September 12, 2013
Why institutions matter; why TAFE matters
By Leesa Wheelahan
Government ‘reforms’ to TAFE are destroying a key institution that contributes to Australia’s well-being, social cohesion and economic prosperity. The purpose of the changes is to create markets in vocational education and training and to transform TAFE into a commercial provider of services that competes on the same basis as private-for-profit providers. I have no doubt that TAFE will survive, but it will be a different kind of institution that serves a different purpose. We will all be poorer as a result.
The Nobel Laureate and economist Amartya Sen (1999: 123) explains that institutions matter because all of us “live and operate in a world of institutions.” He explains that:
“Our opportunities and prospects depend crucially on what institutions exist and how they function.
Not only do institutions contribute to our freedoms, their roles can be sensibly evaluated in the light of their contributions to our freedoms.”
It is important to evaluate the nature, purpose and role of institutions such as TAFE and how these will change as government reforms transform TAFE.
TAFE is a public institution that fulfils public policy objectives and is accountable to government and the public in doing so. TAFE’s purposes are complex and overlapping and it isn’t possible to disaggregate them into this or that service that can be costed and put out to market. TAFE contributes to regional, economic and social development. TAFE institutes support local communities and industries, and all TAFE directors and senior institute staff are heavily involved in local regional economic development committees, and with schools, universities, employers and leaders of disadvantaged communities. TAFE teachers are connected with local workplaces, and with schools, neighbourhood houses, community centres, and employment networks. They are also active in their industry and professional associations, and in industry networks.
Individuals’ lives are transformed as they embark on ‘second-chance’ studies to gain new opportunities and overcome past disadvantage. For many, particularly young people, it is their first chance, as they seek a qualification that will help them build their lives and gain qualifications that will get them started in the labour market and on lifelong learning.
But TAFE does more than this. It takes responsibility for anticipating, identifying, codifying, developing and institutionalising knowledge and skills needed for the future as well as for the present. It doesn’t just work with individual students and individual employers; it considers emerging needs in communities and in industries and anticipates how they are changing. Its role and purpose is to serve the public good.
Commercial providers exist to make a profit in a market and while many may be committed to excellence, their accountability is to their owners or shareholders. The design of the market makes a big difference. In higher education there are only 173 higher education institutions.
Direct public funding is restricted to public universities, and it isn’t easy to become a higher education institution. In VET, in contrast, where private providers have access to public funding, it is too easy to get be registered as a VET provider and there are over 5000 providers. This results in a market where the key driver is profits achieved by running programs cheaply and in high volume. Quality is sacrificed, and rorts and scandals proliferate.
In Victoria, the most marketised of states, private providers have 92% of publicly funded enrolments in financial and insurance services, 74% in administration and support services, 78% in public administration and safety, 75% in retail trade, 72% in transport, postal and warehousing, and 83% in wholesale trade. In contrast, private providers have only 4% of enrolments in mining, 6% in professional, scientific and technical services (which includes a lot of engineering) and 11% in information media and telecommunication because it costs a lot more to run programs in these areas.
In 2008 in Australia, TAFE taught 71% of publicly funded students, but this declined to 58% by 2012. Private providers taught 19% of publicly funded students in Australia in 2008, almost doubling to 36% by 2012. Their student numbers grew by 127% in this time. In Victoria in 2008, TAFE taught 66% of publicly funded students, but this declined to 40% in 2012. Private providers taught 16% of publicly funded students in Victoria in 2008, but 51% in 2012. Their student numbers grew by 417% during this time. TAFE’s share of publicly funded students is declining in other states as their governments catch up to Victoria in implementing similar changes to marketise VET.
The only way TAFE will be able to compete is to become just like commercial providers with profit the driving motive. It will be the only way to survive. Individuals, communities and employers will lose because TAFE must savagely cutback its services and concentrate on making money. But we will all lose because TAFE’s role in articulating the public good through for anticipating, identifying, codifying, developing and institutionalising knowledge and skills needed for the future as well as for the present won’t be funded. This is why we need institutions, not markets.
Sen, Amartya (1999), Global justice: beyond international equity, in Kaul, Inge, Grunberg, Isabelle and Sterns, Marc, Global Public Goods: International cooperation in the 21st century, New York: Oxford University Press: 116-125.