14:13]

CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I invite you to make a short opening statement, and then we will proceed to questions.

Ms Lambert : Thank you, Chair and senators, for this opportunity to appear. With all the controversy around the impact on students and the public purse of the failings of the VET FEE-HELP program, the simple but most important point is lost: providing loans to students studying higher level VET qualifications remains sound public policy. In the same way as for higher education, loans improve access and equity for those who could not otherwise afford the fees associated with diplomas and advanced diplomas. But clearly the larger number of providers and the lower barriers to entry for providers, as well as other structural issues that differ between VET and higher education, require a much more thoughtful approach to program design, enforcement and monitoring than we have seen since the access was widened in 2012.

VET FEE-HELP has so damaged VET that we all need to move on. We need to move on from the language, the poor program design, the dodgy providers, the hurt students and the fiscal nightmare. The VET Student Loans Bill offers a way forward and we support it. In doing so—in our submission, and it is reinforced by the opening comments here and any questions you may wish to address to me—there are a couple of clear messages and a few recommendations on looking at the wording of the legislation.

Firstly, if you are going to introduce caps and limitations, there must be a system sufficiently flexible and responsive and, most importantly, industry informed. Certainly, at the moment, given the wayward way that the system has worked, caps and limitations do seem to be the way forward to try and get the system back into control again. But the government is not qualified to be the sole assessor of labour market needs and the benefit of particular courses.

In terms of the legislation, as we put in our submission, we seek that the Senate committee satisfies itself and reassures us, the industry, that clause 16 enables a flexible and responsive system which seeks to reach out to industry and is informed by the view about need. Really, most of the submissions we have read that you have received, and certainly most of the evidence that I have heard today in the limited time I have been here, have been about the list and the caps. Really, that is driven by the wording of clause 16 in terms of the minister putting out that direction.

Secondly, a really important message is that the legislation must require transparency. We note that the opposition included in their proposed amendment a requirement in the legislation to produce data. We would support that approach. We would add to that list that was proposed a list of qualifications as well. As we have seen from the VET FEE-HELP situation and, indeed, the evidence the previous witnesses pointed to about the reforms that happened in Victoria, you cannot predict 100 per cent of what providers are going to do. So you try and get the system design as good as possible, and then you have got to monitor it. Part of the monitoring has to reveal it to others to make it more transparent so that others can see what is going on. One of the downfalls with the VET system at the moment is that the data takes so long to get in the public domain through the system.

Finally, having reviewed the submissions of other key stakeholders, it is very clear that there are very few issues with the legislation itself. I think that is an important point. This committee is charged with looking at what should be changed with the legislation. Most of the commentaries have been about the contents of the list and the caps. We did attach to our submission our commentary on that. We join the crew that is putting forward some views in relation to caps and inclusions, but we do not confuse that commentary with what is needed in the legislation itself. We confine ourselves to saying: in relation to the legislation, have a close look at section 16 to make sure it provides the flexibility it needs for the minister and the department to assure the industry that they have a truly responsive system that is well informed by industry. That is very important.

There are definitely concerns being raised about the haste of the process in determining what is on the list, but we also recognise and support the idea that if you need to move forward you need to be filled with certainty. If it is going to change for 2017, the legislation does need to be passed to provide that certainty. But it is something that we are saying very strongly to the department and for your information, that we want a clear process of what that consultation will be to make sure the list and the determination of courses and caps remain industry responsive and inclusive of job-facing VET. That is our absolute criterion: it is job-facing VET. But we should not cloud the issue in relation to the merits of the bill. We support the bill. Thank you, Chair, for those opening remarks. I welcome any questions.

CHAIR: Thank you so much, Ms Lambert.

Senator MARSHALL: I am not normally a fan of ACCI.

CHAIR: I thought you might actually be surprised by that.

Senator MARSHALL: You must be from a different department from what I normally deal with, because that was a refreshingly honest and open presentation to the committee! Thank you, Ms Lambert.

Ms Lambert : I think that is praise, thank you, Senator!

Senator MARSHALL: You have confused me! It is praise!

CHAIR: It is high praise!

Ms Lambert : I will pocket that!

Senator MARSHALL: So—ombudsman?

Ms Lambert : We have not given it a policy consideration. I think it is worthy of consideration. Whether it needs to be embedded in very detailed regulations within the act, I leave that for others to judge. But I have at various times put forward that it would be great for students to have opportunities to complain. Complaint hotlines have been put in place, but students tend not to use them. So I think that it is just a matter of, 'Let's not hold up the legislation,' should it be held up in any issue about the ombudsman. We do not have a firm policy one way or the other. But we are very supportive of any opportunity for students to raise any concerns they have. Whether that is through a formally legislated ombudsman or through a mechanism that is put in place the department, we remain open in our policy position.

