Coalition Senators' Minority Report
Government Senators acknowledge the vital role of the VET sector in
building a skilled and productive workforce for Australia’s future and are
concerned that the reputation of the majority of VET providers being tarnished
by the behaviour of a few, as supported by witnesses during a hearing for this
I certainly believe that there are quality issues, but they
are at the margins of the industry. If you look at the numbers, the majority
are delivering a quality product and are doing the right thing. But that is not
to say that there have been no problems.
It is unfortunate that a few bad apples that make the front
page or lead story taint the rest of the VET sector.
During this inquiry the Committee has heard some very disturbing stories
about the unscrupulous behavior of some training providers, using high pressure
sales tactics to prey on the vulnerable in society, leaving students with a
lifetime of unwanted debt that may never be repaid and taxpayers with
increasing liabilities. For example:
We have seen a deliberate targeting of acutely vulnerable
people, particularly those living in high-density public housing in the
Redfern-Waterloo are of inner Sydney. Also, we have seen marketing agents
approaching people directly outside Centrelink offices in Redfern. The
marketing agents have promoted the courses as free or government funded, which
is misleading, and they have offered laptops and iPads as inducements for
people to sign up to VET FEE-HELP loans.
We are deeply concerned about aggressive marketing tactics
that target consumers who do not have the aptitude or ability to complete VET
courses....We have received reports of education brokers in particular cold
calling or door-knocking potential students and pushing them to enrol in
unsuitable courses over the phone or on their doorstep.
There were more than 30 complaints to the Department of Education about
VET FEE HELP between 2011 and 2013. Labor was told about the problems from the
start, but took no action.
Other complaints have emerged from the public, including where a student
who wanted to change providers so they did not have to do the course online,
discovered that they had already been charged the full debt load up front. A
second student enrolled themselves in an online course, but wound up with no
online access and a $20k debt. Another student was told the course was “free”
but wound up with thousands of dollars in debt.
Government Senators condemn this unconscionable behavior which has served
to damage the reputation of the VET industry and negatively affected public
perceptions of the quality of training that is provided by the majority of
providers in the vocational education sector.
In response to these serious concerns the Government has acted swiftly
as it recognises the vital importance of maintaining public confidence in the
VET system to protect vulnerable students from the actions of unscrupulous
operators and to prevent taxpayers being burdened from cost blow outs.
The Government’s reforms address all of these issues to protect
students, taxpayers and the reputation of the sector
Earlier this year, the Government introduced its VET reforms by banning
the use of inducements (eg free iPads/laptops) and banning marketers from
misleading students and signing them up to the VET FEE-HELP loan scheme after
purporting that courses are “free” or “government-funded”.
The Government has already: introduced tough new standards for
registered training organisations; committed more funding to the Australian
Skills Quality Authority (ASQA) to implement the new standards; and introduced
new laws which enable regulators to act more swiftly when addressing quality
Labor’s Failures in the VET sector
Government Senators are concerned that the Committee Report fails to
acknowledge Labor’s poor design of the VET FEE-HELP programme, first introduced
in 2008 then expanded in 2012, and hold Labor to account:
Many of these quality issues were due to the policy
implementation of the new funding models being a step ahead of the regulatory
improvements that we now see coming into play.
Labor, working with The Greens, has sought to politicise this inquiry
instead of working together with the Government to implement the necessary
legislative changes and fails to adequately acknowledge the practical steps the
Coalition has taken to reform the VET FEE-HELP programme since coming into
All of the Government’s reforms to VET FEE-HELP have been necessary
because the previous Labor Government failed to put in place appropriate
compliance arrangements that stopped providers or brokers from using
exploitative practices to take advantage of vulnerable students and burden the
Access to VET FEE-HELP was expanded in 2012 but the Government of the
day failed to put in place a dedicated compliance strategy, as reported in The
That (expansion) precipitated unprecedented examples of
unethical student recruitment practices and astronomical fees as dodgy
operators jumped into a new and easy government-supplied pool of money.
It has been concerning that Labor has yet to commit to supporting the
Government’s reforms and amendments. Their inaction in the VET sector has most
likely cost students, employers, and taxpayers hundreds of millions of dollars
for skills training that failed to deliver real outcomes. Senator Carr
recognised this when he commented in the Canberra Times that:
Labor introduced VET FEE HELP with good intentions but the
scheme contains ‘fundamental weaknesses’ that need to be fixed. The scheme has
allowed too many for-profit companies to access government subsidies and
regulators were not given enough power to crack down on rogue operators.
