Stuart Bocking: Now another of the colleges at the centre of this controversy, this is this Cornerstone Institute, it’s been revealed today in The Australian newspaper it’s received nearly $100 million in taxpayer funds in the past two years. For the year to date it’s received $40 million in payments despite having just five graduations from more than 4000 enrolments last year. Now this is just unbelievable, and it highlights yet again dismal progression and completion rates, and yet despite all of that they [indistinct] another $40 million this year.
Luke Hartsuyker is the Minister for Vocational Education and Skills, and he’s on the line. Minister good morning.
Luke Hartsuyker: Good morning Stuart.
Stuart Bocking: Thank you very much for your time, appreciate it on this Tuesday morning. You look at this, this is one example, $100 million of funding for a college enrolling 4000 students, of which only five graduate. What can we do?
Luke Hartsuyker: Well it’s a disgraceful situation, and it harks back to when Labor set the scheme up without the necessary rules in place. And then - that happened in 2009 - in 2012 they further relaxed the scheme and broke the link if you like between diplomas and a credit at university, or an ongoing link to higher education at university. And really that was the cause of the problem, the major flaw in the system. The Government has acted, Senator Birmingham has instituted a range of measures which are either already in place or going through the Parliament to address many of the problems that we see. But taxpayers would expect me as Minister to leave no stone unturned, to protect students, and to protect taxpayers against people who aren’t delivering quality courses with the required outcomes for students. And I’ll be looking at all measures that are required to ensure that students and taxpayers are protected.
Stuart Bocking: What sort of requirements are there now in terms of accreditation for these courses? What have they got to be able to show, prove to the relevant bodies, to become approved for this VET, V-E-T, vocational education training, the FEE-HELP scheme, the advanced payments that then flow from the Government?
Luke Hartsuyker: Well they have to prove that they’re an appropriate organisation to be part of the scheme, and as part of the changes that we are bringing in there are further requirements on people to be registered as a provider for VET FEE-HELP, requirements that they have an appropriate training history for a period of three years. So Senator Birmingham recognised the problem, instigated a range of measures already with further measures, as I said, in the Parliament. Part of that being looking at the registration process, looking at the training history of those providers to ensure that we’ve got quality providers that are delivery services to students and protecting taxpayers.
Stuart Bocking: In the case of the threshold at which the repayment starts to kick in, it’s currently at $53,000, is there an argument to say that if we are advancing this money to those doing diploma courses and other things, where potentially their earning capacity might not be as great as those who are going to university, is there an argument to say that if you’ve done a course through one of these colleges that perhaps the threshold at which you start to pay back this money is lower than the current $53,000?
Luke Hartsuyker: Well look that’s an argument that’s been advanced, and- but one of the key things to …
Stuart Bocking: [Interrupts] Well what do you think about that argument?
Luke Hartsuyker: Well what I would like to see is that we have quality courses that are going to deliver higher levels of earnings for the people who undertake them. This is all about up-skilling people for jobs of the future, and up-skilling people so that we can be a country of innovation. Now, it serves little purpose in a diploma that is not going to deliver the sorts of employment outcomes that we expect as a nation. And as a Government we want to make sure that we’re investing taxpayers’ money very wisely, and ensure that the sorts of courses that we’re funding are going to deliver the sorts of returns that taxpayers rightly expect. So I think the key thing is here is that we are funding the sorts of courses that are going to deliver an economic dividend to this country, and that’s a key factor. But the level of repayment is certainly something that has been advanced, and …
Stuart Bocking: [Interrupts] Well also the level of completion as well is a problem. I mean, you just wonder, and it highlights, and I’ll give you an example in a moment, I mean I noticed there’s a report from the Victorian Government last week, enrolments in private training courses ballooned by more than 300 per cent in the first six months of this year. Now, it does have echoes of the whole Pink Batts mess all over again where you’ve got fly-by-nighters establishing these private colleges knowing there’s this low-hanging fruit being plucked off taxpayer funds.
