TEU Conference 10 November 2014

Pat Forward AEU

Deputy Federal Secretary Federal TAFE Secretary

The state of TAFE in Australia

Funding to TAFE has been declining for more than 20 years TAFE is the lowest funded of all the education sectors

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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PrimaryGovernmentSchools

SecondaryGovernmentSchools

HigherEducation

Vocationaleducation andtraining

Funding for Education in Australia 1999 – 2011

A 2014 Mitchell Institute Report has found that:

• While spending on schools and universities has risen significantly over the last decade, there has been a much lower rate of growth in VET spending

• Total expenditure grew only 15 per cent for VET over the ten years to 2012-13

• Expenditure per hour of training in VET decreased around 25 per cent in the same period.

What is happening to TAFE in Australia?

• All government funding for vocational education is progressively being opened to private, for-profit colleges

• There has been a massive growth of private for-profit colleges – there are now more than 5,300 RTOs (only 61 TAFE colleges) in Australia

• Government policy is shifting the cost of vocational education onto students

Skills “reform” What is it about?

Governments around Australia are: • spending less on vocational education and training • making students pay more (in some cases all) of the

costs of their education • Giving private for-profit colleges much more money

Skills reforms will privatise TAFE

How do these “reforms” work?

• Funding no longer goes to TAFE • Funding attached to individual students as

an “entitlement” or “voucher” • Individual students can then go to a private

college or TAFE to use their “voucher” • Fewer and fewer qualifications will be

publicly funded – only skills shortages • Funding for the voucher is continuously

reduced and changed

Current situation

• More and more qualifications are getting no public funding (already happening in Queensland and other states)

• Students are having to pay full fees for the qualification

• A provider (RTO) can charge students as much as they want for a qualification – fees are deregulated

• Students must then take out a loan to pay for it (VET FEE HELP)

VET FEE HELP Massive growth in student debt

VET FEE HELP was partially introduced in Victoria in 2008 and fully introduced across the country in 2012 by the Gillard Government.

In 2009 – $25m In 2013 - $709m In 2014 – on track for $1.2b

More than ¾ of VET FEE HELP debt going to private for-profit providers

VET FEE HELP Massive growth in student debt

$0.00

$50,000,000.00

$100,000,000.00

$150,000,000.00

$200,000,000.00

$250,000,000.00

$300,000,000.00

ACT NSW NT QLD SA TAS VIC WA

VET FEE HELP Payments in 2014

Payments to Private Providers

Payments to TAFEs

VET FEE HELP Summary 2009-2014

$0.00

$100,000,000.00

$200,000,000.00

$300,000,000.00

$400,000,000.00

$500,000,000.00

$600,000,000.00

$700,000,000.00

2009 2010 2011 2012 2013 2014

VET FEE HELP Payments

Total Amount to Private Providers

Total Amount to TAFEs

What happened to TAFE in Victoria?

The Victorian Government introduced the Victorian Training Guarantee in 2008:

• Made funds contestable (open to private RTOs)

• Student “entitlement” – (vouchers and loans)

• Removed distinction between TAFE and private

RTOs – TAFE “just another provider”

In Victoria: •A huge growth in private RTO numbers •A huge increase in student fees and charges •A huge shift in the VET “market” •A massive budget “blowout”

Victorian “market share”

In 2008 – TAFE - 75% Private colleges - 14% In 2014 – TAFE - 27% Private colleges - 63%

TAFE in Victoria in 2013 • Eight of the 14 TAFEs and 3 of the 4 Dual-sector

Universities ran at a loss • There was a further $216m reduction in gov’t funding

on top of $400m cut in 2012 • Swinburne University lost 56% of its government

funding, NMIT 47% and GippsTAFE and Advance 45%

• Swinburne lost 27% of its staff, Victoria University 23%

• The dual-sector universities, who once accounted for 40% of TAFE delivery in the metro area now account for only 8% of market share

TAFE in Victoria in 2014 The Victorian Auditor General said:

“There are immediate or short-term financial challenges at five TAFEs,

causing their financial sustainability risk to be rated as high. A further eight

TAFEs were assessed as medium risk, which continues the pattern of

deterioration over the past five years.”

SA “market share”

In 2011 – TAFE - 65% Private colleges - 29% In 2013 – TAFE - 52% Private colleges - 44%

How private VET colleges are making profits

In VET, unlike the schools sector, private colleges are for-profit • There is no minimum amount of time that a qualification has to be taught in • Despite this, RTO’s are still funded on an hourly basis. • This is how “dodgy” private RTO’s have been able to deliver diplomas over a

weekend. They are not required to deliver a set number of hours – only enough hours to enable a student to be competent. But no-one checks properly and there are no mechanisms to check whether a student is competent.

Theoretically, RTOs who deliver qualifications over a

weekend are not doing anything wrong.

Regulatory crisis

•The regulator, the Australian Skills Quality Authority’s (ASQA) 2013-14 Annual report revealed 75% of RTOs are failing to meet training and assessment standards •The current confusion in the regulation system allows for-profit companies to milk the system and pocket millions of taxpayers’ dollars •Lack of regulation and quality control having an adverse effect on students

Vocation – a case study in predatory private for profit providers

Vocation was publicly listed in November 2013 and it began trading on the ASX in December 2013. It was formed from three Victorian companies (Avana, CSIA and BAWM) Between 2011 and 2013, these three companies increased revenue from $9m to $119m 81% of the revenue generated from Vocation comes from Commonwealth and state (Victorian) governments.

Vocation and Victorian TAFE Private “for profit” providers

• Victorian TAFEs reported a $212 million reduction in government funding between 2012 – 2013

• Vocation’s owners made $225 million in profit

when they listed on the stock exchange

Vocation in trouble

• Students were being enrolled in inappropriate courses

• Students enrolled, but not given course materials – “tick and flick”

• Vocation now subject to an ASQA audit • $20m in state government funding taken from

Vocation • Shareprice plunges

Vocation’s real victims are students

• How many students have lost their once only chance at government subsidised training, having completed a low quality course?

• A system where education “providers” are “for-

profit” serves shareholders, not students or the community

Stop TAFE Cuts campaign

Fighting to protect the public TAFE system in Australia

• Appropriate funding for TAFE • Stop the privatisation of the sector • Regulation to stop the predatory nature of

private for profit RTOs • Modest, affordable fees for students • Quality education for the community

Join us!

www.facebook.com/StopTAFECuts www.twitter.com/TAFECampaign www.stoptafecuts.com.au