The Committee Report describes the “good intentions” behind the introduction
VET FEE-HELP but fails to analyse the flaws of the policy which allowed this
unsustainable situation to develop:
The intention behind VET FEE-HELP was to make available for
students options which otherwise they might not have, particularly for
Coalition Senators agree that while these were worthy aspirations,
without the right regulations in place to protect students and taxpayers from
rogue operators, these “good intentions” have not resulted in the desired
outcome due to poor programme delivery and design.
It is also disappointing to note that Senator Carr was reported as
saying that he believes it is now the Government’s responsibility to restore
confidence in the VET FEE-HELP scheme which was introduced by a previous Labor
Coalition Government Reforms to strengthen VET and VET FEE-HELP
The Government has acted to enhance the operation of the VET sector and
VET FEE-HELP and will not tolerate further abuses of the system. In announcing
the reforms to VET FEE-HELP the then Assistant Minister for Education and
Training, Senator Birmingham said:
We will be monitoring the effectiveness of these measures
closely and reviewing the program again within two years. Training providers
should consider themselves to have been placed on notice that further abuse of
the program will result in even harsher measures.
The Government has acted to improve the quality of training in the VET
Introducing tough new standards for all registered training
organisations from April 2015;
Committing a further $68 million to the national regulator the
Australian Skills Quality Authority (ASQA) to maintain our strong reputation
both at home and overseas, for delivering high-quality training;
Introducing with the states and territories the National Training
Complaints Hotline (13 38 73) to make it easier for complaints to be heard and
Supporting the Australian Competition and Consumer Commission’s
(ACCC) investigation into VET FEE-HELP complaints.
In terms of VET FEE-HELP (VFH) a series of measures have been
- Banning inducements to students under the VFH loan scheme;
Tightening VET marketing and recruitment practices;
- Improving the understanding of how VFH operates and student right and
- Strengthening the debt waiver and revocation processes for students
- Strengthening the assessment criteria for, and ongoing scrutiny of, all
- Ensuring student debt is incurred in line with course delivery;
- Establishing minimum pre-requisite and prior education qualifications,
including demonstrated literacy and numeracy requirements; and
- Enhancing training and outcomes information, allowing students to make
more informed choices about training providers and courses.
The Government has acted to swiftly implement these reforms: from 1
April 2015 inducements were banned (eg free laptops/iPads/) and from 1 July
2015 the VET Guidelines were changed with immediate effect to include:
banning withdrawal fees, which stopped students from cancelling
from a course before they incurred a loan;
making providers responsible for the actions of their agents and
disclosing which agents they use; and
banning marketers from misleading students that VET FEE-HELP made
courses “free” or “government-funded”.
Further changes will come into effect from 1 January 2016 so VET
not be allowed to charge a student the total course tuition fees
in one up-front hit - this will result in students only incurring a debt as
they progress through a course;
have to issue a student with a VET FEE-HELP Invoice Notice at
least 14 days prior to each census date for a VET unit of study - this
will ensure students are fully aware of the debts they may incur after the
census date; and
not accept a VET FEE-HELP loan request from a student until a
two-day ‘cooling off’ period has elapsed after enrolment. This will help stop
the high pressure sales tactics that saw people enrolling in a course and
taking out a loan at the same time.
require a parent’s or guardian’s signature before a student under
18 years can request a VFH loan (with exemption for minors considered
independent under the Social Security Act 1991).
The Government will shortly introduce amendments to legislation to
implement these reforms.
The Bill will also further protect students and taxpayers by:
Making it easier for a student to have their debt cancelled where
they have been signed up for a loan inappropriately (a cost that will be
recouped from providers to protect taxpayers);
Introducing minimum registration and trading history requirements
for new VFH provider applicants to ensure those approved have a proven history
of delivering quality training;
Introducing infringement notices attached to civil penalties for
breaches of the VFH Guidelines; and
Technical amendments to strengthen the Department’s
administration of the scheme and its partnerships with Australian Quality
Skills Authority to monitor and enforce compliance.
Coalition Senators commend the government for its proactive
approach and call on Greens and Labor to support it.
