The never-ending private VET scandal

By Leith van Onselen

Reports about rorting of Australia’s private vocational educational training (VET) system seem to be never-ending.

Following in the footsteps of widespread reports last year (e.g. here, here, here and here) showing massive waste of taxpayer subsidies and the unconscionable targeting of poor areas with “free” laptops if they sign-up to expensive online courses, reports continue to emerge of unscrupulous practices and rorting within the private VET sector.

Last month, a whistle blower accused private VET provider Careers Australia of paying him $5,000 in hush money to keep quiet about rorting of the VET-FEE-HELP scheme.

And on Tuesday night, ABC’s 7.30 Report ran an alarming segment (above) uncovering some of the unscrupulous tactics used by providers like Careers Australia and Acquire Learning to recruit unsuitable people into expensive VET courses:

ALEX, FORMER EMPLOYEE: They received calls from, like, four or five other companies because leads generation companies had sold their information to not just Careers Australia but other companies…

MICHAEL ATKIN: Twenty-three-year-old Alex worked in Careers Australia’s Brisbane call centre until February. He claims competitions, like the one Violet entered, were a major source of sales leads.

ALEX: Ninety-five, 98 per cent of your calls are pretty much cold-calling, where you’re calling people who don’t know they’re going to get a call from Careers Australia. When you’re calling 200-plus people in the middle of the day in Australia, you’re most likely going to get in contact with people who are unemployed, are stay-at-home mothers, single parents and stuff like that…

But online competitions are not the only source of personal information for companies offering vocational education.

PATRICK MAGUIRE, FORMER STUDENT: I certainly didn’t consciously say, “You’re free to pass on my information to an educational service provider.

MICHAEL ATKIN: Patrick Maguire is a former police officer with post-traumatic stress disorder. He registered his details with the employment website CareerOne, which is partly owned by education broker Acquire Learning. Acquire signs students up for various providers, including until recently Careers Australia.

PATRICK MAGUIRE: I got a call on my mobile: very pleasant, very upbeat, very positive.

MICHAEL ATKIN: But Acquire wasn’t contacting him about a job. They encouraged him to sign up for a $20,000 diploma of business, with an Acquire-owned training provider.

PATRICK MAGUIRE: I remember saying to her, “Is there a catch to this? I get the feeling I’m going to have to sign up for something.” And then she brought up the educational aspect and how important it was to re-educate yourself to get back in the workforce. This was going to be a golden ticket to getting a job.

MICHAEL ATKIN: Patrick Maguire was shocked to discover the ACCC is taking legal against Acquire Learning for allegedly using unfair telemarketing tactics to take advantage of vulnerable consumers.

PATRICK MAGUIRE: I felt abused. I felt I’d been assaulted…

GERARD BRODY, CEO, CONSUMER ACTION LAW CENTRE: We are concerned that Acquire seem to be flouting the concerns that have raised both by the ACCC and us and others…

MICHAEL ATKIN: The centre is calling on the Federal Government to ban the use of employment websites to recruit students.

GERARD BRODY: It should be prohibited, in fact, for a third party or a related company contacting someone who has applied for a job about something that’s entirely different to a job.

MICHAEL ATKIN: Employment website Seek also wants the practice banned…

DEREK MILLER: Frankly, we think it’s now time for the Federal Government to take a very hard line, whether it be shutting people down, whether it be prosecuting operators to the fullest extent of the law to recover funds that have been paid improperly to them.

A few months back, The ABC reported that the federal government was preparing to write-off billions of dollars of higher education loans on the back of a blow-out in bad debts relating to the scandal-ridden VET sector.

Fairfax also revealed that private VET courses are costing taxpayers seven times as much as publicly funded TAFEs, amid poor graduation rates:

Taxpayers forked out $73,200 per graduate from private colleges on average, but only $10,500 per graduate in TAFE courses in 2014…

In one case, the Sydney-based AIPE, a Senate committee heard the college received $111 million in Commonwealth funding after handing out just 117 diplomas in 2014…

NSW Greens MP David Shoebridge said the privatisation of vocational training “has been a comprehensive failure” that both major parties shared responsibility for…

In a similar vein, the Grattan Institute’s recent report, entitled HELP for the future: Fairer Repayment of Student Debt, highlighted in all its hideous glory the escalation in HELP loans and doubtful debts:

ScreenHunter_12301 Mar. 29 07.16
ScreenHunter_193 Apr. 06 10.48

With much of the rise in bad debts coming from the private VET sector, which has been subject to widespread rorting.

The Turnbull Government simply must crack-down hard on the private VET sector, which is riddled with rorting and waste, has produced poor educational outcomes, and blown a huge hole in the Budget.

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Unconventional Economist
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  1. If ALP and LNP are going to give money to the private sector – why not have a wage subsidy like Germany does? And have it for all age groups – not just those aged over 50.

    On the other hand, slashing 457 visas by 99% would force firms to hire Aussies…

    You cannot make this up. On one hand, giving money to the “education” sector and on the other hand flooding AUS with cheap illegal labour so that young Aussies have no chance of getting a job anyway.