Senator MARSHALL: All right. Jobs focus—not just for new jobs but job improvement and career improvement? You were not just excluding—

Ms Lambert : Absolutely, it has to be about upgrade as well as upgrade of existing skills. Facing a job includes facing a better job within the structure you have available to you. Diplomas and advanced diplomas are particularly strong in that area—very important qualifications in frontline management. They are very well utilised and very important in the VET system, as well are a whole range of other upgraded qualifications from trades.

Senator MARSHALL: And I will just clarify something. I am sure, given the tone of your presentation, that you do not mean this, but I will just put it to you anyway: job facing does not necessarily mean jobs facing the arts. We heard from the ballet school and others this morning that those skills also lead into jobs in the future. Some of those courses have been cut off from the list; you are not suggesting that those—

Ms Lambert : Yes. As someone who has been involved extensively, and through the Innovation and Business Skills Council that used to oversee the creative arts package, there are very strong jobs in that area as well. The problem we are trying to address here by changing the whole system is, obviously, to eliminate those providers who are saying that the course is the end in itself, 'Come along and do it and get an opportunity,' but who then do not deliver it in a way that is industry faced. Creative arts courses have just as much opportunity to be industry facing as every other type of industry. All industries that provide job opportunities are eligible, in our view.

Senator MARSHALL: My last question is about your indication that one of the problems with this legislation is that the government is the sole assessor of what goes on the list and what does not. How do you think that should happen?

Ms Lambert : As I said, in terms of the way that section 16 is worded—and we do not pretend to be legislative drafters—you could potentially look at wording in there which indicates that the minister would need to be informed by the views of employers and industry about the mechanisms, or at least that there were sufficient—

Senator MARSHALL: And others.

Ms Lambert : And others—

Senator MARSHALL: Not just—

Ms Lambert : Industry is employers, unions and others—it is a broad definition in that context. There have to be opportunities for industry. At the moment the exemptions issue is only about the caps, but there may be particularly strong providers with very high job outcomes which do not fall on the list. But those particular qualifications have been a real problem in the hands of other providers. So it is about making sure that there are mechanisms to allow good providers with good qualifications and good job outcomes to have their students have that access.

Senator MARSHALL: That has led me to one more question, then! The caps issue is what you also think should be in that broader discussion. Do you think that having caps in the way they are presented will actually discourage poor kids, effectively, from studying VET courses?

Ms Lambert : The issue is: can the government, with industry information, nail the cap level that fits a quality program that delivers a great outcome?

It would be hard to answer that generically. In other words, there will be situations where the caps will work and others where they will not. Caps are not ideal. We say that in our submission: it is not ideal. Obviously you would prefer the market to adjust, but at the moment we have seen too many examples where courses that were previously charged at X have become three times X, without any shift in quality, and that certainly is something that we are trying to address.

Senator HANSON» - «YOUNG» : In fact, perhaps there is a shift down in quality if anything.

Ms Lambert : Certainly for some providers. There are some providers, I think, who have entered into the system, so they have not had a comparator. So they come in and say, 'Well, we've got a great diploma of management for $15,000 or $20,000,' whereas their competitors would be a lot different. That is why student information is so important as well—having a market better informed about how you can compare the course that you are being offered with another course. We try to build a language within the chamber that is about an informed market and making sure that the students get that career advice and information they need to choose the right courses. As I say, the other thing is data transparency on the actual program itself.

Senator «HANSON» - «YOUNG» : I think you have hit the nail on the head in terms of people's concerns about it mainly being the list and the consultation about that—what is in and what is out—and, yes, the level of effective public subsidy through the loan program in terms of the cap. How does the Chamber of Commerce and Industry consult to work out where the need for skills or workforce demand exists across the country?

Ms Lambert : We have a range of mechanisms. The most prominent one of them is our policy committee for employment, education and training. But I would not say that we then become the font of all knowledge of industry needs. What we become is a facilitator. We enable our members to come forward with their position and views and then work out mechanisms by which the stakeholders that need to know know what those industry views are. We could not pretend to know which courses were needed in arts or in New South Wales through the chamber. We facilitate those members to come forward with that much more detailed knowledge, because they are at the front end. So, as I say, we do not accumulate the information; we facilitate the information going forward.

Senator «HANSON» - «YOUNG» : Let me pick up on that, because of course one of the things that have got quite a few providers and the sector offside in this legislation is the lack of creative arts courses on the list. I cannot imagine that that sector falls under the work that the Chamber of Commerce—

Ms Lambert : Yes, Live Performance Australia is a member.

Senator «HANSON» - «YOUNG» : Okay.

Ms Lambert : And they are also active on our employment, education and training committee. They have raised those issues.

