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Ms BIRD (Cunningham) (18:09) I indicate to the House that Labor had foreshadowed these in detail amendments during the second reading debate. I have listened to the contribution by the minister in his summing-up debate in which he referred to some initiatives that the government is pursuing in a similar vein to what was envisaged when I put them in detail amendments forward. However, I am persisting with the amendments in this format for two reasons and I would just like to explain those to the House.
Firstly, as I understand it, the proposition of the minister is not a legislative proposition. It is Labor's view that, given the extreme and damaging nature of the sorts of rorts and behaviour that are going on, it is a stronger and therefore better position to have this new process actually embedded in the legislation.
Secondly, the proposition put by the minister that is being developed, I still think needs another step and that step is envisaged in the amendment. So I understand from the minister's comments that the amendment will not be supported by the government but I would like to indicate that I am keen to work with the minister as that process is developed to perhaps build in some of what we envisage.
The concept behind the amendment in detail for the interests of the House is to address what has become, I think, the key danger point and where the most damage is being done in the VET FEE-HELP sector in particular. In addition, a further intervention needs to happen by government as the provider of the loan that becomes the lone responsibility of the students.
There has been extensive evidence and many media stories of individuals coming to all of our offices from their constituent case load and through much of the research and work by the regulator, ASQA. I note their report was only released in October on their targeted audit of VET FEE-HELP providers, including an indication of their significant concerns about some of the practices that have been going on. Also, of course, most recently we have had the ACCC publicly indicate it was pursuing one legal case but they had foreshadowed more to come.
What happens is that the student gets cold-called, pulled up on the street or in a shopping centre or doorknocked, and these practitioners—I call them that kindly—are targeting the most vulnerable people on purpose. Often they are targeting people who are unemployed, have English as a second language, have a disability and elderly people in community centres—all of these sorts of cases. They are targeting them specifically, because they use high-pressure sales tactics. They get all the forms signed and all the paperwork done—in fact we have heard examples of providers actually filling out the language and literacy tests for people and saying 'Open this email' and telling people what to put into it and so forth. They use a high-pressure, sign-up and do-it-now sales tactic.
It is Labor's view that we need to break the basis of that model for these sorts of practitioners. It must be an opt-in system, and I think that is where the government's indications are in the right direction. Our view is that that that occurs outside that original contact. So the provider gets the paperwork for both the enrolment and the VET FEE-HELP system. They send that to the department. By that stage, the person is free of their iniquitous control and has gone home or wherever. They then get from the department—the government—a notification by whatever means saying: 'You have applied for this loan. This is how much it will be. These are the terms and conditions'—the normal sorts of things a loan provider would do. 'In order to activate this loan, you must now come back and respond to the government that you understand that you wish to activate it.'
I acknowledge that that activation process is probably what is envisaged and what the minister is talking about. I will seek just a few more minutes to conclude my comments.
Ms BIRD (Cunningham) (18:15): I thank the minister for that indication. I will put on the record that we will pursue this particular issue—though I understand the amendment will not get up—to specifically have that capacity for the person to let the sign-up student go, because they cannot take any further action until they submit the paperwork to the department. That is a conversation I am very happy to have with the minister. My concern with this proposal to date from the government is that there does not seem to be any opportunity, as yet, to stop a provider sitting with the student as they log in and do it. That may be something we can address, and I appreciate the intention of working through that.
I honestly believe, and I get the impression the government believe, that a significant part of this potential bad debt—which is debt accumulated by people who never really understood, if they even knew, they were signing up for a debt—is most unlikely to be recouped by the government, and would never occur in the first place if someone has to come back and say: 'Yes, I did understand that debt. Yes, I do want to proceed with it.' They simply will not come back. That is what will happen. They get these sorts of contacts, and go: 'I don’t want that. 'I'm not going to do anything with that.' By not coming back, they deny the training provider the funding in the first place.
All those reputable quality providers, who are out there trying to do the right thing, will manage this sort of system very effectively, and those who are building a business model on the rip-offs—and, sadly, we have to design this system for the ones who intend to not do the right thing—will find this system undermines and destroys their model. I am firmly of the view it will help towards a significant decrease in potential bad debt for governments. I still would like the government to support the amendment because I would prefer it was legislated, but I will indicate that I will continue to work with the minister to build those principles into an opt-in system.