Report - Consideration of the Provisions of the Vocational Education and Training Funding Amendment Bill 2000
Members of the Committee
| Chair |
DeputyChair |
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Senator John Tierney (LP) NSW
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Senator Kim Carr (ALP) VIC
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| |
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| Members |
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Senator
George Brandis (LP) QLD
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Senator
Jacinta Collins* (ALP) VIC
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Senator
Jeannie Ferris (LP) SA
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Natasha Stott Despoja (AD) SA
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| Substitute members |
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| *Senator Trish Crossin (ALP) NT to substitute for Senator Jacinta Collins for the Vocational Education and Training Funding Amendment Bill 2000. |
| Senator Andrew Murray (AD) WA to substitute for Senator Natasha Stott Despoja (AD) SA for matters relating to Workplace Relations and Small Business. |
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| Participating members |
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Senator
Eric Abetz (LP) TAS
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Senator
Brian Gibson (LP) TAS
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Senator
Lyn
Allison (AD) VIC
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Senator
Brian Harradine (IND) TAS
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Senator
Ron
Boswell (NPA) QLD
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Senator
John Hogg (ALP) QLD
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Senator
Bob
Brown (AG) TAS
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Senator
Steve Hutchins (ALP) NSW
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Senator Paul Calvert (LP) TAS
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Senator
Susan Knowles (LP) WA
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Senator
George Campbell (ALP) NSW
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Senator
Philip Lightfoot (LP) WA
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Senator
Grant Chapman (LP) SA
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Senator
Joseph Ludwig (ALP) QLD
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Senator
Helen Coonan (LP) NSW
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Senator
Kate Lundy (ALP) ACT
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Senator
Barney Cooney (ALP) VIC
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Senator
Sue
Mackay (ALP) TAS
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Senator
Winston Crane (LP) WA
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Senator
Brett Mason (LP) QLD
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Senator
Trish Crossin (ALP) NT
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Senator
Julian McGauran (NPA) VIC
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Senator
Rosemary Crowley (ALP) SA
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Senator
Kerry O’Brien (ALP) TAS
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Senator
Alan Eggleston (LP) WA
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Senator
Marise Payne (LP) NSW
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Senator
John Faulkner (ALP) NSW
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Senator
Chris Schacht (ALP) SA
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Senator
Allan Ferguson (LP) SA
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Senator
John Watson (LP) TAS
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Senator
Brenda Gibbs (ALP) QLD
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| Secretariat |
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John Carter
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Geoff Dawson
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Helen Winslade
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Address
S1.61
Parliament
House
CANBERRA ACT 2600 |
Phone (02)
6277 3520
Fax (02)
6277 5706
E-mail eet.sen@aph.gov.au
Website: www.aph.gov.au/senate/committee/eet_ctte |
Report
The bill
1.1
The Vocational Education and Training Funding
Act 1992 appropriates Commonwealth money to support the states’ and
territories’ vocational education and training (VET) systems. The money is
appropriated to the Australian National Training Authority (ANTA). ANTA
distributes it to the states and territories, primarily on a population share
basis, in accordance with the decisions of the ANTA Ministerial Council.
1.2
The Vocational Education and Training Funding
Amendment Bill 2000 amends the amount currently appropriated for 2000 from
$918.352 million to $931.415 million. This is in line with real prices
movements reflected in Treasury indices. The bill also appropriates the same
amount for 2001. This gives effect to the Commonwealth’s commitment in the
1998-2000 ANTA Agreement to maintain funding in real terms to the end of 2000.