Student and Employer Choice in Training
The Coalition supports all high quality training providers, regardless
of whether they are TAFEs, community colleges or private providers.
Despite the recent challenges faced in the VET sector, Coalition
Senators are not in favour of reducing student and employer choice in the
market and allocating a certain proportion of funds solely to TAFE providers;
as supported witnesses:
One of the key components of an industry-led, demand driven
VET system is that it is flexible and responsive. Flexibility in training
delivery is essential for lowering the overall costs of training to both
industry and the individual....More competitive market arrangements encourage
providers, including TAFE, to deliver more flexible options. As the VET sector
has evolved, the needs of the client cohort have also evolved significantly.
It [student choice] has opened up the VET market to a great
many people who previously would not have been able to access training.
Previously, VET was almost solely the regime of apprentices and government
employees and the realm of the big utilities. It has really opened up the
sector to a much broader range of people.
The private providers see niches and they work in smaller
regional areas. They should have the opportunity to make it available for
students in that particular area. For example, we go to small towns which have
populations of 300 or 400. The government cannot necessarily put a TAFE centre
there or a university there.
Labor also supported student and employer choice in vocational training
when it established the National Partnership Agreement (NPA) on Skills Reform
with all states and territories in 2012. The NPA required all state and
territory governments to commit to reforms including greater competition and
The Shadow Minister for Vocational Education, Sharon Bird MP, has
announced Labor’s VET election policy is to have a fireside chat with the
states and territories to get agreement on a dedicated proportion of funding
from the Commonwealth for TAFEs.
At its recent National Conference, Labor walked away from its own
reforms under the 2012 NPA by amending the platform to “rebalance the
contestable funding model to ensure that priority funds are allocated to
TAFEs...” Funds that are guaranteed to one type of provider are not
As yet, there have been no details released about this policy, such as the
proportion of funding allocated to TAFEs. The Australian Education Union has
proposed that 70% of Government funding go to TAFE
however there are serious concerns about having such a fixed, inflexible
approach to funding arrangements, as outlined by the Australian Chamber of
Commerce and Industry:
...TAFE does not own quality in the VET sector, and I think it
would be very dangerous to curtail the sector by only allowing 30 per cent of
it to flow through to the majority of private providers out there.
A concerning example in South Australia, which shows how far a Labour
government will go to reduce student choic in the market, is the Weatherill Government
announcing a new policy, WorkReady, which provides 90% of new subsidised
training places only to TAFE.
This new policy is detrimental to the needs of students who want
specialist industry training and ignores the needs of those living in regional
areas with the nearest TAFE hundreds of kilometres away. This policy has
already resulted in 176 job losses, with a possible 147 further losses in the
next six months, and an unknown problem into the future as a result of skills
Coalition Senators urge Labor and The Greens to support the Government reforms
to the VET sector which have been strongly supported by stakeholders and address
many of the concerns raised in evidence and recommended by the Committee. As
noted by Study Group Australia:
SGA is of the opinion that, similar to what happened in the
international education space, appropriate strong regulation, coupled with
robust codes of practice and ethical conduct requirements will ensure the
sector moves forward after a rather rocky start.
The Australian education system, including VET, is a world
recognised brand well known for its quality and desirability of a qualification
delivered at an Australian standard. Indeed many nations aspire to having a
vocation education and training system like ours.
Government Senators do not support the recommendation for a further
review (Recommendation 1, Chapter 2) as a number of reviews, including this
one, have already been held or are pending, for example:
The Government appointed a VET Reform Working Group, made up of
representatives of students, consumer advocates, employers and providers, to
help inform implementation of the reforms. In addition, specific consultations
were held by the Department.
The Auditor-General has requested that a performance audit of VET
FEE-HELP be included in the Australian National Audit Office’s (ANAO) 2015-2016
work program, as requested by Labor.
The Government has also appointed a VET Training and Assessment
Working Group to consider options to strengthen the quality of training and
assessment outcomes so as to maintain student and employer confidence in VET
The Government has announced it will review VET FEE-HELP in
While there is more work to be done, the prompt response of the
Government so far to the issues raised during this Inquiry is addressing the
behaviour of unscrupulous VET FEE-HELP providers, protecting vulnerable students
from bearing the cost of a lifetime of debt and aims to restore the integrity
of Australia’s VET sector.
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