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.


Benefit of vocational education comes down to gender

With the Morrison government extolling the virtue of vocational education and training (VET), the benefit of diplomas over degrees differs based on gender, according to a new report.

Published by the Grattan Institute, the report found that for students with a lower Australian Tertiary Admissions Rank (ATAR), VET courses can get them employed faster and higher earnings over their career, but not if they are a woman.

The report compared VET courses to their university equivalent and demonstrated that if a male student with a low ATAR chooses a VET course similar to a university degree, for example engineering rather than science, their lifetime median earnings would be higher. Similarly, a Diploma in Commerce instead of a Bachelor of Commerce, would leave the students better off financially over the course of their lifetime.

For women, however, the data showed different results. Tertiary courses popular among women, such as education and nursing, have better career-long outcomes when women enrol in a Bachelor program.

In science, technology, engineering, and mathematics (STEM) fields, women who study the tertiary equivalent of a VET diploma will earn more. For men, a Bachelor of Engineering will lead to less earnings over the course of their career than a Diploma of Engineering. The amount earned also differed for the same degrees between women and men. Men who studied a Bachelor of Engineering will have a median earning of $2.07 million over their lifetime, while women who studied the same course would have a meaning earning of $1.42 million over their career.

The report authors note that for students with lower ATARs, they are less likely to complete university, leading to lower employment outcomes, and that students with higher ATARs will be more likely to attain higher paying jobs after graduating university.


If you have a low ATAR, you could earn more doing a VET course than a uni degree – if you’re a ma

Prime Minister Scott Morrison said in recent days that “TAFE is as good as university”, and in many cases leads to better pay.

TAFE plays a vital role, but for most university students, a TAFE course is not going to increase their income. University graduates usually have higher rates of pay and employment than non-graduates.

But a new report from the Grattan Institute – Risks and rewards: when is vocational education a good alternative to higher education? – looked at the employment outcomes for students leaving school with a lower Australian Tertiary Admission Rank (ATAR) (their main entry criteria into most undergraduate university programs).

It found men with a lower ATAR have options among vocational educational and training (VET) courses that can get them a job faster, and often higher earnings, than if they do a university degree. But these VET options are less attractive for women. And women who choose them often have poor outcomes, such as being denied a job in a male dominated industry like engineering.

ATAR is not everything. It does not perfectly predict university results or outcomes after university. But compared to graduates with a high ATAR, graduates with a lower ATAR have, on average, worse academic results, lower rates of high-skill employment and less earnings.

The Grattan Institute report looked at VET courses offered as a potential alternative to university. Especially once the income effects of lower ATAR are taken into account, the report found some bachelor degrees led to lower earnings than some VET diplomas and Certificate III/IVcourses.

How ATAR can affect employment outcomes

Over the last decade, more school leavers have been starting university with an ATAR below 70. Before an enrolment boom that began in 2009, about 20,000 school leavers with ATARs between 30 and 70 started university each year. In more recent years, the reported number is around 34,000.

But the true figure is higher, as universities don’t always record an ATAR when it is not used to admit the student.

Read more: More students are going to university than before, but those at risk of dropping out need more help

Employment outcomes usually improve over time, but slow career starts can have long-term consequences. The Grattan Institute report used data from the Longitudinal Surveys of Australian Youth (LSAY), which tracks young graduates up to age 25.

Graduates with a lower ATAR are more likely than those with a higher ATAR to fail subjects during their degree. But fail rates differ between courses. In education and nursing, for instance, graduates with ATARs below 60 failed 5% of all the subjects they took. This was half the fail rate of disciplines such as science, engineering, IT and commerce.

With fails on their academic transcripts, graduates with a lower ATAR have more trouble finding full-time work within four months of finishing their studies, and the jobs they find are less likely to use their skills.

But when it comes to employment options, the course matters more than the ATAR. In the months after graduation, humanities, science and commerce graduates with higher ATARs struggle more than nursing or education graduates with lower ATARs to find a job.

ATAR and annual income are connected within each university course. For example, male science graduates with ATARs of 90 earn about 13% more than graduates with ATARs of 60.