It also reflects the Commonwealth’s proposal, under an amended ANTA Agreement,
to give the same amount in 2001.[1]
1.3
The bill was introduced into the House of
Representatives on 21 June 2000,
debated on 15 and 16 August, and passed by the House on 16 August.[2] The Senate referred the bill to
this Committee on 30 August 2000, on the recommendation of the Selection of Bills Committee. The
Selection of Bills Committee noted as issues for consideration: ‘This bill
provides interim funding for one year only and thus the long term future and
direction of the Australian National Training Authority Agreement are in
question. Issues: future of the ANTA Agreement; demand in VET/TAFE and need for
growth funding (which is not provided for in the bill).’[3]
1.4
The Committee advertised the inquiry on 9 September 2000 and received only seven
submissions (see APPENDIX 1). This is probably explained by the fact that the
issues involved have been well canvassed during the current inquiry into
vocational education and training by the Senate Employment, Workplace
Relations, Small Business and Education References Committee. Most of the
parties who made submissions to the present inquiry also made submissions or
gave evidence at hearings of the References Committee’s inquiry earlier in
2000. In view of this the Committee decided not to hold a hearing.
Background
1.5
Publicly funded Vocational Education and
Training is a State responsibility. The Commonwealth started contributing to
VET costs with Commonwealth funding for TAFE in 1974. The Commonwealth
contribution, as a proportion of total public VET funding, has generally
increased since then. This increasing Commonwealth proportion plateaued in
1998: at that time, in the second ANTA Agreement (1998-2000), the Commonwealth
committed to maintain its funding in real terms (without offering to increase
it), while the states agreed to fund growth through efficiencies.[4]
1.6
The $931 million at issue in the present bill is
general VET funding support to the states and territories, mostly allocated on
a population share basis.[5]
As well, the Commonwealth provides other significant support for VET:
- Funding of New Apprenticeship employer incentives: estimated at
$369 million in 2000-2001.
- Funding of New Apprenticeship Centres to support and encourage
New Apprenticeships: $63 million in 2000-2001.
- Several other programs supporting aspects of New Apprenticeships:
$41.6 million in 2000-2001.[6]
- Funding to ANTA for national programs: $42.7 million in
2000-2001. National programs support Group Training Schemes, Training Package
development, equity and innovation projects, and industry training advisory
bodies (ITABs).
- Funding of ANTA’s operating costs: $10.8 million in 2000-2001.
- Funding of the Australian Student Traineeship Foundation to
support VET in schools: $20.6 million in 2000-2001.[7]
1.7
These items, together with the general VET
funding, total $1.479 billion ($931 million plus $548 million) in 2000-2001.
1.8
When expenditure on literacy and numeracy are
added, total Commonwealth commitment of VET funding rises to $1.7 billion in
2000-2001. The Department of Employment, Training and Youth Affairs (DETYA)
estimates that the states and territories will spend about $2.3 billion on VET
in 2000.[8]
Growth through efficiencies
1.9
The original 1992 ANTA Agreement between the
states and the Commonwealth provided increased funding for the VET sector.
Funding had two components: a set level base funding and per capita
growth-based funding. The period 1991 to 1996 heralded a considerable increase
in Commonwealth funding to VET. The Commonwealth provided an additional $100m
in TAFE recurrent funding in the One Nation Economic Statement of
November 1991 and agreed to provide growth funds on a continuing basis of $70m
annually. Growth funds were provided in the 1993-95 triennium and continued by
the Coalition government in 1996 and 1997. At the time of the 1996 Review of
the first ANTA Agreement, the Commonwealth was contributing 28 percent of
recurrent funding compared to 17 percent in 1991.
1.10
Under the 1998-2000 ANTA Agreement growth
funding was discontinued and states and territories were required to achieve
‘growth through efficiencies’ in return for Commonwealth funding being
maintained (but not increased) in real terms. The means of calculating
efficiencies are in an Agreed Framework for Growth Derived from Efficiencies
endorsed by the ANTA Ministerial Council in November 1997. The Agreed
Framework establishes growth as the principal objective and establishes the
activity measures of actual annual hours curriculum (AHC) and student
enrolments a the basis for assessing planned growth. Changes in planned unit
costs are the basis for measuring planned improvements in efficiency. An
increase in efficiency is either an increase in outputs for the same level of
inputs, or a reduction in the inputs required to produce a given level of
outputs.
