Funding for vocational education and training (VET) at a 10 year low

Mitchell Institute releases new report and sounds VET funding alarm
The Mitchell Institute recently shared the results of the Australian Investment in Education: Vocational Education and Training Report, showing that Vocational Education and Training (VET) funding has reached its lowest level in more than a decade, 
leaving Australia at risk of failing to provide high-quality training for an estimated 45% of new jobs in need of VET qualifications.  

National Centre for Vocational Education March quarterly figures released

Digitalisation and the trades

Electricians, bakers and other skilled tradespeople are adapting to the modern world. That means mastering lots of hi-tech. 3D printing, for example, is set to revolutionise saddle-making! Apprentices can be way ahead of their employers.

The National Centre for Vocational Education released its March quarterly report on Thursday which showed an increase in commencements and completions compared to the previous March.

There were 5140 commencements over the 12 months (up 5.7 per cent).

Commencements in the trade sector went up by 10.4 per cent.

There were 3225 males who started apprenticeships and 1915 females.

There had been 2105 cancellations and withdrawals in 2019; the lowest figure over the past five years.

Commencements over the five-year period were highest in 2015 at 5815 apprentices.

Building Minister Elise Archer said the increase in trade apprenticeship commencements was contrary to a decrease nationally.

“We are bucking the trend in terms of our apprenticeships and traineeships,” she said.

“We’re now seeing an overall decline in apprenticeships and traineeships nationally by 2.7 per cent.”

Master Builders Tasmania executive director Matthew Pollock said almost 3000 houses were built over 2017-18.

He said this was in addition to more $800 million in commercial work and $1.5 billion in civil engineering.

“Looking forward, there is certainty there as well,” Mr Pollock said.

“We expect to see growth of close to 20 per cent in the value of construction work over the next 12 months.

“There is certainly still a skills shortage in construction and we do need to encourage more people to get into the trade.

“What is encouraging is that this construction boom that we’re seeing is attracting more young guys and girls into the industry.”


Australia keen to cooperate in vocational training



ISLAMABAD: Strengthening of technical and vocational education and training (TVET) is crucial for Pakistan’s socio-economic development and Australia will fully support the country in its endeavors to boost the TVET sector, remarked Australian High Commissioner Dr Geoffrey Shaw.

He stated this during a meeting with the National Vocational and Technical Training Commission (NAVTTC) Chairman Syed Javed Hassan on Thursday.

The aim of the meeting was to highlight growing dynamics of technological innovations and e-learning in the TVET sector and enhance collaboration with vocational training institutes of Australia for maximum international recognition of Pakistan’s TVET graduates.

Shaw appreciated the initiatives taken by the Pakistan government including the “Skills for All” strategy and expressed interest in exploring various areas of collaboration in the TVET sector between Pakistan and Australia.

Speaking on the occasion, Hassan pointed out that extensive development of technologies and e-learning had considerably transformed vocational and professional education in the current economic climate and global marketplace. “To keep pace with the evolving TVET system, we are focusing on a reform process that reaches beyond conventional learning techniques,” he added.

NAVTTC Executive Director Dr Nasir Khan said recognising the importance of competence-based models, reducing barriers between vocational and academic education and greater employer engagement were critical factors for meeting the needs of a diversified TVET system. “With the development of knowledge economy, innovation is needed to reshape the TVET landscape and to respond to the challenges of global competition,” he said. “We are also designing new programmes and courses to increase access to and relevance of the TVET sector in Pakistan.”

Another focus was on teaching good work ethics and appropriate social behaviour to prepare the workforce for employment across the globe, he added.

Published in The Express Tribune, August 23rd, 2019.

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Waikato to keep Wintec assets in vocational education shake-up

Developing a new unified funding system for vocational education is crucial says Tertiary Education Commission chief executive Tim Fowler.
Developing a new unified funding system for vocational education is crucial says Tertiary Education Commission chief executive Tim Fowler.

