3.1
As set out in Chapter 2 of this report, the committee considers this inquiry to be a politically motivated exercise orchestrated by the Coalition Government. The committee does not view the current TAFE SA situation as an isolated incident; rather it considers the situation to be symptomatic of deeper issues afflicting the TAFE sector as well as the broader vocational education and training (VET) sector.
3.2
Numerous submitters to the inquiry echoed this stance, pointing out that the problems arising with TAFE SA were consistent with a flawed system.
3.3
For example, Professor John Buchanan, Chair of Business Analytics at the University of Sydney Business School observed that what was happening in South Australia was 'symptomatic of deeper problems':
TAFE has been attacked in policy since the eighties. What you're seeing in South Australia is the ultimate endpoint. Where you attack TAFE for three decades, it will crack. It has cracked, clearly, in South Australia, and it's manifest for all to see. That has got to be stopped. TAFE is a rare asset. Australia's vocational education system used to be the envy of the English‑speaking world. We've done a very good job of trashing a great asset.
3.4
Professor John Quiggin, an Australian Laureate Fellow at the University of Queensland, who submitted in a private capacity, argued that Australian vocational education in general was in a 'state of crisis'. He observed:
The problems that have recently emerged in the SA TAFE system are merely symptoms of a decade of policy failure by state and Commonwealth governments of both parties, involving cuts to funding and ideologically driven projects of marketization.
3.5
When asked for his thoughts on the rate of non-compliance found by ASQA in its TAFE SA audit, Professor Quiggin responded by flagging the broader issues at play:
I think compliance and non-compliance is really a second-order issue here. I don't think the whole system configuration under which ASQA is operating is fit for purpose. I would be looking not at things like compliance and non-compliance. I would look at aggregate outcomes, participation of vocational education, completions and independent assessments of the quality of the training rather than this compliance based focus which, as ASQA has mentioned, says everything is going swimmingly except possibly in a few isolated spots.
3.6
Academic expert Dr Gavin Moodie reiterated the view that TAFE SA was not an isolated incident, commenting that there have been 'substantial systemic failures' in VET across all Australian jurisdictions.
3.7
During the inquiry, three elements were identified by submitters as contributing to the systemic problems of the VET sector. These elements were:
a failure to regulate for-profit providers; and
a fragmented approach to policy.
3.8
This chapter will now briefly examine each of these elements in turn.
Sustained funding cuts
3.9
The committee received evidence from a number of submitters about the detrimental impacts of significant, sustained funding cuts to the VET sector.
3.10
Professor Quiggin drew the committee's attention to 2017 data from the Mitchell Institute that illustrated how VET sector funding had been cut drastically since 2011-12, and was now barely above 2005-2006 levels in real terms (see Figure 3.1). These figures are particularly stark when compared with relative funding levels for school education and higher education.
3.11
Professor Quiggin explained that:
This cut has occurred despite an increase in the size of the population, including the 18–24 [year old] cohort. Moreover, since education is a labour-intensive activity, the real cost has risen over time. The implication is that relative to the number of potential students, resources have declined.
3.12
Dr Moodie also emphasised that all jurisdictions had undergone funding cuts for VET since 2006.
3.13
The Australian Industry Group (Ai Group) stated that decreases in VET funding over numerous years had contributed to problems in the sector. It pointed out that an analysis of VET funding arrangements indicated that the level and composition of funding was not keeping pace with industry needs, and that the VET sector was struggling to maintain quality outcomes in the context of reduced funding.
3.14
Additionally, the Australian Education Union (AEU) emphasised that there was a 'funding crisis' in the Australian TAFE sector and that it was the 'worst funded' of all the education sectors.
3.15
Professor Quiggin concluded that the impact of funding trends on the public TAFE sector had been particularly severe, not only due to decreased funding for the sector as a whole, but because the provision of VET had been opened to competition from for‑profit providers.
Failure to regulate for-profit providers
3.16
Another factor identified by submitters that contributes to the ongoing problems in the VET sector is the failure to properly regulate and control for-profit providers.
3.17
Ai Group argued that all stakeholders must recognise that significant problems in VET were not confined to the South Australian jurisdiction, but rather were part of a 'systemic problem'. It noted that all jurisdictions had experienced quality problems in recent years, and submitted that this was due to the introduction of a competitive training market and associated policies, in particular when such policies were not closely linked to industry needs:
This approach has been based on the twin pillars of funding contestability and student entitlement. This leads to excessive enrolments in some industry areas with little regard for employment prospects. This has been an unfortunate development in the overall positive direction of movement away from a supply-driven training system. Ai Group has consistently supported a balance between the individual demand-driven model and the needs of industry and the economy. It is unwise to leave the provision of training for the needs of industry and the broader economy to market forces alone.
