I rise today to speak in support of the Education and Other Legislation Amendment Bill (No. 1) 2017. As we have heard, the bill establishes a VET student loans ombudsman with the power to investigate complaints about the student loans scheme, to recommend that providers take action to address and resolve problems, to give providers advice and training about handling complaints and to work with the sector to develop a code of practice. The VET Student Loans Ombudsman is very welcome. In fact, Labor took a policy to establish such an ombudsman to the election last year. Then, when the VET student loans bill was debated in the House late last year, Labor moved amendments to establish a VET student loans ombudsman. The government did not support the amendments at that time but did give an undertaking to establish a VET student loans ombudsman separately under the Ombudsman Act 1976. This bill gives effect to that commitment.
In general, stakeholders are supportive of setting up an ombudsman, but many are disappointed that the office does not have stronger powers. They would like the ombudsman to be able to make binding decisions, they would like the department to be able to take action against a provider that does not follow the recommendations of the ombudsman and they would like the ombudsman's powers to cover the entire VET system, not just student loans. But this is a start, and this government is on notice that it must prove its ombudsman model can get results. It must be acknowledged that, without Labor's consistent badgering, the government would not even have come this far. Labor can and will take credit for dragging the government to the table to establish a VET student loans ombudsman—a process that has taken almost two years—and Labor will make sure this ombudsman delivers for students. We know students need someone in their corner to stand up for their rights and to fight back against bad practices and dodgy providers. We have certainly heard enough bad stories and we have seen the names of good organisations tarnished by association with the bad. Labor has really led the debate on this, just as we will continue to lead the broader debate on the need for our country to focus on skills and training. We expect to see the recommendations of the ombudsman respected and heavy punishment for any providers that do not cooperate.
There are many thousands of students who have been treated very badly in recent years, and we know that the system has fallen into crisis. In 2014, the graduation rate for the largest 10 providers was under five per cent. That is hardly a raging success. That represents $900 million in federal money—more than $215,000 for every graduate. Students were tricked into racking up massive debts with little hope their courses would ever lead to jobs. Ten thousand qualifications were cancelled in Victoria because they were not worth the paper they were written on. There was an explosion in short courses and online courses and a decline in quality. It is estimated that 40 per cent of VET FEE-HELP loans will never be repaid. VET FEE-HELP loans have blown out from $700 million in 2013 to a staggering $2.9 billion in 2015. Where was the government when this was happening right under its nose? Labor will lead the debate on the VET sector and will lead the broader debate on skills.
As Labor leader Bill Shorten told the National Jobs and Skills Summit on Friday, our nation is crying out for a long-term vision, and that vision that includes three key objectives: firstly, lifelong learning, ensuring all Australians have access through their working life to the education, skills and training they need for decent jobs; secondly, preparing for the jobs of the future, making sure the Australian workforce is more responsive to the evolving skills needed in our economy; and, thirdly, working together. As the Labor leader said, training and skills is not something that the government does alone; it has to be something that business does as well. It is the responsibility of us all in a changing world and changing environment and a global workforce. In the past 10 years, Australia has lost 75,000 manufacturing jobs. Let me say that again: 75,000 manufacturing jobs in 10 years. But in that time 485,000 jobs have been created in health care and social services. Jobs are changing, and jobs in the service sector are filling those voids left by manufacturing jobs. But there are still challenges—challenges in automation, offshoring, casualisation of the workforce and underemployment. To address these challenges, I again reflect on the Labor leader's words: we must be productive, competitive, adaptable and resilient. To do that, we need to have a workforce with a good education, with good skills and with good training for the jobs of the day.
Key to this debate are apprenticeships. When Labor left office in 2013, Australia had about 420,000 apprentices—now we have 280,000. Across the Hunter, including in my electorate of Paterson, we have lost 4,200 apprenticeships since June 2012. More broadly across the country, we have seen cuts to TAFE and training in the order of $2.5 billion. We have seen an explosion in the private provision of training and some truly shocking examples of mismanagement. We have a great university system, but university is not for everyone. Vocational education is vital. Our TAFE sector is vital, and we must rebuild TAFE for the future. Between 2013 and 2015 the Liberals oversaw a 21 per cent decline in TAFE enrolments and an almost 75 per cent decline in TAFE and VET capital investment. Talk about gutting a worthwhile organisation! We have started to turn this around, but the VET and TAFE sectors are still under pressure, and that is why a VET ombudsman is so important.
As Rod Sims, the Chairman of the Australian Competition and Consumer Commission, told the National Consumer Congress in Melbourne last week, it has taken two years to clean up the mess following the so-called reforms to vocational education, and we are still going—hardly swift, that is for sure. The switch to vocational training carried out by the private sector rather than through the longstanding government provided TAFE and equivalent systems led to disaster. Rather than providing quality education at efficient prices, many VET providers provided poor education at sorely inflated prices.
In its recent report, the Australian National Audit Office found that poor design and a lack of monitoring and control led to costs blowing out. It also found that insufficient protection was provided to vulnerable students from some unscrupulous private training organisations. Mr Sims said the ACCC had so far taken court action against four of these companies, but he described it as the tip of the iceberg. The Australian Government Actuary estimates that over a billion dollars of Commonwealth money in loans issued inappropriately by the education providers in 2014 and 2015 alone will never be seen again. A billion dollars!
In my own region, the Hunter Valley, more than 1,500 students have been left in the lurch after 11 private colleges were suspended across the state for failing to meet minimum standards. Among them is Careers Australia, which the Newcastle Herald reported closed its Steel River campus in Newcastle in July after the New South Wales government withdrew funding, leaving 300 students in the lurch. Among the colleges that had funding terminated was Wise Education Group, which documents reveal had more than 100 enrolled students in Newcastle. The Herald has also reported that Hunter students have been caught in the federal crackdown on the scandal-plagued vocational education sector, after Aspire College of Education and Evocca College both closed their Newcastle campuses. This government, finally, is acting on these shonky dealings, but we must go further, to ensure that the ombudsman being set up is truly a voice for students.
As the Business Council of Australia Chief Executive, Jennifer Westacott, said recently:
The VET sector is a crucial piece of Australia's economic and social infrastructure. It prepares workers for the rapid economic change and helps to keep Australians competitive in a global market.
We recognise the role of strong TAFE providers alongside effective and accountable private providers.
Ms Westacott said the Business Council welcomed the opposition leader's recognition that vocational education and training is not a second-best alternative to a university degree and that both types of qualification should be valued equally. Generations of Australians already know this. They know that TAFE is the backbone of our apprenticeship system, and that both are badly in need of revival. This is a job that Labor will do.
I will not say this VET Student Loans Ombudsman is a case of 'too little too late', but I will say it is a case of 'just in the nick of time'. Reforms are being made; shonks are being closed down. But the ombudsman is a vital link in the chain to ensure that students undertaking vocational education are protected, not ripped off, and that their concerns are not summarily dismissed but taken seriously. The government is on notice that Labor will be watching this VET Student Loans Ombudsman to ensure the office is a strong voice for students, the way that Labor will be.