Hamilton is still in the running to host the headquarters of the country’s new mega polytech.

Tertiary Education Commission (TEC) chief executive Tim Fowler was in Hamilton on Monday to meet with the Wintec Council.

TEC, together with the Education Ministry, are leading the reforms in vocational education and training announced by Education Minister Chris Hipkins in early August.

A key aspect of the shake-up is the merging of the country’s 16 polytechs and institutes of technology and Industry Training Organisations (ITOs) into one mega polytech.

Hipkins has already ruled out basing the head office for the new national institute in Wellington or Auckland.

Tertiary Education Commission chief executive Tim Fowler said the new mega polytech will be flexible and innovative.
Tertiary Education Commission chief executive Tim Fowler said the new mega polytech will be flexible and innovative.

One of the first jobs of the new establishment board is to recommend where to base the head office, Fowler said.

“No decisions have been made so I think everyone is in the running with the exception of Auckland and Wellington,” he said.

Fowler said a lot of focus has gone on the creation of a new national institute yet it was only one of seven key changes. An important part of the reforms is developing a new unified funding system.

“The reason why funding is important is because it’s the blood of the system and you need to have that blood circling around the system and at the moment it’s not,” he said.

“The funding system sends incentives to ITOs and ITPs (Institutes of Technology and Polytechnics) that set them up into competition, when what we know is we need to be building something that is far better and more collaborative.”

Several polytechs have had to bailed out by taxpayers in recent times, to the tune of $100 million.

Opposition MPs such as National’s Hamilton East MP David Bennett have slammed the reforms. Bennett said he has little faith the centralised body will represent Waikato’s unique interests or be flexible and innovative.

Bennett also said Wintec’s cash assets and land holdings could be lost to the centralised body.

Fowler said Wintec’s cash and liquid assets, which have been built up through hard work, will not be hived off to a national entity to be spent elsewhere.

New regional skills leadership groups will also ensure polytechs identify local skill needs and make sure the right mix of education and training is delivered in each region, Fowler said.

“I’ve also seen the comment that this [national institute] won’t be an innovative and flexible organisation because it’s large. I would say you may have noticed companies like Google and Amazon are actually quite innovative organisations for ones that are enormous. So size isn’t a determinant for flexibility or innovation, it’s actually mindset.”

Fowler said students currently enrolled at Wintec or prospective students won’t notice any immediate changes.

The name Wintec will be kept for the immediate future.

The long-term skills shortage experienced by several industries reflect the fact the current vocational education sector isn’t working, Fowler said.

“One of the key concepts out of this [sector] change is that we’re giving the employers the whip hand to say this is what we want, this is what we need.”


Repairing vocational education

According to a confidential report, Australia’s largest private training college raked in hundreds of millions in public money before its collapse, despite abysmal completion rates. A senior figure in the sector fears it could happen again. By Paddy Manning.

The former education minister Simon Birmingham (left) and the current skills minister, Michaelia Cash.

When Careers Australia collapsed in May 2017 it was the country’s biggest private training organisation. Along with its subsidiaries, the group had 19,000 students across hundreds of courses and 1100 employees but it was facing financial ruin – owing more than $150 million to creditors, including the Education Department, Westpac, NAB and the Australian Tax Office. Its administrators identified there were more than 20,000 potential unsecured creditors affected, including students.

Careers Australia pulled the pin suddenly, after the federal government refused to renew the organisation’s authority to deliver courses, citing its controversial record. The announcement to students and staff came without warning – all classes were cancelled, indefinitely. Careers Australia had relied on the federal government for 90 per cent of its revenue.

It was a baptism of fire for Craig Robertson, then just weeks into his job as head of TAFE Directors Australia (TDA), the peak body that represents TAFEs from every state and territory. TDA – a small organisation, with a tiny staff – took over responsibility for about 7000 enrolments under the national tuition assurance scheme. Robertson recalls how “our office phones went crazy”, fielding calls from panicked teachers and students.

