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Monday, 24 August 2020
Page: 3752


Senator RENNICK (Queensland) (13:44): I rise in support of the National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Bill 2020. Australia's vocational education and training sector is a vital driver of our economy. The VET sector provides education and training for key industries and services through a network of private and public registered training organisations. Having a high-quality VET sector is fundamental to keeping our workforce skilled and our economy productive. However, due to the debacle of Labor's VET FEE-HELP scheme, the quality and reputation of Australia's VET sector have taken a significant hit, where once the sector was regarded as among the best in the world. This bill comes as one more essential step in a long line of amendments brought by this Liberal-National government to repair the damage done by Labor and get vocational education and training in Australia back on track. The bill deals specifically with the national VET regulator, ASQA, making several changes and improvements to increase its efficiency and transparency in regulating the sector.

You will recall, Mr Acting Deputy President, that the VET FEE-HELP scheme was introduced in 2008 and operated as a HECS type loan for vocational education students, where the government paid tuition costs and students would start paying off their loan once their income reached a high enough threshold. At the time, the loans were quite limited and were not widely used, which led to a further overhaul of the scheme in 2012 by the Gillard Labor government. The revised version of the scheme dropped many of the earlier restrictions in an attempt to open the scheme to more students and trainees. This weakened the dam wall, so to speak, and opened a lucrative niche for a flood of private registered training organisations to move in and take advantage of the loan scheme as a government funded cash cow, in many cases with little regard for student outcomes. The RTOs maximised their profits simply by maximising their enrolments, irrespective of the circumstances or background of the students they enrolled. By signing up as many students as possible, unscrupulous RTOs could quickly establish huge cash flows, as the government paid based on the number of student enrolments, regardless of whether or not students finished the course, qualified or even were able to meet the requirements of the course.

To rake in as much taxpayer money as possible, some RTOs went to great lengths to trick, coerce and bribe students into signing up for their courses. A common and quite blatant inducement advertised by RTOs was to offer free laptops or iPads simply for signing up to a course. In making their sales pitch, shonky training providers would often deliberately target uninformed people, implying there were no upfront costs and misleading them about their liability to pay fees and service the debt. Brokers were hired to recruit the most vulnerable people, including the old, unemployed, less educated and disadvantaged, using the marketing tactics of cold calling, handing out leaflets, setting up shopping centre booths and selling door to door. On top of this, many courses were of very poor quality and extremely overpriced. In one instance, an online business course from a private RTO with no reputation to speak of cost a jaw-dropping $8,000 more than a similar course offered by a prestigious Melbourne university.

Yet the Gillard government just kept paying. There was no quality control and there were no audits or checks and balances—nothing. Labor just kept shovelling taxpayers' money out the door. This behaviour from RTOs was outrageously unethical and, due to the poor design of the scheme, far too easy to get away with. The total value of loans jumped from $25.6 million in 2009 to $2.9 billion in 2015. Many of the students who received these loans will never reach the income threshold, meaning that the costs will be forever borne by hardworking Australian taxpayers.

This catastrophe was entirely due to the Labor government's negligence and mishandling of the scheme. An audit of the scheme published in 2016 found that the government did not establish processes to ensure that all objectives, risks and consequences were managed in implementing the expanded scheme. In effect, the quality and integrity of much of the available education and training was trashed in the name of expanding the sector. Labor's VET FEE-HELP scheme simply did not have an appropriate level of accountability and regulation to balance the systemic risk of abuse that comes with such a scheme.

There is invariably a great deal of risk involved when it comes to the government handing out so-called free money, so strict regulation is needed in order to mitigate those risks. Legislation must always be designed to account for the lowest common denominator, with all the contingencies provided for, because if there is an opportunity for exploitation there will always be someone out there to do it. Government should never be in such a hurry as to let enthusiasm for change take pre-eminence over accountability, transparency and due diligence when it comes to good and effective legislation.

The coalition has been working for several years to clean up the mess caused by the VET FEE-HELP scheme. Reform in this area has occurred incrementally and methodically to limit disruption to legitimate RTOs and to protect the many students who use the loans scheme. The point needs to be made that, despite the financial abuses that occurred, unscrupulous RTOs made up only a relatively small portion of providers, and students shouldn't suffer any further because of bad policy. Most significantly, in this process the VET FEE-HELP scheme was entirely scrapped in 2016 and replaced with a new system, the VET Student Loans scheme, which is far better designed, with stricter vetting and enforced loan caps.

Today the government is introducing this bill in order to further improve the national VET regulator, ASQA, to keep RTOs in check so that widespread abuse of the system won't be possible in the future. Having an appropriately governed regulator means that skills training will be delivered in a more efficient manner. This is important—the high-quality sort of skills training that is needed to help us come up with the best possible post-COVID workforce. The new governance structure within ASQA means that a CEO and advisory council will be able to take a greater educative role and have a more modern approach to regulating the VET sector. The new expert advisory council means that those who are best placed to understand the nuances of this highly diverse sector are best positioned to help guide it into the future.

Important privacy safeguards will be put in place to ensure that the data of vulnerable students is not shared inappropriately and will also help buttress the vulnerable against potential abuse such as we saw under Labor. It is tremendously important to recognise that at a time like this skills and training are more important than ever. VET reform is a key pillar of the Morrison government's JobMaker plan. We on this side of the chamber know that all jobs are worth supporting, not just those of tertiary-educated Labor and Greens voters in the inner cities. We have announced $2.8 billion to support apprentices and trainees since the COVID pandemic hit, and we will continue to keep pushing to ensure that vocational education has a strong backbone of funding and rigorous and appropriate oversight. It is and always will be core to our economy and should never be considered an afterthought. A stable, well-functioning VET sector that continues to turn out skilled, appropriately qualified workers is essential to Australian industry. It is essential to the strength of our economy and essential to the wellbeing of our society as a whole.

This bill will make the necessary improvements that are needed in order for ASQA to fulfil an effective certification and oversight role, providing the checks and balances needed for the vocational education and training sector to flourish. A good and effective regulator was one of the key elements missing from Labor's VET FEE-HELP scheme. It was a vital missing ingredient that almost guaranteed that rampant misconduct and poor quality would infect many RTOs. With the passage of this bill ASQA will take a giant step forward to be the highly effective regulator our VET sector needs. I commend the bill to the Senate.