Two very different reports have been released this year, both of which could have significant implications for the future of TAFE. First was the Productivity Commission’s delayed final report into the ‘National Agreement for Skills and Workforce Development (NASWD)’ on 21 January. This was followed on 3 February by the ‘Skills for Victoria’s Growing Economy’ report, commissioned by the Victorian government and conducted by former federal government minister Jenny Macklin.
Funding for TAFE is provided by both the state and federal governments. Federally, it is provided to the states through national funding agreements. These agreements don’t only contain a commitment to dollars but also include policy commitments. This point of intersection could prove contentious, as many of the findings of the Productivity Commission’s national report are at odds with recommendations in the Macklin Review. How the Andrews government responds to the Macklin review will have ramifications for TAFE and the broader VET sector, particularly given the impending negotiations for a new national funding agreement. (The current agreement expires in 2022).
The national Productivity Commission report indicates the current funding agreement is not fit for purpose and that a new agreement is needed. It then goes on to argue that the VET system is not in crisis and that the government should continue to support the development of a more efficient and competitive VET market through informed user choice, and a focus on quality through a ‘provider agnostic approach’. The report also criticised state governments offering free TAFE courses, claiming this distorted contestable market conditions!
These conclusions stand in stark contrast to Macklin’s report, which argues that the VET competitive market model too often pits training providers against each other in a race to the bottom, obliging them to deliver training courses that generate short-term profit without long-term benefit for learners or the economy. There is no doubt, as the AEU has been arguing for years, that the contestable funding model – and the behaviour of some private providers rorting the system – has damaged the standing and quality of VET and of TAFE.
The Macklin report proposes a remodelled, more cohesive and collaborative VET system. It also recommends that TAFE be supported and promoted to become the quality benchmark for the entire VET system. It is imperative that the Andrews government recognises the way competition has undermined the system and driven down quality. If it bows to the agenda of the Morrison government, continuing with the failed policies of the past, we will not have the education and training system so vitally needed to support the community and rebuild the economy as we recover from COVID-19.
Central to the Macklin Review recommendations is the creation of Future Skills Victoria, an independent body to ‘act as a champion and steward of the skills system’. This recommendation was the result of many stakeholders, including the AEU, calling for a more collaborative and unified approach to leading the sector. Government would still determine policy, regulation and funding, but Future Skills Victoria would coordinate collaboration on issues such as monitoring skills supply and demand, planning for future needs, understanding and monitoring cost of course provision, commissioning and sharing high-quality curriculum and teacher professional development, and leading collaboration to meet the needs of students and community through expanded skills and jobs centres.
The Macklin report also makes a number of observations and recommendations about funding. One of the immediate recommendations is to ‘develop an understanding of costs, subsidies, process, loadings and concessions to enable the Victorian government to produce a fairer VET funding model.’
The report also recommends:
- the need for a published set of principles that seek to strengthen the quality, efficiency, stability, transparency and equity of funding
- the development of an independent, transparent methodology and process to inform a set of base costs for all publicly funded courses and qualifications
- subsidies be indexed annually, with the actual costs of delivery being reviewed every three years
- the cost differentials between public and private providers, and the unique role of TAFE be recognised.
These and its many other recommendations clearly highlight that the current funding model must be overhauled. The most recent Report of Government Services showed that Victoria’s hourly funding rate for VET was the lowest of any state in 2019 ($14.24, which was $3.43 less than the national average). Between 2018 and 2019, the hourly funding rate actually dropped by $1.48 (9.4%).
The investment in Free TAFE courses has been a clear signal that the Andrews government values TAFE. There is no doubt that this program has brought thousands of people into the system, many from our most disadvantaged groups.
However, the state government cannot be fooled into thinking Free TAFE courses are enough. Both the federal and state governments must increase levels of funding to support the ongoing stability and viability of TAFE – particularly as we recover from COVID-19.