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.