Representing quality private education
providers in Australia

I must say I am struggling to even remember Easter

Monday, April 13 2015

I am sure we all had a good break.

I am incredibly impressed by our private higher education providers. Despite the rejection of a way forward by the Senate and therefore the continuing injustice for our students, our colleges have done what they do best. They have just kept supporting and delivering high quality

I take my hat off to you.

Nothing, not even the political minefield we now have has distracted you from your main aim – educating students.

In terms of VET, well not much has changed there either.

Yes we have fantastic colleges’ delivering high quality support to students and great outcomes.

However, we also have a more negative side that the media is shining the spotlight on.

I must ask myself at times like these, is the VET sector actually broken, or does the private sector play a legitimate role?

Let’s go to the data:

  • Private tertiary education injects $5.8 billion per year to the national economy, employ almost 100,000 people and educate 1.4 million students.
  • 1670 of the 4500 private RTOs received government funding in 2013 and enrolled 28% of students.
  • In a sign quality does exist, private providers are the preferred choice for international students, attracting 109,700 overseas visa students studying onshore in 2013. As we often hear bad news reported out of Victoria, here is a fun fact - private VET providers have achieved an 85 per cent market share of international student enrolments in Victoria. Australian Education International Year to Date Data, (December 2014) reveals that Victorian TAFEs achieved 6,887 international student enrolments in 2014 compared to 37,452 enrolments in private institutions
  • VET completion rates are 35.8 percent, yet 87% of graduates and 84% of module completers satisfied
  • 77% of graduates were employed after undertaking training and 80% of those undertaking training for employment related reasons were employed after training
  • In the broader VET sector (government and full fee for service activities) private VET providers are consistently the most preferred supplier of nationally recognised training with 45 per cent of employers choosing them as their main provider.  By contrast only 17 per cent of employers used TAFE as their main provider of nationally recognised training.

So it would not appear to be broken.
What about elsewhere?

  • Under the 2012 National Agreement on Skills and Workforce Development, states and territories essentially agreed to introduce a student entitlement (a subsidised training place) up to a Certificate III qualification at any private or public provider that meets criteria to access funding. These criteria are set by states and territories to reflect local needs.
  • As a consequence there are eight different funding models, with a myriad of funding levels and criteria that reflect not only ‘local’ skill priorities but also differing commitments to VET and contestability. 
  • Under this indefensible model, VET budgets are stagnating or in decline, along with student numbers.  NCVER data indicates that publicly funded student enrolments in 2013 fell by 3.9 %.  Over the same period, as the Commonwealth increased its VET expenditure by $374.5 million, states and territories decreased their expenditure by $344.4 million.

The problem starts to become clearer (Don’t worry I will return to the provider issue)

  • States and Territories cutting of funding is of course reflected in the growth of VET FEE-HELP.  Loans approved have grown significantly in recent years - $117.6 million in 2010, $699 million in 2013 and around $1.5 billion in 2014.
  • This growth should be seen as a genuine commitment (and thank goodness) by the Commonwealth to grow Australia’s human capital.
  • However, the rapid growth has been accompanied by some unscrupulous behaviour on the part of a few providers (and their brokers/agents) to attract enrolments, particularly amongst vulnerable client groups.
  • The Australian Government is now responding with changes to the program – but once again the Commonwealth, and the Industry is being forced to bear the cost of the regulatory ‘heavy lifting’ brought about, in part, by state and territory failure to properly resource VET.
  • ACPET will play a part in establishing the highest quality benchmarks for education and by removing poor providers from our membership. But what should others do?
  • The push for competition is a necessary part of economic development. However, it must be done properly. Poor design of any market strategy will produce what it is designed to do – poor results.

The recent Harper review provides some governments some salutary lessons about their role:

  • support independent regulators to police service providers
  • encourage private sector delivery
  • remove poor performers
  • ensure quality information, and
  • let funding follow the choice of the people.

And I will add design the market to produce quality results.

On that note, in Victoria the Government is conducting a Review to inquire into and report on how to improve the quality, stability and sustainability of the Victorian training market, by recommending alternative VET funding models and settings.

The ‘Harper’ principles above are certainly an ideal future framework.

ACPET has made a submission to this important review.

ACPET supports a diverse and competitive sector to drive quality and innovation. The role of TAFE as a public service provider needs to be made clear and, ideally, aspects of its operation should be funded outside of the contestable market. Re-creating a government funded monopoly ignores the considerable progress the sector has made since the introduction of contestability.

TAFE has an important role to play, but this role needs to be shaped by student choice.

A copy of our submission can be found here.

Rod Camm


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