National Vocational Education And Training Regulator Amendment Bill 2015


Click here to watch Sharon’s speech


Ms BIRD (Cunningham) (10:07): I move:

That all words after "That" be omitted with a view to substituting the following words: "whilst not declining to give the bill a second reading the House:

(1) notes that:

(a) whilst this bill is designed to improve regulatory oversight of the sector, it does not address the damage to individuals that has already occurred or propose action to engage with the community to minimise future problems;

(b) the actions of unscrupulous Registered Training Organisations and brokers have had serious impacts on vulnerable individuals;

(c) reports of people being left with large debts and no qualification or useless qualifications must be addressed; and

(2) calls on the Australian Government to:

(a) act with more urgency to ensure the protection of students is prioritised;

(b) immediately seek a consumer protection information campaign by the ACCC, including advice for people who need to seek redress, and consider other mechanisms available to strengthen consumer protections; and

(c) support Labor's call for the Auditor-General to conduct an audit on the use of VET FEE-Help."

I want to speak to colleagues today in support of the amendment that I have moved on behalf of the opposition to this bill and express my hope that the government sees that it is a reasonable amendment and supports it. I would also foreshadow that we will propose a detailed amendment that I believe is also sensible and reasonable and I hope the government will be able to support it.

Having made those comments, I would indicate that Labor supports the bill passing and we seek to make some constructive amendments that will strengthen the message and the operation of the changes. We are acutely aware of the individual stories of stress, hardship and suffering of vulnerable individuals that are emerging every day—indeed, again last night on the ABC. We read them in newspaper stories, we see them on television news items and we hear them in our electorate offices. We strongly believe that the government needs to act swiftly to deploy any and all consumer protection activities at its disposal. We recognise that this bill seeks to improve the powers, effectiveness and responsiveness of the national regulator and the national standards, and we of course support that. We do believe that this is not the right time or environment to lengthen the automatic time frame for registrations. However, we will suggest some alteration to seek to make this an earned benefit for high-performing and low-risk RTOs rather than the standard.

However, Labor is very concerned that the government's sole focus to date has been on the regulation and investigation side of the story, and now the timing is imperative. It is well overdue for the government to take action to strengthen the consumer focused actions that are available to them. We must be out in public spaces providing well developed and usable consumer guides and information to the general public to make them more aware of the unscrupulous activities that are taking place in their streets and shopping malls, as well as on websites and social media sites they visit. We need an organisation such as the Australian Competition and Consumer Commission to develop a full package, as they have done for other sectors that have proven to be susceptible to these sorts of aggressive and unprincipled marketing and recruitment practices.

On the consumers' page of the ACCC website are listed debt and debt collection; groceries; health, home and car; internet and phone; misleading claims and advertising; online shopping; petrol, diesel and LPG; prices and receipts; and sales and delivery. It is our view that we need a section of resources developed for consumer advice and information on vocational training courses, fees and debts. The extensive information available in each section provides sound advice to everyone, with checklists, warning signs, suggested strategies for decision making and ways to find a reasonable recourse when things go wrong. All of this information is needed in our communities now to be able to provide preventative advice to people and to help those who have been caught already, signed up to courses they could never complete or that were so shoddy that they would not be able to provide a pathway to work or further study as they had hoped and, indeed, were promised.

The situation is even more distressing and difficult for those people who signed up for debts, usually unaware that they were doing so and subsequently discovering that they had a debt for, on average, $20,000 and very often no qualification to show for it. These people need advice and assistance to seek redress, whether that is a direct refund from the training provider or waiving of debt by the Commonwealth. They need information on how to go about that and what their rights might be.

On Monday of this week, the Senate committee inquiry into the private VET sector tabled its interim report. This indicated the evidence received by the committee specifically addressing the significant growth in the volume of VET FEE-HELP loans. Under the section of the interim report headed 'Marketing techniques used by private providers', they stated:

The committee has received a number of submissions that highlight concerning reports of aggressive marketing techniques used by private education companies and education brokers.

