Topics: VET FEE-HELP scheme, unethical training providers, Government’s plans to redesign Labor’s flawed VET FEE-HELP scheme

E&OE…

JON FAINE

Senator Scott Ryan, Victorian Liberal Senator, is now the Minister for Vocational Education and Skills, it is his job now to sort this mess out. Senator Ryan, good morning again.

MINISTER RYAN

Good morning Jon, how are you?

FAINE

Who do we blame?

RYAN

Well, can I just say firstly that there are two issues here, one is the system itself which has significant massive flaws. And I said to you, I think on the day I was appointed I came on air and you asked me how I was going to fix it and I asked you to give me some time to get across it, so that is one discussion. The other issue is what you mentioned in your introduction, which is the students. I might just say that I don’t think there are hundreds of thousands of students that are in the situation you outlined, that is not to dismiss that we are looking at probably tens of thousands of students. There are about three hundred thousand students in the VET FEE-HELP system, which is the centre of these issues and overwhelming most of those are being serviced well. We have a number of providers that are the subject of legal action, investigation, and enquiry and yesterday we had the collapse of ACN which is the owner of Phoenix which made the news a couple of weeks ago and also last year.

FAINE

Who do we blame?

RYAN

I think this system was designed badly, I think…

(Interrupted)

FAINE

Who by?

RYAN

It was put in place in 2012 by the previous Labor government and two things I think stand out about it. Firstly, they took the successful university HECs model and I think they inappropriately applied it to the vocational education sector, and there is a couple of key differences. Universities are well known institutions and higher education providers even when they are private, it is a stable market, it is an informed market, there is often state and other government oversight of those providers for example state auditors general look over the books of Melbourne Uni. In the vocational space, it is not such a stable market. At the same time there were less protections put in place for students and taxpayers in the vocational system…

(Interrupted)

FAINE

Are you trying to maintain that this problem started when the Labor Party were in power rather than before then even further back?

RYAN

This is the second point I was going to go to Jon. I think this is the Federal Government issue, the VET FEE-HELP scheme, at the same time Labor put in place the national partnership that actually said there should be contestability for vocational funding across the country. What really concerned me though was that we had the problem in Victoria a couple of years earlier and there were no learnings at the Commonwealth level from what happened at Victoria…

(Interrupted)

FAINE

It was so predictable Senator Ryan, this was a crash that we watched and predicted and we commentated on it and no one did anything about it. Do you have confidence in the people in your department? Because they have been watching too.

RYAN

There is a couple of issues there, the law…

(Interrupted)

FAINE

There is really only one to me, you either do or don’t think they know what they are doing. The people advising you now, do they know what they are doing?

RYAN

I think they do…I think politicians…

(Interrupted)

FAINE

They are the same people who have been there right through this.

RYAN

Politicians need to take responsibility here, Jon. The law that set this up, the law that set the VET FEE-HELP system with the lack of protections was passed by Parliament. Okay, I am trying to be a politician and being completely frank here, there are not sufficient protections and levers for the regulators to oversee this system and stop the behaviour that you and others have highlighted and that we have all read about.

FAINE

Where is the enquiry Senator Ryan? Your Government, when the Liberal Party came into power Tony Abbott immediately called an enquiry into pink batts. This is much bigger than pink batts, although I do understand that some tradies died and that is what elevated pink batts, but the amounts of money and the impact on our economy and our future and the aspirations of thousands of young Australians have been destroyed here. And everybody in Canberra, in the public service and politicians on both sides have simply sat back and watched.

RYAN

Well, Jon this is my 33rd day in the job, every single day I have been focussing on this. As I said to you when I started, I understand that this is a massive issue. It is one that my predecessor put in place a freeze on the scheme at the end of last year, my predecessor also put in place a whole list of limitations and regulations in the middle of last year that stopped some of the most egregious and outrageous behaviour. But, we also understand that the system cannot keep going the way it is and we have committed to rebuild it from the ground up for 2017. And that is my job.

FAINE

How many of the sleazy, manipulative so-called entrepreneurs have been bankrupted and had their ill-gotten riches recovered from the fake training schemes that they set up?

RYAN

I have to be careful about the legal action…

(Interrupted)

FAINE

We both know the answer, the answer is zero, none, no one, zip, zilch, nil.

RYAN

….As to the people involved, the ACCC has got some actions underway and we are working with them…

(Interrupted)

FAINE

What, so by 2033 there will be a court case and someone will do a plea bargain and wander off to the Bahamas to collect the money from their bank account that they have squirreled away?

RYAN

Jon, I agree with your outrage on this, I said I would come back to you and I agree with you. The behaviour of some people in this sector has been a scandal but not all. For example, some of the private providers are now, through nothing but their own good faith, they are not required to, helping us ensure that the students from Phoenix can continue their studies at another reputable provider. That was something I spoke to…

(Interrupted)

FAINE

Can you find a reputable provider?

RYAN

Jon, I think it is unfair. You have three hundred thousand people in the VET FEE-HELP scheme, you have four million people in VET overall all over the country of which just under one and a half million are in a publically subsidised area and there are some very good private providers. The real issue here is that the fly-by-nighters, the shonks have not only ripped off the taxpayer and in some cases tens of thousands of students, they are also causing substantial damage and loss of faith in a very important sector, not only for our economy – vocational education – but also for people seeking opportunity and better jobs. I have got to fix that and that is basically what I am spending all of my waking hours doing this year.

FAINE

Thank you for your time this morning, and let us keep working on it. Somewhere someone sometime down the line in the future, maybe it will get fixed, maybe it won’t, we will wait and find out. Thank you.

RYAN

Thank you Jon.

FAINE

Scott Ryan, Minister for Vocational Education and Skills in the Turnbull Federal Liberal Government.

(ENDS)