campusreview.com.au
Labor’s $8000
cap mystery
Shorten announces a plan to limit VET FEE-HELP, but
how he arrived at the final number is anyone’s guess.
By James Wells
F
ederal Labor refuses to disclose whom it consulted to arrive
at its proposed VET FEE-HELP cap, and two of the major
industry groups representing TAFEs and private education
providers are adamant they were not involved. The $8000 question
now is: Whom did Labor consult?
The proposed cap was announced by opposition leader
Bill Shorten in his Budget reply speech, as the centrepiece of
Labor’s VET policy. To prevent price gouging of courses by
dodgy trainers, and to curb growing student debt, the opposition
says it will introduce an $8000 cap per student, per year, on
VET FEE-HELP.
Neither TAFE Directors Australia (TDA) nor the Australian Council
for Private Education and Training (ACPET) was consulted on the
cap. Instead, Kim Carr, shadow minister for higher education says,
Labor looked at ACPET’s and TDA’s submissions to the Senate
inquiry into private VET for “evidence” when crafting its policy.
However, neither submission referenced a VET FEE-HELP cap.
TDA says in a statement it wasn’t consulted directly. An ACPET
spokesperson tells Campus Review the same.
Both TDA and ACPET criticise the $8000 cap as unresponsive
to the market. Both also warn it may leave students out of pocket,
as the yearly cost of many courses, even in TAFE, far exceeds the
loan cap.
“[TDA] do not see Labor’s plan properly settled, as the $8000 cap
POLICY & REFORM
looks arbitrary and may disadvantage some TAFE courses,” TDA
chief executive Martin Riordan says.
Rod Camm, ACPET chief executive, is even more strident in
his criticism.
“Labor’s policy will limit student and industry choice and unfairly
protect a public system in much need of change,” Camm argues. “It
seems to be a policy that will wind back two decades of reform that
has brought greater choice and flexibility for students and industry.”
Carr – whose office is handling communications on the matter
– wouldn’t disclose whom Labor talked to when developing the
policy. He mentions only: “Labor consulted with a number of
industry stakeholders in the development of our VET FEE-HELP
policy. The details of these consultations and who they were with
are confidential.” A call to the office of shadow VET minister Sharon
Bird was redirected to Carr’s office.
Data published in a federal government discussion paper on
VET FEE-HELP, released by skills minister Scott Ryan amid ongoing
efforts to fix the troubled loan scheme, shows the average yearly
course cost throughout the entire VET sector was $14,018 last
year. Though, as the discussion paper shows, this may be inflated
because of price gouging by dodgy providers.
“Providers are able to extract margins that are substantially higher,
likely due to a serious information asymmetry, and particularly poor
consumer information or access to it,” the paper reads.
Australian Government data, published in 2010 while Labor was
in power, also shows that while some courses wouldn’t be affected
by the cap, some would. It indicates that students in hospitality,
engineering, creative arts and information technology would be
hardest hit, facing out-of-pocket costs between $1000 and $5000.
Grattan Institute higher education program director Andrew
Norton says a cap is worth considering, but cautions that flexibility
will need to be built into such a model.
“The trick is designing caps that can allow for the inherent
differences between disciplines and for a variety of teaching
methods, while limiting the excessive fees we have observed in
recent times,” Norton says.
Labor allows one caveat for VET courses to slip through the cap.
In a joint statement, Shorten, Carr and Bird say: “There will be an
exemption on legitimate high-cost courses, such as nursing and
engineering, following ministerial approval.”
However, Norton counters there isn’t a regulator out there
capable of determining if $8000 is the right base amount for the
cap, or to decide on which courses should be exempt.
The Australian Education Union (AEU), meanwhile, endorses
Labor’s $8000 cap as a good start, though it wants guaranteed
funding for TAFE.
“Labor’s announcement will go some way towards controlling
the growth of low-quality private operators by cutting the profits
they can make at taxpayer expense,” argues Pat Forward, AEU
federal TAFE secretary. “But with VET FEE-HELP debts hitting
$4 billion for 2016 alone, this action doesn’t go far enough. VET
FEE-HELP must be suspended while a full inquiry is held. We
need to ensure that at least 70 per cent of government funding is
reserved for TAFEs, so they can continue their role at the heart of
the vocational education system.”
When contacted by Campus Review for comment, Forward
declined to confirm whether or not her organisation had
consulted Labor regarding the cap and questioned the relevance
of such queries. ■
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