July 28, 2015,

A Commonwealth takeover of VET would destroy the public TAFE system

By Pat Forward

A Commonwealth takeover of vocational education in Australia would see the ultimate triumph of the privatization agenda, and the destruction of the public TAFE system.

Currently, around 30% of recurrent VET funding comes from the Commonwealth and 70% from the states and territories. Recurrent VET funding has declined by 25% since 2004, and VET is the worst funded of all education sectors. In 2013, 42% of VET funding nationally was allocated contestably – that is, open to for-profit private providers - with close to 80% contestable in Victoria and SA. There has been a massive growth in students’ fees and charges, and a huge growth in student loans. In 2008, $25m was expended on VET FEE HELP. In 2014, this had grown to $1.6b, and by May 2015, $1.74b had been expended. If this figure stays on track, the VET FEE HELP debt for 2015 will exceed $3.5b. More than 75% of VET FEE HELP goes to private for-profit colleges. The total annual recurrent government funding for VET in 2013 was $5.8b. VET FEE HELP is on track to be more than half of recurrent government VET funding by the end of 2015.

This shift in the funding and organisation of the sector is a fundamental change which has occurred during a period of increasing rorts by private VET companies, and growing uncertainty about the quality and usefulness of qualifications in the sector.

Many states and territories have effectively defunded Diplomas and Advanced Diplomas, shifting the costs of these qualifications onto students in the form of student debt. Fees in the VET sector, unlike fees in the Higher Education sector, are completely deregulated where there is no government subsidy attached. This is the majority of VET FEE HELP loans.

In Victoria, South Australia and Queensland, TAFEs are now minority providers of government funded VET.

In these three states, as the governments shifted their funding to the private sector, thousands of jobs were lost in TAFEs, campuses were closed, regional areas lost their VET provisions, and courses were defunded.

In SA, when a panicked state government shifted their diminishing state funding away from the private sector, the Commonwealth Government joined the private for profit sector in condemning the state for what they claimed would be tens of thousands of job losses. The hypocrisy of this outcry, particularly in the context of the failure of governments to support their own TAFE colleges, is not lost on workers in the sector.

The activities of the private for-profit VET sector have undermined trust, confidence and damaged the reputation of the whole VET sector. Thousands of qualifications have been withdrawn and the quality and usefulness of thousands more called into question. The National VET Regulator has admitted that they can no longer be certain about the quality of VET qualifications, or even whether students hold the competencies that their qualifications attest to. The activities of brokers operating on behalf of the private VET sector continue unabated, with thousands of disadvantaged and vulnerable young people signing up for worthless qualifications, and for a lifetime of indebtedness.

In Victoria, the recent Mackenzie Review showed that 80% of private providers are 90% reliant of government funding. In stark contrast, on average, more than 30% of TAFE college funding is Fee For Service. A recent report from Sydney University showed that the largest private for profit VET colleges are making super profits in excess of 30% - whilst in some cases drawing more than 95% of their funding from the government.

The split in responsibility for the governance and resourcing of vocational education in Australia between the States and the Commonwealth has resulted in more than twenty years of policy incoherence and confusion, under-funding, and a lack of clear direction for the sector.

TAFEs in particular have been left to the vagaries of the incoherent policy of the states, and the largely bipartisan push from successive Commonwealth governments to privatize the VET system.

A shift of responsibility for funding and organization of the sector to the Commonwealth would be a triumph of market reforms and result in the complete privatization of the sector, and of TAFE colleges.

Some states may consider continuing to support their TAFE colleges but this would be in the context of a virtual de-funding of higher level VET qualifications (Diplomas and Advanced Diplomas), as VET FEE HELP becomes the major source of funding for these qualifications.

There has been no publicly available analysis of the impact and growth of VET FEE HELP and its consequences for some of the most disadvantaged students in the Australian community. And it is worth remembering that fees in VET are completely deregulated, with the only limited on fees charged being the $95,000 limit on the amount of money a student can borrow.

A Commonwealth takeover of vocational education would see TAFE abandoned by a number of states and the collapse of public provision in this crucial sector of education.

The implications for individuals, the community and regions will be profound.

There will be a massive growth in student indebtedness, in a climate where the quality and usefulness of VET qualification has been called into question.

TAFEs will become residual providers in the states where they remain.

Pathways between VET and Higher Education will collapse, and employment outcomes in the sector will be undermined as employers continue to lose trust in the sector.

The states and territories, and the Commonwealth must work collaboratively to develop coherent policy in the vocational education sector. Each level of government must commit to the provision of public education through TAFE in this crucial education sector.

Shifting responsibility for VET to the Commonwealth will not solve the problems of vocational education. A Commonwealth takeover would be the triumph of privatisation, and the residualisation and ultimate destruction of the public TAFE system.

Another step towards guaranteed funding for TAFE

Another step towards guaranteed funding for TAFE

The commitment of the South Australian Premier is another step towards guaranteed funding for TAFE.
A Sector with no Clothes

A Sector with no Clothes

A very different and humorous look at vocational education in Australia.
Increase funding to TAFE, not more student loans

Increase funding to TAFE, not more student loans

As the unfolding funding catastrophe in TAFE and vocational education was revealed again this week, it has elicited calls from those who have been at the forefront of the introduction of Income Contingent Loans into the sector to further expand them to lower level VET qualifications. As the magnitude of this disaster unfolds, it makes no sense that those at the forefront of the creation of a VET market espouse a further shift of funding responsibility for the sector onto individual students.
TAFE success at training awards

TAFE success at training awards

TAFE institutions, students and teachers dominated at the 2017 Australian Training Awards.
The rise and fall of Careers Australia

The rise and fall of Careers Australia

A brief examination of the meteoric rise of Careers Australia, and the implications for students, teachers and the vocational education sector.
New models: partnerships and innovation

New models: partnerships and innovation

Mary Faraone reflects on the future of TAFE and concludes that "the trick is to be ready for opportunities and develop a vision that respects and is loyal to the past but looks to the future."
Skilling Australians Fund

Skilling Australians Fund

Effective skills formation is essential to our national economic and social wellbeing. It will be the difference between whether as a nation we prosper or decline.
The Failure of For-Profit Education: Implications for TAFE

The Failure of For-Profit Education: Implications for TAFE

Among the many failures in the education ‘reform’ movement, the attempt to promote for-profit education has been the most complete. For-profit education has failed at every level.
Vouchers won't fix the TAFE system

Vouchers won't fix the TAFE system

Jennifer Westacott and the Business Council of Australia’s proposals for Education and Skills released at the National Press Club today are another disappointing suggestion that fails to recognise the very real issues facing vocational education in this country.
Does your MP support guaranteed funding for TAFE

Does your MP support guaranteed funding for TAFE

The TAFE sector is the lowest funded education sector and funding has declined by more than 24% since 2008. As privatization of the sector has increased, and as more and more government funding has gone to private for profit providers ...