NATASHA MITCHELL: First up this morning what impact have dramatic increases in course fees for many TAFE courses this year had on your training or study plans? Across the country TAFE fees are up, enrolments are down due to funding cuts, also due to the Government facilitating increased competition for private colleges, which now receive substantial government subsidies for many enrolling students.
But private colleges aren't a cheap alternative to TAFE, but they've been very successful in boosting their enrolments through aggressive, in some cases unscrupulous marketing, and profits appear to be booming as a result in that sector. So are student debts as students take on loans through the VET FEE-HELP scheme, that's the vocational education equivalent of HECS that's been extended to private providers.
A senate inquiry into private vocational education providers has raised really significant concerns about enrolment practices in this sector, and this week the new Minister for Vocational Education and Skills, Luke Hartsuyker, will introduce legislation which seeks to respond to those concerns, and the Minister joins us on Life Matters this morning, welcome back to Life Matters.
LUKE HARTSUYKER: Good morning.
NATASHA MITCHELL: What specifically will this bill address? What will it require of private training providers to do differently?
LUKE HARTSUYKER: Well the bill addresses a range of concerns that some private training providers are acting inappropriately, taking advantage of particularly young people who in all likelihood don't have the capacity to benefit from the courses that they are offering those people. So it's about protecting young people, it's about delivering a better service of training to those young people.
And the bill does a range of things; it introduces a cooling off period for students of two days, it introduces very simple requirements requiring a guardian's signature on a document, which everyone would believe that would be appropriate, and pre-requisites by way of education before someone goes into a course. It makes it easier for students to have their debts cancelled when they're signed up for a loan that's inappropriate to them. It introduces minimum registration and trading history requirements for VET HELP providers. It introduces infringement notices attached to several penalties, and it has a number of technical amendments.
So it does a range of things to strengthen the measures that have already been put in place by Minister Birmingham which started with the banning of inducements earlier this year which was, I think, an absolutely inappropriate practice.
NATASHA MITCHELL: Let's backtrack a bit; so what we're focusing in on is the enrolment practices that many of the private colleges were using, so one of them for example was the use of inducements like free laptops to push for enrolments. So Simon Birmingham addressed that, this goes further. One of the issues that has been of major concern is that for example these colleges are using door-to-door salespeople, spruiking in socially and economically disadvantaged communities, targeting people unsuited to the courses they are selling, landing students with big loan debts for courses upon enrolment. So is this what this bill is partly addressing? To allow that cooling off period?
LUKE HARTSUYKER: It does, I mean it's vitally important that- I think when any… when a person enters into a course of study, which is an activity that's going to take a great deal of commitment from them and it's going to impact on their lives in a range of ways, that it's a very considered decision. And I think as a Minister who's been in this role only a short period of time, one of the glaring things that I have seen is this practice of courses being sold to students rather than a student taking out a process- or a long and considered decision making process before entering into those courses.
The issue of debts being incurred up front is a very important one, and Minister Birmingham has addressed that whereby the fees are being accrued by the training providers in future, rather than being payable on day one, and if the student drops out further down the stream that debt still hangs with them. Under these changes that are being progressively introduced a student effectively accrues the debt as they progress through the course, which is totally appropriate. This is in part a problem that successive governments have created through radical reforms to the vocational education sector. So government subsidies being paid to private colleges now are essentially bankrolling those companies' profits at taxpayers' expenses. That's certainly the picture that seems to be emerging. Would you agree? Well, what I would say is that there are very many, the overwhelming majority of providers are delivering a quality service to their client.
NATASHA MITCHELL: How do we know that, though?
LUKE HARTSUYKER: And there are a rogue element, and these changes that
the Minister Birmingham has started and will be continued with the legislation that I'll be introducing into the House this week continue that process.
I think it's important that our VET education system is flexible, that it responds to the needs of students, but it also has to deliver a quality outcome, and that's certainly a very strong focus that I bring into this portfolio and that Senator Birmingham has had when he was the minister responsible.
NATASHA MITCHELL: This issue of quality is vital, isn't it, because you're addressing with this bill the enrolment practices and procedures and inducements, but the issue of quality is a major concern, that students are enrolling in courses, incurring big debts sometimes for quite dubious course offerings. How can we be confident that the great majority of the private providers are providing a quality product and quality education experience comparable to TAFE?
LUKE HARTSUYKER: Well the Government has increased funding to ASQA by some $68 million. We're very focused on that …
NATASHA MITCHELL: [Interrupts] And what's that, sorry?