The committee is concerned about the link between access to government funding and a subsequent increase in targeted marketing, particularly that which de-emphasises the real cost of undertaking VET and misconstrues the costs associated with VET FEE-HELP.

I would encourage interested members to look at the submissions that have been made to this inquiry. In relation to the consumer matters our amendment seeks to address, I would particularly draw members' attention to the submission from the Consumer Action Law Centre. Much of the evidence and recommendations of this submission describe the abuses that are occurring in the VET market and make recommendations about the powers of ASQA, as the national regulator, to address consumer protection and consumer rights issues. I particularly draw members' attention to recommendation 6 of that submission, where the Consumer Action Law Centre says:

We recommend that ASQA's jurisdiction be extended: a. to ensure that appropriate policies exist in relation to selling techniques, unfair prices and quality. These factors should be taken into account when accrediting a provider, and determining whether accreditation should continue; b. to regulate education brokers and unregistered subcontracted providers; and c. to consider consumer protection issues, including unfair contract terms in private VET provider contracts within the meaning of section 23 of the Australian Consumer Law. Consideration of standard terms and conditions should be an aspect of accreditation.

The submission gave a number of examples. I would like to share what the Consumer Action Law Centre found in their own review of what was out there. The first example they give is:

Tuition fees are not refundable or transferable after the commencement date, except in the case of extreme illness which precludes a student from staying in Australia. This must be supported by a doctor's certificate and the refund of unused tuition fees will be sent to the student's home country. All applications for refund must be in writing and must be received by the Institute no later than three months after the commencement of the course. Applications received after three months will not be granted.

A second example is:

A full refund less a $370 administration fee will be given to students who cancel or withdraw their enrolment in writing within five days of enrolment. If you are studying certificate III-IV in fitness, the student kit will not be despatched until after the five-day cooling off period. No refunds will be given after five days of the date of enrolment, and the student is liable to pay the balance of any fees owing.

It goes on with some other examples.

The Consumer Action Law Centre was very concerned that the insertion of these detailed requirements was causing confusion to some students and leading to them to miss out on their protections and rights. The submission goes on further to specifically talk about VET Fee-Help. It says:

We are also concerned that the VET Fee-Help model encourages private VET providers to provide barriers to withdrawal before the census date, being the date they receive guaranteed payment from the government. Students have reported difficulties with withdrawing from courses prior the census dates and being referred to marketing teams that persuade them to continue with or to defer a course that actually does not suit their needs or that they will never complete. Once the census date has passed, there are limited incentives for unscrupulous VET providers to provide ongoing support to students.


The marketing of VET Fee-Help loans to disadvantaged and vulnerable students is also worrying. We are particularly concerned about studying now, pay later slogans that fail to highlight the actual costs of study and marketing TAFE Fee-Help loans to students who are unlikely to be able to repay their loans. These sorts of slogans draw upon behavioural biases such as myopia and overconfidence and are more likely to result in students enrolling in courses that are inappropriate to their needs.

So what do the serious consumer issues mean in reality, in the lives of real people living in our communities? This has only been well documented recently and, if members of the House have missed the media reports, I would like to take them through some of the stories that have been publicly aired. Last night on the ABC's 7.30, we had another report of a large training provider recruiting students from a shopping centre with incentives such as free iPads and laptops, with these people then heading straight to the local pawnshop to sell them. The report spoke to Dylan Palmer in Lowood, Queensland, who was travelling three hours each day to Brisbane to study digital gaming. Dylan has Asperger's Syndrome and found that the teachers at the college provided very little support when he was running out of time. He is now left with $27,000 VET Fee-Help debt and he is unsure whether he will ever be able to finish the qualification. He was excited, he said, to be studying digital gaming—he was obviously very interested in it. What is so devastating is that Dylan's experience with training may now seriously affect his confidence and put him off participating in a training course again.

