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Question and Speech: Vocational Education and Training Sector

Question
Lee Rhiannon 12 Oct 2011

Vocational Education and Training

Question Time and Take Note Speech in Reply - Senate Hansard transcript – 11 October 2011

Senator RHIANNON (New South Wales) (14:48): I direct my question to the Minister for Tertiary Education, Skills, Jobs and Workplace Relations, Senator Evans. In a letter you sent to the New South Wales Labor MP Carmel Tebbutt on 29 September this year about concerns raised by the New South Wales Teachers Federation concerning vocational education and training, you stated that there was a role for healthy competition between public and private VET providers. How do you regard as healthy competition the huge profits being made by private providers as a result of the funding growth in their sector, given that private provider tenderers have been exempted from providing lists—
Opposition senators interjecting—

The PRESIDENT: Order! Senator Rhiannon, you are entitled to be heard in silence. Order! Go back to the second part of the question; I did not hear it.

Senator RHIANNON: Thank you, Mr President. How do you regard as healthy competition the huge profits being made by private providers as a result of the funding growth in their sector given that private provider tenderers have been exempted from providing lists of teachers and facilities they will use and when the growth in profits of private providers is being underwritten by students paying VET FEE-HELP loans?

Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Jobs and Workplace Relations and Leader of the Government in the Senate) (14:50): I thank Senator Rhiannon for her question. I am not sure how she came to have the letter that I sent to Carmel Tebbutt, but that is a question for her and Carmel Tebbutt. I do not have that in front of me, but can I say that I do not accept some of the concerns expressed in the senator's question. We are very much committed to a strong reform agenda in the vocational education and training system. We do think the sector is in need of further reform, but we back that by record investment in the VET sector. Over the last three years, this government has put $11.1 billion into VET, compared to $7.2 billion over the last three years of the previous government. So we are seeking to reform and invest to try to build the skills base this country needs to take advantage of the growth in the economy and the opportunities provided by the mining boom. So we are committed to reform in VET. We are committed to greater investment in VET and have a commitment to the skills and training agenda.
It is true that a number of the states have gone down a series of reform programs, most notably in Victoria, where they have provided a greater role for the private sector. I do not have any problem with there being competition between private providers and the TAFE system in the VET space, and I do not expect that private providers would operate unless they were making a profit. So making a profit in itself, it seems to me, is not something one could be critical of them for doing. But it is the case that I have a very strong view that there is a significant role for TAFE to play in the future of VET in this country. We have invested enormously in both the facilities and the skills of the staff. It is a very key part of our training system, and in no way should these reforms be seen as a reduction in the contribution of TAFE. (Time expired)

Senator RHIANNON (New South Wales) (14:52): Mr President, I ask a supplementary question. Minister, if, as you state in your letter, TAFE must continue to play a pivotal role in delivering a skilled workforce, why has your government invested $53.6 million over four years to encourage private providers to form start-up companies with no teachers on their books and no facilities in their asset register to tender to provide courses that TAFE already effectively delivers? How is this competitive or delivering value for money or building the skills base you just spoke about?

Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Jobs and Workplace Relations and Leader of the Government in the Senate) (14:52): I think that question refers to concerns about quality in the private provider area and I think there are legitimate bases for concern about some of the companies involved. That is why, as the Minister for Immigration and Citizenship, I implemented a lot of measures to try and assist in breaking the link between some of those companies the way they were operating—and the provision of services to international students. This government has also driven a reform program in this area in relation to quality. The new regulator, ASQA, has been set up to try and address these very concerns—where state based regulation was not adequately covering the performance of the sector. We had serious concerns about that state based regulation. That concern was reflected, for instance, in the Victorian Auditor-General's report. The new national regulator established by this parliament will provide us with greater confidence that proper standards are being applied to training and that students are getting value for money from their investments in the courses they undertake. (Time expired)

Senator RHIANNON (New South Wales) (14:53): Mr President, I ask a further supplementary question. Minister, can you inform the Senate if the VET competitive tendering process applies competitive neutrality adjustments to TAFE which effectively penalise TAFE for having access to state owned infrastructure? Has this happened in tendering in New South Wales and in other states?

