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CONTENTS
Vocational Education and Training Funding Amendment Bill
1997
Date Introduced: 4 June 1997
House: House of Representatives
Portfolio: Vocational Education and Training
Commencement: Royal Assent
The major amendments proposed by the Bill:
- reduce the level of Commonwealth funding for vocational
education and training for 1998; and
- set the level of funding for 1999.
Commonwealth role in the provision and support of vocational
education
The Commonwealth provides grants to the States and Territories
for the provision and support of vocational education and training
primarily to the Technical and Further Education system. Prior to 1
January 1994, grants to the States and Territories were provided in
accordance with the provisions of the States Grants (TAFE
Assistance) Act 1989. The grants contributed to general
operating costs (recurrent expenditure grants) and infrastructure
(capital expenditure grants).
From 1 January 1995, the funding arrangements under the
State Grants (TAFE Assistance) Act 1989 were replaced by
funding arrangements under the Vocational Education and
Training Funding Act 1992. Under the new arrangements, a
single pool of funds comprising the previously separate recurrent
expenditure grants and capital expenditure grants is passed to the
Australian National Training Authority (ANTA) for allocation among
the States and Territories.
The Australian National Training Authority Act 1992
gave effect to an agreement (the Agreement), announced by the then
Prime Minister on 21 July 1992, between Commonwealth, States and
Territories for the establishment of ANTA. The objectives of the
Agreement include:
- the establishment of a national vocational education and
training system;
- closer interaction between industry and vocational education
and training providers;
- an effective training market; and
- improved cross-sectoral links.
The key elements of the Agreement, the text of which is set out
in the Australia National Training Authority Act 1992,
relate to the roles and responsibilities of ANTA, the Ministerial
Council and funding arrangements.
The functions of ANTA include allocating and remitting funding
to State and Territory training agencies on the basis of guidelines
determined by the Ministerial Council, and administering any
programs, agreed by the Ministerial Council as requiring national
delivery, within the guidelines approved by the Ministerial
Council.
Budget Measures
| Program |
4.3.0 Vocational Education and Training |
| Outlays |
1996-97 ESTIMATE $1363.4 million
1997-98 ESTIMATE $1354.8 million |
|
|
EFFECT OF MEASURE ON BUDGET OUTLAYS
$MILLION |
| Measure |
1997-98 |
1998-99 |
1999-2000 |
2000-2001 |
Benchmarking Vocational
Education and Training |
-10.0 |
-20.3 |
-20.7 |
-21.0 |
In 1996-97 an efficiency dividend on Commonwealth own-purpose
outlays resulted in a 5% reduction of funding provided to ANTA. In
1997-98 the Commonwealth will reduce annual funding to the States
and Territories appropriated under the Vocational Education and
Training Funding Act 1992, to provide "an incentive to the
States and Territories to achieve efficiency gains in vocational
education and training operations."(1) The reduction, which takes
effect from 1 January 1998 and is anticipated to be carried into
subsequent years, is estimated to be $20 million in the 1998
calendar year.
Comments
The reduction aims "to provide an incentive to the States and
Territories to achieve efficiency gains in their VET operations by,
for example, benchmarking their activities against the most cost
effective States."(2) Procedures for applying the reductions on the
basis of a State or Territory's record in meeting relevant
efficiency benchmarks are to be negotiated with the States.
At their meeting on 23 May 1997, State, Territory and
Commonwealth Ministers agreed that, "in negotiating VET plans for
1998, ANTA would agree bilaterally with each State and Territory
its activity levels for 1998 having regard to that
State/Territory's scope to achieve efficiency gains and the
agreements reached at MINCO regarding priorities."(3)
In a further development the Minister for Vocational Education
and Training, Dr David Kemp announced guaranteed funding of $4.5
billion in the next five years "conditional on the States and
Territories increasing TAFE places and improving the quality of
training through more effective use of funds."(4) Drawing on
analysis by ANTA which indicates that with better targetting of
$300 million a year in existing TAFE funding an extra 100,000
student places could be created, the Minister is requiring that
500,000 more places be created in the next five years.Renewal of
the five-year ANTA agreement is due to be considered later this
year.
h3 Efficiency Indicators and Negotiated Priorities
While details about the conditions of the Commonwealth's offer
are unavailable, reports on statements by the Minister suggest that
new places, better targetting, improved standards and greater
responsiveness to industry are likely to be criteria to be
considered during the funding negotiations.
Other measures of benchmarked or relative efficiencies may also
be utilised during the negotiations.Recurrent costs per curriculum
hour are identified as the main efficiency information available
regarding VET in the Report on Government Service
Provision of the Steering Committee for the Review of
Government Service Provision.While the report documents unit costs
ranging from $8.30 in Victoria to $20.30 in the NT, it points out
that these are problematic insofar as they have not been adjusted
for factors such as population densities, provision to
disadvantaged groups and remote locations.(5)
Institutional, lobby group and media reaction to Budget
measures
The Victorian Minister Mr Honeywood, is reported to have said
that Victoria did not agree to the conditions under which the
Federal Government proposed to continue its normal funding. He has
also questioned whether the requirement for 'up to 40 per cent'
more TAFE places with no additional Commonwealth funding, aimed to
'dismantle the TAFE system'.(6)
A spokesperson for the NSW training Minister John Aquilina was
reported as surprised by the offer given the announcement of the
Budget cut in May. He suggested that it was the Budget being
'repackaged'.(7) In the same article, Campus Review
reports that senior VET sources view that the States' failure to
respond to the Commonwealth's offer could result in a redirection
of funds from the TAFE system to private providers.(8)
The effect of item 1 of the Schedule is to
amend the amounts payable to ANTA under section 9 of the
Vocational Education and Training Funding Act 1992 in the
following manner:
- increasing the amount payable for 1997 from $869.779 million to
$887.717 million;
- decreasing the amount payable for 1998 from $872.154 million to
$869.039 million; and
- setting the amount payable for 1999 at $869.039 million.
Section 9A of the Vocational Education and Training Funding
Act 1992 provides for payments to ANTA for additional trainees
under the Australian Traineeship System (ATS) and Career Start
Traineeships (CSTs). Item 2 of the Schedule
provides funding of $21.546 million for 1999.
- Vocational Education and Training Funding Amendment Bill 1997,
Second Reading Speech.
- Budget Measures 1997-98, Budget Paper No. 2, p. 40.
- Department of Employment, Education, Training and Youth
Affairs.
- Minister for Vocational Education and Training, Media Release,
June 8 1997 K28/97.
- Report on Government Service Provision, Steering Committee for
the review of Commonwealth/State Service Provision, p.142.
- Training Ministers angered by TAFE plan, The Age, 13 June
1997.
- Kemp's funding offer stirs the States, Campus Review, 11-17
June 1997.
- ibid.
Ian Ireland and Carol Kempner
28 July 1997
Bills Digest Service
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This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.
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the public.
ISSN 1328-8091
Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library,
1997.
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Last updated: 12 August 1997
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