Some comments on the VET FEE HELP emergency measures
December 2, 2015 6 Comments
So as a lot of us has been saying for some time now the VET FEE HELP system is broken. The fact that it is broken and far to open to abuse, should not be taken to suggest that there is anything wrong with the concept of utilising income contingent loans to provide a vehicle for those students who for what ever reason fail to qualify for direct government funding. Conceptually income contingent loans are a fantastic idea. The problem is that the current system for administering these loans either simply doesn’t work or has been badly administered or applied. For what ever reason though, what remains is a mess, a mess that putting any kind of party politics aside simply needs to be cleaned up. Both the previous Minister for VET, Senator Simon Birmingham and the currently Minister Luke Hartsuyker, should at least in my opinion be applauded for taking steps to address these issues. In particular I think Senator Birmingham deserves recognition for his work in guiding the sector through this troubling year.
But enough of that, lets look at the so-called ‘emergency measures‘ that Minister Hartsuyker announced yesterday. The first is the limiting of claims to 2015 levels. While this has been criticised by some at least what it does is close the flood gates. It will give the government a relatively solid maximum dollar figure for the next 12 months. Yes it does mean that someone who claimed $50 Million last year will still be able to claim that amount this year, when you add to this the ability to place providers on a payment in arrears based on actual enrolments rather than estimated enrollment, plus making it easier to pause or withhold funds, it should allow the government to better control the system and to deal with anomalies and problems as they arise . Tightening the reigns on new providers into the system is also a good thing. I have long said that unless providers have been around for at least 5 years they should not have access to the system. There needs to have been a history of providing high quality training in order for a provider to be able to qualify. Add to this some form of capping of loan levels, as I have said previously I struggle to see a reason for people to be charged in excess of $10,000 for Diplomas and Advanced diplomas, and I think things will start to calm down.
While I agree in principle with the sentiments of Rod Camm from ACPET that perhaps a risk based approach would have been better than a freeze of funding levels approach, I think that a risk based approach is something to be unpacked as part of any reshaping of the program for 2017 onwards. In the shorter term I think the current approach has a greater appeal as it does allow the government to limit runaway funding in a much easier way. I think a tight risk based approach is the way forward along side in arrears payments on actual enrollment numbers, (I would personally prefer a completion payments models as is often used with direct funding), where numbers of students enrolled is a critical risk factor, because as we have seen from the data, in general it has been the providers with the largest numbers of students, and therefore the highest amount of loans, who seem to have had the most difficulties with the system.
As far as the call for a training ombudsman goes, while I think the idea has merit and should definitely pursued, I don’t think again in the short-term it is going to make all that much of a difference. Certainly as part of a longer term reform plan yes definitely have an ombudsman, but lets just get some measures over the line first that might at least start to slow down the hemorrhaging which is currently happening.
Anyway that’s just my opinion.