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The Honourable Steven Joyce

Head of National Vocational and Training Review

Department of Education and Training

PO Box 9880

CANBERRA ACT 2601

Lighthouse Learning International Pty Ltd

Dear Mr. Joyce

RE: SUBMISSION TO AUSTRALIAN VET INQUIRY

I am pleased to make a submission to this national review of vocational education and training.

The joint announcement by Prime Minister Hon Scott Morrison MP, and Minister for Skills and

Vocational Education, Senator Michaelia Cash, is important. This Inquiry into VET should be a

catalyst to crystallise what has emerged as several policy issues causing concern to business and

training providers, and at a student level, issues adversely affecting student enrolments across

competitive qualification levels in Australian tertiary education.

As background, I was CEO of TAFE Directors Australia from 2006-17. Post-TDA, I founded Lighthouse

Learning International Pty Limited in 2018, a new consortia firm collaborating with ‘NUHEP’ applied

learning providers, for foundation pathway studies from vocational to higher education systems in

China and SE Asia countries into Australia. I am a Senior Fellow, LH Martin Institute for Tertiary

Education and Training, University of Melbourne; this followed nomination for the Australian Prime

Minister’s Asia Postgraduate Scholarship (2015) to review emerging models for polytechnics and

universities of applied technology in China hosted by a polytechnic university in Shanghai, and the

American-Australia Fulbright Professional Scholarship for Vocational Education (2009) reviewing new

business models for US community colleges.

My submission is in the form of comments under the Terms of Reference (see below). These

comments are limited to those segments identified as requiring change to policy for vocational

education and training, and the cross-over with tertiary education funding and policy.

Thank you for this opportunity to contribute to the Inquiry.

Yours sincerely,

MARTIN RIORDAN

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SUBMISSION – MARTIN RIORDAN

January 2019

TERMS OF REFERENCE – ITEM 1.

The Review will have regard to VET funding, policy and regulatory settings and how they can be optimised to support both school leavers and workers to maximise the achievement of relevant skills and employment outcomes from the VET sector.

Comment

The Mitchell Institute (Victoria University) documented over several years the increasing

discrepancy affecting TAFE and the vocational education and training sector. This was

demonstrated with the boost in schools funding under Gonski school funding policy, and

imbalance adversely affecting vocational and higher education funding in Australia.

Studies under , Mitchell Institute, demonstrated quite dramatically

how far the Australian vocational education and training sector has become the ‘poor

cousin’ of Australian federal policy. Sadly, this scenario was not surprising. Encouraging

policy settings recommended for improved funding from the Federal Bradley Inquiry into

Higher Education were abandoned for VET under former Deputy Prime Minister Julia Gillard

MP, and instead uncapped places for universities and full CPI promised instead – an

ominous legacy that was unchanged, under subsequent Labor (Rudd) and Coalition

(Abbott/Turnbull) governments.

Worse, NCVER student enrolment data demonstrated this policy discrepancy accelerated

the decline and stresses to VET; the capacity of states and territories to fund traditional

vocational education became badly impacted, and the stresses on TAFE across almost all

state and territory systems worsened dramatically.

This has created two main problems needing to be resolved:

I. CRISIS IN THE PURPOSE OF TAFE, & FUNDING OF TAFE

Enrolment reductions in TAFE have been evidenced, with the worst-hit state data

recorded in NSW, Queensland, South Australia and Tasmania. This has provoked

issues including a quality capacity crisis EG, the issue displays questions as to the

mission for our TAFE Institutes, and certainly evidence showing the function of TAFE

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is often far removed from the time of their creation after the Federal Kangan

Education Inquiry. NCVER data shows these exceptionally large reductions in student

enrolments frequently coincided with changed state/territory government single

statutory authority governance. With changed governance, so TAFE often operates

with a much-reduced role identified for the educational outcomes in remote and

regional, suburban and inner-city locations. Financial ROI has become of greater

importance, and this has unquestionably influenced TAFE Institute quality and

standards, especially a once-primary legislative role to contribute to the

state/territory skills and employment industry GDP targets. The near-collapse in

recent years of state funding commitment to TAFE began with the failed National

Partnership Agreement for Skills (NPA), under the then deputy Prime Minister Julia

Gillard MP. Federal funding NPA guidelines failed to articulate how state and

territory governments participated in key objectives, and cost-shifting by states and

territories became rampant. EG Former NSW Premier, Barry O’Farrell, pledged

support for schools ‘Gonski’ school funding, at the expense of vocational and TAFE

funding. Most jurisdictions followed, and the Mitchell Institute continued to

document the funding decline in TAFE and VET as a result.

