Chaos And Confusion In Skills Portfolio

In another example of the Coalition Government’s lack of understanding of its own Budget measures, Minister Ian Macfarlane today contradicted himself, the Budget papers and his Department’s website on whether his Trades Support loans for apprentices are interest free.

There was chaos in Question Time today Tony Abbott flicked the question, Minister Macfarlane ducked the question and then in Senate Estimates, Minister Ronaldson weaved around the question when asked whether Trade Support Loans will be interest free.

In Question Time today, Minister Macfarlane claimed the loans were both “interest free” and “indexed at CPI” in the same answer to a question from Shadow Minister for Vocational Education Sharon Bird.

There is no doubt that the loans are interest-free. It gives me an opportunity to highlight the great regard and delight from industry solution in relation to the trade support loans. The loans, as the shadow minister knows, are indexed annually with CPI.

         Ian Macfarlane, Question Time, 2 June 2014

 But the Department’s website, and the Budget papers, make it clear that loans will be indexed.

Trade Support Loans will be provided at concessional interest rates and capped at $8,000 in the first year of the apprenticeship, $6,000 in the second, $4,000 in the third and $2,000 in the fourth. 

Budget Paper Number 2, page 172

Loans will be indexed by the Consumer Price Index and repaid on an income contingent basis through the taxation system, similar to the way HELP loans are repaid.

Australian Apprenticeships website

The confusion has parallels to the chaos and confusion that the Prime Minister and cabinet ministers have shown recently over the impact of their own budget measures.

“Apprentices need to know at what rate of interest they will be required to pay back the government’s Trade Support Loans,” Ms Bird said.

“I have been calling on the Minister to clarify whether the Budget papers are correct and he is wrong or vice versa.  All we have had to date is flicking, ducking and weaving by Tony Abbott and his team of incompetent Ministers who still don’t know the details of their savage budget cuts.”

This is not the first time Ian Macfarlane has been confused about the indexation that will apply to the loans:

The trade support loans will supply $20,000 over four years to an apprentice and then, once they earn over $51,000, they will repay the loan interest-free—absolutely interest-free

Ian Macfarlane, Question Time, 28 May 2014

Trade Support Loans will be interest free, indexed annually in line with CPI

Ian Macfarlane, The Australian, 28 May 2014

As of 1 July, an apprentice will be able to apply for a loan, which will total $20,000 and which is interest free

Ian Macfarlane, Question Time, 15 May 2014

“Rather than trying to trick apprentices, the Minister needs to start taking the skills area of his portfolio seriously and let apprentices know what level of debt they are signing up for.”