“I’d always thought Careers Australia was a fairly respectable operator,” says Robertson. “It wasn’t until we really looked at the data that we realised what was going on.”

Once TDA started reviewing the company’s records, Robertson saw how Careers Australia had worked the government’s loan scheme for vocational education to maximise profits. According to a confidential internal report, seen by The Saturday Paper, Careers Australia received more than $578 million in Commonwealth money in four years by cutting corners on training quality, and ultimately left thousands of students in limbo.

Under the VET FEE-HELP scheme, this was perfectly legal. The Saturday Paper is not suggesting Careers Australia’s board had any knowledge of misconduct.

Two years later, Robertson says he is concerned there could be a repeat of the crisis that saw private colleges across Australia paid billions of dollars in public subsidies through the VET FEE-HELP scheme for poor-quality diploma and associate diploma courses.

VET FEE-HELP, a vocational education equivalent of HECS loans for university students, was first introduced by the Coalition but was overhauled and expanded by the Gillard government in 2012, which introduced the demand-driven funding model. It was scrapped at the end of December 2016, replaced by the VET Student Loans scheme. But Robertson fears the lessons of the VET FEE-HELP disaster have not been learnt.

Often, industry compliance scandals are blamed on a few rogue operators. In the VET FEE-HELP debacle, scandal engulfed the biggest training outfits. Some 150 dodgy private colleges have been shut down or kicked out of the system since a crackdown by the Australian Skills Quality Authority. But their misdeeds also tarnished the reputation of many high-quality, niche private colleges, which had operated without issue for decades. Confidence in the whole vocational education sector was shaken, leaving Australia facing a skills crisis. In the years since, TAFE enrolments have halved.

Andrew Norton, higher education director at the Grattan Institute, says the expansion of VET FEE-HELP by the Gillard government was “in principle, a very good idea, but clearly it’s been very hard to run in practice”.

He continues: “Possibly the lessons have been learnt but whether there is the regulatory infrastructure to ensure that it can’t happen again, I am not so sure. Even though there are providers being deregistered, I wouldn’t be convinced that the industry is clean.”

This week, Grattan released a report showing vocational diplomas in construction, engineering and commerce typically lead to higher lifetime incomes than many low-ATAR university graduates are likely to earn, especially those with degrees in popular fields such as science and the humanities. However, as Norton points out, vocational education has flatlined over the past 20 years while higher education has boomed.

“Funding for vocational education has gone down,” says Norton, “both from a loss of direct subsidy and a loss of revenue from the [VET FEE-HELP] student loan scheme.” He argues the extension of the entitlement-based funding model used for a small number of universities to vocational education was always going to be problematic.

“Unfortunately, the history of this industry, where you’ve got about 4000 often quite small providers in the market, makes it very hard to regulate, and as a result schemes that work reasonably well in higher education have been very troubled in vocational education,” Norton says.

In Robertson’s view, Careers Australia was emblematic of what went wrong with the training industry. Private colleges got paid upfront in full for delivering courses, despite abysmal completion rates by students – in some cases as low as 2 or 3 per cent. In 2016, the then education minister, Simon Birmingham, introduced three census dates to ensure colleges were not being paid the full course fee before students had finished the course.

But Robertson says that Careers Australia worked around the requirement by operating very short units of study so there were regular census dates to maximise cash flow. “You would sign up for a qualification that has 10 units … Because all of the units were short and they followed each other, you would just trip all of those census dates, so you met the three census date requirements, but you just cascaded very quickly into each unit.”

When it took over, TDA found many students had passed their last census dates years earlier but had never completed their training, even though Careers Australia had received the cash at the time. “Students may have been misguided in thinking that they had plenty of time to complete their training,” the TDA report notes. Robertson says the Commonwealth paperwork was very clear that there was no obligation on the provider to help the student complete their course. “That model still remains,” he says.