Senator CHRIS EVANS (Western Australia—Minister for Tertiary Education, Skills, Jobs and Workplace Relations and Leader of the Government in the Senate) (14:54): I think I will have to take the question on notice. I remind the Senate—I am sure Senator Rhiannon knows—that the states actually administer the vocational education and training systems. We are a funder of those systems and this government has greatly increased the funds going into the vocational education and training system. We also have a national partnership with the states where we agree on the objectives. We are in the process of renegotiating the national agreement and the national partnerships, which are due to come into effect on 1 July 2012. Those processes are looking to try and make sure we get better outcomes from the Commonwealth's investment in the state training systems, but the systems themselves are administered by the states. Your question really goes to the principles the states have been applying, so I think I will take that part of the question on notice.

Take Note Speech - Vocational Education and Training

Senator RHIANNON (New South Wales) (15:31): I move:

That the Senate take note of the answer given by the Minister for Tertiary Education, Skills, Jobs and Workplace Relations (Senator Evans) to a question without notice asked by Senator Rhiannon today relating to vocational education and training.

In response to my question on TAFE, the Minister for Tertiary Education, Skills, Jobs and Workplace Relations, Senator Evans, provided some interesting and worrying insights into the government's motivations. The minister failed to explain that federal government policy in VET and TAFE is increasingly based on reducing government investment in the sector, encouraging the growth of private providers, giving more control to business and increasing the contribution to the cost of their education by individual students. The VET sector is the worst funded education sector in Australia and has sustained reductions in government investment for almost 15 years. This is a matter of great interest to the people of New South Wales, where there are more than 550,000 students enrolled at TAFE institutes and campuses—there are 10 institutes and 130 campuses across our state. I congratulate the teachers in the TAFE system for the excellent work they do, despite years of government underfunding.

Governments have introduced income contingent loans into the VET sector to mask the effects of their policies, which have resulted in considerable increases in fees and charges to students. Governments are not proposing to introduce an income contingent loan scheme to help TAFE and VET students who are currently struggling with the cost of their education; they are introducing income contingent loans like VET FEE-HELP to mask the increased costs to students. The federal government argues that income contingent loans will encourage students and workers to enrol in TAFE and VET. That is not true, and history shows how untrue it is. In 1973, the Whitlam government abolished TAFE student fees. That resulted in enrolments increasing from 400,700 in 1973 to 671,013 students in 1975—a 59 per cent increase. That made such a difference to so many people's lives and helped to increase the skills base of this country.

At a time when our nation has ongoing, critical skills shortages and there are global fears of another financial crisis, changes which threaten the quality and affordability of TAFE will deter many from education and training and undermine the type of society we need to be building, particularly at this critical time, when we need to be working on the transition to a low-carbon economy. A variety of skills in our diverse section of our community is urgently needed.

The Productivity Places Program is also relevant to this debate. The PPP was a clumsy attempt by the federal government to cut costs in the TAFE and VET sector, and to increase the share of the so-called VET market held by private for-profit providers. Though it succeeded in these objectives, it failed students, industry and the community. More than 75 per cent of PPP funding went to private for-profit providers. The program was an attempt to privatise the TAFE system, effectively by stealth. You would have to say, when you look at the figures, that it is actually an example of the failure of the market in this area.

The Productivity Places Program was a hastily cobbled together election initiative of the former Rudd government. The $2.1 billion program was supposed to provide 711,000 new or additional places over five years. It did not achieve this. It was supposed to deliver higher qualifications in skills shortage areas, of which we have many. It failed to do so. It was inadequately funded, with many TAFE institutes unable to bid for places in the program because the funding allocated was less than half the cost of delivery. That skewed the program, making it attractive to private providers, who focused their activity on high-volume, low-cost courses, which, again, do not deliver the highly skilled workforce our country so urgently needs.To view the future, we can look at Victoria, where the coalition government has gone on an extensive program to push VET training into the marketplace. VET in Victoria was:
... confronted with an operating deficit of nearly $125m last year, after public payments to non-taste providers rose almost $140m to $275m.
That is nearly a doubling of costs. (Time expired)

Question agreed to.

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