Australia’s multi-billion-dollar vocational education and training (VET) sector has come under more criticism, with calls for major changes to overhaul a complicated and underperforming system.
- The Productivity Commission has found substantial scope to reduce waste in the VET system
- Prime Minister Scott Morrison has vowed to overhaul the “clunky” system
- The Australian Education Union federal president has called for TAFE to be central to any reforms
The Productivity Commission found the skills-funding agreement between the Commonwealth and the states was overdue for replacement, saying targets had not been met and government funding could be better spent.
It also suggested students should be able to access loans for a wider range of VET courses.
“We hope the report will provoke a broad discussion of big reform,” Commissioner Jonathan Coppel said.
“There is substantial scope to reduce waste and better target the $6.1 billion in government spending.”
The interim report comes after Prime Minister Scott Morrison flagged an overhaul of the skills sector, which he labelled clunky and unresponsive, as part of Australia’s economic recovery from the coronavirus pandemic.
Subsidies criticised, loans could be expanded
The report was critical of a lack of transparency about how government funding was used, and highlighted large differences in subsidy rates across the states and territories.
For example, standard subsidies for a popular course taken by students wanting to work in the aged care sector could vary by more than $3,500 across the country.
“It is time to think about shifting the focus from funnelling subsidies to training providers to giving students more help to choose the training they need,” Commissioner Malcolm Roberts said.
The Commission said poor design was to blame for rorting under the previous Labor government’s VET FEE-HELP scheme and that expanding student loans, with proper risk management in place, would make training more affordable.
It also called for government incentives encouraging employers to train apprentices to be reassessed, arguing there was little evidence they boosted enrolments.
“These payments offset only a small share of the total costs to employers of taking on a trade apprentice,” it said.
“The Commission estimates that the Australian Government’s employer incentives [which have remained fixed in nominal terms for many years] account for less than 2 per cent of the full costs of hiring, remunerating and training a trade apprentice.”
Findings reinforce government strategy, Minister says
Skills Minister Michaelia Cash welcomed the findings, saying they reinforced the Government’s argument that the National Agreement for Skills and Workforce Development (NASWD) needed to be replaced.
“We need a new funding model to better link funding to actual forward-looking skills needs, based on what businesses need,” she said.
“It needs to simplify the system, reduce distortions and achieve greater consistency between jurisdictions, and between VET and universities.”
The federal president of the Australian Education Union, Correna Haythorpe, said any overhaul of the VET sector needed to include a renewed focus on the TAFE system.
“Right now, TAFE is the only institution ready to meet the challenge of rebuilding Australia’s workforce,” she said.
“TAFE must be the Government’s preferred solution for providing high-quality vocational education, helping people to get back to work and getting the economy moving again.”