The former Skills Australia Skills for Prosperity (2011) signalled this development

affecting TAFE as a primary issue facing national vocational education and training

policy. Eight years after this Blueprint Report on the VET Sector, the lack of role for

the public provider, and a purposeful definition for TAFE in supporting industry and

student ‘work-ready’ job outcomes – and linked to funding - is urgently required.

Resolution of this issue may go a long-way to restore why TAFE needs to be funded

into the 21st century, and like the university sector, re-defining its role supporting

trust by business in quality qualifications, and clarity for MPs – state, territory and

federal.

II. FEDERAL ROLE IN VOCATIONAL EDUCATION & TRAINING

A lack of coherence in national policy has been a fundamental flaw affecting

Australian VET funding, policy and regulation settings. Several times over the past

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two decades, national governments have sought to re-structure the shared

federal/state and territory funding responsibilities.

The VET Inquiry may note:

In 2015, former Prime Minister Tony Abbott MP took to COAG (Council of

Australian Governments, Victoria Barracks, NSW meeting) a proposal to

review TAFE and vocational education moving to become a federal

responsibility. This historic initiative was supported by all three business

groups, ACCI, AiG and BCA. Yet despite this and several states including

Queensland and SA supporting the re-structure, the reform to VET

responsibilities was abandoned, amid political turmoil again in Canberra

politics, and opposition from a new Labor government elected in Victoria,

which had been successful in an election campaign led by concern of TAFE

funding declines under the Coalition.

A decade earlier under Labor Prime Minister Paul Keating, following Labor’s

earlier ‘Dawkins’ reform to higher education, Mr Keating sought to re-

structure vocational education and training policy and a tertiary remit for

TAFE, under Canberra. This initiative was abandoned, largely after

Queensland and reportedly Mr Kevin Rudd, then a Queensland government

official, objected.

This dislocation in national tertiary policy settings has prolonged poor policy synergy

and fairness in funding, and created far greater friction than is healthy between

universities and TAFEs and vocational education. EG, more recent attempts by

Canberra to extend student loans from university to VET students hardly rates as a

sufficient equity measure to overcome the deep structural imbalance so apparent in

the tertiary sector, affecting vocational education and training.

TERMS OF REFERENCE - ITEM 2

It will examine skills shortages in VET-related occupations, in particular any tension between VET outcomes and the needs of industries and employers, and what might be done to better align these.

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COMMENT

The shortage of trade and related technologic skills has worsened in Australia, exasperated

by the continued decline in apprenticeships, and an arbitrary funding decline also affecting

traineeships. Not surprisingly, trade and technological skills remain high on the Skills

Occupational List for skilled migration – albeit policy tensions on imported skills and

migration has more recently made this option more controversial. The controversy on

skilled migration has certainly added pressure on business to successfully bypassing the VET

sector, and securing HR resources via skilled migration.

I also refer to a parallel discrepancy across the tertiary sector during this period. During the

past decade post-Labor, generous Federal funding for uncapped or partially capped

university enrolments has become the policy norm. Universities were encouraged by this

uncapped funding to accept all – including low-ATAR school students. This policy mix issue

have become genuine problem issues, when scanning the environment and reasons for the

worsening in Australian skills enrolments.

Equally, it is hardly fair blaming the quality or content of school career counselling, when

parents see university enrolment promotions with full HECS loans, vis-à-vis TAFE and

vocational qualifications, with complex enrolment blockages – including real difficulty to

seek out and achieve an apprenticeship.

It is also a reality that quality concerns remain (REF: ASQA audits) over so many private

providers, and university vice chancellors (Ref: Professor Greg Craven) have flagged the poor

reputation of the VET sector and private college loan rorting as reasons why reform or

balance in tertiary funding is not warranted, nor enough reason to support TAFEs.