1.11
The states and territories have improved or will
improve efficiency by about 6.9 per cent in 2000 over the 1997 level, on
average, although performance is uneven across the states and territories. In
2000, states and territories are collectively planning to deliver cumulative
growth of 20.9 million adjusted annual hours curriculum (equating to
approximately 160,000 additional student places) above the revised planned 1997
level, the agreed base for assessing growth.[9]
Issues raised in
submissions
1.12
The main claim raised in submissions was that
‘growth through efficiencies’ has run its course, and that no further economies
are possible without reducing the quality of training. For example, the South
Australian Vocational Education, Employment and Training Board pointed to the
significant economies that South Australia has made: from 1998 to 1999 training
delivery increased from 21.6 million hours to 24.5 million hours, while costs
were reduced by 13 per cent by means such as rationalising programs, expanding
contestable funding, and lowering per head overhead costs. In the Board’s view
‘the growth through efficiency policy pursued in the current ANTA Agreement
1998 to 2000 is not sustainable...’
...There are no further efficiencies to be gained if quality is
to be maintained... Now that efficiency has been effectively addressed, it is
time to make a shift in emphasis to other elements of the system - including
the quality and consistency of Training Packages.[10]
1.13
Similarly, the New South Wales Department of
Education and Training described the efficiencies it has achieved, and argued
that the growth through efficiencies policy ‘has placed pressure on the
vocational education and training system.’ It argued that the capped
Commonwealth general VET funding represents a loss to the states and
territories of $420 million since 1998, compared with what they would have
received under the previous growth funding policy. It noted that an April 2000
report for the ANTA Chief Executive Officers estimates a growth in demand for
VET of somewhere up to 5.7 per cent per year to 2005.[11]
Without additional resources for vocational education and
training the Australian economy and the skills base of the workforce will
suffer. This increase in demand cannot continue to be met through State-based
efficiencies without significant cuts to quality, staffing and teaching
resources. The only other way to deal with the increase in demand is to turn
young people away from training, creating unacceptable waiting lists and
damaging the economic development of Australia.[12]
1.14
It should be noted that the April 2000 report on
future growth is stated to be a ‘draft’, and its methodology and assumptions
are debated. DETYA, quoted in the report, suggests a growth rate of up to 2.8
per cent per year. The report was mentioned at a hearing of this Committee on
budget estimates on 31 May 2000. At that time ANTA commented: ‘...there is clearly a view from
ANTA that there will be some level of increased demand [but] it is not a
precise science.’[13]
DETYA stressed that an estimate of future demand does not necessarily lead to a
clear conclusion about future funding needs:
In relation to that figure
of $26-odd million [an estimate of the cost of a 1 per cent increase in
participation in publicly funded VET], I think it is important to say that it
is no more than a fairly crude division of the total amount of money spent on
VET by 100. It does not really go to, for example, what particular areas you
would expect to see growth in in the future and whether they are comparatively
more expensive or less expensive
than the average. I would not put a huge amount of store on it.[14]
1.15
The government
advises that work is continuing in this area.[15]
1.16
To return to the evidence of this inquiry: the
Australian Education Union argued that the Commonwealth contribution to VET
operating revenue fell from $947.2 million in 1997 to $828.2 million in 1999.
‘As a percentage of total VET operating expenditure, the Commonwealth
contribution has declined from 25 per cent in 1997 to 22.1 per cent in 1999.’[16] However, it should be noted
that these figures do not account for the significant Commonwealth
contributions to VET other than through general operating grants, as noted in
paragraph 1.6 - in particular, the Commonwealth support to New Apprenticeships
through employer incentives and New Apprenticeship Centres. As well, it should
be noted that the NCVER financial data referred to include a range of State
expenditures that are not within the scope of the ANTA Agreement, so they do
not show the proportional contribution of the Commonwealth to VET delivery. In
fact, funds appropriated by the Commonwealth under the Agreement have not
declined over the period.
