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Tuesday, 1 December 2015
Page: 9379


Senator LINES (Western Australia) (13:18): I rise to add my comments to the Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015. We had a Senate inquiry which was really concerning in terms of the sorts of scams and shonks, and the horrific stories of students being left without an adequate qualification. The problem is that, whilst Labor is not suggesting that this is a huge problem in the sector—it is in terms of money—it is not the majority of providers. We have seen very good providers in the VET system, both public and private, but, of course, what gets into the media are the shocking rip-offs of students that we have seen from a number of private colleges, which have gone on completely unchecked by the Turnbull government.

It is time that the government really got tough on those that are seeking to flaunt the system. It is as bees to a honey pot. The VET FEE-HELP system has attracted its fair share of shonks and sharks, and those are the people that Labor wants to see dealt with in a very robust way. Once again, like the bill we had in here yesterday, this bill falls short. It misses an opportunity. It is the government, again, applying a light touch. They will tell us that it is robust but it is not robust enough. We have these sharks in the system preying on vulnerable students, students with disability, students from low socioeconomic backgrounds, who are very pleased to be given an opportunity yet are left high and dry from a system, which the government is administering, which clearly needs substantial reform and robust regulation.

The aim of the bill before us today is to do that kind of regulation. But Labor says: this is a bill which is playing catch-up. It is playing catch-up to put in place regulations to the operation of the VET FEE-HELP system. It is playing catch-up to try to retrospectively put in place regulations for the victims of the shonks and the shysters, who have been perpetrating a scam on students, on Australian voters and on Australian taxpayers.

Again, we have before us today another inadequate bill. It continues this government's practise of addressing the symptoms but not fixing the underlying problems. These problems plague the VET FEE-HELP system and vocational education across the country. This bill forms part of the government's hopelessly inadequate and flawed deregulation agenda and it makes the whole of the vocational education system look bad, when, in fact, it is not. There are significant amounts of money involved, but it is a few small operators that need to be taken out of the VET system. This bill, just like the bill yesterday on regulation and international students, is yet another missed opportunity.

The government has failed to take the opportunity to give the Commonwealth and the national regulator sufficient powers to act. This is what we want—sufficient powers for them to act decisively against providers who are suspected of misusing the VET FEE-HELP scheme and exploiting Australians. That is what is happening here: young Australians, in particular—but mature age students as well—are being manipulated and exploited. They leave school with the best of intentions to take up a vocational education course. Many of these shonksters and sharks, if you do a Google search, come right to the top, and you think that they are decent operators, and yet they are not. Clearly what we saw in Victoria last week with Phoenix is an example of where students are absolutely preyed on. They are absolutely run down by these shonky operators. And what for? For the millions of dollars of taxpayers' money. They are not interested in providing quality education.

As I said at the start of my response today, they make all colleges, whether they are public or private, get tarnished with the same brush. That is what Labor wants to see completely stamped out, for the benefit of young and older Australians—because we know that VET is particularly important for second and third careers, after a business has closed or people require retraining. Vocational education, including through TAFE, is the great provider of that. We want a system that is free of corruption, because students and potential students are the victims of these providers and the broker-led feeding frenzy that is going on.

We know that the government—and they did it in their majority report—like to blame Labor for this. But the reality is that, when Labor introduced the VET reforms, the government—the opposition as they were then—supported those reforms. So they cannot sheet home the blame of their failures to Labor. In his second reading speech, the government minister sought to play partisan politics with this bill, pinning the blame for this scheme on the former Labor government. Well, it is just not on, and it is not true.

Unfortunately for the government, the facts do not bear out what it says in its divisive policies and politics. In 2012—the last year of published figures before the current government was elected—there were just over 55,000 VET FEE-HELP assisted students. VET FEE-HELP loans totalled $235 million in that year, and the average loan was just under $6,000. In 2014 there were almost 203,000 students, a whopping increase of, wait for it, 367 per cent. VET FEE-HELP loans totalled almost $1.8 billion. And we know fees have shot up. As senators in this place, all of us, no matter which side of the political divide we are on, get those complaints from students about the great hikes in fees that have occurred. Fees have shot up to almost $9,000. Under Labor they were about $5,800. They are almost now at $10,000, a whopping increase of 147 per cent. None of that can be attributed to Labor. It is all because this government has got a runaway scheme that it tries to regulate all the time after the event.

Under this government we have had three ministers to date. Ministers Macfarlane and Birmingham both talked tough, but on the demonstrated outcomes they have failed. Even Senator Birmingham's cherished initiative of a transfer of VET powers from states and territories to the Commonwealth appears to have failed, largely because the territory and state ministers, quite rightly, doubt the capacity of the Commonwealth Department of Education and Training to manage a national VET system, given its incompetent administration to date of the VET FEE-HELP scheme.

Let us not forget that VET is vocational education. That is what it is: vocational education, ensuring that our young people about to start their careers can develop new skills to equip them to enter a modern workplace, that they can bring those new skills to the job. But all of that has been lost with the crisis and scandal that is going on across the VET scheme right now. Unfortunately, what it looks like now, looking from the outside in, is that the VET FEE-HELP system has become a business opportunity for shonks and shysters to rip off young people—particularly those who are vulnerable—to rip off Australian taxpayers, to rip off Australian voters. That is what the VET system is currently looking like.

Just last week it was reported that the Phoenix Institute of Australia took more than $100 million in government funding. As a former union official, I would be very proud; in fact, I would be amazed—they signed up 9,000 students in 10 months.

Senator Canavan: Standard practice for the unions, isn't it?

