Representing quality private education
providers in Australia

A message from the Chair

Monday, February 8 2016

Hello and Happy New Year.

2016 again finds us working in a sector that is both confusing and uncertain.

Yes of course VET FEE HELP (VFH) remains the topic of the day. It is certainly pleasing that the government’s changes are making a difference, as is the action of regulators. Unfortunately the most recent changes were too broad affecting the good with the bad which is a familiar story in this industry. It did take too long and has hurt our industry, but we must look forward.

ACPET is pushing hard to make sense of the changes rushed through before Christmas. We have met with the Minister with more discussions to come. We will keep members informed.

I am pleased that the Board met with Victorian members on Thursday night and it gave us the opportunity to discuss VFH, the Victorian Funding Review and other issues impacting on the sector. Thank you to those who attended. It was also an opportunity to host Neil Coulson, the Victorian Skills Commissioner. Members were very eager to discuss the road ahead with Neil.

Our CEO also announced the appointment of Demmi Paris as the new Victorian Executive Officer replacing Martin Powell who has taken on a new and exiting role of CEO for the VET Development Centre. Demmi has fantastic Experience and I have no doubt will add tremendous value in our engagement with both members and government. Welcome Demmi.

On a different note, the Productivity Comission has a released a report on the VET sector, which presents an opportunity to consider the state of the government funding in 2014. $5.2 B was spent by governments in 2014. A significant amount and an increase in real terms of 4% since 2004. Peter Noonan has already well established that this is very poor growth compared to both Higher Education (unfortunately excluding Non-University Higher Education Providers) and Schools.

A startling fact is that there has been a decrease of 11.9% on 2013. Yes, in an economy where Australia must be able to distinguish itself based on our population’s skills, a decline of 11.9% makes no sense.

Of course much has been said about the growth in contestability.

$2.4 B was allocated on a competitive basis in 2014. Perhaps the important element is that students chose non-TAFE providers to the value of $1.5 B, and chose TAFE to the value of $0.9B. The other $3.8B was expended on the public system.

Competitive funding has increased by 222% since 2005 so yes it is growing , but what are the outcomes?

Introducing private provision to a public system must be done with a deliberate purpose and effective controls. TAFE’s have a very important role to play in the skilling of Australians and we at ACPET fully recognise that. However, Government can’t achieve real skills outcomes without a quality (yes quality) private sector.

I already hear some detractors wailing that we should go back in time and only fund TAFE. That simply can’t happen otherwise the pendulum swings from one extreme to the other. Effective, outcome based controls will find the right balance.

Put simply, while expenditure has only grown 4.1% in real terms,  AHCs (training delivery hours) have increased by 51.8%.  That means real government expenditure per AHC has decreased by 31.5% over the decade. How does it go – you get what you pay for!

What are some other key facts:

  • Completion rates sit at 34% for those commencing in 2013 – down 2% on 2012  but up on 2009 (32.1%).
  • Subject load pass rates are 83.1%. Let's not forget many come to VET to achieve skills and not a qualification so this KPI remains important. That is what VET is about – students getting what they want.
  • Student Satisfaction rate of 87.6%

So a summary - Government funding, particularly at the State and Territory level is not keeping up. That also explains the States and Territories shifting costs to the Commonwealth through VFH.

Competition therefore has a critical role in driving efficiencies. This means the Government’s role in both market design, effective and timely controls and monitoring are critical.

Satisfaction rates are high, meaning competition has not ruined VET.

Yes there have been real problems in VFH leading with the exploitation of vulnerable people. All educators remain outraged at this.  However, this does not mean competition has failed. The VFH program accounted for 243,000 students of the total VET activity in Australia (3.9M students) in 2014. A total of 224 providers have VFH registration out of 4500+.  The VFH debacle, which it is, must be kept in perspective in overall training delivery.

Onwards to an interesting year.

Mel Koumides
National Chair


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