VICTORIA S TERTIARY EDUCATION SYSTEM

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1 VICTORIA S TERTIARY EDUCATION SYSTEM Consequences for TAFE of Government s Skills Reforms AEU Victorian Branch Condensed briefing paper February 2012

2 VET in Victoria: Background The once-clear division between vocational education and training (VET) and higher education (HE) is eroding. Some universities are offering VET, TAFEs are offering degrees, schools offer VET and growing numbers of private education firms are competing for tertiary students and government subsidies. A new term, tertiary education sector (TES), has emerged to cover both sectors. Boundaries between public and private funding in tertiary education are also eroding. Non-government providers (including private training firms and companies such as Crown and McDonalds) have increasing access to public VET funding. Students access to income-contingent loans to pay for private or full-fee higher education and higher-level VET courses is weakening the distinction between government-funded places and full-fee places. The differentiation between the HE and VET sectors is being eroded by factors including: Government aims to increase the number of Australians with tertiary qualifications to meet changes in the economy. It seeks more fluid pathways between the two sectors and making tertiary education providers compete for students. Pressure on students to gain higher qualifications as diploma holders compete with degree holders for entry-level jobs. Public VET providers are under pressure to extend the range of their courses in a now competitive tertiary education sector. More than 1300 registered training organisations deliver accredited training and assessment. Publicly-funded TAFE institutions deliver the bulk of VET but their market share is declining down from 75% in 2008 to 48% last year. TAFE (Technical and Further Education) institutes were created in the 1970s. Unlike universities, which are autonomous institutions, most TAFE systems grew out of government departments. TAFEs must implement state and federal economic, social justice and education policies. They must deliver a broad range of VET, including general education and literacy courses, trade, paraprofessional and now degree courses. In 2009 Victorian VET s funding came from the state government (45%), federal government (17%), course fees (24%), student fees and charges (4%), and other (asset sales, investments) (10%). In 2010 about 582,000 students, or 10% of the state s population, were enrolled in Victorian VET courses. Of these, 57% were government-subsidised and 43% self-funded. TAFE in Victoria Fourteen TAFE institutes and 4 universities offer TAFE programs, with more than 400,000 students currently enrolled. Victoria s TAFEs have a statutory obligation to provide industry, students and their region with efficient, effective VET in more than 130 industry occupations. The Victorian TAFE system has been the lowest funded TAFE system in Australia for more than 15 years. Its funding has declined by 7% since Ongoing cuts are preventing TAFEs from delivering the broad range of programs they are obligated to provide. TAFE students are more likely to be from lower socio-economic backgrounds than university students and are more likely to be from areas where larger proportions of people receive some type of government benefit; they are also more likely to live in areas of high unemployment. Victoria s Skills Reforms I n 2008 the Victorian Labor government made big changes to the VET system outlined in Securing Jobs for Your Future. Its reforms included: Establishing the Victorian Training Guarantee giving eligible people an entitlement to government-subsidised training. Previously, the government capped the number of government-subsidised training places Abolishing concession fees and big increases in course fees for the many people ineligible for the VTG Making Commonwealth student loans available to those paying for diploma and advanced diploma courses Abolishing minimum and maximum course charges 1