1.17
TAFE Directors Australia argued that the scope
for further efficiencies is very limited and the continued loss of growth
funding will have a widespread detrimental effect on TAFE operations. ‘The
emphasis on the bottom line and efficiency has resulted in a loss of quality.’[17]
1.18
By contrast, ANTA argues that that growth and
efficiencies achieved during the present ANTA Agreement are a substantial
achievement.[18]
ANTA believes that no
correlation has been shown between the growth through efficiencies policy and
declining quality of training:
There is no lowest state
benchmark in relation to growth through efficiency. If you actually draw some
sort of relationship between the growth in particular jurisdictions and, for
example, the satisfaction expressed by employers, there is quite a neat
relationship between systems such as in WA, South Australia and Queensland and
their growth and increasing employer satisfaction.[19]
The government’s view
1.19
According to the Minister, Dr Kemp, the bill
reflects the Commonwealth’s proposal to the states and territories to maintain
funding in real terms for a further three years, subject to finalising a
satisfactory amended ANTA agreement. The Minister stresses the achievements of
the present ANTA Agreement (1998-2000) in increasing access to VET:
In the three years of the current agreement, 1998 to 2000, there
has been a significant expansion of the vocational education and training
sector. State and territory ministers have estimated that, by the end of this
year, there will be an additional 160,000 training places provided nationally
over the planned 1997 level. In 1999 alone it is estimated that well over 1.5
million Australians participated in formal vocational education and training.
This is a splendid achievement.... I have every confidence that the agreement
for the next three years will maintain this solid underpinning and will build
on the substantial achievements of its predecessor.[20]
1.20
The government generally stresses its commitment
to maintaining the quality of publicly-funded VET:
The [Commonwealth Minister’s] proposal [under an amended ANTA
Agreement] also involves enhanced accountability arrangements for achieving the
outcomes of agreed reforms. The focus of the proposed new arrangements would be
on quality assurance and flexibility in training delivery. The recently
established National Training Quality Council would be responsible for
monitoring and reporting on the implementation of the National Training
Framework and it is expected that it would assist the ANTA Board in reporting
to the Ministerial Council on the performance of States and Territories. The
proposal for an amended ANTA Agreement would replace the current ‘growth
through efficiencies’ requirement with a broad commitment to ongoing efficiency
improvement.[21]
1.21
The ‘National Training Quality Council’ referred
to was agreed by the ANTA Ministerial Council on 30 June 2000. It will be able
to provide independent advice to ANTA on registration and auditing of VET
providers. The Commonwealth Minister for Education, Dr Kemp, describes it as
‘an independent “Quality Council” to produce a report card on the quality
assurance arrangements that are put in place by the States and Territories.’[22]
Conclusion
1.22
The ‘growth through efficiencies’ policy of the
1998-2000 ANTA Agreement has undoubtedly been successful. As noted in paragraph
1.11, the states and territories have or will improve efficiency by about 6.9
per cent in 2000 over the 1997 level, on average. The value for money which
taxpayers are receiving for their public VET expenditure has improved
significantly.
1.23
At the same time, the Commonwealth has shown its
commitment to maintaining the quality of publicly funded VET by the initiatives
taken at the 30 June ANTA Ministerial Council meeting in relation to the
National Training Quality Council.
1.24
What further efficiencies are possible, and how
much future growth should be expected, are matters now under discussion between
the Commonwealth and the States in context of negotiating the next ANTA
Agreement. The present bill does not pre-empt these negotiations. It simply
maintains the status quo, in accordance with the Commonwealth’s previous
promises, to give funding certainty to the states and territories. As DETYA
commented:
The point that the minister
made at the open part of the session [ANTA meeting 30 June 2000] ....was that
the Commonwealth was offering an assurance of real-terms funding for the three
years ahead. The states now know that they have got that, and that gives a
remarkable degree of planning assurance. I think the minister posed the
question: how many state treasuries would offer a similar assurance in terms of
three years ahead?[23]
Recommendation
The Committee recommends that the bill should be passed.
Senator John Tierney
Chair
Minority report by Labor Senators
Summary
1.25
The Vocational
Education and Training Funding Amendment Bill 2000 leaves a gaping hole in
funding for vocational education and training (VET). It maintains the
Commonwealth’s policy of slow starvation for the national VET system. It
ignores the need to fund growth in the VET system - growth which the
Commonwealth itself predicts and is encouraging. It seems to assume that future
growth can be funded by ‘efficiencies’ - which has all too often become a
euphemism for cost-cutting - in the same way as it has been over the last three
years - although, not surprisingly, the minister’s second reading speech makes
no clear statement on this point.