Senator LINES: I tell you what: as a good union official, I never, ever had stats that good. You know why? Because I could not offer incentives; I could not offer inducements; I could not take advantage of people. That is why. And that is exactly what is happening here. Nine thousand students in 10 months—that should have rung alarm bells somewhere, but it did not. And what was being offered? Can you imagine the pressure being applied to those young students? It must have been horrible: 'Sign up now. Sign up today. Sign here. Sign on the dotted line.' Nine thousand students in 10 months should have rung alarm bells somewhere, but it did not.

What were those shonky salespeople of Phoenix saying to those potential students? What on earth was going on? We know from media reports that the Australian Competition and Consumer Commission has started court proceedings against the private training college Phoenix in the Federal Court. The allegation is of misleading and deceptive behaviour, so what on earth were they promising? What were they saying to those 9,000 students that was misleading and deceptive? One can only imagine.

The ACCC went on to say that there are clearly problems with the federal government's billion-dollar VET FEE-HELP system. I think that, when one government regulator criticises another, we should all sit up and take note. So here we have the ACCC calling into question the VET FEE-HELP system. The ACCC said that it is going to go after the $100 million that Phoenix took from those students—the $100 million of taxpayers' money, the $100 million snatched away from reputable companies that want to offer good, quality training that has now gone.

We know that Phoenix targeted people with intellectual disabilities and, it seems, it targeted people who did not have computer skills with its online courses. What kind of shonky operation is that? We know through our Senate inquiry that online courses are preferred by the shonks and the sharks. They told us that at the Senate inquiry. Why? Because there is much more profit. There are no overheads. You do not have to front up with a teacher and a classroom and a physical presence; you just offer it online. We also know that the parent company of Phoenix, Australian Careers Network, has halted its trading since these reports emerged. It has been halted on the stock exchange for three months. Of course, despite the ACCC saying that it was going to go after Phoenix for that $100 million, Australian Careers Network has said that it will contest that.

In the business pages of our newspapers we hear about one shonky operator fighting with the ACCC, when what is at the heart of this is young people and mature-age students trying to improve their skills. All of that is lost, as the business papers report day in and day out about these shonky operators when really it is about educational opportunities for our young people. So let's get rid of these shonks and these sharks. It is a disastrous outcome that ACN, Australian Careers Network, has halted its trading. What kind of company is that? This is clearly not about vocational education and training; this is about private companies seeking to rip off Australian taxpayers through the VET FEE-HELP scheme. This is fraudulent behaviour that must be stamped out so that we get the quality and the reputation back in the vocational education system. We need a robust system that will stop these rorts starting—not a new bill seeking to rein in rorts once they have started. This is the wrong place to start.

It is not just the shonks, the shysters and the sharks; we know that VET FEE-HELP is accumulating a substantial amount of bad debt. The Grattan Institute told the Senate inquiry that almost half of the VET FEE-HELP debt has become bad debt. The figure they gave was 40 per cent. Forty per cent has become bad debt. What kind of system are we running? It is just throwing good money after bad. It seems that the Turnbull government thinks there is an endless drip of money, a bottomless pit of money. First we had 9,000 students enrolled by a shonky operator in nine months. That did not ring alarm bells anywhere. Then we had a figure of 40 per cent bad debt and that does not ring alarm bells anywhere. That tells me the government has lost the plot. The government is too busy trying to impose a big, fat new GST on everyone to worry about what is happening in education. It is too busy—with its deregulation agenda to let private colleges and other shonks run the system—to notice what is going on here. A 40 per cent debt is a massive debt and it is bad debt, so that means it will not be recovered. That is what we are really talking about here: debt that will never be recovered.

This is not the government's first attempt to fix the VET FEE-HELP scheme. Amendments were made to the act last year and new national standards came into effect on 1 April this year, but they have not stemmed the tide of abuse and exploitation. The system is in crisis on the watch of the Turnbull government. That is what is happening. Senator Birmingham will wax lyrical about everything they are doing, but you cannot talk the talk and not walk the walk. Last week we had the Phoenix Institute in the Federal Court with the ACCC accusing them of fraudulent behaviour, of misleading and deceptive behaviour. That is a pretty strong charge to level at a company.

For months we have heard the government say that its previous changes, the most notable being new national standards that came into effect on 1 April 2015 this year, would fix the problem. They have not fixed the problem. The problem continues. On 1 April—April Fool's Day, it would seem—the then assistant minister for education and training said in a media release, 'The time is up for dodgy marketing agents offering inducements like laptops, meals, vouchers and prizes so that people sign up for VET courses they don't need and incur a debt they cannot repay.' Nine thousand students have been ripped off by Phoenix since 1 April, so what on earth were these standards supposed to do? They certainly did not stop Phoenix.

Since that media release on April Fool's Day, the reports of exploitation have continued. The Age reported on 4 April that brokers were targeting elderly and disabled public housing tenants in Melbourne suburbs and were giving them iPads. Fifteen private colleges were reported to be under investigation for flouting the new standards by offering inducements like laptop scholarships, according to The Age of 16 May. ASQA was forced to defend its conduct in June 2015.

The Senate inquiry was told that brokers were continuing to flout the national standards. That evidence was given to us by the Redfern Legal Centre. The Australian College of Broadway was accused of enrolling a woman for a $28,000 course after convincing her it was free. That was reported in The Australian on 5 August. The Fairfax media continued to report that Careers Australia had enrolled almost 3,000 students using VET FEE-HELP but only 300 had graduated.

These are the shonks and the shysters. These are the people we want to stamp out with the amendments that we have put forward. The government has laughed off the sorts of recommendations that our Senate inquiry put forward, but we believe they are required as part of a robust system. We will continue to have students in this country left without a qualification if the government does not act decisively on this matter once and for all.