On 28 February ABC radio reported another example of a single mum, Samantha Saxton, who had enrolled in a diploma of salon management and Cert III in hairdressing,. She now has a $33,000 VET Fee-Help debt and has had to go to TAFE and start again. She said that she figures that she would have learnt more from Youtube than she did at the college. Her employer said that Samantha was unable to perform tasks, such as cutting men's hair, restyle cutting and foils—tasks that a graduate should be able to complete. Samantha said she complained at least 10 times about the quality of the course, but no steps were taken to rectify those problems. On 26 February ABC's 7.30 did another report on another provider targeting disadvantaged areas and welfare recipients and selling door-to-door. Sales staff were pressured to sign up students, and many sales staff completed the literacy, language and numeracy test on behalf of the students they were signing up. A former careers adviser said the free iPad or laptop was very influential in signing up these students.

Last year in Hobart Nola Smith encountered a door-to-door salesperson from this training provider. The double diploma in counselling and community services online courses appealed to the single mum of three, as she was able to stay at home with the kids and show her oldest child that she was also doing some study. She was promised no up-front course fees and advised that if she did not turn over $53,000 she would not have to repay the fees. She was influenced by the free laptop, as she has a 13 year old in high school and could not afford to buy him a laptop. When she went to complete the online course application, the salesperson took over and filled it out for her. Nola has been informed that she will probably still have to pay the money back and finds it a very scary prospect as a single parent.

In The Age on 16 February, a Melbourne job hunter was targeted after entering her details in jobs advertisement site. A broker cold-called her and persuaded her to enrol in a diploma of management. The broker guided her through the enrolment, saying there was no need for her to read the details. She did not even start the course and, at 19 years of age, she has a debt of almost $24,000. On 27 January ABC am reported Shaquille Ray's experience of the training provider in Parramatta. He was enrolled in a digital media degree; he found the course content had been copied directly from Wikipedia, which he said he knew because he had authored the Wikipedia entry. He is trying to have his $20,000 debt reversed but the college has refused. He referred to his concern about his fellow students, one of whom was illiterate. He said there were no prerequisites, except for a questionnaire for enrolment in the course. On 14 November last year The Australian had a report from United Voice, this union representing childcare workers, that 80 per cent of childcare RTOs had recently failed audits. The National Secretary, David O'Byrne, said some of the qualifications were clearly not worth the paper they were written on because some childcare centres were refusing to hire applicants who had graduated from courses, some of which had only lasted a few weeks. Those students were being told by employers that the time and effort they had put into those courses was not going to be recognised because of the quality of the course.

In October last year, on ABC radio, the chief executive of Adult Learning Australia, Sally Thompson, said that she saw many disadvantaged students being recruited to training companies outside the local Centrelink office. She said the promoted courses were expensive and that they were not appropriate for long-term unemployed people with higher needs. In particular, she said:

Our members often deal with people with quite low skills; they often deal with people with English as a second language, people with literacy difficulties and they've been telling us for a long time that they're just inundated with these kinds of spruikers.…

The spruikers tend to hang out in places where they think marginalised people will be.

These are the sorts of concerns we have seen over recent months in the media—real stories. I think those should, if nothing else, drive us to urgent action. In the second half of last year, when these reports were getting more regular, the shadow minister for higher education, research, innovation and industry, Senator Kim Carr, and I wrote to the Auditor-General to ask for an inquiry into the use—and indeed misuse—of VET FEE-HELP to ensure that skills funding is being used in accordance with the intention of the legislation and not being squandered by unscrupulous providers. We were pleased to receive advice in January that the Auditor-General has requested that a performance audit of VET FEE-HELP be included in the Australian National Audit Office's 2015-16 work program.

This amendment invites the government to publicly state again its support for that review. This situation is so serious, and its impact on vulnerable people so distressing, that it does require urgent action. For these reasons, Labor is calling on the government to support the amendment before the House today. I would like to take some time to talk to the specific details of the bill. Protecting and enforcing regulations and standards that seek to protect the quality of the vocational education sector and ensure its viability and reputation are critically important tasks for government. I have spoken at length on many occasions about the significance of the postsecondary education sector to participation and productivity achievement of the nation and its contribution to growing national wealth and economic diversity. It is also a key driver of the ability of individuals from diverse educational experience to achieve the knowledge and skills they need to participate in work or further education.