1.26
In view of the
scale of the need, this hope is totally unrealistic. Growth through
efficiencies has run its course: future growth will need serious increases in
funding. The Commonwealth must accept its share of the duty of funding growth
in the national VET system. The Commonwealth must abandon its current freeze
on general VET funding and reinstate its share of growth funding. This
Government has both reduced the base funding for vocational education and
training in real terms, and withdrawn from the former Government's commitment
to fund $70 million per annum for growth.
1.27
The underlying issue is that if Australia wants
to become a highly skilled nation, it will have to increase its expenditure on
vocational education and training. There are no quick fixes.
1.28
The national vocational education and training
reform agenda, which has been pursued through the ANTA framework, has
traditionally been seen as a joint Commonwealth-State project. Under Dr Kemp's
administration, the relationship has instead been characterised by a top-down
approach driven by the Commonwealth. The vocational education system is
showing increasing signs of stress as a result of these new policy directions.
Concerns about growing skill shortages and declining quality of training
delivery and assessment are widespread.
The effects of
freezing VET funding
1.29
The bill provides
Commonwealth general funding support for state and territory VET authorities.
It increases funding for 2000 and 2001 from $918 million each year, as
previously enacted, to $931 million. This simply represents the increase of the
Consumer Price Index since the figure of $918 million was enacted.
1.30
In real terms the
bill freezes Commonwealth general funding support for VET at the 1998 level for
the fourth year in a row. The 1998 figure was itself the outcome of cuts in
previous budgets.
1.31
Yet during this
time participation in VET has grown strongly. In 1999
nearly 1.8 million people participated in publicly funded VET - an increase of about 7.3 per cent
since 1998, and an increase of 374,000 (29.4 per cent) since 1995.[24]
1.32
The result of
capped funding at a time of growing participation has been predictable. Unit
costs have been forced down. For cash-strapped state training authorities, the
cheapest tender price becomes the dominant consideration. The quality of
training has fallen, as the Schofield Reports in Queensland, Tasmania and
Victoria have shown. The rate of non-completion of apprenticeships and
traineeships has increased alarmingly.
Predictions of
future growth
1.33
These serious problems
have been abundantly documented in the evidence of the current Senate ERWSBE
References Committee inquiry into the VET system. The Commonwealth has yet to
develop a serious policy response to these issues. The growth in demand for
VET, above and beyond normal population growth, is predicted to continue. The
reasons for this include the greater demand for VET prompted by the extension
of recognised, structured, entry-level training to areas where previous there
was little or none; the growing need for upskilling during this period of rapid
technological change; and increasing labour mobility.
1.34
The government’s
own estimate, in an April 2000 report to the Chief Executive Officers of the
Australian National Training Authority, suggests growth of 2.8 per cent a year
until 2005.[25]
Other estimates in the same report range up to 5.7 per cent a year, depending
on how the various factors are weighted. Even the
lowest figure implies a very significant increase in public VET costs. For
example, using 2.8 per cent per year growth, and an approximate figure of
$26.64 million for each per cent of increase (as suggested in the report),
suggests a cost about $500 million greater in the fifth year than in the base
year. This is a 14 per cent increase on the planned public VET expenditure of
$3.6 billion in 2000.[26]
1.35
In fact most state training authorities support
a growth rate in the high range. This is a reasonable and prudent approach
given the predicted takeup of Training Packages, ANTA’s current Marketing
Strategy to increase the profile of VET, and the Commonwealth’s own efforts to
promote New Apprenticeships. A growth rate in the high range would suggest a
funding requirement of up to $1 billion more in the fifth year than in the base
year.
1.36
This bill ignores
the obvious need to fund this growth.
