House of Representatives

Second Reading Speech

Ms Gillard (Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion)

I move:

That this bill be now read a second time.

The Higher Education Support Amendment (VET FEE-HELP Assistance) Bill 2008 is to implement the original policy intent of the VET FEE-HELP legislation passed through the parliament last year. That legislation extended the FEE-HELP student loan scheme to important parts of the vocational education and training sector, but it was poorly framed and now requires the corrections set out in this bill in order to operate effectively.

Consequently it has fallen to this parliament and to the Rudd Labor government to fix the incompetence of the Howard-Costello government and specifically the incompetence of the former minister for education, who is now the Deputy Leader of the Opposition.

It is to be regretted that parliamentary time needs to be devoted to this patch-up job. But unfortunately there is no choice. If the errors in the current legislation are not corrected they will have budgetary consequences.

The objective of VET FEE-HELP is to provide an Australian government loan to ease the up-front financial burden for full-fee paying students in high level vocational education and training courses, including diploma and advanced diploma courses that have appropriate credit transfer into a higher education award.

Specifically the amendment will ensure:

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VET FEE-HELP is restricted to eligible full-fee paying students in diploma, advanced diploma, graduate certificate and graduate diploma courses; and

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VET providers have credit transfer arrangements with a higher education provider in place for each VET accredited diploma or advanced diploma qualification.

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As it stands the current legislation does not achieve these aims and if left without amendment could result in an unintended extension of FEE-HELP far beyond the stated intention.

Such extension is not budgeted for in the forward estimates and could prove extremely costly. In the current inflationary climate such an unintended expenditure cannot be justified.

The current legislation fails to adequately set out the fee arrangements under which VET FEE-HELP can be offered to a student, leaving this wide open to a full range of VET courses. The proposed amendments ensure that VET FEE-HELP is to be made available only to students paying full fees, and a mechanism is put in place to ensure that the minister has clear information from VET providers on this matter.

Further, the current legislation does not ensure that, in order to offer VET FEE-HELP to students, VET providers must have credit transfer arrangements in place. This is corrected in the proposed amendments.

Increasing Australia's productivity is critical to our future economic prosperity and enhancing the skills and capacity of our workforce is a key to productivity. VET FEE-HELP provides a strong financial underpinning to help more Australians gain essential skills through vocational education and training.

VET FEE-HELP enhances opportunities for individuals to pursue study in the vocational education and training sector at the diploma level and above without the disincentive of up-front payment of full fees. FEE-HELP loans are not subject to income and assets tests and repayments do not commence until an individual's income is above a minimum repayment threshold.

VET FEE-HELP will create opportunities for Australians to pursue new careers or lift their qualification levels to diploma, advanced diploma, graduate certificate or graduate diploma. It opens the way for greater movement between vocational education and higher education. Aligning student financing arrangements between the sectors reduces the funding inconsistencies which can sometimes get in the way of students seeking to move between the sectors. It also eases the administrative load for multisector providers of both VET and higher education.

We anticipate that over the next four years more than 6,000 students will benefit under this scheme.

Higher level VET qualifications are the way of the future for skills development-and the Rudd Labor government has made them a centrepiece of its Skilling Australia for the Future policy.

Our Skilling Australia for the Future policy will increase and deepen the skills capacity of the Australian workforce. The government's plan for our future skilled workforce will close the skills gap in the Australian economy in three key ways: firstly, by funding an additional 450,000 training places over the next four years.

The first 20,000 of these new training places will be available from April 2008. These initial places will be directed to those outside the workforce and will help many Australians gain employment and stimulate workforce participation rates.

Secondly, we will ensure that most of the 450,000 places lead to a higher level qualification.

The new places will offer high-quality training opportunities which better suit the needs of our economy in the future. In an increasingly globalised world, we need to increase not only the number of Australians with skills and qualifications but also the depth of skills in our workforce if we are to drive up productivity and compete internationally.

The Business Council of Australia estimates that nearly half of the qualifications needed to meet the predicted demand for skilled workers over the next decade will need to be at certificate III level or above.

A 2007 study by the National Centre for Vocational Education Research highlighted the importance of associate professional occupations in the context of globalisation, technological change and the changing nature of work yet shows that in recent years there has been a decrease in the level of participation in diploma and advanced diploma qualifications in the vocational education and training sector.

Thirdly, we are placing industry demand at the heart of the skills training system through setting up Skills Australia and by strengthening industry skills councils.

The Rudd Labor government's Skilling Australia for the Future policy will give skills training in critical high-level skills a much-needed boost. VET FEE-HELP provides an important underpinning for growing participation in high-level skills training.

I commend the bill to the House.

Debate (on motion by Mr John Cobb) adjourned.