The Commonwealth Productivity Commission’s final report on Reforms to Human Services has just been released and uses the VET FEE-HELP program as a case study of policy failure, and the importance of good government stewardship.
The report states:
“In the VET system, reforms were not accompanied by adequate safeguards or oversight of providers. In 2012, the Australian Government expanded the VET FEE HELP scheme. The reforms provided access to VET FEE HELP loans for students undertaking some courses at VET providers that did not have credit transfer arrangements with a higher education institution.”
“As a result, there was a sharp increase in the number of (mainly full fee) students. This led to students accumulating large debts that many are unlikely to ever repay. Some private providers aggressively marketed their courses, emphasising to students that they would not have to pay upfront, and in some cases offering inducements (such as ‘free’ laptops). Thousands of students signed up for courses that they had little prospect of completing. Better oversight of providers, combined with quality standards and improved information, could have avoided some of these issues.”
Commenting on the report’s release, ACOSS CEO Dr Cassandra Goldie said:
“The Productivity Commission believes that both not-for-profit and for-profit providers should be involved in the delivery of human services. Not-for-profits, are focussed on their mission, and often service remote localities and work with the most complex clients. They usually reinvest surpluses in service delivery, ensuring that funds invested remain in the service system. These are just some of the ways that not-for-profits add value to the services they deliver.
“On the other hand, we know that for-profit providers are focussed on making a profit, and will prioritise services that generate the highest profits. They also take vital money out of the service system through dividends to shareholders.
“We need to put people at the heart of how we determine what services are needed, and how we design the services that will be delivered. We don’t need more competition to achieve that.”
CCA comment: As CCA has detailed at great length, it supports the strict limitation of government funding to for-profit training providers. It is clear that the national policy – unfortunately shared by the Commonwealth and almost all states and territories – of “marketising” and privatising Australian vocational education and training has been a significant national policy failure.