Senator «HANSON» - «YOUNG» : I guess that is what I was about to say. It is pretty obvious, when you look at the list from the department, that it feels like the creative industries are kind of in the too-hard basket. Is that the view of the Chamber of Commerce and Industry? Do you have a concern that those creative industries are not seen as being as important as others in terms of job creation and the needs of a state based skills list?

Ms Lambert : We only have a concern if there is no mechanism by which industries can raise legitimate concerns and have them dealt with. Our submission is as much to do with what process the government and the department are going to use to make sure they bring this information into account—

Senator «HANSON» - «YOUNG» : And just relying on those state lists is not enough of a process.

Ms Lambert : Just relying on state lists is definitely not part of the process. As you may have seen in our submission to the department, a lot of the courses on the list are what we call accredited courses, which are not national training package courses, in which case they have not gone through that industry analysis of whether these skills are needed; they have gone through directly to the regulator for approval, and they are driven by the states.

Senator «HANSON» - «YOUNG» : So you think there are actually courses on there that, from an industry perspective, do not need to be on there?

Ms Lambert : We have indicated in our submission to the department that in our view there are too many accredited courses. That is using the terminology of accredited courses not being courses through the national training package system. For example, the creative arts courses are national training package courses, by and large; some of them may not be, but the vast majority of them would be through the creative arts package. So, in our view, we need to encourage a vocational training system that is based on national training packages that the industries have endorsed through the system. A lot of those lists are done by states, and they put forward these accredited courses outside of the system. So, no, we do not believe the sole criterion should be that it is on two states' lists. We believe the criteria should be a formal and structured process of consultation with industry so that it brings forward the opportunity for people to say what courses they believe are job facing.

Senator MARSHALL: Is that what the industry skills training councils used to do?

Ms Lambert : Indeed, they still do now. The system still allows that through the industry reference committees, so that is one mechanism. But there are obviously also employer groups and unions that would bring forward issues, and there are support providers seeking exemptions or whatever. In the new system, the industry reference committees being serviced by the skills service organisations definitely are a very strong mechanism for doing it, but they are not the only mechanism for doing it.

CHAIR: Just on that, and about the lists, you made some comments about being industry responsive. We heard evidence that the lists have nothing to do with being responsive to either industry or skill shortages and that it was more about states' funding priorities. You are intimately involved at both levels, I assume—Commonwealth and state. Could you help us out.

Ms Lambert : The list itself was new to us when it was published to everyone else, so we are taking the same information as everyone else about what is on the list. I do not know what criteria they have used, other than what has been published.

CHAIR: When ACCI looks at state lists—

Ms Lambert : You mean state skills needs lists?

CHAIR: Yes. If you are looking at what a state is saying it is happy to fund in the vocational education and training space and the state is not necessarily taking on things that the Commonwealth may see as important or a priority, we have heard evidence that the states use these lists as a way of cost shifting.

Ms Lambert : Yes.

CHAIR: Is ACCI aware of that or concerned about that?

Ms Lambert : We are definitely aware of cost shifting, and we are definitely concerned about the way that some of the states more than others have removed themselves from funding diplomas and advanced diplomas as the VET FEE-HELP system has arisen. We have certainly been very concerned that that is a trend, because that leaves a bigger gap for the student to cover through the loans system. We have taken a very strong, holistic picture of VET which is about aiming towards more of a national system, and we would prefer to see that looked at that way. We will continue to see concerns about cost shifting, provided it remains very indistinct as to the roles of the states versus the roles of the federal government.

CHAIR: Thank you. Could you outline for us which states have been a concern. You said some are better than others.

Ms Lambert : This is anecdotal, I guess. It is very hard—we have raised this point in a formal way—to capture information about what the states are doing in this area in a way that is easy and accessible. But my understanding is that Queensland has really pulled back from its funding of diplomas and advanced diplomas, and to some extent there are some of the other areas—Victoria, South Australia and the like. But I would only be anecdotal from then on. It is sort of like shades. It is a continuum of anything from continuing to fully support through to not supporting. This will continue to be a problem as long as we have this situation where it is murky as to who funds what. At the end of the day, the initial VET FEE-HELP reforms in 2012 came out of the partnership agreement, and the states clearly, I would have thought, had in mind that they were going to change the way they funded diplomas and advanced diplomas if they were keen to see that.

CHAIR: Could you just give us some details of the impact of the failed VET FEE-HELP scheme on employer confidence in the training system more generally.

