Australians continue to pay for vocational education rorts

By Leith van Onselen

It was dubbed the “biggest public policy scandal in Australian history: the systematic rorting of the vocational education and training system (VET)”.

It was the reckless policy first introduced by the Howard Government and then expanded by the Gillard Government, which gave private VET providers virtually unregulated access to government subsidies for every student they enrolled. This incentivised the emergence of dodgy colleges and salesman to enrol as many students as they could in order to gain VET FEE HELP funding. They lured unsuspecting vulnerable victims into enrolling in over-priced, dodgy courses (often online), allowing these private VET providers to gain billions in taxpayer dollars while providing very little actual education.

The VET scandal has so far cost Australian taxpayers an estimated $7.5 billion, which includes loans that will never be repaid. And it has left swathes of rorted students owing thousands in loans for courses they never finished, or qualifications that aren’t worth the paper they are written on.

Back in September, ABC’s Hack ran a report claiming that only 0.2% of VET loan complaints to the ombudsmen have resulted in refunds being granted.

Shortly afterwards, the Morrison Government passed legislation that would make waiving the debts of former students conned by dodgy private colleges easier.

Yesterday, The Australian reported that the Ombudsman appointed to rectify the VET scandal has identified another 5,340 more students eligible to have their fees waived at a cost of around $83 million:

[Legislation] passed in November and came into effect on January 1, has so far enabled 107 students to have debts of more than $3m expunged.

Those 107 students represent just 2 per cent of the backlog of complaints the ombudsman is working through…

The 5340 complaints to the ombudsman add to those of 8000 students who have already had $90m of debts waived through commonwealth and tuition assurance provisions…

This VET rorting is a textbook example of the failed ‘marketisation’ of public services that Ross Gittins lamented last year.

The policy was supposed to give students greater choice and make providers more responsive to students and employers. Instead we got a wasteful, rorted system that has delivered a huge Budget blow-out, left students with huge debts, and delivered poor educational outcomes.

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  1. Julia Gillard established the vet fee help scheme in 2008 when she was education minister. Between 2009 and 2015 the number of students accessing the scheme jumped from 5262 to 272,000 with course costs tripling to 14,000 and the total loans blowing out to $2.9 billion. It was cleaned up by the coalition.

    Howard didn’t start anything – this was Gillards mess up through and through – LVO – why don’t you call it for what it is.

  2. The worst thing is the duplicity. Get taxpayers to fund TAFE and “unis” and then give 90% of all new jobs to foreigners anyway!

    Utter madness. Foreigners should be banned from working in certain jobs such as truck driving, accounting, computer networking, nursing, teaching, etc.

    Are foreigners allowed to work as soldiers and federal politicians? So why let them work in the government-funded NBN and government-funded train stations?

  3. and everyone thought that was a brilliant idea – to give lower income people chance to educate, to get country’s workforce more skilled, … and than it got corrupted like every other good idea

    • proofreadersMEMBER

      And after VET proved a dud for students, some one had a bright idea that everybody should be able to go to uni, start/do a degree and then have trouble getting a job. Oh, but wait our unis sold out to foreign students so that they could offer them some form of residency ticket with the degree, instead of french fries. All good – welcome to Straya.

  4. Hey, I thought you blokes were FOR fiscal stimulus.

    What else do you call $7.5b of government money dolled out for nothing, if not stimulus?

    Next round of fiscal stimulus can be expected to be similar – with with significant parts grabbed by shrinks, various migrants and other raiders, with nothing tangible or valuable produced. Bring on the fiscal stimulus!

    • Based on the ethnic background of those rotting the system, nearly every cent scammed went overseas. So no fiscal stimululation at all!!

      • @Peachy. Buying a Maserati at a local dealer is not really spending on the local economy. Giving those low income folk and additional $10 per week towards a smashed avo in toast is.

      • Maserati – yes, that’s imported. But gobbies at the local nail salon and smack from habib down the street – that’s all local spending.

      • Mining BoganMEMBER


        There used to be a one-stop shop for cars, gobbies and drugs. Davo down the caravan park. This has to stop. Immigration is ruining the lifeblood of our greatest Australians.