The limits of
‘growth through efficiencies’
1.37
The growth of the
last few years was funded by what the Coalition government cynically called
‘growth through efficiencies’: the Commonwealth refused to take its share of
funding growth, but instead demanded that the states should accommodate growing
numbers of VET students through efficiency gains. In response the states have
reduced unit costs. No doubt some of the efficiencies have been worthwhile. But
there is strong evidence in the current Senate References Committee VET inquiry
that, overall, funding cuts are reducing the quality of training. Many submissions were concerned that ‘efficiencies’ have been gained
at the expense of reduced service quality, particularly in the TAFE system. Both Labor and non-Labor state
governments gave convincing evidence that ‘growth through efficiencies’ has run
its course, and little more is possible. The states have cut the fat, and are
now into the bone.
1.38
For example, the Victorian Office of Post Compulsory
Education and Training mentioned Australia’s poor performance in OECD
comparisons of the qualifications profile of its population, and argued that
the Commonwealth must take some responsibility for funding an increase in
participation.[27]
In the last few years
Victoria has been able to achieve very significant growth in apprenticeships
and traineeships, but it has been at the expense of some of these [quality]
issues that Schofield has talked about.... we cannot have quality and growth in
a national system without additional resources. From our point of view we have
no interest in nationally consistent mediocrity.[28]
1.39
The New South
Wales government said that ‘the flawed approach of “growth through
efficiencies’ has focused attention on reducing costs rather than achieving
quality and equity.’[29]
The Commonwealth principle
of ‘growth through efficiencies under the present ANTA Agreement has had a
negative impact upon the national vocational education and training system....
The key indicator of success under the policy is the reduction in unit costs.
Other measures, such as quality, ease and cost of access, or participation by
disadvantaged groups, are not considered by the Commonwealth to be relevant.[30]
1.40
Dr Wood (South
Australian government) said that the rate of efficiency gain in South Australia
has slowed down: ‘The curve is starting to flatten out.’[31] The
Western Australian government said: ‘there is a limit to the efficiencies that
can be made without affecting the quality of training. There is some evidence
that this limit is approaching.’[32]
Many other submissions felt strongly that lower unit
costs have been detrimental to quality, and growth through efficiencies must be
abandoned.
1.41
Even ANTA -
usually quick to support the Commonwealth government’s line - admitted:
All States and Territories consider that if growth in New
Apprenticeships were to continue at current rates, current funding arrangements
would be unsustainable and they would expect to have difficulties resourcing
future demand for New Apprenticeships.[33]
1.42
What makes this situation particularly
aggravating for the states is that most of the growth in demand for VET is
caused by growth in apprenticeships and traineeships. This growth has been
promoted aggressively by the Commonwealth through New Apprenticeship Centres
and employer incentives. However the states are still obliged to fund the
apprentice or trainee’s training. As long as the states continue to treat new
entrant New Apprentice training as an entitlement, the Commonwealth-promoted
growth in New Apprenticeships calls on their VET budget outside their control,
and effectively forces them to divert resources from the public TAFE system. As
the Victorian government said:
States and Territories are committed to fund all apprentices and
trainees who are attracted to the system by Commonwealth initiatives. Where
the Commonwealth succeeds in increasing numbers, the impacts on State and
Territory budgets can be significant... If demand for apprenticeships and
traineeships continues to grow, State and Commonwealth governments will need to
reconsider the appropriate level of funding for TAFE to ensure that other
priorities continue to be met.[34]
1.43
The Tasmanian
government argued similarly that pressures on State budgets were largely caused
by Commonwealth policies promoting New Apprenticeships:
Traineeship demand has been stimulated by Commonwealth policy
directions, and further stimulated by national marketing of New
Apprenticeships. Demand cannot be met within existing resources.[35]
1.44
Submissions to
this inquiry confirm the evidence of the other inquiry. The New South Wales Department of Education and Training argued
that ‘without additional resources for vocational education and training the
Australian economy and the skills base of the workforce will suffer....
...This increase in demand cannot continue to be met through
State-based efficiencies without significant cuts to quality, staffing and
teaching resources.[36]
1.45
TAFE Directors Australia argued that the scope
for further efficiencies is very limited and the continued loss of growth
funding will have a widespread detrimental effect on TAFE operations. ‘The
emphasis on the bottom line and efficiency has resulted in a loss of quality.’[37] The South Australian
Vocational Education, Employment and Training Board argued that further growth
through efficiencies is not sustainable:
There are no further efficiencies to be gained if quality is to
be maintained... Now that efficiency has been effectively addressed, it is time
to make a shift in emphasis to other elements of the system - including the
quality and consistency of Training Packages.[38]
1.46
The message from the states is loud and clear:
growth through efficiency policies have been pursued at the expense of quality.
