Representing quality private education
providers in Australia

The solution to Productivity Growth

Monday, February 29 2016

Happy Leap Year!

Yes, today is that one in every 4 year event, an extra day of the year.

I doubt I will get the opportunity to write a leap year message to you again on the actual 29th – it is not always a Monday. An extra day so that must increase productivity – right?

This week I will start with Higher Education.

Higher Education plays a critical role in preparing Australians for the future economy. Apart from some commentary about covert reading of University emails, the sector has remained largely controversy free.

Reform though remains important, particularly designing a more equitable system than currently exists, by offering Commonwealth Supported Places to the Non-University sector.

Additionally, international education is of paramount importance. On that note the second Australia Week in China (AWIC) is being held across multiple cities during 11-15 April 2016.

Led by the new Minister for Trade and Investment, AWIC 2016 will attract a high level of Federal and State ministerial participation. These events are really something to behold and will include one of Australia’s largest business delegations to China. 

AWIC 2016 includes trade, investment, education and tourism promotion events designed to highlight commercial opportunities underpinned by the rise of an affluent middle class and the China Australia Free Trade Agreement (ChAFTA).

Nine sector-specific programs will be held in cities including Hong Kong, Beijing, Chengdu, Hangzhou, Shenyang, Shenzhen, Guangzhou and Hohhot (Inner Mongolia) before all delegates come together in Shanghai. The AWIC 2016 program will feature trade and investment seminars, roundtables, site visits, product showcases and opportunities for networking with Chinese business, industry and government.

For our sector, perhaps the key focus will be on the listing of Non-University Higher Education Providers on the China JSJ list. This is very important and the waiting game for this has been a challenge to our patience. AWIC 2016 provides an ideal environment to discuss the opportunities, participate in industry-specific networking events and enhance existing or create new relationships with Chinese businesses. This all represents a very ideal opportunity to show case just what our quality members can and do produce.

The other focus will of course be on China as Australia’s largest international student source market. While China itself is developing into a strong international education provider, there continues to be strong growth in the number of Chinese students seeking an overseas education.

So what can we expect of the week? The Education program will highlight education trends in China, the Chinese Government’s development priorities and in-market opportunities. That all sounds relevant.

Delegates will gain insights into new education marketing strategies driven by growth in online education, largely due to changing attitudes toward education delivery as well as very high connectivity rates nationally in Tier Two, Three and Four cities.

My point – get involved as it will be an ideal opportunity to work together.

Well there remains much conjecture about how the future VET sector might be designed. Who will run it and how?

There are a range of reform agendas across some States and in VET FEE HELP. Some are jumping on the bandwagon that any allocation of funding to private providers is a sign of the end of TAFE. Some also argue for a return to the halcyon days when only TAFE received government funding.

For those of that were there, they were far from ideal days in terms of quality, student choice and innovation.

So what might more objective design principles be for what should be Australia’s preeminent educational program?

We must support the fundamentals of VFH - it has improved access to VET, particularly for those who might otherwise be unable to access training.  In an environment where State and Territory VET funding is declining in real terms, VFH plays an important role in responding to the needs of students and industry.

The experience of VFH, however, demonstrates a stronger stewardship role by the Government is fundamental to any reforms proposed for 2017.  The failure to perform this stewardship role has underpinned the failings of VFH and the raft of measures that have been introduced in response.

While acknowledging that student choice (and of course student protection) is a key design feature of VFH, the reality is that student decisions are very much guided by the Government’s program guidelines in relation to provider participation, priorities and pricing. 

Put simply, the Government needs to adopt a program stewardship role along the lines outlined in the Harper Competition Review.  This does not mean measures that seek to micro-manage the delivery of training (and duplicate or add to existing regulatory arrangements) but a prudent approach to program design and implementation.

Any redesign should build on some core program design elements:

  • Government being more discriminating in its choice of contracted providers.  Government should contract (and renew contracts with) providers that have a sound track record of achievement in meeting the needs of students and industry.  Many of the problems with VFH involved the contracting of providers without a strong (or any in some cases any) substantive record of achievement in relation to student outcomes.  A significant number of the recent VFH reforms that add to the administrative burden for Government and providers would be unnecessary if a more prudent approach to contracting providers was adopted. As noted above, delivery of training via external modes has increased some 57% over the four years to 2014 with poor overall student outcomes.  While ACPET acknowledges the increased flexibility and innovation that can accompany external delivery, greater scrutiny of providers focusing on this mode of delivery, in particular, should feature in a more discriminating provider contracting process.
  • Establishing priorities for the program. While students clearly have a role in determining their needs, there is a role to signal economic priorities to help guide any choice. However, while governments across the country have invested significantly in mechanisms to identify and respond to the skill needs of business and industry, the fact remains that the majority of VET students do not go on to work in their industry of study. They do though rate the importance of their training regardless. Therefore, the quality of the qualification is the paramount issue rather than government picking winners in choosing available qualifications. Do we really think bureaucrats are better placed to choose the right course than a well informed student?
  • To address the price insensitivity that has underpinned some of the adverse practices by some providers and their agents, there must be a far more transparent mechanism to provide students with more information about providers, their pricing, and qualification and other outcomes. If better information was made available for students, including comparisons across the market, it would in effect establish price benchmarks linked to skill priorities and other factors.  Simplistic price comparisons between TAFE and private providers is not adequate, as TAFE’s infrastructure costs are met by government.
  • Extreme care should be taken in any consideration of prescriptive, narrow price settings at the qualification level. Such settings would not support the flexibility, innovation and choice necessary to respond to the diverse needs of students and industry. The benefits that arise from price contestability would also be reduced.
  • A greater focus on student academic achievement, progression and outcomes. The very poor completion rates from VFH means there needs to be a greater focus on student academic achievement.  Continued enrolment in the face of poor academic achievement and progression serves neither the interests of students who may be ill-equipped to undertake their course or the broader priority of building workforce skills.  Student academic achievement and progression needs to be an explicit part of the greater scrutiny of provider performance that was highlighted in the Government’s reform package. A risk management approach that targets high risk providers, qualifications and student cohorts should be adopted, with external assessment used to confirm outcomes in high risk areas.

While the very bad end of provider performance deserves the mandating of compliance measures, these approaches also punish quality providers and limit innovation and responsiveness, a stronger risk-management approach is therefore warranted. 

Any VFH reforms must also be accompanied by further consideration of the RTO Standards to ensure that ASQA has the tools to regulate the market (including VFH providers) effectively. Changes to governance requirements and introducing the monitoring of outcomes, that would assist a stronger risk management approach, would add value to the program and sector.

Rod Camm


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