Would a Federal VET funding system be good for TAFE?

So I wrote a couple of days ago about the discussions that are happening around the idea of the Federal government taking over responsibility for Vocational Education and training from the various states and what that would mean.  One of the points I talked about was the idea that essentially under a system where funding and regulation are the responsibility of the Federal government, TAFEs become simply another provider within the system, albeit one that is owned by the state rather than by some kind of non-public entity.  A small amount of criticism to the idea or use of words, that TAFE would be ‘simply another provider’ was raised.  Central to the criticism is the idea that TAFE being just another provider devalued the social value and functions that TAFE provided and its special responsibilities as a publicly owned provider.  It would be my contention however that a federalised VET funding system would, if there are in fact special responsibilities in terms of social functions and value for TAFE, make the provision of these functions easier and in addition far more transparent than what they currently are.

The idea that TAFE has some special responsibilities, social functions and value in excess of the responsibilities of non public providers is often raised as a reason why TAFE needs to be protected, needs to have some percentage of funding allocated to it and outside of any contestable model which might be being utilised.  Now while I am sure that there are areas in which some TAFE institutes do have these social functions and responsibilities I have never been completely convinced by this argument, particularly when used to justify funding allocations, primarily because while it is quite often talked about in terms of support for people with disabilities and other special needs, providing community hubs and various things like that, a lot of what is discussed is provided by a range of other organisations.  Non-public VET providers, particularly those not-for-profit providers, do substantial work with disabled and disadvantaged people in assisting them to achieve their educational and other goals.  There are also numerous community sector providers (non-VET) who provide substantial amounts of social value and function in communities and in a lot of cases the services and outcomes provided by both these types of organisations are often better then those provided by TAFE.

No withstanding that however, let us assume that TAFE or at least some TAFEs have special responsibilities or functions in terms of social and community value.  A federalised system would it seems, create a situation where these functions could be properly resourced and funded , by the state governments, without that resourcing and funding being rolled up or conflated with funding for the provision of vocational education outcomes.  Essentially a federal system would be responsible for the regulation of all registered training organisations and for providing a pool of funding which would be allocated under some type of contestable model to meet the skills and training needs of both the nation and where necessary particular states.  Given that the states were no longer involved in the allocations of funding for training and were simple the owner of a number of providers of vocational education there would be no need for funding at a federal level to be portioned off into that which was solely for TAFE and that which was available for all other providers.

This is the case because like any other training provider, the operational costs for the delivery of VET services should be covered by the income they generated through the provision of those services, be that through the delivery of funded training, fee for service or income contingent loans.  Capital expenditure, maintenance of infrastructure and any additional functions should be provided either from additional revenue raised through the provision of educational services or in the case of TAFE from the state government.  This would then allow the state governments to allocated state funding to TAFE institutes for the provision of these special responsibilities and social functions, over an above the income which the TAFE generated through a contestable federal funding model.

This would have some additional side effects as well.  It would make what funding was being allocated to public education providers, and for what purposes extremely transparent, which would in turn indicate what the special responsibilities and functions that public providers had were and what they cost.  This would then allow the government to determine whether or not using an educational provider to provide these special social functions or values was the best way of achieving their social goals or whether it might be the case that in most cases TAFE should simply be a training provider and the other functions were better off being provided in some other way.  This transparency would also show the true costs associated with delivery within the public providers, as being responsible for their operation expenses through the generation of training income would show whether or not they needed to be supported even in this area and whether,  depending on the particular institute that was the best use of resources or if in cases where they were seen to be unable to cover their operational expenses through the delivery of training services and where there were no other substantive reasons, or the situation was not likely to improve, hard decisions about their continued existence and form might need to be asked.   The costs in terms of capital expenditure, maintenance etc. would also be clear.  In essence a federal funding system for VET, where state owned TAFEs were simply another provider, would actually improve the system of public provision, by allowing TAFEs to concentrate on what they should be doing, that is the business of delivering educational outcomes and the State governments to simply act as the capital support mechanism in a way that was far more transparent than it currently is.