LUKE HARTSUYKER: ASQA, the quality assurance organisation that has responsibility for regulating the system. We absolutely focused on the need that we ensure that people are getting a quality course, a quality course that they are paying for through those loans that they have accrued. And ASQA is also taking on a risk based approach so that we are focusing on those areas where they see risk is greatest.
NATASHA MITCHELL: What's the benefit of opening the market up in this way, from your perspective?
LUKE HARTSUYKER: Well look I think it's vital that we have a vibrant market, a deep market, a market where students are well informed. And I mean, TAFE has been reforming over the years, I mean many areas of TAFE, they are very much at the forefront of course delivery. But it's important that we have a dynamic market, and I mean competition is very much what drives innovation, what drives quality.
But we also have in the VET sector a small number of rogue operators, and that's where the role of governments is, to step in and address those issues where there are rogue operators participating in the market, not delivering the sorts of student outcomes that we would expect, that employers would expect, that the students expect and that taxpayers should expect for their tax dollars.
NATASHA MITCHELL: Let's look at the TAFE system. TAFE fees have gone up astronomically in many courses in most states because of reforms. Enrolments are down, as you'd expect. People are very concerned about the future of the TAFE system - what future do you see for TAFE, given its rapid decline in the last few years?
LUKE HARTSUYKER: Well I see TAFE as having an important role to play, and I'll be discussing with my state counterparts on an ongoing basis the role that TAFE will have into the future. I've already commenced those discussions, and I'll be having further discussions in the weeks ahead. It fulfils an important role, and there is an important place for TAFE.
NATASHA MITCHELL: As the primary provider of vocational education, at the moment it seems to be almost a minority provider now.
LUKE HARTSUYKER: Look, overwhelming TAFE is a major provider in … around the country. Its market share is quite clearly reducing over time, but that's very much up to TAFE to respond to the challenges that it faces in a dynamic marketplace. We want to see a dynamic, fully informed market delivering quality outcomes, and that's a challenge for TAFE.
NATASHA MITCHELL: Joining us this morning on Life Matters is the new Minister for Vocational Education, Luke Hartsuyker. Is there any benefit though in strangling the nation's TAFE system? It was very robust and very comprehensive, and one of the vital roles that TAFE has traditionally played, as public education providers do, Minister, is this focus on increasing access and affordability to education and training by disadvantaged students, and most especially students in rural and regional areas. That's not the primary premise of the private providers but it has been of TAFE.
LUKE HARTSUYKER: Well TAFE does have an important role to play, and a great many students are subsidised students through a range of means. But TAFE has to compete in a dynamic market. I mean the world is changing, the world of work is changing, the skills that employers expect from their employees are changing, the skills that students want to acquire are changing. We can't stand still and look backwards at the old ways of course delivery; we have to be looking at new methods of course delivery, new methods of institutions to deliver those. And TAFE has a huge market share in this country, even still today, and is well placed to provide services into the future.
NATASHA MITCHELL: I'm sure many people would agree with you, but I want to bring it back to the point about equity of access in regional and rural communities where TAFE has been absolutely vital. And at the moment if TAFE is wound back in those communities, as it has been, people struggle to get access to education.
LUKE HARTSUYKER: Well look, there are a range of private providers in many regional and rural areas, and in fact I was in a small country town of 1000 people just last week and spoke to two providers of training services operating out of this small town, around 1000 people, delivering much of their services long distance over the internet, some of it face to face in the case of one provider. But new models of service delivery are popping up; hybrid models of service delivery are being developed. It is very much a changing education market and TAFE has the responsibility to meet that market and to have course offerings and methods of service delivery that stand the 21st century.
NATASHA MITCHELL: But of course there's a lot of vocational education and training that simply can't happen over the internet. It's practical, applied training. You can't do a diploma in refrigeration engineering, for example, over the internet necessarily. Perhaps a component of it, but a lot of it is practical, hands on, tools-based.
LUKE HARTSUYKER: And you're right, their hybrid course delivery is very much current practice, but in many regional areas young people go to the larger centres for block, and I mean that's something that's been going on for a long time. I mean I live in a regional city of 70,000 people and even there you have very significant numbers of students who travel to larger TAFEs for block placements, or go to a TAFE in another large centre not far away based on the way the course is being rolled out.
So it's very much happening now, I think it's very much part of the economics of scale that's required to deliver many courses. Very much of trade training can be done in the workplace where the technology and the equipment that is used is changing so fast it's impractical for, say, a TAFE to be buying the latest computer operated lathe every three months. Well not every three months, but certainly every year or two as the technology changes rapidly. It's impractical for a teaching institution to do that, and its' incumbent on the students to be taught in the workplace where that equipment is.