Men’s VET options could make them better off

To be considered a potential better choice, a course must plausibly interest the student and have better employment outcomes. There is no point telling a potential performing arts student an accounting diploma would improve their job prospects.

Few people are interested in both these courses. University applications, which often include preferences for multiple courses, reveal what other fields students are interested in.

One in five of all men whose first preference university course was science had a lower preference for engineering. Science is a high-risk university course, as rapid enrolment growth has led to graduates significantly outnumbering jobs.

Young people with lower ATARs considering science would receive a university offer, but could potentially earn more enrolling in a VET diploma (as shown in the chart below).

Similarly, about one in five men whose first preference is arts (another high-risk field) have a lower preference for commerce.

For men, with a lower ATAR, a commerce-related VET diploma would give them better employment prospects than an arts degree. These and other possible alternatives can be seen in the chart. Often a diploma is acquired after first completing a Certificate III/IV course.

Read more: We need to change negative views of the jobs VET serves to make it a good post-school option

Women should stick with uni

Women make up the majority of students who enrol into university with a lower ATAR. For them, a commerce diploma can sometimes be a good alternative to university, too. But otherwise women’s realistic choices differ from men’s – for both positive and negative reasons – in ways that make VET less attractive.

A positive reason is that two popular courses for women with lower ATARs – education and nursing – have good outcomes. Rates of professional employment for graduates of both courses are high across the ATAR range.

Nurses and teachers with higher ATARs who went to university tend to earn more than those with lower ATARs but the differences aren’t large enough to not recommend a bachelor degree over a VET course (as the chart shows).

A negative reason why vocational education is less attractive for women is that they show little interest in engineering-related fields that are popular for men. Once qualified, these men often work in construction, manufacturing, electrical and maintenance related fields.

But even when women have the relevant qualifications they often work in other occupations that pay less but offer more flexible working conditions.

VET fields popular with women, such as child care, nursing, aged care and hospitality have a large number of job vacancies, but don’t pay as well as most graduate occupations.

Vocational education does get overlooked in careers advice. But VET is less attractive for women than for men, if pay is a significant factor in course choice. Women have been a majority of university students since 1987. Given the nature of the labour market, it is not hard to see why.


COAG Call to action on skills

The Australian Chamber is calling on the country’s political leaders to agree to reform our vital Vocation Education and Training (VET) system, to deliver the skills that Australian jobseekers and businesses need, at tomorrow’s meeting of the Council of Australian Governments (COAG) in Cairns.

Prime Minister Morrison has put vocational training back on the agenda following the recent Joyce review of VET that he announced to ACCI’s members late last year.

It comes amid evidence that, despite significant funding growth in all other sectors within education, the amount of funding nationally for VET and the number of government funded VET students has declined over recent years.

Australian Chamber CEO James Pearson said it was important to improve confidence in the system.

“We know how fraught discussions about VET reform have been, and recognise that COAG has attempted on a number of occasions to consider changes that will make a real difference to the support provided to students and industry Now is the time for decisions to be made.”

“Industry stands ready to work with all governments, and we know that the Prime Minister is committed to positive change.

“We have worked closely with Ministers and advisers, and government officials, in the lead up to, and after, the Prime Minister’s announcement of the VET review to our members last November. Our network of state and territory chambers of commerce – the peak business bodies in each COAG jurisdiction – and industry associations is well placed to work with all governments on reforming VET.”

“Given the urgent need to make long lasting positive improvements in VET, we urge COAG to focus first on the end goal. This is likely to be a more fruitful discussion than the more difficult one about who pays for what and what changes are needed to get there.”

The Joyce Review has repeated our call for governments, education and training providers and industry to agree on a shared vision for VET. Successful reform of VET would include:

  • Meeting the labour market skill needs in occupations that rely on vocational training
  • A return to growth in the number of government funded VET students
  • Real funding increases for vocational training in all jurisdictions
  • Improved student employment outcomes
  • Industry more strongly embedded in the advisory and governance arrangements at all levels of the VET system
  • Valuing equally VET and Higher Education and promoting jobs that require VET qualifications to students and parents as good career options
  • Increased support for apprenticeships and traineeships to address skill needs and youth unemployment

“The path to achieving these objectives is challenging; we call on COAG to take the lead from the Prime Minister and move beyond the cost and blame shifting to restore certainty and growth to VET,” Mr Pearson said.