Basic occupations that are key to GDP and jobs, including electrical, building and

construction, brick and stone masonry for the building sector, allied health, early learning

children, community and aged care services in the community sector, and technological and

telecommunications skilling for the growing ICT and mobile telecommunication sector are

all equally important - each offer real jobs, vital to remote, regional and city locations, yet

compete unfairly because of tertiary policy imbalance.

In recent years under former Prime Minister Malcolm Turnbull, higher education funding

policy for sub-bachelor degrees was further relaxed, allowing for the rapid expansion of

university foundation colleges. These foundation colleges have further siphoned off huge

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numbers of potential vocational education student cohorts, with full-HECS offers now

available. These recent tertiary policy settings effectively ‘gifted’ mid and lower-ranking

outer suburban and regional universities – otherwise facing financial challenges when

Federal CPI funding was restricted – a lifeline that has sustained their otherwise dwindling

financial position.

This policy setting has been worsened during this same period because “Structural

Adjustment Funding” (SAF) was discontinued from recent Federal Budgets. SAF was for

some years under the Hawke/Keating, and Howard terms, a successful fiscal reform ‘tool’.

Certainly, past years even under PM Abbott showed SAF progressed federal reform -- albeit

with the blunt instrument leading inevitably to concepts like dual sector universities

(university and TAFEs combined), in which case across all seven dual sector universities, VET

delivery has declined. In contrast, education models in USA states, show tertiary reform was

instead structured between state universities and community colleges, forming community

college district alliances, without threatening the community college brand, and US state

legislation insisting universities recognise college sub-bachelor qualifications, ensuring

guaranteed pathways and more coherent and economical post-school progression.

Restoring Federal SAF funding opportunities should ideally be open to TAFEs, not only

universities. This restoration of SAF funding opportunities may otherwise bypass

federal/state and territory blockages, and spur innovative ways under current jurisdictional

arrangements, IE for universities (under federal authority) and TAFEs (under state/territory

authority) to forged reform with mutually agreed outcomes, such as in skills delivery, with

fiscal solutions, structures, asset management and resource.

A more balanced tertiary structure will be paramount to overcome sustained relief to skill

shortages.

TERMS OF REFERENCE – ITEM 3

It will consider expected changes in future work patterns and the impact of new technologies and how the VET sector can prepare Australians for those changes and the opportunities they will bring.

and

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TERMS OF REFERENCE – ITEM 7

The Review may seek out case studies of best practice in VET, and consider whether specific trials should be undertaken to test innovative approaches likely to deliver better outcomes.

COMMENT

A key overlay to the vocational education and training debate is a discussion on structure, so

critical to guiding qualifications in the VET sector. I also illustrate this issue by noting best

practice examples internationally -- especially in north Asia and SE Asia, and New Zealand.

The recently commissioned Federal Inquiry into Tertiary Category Standards, in a recently

released Discussion Paper, showed a glimpse into what opportunities may flow toward a

coherent approach to tertiary education reform. Evidence of a ‘missing bridge’ or gap in

Australia’s provider categories is best illustrated when compared with China, Taiwan, Korea

in north Asia, Singapore, Indonesia and Malaysia in SE Asia, and in New Zealand, and in

Europe, the technological universities so apparent, and 4-year community colleges in the US

and Canada. A modernist view to vocational education and training that addresses new

higher level skills demanded by industry, require inclusion of a structure to better enhance

branding for quality (non-university, NUHEP) providers in Australia, and encourage more

diversity and quality in vocational education and training.

The outcome is that Australia lacks the capacity to adequately promote higher level skills to

school leavers, with any credibility. Australian education and its international diversity is the

poorer because of this missing category of tertiary education. For instance, there is evidence

in our region and internationally of great options for students if categories such as university

college, and/or specialist universities, and polytechnic universities, were in the market. We

may also overcome current challenges facing many domestic schools and parents seeking to

propose sending school leavers the opportunities in favour of choosing a skilling career in

new industries, especially highly paid advanced technological and health-related industries.

This reform may additionally improve our collaborations with so many of our international

education institutions - especially regional and across the Tasman with New Zealand, for

jointly promoting better skilling exchanges during courses, and offerings for graduate work

visa categories.

Author: Martin Riordan

Date: 21 January 2019