The 2017 Federal Budget provided little new funding for vocational education and training, with its main focus the Skilling Australians Fund. This Fund appears to only exacerbate the uncertain future of the VET sector with its narrow student application, dependence on revenue generation and outcomes focus.
In the lead-up to the 2017 Federal Budget there was considerable publicity about funding for schools via a revamped Gonski proposal and the rising cost of student loans in the university sector, but very little about vocational education and training (VET). Given that two National Partnership Agreements covering funding between the Commonwealth and the states, were due to expire in June 2017, this was perplexing. Given the very volatile nature of the VET sector over the last couple of years, this was of concern.
And then came the Federal Budget and there was again very little focus by the Government on VET except for a diversion of funding from the now finalised National Partnership Agreement on Skills Reform to a new Skilling Australians Fund. The Assistant Minister for Vocational Education and Skills, Karen Andrews, stated in her Post-Budget breakfast briefing that “the Skilling Australians Fund commits $1.5 billion over four years – a funding increase equivalent of about $70 million compared to the previous National Partnership Agreement”, which provided $1.75 billion to the states and territories over five years.
This funding, she said, ‘was on top of the Government’s yearly commitment of $1.2 billion to support Commonwealth Skills programs and the additional $1.5 billion per annum of Australian Government funding already provided to state and territory governments for their VET sectors each year’. This is still a small amount compared to the funding allocated for the other education sectors. Funding for schooling and higher education has increased over the last ten years, whilst funding for VET in the 2014-15 year was 4% lower than it was ten years earlier, according to the Mitchell Institute.
The Assistant Minister refers to the Skilling Australians Fund, as a “new approach to Commonwealth support for state and territory training systems”. It is certainly a new approach in that it is very difficult to work out exactly what it is going to fund and how it will do it. There is an initial allocation in the Federal Budget of $15.3m but only $1.9m in the Forward estimate, as the ongoing fund is dependent on revenue generation. Businesses sponsoring migrants under new temporary skill shortage visas and certain permanent skilled visa holders will have to pay a levy, and this revenue will be used to provide the ongoing funding for the Skilling Australians Fund. There appears to be no consideration of the consequences of this uncertain funding model and whether the Federal Government will pick up any shortfall.
There are a number of other elements to this new funding model. The first is that it is focused on apprenticeships and traineeships, with the aim of creating up to 300,000 apprenticeship and traineeship places over four years. This focus is, according to the Government, in response to the fall in apprenticeship and traineeship numbers since 2012. Yet interestingly the Parliamentary Library suggests that “declining numbers of commencements could be driven by changes to incentive payments made in mid‑2012; the decline in demand for skills associated with a softening labour market, and the uncapping of university placements”. None of these issues appear to be addressed through the new Skilling Australians Fund. It is interesting also that the major falls have occurred in non‑trade occupation traineeships. Non‑trade occupations for trainees include farm managers, sales workers, clerical and administrative workers, community and personal service workers and drivers and machine operators. Yet the priority industries referred to by the Assistant Minister in her post-budget address were: “tourism, hospitality, health and ageing, engineering, manufacturing, building and construction, agriculture and digital technologies”, many of these industries employing apprentices in traditional trades.
A further element of uncertainty around this new fund, is that it will only support state and territory-led projects that deliver on the aims of the fund. Far from providing greater funding certainty in the VET sector, it appears that this Federal Budget has created another level of uncertainty and competition. The Assistant Minister states that she will be meeting with state and territory officials on 2 June to commence negotiations around projects to be funded through this new Fund. One has to hope that there will not be significant lead-up time to agreement before the funding flows, and that ‘policing’ arrangements will not eat-up significant amounts of the Fund.
But what of the remaining students within the VET sector? Of more than one million government-funded students in Australia’s VET system, over 800,000 are not apprentices and trainees. So the focus on apprentices and trainees through this new Budget measure is only a focus on about a quarter of the VET student cohort. Is the rest of the VET sector to be the responsibility of state and federal governments, bringing to fruition the split that has been suggested by some commentators for some time?
One announcement that was made before the Federal Budget was contained within the higher education reform package, with the demand driven funding system being expanded to include Commonwealth Supported Places (CSPs) in approved sub-bachelor level diploma, advanced diploma and associate degree courses at public universities from 1 January 2018. The impact of this in the VET sector could be considerable, with students choosing to study cheaper diplomas at university rather than TAFE.
What does all of this mean for the VET sector? A further age of uncertainty, competition and change it appears. The VET sector needs a Government that not only commits to the future of the sector as part of its innovation agenda and economic vision, but also recognises the diversity of students and the range of qualifications that are offered through VET. One hopes that these new measures will not result in a loss of options for young people and a further increase in youth unemployment.
Linda Simon has been a teacher in schools, TAFE and now at university. She currently teaches subjects relating to adult education at Charles Sturt University. She was Secretary of the TAFE Teachers Association for over fifteen years, and Federal TAFE President of the Australian Education Union for six years. Currently she is National Convenor for Women in Adult and Vocational Education (WAVE), an Executive member of AVETRA, and an organiser of the TAFE Community Alliance. She has served on the Boards of NCVER and BVET in NSW, and is an educationalist and researcher committed to equity and public education.