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Thursday, 5 December 2019
Page: 5225

Senator PRATT (Western Australia) (11:07): Today I want to make a contribution, on behalf of the opposition, on the three bills before us, which we are considering together: the Education Legislation Amendment (Tuition Protection and Other Measures) Bill 2019, the VET Student Loans (VSL Tuition Protection Levy) Bill 2019, and the Higher Education Support (HELP Tuition Protection Levy) Bill 2019. We have here in the main bill tuition protection arrangements structured according to the three schedules. Schedule 1 proposes to amend the VET Student Loans Act 2016 to replace the current tuition assurance arrangements with a new VET student loans tuition protection scheme and to make minor consequential amendments to the Education Services for Overseas Students Act.

Schedule 2 proposes to amend the Higher Education Support Act 2003 to replace current assurance arrangements with a new higher education loan program tuition protection scheme. I note that schedule 3 does not specifically relate to tuition protection and proposes minor amendments to the VSL act provisions that require the secretary to revoke approval as a VSL provider at the request of that provider.

The two accompanying bills propose to formalise the terms of the levies. Labor has some remarks to make about that issue, as well as some of the issues that have been excluded from this bill. So we support this legislation and welcome today the practical effect of introducing protections for students with VSL HELP loans and simpler processes for decision-making, which will make student placement and VSL HELP loan for VSL HELP loan re-crediting.

Labor does strongly support the principle that students should be protected in instances of provider or course closure. The intention of this package of bills is positive overall, as they seek to address the impact of VET FEE-HELP, which has seen ongoing increases in course fees and, as a result, unrecoverable student debt.

We very much want to see a strong VET sector, with TAFE as the backbone of that. Labor wants to protect students from any adverse outcomes in the event of provider or course collapse. The bills were referred by the Senate to the Education and Employment Legislation Committee, and I'd like to thank Senator McGrath for the ability to hold inquiries. They've been very helpful to our deliberations on this legislation.

I'd like to highlight some of the submitters' remarks and evidence to the inquiry, noting that stakeholders in the VET and higher ed sectors were broadly supportive of the bills but did have some concerns, which we've been discussing with the government. I note that shadow minister Tanya Plibersek has had some successful negotiations and discussions around some of those issues. Submitters have raised concerns that students who pay their tuition fees upfront from personal savings or from the savings of a business are excluded from protection arrangements in these bills, potentially leaving them vulnerable. This was certainly highlighted in the evidence before the inquiry. I note that stakeholders are actively engaging in these discussions on an ongoing basis with government. They haven't had an opportunity to be clearly resolved in terms of this legislation, but we would like to keep the pressure on the government to see those issues resolved.

Labor notes in this context that private providers do already have a legal obligation to provide tuition protection for fee paying students and that those students might seek recourse via the Australian Competition and Consumer Commission. But we, like other stakeholders, are concerned that the scheme before us today, because it doesn't sit well alongside other schemes, entrenches complex arrangements where different students have different rights and protections. The Department of Education told the committee that students could seek recourse via the ACCC, but we believe this provides little comfort because of the simple fact of the kind of situation where the student needs to engage the ACCC to recover fees paid upfront. In those circumstances, the provider would be likely to be in administration, no longer operating and unable to provide the course refund protection.

Labor senators also note that providers that were using insurance products in this space that those insurance products have been withdrawn, weakening the diversity of protections available to those students. We think it's a missed opportunity to have looked at those issues in conjunction with this legislation. However, we appreciate that the time constraints in looking at those issues together may have proven difficult, and we'd like to keep the pressure on the government to resolve those issues.

Another major concern raised by submitters to the inquiry was that TAFE will be insuring their students, despite the fact it has such an extremely low risk that students would be left vulnerable in the event of course closure at TAFE. It was clear that there was a very real risk that students accessing student loans in order to attend TAFE for a VET qualification would be bearing a proportion of the insurance cost across the whole of the sector for students who have accessed a student loan to attend a private provider. I note that Mr Jackson, from TAFE Directors, gave clear evidence to the committee on this. He said:

It is partly setting up a scheme that only covers 14 000 students at a significant cost to the public sector, when in fact the public sector is already insuring its students by being state owned. So the question in some ways is around the economics of just having a scheme for 14 000 VET student loan students, when probably the greater risk is for those full-fee-38 paying students who are outside it, except full-fee-paying with TAFEs, who are actually guaranteed by their state government anyway.

I'm delighted that the government has responded to urgings by the shadow minister, Tanya Plibersek, to amend the legislation to address the issue of TAFE, because this is important. The latest data from the Department of Employment, Skills, Small and Family Business on VET student loan uptake by student, by provider or by state or territory government shows that providers enrolled 43,970 out of the 57,874 VET VSL students for 2018. So they have the vast number of enrolments. We were concerned that state and territory government-owned providers would be underwriting 76 per cent of the administration of the domestic Tuition Protection Service without those students having a material benefit.

Demonstrating the case that TAFE students have no significant risk of losing coverage of their loans, the Department of Employment, Skills, Small and Family Business confirmed to our hearing that the department has managed interim tuition assurance arrangements from 1 July 2018. They told the committee that during this period no TAFE students sought court assurance or were eligible for a re-credit for any part of their loan.

From Labor's point of view, the effect of overzealous application of competition policy and privatisation in the VET sector, as well as chronic underfunding on the part of this government, has had a very negative effect on the sector. It is an unfortunate reality for some students that they do sometimes unknowingly enrol with a dodgy provider which is overloaded with students in order to turn a quick profit. The provider goes under, the student is left in the lurch with their course and they are out of pocket. The failure of the system in these cases lies with the government, but we are pleased that today the Tuition Protection Service will provide students some comfort in the future. We also urge that the quality of these providers very much needs to be held to account through government processes.

Predominantly, as I highlighted, our concerns have been around students attending public TAFE but wearing the cost of the course or business failure in the private sector. As I also highlighted, our other concerns have been around the lack of protection for students who have paid their fees upfront. I wish the government well, and we'll certainly continue to talk to stakeholders ourselves about the progress in addressing these issues. In Labor, we want to see the best interests of students and publicly funded TAFE education upheld and addressed. We've called on the government to address the issue of TAFE with an amendment to the VET Student Loans (VSL Tuition Protection Levy) Bill 2019, which is before us. We're very appreciative of the fact that the government has been cooperative in this matter and has circulated a request to be sent to the other place for amendment.

We very much want to make sure that students are protected from the operation of dodgy providers and we support the bill.