Training sector needs ‘a new and sustainable funding model’: Report

by L&D24 May 2016
There must be measures introduced to improve the quality and confidence in vocational education and training, according to the Mitchell Institute’s new Participation in Tertiary Education in Australia report.

The paper acklowledged the weaknesses in the current funding framework between the Commonwealth and State Governments.

Namely, public investment by the states is decreasing, and investment by the Commonwealth is on track to fall in 2017-18. Moreover, enrolment and participation levels in VET are falling and are likely to drop further in 2016.

The abuse of the VET FEE HELP scheme by some providers has led to significant increases in outlays through excessive pricing and inappropriate enrolments, said the report.

The Mitchell Institute added that even though the Labor Party is proposing to cap VET FEE HELP loans at $8,000 a year, the savings will go into other areas rather than being redirected back into mainstream VET funding.

The report added that declining levels of public funding for VET, increasing student fees without access to income contingent loans, and the reputational damage to the sector from the VET FEE HELP scandals are likely to create incentives for students to opt for HE over VET.

“Without a new and sustainable funding model and measures to improve quality and confidence in VET, the VET sector is not well placed to underpin growth in participation in tertiary education into the next decade,” said the report.

Sharon Bird, the Shadow Minister for Vocational Education said it’s students suffering the most from the failures of the Coalition.

“Most fail to graduate, while those that do often find their so-called “qualifications” from the new private providers are unable to get them the jobs they want, despite incurring a substantial debt,” said Bird.

“At the same time, the Liberals are cutting funding to skills, vocational education and training by $2.75 billion, including $1 billion cut from apprentice training.

“The Liberals have used the Vocational Education and Skills portfolio as a piggy bank to bankroll their tax cuts for big business.

“The (Participation in Tertiary Education in Australia) report shows that the sector has suffered significant reputational damage in recent years as a result of the Liberals’ neglect and needs a new and sustainable funding model.”

Bird said Labor’s policy addresses these problems.   

“Labor has announced a full, evidence-based review of the vocational education and training system to build a stronger sector and weed out dodgy providers and student rip-offs,” she said.

“Labor has also committed to a funding guarantee for TAFE, a comprehensive review into the role and function of the vocational education and training system and a VET ombudsman.”

In the recent budget, the Turnbull Government committed around $7 billion to vocational education and training through funding and student loans, and a $10 million vocational education advertising campaign in an attempt to reform the scandal-hit sector. 

They also recently announced a discussion paper which includes insights from key industry figures including TAFEs, private training institutions, industry groups and peak bodies.

In announcing plans to reform VET-FEE-HELP, the Minister for Vocational Education and Skills Scott Ryan said the scheme introduced by Labor was demand driven, uncapped and had insufficient student protections in place.

"The original scheme opened the floodgates to shonky training providers and predatory brokers to take advantage of the system,” said Ryan.

Related stories:

Labor announces crackdown on dodgy training providers

Turnbull prepares for radical shake up to training sector