Dr Kemp refuses to hear the message.
The Commonwealth’s approach to ANTA negotiations
1.47
Labor senators regret the authoritarian and
unco-operative approach to Commonwealth-State VET planning taken by Minister
Kemp. We have mentioned the problems created for the states by the way the
Commonwealth has promoted New Apprenticeships aggressively without regard to
state priorities or the impact on state budgets. As the Victorian government
said:
[There is a need for] improvements to Commonwealth-State
cooperation.... An area requiring particular attention is the impact of
Commonwealth attempts to increase apprentice and trainee numbers, where these
are not targeted to priority areas or backed up by additional funding for
training.... It is vital that Commonwealth initiatives are targeted to areas of
national priority, and their impact discussed with States and Territories
before implementation.[39]
1.48
Dr Kemp ambushed
the June ANTA Ministerial Council meeting in a bid to pre-empt the Senate
References Committee Inquiry into the quality of vocational education. He imposed
a rebranding of the National Training Framework Committee as the National
Training Quality Council. This bill has to be seen in the context of the
current impasse in negotiations with the States over the new ANTA Agreement.
1.49
Ms Sussex
(Victorian government) said that the states had put forward an alternative to
the Commonwealth offer, but this was ‘rejected out of hand’:
The states put forward a
proposition as an alternative to the Commonwealth offer which had been made on
budget night. That new proposition encompassed a commitment to a national
system of high quality, a new agreement which related to a forward view—not
based on agreement to agreement negotiations but a truly national system—but
underpinned by additional resourcing, the dimension of which was subject to
negotiation. That proposed agreement was rejected out of hand by the
Commonwealth.[40]
1.50
Mr Noonan
(Queensland government) said:
There is a range of
scenarios in that paper [April 2000 ANTA paper on future growth], all of which
point to the need for growth in vocational education and training over the next
few years. I think what then has to happen is that there has to be a sensible
negotiation about how that level of growth might be accommodated.[41]
1.51
This bill does not contribute to sensible inter-governmental
negotiation. Obviously this bill needs to be brought forward to provide an
appropriation for next year. The underlying issue is that the matter is being
considered far too late. Commonwealth VET funding should be budgeted on a
rolling triennium, in a similar way to higher education funding. Negotiations
should relate to a year far enough out so that the negotiations can actually be
completed sensibly, on good information, without being pre-empted by the
deadline for next year’s appropriation. Year by year funding gives no security
for planning and confirms the status of VET as the cinderella of the education
system.
Recommendation
Commonwealth VET funding should be budgeted on a rolling
triennium.
Conclusion
1.52
There is every reason to suppose that demand for
VET will continue to grow, for reasons including the needs of the higher
skilled economy; the growing tendency for career change and the need to improve
skill formation amongst the workforce.
1.53
Labor Senators believe it is unreasonable to
expect that the predicted growth can be accommodated by further efficiencies
without a real increase in funding. The fact that the states have achieved
significant efficiencies over the last three years does not mean that they can
continue to do so - logically it ought to mean the opposite, as ‘the curve
starts to flatten out’, as it was put.[42]. The states themselves (supported by submissions from TAFE
managers) gave convincing evidence that ‘growth through efficiencies’ has run
its course, and little more is possible.
1.54
Supporters of present policies often refer to
positive figures shown in surveys of employers’ satisfaction with VET. However
these are far from a complete measure of quality - not least because the
satisfaction of employers of apprentices and trainees may well be influenced by
the fact that they are receiving Commonwealth incentives. Against these surveys
must be set the serious concerns about declining quality raised in the
References Committee VET inquiry in many submissions from all sides - including
industry groups and some private RTOs.