NATASHA MITCHELL: Minister, what about the price of vocational education in Australia? We get correspondence from students or prospective students that- perhaps last year, depending on which state you are and which state and when the reforms were rolled out in their particular sector, but of courses that have gone up 400 per cent in fees and it's just made it prohibitive for them to do the courses that they hope to do. And that puts them in a really tough position. And private colleges are no less cheaper, in fact possibly more expensive.
LUKE HARTSUYKER: That's a good point that you raise, and certainly that's a concern that's been put to me and that's something that as a new Minister, only in the portfolio for a number of weeks, I want to explore further in the weeks and months ahead. I think it's vitally important that we ensure access to education, as you have said, whether you're in a regional area, whether you're in a metropolitan area. We want to have access to quality training, the future economic prosperity of our nation depends on it, and appropriate pricing is something that I'll certainly be looking at.
NATASHA MITCHELL: Because it's open to the free market at the moment, certainly in the private sector, and that is very tough for students. Courses that might've cost a few hundred dollars are now costing thousands of dollars.
LUKE HARTSUYKER: Well price rises are not just common to the private sector. I mean prices are going up across the board and as I said it's something that I'll be putting my mind to going forward.
NATASHA MITCHELL: Now that's in the TAFE sector so a course that might have cost a few hundred dollars, might cost thousands now, simply in the turn of a year.
LUKE HARTSUYKER: Yes, I acknowledge you- the point you raise is valid. There have been some very significant price increases.
NATASHA MITCHELL: There have and it makes it prohibitive for people. Is there an argument to be made for example for capping course fees across the board and certainly there's been a discussion and in principle agreement for say the Federal Government to take over the running of vocational education, including TAFE. This is all still early days and it's a work in progress, could there be a place for the feds to cap fees for example?
LUKE HARTSUYKER: Well a national VET system is certainly something that's been considered by COAG and one of the things that has been suggested is the capping of fees. I'm not going to rule things in or rule things out but certainly that rapid escalation in cost that you identify is something that concerns me as a new minister.
NATASHA MITCHELL: What's the benefit of vocational education becoming a national system across the board as is being considered now?
LUKE HARTSUYKER: Well I think that there are a whole range of benefits with regards to having a consistent set of rules, single set of qualifications and trade packages, for example, that have national application. It makes total sense, I mean cross border issues are an area where there is tremendous inefficiency in this country and is being progressively addressed by governments- state and federal- over the years. We've got a lot more work to do and just like in so many areas, there can be benefits in having national consistency, particularly for employers who work across state borders that they can be assured that a particular student wherever they come in from is going to be taught in a way which is consistent and in a way which meets the corporation's needs.
NATASHA MITCHELL: Every education minister says the vocational education system needs more status, it needs a high profile. How do we achieve that, isn't it the case that in terms of funding and policy, universities are still the main game?
LUKE HARTSUYKER: That's a very good point because trade skills are so vitally important from a number of perspectives. I think that they should be viewed as an alternative career opportunity for a young person who is leaving school and somehow not of a lower standing than a university degree. Yes, it is a different form of training, yes it is not within the worlds of a sandstone university but it is vitally important.
As a nation going forward, if we're to innovate, people will need to be training constantly to keep their skills up and to change their skills as the workforce that they're in- or the workplace that they're in, evolves over time and training, probably in many places outside university will form an important part of that.
I think skills-based training is also vitally important for those young people who are perhaps disconnected from the workplace and those people who when I was in the employment portfolio we were looking to engage with our new youth employment strategy.
I think we want those young people not only to aspire to any job, and getting a first job is vitally important, but I think we need to encourage them to aspire to be the best that they can be. That skills training is very much something that can further their- not only their employment, but their financial wealth and wellbeing in the years ahead. We need to be encouraging those disengaged kids of the benefits of a skills-based career. Just as we need to be encouraging our school leavers that a skills-based career is a quality alternative to university, not a second choice to university.
NATASHA MITCHELL: If the courses remain affordable.
LUKE HARTSUYKER: Affordability of course is a very important issue.
NATASHA MITCHELL: It's a vital, vital issue; you will hear this now you've taken up this mantle.
LUKE HARTSUYKER: I've heard it already.
NATASHA MITCHELL: It was come in every direction your way and it's a very, very depressing scenario for many people who had their hopes on a TAFE course. I'm sure you would agree.
LUKE HARTSUYKER: Well, it's very much something I'll be looking at going forward.
NATASHA MITCHELL: We’ll look forward to staying in touch with you. Thank you very much, Minister, for making time with us on Life Matters this morning.
LUKE HARTSUYKER: Pleasure.
NATASHA MITCHELL: And Luke Hartsuyker is the newly appointed Minister for Vocational Education and Skills.