Luke Hartsuyker: Absolutely. And I mean Labor did set up another Pink Batts scheme in this whole system that they put in place without the necessary safeguards. But we’re about fixing that. I mean, we come to Government, we’re up to the task of fixing it, we’re working on that as we speak. And it’s vitally important, as I said, that we’re delivering quality training that meets the needs of future employers, that addresses the issues of the jobs of the future, that allows people to transition into higher skilled occupations to earn higher wages and increase the living standards of Australia more generally, VET has an important role [indistinct] …
Stuart Bocking: [Talks over] And all of that’s important. I mean in the case though of this Cornerstone Institute, we’re talking about it having received nearly $100 million from taxpayers in the past two years. Now, Labor maybe have put the mechanism in place but you have been in office the last two years. This crowd has taken $100 million of our money, and in one particular year produced just five graduates. So in terms of their outcomes, they’re dreadful; in terms of their reputation, they have to be questionable; and yet under this Government $100 million in the past two years – that’s just one of these private vocational colleges. So when are we going to see the tap turned off on this stuff?
Luke Hartsuyker: Well I can tell you completion rates are certainly something that is very much front of mind in the work that I’m doing going forward, and we’ll be having more to say on the issue of these colleges and protection for taxpayers very shortly. It is something absolutely at the top of my list to ensure that we’re getting quality outcomes in the VET sector, and that the reputation of the VET sector is preserved and that it doesn’t fall victim to a relatively small number of dodgy providers.
Stuart Bocking: The point about it is that relatively small but big sums of money, $100 million over two years. The other point being as well it seems to me that a bit like the Pink Batts scenario some of these private colleges they don’t have a business model unless it is effectively underwritten and subsidised by the taxpayers. Why should we be propping up these private operations anyway?
Luke Hartsuyker: That’s a very good question, and it’s certainly something that’s front of mind in the work that I’m doing going forward. With regard to the way that the scheme will go- will work into the future, we already have, as I said, a range of measures before the Parliament that are going to further strengthen the scheme. But I’m not stopping there, I’m doing a lot more work as to the ways in which we can ensure that we get the outcomes that we require.
Stuart Bocking: Because in the meantime, I mean, tens of millions of dollars keep walking out the door.
Just while I’ve got you, an email here from Letitia, she was unemployed for a period of time, she said I had to go onto Newstart, all ended well, I’m now employed. I walked outside the Penrith Centrelink office after signing up, there were about four people standing outside with ID hanging from lanyards talking to people about education opportunities and delivering the line pretty much verbatim, as you said, Government pays, you don’t have to pay it back unless you earn over X thousand dollars. I’m a confident person, knew it was only a matter of time before I had a job again, and I said look no thanks and walked off. They said oh you’ll get a free iPad, she said look I’ve got one, not interested. She says as I’m sure you’re aware when you sign up for Newstart you have to sign up with a Centrelink-affiliated job agency, which I duly did. About a week later the phone calls started – hi, I’m X from blah blah blah, I’d like to talk to you today about up-skilling and further education to assist with your job search. She said thanks, I’m not interested. They said oh but it’s free and you only have to pay. She then asked well how did you get my number, and they said well look I mean you signed up with Billy Bloggs, your details were passed on to education providers to assist you. She said thanks, but I’m not interested. How can you say that, they go on, let me tell you about our advanced courses. One particular cold caller got quite aggressive, and she then goes on to talk about the experience she’s had in administration. She says I’m a confident person who went through a situation many people find themselves in, I need a little help for a little time. I can completely understand how someone who is easily intimidated or who’s vulnerable can be steamrolled by these unscrupulous companies, the Government needs to scrap them completely and invest more money in TAFE. It’s pretty ruthless stuff isn’t it?
Luke Hartsuyker: Absolutely. And the very examples that you give were measures- were countered in some of the measures that Minister Birmingham announced in March and put in place in April. That is the offer of inducements by providers – such as laptops, such as shopping vouchers, whatever the case may be – to encourage people to enter into a course, many of whom didn’t have a prospect of realistically completing that course. The providers are now banned from attempting to claim and misrepresent the fact as to the nature of the course. Those claims that courses are free, or Government funding, it is now against the rules to make those claims. So there are a range of measures that we’ve already put in place, and I’m working on further protection, as I said, to protect taxpayers, to protect students.
Stuart Bocking: Yeah. Alright. Well look I appreciate your time this morning, good luck with it.
Luke Hartsuyker: Thanks Stuart.
Stuart Bocking: Thank you very much. The Minister, Luke Hartsuyker.