Robertson says that because the government and providers are currently focused on getting completion rates back up, there is no problem. But he says that if that scrutiny falls away, providers could still abuse the system because the structural issues haven’t been addressed. “Our point is that in two, three years’ time, when everybody has turned their focus to something else, it could be an easy thing to try to do,” he says.

As Careers Australia’s business model came under pressure, it tried to use education broker Acquire Learning to boost enrolments in its subsidiary training organisation, the Australian School of Management. Acquire would get prospective jobseekers in, urge them to do a course and then ASM would come in and do the training.

Robertson says Acquire, in turn, sold off two registered training organisations (RTOs) – Franklyn Scholar and the Asia Pacific Training Institute – to another provider, which subsequently collapsed. Again, TDA wound up with responsibility for the students.

“When we looked at the data, we found there was a 90 per cent failure rate for 2016 students,” says Robertson, explaining that Acquire didn’t want to encumber the potential sale of these RTOs by requiring the buyer to continue the training of current students. “So, they wholesale-failed all of those students. Now, most of those students wouldn’t even know that they were wholesale-failed in 2016. It was egregious behaviour of Acquire, to make it an easy sale.” Hundreds of students were affected.

Ahead of last Friday’s Council of Australian Governments meeting, Scott Morrison put vocational education top of the agenda. State and territory leaders agreed on a new one-page vision statement for the sector, which acknowledged “the importance of a viable and robust system of both public and private providers, and the particular role of states and territories in facilitating the public provision of VET”.

Last year, soon after he became prime minister, Morrison commissioned Steven Joyce, former New Zealand skills minister in John Key’s conservative government, to do a review of the TAFE sector. Joyce came up with 71 recommendations, including a new National Skills Commission, announced in the April budget as part of a $525 million skills package.

However, the Joyce review did not recommend ending the demand-driven funding model, which enabled the explosion of private colleges subsidised by VET FEE-HELP. Instead, according to Skills Minister Michaelia Cash, the government has put tighter restrictions on providers. Only 187 registered training organisations are now able to access funding from the VET Student Loans program and the government has introduced “a student engagement and progression process in VET Student Loans to ensure students continue to be actively engaged with their provider”.

Robertson predicts that if the Commonwealth government runs with the Joyce blueprint, state and territory governments may go their own way. He says they have reacted to the VET FEE-HELP debacle by increasingly switching support back to their own TAFE networks. Victoria, for example, has had great success by making priority TAFE courses free.

The prime minister seems determined for the Commonwealth to remain agnostic, supporting both private and public training providers. In a recent interview with 2GB’s Alan Jones, Morrison noted that the public TAFE system enrolled only 16 per cent of students in training – a figure overlooking that half the total enrolments are for short courses such as first aid or responsible service of alcohol. When it comes to proper training courses under the Australian Qualifications Framework, TAFEs account for a much larger share.

But even the radio host championed the public system, lamenting the closure and sale of dozens of TAFE campuses around New South Wales. Jones told Morrison: “TAFE is the only institution you can trust to deliver genuine vocational training.” With such a ringing endorsement coming from a prominent conservative such as Jones, the prime minister may need to listen.


Skills council to drive vocational education reform

The current training system need to be more agile, Prime Minister Scott Morrison said. Picture: Marc McCormack/AAP
The current training system need to be more agile, Prime Minister Scott Morrison said. Picture: Marc McCormack/AAP

The federal and state governments will create a new “skills council” to drive vocational education reform and deliver a plan to overhaul the sector next year, as premiers unite with Scott Morrison to put TAFE on an equal footing with universities.

Businesses and the housing ­industry hailed the Council of Australian Governments commitment to VET yesterday following warnings of skills shortages in some sectors and calls for bolder reforms to fix the nation’s training system.

“It needs to be agile, it needs to be modern, it needs to be up to date,” the Prime Minister said. “It can take you 12 months to change a qualification in this country.