“VET not only prepares young people for work, but also ensures Australia has the skilled workers required to build the infrastructure so badly needed in our regions and cities.

“With more than a year before the next State Election, political leaders have the clear air needed to be decisive. Australia cannot afford to let this opportunity pass us by to make meaningful change to vocational training.”

The Australian Chamber is Australia’s largest network of employers, speaking for over 300,000 businesses employing millions of Australians in every sector of the economy, in every corner of Australia. Our Small Business is a Big Deal campaign gives voice to what small businesses need from the federal government, and our Getting on with Business recommends ways to make Australia the best place in the world to do business, so that Australians have the jobs, living standards and opportunities to which they aspire.

/Public Release. View in full here.

PM pushing TAFE students into jaws of a profit-driven feeding frenzy

The Morrison Government’s push to put the private sector at the forefront of Australia’s VET sector will only create a profit-driven feeding frenzy that hurts the career prospects of thousands of Australians who need access to high quality vocational education.

Since being in government the Federal Coalition has already overseen $3 billion cut from vocational education and training (VET) and 140,000 fewer apprentices now than when it was elected.

Australian Education Union President Correna Haythorpe said that Prime Minister Scott Morrison’s plans to privatise VET would leave hundreds of thousands of trainees and apprentices across Australia at the mercy of profit-seeking private training providers.

“Putting profit-seeking private training providers in charge of vocational education is all about helping big business line its pockets at the expense of ordinary Australians,” Ms Haythorpe said.

“The Prime Minister is on record as saying he thinks TAFE is as good as university. Yet if this is the case, why has he stripped $3 billion in funding from TAFE, our world-class public vocational education provider?”

“If Mr Morrison supports TAFE so strongly, why didn’t it get a single mention in the Federal Budget? Why do we have 140,000 fewer apprentices learning their trade today than back in 2013?” Ms Haythorpe said.

“History has already shown us, via the VET FEE-HELP scandal, that private training providers will go into a feeding frenzy in their drive to extract profits from VET students.”

“People need to remember that Australia will always need TAFE as a strong public provider at the heart of VET to provide affordable and high quality vocational education,” Ms Haythorpe said.

The latest available data from the National Centre for Vocational Education Research (NCVER) on government funding[1] shows that:

  • since 2013, the year the Federal Coalition was elected, the number of students in government-funded vocational education has fallen by 25%, from 1.48 million to 1.1 million. In addition, the number of hours of vocational education delivered has fallen by 28% between 2013 and 2018.
  • in 2017, following the VET FEE-HELP scandal, nearly $1.2 billion of public money flowed directly to private providers.
  • despite the fallout from the VET FEE-HELP scandal, in 2017 more than a third of the hours of training delivered by private providers were funded from public sources (34.5%) and more than a third of all state and commonwealth publicly funded hours (34.3%) were also handed to private providers.

“Despite the clear and undisputed benefits that a fully funded high quality public TAFE sector provides our economy and our society, there has been a concerted and continual drive from successive Coalition governments to marginalise vocational education and deprioritise TAFE,” Ms Haythorpe said.

“The Morrison Government just isn’t concerned enough about the 25% fall in TAFE enrolments on its watch to even acknowledge the existence of TAFE anywhere in the budget, let alone to do anything about this crisis.”

“Instead of reigning in private providers and rectifying the incalculable damage they have inflicted on the sector in recent years, Mr Morrison plans on handing them the keys to the piggy bank,” Ms Haythorpe said.

Ms Haythorpe said that TAFE must remain a strong public provider of vocational education in Australia. She called upon the Morrison Government to:

  • Guarantee a minimum of 70% government funding to the public TAFE system. In addition, no public funding should go to private for-profit providers, consistent with other education sectors.
  • Restore funding and rebuild the TAFE system, to restore confidence in the quality of the courses and qualifications and the institution.
  • Abandon the failed student loans experiment, and cancel the debts of all students caught up in private for-profit provider scams.
  • Re-invest in the TAFE teaching workforce and develop a future-focused TAFE workforce development strategy in collaboration with the profession and unions.
  • Develop a capital investment strategy in consultation with state governments, to address the deplorable state of TAFE facilities around the country.
  • Support a comprehensive independent inquiry into TAFE.

