Mitchell Institute Reports & National VET Funding

This week has seen the release of the Mitchell Institute’s paper, “Feasibility and design of a tertiary education entitlement in Australia”, written by Dr Timothy Higgins and Prof Bruce Chapman.  It expands on the earlier report, “Financing tertiary education in Australia – the reform imperative and rethinking student entitlements”, by Prof Peter Noonan and Sarah Pilcher.  These reports follow up on the issues raised in the Reform of the Federation White Paper released last year. My comments on these papers: These reports come in the middle of a significant public and parliamentary debate about the current state of vocational education and training in Australia.  Only last week we saw the first public hearing of the Senate Committee Inquiry into the operation, regulation and funding of private vocational education and training (VET) providers in Australia. Many submissions cover the practices that have emerged in the sector that are causing serious concern and have been the subject of extensive media reporting, ranging from the inefficient to the downright shonky. I am happy to acknowledge that many of the submissions also outline their experience with efficient, ethical, quality-focussed private providers but they make the point that both the public providers (State-based TAFEs) and these private providers are being hollowed out by the proliferation of the shonky and unethical. With this increasing dilemma in mind, in an opinion piece published in The Australian Online I made the observation on the Federation White Paper: “Getting the balance right, however, is not only about the funding mix between different levels of government and between government and students and employers. It must also address the interaction between funding sources and the impact on the quality and relevance of the training provided.” The Noonan/Pilcher paper, released in February this year, proposed “one foundational aspect of that matrix” should be “a fairer and simpler financing framework, across the different levels of government and tertiary education, that supports a tertiary education student entitlement for young Australians.” The proposal would see an entitlement for Australians aged between 18-24 and would be composed of a combination of public subsidies (by State/Territory and/or Commonwealth governments) and a student contribution through an income contingent loan. The report considers three funding models and indicates a preference for the third option which separates responsibility between the levels of government based on the level of qualification with the Commonwealth assuming responsibility for all sub-degree and degree level qualifications regardless of which sector they are delivered in.  The States and Territories would assume responsibility for everything else up to Certificate IV level qualification.  However, it also proposes that the Commonwealth make income contingent loans available for all qualification above (and including) Certificate III level. Echoing the concerns I have expressed about the White Paper proposals, the Noonan/Pilcher report goes on the outline ten specific factors that would need to be considered in setting public subsidies. These factors are just as relevant to the provision of income contingent loans as a complementary avenue of funding, particularly as many students accessing these loans are increasingly enrolled in training that does not carry a government subsidy. The Higgins/Chapman report explores the potential cost of the extension of income contingent loans to Certificate III and IV level courses based on the measurement of the subsidy ratios that would be created given the lower graduating incomes(indeed often lifetime earnings of graduates, particularly women). The report specifically outlines a range of risks in this model which include the “potential for intentional income manipulation in order to avoid repayments, generous loan conditions that might influence student choices and/or course providers charging excessive fees and providing poor education services”. Continue reading

Labor Backs TAFE For The Future

  Over the last year the media has been full of stories documenting the serious issues in communities across our country with the closures of TAFEs, reductions in staffing, ever increasing course costs and unscrupulous private providers and brokers preying on vulnerable people – this must not be allowed to continue.  TAFE must be backed by governments as it is critical to our future.   Labor has always been the party of TAFE.  Gough Whitlam instituted the Kangan Report into TAFE which resulted in additional Commonwealth investment for TAFE infrastructure, quality improvements, staff development and equity programs.   The Hawke and Keating Governments strengthened TAFE through establishing a framework for an ongoing dialogue between industry and the training sector which has been a contributor in our two decades of uninterrupted growth.   The last Labor Government increased Commonwealth annual funding for VET by 25 per cent in real terms with over $19 billion invested over five years as well as investing in TAFE campus infrastructure and technology upgrades.   Last week, on National TAFE Day, Labor Leader Bill Shorten and I announced Labor’s plan to back TAFE into the future by developing a comprehensive National Priority Plan that defines the unique role of TAFE as our public provider and delivers on this by working with the states and territories to provide ongoing guaranteed TAFE funding.   TAFE must remain an essential part of Australia’s skills and training sector as it plays a vital role in servicing our regions, industries in transition and disadvantaged groups.   As the Australian economy changes, the jobs of the future will change.  Our trades will involve more technology-based skills and workers will need training in these skills to be more effective in the workplace and to remain competitive in the employment market.  New trades and professions will emerge and require quality training programs and upskilling courses.   It is therefore absolutely critical that we invest in supporting our national asset – our public TAFE sector. There are challenges in the way the vocational educational sector is funded which has led to the decline of the TAFE sector nationally.  Over the last year it has become clear that there has been a failure in the market and we have seen the proliferation of opportunistic and sub-standard training providers costing the taxpayers and students millions of dollars. This needs to stop.    Vocational students need to have access to good quality training but we need a better system in place to ensure TAFE’s viability and strength into the future. The fundamentals of an effective market are clearly missing and no amount of regulation, as important as it is, will change this.  Labor believes the market must find stability through a predominant public provider, complemented by a quality private sector. Under Labor’s plan for TAFE, a Shorten Labor Government will work with Premiers and Chief Ministers on a comprehensive National Priority Plan that defines the unique role of TAFE and places it squarely as the public provider within the VET sector – as the cornerstone of our economy’s need to train and retrain its workforce and to deliver on improving the participation, productivity, innovation and growth efforts required for the nation.   We will work with the states and territories to rebalance the contestable and non-contestable funding model to ensure it delivers the outcomes that are intended.  Labor believes there is a place for contestable funding but we must get the balance right.   The Abbott Government has been silent on TAFE and now it appears they are considering abandoning the VET sector completely to the States.  This would seriously undermine the national effort required to support growth and jobs through nationally coordinated skills development.   In comparison, Labor is firmly committed to a strong TAFE sector.   We understand how critically important TAFE is to so many students, communities, industries and businesses.  It is a national asset and we must work across all levels of government to ensure its future.   HON SHARON BIRD MP SHADOW MINISTER FOR VOCATIONAL EDUCATION