Hatchet Job or uncomfortable truth – The TAFE NSW report.

A report compiled by Boston Consulting on the operations of TAFE NSW was released recently.  You can find a copy of the report here.  Given the fairly scathing nature of the report some parties and in particular the NSW Teachers Federation, other education unions and number of others have called it a hatchet job, noting the fact that Australian Careers Network was mentioned in the report as a competitor which some of the data seems to have been based on.  Given this I thought it was both topical and worthwhile to have a look through the report.  The first point I feel has to be made it that ACN is only mentioned twice in the report itself and Navitas is mentioned three times.  Now while I acknowledge that there may be some issues with data arising from ACN, I think it would be a brave person who was overly critical of on organisation like NAVITAS who has a very strong reputation and is not some new to the market player.  With that said lets look at the report.

The first part of the report talks about the VET market in NSW and TAFEs place in that market.  A lot of the information contained in this section is fairly straightforward such as;

  • NSW is the second largest VET market in the country behind VIC,
  • TAFE NSW provides the majority of training in the state, around 76%,
  • NSW and VIC have much higher figures of government expenditure on Training than any of the other states.
  • TAFE delivers over 80% of Smart and Skill funding and Government funded programs account for about 63% of all of TAFEs revenue
  • 20% of revenue comes from Fee for service including VFH and the rest of the income comes from a variety of sources (International etc)

When we look more closely at how TAFEs market share is broken down there are some really interesting things that pop out.  While TAFE enrolments count for 95% of all enrolments at a Certificate I level, this drops dramatically to 54% at a Certificate II level, before rising to 75% at Certificate III, 85% at Certificate IV and 95% again at Diploma level and above.  The other interesting thing of note here is that 42% of all of TAFEs enrolments were in Management type qualifications, with society and culture qualifications (Aged care etc) being the next largest segment at 14%.  Engineering and building when taken together (10% and 5% respectively) account for 15% of enrollments.  I find this interesting because one of the criticisms of the non-public sector is that concentrate of the low hanging fruit of Management qualifications, when it seems at least from these figures the vast majority of TAFEs work is the low hanging fruit area as well.


Lets move on the next section which compares student offerings and outcomes.  So while TAFE has a strong reputation for quality it seems that it lags behind in terms of cost, flexibility and convenience.  What is of note here is that TAFE NSW is only marginally ahead of the non-public sector in terms of satisfaction with the overall quality of training (about 3%) and the margins are even less when specific things like teaching, assessment and generic skills are considered.  Where it seems that TAFE does fall behind and in some areas significantly is in student outcomes.  While about 80% of students in non-public providers achieved their training outcomes the figure was only around 72% for the public provider.  The difference however is far more significant when we drill down and look at the results for people who were unemployed upon entering training.  For non-public providers 62% of students went on to either be employed or to undertake private study, whereas the number for TAFE NSW is 31%.  Now while as the report states TAFE does work with people with genuine disadvantage and with very low skills, given that there are a range of non-public providers particularly in the not for profit space that also work in this space, it seems unlikely to me that it could account for half the outcome rate of non-public providers.  The other area in which TAFE NSW seems to be well behind the market, in the opinion of employers (from NCVER data), is flexibility at about 8% lower than other providers, in addition there is also an issue with the conditions of the equipment and facilities.  On the positive there is a view that their teachers skills and assessments are slightly better than those at non-public providers.

TAFE also lags behind significantly in terms of utilising blended learning (classroom + online) for their students, with 66% of all TAFE programs being classroom based.  I think we need not to read too much into this as a significant number of TAFE courses (Trades for example) require significant classroom/face to face time.  It does however point to the fact that blended learning solutions (rather than full classroom or full online) are becoming the preferred option for employers and students as they offer additional flexibility.  TAFE NSW is also behind the other state TAFEs in every area of enrollment except for interstate online and significantly behind QLD and WA in terms of VET in schools enrolments although the VET is schools issue may be the result of structural program differences between the states.

Now here comes the controversial stuff, comparisons between TAFE NSW and competitors.  I will to be fair and where they are mentioned, restrict my comments to data relating to TAFE and NAVITAS and not ACN and comparisons between TAFE NSW and other TAFEs.  One of the problems it seems for TAFE NSW (if we ignore the private sector data) is that its unit enrollment costs as some 40% higher than interstate profitable TAFEs and is higher than even unprofitable interstate TAFEs.  Now even without a comparison with the private sector where costs may be as much as 60% lower, the fact that TAFE NSW is more expensive than TAFEs in other states is a substantial problem, which needs explanation.

