Senate Estimates: Economics Committee

Economics Committee

Estimates hearings 17 October 2012

• Senator RHIANNON
• Senator Chris Evans

 Full transcript available here

Senator RHIANNON: Minister, with the controversy of TAFE funding in Victoria, what lessons has the government learnt from how that has played out and what changes do you plan to make to your funding and relationships with TAFE on vocational and educational policy?

Senator Chris Evans: The first and primary lesson I have learnt is that if a state government takes $300 million out of its TAFE budget, TAFEs find it very hard to manage the same level of service and service the same number of students. That is the major lesson. The Victorian government took $300 million out of the budget. There is nothing complex about this and, by reducing their funding, they gave less funding per course, less funding per student in many areas and we are seeing the impacts of that. That is the major, fairly uncomplicated lesson you take from it. While there have been attempts to defend what has occurred in terms of policy, it is a $300 million save from the TAFE budget and it is having its impact. I know that people want to read all sorts of things into policy and influences but, if the $300 million had been left in the budget, these things would not have been happening.

Senator RHIANNON: I note you did not expand on the shift to the private sector and private providers. Hasn't that been a big factor? Isn't that something that you would have drawn some lessons from?

Senator Chris Evans: That is the sort of defence that the Victorian government uses. I do not accept it. There has been growth in the private sector in Victoria. There are new products offered, greater flexibility offered and some of that growth has been beneficial. Some of it has not been beneficial in the sense that there have been providers enter the market who, I think, have not been as high quality as I would like. But, fundamentally, the inescapable basis of the problems in Victoria is the withdrawal of $300 million from the budget for TAFEs and that is what is driving the cutbacks, the closures of courses and campuses and the reduced access for students. This is often in areas where the private sector is not currently active in skills and trades and where it has not been necessarily a competitor. That is the major lesson I draw from it.

Senator RHIANNON: You identified in your response that some of the providers were not as high quality as you would have liked. Considering much of this is federal money, isn't there a responsibility for the federal government to put conditions on some of this money that is handed over, considering it is clear the state coalition governments will be looking to further weaken the public TAFE system?

Senator Chris Evans: Mr Griew might like to make some remarks about the agreement with the states and the requirement for them to continue to support a strong TAFE sector. The question of quality is one we have sought to address with the creation of ASQA, the national regulator. We have sought to create one national regulator, given the fact that so many of these TAFEs and private providers operate across state borders. We have created ASQA, and it has now been operating for about a year and is starting to hit its straps. It is the case that Victoria and Western Australia have refused to participate in handing over their responsibilities, and therefore in Victoria we have both a state regulator and a national regulator, and a less than ideal outcome. I would still hope that Victoria and Western Australia would see the sense in conferring those regulator powers to the national regulator. In terms of the agreement, Mr Griew might be able to help you a bit more.

Mr Griew : The agreement that was entered into through COAG for reform of the training system has a number of specific conditions in it that require jurisdictions to take steps that would address some of the concerns being raised about what is happening in TAFEs. These are of course issues that are now therefore the subject of negotiations between us and officials in those governments prior to final resolution of those agreements. These include, for example, implementation of criteria specific to each state for access to public subsidy funding and complementary strategies to take account of competition and local training markets; and specific requirements for development and implementation of strategies which enable public providers to operate effectively in this environment of greater competition, recognising their important functions and servicing the training needs of industry, regions and local communities. Their role spans high-level training and workforce development for industries and improves skills and job outcomes for disadvantaged learners in communities. Those are quite specific requirements which the states to receive their payments have to make good in their implementation plans.

Senator RHIANNON: Thank you for setting that out. Minister, I wish to go back to some of your comments where you spoke about the national regulator. I remember from earlier estimates it was, obviously, still finding its feet. You did go on to say how some of the states are refusing to participate. Doesn't this further underline the need for you to at least be considering if those guidelines that we have just heard need to be tightened up? The problem is happening right now as we speak; it is enormous.

Senator Chris Evans: Senator, we have established a national regulator and the other states and territories, under the Constitutional arrangements, have given us that responsibility. It is the case, though, that increasingly the ASQA is, particularly in Victoria, gaining, if you like, a greater share of the market as a result of more and more institutions enrolling international students who are operating across state boundaries. Those are the requirements that, if you like, bring in the national regulator even if there is still a state regulator in place. So, increasingly, the national regulator's role in Victoria will be increasing—though less so in Western Australia.

As I say, this is a decision for the Victorian and Western Australian governments about whether they cooperate with the national regulatory arrangements we put in place. But I have encouraged them to take a very firm view about ensuring quality in this market. I think it is the case that there are very good private providers, but there have also been some developments or practices that I think need to be addressed, and I am pleased to see ASQA is taking that very seriously. We certainly in the national agreements with the states have focused very much on the issue of quality.