History repeating: Parallels between the VET FEE-HELP loan scandal and the NDIS

Ten years ago, Australia's Vocational Education and Training (VET) sector was scammed.

It all started with good intentions. The federal government wanted to support more people to upskill, gain employment and advance their careers, so it extended the VET FEE-HELP scheme which provided HECS-like loans to VET students (think TAFE, and similar private colleges). At the same time, it removed many of the guardrails - all in the name of boosting and simplifying access.

On paper it was simple. The student signed up for a course, the provider received the full fees from the government, and the student repaid the loan once their new found skills allowed them to earn enough to trigger repayments. What it did not account for, however, was how easily the system could be gamed.

In its wider and looser form, this scheme offered private vocational training providers all, but unregulated, access to government subsidies for thousands of students. With this came the ability to saddle the majority of these students with a loan - whether they knew it or not. We’re talking tens of thousands of dollars for each one. And between 2012-15, a bunch of unscrupulous, so-called “education” providers took this as an opportunity to rip-off the system.

Armed with “free” laptops, iPads and other incentives and empty promises, these providers and their agents often targeted vulnerable and disadvantaged people and encouraged them to sign up for courses that weren’t a good fit, didn't deliver any teaching and were grossly overpriced.

In the space of three years the VET FEE-HELP scheme blew out from $325 million to $3 billion, all at the taxpayers’ expense. It should come as very little surprise that the proportion of students who actually completed their courses shrank. Once the government caught on to the scam the scheme was restricted and then abolished in 2017, however, victims of what is now known as the VET FEE-HELP loan scandal are still grappling with thousands of dollars of student loan debt.

This is a cautionary tale of what happens when a government policy is created to support and grow a sector but appropriate regulations and safeguards are not put in place around it.  

Disturbingly, since the rollout of the National Disability Insurance Scheme (NDIS), Australia’s disability sector is seeing a similar story unfold.

With the very best intentions of offering choice and control to its participants, a multi-billion-dollar scheme was implemented by the government. Since then, the NDIS has seen the emergence of many disability providers that are entirely unregistered and unregulated.

The latest NDIS quarterly report shows there are over 120,000 unregistered providers, compared with just 13,000 registered ones. While many try to do the right thing, the door is left wide open to unscrupulous individuals and organisations to charge whatever price they want, disregard employment laws entirely, and provide service without even the basics, such as appropriate insurances.

This has left many people asking the most obvious questions. For example, if disability support workers - or the clients they work for - aren’t properly insured for workplace injuries, when an accident happens on shift, who foots the bill? An important question to answer, especially considering care work has the second highest rate of workplace incidents and injuries of any sector, costing $8.5 billion in claims every year.

Without proper oversight, what’s to stop a disability support worker overcharging for their services or, on the flipside, being paid under minimum wage by dodgy providers?

These are just some of the most basic questions that should have an answer, but once again, we’re talking about a government scheme that’s been put in place without appropriate guardrails and regulations. Many fear this is just the tip of the iceberg.

In the most appalling revelations yet - aired as part of a 60 Minutes investigation called ‘The Big Steal’  on Sunday - Australian Criminal Intelligence Commission (ACIC) chief Mike Phelan claimed that up to 20 per cent of the scheme (that’s $6 billion) could be wasted in fraud and misuse of funds. That's annually.

And let’s be clear: not all of this waste is technically illegal. Much in the same way we saw vulnerable people taken advantage of in the VET sector, a lot of the waste in the NDIS is perfectly legal under current lax application of pricing arrangement policy. 

It seems history is repeating itself, and we’re doing nothing about it until it’s too late. In the words of Tim Dodd, writing about the VET FEE-HELP scandal in 2016, this seems “unbelievably, mind-bogglingly inept.”

My biggest fear is that, like the VET FEE-HELP scheme, things will get out of hand and the government will feel it has no option but to take drastic action and cut back the NDIS, or greatly limit access to it. If this were to happen, once again, our most vulnerable members of society will bear the brunt of the damage.

Now is the time to build sensible regulations around providers and people who offer disability services, all while ensuring the choice, control and flexibility that NDIS participants and their support workers deserve.

This article was originally published on Linkedin.