Release type: Transcript


2GB Money News with Ross Greenwood



ROSS GREENWOOD: In the meantime let’s go to the Minister for Vocational Education and Skills, Scott Ryan, who is on the line from our Canberra studio. Thanks for your time Scott.

MINISTER RYAN: Good evening Ross, thanks for having me.

GREENWOOD: Look, here is the interesting thing, Phoenix Institute – quite clearly – it has gone to the Federal Court, it has missed out and it is now in administration. But the fact of the matter is that there have been significant complaints about this organisation for a long, long time, 15,000 students now without a training provider, 500 staff have lost their job since November. This is not the sort, if you like, glowing advertisement for this system that the Government has been only too willing to go along with.

RYAN: Not at all, and we don’t apologise, the Federal Government, for the changes we introduced last year before my time in this portfolio that made compliance a much higher hurdle. I should characterise what Phoenix was seeking in that Federal Court action that they lost – they, Phoenix, like every other institution will still get paid for students they enrolled, what they were seeking was payment in advance. They were still going to get paid if the students were enrolled at the reconciliation date that happens later this year, but what they wanted was payment in advance because of some concerns with this provider, and I do need to be careful with my terminology because there are legal actions underway…


GREENWOOD: I do understand, just one thing about this though. Here is the problem that I can see, and that is if I sign somebody up and effectively they do the minimum to try and get through these courses, $18,000 per year or something of that nature, it seems to me as if there is a big inducement for commission sales people to really try and sign up just about anybody in the community, whether they are suitable or whether they are not suitable. If you backended some of these payments when the (inaudible) and therefore became a productive member of our community, with that education and therefore was capable of turning that into an income, that to me would seem like a fairer way to reward those educators.

RYAN: Look, Ross that is a very good idea. One of my predecessors in this role – Simon Birmingham – last year for example put substantial restrictions on the use of brokers, where those commissions were actually funding people to go out and some pretty nasty practices were happening, things like free iPads. We now have a stay between when you enrol and have to fill out the form for the VET FEE-HELP loan…


GREENWOOD: I’ll just pick you up there though, because of course as you are aware, in the worst circumstances that we have heard about you have indigenous communities that have been targeted, bowls clubs, retirement homes – people who are thoroughly in many cases…now some of these people may be suitable so you can’t really slight everybody in the same way – but the fact of the matter is that it is quite clear that people who had no hope of earning the $54,000 at which point they would start to re-pay the Government, no hope of ever earning that sort of money.

RYAN: Ross, when this system was set-up, it was set-up in my view – and I am 32 days into the job – in a profoundly flawed way, and that is one of them. The Government, the Commonwealth has very few levers we can use to pull back this money or restrict the payment of funds. The law was set-up so that in essence if a student qualified – and their qualifications were very low – and the organisations was an organisation that the Commonwealth had said was eligible for VET FEE-HELP then there was nothing we could do to stop the payment of funds. So, we have actually put in place, my predecessors, a number of restrictions over the last 12 months. But you are right, there are still some significant flaws which is why we have committed to redesigning the system from the ground up for 2017.

GREENWOOD: So, how long will that take, to get that redesign system…


RYAN: Well, it will happen later this year for 2017, we have put a freeze in place to stop the growth of the scheme – because it was completely out of control, there weren’t enough controls for the Commonwealth to restrict the growth to ensure it was being used in the appropriate way. And over the course of this year I will start some consultation, and then announce a policy to ensure these things do not happen again. But I do want to make sure that I listen to people in this space, there are a lot of good private providers, there are a lot of students who have benefited and unfortunately they are being tarred with the brush of a few who have really seriously misbehaved and quite frankly, I do not know how they sleep at night.

GREENWOOD: To be honest, it feels a bit like the old Pink Batts stuff.

RYAN: It does, and quite frankly a whole lot of money was put on the table here by the Labor Party, there were no controls – there are less controls than there are in the University system which has an income based contingent payback system – and what we have seen, the consequences are exactly what you would expect. And that is why over the last 12 months there have been more and more restrictions put in place, but at the end of last year the then minister made it clear that they weren’t working and so it has to be redesigned from the ground up and that is now my job this year.

GREENWOOD: More speed to you, and of course you are going to have an election in the middle of that which is really going to disrupt  a lot of this, but as I say it is highly important that this gets fixed and fixed quickly to get those crooks and shonks out of the system, the Minister for Vocational Education  and Skills Scott Ryan, we appreciate your time on the program.

RYAN: Thanks Ross.