“I mean, that’s not agile and that needs to be improved. I want, and we all want, students, whatever age they are — they could be 21, they could be 61 and going through a career change, or 41, or whatever age it is. And I want them to have confidence that that system is going to help them with their ­future intentions and their future careers.”

COAG released a “vision” for the VET sector, including that it provides workforce skills and relevant, up-to-date qualifications that are matched to the evolving opportunities and challenges of the economy.

“A co-operative approach ­between the federal government, state and territory governments, together with meaningful consultation with industry, will help to deliver a much-needed refresh for the VET sector,” the Housing ­Industry Association’s Kristin Brookfield said.

Australian Chamber of Commerce and Industry chief executive James Pearson said COAG’s agreements — including that the skills council advise leaders on ­future reform priorities by the end of the year — marked a new page in the country’s education and training manual.

“Our parliamentary leaders have come together to agree on what that looks like — a vision where VET and university education are given equal standing,” Mr Pearson said.

Also discussed at COAG was the embattled Murray-Darling Basin Plan, with all states agreeing to reaffirm their commitment to the plan and to the appointment of an inspector-general to oversee water resources and ­improve transparency and accountability.

The state leaders acknowledged the impact the drought was having on rural communities.


Australian Industry Group warns gov’t of national skills shortage

SYDNEY, Aug. 8 (Xinhua) — Australia’s peak industry body has urged the government to address the country’s “skills shortages” on Thursday, by reforming Vocational Education and Training (VET) Systems across the nation.

Writing a letter to Prime Minister Scott Morrison and the country’s State and Territory leaders ahead of the Council of Australian Governments (COAG) meeting in Cairns Friday, the Australian Industry Group’s chief executive Innes Willox warned that “75 percent of employers are experiencing difficulty in recruiting suitably qualified or skilled people into vacancies.”

“With the global economy now in choppy waters and Australia falling down the world’s performance tables, now, more than ever, governments need to work with industry to secure a long-term prosperous future for us all,” Willox said.

“The first step has to be a ground-up rebuild of our Vocational Education and Training (VET) System. This must be a national priority.”

“It is our view that the VET system is in a less than optimal state to meet the national imperatives of delivering the skill requirements for the labour market of the future.”

Calling for a complete overhaul, he added that Australia’s economy and community are currently facing a significant transformation period in the jobs sector triggered by digital disruption, structural adjustment and demographic shifts.

“This has contributed to a dynamic and accelerating requirement for skills and employment,” Willox said.

Among the industry jobs most frequently reported to be in shortage according to an Australian Industry Group report in 2018, were technicians, trade workers and professionals in all fields of science, technology, engineering and mathematics (STEM).

“Employers listing occupations experiencing skills shortages for the first time also included those with skills in business automation, big data and artificial intelligence solutions,” Willox said.

Despite Australia’s increasing population, figures from the peak body suggest apprenticeships and traineeships have actually plummeted in recent years.

In 2012, there were 446,000 people undertaking these training programs, but as of last year that number had dropped to 259,385 – the lowest level for a decade.

But with an unprecedented pipeline of public investment being pumped into transport and social infrastructure projects around Australia, Willox said the increased demand for workers could see the skill shortage Down Under get even worse.

“This infrastructure work is necessary to stimulate our softening economy and lift domestic productivity and amenity but it also carries with it pressures on particular skills which are in high demand because they are the same skills required elsewhere in the economy – such as in the mining sector,” he explained.

“Such a large program of work increases pressures on capability and capacity in both the private and public sectors.”

In order to tackle the problem, The Australian Industry Group wants all levels of government to engage with the Education Department’s National Skills Commission and commit to a national “roadmap for reform.”

“A genuinely national training system that meets the needs of the economy may finally be possible,” Willox said.

“Commitment to a roadmap for reform should be a key outcome of the current COAG process.”