Now the cynical part of me would suggest that one of the reasons that the NSW teachers federation and other like bodies have been so critical of this report is that they have recently suggested that the offer relating to a new agreement for TAFE teachers which the NSW government has put on the table will  result in onerous working conditions. (The union response to the offer is here) Now if TAFE is as it seems more expensive on a per enrollment basis than even other TAFEs, it has to make it difficult for the union to advance claims that the removal of the additional 5 weeks leave (NAT) that TAFE teachers get in addition to their 4 weeks annual leave and expecting TAFE teachers to turn up at their institute 5 days per week when working are onerous ones.  That however is as I said, just the cynic in me talking.

It also appears that when compared to other TAFEs (not private providers remember other TAFEs) that TAFE NSW teachers are less productive.  They deliver less teaching hours per year than TAFE teachers in any other state and almost 35% less than those in QLD and are paid substantially more, up to 13% more than TAFE teachers in QLD.  Now I don’t know about you but that to me suggests there is a problem and that increasing the number of teaching hours for TAFE NSW teachers, by say curtailing NAT leave or having teachers at the institute 5 days per week, would have an effect on the per unit cost of delivery, which to restate is more expensive than in any other state (about 40% more expensive than in QLD).  Now I might be wrong, but somehow I don’t think I am.

Now if we remember that this is data which compares TAFE NSW with other TAFEs this is a staggering indictment of the system in NSW, which I think puts the education unions and others who are saying TAFE NSW just needs more money and funding to be successful in a pretty tough spot.  Even in terms of their admin staff, the costs at TAFE NSW are out of alignment with those in other state TAFEs resulting in the admin costs per hour taught being up to 50% more than in other State TAFEs.  Again remember this is not a comparison between TAFE NSW and private providers, this is a comparison between TAFE NSW and other TAFEs.  Yet again when we look at ‘educational managers’ we see the same scenario where the unit costs per hours taught are up to 50% more than that of others TAFEs.

Again if we ignore the non-public comparisons the unit costs of assets at TAFE NSW are 2.5 times that of TAFE VIC.  There also seems to be a problem around the utilisation of these assets, now while some of this is the result of the need for specialist facilities for certain programs, issues such as;

  • Classes not typically run on Fridays
  • Classes are not typically offered after hours (e.g.,evenings, weekends)
  • Facilities are lightly used outside of ‘term’ and
  • Term structured learning

cannot I think be ignored.

If we add to this is the sheer size of the asset pool, some 1900 buildings over 168 sites with a replacement value somewhere in the vicinity of $4.7 billion we can start to appreciate the scale of the problem.  One of the issues with this is that there are therefore a substantial number of campuses which are within a 5 km radius of at least one other campus.  The structure of TAFE NSW as ten different institutes also creates problems in this area with significant duplication of courses, administrative and teaching roles and the need to duplicate assets across multiple locations.  With the majority of Institutes offering training in more than 6 fields of education, many campuses turn out to be to small to cost effectively deliver this range of programs.


So what does all of this mean for TAFE NSW?  It means I think that certain stakeholders in the TAFE NSW and VET in general need to take a good, hard, long look at what they saying, their positions and their agendas.  It is cleat that the concept that all TAFE needs is better funding and more money and everything will be alright is a deeply flawed notion.  There is a significant need to look at the costs associated with delivery as it seems from the data that compared to other TAFEs the awards conditions and arrangements in NSW are driving the costs of delivery up by between 35 to 50%.  Now as I have always said I firmly believe we need an effective, well-funded TAFE system in this country, however, it also has to be one in which we get a return for the money we invest in it and with TAFE NSW staff costs where they are alone it seems difficult to justify that they are getting a good return for the dollars spent, particularly when we compare them to other TAFEs.

So what needs to happen.  I think we need to see what we have seen in other states, that is amalgamation at the very least at an administrative level and possibly even at a campus and teaching level.  There needs to be work done on the award conditions, in particular the number of hours teachers actually deliver and there needs to be work done on developing blended learning solutions where they are appropriate.  In addition even though it might be uncomfortable TAFE NSW and its supporters and stakeholders need to stop blaming there issues on everybody else, including the non-public sector and the government and really look at themselves.