    • That is what was running through my mind as well. What a waste of money that could have actually been used to assist others instead of going to a group of shysters. $73,200 per bogus qualification.
      As well as that, did tafe ever cost that much? That is well over $1,000 a week. It is disgusting.

    • drsmithyMEMBER

      If ALP and LNP are going to give money to the private sector – why not have a wage subsidy like Germany does?

      It’s not as well targeted to “people of the right calibre”, and also improves the lives of peons in the process.

      Lose-lose from a Liberal Party perspective.

  2. Politicians make these sort of mistakes repeatedly, yet are never held to account in any meaningful fashion. Of course it is never their own money they are wasting, but many people forget that.

    It wouldn’t be so unforgiveable if they clamped down as soon as the rorts become apparent, but they let them run for ages so that yet another group of sociopathic scumbags make like bandits and set themselves up for life at the expense of the rest of us.

    I’d love to see some genuine accountability required from our politicians, like most of the rest of us are subject to.

    • Ronin8317MEMBER

      They did not clamp down because that would be admitting their model to ‘privatizing education’ doesn’t work.Furthermore, the blow out in debt will be used as an excuse to say ‘education is too expensive, the government can’t afford to fund it”.

    • Stephen Morris

      Politicians make these sort of mistakes repeatedly, yet are never held to account in any meaningful fashion.

      This is an inevitable consequence of “elective” government under which citizen-voters face a tightly constrained target space of options. Consider the simplest example:

      – Party A supports Policy X and Policy Y;

      – Party B supports Policy not-X and Policy not-Y; and

      – a voter (perhaps the majority of voters) prefers policies X and not-Y.

      Mathematically, there is simply no way that such a voter can reflect his or her preferences with a vote for either party. Conversely, there is no way that support for any policy may be inferred from votes for the parties.

      And this simple example involves only two policy options. In practice, there are dozens of policy dimensions at work.

      Moreover, under the Westminster system (which combines Legislative/Executive functions), voters are forced to make a single vote not only for a multitude of policies but also for the agent who they believe will be able to administer those policies.

      Moreover, this simple example does not take into account the possibility of collusion amongst major parties to implement policies which favour influential pressure groups.

      Perhaps citizens prefer this form of government. Who knows?

      What we do know from the historical record is that:

      a) where people have been given a free choice (the target space of options not constrained by self-serving politicians) they have almost invariably chosen a form a genuine (i.e. direct) Democracy as their preferred form of government; and

      b) where people enjoy such Democratic rights they do not seek to limit or abolish them, even though it is a straightforward process to call a referendum for that purpose.

      Thus does genuine Democracy demonstrate the ongoing consent of the People in a way that “elective” government cannot.

      In light of this, one is left wondering by what authority the Elitists prohibit the People from choosing the form of government they prefer for their country.

      As John Locke once quipped, they “ought to show us this Charter from Heaven that we may see . . .”!

      • I often call voting as akin to a set menu A and Menu B deal as when you go to an Asian restaurant and they have three course meal deals, you have to choose Menu A or Menu B. You may prefer whats on A to B but it does not mean you like all on Menu A if you opt for that over Menu B.

      • Locke was a man of the aristocracy and had no problems with slavery because of the free will thingy ™… his main complaint was the deity backed monarchs could arbitrarily confiscate gawds gifts from those that toiled, albeit with slaves.

        Disheveled Marsupial…. can we please move on beyond the age of ignorance….

    • If you going to go all ape about politicians you might want to discern whom advises them, you see most politicians don’t make policy without first getting expert advise.

      Disheveled Marsupial… or do you think Abbott was thinking for himself…

  3. There should be a Royal Commission in the rorting and exploitation of people on Student and 457 visas…Doubt it will ever happen though. Meanwhile they will continue to be ripped off and treated like slaves.

    Amazing how quickly things can happen when there is cruelty and exploitation of animals such as greyhounds or cows.

    • Yep. If greyhound racing can be banned due to repeat violations of the law, then 457 visas should also be banned or slashed by 99%.

      Almost any job done by a 457 visa worker can be done by an Aussie/Kiwi.

  4. Its hard to believe any current government is not slamming down hard immediately on this sort of thing.
    The sheer volume of money being lost is appalling. You would be better off paying the money directly to the unemployed people. The entire system is like the pink batts rip off.
    I remember a elderly neighbor getting door knocked to be sold roof insulation. When he explained to the young fella he already had roof insulation the kid thrust a pad and pen in his face and said Sign here we will give more insulation for free.

    • It’s worse than the pink batts, not only is public money being systematically rorted on a vast scale, the poor students are being given substandard educations with what will likely end up worthless qualifications if they manage to finish, they are also being saddled with tens of thousands of dollars of non dischargeable debt and we are simultaneously destroying the true provider in the VET sector, the TAFE system through being starved of funds and being forced to “compete” with these shonks.