3.18
Dr Phillip Toner, Honorary Senior Research Fellow at the University of Sydney, noted that some private providers had acted opportunistically by diminishing the quality and quantity of training, thereby cutting costs and increasing profits. As an example, Dr Toner cited a 2016 Department of Education and Training review of the student loan scheme VET FEE-HELP that attributed student confusion around the scheme to the 'scale and breadth of unethical practices' undertaken by certain private providers to attract and enrol students.
3.19
Professor Quiggin also informed the committee of problems arising due to for-profit providers:
…most of the leading large-scale providers have been exposed as essentially fraudulent operations, exploiting government subsidies and leaving students with worthless qualifications. However, the pressure to respond to market competition has also had damaging effects within the TAFE sector. The problems reported in SA are consistent with this analysis.
3.20
He contended that for-profit education had 'almost invariably' failed to deliver good educational outcomes, in particular when for-profit providers have access to public funding.
3.21
In arguing that deep problems inherent in the design of the current VET system had become manifest in recent years, Professor Buchanan listed the financial scandals with private providers operating in a publicly funded 'training market' as a major contributing factor.
3.22
Professor Buchanan explained that while historically VET had been delivered by a network of geographically dispersed, publicly funded TAFEs, more recent funding reforms had delivered government support for private providers as part of a push to create a publicly funded 'training market'. For example, over a five year period in Victoria, the private sector shifted from being a marginal to major element of the VET system. Figure 3.2 demonstrates that in Victoria, the number of private providers more than doubled from 201 to 428 between 2008 to 2012-14.
3.23
Professor Buchanan explained that according to the data, student numbers increased five-fold and market share of private, for-profit providers increased from 10 to 40 per cent. He noted that such changes were associated with 'huge personal gains' to the owners of the companies involved.
Policy fragmentation
3.24
Submitters highlighted the problems that policy fragmentation had caused to the VET sector.
3.25
Dr Moodie informed the committee that Australian VET policy had suffered by being fragmented between Commonwealth, state and territory governments. On this matter, and in regard to the value of this particular inquiry, he stated:
This Senate review of TAFE SA perpetuates and exacerbates this fragmentation of vocational education and training policy, as if the South Australian Government's policy and funding of vocational education and training were unrelated to its funding agreements with the Australian Government, vocational education student loans, standards, quality assurance and related issues.
3.26
Dr Moodie also advised that there was policy fragmentation across a number of other fronts in the VET sector, including:
inputs (i.e. funding levels, government grants, student loans, student fees, curriculum);
processes (i.e. pedagogy, course duration); and
outputs (i.e. standards, quality, assessment).
3.27
AEU also highlighted the problems with the fragmented policy approach to VET:
The vocational education sector has lurched from crisis to crisis because each example of failure of government policy has been dealt with in isolation, rather than in the context of policy overall.
3.28
To combat this fragmentation, the AEU called for a comprehensive review of the TAFE system involving state, territory and Commonwealth governments, in order to consider broader issues such as funding, financing, curriculum, pedagogy, assessment, standards, and quality assurance. It added:
The problems currently being experienced by TAFE SA are symptomatic of a crisis in the Australian TAFE system. These problems cannot be addressed or solved by continuing the ad hoc approach to policy.
3.29
Professor Buchanan agreed that a fundamental review of the current VET framework was needed in order to deal with the systemic problems and prevent the sector from being irrevocably discredited.
Committee view
3.30
As outlined in Chapter 2 of this report, the committee views this inquiry as a political attack on the South Australian Government, orchestrated by the federal Coalition. The terms of reference put forward by the Coalition completely ignore the systemic issues that are impacting not only the South Australian TAFE sector but also the broader VET system across the nation.
3.31
In line with submitters to the inquiry, the committee considers the current concerns about TAFE SA to be symptomatic of the systemic issues hampering the VET sector. Furthermore, it believes that a comprehensive review of the sector is required to ensure that Australians are able to equitably access effective, relevant and high quality vocation education and training.
3.32
The committee recommends that the Government establish a comprehensive review of Australia's entire VET sector with a view to achieving adequate and sustainable ongoing funding levels, appropriate controls on private providers and a coherent and supportive policy framework.
Senator Gavin Marshall
Chair