  5. The idea that private, for-profit operators are capable of providing a public good such as education with superior outcomes to a public provider has been proven to be a lie here in Australia. Especially when the bulk of their income is channeled via the public purse, or where there are massive barriers to entry or when the government sets prices or drafts policies which determine their capacity to generate income.

    The outcomes are proven, time and time again, to be positive for the providers of said public goods and negative for the public who uses them.

    What is the point in gutting TAFE but letting shonky fly-by-nighters set up hospitality schools which the government pays for anyway? Why is the new public hospital in NSW operated by a private company when it doesn’t even bother trying to have adequate supplies on hand? Why are free roads re-tolled and shipped off to private operators so they can make a killing whilst resulting in additional congestion and some of the most expensive driving for commuters? It’s all a lie because it is a rort.

  6. Most parents I know would pay a small fortune if they could be certain that their kids were set on a path that would make them productive members of our society. I suspect these Vocational colleges are just the communal extension of this parental well wishing. Unfortunately these aren’t life careers were hoping to create with VET they aren’t even McJobs they’re not even the promise of McJobs.
    That’s the thing you need to recognize VET’s are the modern day Make-Work (you dig a hole and I fill it in) but instead of having to deal with the inevitable injuries that result from manual labour we’ve elected to have the whole exercise take place in an office / school room environment where the untrained / unqualified / uninspiring teach our uninterested kids….than we’re surprised by the outcome.
    The solution is a real education (especially at the high school level) that prepares a significant percentage of our kids for the jobs of tomorrow and a real focus on creating regional advantage, I know Sydneysiders can’t see how their advantages / actions drive down opportunities in the bush but they do and they create a cancer that eats at our very core.

    • I argue that most people (myself included) do an extremely poor job of judging if a person is productive or parasite.

      Take the example of a Chinese couple driving around in a camry cleaning rich people’s houses and some commercial premises. They pay no income tax yet use the roads, turn-up for free medicare and when old will collect pensions. Parasite?

      Now take the example of a rich home owner who pays these cleaners to clean his house. He declares a lot of income, PAYS A LOT OF TAX, and has private health care and will be so rich that he will not collect a pension. Productive?

      Did I mention that the rich person inherited his house, has never done a day’s hard work in his life, and owns several companies that sell useless rorted VET courses? Parasite?

      Did I mention the Chinese cleaners are the ones who keep the Cochlear laboratories clean, assisting in the production of equipment that allows deaf people to hear? Productive now? or does that depend on what the hearing aid recipients produce with their newfound hearing abilities?

  7. Stewie GriffinMEMBER

    Culture matters.

    Problem: How to educate next generation of workers.

    Culture 1: Society needs to perpetuate itself, therefore it is the role of Govt to provide the education facilities needed in order to enable this to happen. Given that society needs educated workers in order to perpetuate itself, it is appropriate that society pick up the majority of the initial education costs, and recoup them later through the individuals higher earning potential.

    Culture 2: Society is comprised of individuals. It is abhorrent that the Govt only provide a single educational lens for those who want to better themselves – it is imperative in a Multicultural society that individuals have a selection of choices to choose from. As the individuals will benefit from the higher incomes that this education provides them, it is appropriate that they pay for the education themselves as a part of personal responsibility. This also helps prevent individual communities from cross-subsidising other cultural groups operating within the economy.

    Culture matters – cultural starting point and from whose values do these two solutions arise from?

  8. These sorts of articles ought to have a warning at the top of what they might do to your blood pressure. It was obvious from the beginning that this VET system would be rorted.

      • I have never made a comment on means testing and have no problem with the government recovering pension money (and superannuation tax concessions) from death duties, so long as they don’t put the surviving spouse out on the street. I do have a problem with forcing people (elderly or otherwise) out of their homes with extortionate reverse mortgages to provide a fig leaf. If you saw elderly people as fully human, you would see the injustice as well.

    • I always wonder whether they:

      A) were incredibly thick / naive and didn’t actually realise that it would be rorted.
      B) knew damned well that it would be rorted but took some kind of kickback.
      C) were easily influenced by slick lobbyists.
      D) were simply blinded by neoliberal ideology.