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Thursday, 15 October 2015
Page: 7826


Senator KIM CARR (Victoria) (15:54): On behalf of Senator Lines, I present the report of the Education and Employment References Committee on private vocational education and training providers, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator KIM CARR: I move:

That the Senate take note of the report.

This is a very timely and very important report. This is the second report that the committee has delivered on the issue of private vocational education providers. This is an area of the education and training system that has been subject to considerable media scrutiny of late, so not just in terms of the work of this chamber but also the general public would be aware of the evidence, which was deeply, deeply alarming.

If we just look this week, one of the largest providers in the vocational education system, Australian Careers Network, announced a suspension of trading. This is a college that has grown by 415 per cent in one year, has over 25,000 students and has secured very substantial levels of government support. ACN previously seemed likely to survive the upheavals that had affected other prominent private providers such as Vocation and Ashley Services. But what we do now know is that there is a pattern of behaviour. ACN said it would cease trading to respond to correspondence from the education department and others. In fact, the sector's regulator, ASQA, the Australian Skills Quality Authority, had given ACN subsidiary Phoenix Institute of Australia a 'notice of intention to cancel its registration as a provider of vocational education and training and education services including to overseas students.' So it is not just a question of domestic students; it is also a question of our international reputation that is at stake here.

An ASQA spokesman was quoted in The Australian newspaper as saying that the agency inquiries had 'uncovered significant non-compliance with the vocational education quality framework that all registered training providers are required to satisfy to maintain registration as a training organisation.' ACN, Vocation and Ashley Services are three major companies that have been recently faced with considerable scandal, and they have a pattern of behaviour which goes to the gross abuse of public subsidies, the gross abuse of students and, in my judgement, a gross abuse of public trust which goes to the very heart of undermining the integrity of the vocational education system in this country.

But they have another pattern: that is, these companies, before listing or shortly after listing on the stock exchange, seek to attract board members of prominent personality: so, in the case of vocation, former federal education minister John Dawkins; Ashley Services, former education minister Simon Crean; and, for ACN, the former Victorian Minister for Higher Education and Skills, Peter Hall. And we have seen others—sporting identities and the like—filling a similar pattern with other companies.

I do not want to say or suggest for one moment that these men have not discharged their duties without the fullest and conscientious sense of propriety, but what I can see here is that each of those persons has been taking up the board positions on the basis that they thought they could actually contribute to the development of the education system in this country only to find that the companies were behaving in a totally improper manner. Now, what we have got is that the status of these individuals was designed, in my judgement of the evidence presented to the Senate committee, to actually enhance the operations of the company and lift the share price. What we do know, though, is that the business model of the company undermined not just the reputation of the company and not just the reputation of the individuals but the vocational education system itself through the exploitation of public funds in order to build up market capitalisation. We have seen an extraordinary transfer of wealth from the public purse to individuals. VET providers have thoroughly undermined the integrity of the education system itself. We see a similar pattern in the United States. I could not get stronger words than those from TheNew York Times recently, which identified a similar problem. TheNew York Times states:

The career training and for-profit college industry has been accused in recent years of preying on the poor, veterans and minorities by charging exorbitant fees for degrees that mostly fail to deliver promised skills and jobs …Without government funds, which account for the overwhelming bulk of revenue, few of these institutions could attract students or stay in business.

That is exactly the pattern that has occurred here.

To add insult to injury, it has been said that, because this program was established under the Labor government, it is not a matter of responsibility for the present government to face. Nothing can be further from the truth, because this government has been in office for two years, and systemic failure and systemic corruption within the system is a matter of responsibility for the government of the day. Furthermore, this assessment is underpinned by the evidence presented to this committee of the fact that our regulators were nothing more than toothless paper tigers and that they have worked on the simple assumption that you worry about the problem after it emerges—often as a result of media attention. That proposition is reinforced by the government's own regulation impact statement, which has been tabled in the House of Representative today. Let me quote directly from it:

Current and historical compliance activity is reactive rather than proactive, and is weighted heavily to the lower level of the enforcement pyramid, focusing on encouragement in the hierarchy of responses (that is, guidance, education and training in the main), with non-compliance taken to be due to lack of knowledge or misunderstanding of the Act and guidelines on the part of the provider. It is now apparent that this is not necessarily the case.

This report finds systemic abuse of the vocational education system in this country, systemic abuse of the students of this country and systemic abuse of the loans system in this country to the point where, in one year, the loans system has blown out: VET FEE-HELP loans, 151 per cent; the number of students engaged, 103 per cent; and the number of places provided, 102 per cent. Yet, the number of providers has increased by only 44 per cent.

ASQA has thoroughly failed in its responsibilities. And you can see no sharper contrast than in the way this government has behaved compared with the way the Victorian Labor government has behaved while it has been in office. One government, in office for just a year, has taken stern action, with 8,000 certificates withdrawn, substantial numbers of training contracts removed and a number of bodgie operators closed down. What do we have from this government? We have a government that has a fetish for deregulation and for allowing these bodgie operators to get away with shocking, shocking abuses of the vocational education system. We have a government that has taken too long and produced too little, too late. The consequences have been a fundamental undermining of the confidence in the vocational education system, and the abuse of the weakest and most vulnerable people in this country to the point where substantial numbers of people have been signed up on massive debts with no chance of ever repaying. (Time expired)