“Any proposal which undermines the importance of the Commonwealth and state and territory governments working together to build a strong, vibrant, fully funded public TAFE will be fiercely opposed by the AEU,” Ms Haythorpe said.

/Public Release. View in full here.

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.


New guidance on third-party arrangements for delivery of training and assessment

9 August 2019

ASQA has published updated guidance on third-party arrangements that will come into effect from 1 September 2019 for new third-party arrangements and 1 November 2019 for existing arrangements’.

This updated guidance comprises:

Why has ASQA revised its advice?

Registered training organisations (RTOs) have indicated that they are unclear of the extent to which they can use third parties for the delivery of training and assessment. ASQA has found some RTOs hold arrangements for delivery of training and assessment by third parties that do not meet the requirements of the NVR Act and, therefore, cannot be entered into.

ASQA holds concerns with third parties undertaking marketing and recruitment on behalf of RTOs that is not in line with the requirements of the NVR Act. ASQA’s guidance clarifies the existing requirement for VET courses to be marketed in the name of and on behalf of a registered training organisation that is registered to deliver that course only. This helps to ensure students know who will provide their course.

In addition, ASQA has identified a risk to the quality of VET through a number of RTOs entering into third-party arrangements for delivery of training products from the Training and Education (TAE) Training Package. TAE training products have been identified by ASQA as ‘VET courses of concern’.

The General Direction—third-party arrangements for training and or assessment of VET courses sets a requirement for RTOs to seek written agreement from ASQA prior to entering into a new third party arrangement for any VET course of concern as of 1 September 2019. The General Direction requires RTOs to seek written agreement from ASQA before 1 November 2019 to continue existing arrangements.

I have existing arrangements for delivery of training and assessment by a third party—how will I be affected?

ASQA has emailed all training providers that have previously notified the regulator that they hold third-party arrangements with information about the new requirements and the transition period. If you have not received this email, please contact the ASQA Info Line on

When does the revised advice come into effect?

You may not enter into any new arrangements that do not meet the requirements outlined in ASQA’s guidance from 1 September 2019.

All third-party arrangements, including existing arrangements, must meet the requirements outlined in ASQA’s General Direction from 1 November 2019. For more information on what this means for your RTO, please refer to the email advice ASQA has provided.


Morrison urges states to act on skills

PM Scott Morrison and state and territory leaders hold a formal COAG meeting in Cairns on Friday.

 PM Scott Morrison and state and territory leaders hold a formal COAG meeting in Cairns on Friday.

The nation’s leaders will grapple with the best way to give Australians the skills they and employers need for the jobs of the future.

Prime Minister Scott Morrison said he had a good discussion on the topic with premiers and chief ministers over dinner in Cairns on Thursday night and expects to make further progress during the formal Council of Australian Governments meeting on Friday.

“Qualifications and accreditations aren’t keeping pace with the modern economy and employers are not getting people out of the training system they need that can actually make their business work better,” he told 2GB radio ahead of the meeting.

Queensland premier Annastacia Palaszczuk – the only leader to speak heading into the meeting – expects the issue to be front and centre of the discussion.

“We need to make it easier for young people to get a loan if they choose to go into vocational education and training,” she told reporters.

“There has been a lot of focus in the past on university education and I think we need to have an equal focus on VET education because there is going to be a skill shortage.”

NSW Premier Gladys Berejiklian wants a national approach to look at vocational training and universities as a single sector, something the Business Council of Australia has also been pushing for over several years.

The federal government funded a National Skills Commission in its April budget, to better identify and plan for skills shortages and work with industry to design training courses, but it is yet to be established.

Federal Labor’s education spokeswoman Tanya Plibersek accused the government of having gutted TAFEs and now offering to put back a paltry amount of cash.

“When will the Liberals do something serious to fix the skills crisis they have created?” she told AAP.

“By locking Australians out of TAFE and training, the Liberals are locking Australians out of jobs. By presiding over a skills crisis, the Liberals are holding Australian businesses back.”

But Mr Morrison pointed out more than four in five Australians in training went through private providers, with only about 16 per cent studying at TAFEs.