To answer the question in the title, hatchet job or uncomfortable truth? I have to say I going to come down on the side of uncomfortable truth.

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.

4 Responses to Hatchet Job or uncomfortable truth – The TAFE NSW report.

  1. Barry Hansen says:

    Very well analysed Paul. I totally agree with your opinion. But to change it will take a government with a lot of guts to take on the unions. Any idea where we could find one?

  2. basdenleco says:

    Being a long time Workplace Trainer and Assessor and then joining TAFE which meant that I was fortunate enough to be paid to achieve a higher education credential and begin to realise the enormity between being a teacher as opposed to being a trainer/assessor.
    Initially I thought the whole concept of undertaking the degree was ill advised especially at the age I was then being my mid-fifties.
    Was very successful in the course and I learnt so much that has aided me and still does to cope with, motivate, understand, coach, mentor the typically 16 to 22 year olds starting their apprenticeship in Electrotechnology Electrical Trades.
    There were also parts of the course given over to management, organisation and futures.
    It was obvious to Mr Dawkin AM in the late eighties that the tax payer honeypot was not infinite thus the first cuts to FEVET occurred or syphoned off to support HE.
    Enter Paul Keating as Treasurer, then next as PM in the early nineties. Thus causing even more swathing, vicious cuts to take place.
    Thus the cutthroat razor has been slicing, gouging and paring to FEVET ever since.
    A tipping point has to come eventually in any none finite system.
    That point has occurred.
    Even if the out of proportion overhead costs were reeled in in the NSW system being part of that system if draconian measures are initialised then the system may just survive.
    Blaming the teachers of the NSW TAFE system and calling for acceptance of a 2.5% salary increase with changes in conditions that effectively reduce one’s hourly rate by some 17% is ludicrous.
    I have had many students at various stages of their 48 months apprenticeship turn up in class where they had previously been to private RTO’s and from the onset, they have really struggled as they have not been taught the basic underpinning knowledge and skills that they should have.
    As a teacher who is at heart as a WORKPLACE, trainer/assessor, an apprenticed journeyman tradesperson, been a supervisor, project manager of multi-million dollar jobs constructing very large electrically powered mining equipment in some of the remotest parts of Australasia. Undertaken management positions in TAFE at extremely short notice, then I will categorically state that my present salary does not even begin to compensate for what I bring to the classroom combined with onerous management duties.
    Apart from that, then many of the comments of the report, your own sage observations are ones that I cannot defend.
    I also believe that there has to be much better use of assets and facilities, support going back to centralisation of administration and ASSESSMENT, make profoundly better use of administration staff and let teachers teach to the hilt, without being submerged in the midden of compliance.
    The above is my opinion only and does not reflect Teacher’s Federation or TAFE’s management’s ethos.
    If the present free fall to the bottom in training continues unabated, the tragedies of the failed Insulation Scheme will pale into complete insignificance.

    • pauldrasmussen says:

      Don’t get me wrong here and please don’t think I am actually blaming the teachers, I think the blame for some of this lies elsewhere then the teachers themselves. I think that vocational teachers or workplace trainers and assessors, whatever the title is we choose to call them are the lifeblood of the system and should receive good compensation for the work that they do. In addition there are a significant number of structural changes (amalgamations, streamlining of management and administration) which should be done first in an attempt to reign in what seems to be unit costs which are way out of proportion with the rest the countries TAFEs. Teaching should be the last thing that is touched as it is actually what these institutions are meant to do. The problem I have is this; we pay our training staff well, and above award wages, but they like almost everyone else in the country get 4 weeks a year off in leave and for the most part are expected to turn up at the office for work everyday (this of course excludes off site training and those sorts of things). I have, and I have said this on a number of occasions, never understood the need for NAT leave or non-contact hours and those sorts of things. One of the advantages of having training staff at work everyday is that they can where necessary answer queries from students or from myself or other staff about things and none of them seem to have a particularly difficult time managing all of their commitments and delivering high quality training. One of the advantages of not having proscribed limits on the number of hours of class time in a week, is that where necessary staff can train 4-5 days in a week, without incurring overtime and other penalties. Having staff not available to deliver training for 5 additional weeks of the years over and above standard holidays seems ludicrous to me, and apart from historical arguments I have not seem a justification for it that seems to hold water. The question I have and I am yet to find an answer for is why in NSW are the wages for TAFE staff so much higher than in other TAFEs, as are it seems so many of its other costs.

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