The nation was well served for many decades by our public TAFE system. Unfortunately, over recent years we have seen the undermining of the funding and staffing of our TAFEs across the nation. The serious concern this has caused among the general public has been well demonstrated by the prominence of TAFE campaigns in the Victorian and Queensland elections and in the upcoming New South Wales election. I believe that for the preceding decades, when TAFE was the major provider in our system, many other countries in fact looked to Australia, looked at the strength and depth of our TAFE system, to learn from our world-class vocational training. Indeed, as many of us know if we have family and friends with young people who have completed a trade or training in our TAFE system, if these young people travelled they were snapped up overseas because the quality of our skills education was so well regarded. We have also had many strong performers in the private training sector, as well as large and medium employers who have developed their own effective training sections. These providers also benefit from a rigorous quality focus in the sector, as the sharks that are feeding in this market are uncaring of which genuine providers have their viability destroyed by their unscrupulous activities.

The proposals in this bill that go to providing improved definitions and clarifications to enable better regulatory coverage are worthwhile, including the increased capacity for more prompt and effective action to protect quality as problems emerge in the sector. As I indicated at the start, the proposal that does give Labor some concern is the amendment to the registration period from five to seven years. It seems to be exactly the wrong time to be loosening the regulation by requiring registration reviews after a longer period of operation. If it is an option, I believe it should be earned and therefore an incentive for providers to be more rigorous in their own quality management and student protection systems. I understand from the comments of national regulator ASQA's CEO to Senate estimates last week that it is intended to increase the focus of resources on the intelligence- or complaint-generated audits and reduce the focus on the known, predictable periodic audits. While that would seem on face value to make perfect sense, it is our view that at this time it sends a contrary signal to the broader VET market, at a time when the message should be consistent, until the serious market issues are well resolved.

I am aware that many members of the government have made public comments also on the concerns that have been raised with them in their community from people who have been caught up in these unscrupulous practices. I believe the opposition's amendment provides an opportunity for us to join together in calling for a renewed focus and a very public conversation about the consumer protections we need to prioritise in order to protect vulnerable people who are being manipulated for a profit in so many of the examples that have been brought to our attention. For that reason, I commend the amendment to the House.

In the bit of time that I have left I want to take people to the issue that I think is at the heart of so much of our concern about this, from my own experience in my electorate with people who have raised these issues with me, and my colleagues who have talked to me. The issues about the operation of the market, the quality and reputational importance of the sector, and the national education and economic development task are all critically important. They are absolutely significant tasks for our national government. And I think that at a critical point in time we have an opportunity here to build a very sustainable, high-reputation sector and to stem what is an emerging flood of problems. But within that there are individual people who are having their dreams slashed, their confidence and sense of wellbeing demolished and, I would argue, their ability to continue to engage in the future with training and education seriously undermined by what is happening.

These people—such as the single mum we talked about, the young man with Asperger's syndrome, the refugee who has arrived with poor literacy and numeracy skills or the young person who has come out of school in an area with high youth unemployment and is struggling to get a foothold in the employment market—very often are out in our public spaces. They are particularly in Centrelink queues, in shopping centres, at train stations or online, desperately going through job seeker websites.

I encourage members to go online and search for a job you might have been interested in if you were a young person starting out, perhaps a shop assistant or sales type job. Just watch what comes up. I have heard stories from individuals who thought they were applying for a job through one of these sites—and there is the example we heard of in the media report—but suddenly discover they have actually signed up as having an interest in doing training. They are then pressured and told, 'If you do this, there will be a job at the end of it.' All sorts of promises are made to them.

