TAFE: impact of under-funding and competition

TAFE SA has always punched well above its own weight, but should it have to carry such a heavy financial burden?

leaf cutter ants

The following figures were produced for the Productivity Commission in 2014 and show exactly how much the expectations on TAFE SA are out of step with other states.

TAFE: impact of under-funding and competition 2014

Percentage of public funding allocated contestable:
SA      74.44%
WA     29.68%
NT      18.25%
QLD    27.60%
NSW   20.83%
ACT    22.42%
VIC     71.31%
TAS    33.81%

Percentage reduction of public funding from 2003 to 2012:
SA      45.43%
WA     20.59%
NT      19.52%
QLD    17.98%
NSW   22.44%
ACT     5.69%
VIC      26.21%
TAS     22.93%

I can’t start to imagine the logic for such significant differences, can you?

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Is TAFE SA half pregnant?

By Dr Ruth Schubert
Program Director – Vocational Education and Training
LH Martin Institute – For Tertiary Leadership and Management

When the Victorian VET system was progressively overhauled commencing in July 2009, to become an open market with the implementation of the Victorian Training Guarantee, this was keenly observed by those in South Australia, where changes had been mooted for some time. The SA Government had signed up for the National Agreement for Skills and Workforce development which meant that additional funds would be available under the condition of developing an open market. So when one of the key architects of the Victorian model; Chris Eccles was employed as the Chief Executive in the Department of Premier and Cabinet it was expected that a version of the Victorian model would be adopted in South Australia. The development phase culminated in the launching of Skills for All, on the 1st July 2012.

A complication for the Department of Further Education, Employment, Science and Technology Structure (DFEEST) meant that the Government (and DFEEST) was effectively the owner, funder, purchaser and provider of vocational education and training. A key part of the Skills for All reform was to establish TAFE SA as a Statutory Authority, a Government owned business at arm’s length from the Government Department. Yet while the move was ostensibly to enable TAFE SA to operate commercially in this new market, the Government repeatedly stated a central role in the State for the public provider.   The Statutory Authority came into being on the 1st November 2012, a high profile Chair and board was appointed, and while this board remains in place it has little real independence. The legislation to establish this board has some key flaws. While the Chair and CE meet regularly with the Minister, the financial performance and accountability for TAFE SA has been within DFEEST, the Minister for TAFE SA has been the Minister for DFEEST, staff retained all the conditions of public sector employment, TAFE SA doesn’t “own” the physical infrastructure, and the TAFE SA CE is not even a formal member of the Board. Even with the newly formed Department of State Development (incorporating the old DFEEST) this will still operate as a big brother, so this critical reform has achieved little.

Skills for All, was to be the platform for developing a new market in Vocational Education and Training.   The rapid expansion of training was lauded by the SA Government as a great success with the Premier and Minister celebrating the 100,000 extra training places achieved in just over a year, three years ahead of schedule. However, is that really a great result or classic political spin? For if the target was overachieved surely the budget for Skills for All was also severely overextended blowing the forward estimates out of the water. The result being that instead of a market with uncapped places, with those specially selected “quality” providers able to complete for business, we now have the public provider being severely capped and with the number of hours” allowed” being progressively and significantly reduced, and small private RTOS are struggling to maintain a viable business. The subsidy price for training has been slashed and the courses on the Funded Training List (FTL) being so reduced , that some students are having to pay full fee for service, which means that access to training for many is already beyond their means. A young trainee in beauty, who earns on very best calculations approximately $26,000 gross per year (and many are on less), is now having to pay over $15,000 for a Certificate 4 in Beauty Therapy at TAFE SA.   Of course they may get this a bit cheaper elsewhere, but what private RTO has the kind of coverage that TAFE SA can provide, and other research indicates that TAFE SA is not always the most expensive, and is surprisingly “middle of the road” in terms of some fees.

I could be generous and say that any new initiative has its teething problems, but these changes are hardly at the “minor adjustments” end of the scale. Just one example of this is the changes that have been made to the agreements to be a Skills for All provider, an agreement that can be changed with a mere 30 days’ notice, and overwhelming at the will of one party.   To the extent that in the past 20 months the agreement, courses on the Funded Training List, and the subsidy prices have been changed 8 times. How can TAFE SA, let alone a small provider run a profitable business with such draconian commercial practice? This kind of knee jerk reaction is all about trying to control the major and uncontrolled increases in volume, when the budget was and always is finite, and indeed it would appear that funds committed by the Government were actually wound back, causing the then DFEEST considerable consternation.   It also demonstrates a lack of understanding about just how commercially focussed TAFE SA been for some time, and given the opportunity TAFE SA grew by over 20% in the first year of Skills for All operation. This was unexpected by those within Government circles.   Many private providers also demonstrated “creativity and flair” in driving their business profits growing by over 100%, again the Government officials were not prepared for the hard-nosed entrepreneurial world of commercial business. Growth exacerbated by seemingly endless regulation but with little effective accountability.

One of the stated drivers for this change was about increasing the volume of training and skills, and for engaging the “under engaged” i.e. unemployed, underemployed and low skilled in the study pathway, and achieving value for money.  Has that been achieved, yes in part, but at what cost? The budget was expended in the first year way beyond what was expected. High volumes of training were achieved in many areas but not always in employment demand areas. The quality of training has suffered a considerable set back, and TAFE SA the so-called cornerstone of the system is being progressively hollowed out with significant reductions in personnel, losing the very staff that are highly experienced and well qualified, who have ensured a quality training system over many years.