1.55
This Committee has already considered this
matter once, in its 1997 inquiry into Vocational Education and Training Funding
Amendment Bill 1997 (which put into effect the ‘growth through efficiencies’
policy in the present ANTA Agreement). At that time Labor and Australian
Democrats senators expressed concern about the way the Commonwealth was
imposing this policy without any real knowledge of what a likely or desirable
rate of growth in VET was, and without any knowledge about the ability of the
states to find efficiencies.[43]
1.56
Labor senators regret to have to report that
three years later, even after all the serious concerns raised by all types of
stakeholders in submissions to the current Reference Committee VET inquiry in
the first half of this year, the same thing is happening again. The
Commonwealth proposes to continue its cap on Commonwealth general funding for
VET - without any clear picture of what the future demand for VET will be;
without any knowledge of the states’ ability to find further efficiencies; and
without any knowledge of what the effect of this will be on the quality of VET
outcomes. The Commonwealth is refusing to reinstate urgently-needed growth
funding.
1.57
New Apprenticeships have contributed substantially
to the current growth in demand for publicly funded VET. There was ample
evidence of the pressure that this growth puts on State VET budgets - since, so
far, the States have felt honour bound to give new entrant apprentices and
trainees access to publicly funded training on an entitlement basis.
1.58
The underlying issue is that if Australia wants
to become a highly skilled nation, it will have to increase its expenditure on
vocational education and training.
Recommendation
In light of the strong growth in VET participation
associated with New Apprenticeships promoted by the Commonwealth, resulting
funding pressures on state/territory VET systems, and the limits of ‘growth
through efficiencies’, the Commonwealth should abandon its current policy on
funding and negotiate a new ANTA Agreement with the states that recognises
shared responsibility with the Commonwealth for growth funding.
Recognising the intransigence of Dr Kemp on these issues,
Labor Senators call upon the Senate to support a second reading amendment in
the following terms:
"At the end of the motion, add 'but the Senate,
- notes that:
- the broadest possible access to quality training opportunities is
a vital part of Australia becoming a Knowledge Nation;
- demand for vocational education and training is likely to
increase by at least 2.8% a year over the next four years; and
- condemns the
Government for:
- failing to provide any funding to support this growth;
- failing to negotiate a fair and reasonable new ANTA Agreement
with the States and Territories; and
- pursuing policies which damage the quality of training and put at
risk the nation's skills base." '
|
Senator
Kim Carr
Labor
Senator for Victoria
|
Senator
Trish Crossin
Labor
Senator for the Northern Territory
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Australian Democrats' Comments
Senator Stott Despoja
- The Australian Democrats endorse the body of evidence
presented in the Minority Report of Labor Senators, and endorse the following
recommendation of that Report:
In light of the strong growth in
the VET participation associated by New Apprenticeships promoted by the
Commonwealth, resulting funding pressures on State/Territory VET systems, and
the limits of ‘growth through efficiencies’, the Commonwealth should abandon
its current policy on funding and negotiate a new ANTA Agreement with the
States that recognises shared responsibility with the Commonwealth for growth
funding.
- The Australian Democrats will move the following second
reading amendment:
That the Senate:
- Notes that:
- If Australia is to develop and maintain the new
skills to become competitive in the emerging global knowledge economy, it must
have a well-resourced education, training and research base;
- The growth through efficiencies policy implemented by
the Federal Government has reduced the capacity of vocational education and
training system to meet Australia’s current and future training needs; and
- Calls on the Government to increase funding to the
vocational education and training system to redress the deficiencies it has
allowed to develop.
Senator Natasha Stott Despoja
12 October 2000
Appendix 1: Submissions
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SUBMISSION FROM
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No.
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Ms Carol O’Donnell, GLEBE, NSW
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1
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Department of Education, Training and Youth Affairs, CANBERRA ACT
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2
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SA Vocational Education, Employment and Training Board (VEET), ADELAIDE,
SA
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3
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NSW Department of Education and Training, SYDNEY, NSW
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4
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Mr Edward McCartin, MOUNT PLEASANT, NSW
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5
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Australian Education Union (AEU), SOUTH MELBOURNE, VIC
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6
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TAFE Directors Australia, DEAKIN WEST, ACT
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7
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