“The problem I’ve got at the moment is the way the system is funded and the way the system is run,” he said.

Ahead of the main COAG meeting, leaders in the Murray-Darling Basin states signed an agreement about the management of the basin plan, in line with what water ministers decided last Sunday.

The COAG agenda is also expected to cover mental health and suicide, domestic violence, infrastructure, preschool education, population planning, and indigenous disadvantage.

Leaders are expected to agree on a plan for tackling plastic waste, which is reaching crisis point after China stopped accepting foreign recycling imports.

“I know this, as you all do, is an issue of great concern right across the community and I’m very encouraged by some progress we’re already making on that front,” Mr Morrison said in his opening remarks.

Outside the Cairns Convention Centre, about two dozen protesters gathered calling for action on climate change.

A woman wearing a pink Extinction Rebellion shirt said she was there to perform a citizen’s arrest on Mr Morrison and ministers Angus Taylor and Matt Canavan for crimes against humanity and the environment.


Leaders have skills test ahead of them

The best way to give Australians the skills they need to find quality jobs will be top of mind for the nation’s leaders as they meet in Cairns on Thursday and Friday.
Vocational education and training is shaping up to be a key discussion point for the Council of Australian Governments as leaders consider the recommendations of a recent review that identified a spate of challenges in the sector.
Employers have written to Prime Minister Scott Morrison warning of growing skills shortages and a training system that isn’t coping.
The letter from Ai Group chief executive Innes Willox points to the large pipeline of planned infrastructure projects – driven by the commonwealth’s $100 billion budget – an ageing population and degraded training and apprenticeship systems.
He calls for COAG to start work on “bolder and more decisive reforms” to vocational training and directly engage with industry.
Mr Morrison said he understood the situation was frustrating both for businesses and people who were seeking training to get a job.
“The system is letting us down. It needs to be far less bureaucratic and public service-driven,” he told reporters near Townsville on Thursday.


“It’s not about the providers … it’s about the people who want jobs and the people who want to employ people.”
NSW Premier Gladys Berejiklian also wants the leaders to look at radical reforms, calling for universities and the vocational sector to be treated as one.
“I am concerned the usual COAG approach that simply divides up responsibilities between the commonwealth and the states will detract from us getting better tertiary education outcomes,” she told AAP in a statement.
“We want universities and VET to be thought of in the same sentence for workers looking to prepare themselves for the high-value jobs of the future.”
NSW wants more integrated degrees, where a student can start at a vocational provider and finish at university, or vice versa, to gain a broader range of skills.
It sees the siloed system of keeping the two types of tertiary education separate as outdated.
Mr Morrison agreed, saying TAFE was just as good as university and his government wants to lift the status of training.
Queensland leader Annastacia Palaszczuk is keen to use the discussion to highlight a number of her government’s initiatives, including payroll tax concessions and free apprenticeship training for people aged under 21.
Earlier in the week, federal Employment Minister Michaelia Cash warned desperately-needed reform of the vocational education sector could only occur if state and territory governments put political differences aside.
The COAG agenda also touches on population and infrastructure after treasurers met in February to start developing a national framework that sets out a practical approach to improve population planning and management.
NSW will argue for more autonomy for states over federal infrastructure funding and a bigger say in what projects attract cash.
Early childhood education including universal access to preschool, coastal erosion, indigenous disadvantage and suicide, domestic violence, and state restrictions on gas developments are also expected to be discussed.
The leaders are travelling to Cairns for the COAG meeting at the invitation of Ms Palaszczuk.
The premier wants the chance to showcase Queensland’s investments in tourism and exports, particularly targeting Asian markets.
“Since the agenda includes northern Australia where better to meet than one of our northernmost cities,” a spokesman for Ms Palaszczuk told AAP.
“The temperature differential between Cairns and Canberra on Friday is 20 degrees. Our national leaders are about to experience a Queensland winter.”

Skills, training must lift for challenges ahead

The economic challenges ahead will demand better skills, and that starts with apprenticeships.
The economic challenges ahead will demand better skills, and that starts with apprenticeships.

The national training system has an incredibly important job before it. Our economy and our communities are undergoing significant transformations, triggered by digital disruption, structural adjustment and demographic shifts.