Yes it would be a substantial change to the mindset of both those in the government and those managing TAFEs and some of them might not survive at least in their current form, but a federalised system would also have a effect upon non-public providers as well and those who were not able to cope with the change would not survive.  All in all a system of federal regulation and funding where all providers are essentially playing on a level field is one it seems  likely to produce solid outcomes for everyone involved.

Anyway that’s just my opinion.

About pauldrasmussen
Paul Rasmussen is one of Australia’s most widely read Vocational Education and Training Commentators. He provides deep, unbiased analysis and insights not only on topical issues, but also on the underlying structure and policy which supports the industry. His writing and analysis has been praised for its uncompromising and thought provoking style and its ability to focus on the issues of real importance to the sector. He has advised various government departments and ministers, training providers, public and private organisations, not for profits and small to medium enterprises on the VET sector and the issues and opportunities facing it. He is one of Australia’s most awarded learning professionals and a regular speaker at a range of conventions and forums. His extensive experience in vocational education, and learning and development coupled with formal qualifications in philosophy, ethics, business and education management allow Paul to provide a unique view of the road ahead and how to navigate it.

One Response to Would a Federal VET funding system be good for TAFE?

  1. Tony Ayaz says:

    Paul, it would be better to run TAFE system nationally as a Quasi govt enterprise, similar to what Govt Business Enterprises with a profit motive used to be. TAFE management needs to do two things, provide VET and manage the facility profitably by sourcing clients to support the students coming to TAFE, a Public Relations Marketing job.

    Educational funding should only be allocated to TAFE if sponsored by an employer providing employment to the student during and post qualification, and that is supported by the national govt. No one needs States to be involved, it will only lead to a ship load of documentation and regulations; we are better off running a targetted program through employer needs. This will put the business to place their money where their mouth is and stop complaining about skill shortages.

    The wages are subsidised on the basis of employer pays half of the apprenticeship wage and the govt pays the other half and as there is a promise of employment for the period of contract, equal to the period of study, let us say 3 years. This will provide skills needed, funding will be directed to targetted employment support, targetted funding of TAFE education programs at competitive rates and less welfare from govt and better employment for the young educated kids.

    As I have said before on Linkedin and here, I think, we need to think lateral now. Throw all the old formulas, start a fresh, so we are not doing a PATCHUP job that politicians love so they can have their hands on some solutions leftover yet to be found at every election, instead of fixing it right in the first place.

    My previous suggestion was along similar lines, any combination will do as long as we scrap the old system totally. I suggested:
    More of the same from politicians, empty sweet rhetoric, nothing new, we have heard the same for the last 20+ years (words like “long- overdue”). The business and big employer whinge about it yet are not prepared to put their dollars where their mouth is either. They need to sponsor the skilled courses and guide the Education sector with specifics.

    The current system of VET is run by the technocrats who have little understanding or in-depth knowledge and working of business, as long as dollars flow through the door they thing education and skill set is provided within the competency bases criteria.

    As I have said before and my comments disappeared:
    This area is Vocational and can be dealt with by Vocational sector when the students come from the employer to the college, and not the other way round, as students are not guaranteed work and hence there is less motivation. However, if employer hired them on the bases that they (hiree) will up their skills and have a govt wage subsidy for this apprenticeship with targeted spending and a window of 3-5 years as articles clerkship (work study program) with the employer as a bond. Govt also benefits as welfare is being used productively and the employer has someone who is committed.

    Industry and recruitment agencies needs to take a lead and support tertiary education for targeted students, with short, sharp, specific courses, other than core Medicine, Engineering and Accounting (and others unmentioned); this may lead to better employment for graduates. Others will need to be supported by government incentives to the industry to hire, a package with on the job training and vocationally employer driven targeted courses run by the private industry. This will spread the burden of cost and distribute the benefits to education and create realistic employment for most. Cheers.

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