The Australian Greens dispute the assertion that because other jurisdictions have also cut funding to vocational education and training (VET) providers, then the cuts made by the South Australian Government should be treated as a data point in a trend, rather than as an event worthy of examination in and of itself. In TAFE SA we see a clear link between cause and effect. We see in stark detail both the cuts and their consequences. It is a warning sign to the rest of the country, and it is worth heeding.
For the Australian Labor Party to seek to deny, then frustrate, then filibuster and finally dismiss a an inquiry into one body’s poor performance is to put selfish political interests above the needs of students, teachers, employers and the state of South Australia itself.
The Australian Government provides funding to states and territories to support the provision of training systems. Nonetheless, VET remains a responsibility of the state and territory governments, both in its implementation and its funding. TAFE SA is owned by the South Australian Government.
Both the South Australian State Labor Government and the Federal Coalition Government have failed to adequately support the vocational education and training sector to such an extent that would have avoided the outcome we have witnessed with TAFE SA.
To be clear, fault is found at all levels of government. Since the 2008 decision by the Rudd Labor Government to make all public VET funding open to competition between public and private providers, the number of registered training providers has ballooned from around 400 in 1995 to 4300 in 2015. The majority of these providers are private.
The Turnbull Coalition Government has doubled down on this line, compounding a foundational error and accelerating the decline on show in South Australia and elsewhere.
The experience of TAFE SA and similar experiences in other jurisdictions has revealed that, contrary to policy intention, the increase in competition in the VET system has not led to an increase in quality. There remains substantial ‘information asymmetry’ between providers and students, so that competition remains elusive.
The current model assumes that consumers are in a position to make an informed choice between providers. This is not the case. As such, competition is not possible and what we have instead is an imperfect market mimicking a perfect one. This fiction has been persistent in part as it offers politically convenient justification for funding reductions from governments of all persuasions: competition should, subject to certain conditions being met, push outcomes higher and push prices lower.
In the absence of genuine competition, shrinking the pool of funding does not promote greater competition between bidders – it simply means less funding. The sector lost one-sixth of its revenue in 2016, courtesy of cuts from both state governments and from the Commonwealth.
In the meantime, the poorly-devised ‘market design’ reforms have stretched budgets for public providers to such an extent that, by some estimates, more than 15 000 TAFE teachers have lost their jobs in the last five years. This includes 17 per cent of TAFE SA’s workforce.
Students are also being shed. The number of apprentices and trainees in training across South Australia as of 30 June 2017 was down eight per cent from the year before. Amongst those, students receiving government funding in South Australia dropped 17. 9 per cent from 2015-16, bucking a nation-wide increase.
The dramatic negative impact of funding cuts to the system cannot be overstated. Funding growth in the VET sector is much lower than in other sectors of the education system. It is falling in real terms; it is clear that this contributes, if not causes, outcomes such as those witnessed in TAFE SA.
The changes made in 2008 were not made in a vacuum. Rather, it was a poorly-designed and poorly-implemented response to an ongoing and persistent problem in the system itself. Specifically, the VET system’s role in the labour market is muddled and unclear.
It is being told to be all things to all people, and being funded to provide less to any. There appears to be unanimous agreement that the labour market requires a robust and highly-functioning VET sector, and there appears to be unanimous agreement that we are lacking in one.
Recommendation 1
The Australian Greens recommend that a comprehensive review be initiated into the role of the VET sector in the Australian labour market.
The review should examine how public funding can better aid the provision of vocational education and training, and how effective the contestability reforms have been in assisting the sector.
Finally, the review should examine whether the VET system is being adequately funded to deliver what is required of it, and whether there is scope to improve the means through funding is distributed between public and private operators.
Senator Sarah Hanson-Young