Ms Lambert : It has impacted employers to the extent that they are very concerned that they will not attract the calibre of students into the VET system. A lot, or most—you would perhaps say all —of the dodgy providers, if you are using that colloquial term, that have been rorting and causing problems in the system are not industry connected. If they were industry connected, the industry would be a lot more comfortable with it. But the fact that you have a whole range of providers either newly established or who have converted their business models to chase the funding means they have lost the connection with industry, and we are very concerned about that. We want to make sure that the whole system brings the view of industry back into what the providers are doing. So that is why the objectives of this new program are very strongly supported, to the extent that they really reinforce the idea that the loans are there to support students doing jobs that industry needs. You have to see that connection, and you should see it at every level of the system. So, from the employers' point of view, we have been very concerned about the reputational damage, and that would be our No. 1 issue: what has the reputation been for students? What has it meant in terms of the confidence that employers have in the system? From the Australian Chamber of Commerce and Industry's point of view—just to not disappoint the senator entirely—the Australian chamber's focus on fiscal discipline would indicate—

CHAIR: Thank you for throwing it in!

Ms Lambert : I just wanted to end on that note!

Senator MARSHALL: Time!

CHAIR: Extension!

Ms Lambert : We are certainly very concerned that in an environment where both the state and the federal government are reducing their investment in VET, which is a major concern to employers, we have seen considerable amounts, potentially billions, of bad debts and issues that will arise out of the previous system—or soon to be previous, one hopes—that could have been better spent on improving vocational training for students.

CHAIR: This has been an issue and an undercurrent of all of today's evidence, about the information for students in making choices about which course or which provider. TAFE will say that, simply from the fact that they are a TAFE, it is all rolled gold, but there might be instances where that is not the case, and similarly not all private providers are rorting the system and not delivering a quality outcome for students. What is the role for industry in promoting industry endorsed courses or providers?

Senator MARSHALL: Someone suggested a TripAdvisor type thing earlier.

CHAIR: To sort of give information to the 17-year-old doing year 11 right now—please do your homework—about what they might be choosing to do next year.

Ms Lambert : That is a really critical piece in this puzzle and the broader puzzle of how we get VET before the parents and before the students and get them to have a better understanding of it. For informed markets, there should be mechanisms such as one being introduced into the higher ed system called QILT, the Quality Indicators for Learning and Teaching.

CHAIR: Yes, but industry's role? What is ACCI doing?

Ms Lambert : Industry's role can only facilitate that. From our point of view, we have suggested that if we have the opportunity—whether it be through what we have called a clearance system of careers information, or if governments collectively could facilitate that system—then industry's role would be to feed into that system. Other than that, unless we have a platform by which industry can express its comments, concerns, support or otherwise, it is hard for industry to do anything more than what it is doing now. Many of our members are very much engaged in career expos and information, and some of them, of course, are registered training organisations themselves. So there are a range of things industries can do, but it is limited if we do not have a platform by which we can say, 'These are the qualifications that are leading to jobs in our sector.'

CHAIR: It is my understanding that the Hairdressing Council has an endorsed model. Why wouldn't other sectors say, 'Okay'—

Ms Lambert : Quite a number of years ago we did start down that path, and we would be keen to get back to it, but a lot of changes have happened. It was like a star rating system of providers where the industry could reinforce their endorsement of particular providers and particular courses that providers do.

CHAIR: A bit like the Heart Foundation's tick.

Ms Lambert : Yes. We have definitely looked at it. One of the major challenges to do that at the moment is we are still bedding down changes. For example, I was very active many years ago in tourism where it had its own accreditation panel. In fact, courses went through the industry system. That was then taken over by the state. The state training organisations and regulatory authorities took over that system. Now we have had, for the last few years, the national regulator in terms of ASQA, which we have still not got all the states signed up to. We would say the No. 1 thing is: can we at least get all the states signed up to it? If we can get that bedded down then you can say that is the base level, how can we can build on that to bring in place industry—

CHAIR: With respect, that is all government funded at one level or the other—this new platform and this engagement—but certain industries are taking leadership. Childcare, for instance, blacklists providers that they [14:41:13 inaudible] this particular provider, so industry taking a leadership role outside of this amorphous national conversation. I am thinking of little Billy and Sarah. They, and probably their parents, will go, 'Okay, you want to be a plumber, let's go the plumbers and see who they think are good.' You might have a list of five qualifications at your preferred provider.

Ms Lambert : Yes, but all that information in the end still has to get in the hands of the student. You still need mechanisms by which—

CHAIR: My point is: if I asked you to give me the top 10 best providers across the industry, would you be able to do that?

Ms Lambert : No, because we would not be able to accumulate that information. We have got 60 industry associations as members. There would be another X number of industries outside that system. To accumulate that information in a collective way without some common platform would be very difficult.

CHAIR: Okay, thank you. Any further questions for ACCI?

Senator MARSHALL: No, but I can just say, Ms Lambert, I forgive you.

CHAIR: Look at that. Senator Marshall and ACCI at one, if but for a moment!

Ms Lambert : I feel honoured! Thank you very much.

CHAIR: Thank you very much for your evidence here today.

Proceedings suspended from 14:42 to 15:01

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