Their commitment as individuals to seeking either a training place or a job is something that we should commend them for. Despite the difficulties they are dealing with, they are actively out there, trying to get a start. The fact that somebody can come in at that point in their life and with foresight and knowledge unscrupulously take advantage of them and walk away with a profit and leave them with a significant debt is absolutely disgraceful. I have heard in some examples from my colleagues that some of these 'spruikers', as Sally Thompson from Adult Learning Australia described them, make comments to people such as, 'Don't worry about the debt. You'll never had to repay it. Until you earn $53,000 a year, you will not have to repay it.' In actual fact, the reality for them is that it is still going to be a debt of concern in their life.

I would hope that for those individuals who are told, 'You can sign up for this debt for this course and you will never have to repay it because you will not earn $53,000,' the reality is quite the opposite and that they actually do well and go from strength to strength and get past the threshold for domestic students to start repaying the debt. I would hope that is the wish of all of us for them. One group of retired people in a community group that just wanted to get some computer skills were told, 'Sign up to this diploma to get them, and don't worry about the debt. You are all retired. You will never have to repay it.' I would hope that some of these spruikers and companies start to understand that, whether they have to repay it or not, for vulnerable people on limited incomes a debt hanging over their heads is a serious stressor in their lives. These are, at heart, the human stories. These are the real stories of people in our community who simply out of a wish to better themselves and being not well-informed consumers in this market are being specifically sought out and unscrupulously used by these operators.

I can think of no greater task for a parliament such as ours than to encourage people to engage in education. I think that is what we all want to do. I have been working on education for many years in this parliament and I have found good, solid commitment to it from people across all parties. We want people to engage. We want them to participate. We want the disadvantages that they may have carried with them from life circumstances to be addressed so that they can get a good-quality education and have access to work and full participation in our communities. That is an absolutely critical task for government.

So when we see this sort of activity I do not think we can drag our feet. I do not think we can consider that the need for action is not urgent. There are people out there today walking the streets of suburbs, knocking on doors. When I returned to my electorate last Friday, I had a letter from a lady saying that she was visiting a friend in one of my suburbs when somebody knocked on the door and asked, 'Are you permanent residents and under 65?' She said, 'No, we are over 65. Why do you want to know?' He said, 'The government is giving away free laptops. But you don't qualify, so I will keep these.' To be fair, if they had been under 65, he may then have sat down and gone fully through what the training was that he was going to sign them up for, what the debt requirements were and so forth.

I have no doubt that these people are out there in the suburbs now as I speak. As they go through those suburbs, I think we need to be acting swiftly. I hope that the government's bill is one way in which we can do that by strengthening those regulations and by looking to improve the speediness and effectiveness of the ability of the government and the regulator to act. I think that is good, and I commend those amendments.

I would say to the government that I think including at this point in time an amendment that says that instead of five years registration people get seven years registration is just the wrong signal. I understand the intention of the regulator and the argument that those are well known, predictable audits and so therefore you are not going to catch terribly much in them. I do understand that. And I do understand the auditor's desire to focus on the place where they are getting intelligence, reports and media stories saying that there is a problem. I understand that as well. I also understand the argument that in the higher education sector under the TEQSA university regulator people are registered for seven years and so there is some consistency, particularly for those who are dual sector providers and have to be registered with both. I understand all of that. It makes sense. But my argument would be that this is exactly the wrong time for this. Until we get on top of these practices and put action in place to ensure that, as much as possible, we have strangled off this sort of behaviour and this sort of unscrupulous exploitation of very vulnerable people, it is the wrong time to be moving a proposal in the bill such as this. So I would ask government to rethink that. It might be something to revisit further down the track, but I think it muddies the whole message at this point in time and heads us in exactly the wrong direction.

I commend the opposition's amendment to members, and I hope that they have a look at it in the spirit it is intended. I know that members opposite have also been making public comment about their concern about vulnerable people in their communities who are coming to them with a great deal of worry about what is happening. So I hope that we can get to that point in the debate, and I commend the amendment to the House.

The DEPUTY SPEAKER ( Mr Vasta ): Is the amendment seconded?

Dr Leigh: I second the amendment and reserve my right to speak.

The DEPUTY SPEAKER: The original question was that this bill be now read a second time. The honourable member for Cunningham has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.