This has contributed to a dynamic, shifting and accelerating requirement for skills and employment. However, skill requirements for the labour market of the future are not the same as those of today. It is our view that the VET (Vocational Education and Training) system is in a less-than-optimal state to deliver on this national imperative.

The Prime Minister and state and territory leaders can achieve this by using the upcoming COAG meeting to tackle reform for Australia’s training system.

The system has endured a number of problematic years. The VET FEE-HELP debacle inflicted reputational damage from which the system has not yet emerged. From an employer and an individual perspective, the system is further bedevilled by inconsistency in both its multiple funding regimes, declining levels of funding and varying qualification arrangements. Disappointing apprenticeship commencement and completion rates further add to the confusing situation.

Industry leadership has been eroded and the pivotal alignment of public expenditure to economic imperative has been diluted. Confidence needs to be restored to the VET system.

Recent research by Ai Group reveals the growing level of skill shortages. Our most recent Workforce Development Needs (2018) survey highlights 75 per cent of employers experiencing difficulty in recruiting suitably qualified or skilled people. The occupations most frequently reported in shortage were from the technicians and trades workers occupational group, followed by professionals, all in STEM fields. Employers listing skills shortages for the first time included those in business automation, big data and artificial intelligence solutions.

These findings need to be considered in the context of the emergence of complex “mega projects”. To be able to deliver on the pipeline, a more focused approach to skill development is required. The pipeline of public investment across transport and social infrastructure will place pressure on government and industry to respond and also creates the opportunity for a skills legacy. Such a large program of work increases pressures on capability and capacity in the private and public sectors. Accommodating a pipeline of this magnitude when skill shortages are already acute in some areas requires new thinking, processes and partnerships to deliver. Skills demand is further aggravated by a combination of renewed employment demand in the mining sector competing with high levels of infrastructure investment across the country.

This infrastructure work is necessary to stimulate our softening economy and lift domestic productivity but also carries pressures on skills in high demand because they are the same skills required elsewhere in the economy, such as in the mining sector. While the bulk of the infrastructure pipeline is city-based, the mining work is, of course, largely regional. This adds to the difficulties for regional-based operations that need to compete with the cities.

Demand for skilled workers is coming at a time when the impacts of our ageing society are intensifying. Our analysis of data related to the manufacturing sector shows that as of May 2019 there were 38,600 people aged 65-plus working in manufacturing (4.2 per cent of the workforce). This has doubled from 2.1 per cent in 2009. While the participation is positive, people in this age group are heading for retirement without the level of skilled workers to replace them. It is a similar story for the economy overall. As of June 2019, 610,676 people aged 65-plus are working (4.7 per cent of the workforce), up from 300,107 a decade earlier.

The state of apprenticeships and traineeships is illustrative. We have 259,385apprentices and trainees in training in 2018 compared with 387,100 a decade ago and a high of 446,000 in 2012. This is the lowest for a decade. This drop can be linked to a series of policy adjustments including removal or reduction of employer incentives. Apprenticeship systems, where they work well around the world, enjoy strong support from both government and employers. This acknowledges that the core principle of an apprenticeship is the employment relationship between employer and apprentice. Policy reforms of the apprenticeship system have let decision-making and funding drift to training providers and support services.

For us to return to the most effective development pathway we would need to restore employer incentives, and build strong, flexible and quality provision. The apprenticeship system should be defined as an employment-based learning pathway, as is the model internationally. Higher apprenticeships should become a flagship of this reform. This approach must be national.

The training system as a whole needs urgent attention. The establishment of the National Skills Commission provides a rare opportunity to develop fit-for-purpose partnership arrangements. These should drive national approaches to qualifications development, apprenticeship reform, labour market mobility and establishment of price that will enable improved and transparent funding mechanisms.

It is timely to consider bolder reforms to lift the quality of the training system while achieving a more effective spend of public funding. Engagement of the key industry and government stakeholders in the system will enable the right level of “buy-in” to drive outcomes. The National Skills Commission is an important first step for all parties to engage with. Commitment to a road map for reform should be a key outcome of the COAG process.

Innes Willox is the chief executive of AiG.