This of course comes to the central problem with this initiative what is the Government trying to achieve? Surely, the role of Government is to ensure that the citizens of the country have the support to develop to their fullest capacity, which in turn grows the society and economy. A quality education system is the bedrock of any developed or developing nation. Vocational education and training is a key part of that system.  A cursory glance overseas will see the importance, other countries place on a comprehensive tertiary sector, and TAFE has long been recognised as one of the best systems in the world.

So, what role does the State and Federal Government want TAFE to play? Successive Governments, SA included have wanted “a market” for education, and undoubtedly competition can be a useful way of honing any system. At present the messages for TAFE SA are very mixed. I am confident that TAFE SA can compete, and compete very effectively, but the current situation is really like being half pregnant, not one thing or the other.   If TAFE SA was truly free to be a commercial entity, then it wouldn’t be the backbone of the State’s VET system, but it would be a highly effective and quality provider. It would have as much business offshore as onshore (earning much needed export revenue), and the State Government would have to pay fair recompense for community service obligations and market failure that would inevitably emerge especially in regional locations. This indecision and lack of long term vision is damaging the reputation of TAFE SA, and the opportunity for TAFE SA to be a National and International provider.

The reality is that when Governments open up a service to develop a market, typically budgets are over extended, dubious practice emerges, and quality drops. Yet the solution is within the control of the Government and Regulators, and that is to license a select and limited group of providers, with a fundamental requirement that Lecturers are independently registered with either a degree or postgraduate qualification in education, and the appropriate industry qualification and experience.   After all is the person who teaches your son or daughter to be a diesel mechanic, become a registered nurse, run a small business , or be a head chef, no less critical that when your child was in year 8 doing English? Surely, if the degree is the minimum in schools, and a Masters the bare minimum in Universities, we are short-changing our business sector to require anything less.

The SA Government has it within their power to change the policy settings around Skills for All. This is not an “open market” but the Government managing contracted services, where TAFE SA is one of a select group of licensed providers, providers who compete for contracts with realistic timeframes, and where all providers are held accountable for the quality of both their inputs as well as the outputs. If this happens we would have the birth of a new TAFE SA, in a genuine managed market, where quality, access, and innovation can flourish, which is after all nothing less than we need and deserve.

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Stirring the pot

Help us stir the pot!

TAFE SA is like a traditional fruit cake. The ingredients are rich and varied, but without the base ingredients in the correct proportions to bind the mixture it will be a flop.

TAFE SA can produce a fantastic product with the right ingredients and correct proportions. Are we still clear on what the recipe needs to be for TAFE SA’s success?

The TAFE SA recipe has been adjusted and watered down over so many years now, that we need to go back to the original successful recipe and compare it to the current one, before we waste the whole cake mixture.

Let’s not just throw it out without a genuine attempt to restore it to a prize winning product. Tell us what you think should be done.

Stirring the pot

Stirring the pot

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Now for the long term

The Oxford Martin Commission for Future Generations, convened by the Oxford Martin School at the University of Oxford, has gathered 19 international leaders from government, business, academia, media and civil society to address the growing short-term preoccupations of modern politics and business and identify ways of overcoming today’s gridlock in key international negotiations. Chaired by Pascal Lamy, the former Director-General of the World Trade Organization, the Oxford Martin Commission’s report, Now for the Long Term, is the product of a year-long process and debate on the successes and failures in addressing global challenges over recent decades. The report calls for a radical shake-up in politics and business to embed long-term thinking, and provides practical recommendations for action in order to create a more resilient, inclusive and sustainable future. Read more>

Although dealing with the ‘big picture’ on a global scale, there’s a lot of information in this report that is relevant to challenges facing educational institutions, in particular the importance of strategic thinking and setting long term goals rather than responding to current short term crises.

The following excerpt is taken from page 24 of the report:

Future jobs

Globalisation and automation are changing the workforce. Many manufacturing activities, along with other key supply chain activities, have moved to emerging economies. Labour-saving technologies are rendering an increasing number of jobs obsolete. Recent figures in the United States point to substantial structural shifts in the workforce, and reveal that large numbers of clerical jobs have been displaced by new technologies. Technological innovation has driven down demand for low and medium skill labour. Demand for employees to reskill quickly to keep pace with technological change continues to rise. Technology and structural shifts do not necessarily mean there will be fewer jobs in the future, but adapting to the new environment and generating future jobs is a challenge.

The tech-boom has fuelled new employment opportunities in creative and innovative sectors, including computer network support roles, system architecture and web development. Technology also democratises education and training by allowing many individuals to learn online and fast-track employment opportunities.

How should TAFE SA address these issues in a sustainable and meaningful way?

Download Now for the long term to read the full report.



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TAFE: How a good idea got buggered up

The following article is based on a speech delivered by Kim Bannikoff at the Australian Education Union’s Federal Conference in February 2013. We hope it promotes some further discussion amongst your colleagues.


Stop TAFE Cuts

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We can do it!

Let’s roll up our sleeves and tell it how it is.

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We can do it - Rosie the Riveter

Rosie the Riveter

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