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Wednesday, 2 December 2015
Page: 9575


Senator BIRMINGHAM (South AustraliaMinister for Education and Training) (10:30): Let me deal with a few of the issues that Senator Carr has raised. He quite rightly indicated that the government of the day needs to take responsibility for the circumstances that it finds. This government has been very clear that it takes responsibility for seeking to clean up the mess that it has discovered in the VET FEE-HELP scheme. It has been a process of attempting to apply reforms that we think will fix it. We have acknowledged this week that we think it will take a profound overhaul and rewrite of the scheme to address it, but we completely take responsibility for fixing the mess we inherited. That is exactly what we have been doing, and that is exactly what we are doing through this debate today.

Senator Carr may never have been the minister responsible for VET FEE-HELP or vocational education, but, of course, he was a minister in the government that did enact the various changes that opened this scheme up. It is important that we recognise the history of the scheme. Senator Carr is right: the idea of having an income contingent loan scheme was conceived by the Howard government, but it was with very tight arrangements in place. It was with a requirement that an articulation agreement and credit transfer agreements were in place with universities and that those universities therefore acted as a quality control measure in relation to the VET FEE-HELP providers.

Senator Carr asks me whether reintroducing any provisions in that regard is something that we would consider in rewriting the scheme. I say to Senator Carr: yes, we may consider that in certain circumstances. I think it is important when we consider access to public subsidy, be that public subsidy directly paid as a subsidy or be it paid indirectly via an income contingent loan, that we consider the thresholds of standards that providers need to meet. In the VET sector we have 4,700 registered training organisations. They need to meet a standard to be an RTO, and that should be a strong standard that gives people confidence in the qualifications that are delivered. But, of course, if you are dealing in public funding then it is not unreasonable that a much higher standard is expected, because the fee-for-service market, which I was talking to Senator Simms about before, is far better able to self-regulate itself in many instances because people are making fully informed value judgements about the service they are purchasing. Whether it is an employer paying for the training or an individual paying for the training, they are assessing the value and merit of that training at the time they part with their hard-earned cash. But if they are not parting with hard-earned cash—because they are racking it up on a student loan or because the taxpayer is paying for it—then, unfortunately, we do not seem to see that same serious, informed decision making by individuals occur before they sign on the bottom line, so we do need to expect, therefore, a higher standard from those providers.

What that higher standard may be in a new model is something that we are open to. Articulation agreements may be a means—I say 'may', in a hypothetical scenario—by which you may be able to access whatever a new VET FEE-HELP model looks like, without perhaps having to jump through other hoops. So you might conceive of a model where that is one criterion of high-performance recognition that could be met that saves you having to jump through or demonstrate other hoops—that saves you, perhaps, from having to enter into a contract arrangement if that was something else that was conceived of. These are all scenarios that could be contemplated.

In terms of the process that may be undertaken and your statement that we will be back here, we certainly will be back here because to conceive of a new model will require change to this legislation. So we will be back here to rewrite this legislation under the terms of a new model. But, before that occurs, I am happy to give the Senate the commitment that we will make sure the approach that will be taken is spelt out in a manner that provides an opportunity for public commentary and feedback and that we will not be just rushing through informal consultations to a point of legislation. There will be an opportunity for informed public comment in relation to what changes may look like, not just through an informal consultative mechanism.

Lastly, I will touch on the comments around a takeover of VET. That is an idea that is encouraged by the South Australian government and the South Australian Premier as part of a grander bargain in relation to federation responsibilities that he has publicly spoken about: enhanced opportunities for the states to pursue options in early learning in return for the Commonwealth undertaking an enhanced role in vocational education and training. I think there is a real problem that the VET sector is seen, all too often, as the poor cousin of the university sector and particularly perceived, sadly, by parents, perhaps by teachers, as students are making their postschool decisions, as being something of the poor cousin. I think the inconsistencies that occur from state to state, the inconsistent policies within states and, indeed, challenges with the VET FEE-HELP system all help to plague those perception problems, whereas, notwithstanding various changes in debates over the time, we have had relatively continuous arrangements and certainty for universities since the advent of HECS. Throughout those decades, students have had confidence with how they access a university place, what the funding support for them will be and, indeed, the quality arrangements that should sit alongside that. In an ideal world, students would have the same type of confidence and the same type of certainty built up in the VET sector over a period of time.

Whether or not those discussions proceed, absolutely the Commonwealth needs to look like it would be a competent and responsible steward of the sector were we to have a greater role in funding, noting that we already have the primary national role in the setting of qualifications and the regulation of RTOs. Those two responsibilities are already largely nationalised in any event, and it is only the funding and the student support that now have this odd arrangement where the Commonwealth is the primary agent for student support for high-level VET qualifications, in the diploma and advanced diploma space, while the states are the primary provider of support through the certificate level qualifications—yet another complication to the way the whole scheme works. A federation solution might provide a better outcome. Those are discussions that will be had between the Prime Minister and the state premiers, and the questions will resolved through that context, not here. I am very open to making sure that, if they are progressed, we then get a model that works for all qualification levels settled in a very sensible and careful way that ensures we do not repeat any of the mistakes we have seen in this qualification level.