3 Fee changes under the Skills Reform package Fees reduced for entry-level (foundation courses) courses Fees tripled over three years for diploma and advanced diploma courses. For example, a government-supported diploma course costing $877 in 2009 now costs $2500. Abolition of concession fees for certificate, diploma and advanced diploma courses. (The Baillieu Government reintroduced concession fees for students under 25 enrolling in diploma and advanced diploma courses). Concession fees increased for most other courses A nearly 60% increase in apprenticeship fees Students are ineligible for government-subsidised training for a qualification at a lower or equal level to one they already hold. Instead the student must pay full fees, which can amount to $10,000 or more a year. Examples of full-fee course charges are a diploma of engineering technology ($9000) and a diploma of community work ($8475). Some full-fee paying plumbing and electrical apprentices are reportedly paying up to $10,000 a year. For example, students aged over 20 who are not enrolling in a higher-level qualification than one they already hold and who are not studying for a foundation-level qualification are charged full fees. The union is aware of many people who have given up pursuing study or training because their previous qualifications, often obsolete or inadequate, have prevented them from accessing a government-supported place. These people are often living in disadvantaged circumstances and are not entitled to concession fees. They include single parents, young men and women, former refugees and people from non-english speaking backgrounds. People s entitlement to government-subsidised training is forfeited should they not make their first training choice the right one. For example, if an individual completes a Certificate 3 in Fitness and decides to study a Certificate 3 in Child Care because they can t find a job in the fitness industry, it will cost them about $5000. Student loans, or large future debts, are another disincentive for those contemplating VET, particularly people from disadvantaged backgrounds. Consequences of the skills reforms Proliferation of private training providers Inadequate quality control over a fast-expanding sector Complicated student-funding system Big cuts to TAFE funding Small increases in TAFE enrolments and a decline in enrolments in full-fee TAFE courses. Big operating losses in TAFE sector and viability of some TAFEs threatened. Only two of 18 TAFE institutes and dualsector providers recorded operating surpluses in Nearly 300 ongoing TAFE jobs axed in past 12 months. Hundreds of contracts not renewed this year. There is a trend for private training providers to cherry pick popular and cheap-to-run courses. TAFEs are competing with private providers offering cheap qualifications in unfeasibly short-time periods. These courses rarely deliver a job. One well known registered training organisation was delivering a Diploma in Events Management in 20 hours even though students had enrolled in, and were charged for, a 400-hour course. The Baillieu Government has reduced the difference in funding Example: A single mother who completed an advanced certificate in cookery I7 years ago was deemed ineligible for a government-subsidised place in a nutrition-related course. Her healthcare card also did not give her access to subsidised training. A full-fee spot would cost her $7000 compared with a subsidized course fee of $1000. She did not enrol. rates for private and public VET providers, resulting in a 25% cut in funding (about $100 million) to bigger TAFE institutes. TAFE institutes say the arrangement is unsustainable. The Government is considering adopting another Essential Services Commission (ESC) recommendation to cut more $230million from TAFE funding. TAFE staff say declining enrolments and funding cuts are leading to course closures and the delivery of fewer teaching hours than that specified in course information. Competition for subsidised and full-fee paying students and competitive fee setting is undermining VET training quality. It has also resulted in costly, time-consuming preoccupations in TAFE institutes with branding and marketing. Increasing numbers of tertiary education providers and contestability has made it very difficult for potential students to make informed decisions about the price and quality of VET products. Those in rural and regional areas have little choice of VET providers, making the funding of regional TAFEs critically important. The Government s claim that contestable per-student funding will boost training in areas with skill shortages is dubious. Evidence instead suggests that public funding is being diverted to popular, cheap-to-run, job-specific courses with no or limited job prospects. 2

4 What should be happening in VET? Provision of fully-funded, government-supported places in a TAFE institute for any student Increase in TAFE s hourly funding rate to national average Reintroduction of $55 concession fee for all concession-card holders in all courses Full-fee student places for international students under humanitarian or critical skill shortage programs but not at the cost of unmet domestic demand. Private RTOs should not be eligible for the same or higher hourly funding rate as TAFEs unless: * They demonstrate a comparable investment in the social and student welfare functions required of TAFE institutes; * Employ teaching and training staff with at least the same qualification levels and under at least the same employment conditions as offered by TAFEs. Greater regulatory control to ensure all VET training is provided by an appropriately qualified and registered workforce. A teaching diploma should be the minimum qualification for anyone delivering government-funded training. A Certificate IV in Training and Assessment is not a teaching qualification. All teaching and training staff delivering government-funded training must be registered, as they are in schools. Higher fees and restricted access to subsidised training is illogical given critical skills shortages, the VET demographic and high youth unemployment in many areas. The Skills Reform changes are deterring the many people who change careers and occupations and those seeking complementary qualifications. The State Government should commit to a well-resourced, high quality vocational education sector with TAFE institutes at its core. The alternative an underfunded public VET system competing with poorly regulated private providers delivering quick, low-cost qualifications will not solve skills shortages, boost national productivity, improve work and life prospects for the disadvantaged or promote lifelong learning. 3

5 #2059A Mary Bluett AEU Victorian branch president Brian Henderson AEU Victorian branch secretary AEU Victorian branch head office 112 Trenerry Crescent, Abbotsford 3067 Tel: Fax: Web: