Productivity Commission prioritises profit above TAFE's future

The Productivity Commission review into skills and workforce development is failing to ensure the public TAFE system's future as the pre-eminent provider of high-quality vocational education and training (VET) across Australia.

The Productivity Commission National Agreement for Skills and Workforce Development Review Interim Report clearly favours private providers, increasing contestability, student loans and vouchers.

AEU Federal's submission to the review process highlights the abject failure of a decade of VET marketisation, contestability and privatisation by governments at all levels, and the catastrophic damage it has wrought on this sector:

  • VET funding was cut by more than 15% in the decade from 2007 to 2016 and government expenditure declined by 31.5% over that time.
  • As a result of this continual assault, TAFE enrolments have declined steadily in recent years, from nearly 800,000 in 2015 to 680,000 in 2017.
  • There are now over 4,600 active registered training providers, but only 96 of these providers have more than 100 full time students.
  • In 2018, states, territories and the Commonwealth spent a combined total of $6.1 billion on vocational education, a decrease of $135 million when compared to 2017.
  • In 2018, the Commonwealth contribution to all vocational education fell by $326 million (10.6%) , while Commonwealth contributions to public VET delivery fell by more than double that total, by 23.2%, in that year.
  • The number of government funded vocational education students has fallen by almost 17% since 2012 across all jurisdictions, but in TAFE, student numbers have fallen by 25%. Meanwhile, students enrolled in subjects not delivered as part of a nationally-recognised program (private providers) increased by 4.9% to 2.5 million people in 2018, compared with 2017.
  • Overall VET student numbers have also decreased by 1.5% to 4.1 million people in 2018, compared with 2017.

AEU Federal president Correna Haythorpe said the interim report’s focus on giving profit-seeking private training providers more access to public VET funding was appalling, and would make it more difficult for Australian workers and apprentices to access high-quality public vocational education at a time when they are most urgently needed to help rebuild the economy.

“The COVID-19 crisis has highlighted the urgent need for qualified workers across all industries to be able to adapt quickly to new opportunities when they arise,” Ms Haythorpe says.

“TAFE is the only institution with the infrastructure, the workforce and the trusted reputation to be able to provide high quality VET qualifications across the country today.”

“TAFE is Australia’s most trusted brand when it comes to the public provision of vocational education and training. The community knows, understands and values TAFE for what it is and what it offers. The Morrison Government has shown time and time again that it does not,” Ms Haythorpe said.

The AEU is calling on governments to prioritise investment in TAFE as the anchor institution of vocational education, ensuring that it is the centrepiece of rebuilding Australia’s economy. 

Ms Haythorpe says the Morrison government should put TAFE at the forefront of the economic recovery process through immediate investment in infrastructure, equipment, staffing and programs.

“History has shown that private providers do not provide the skilled and highly qualified workforce to meet the needs of a changing economy,” says Ms Haythorpe.

“TAFE offers high quality vocational education at all levels, with nationally accredited programs, a highly qualified and experienced workforce, campuses across Australia, and it has the trust and respect of employers and the community.”

“A strong, fully-funded TAFE sector must be at the centre of the Commonwealth’s response post COVID-19 so that Australia emerges in the best-possible social and economic condition.”



Summary of main points of the AEU’s submission to the Productivity Commission National Agreement for Skills and Workforce Development Review Interim Report.

In its submission to the Productivity Commission’s review of the NASWD the AEU has challenged the Commissions core assumptions about the inherent superiority of markets and contestability.

The AEU says that throughout the interim report the Commission demonstrates a clear preference for private providers operating in an unencumbered market, revealing the Commission’s predetermined view of how vocational education should operate in Australia.

The AEU submission highlights the damage inflicted on the sector over the last decade as a result of competition and marketisation, which has flooded the market with inferior private providers, resulting in the chronic underfunding of TAFE and publicly delivered vocational education and in the TAFE sector being the lowest funded of all the education sectors in Australia.

The submission roundly condemns the review’s recommended options of shifting subsidies to individual students as vouchers, as vouchers cannot deliver value for money in the long term and do not represent a prudent, efficient and sensible way to invest in vocational education.

Incredibly, the Commission’s interim report has proposed an increase in income contingent loans despite the VET FEE-HELP fiasco handing billions of dollars to dodgy private RTOs and causing unprecedented damage to Australia’s vocational education system,costing more than $7 billion in total – more than is spent on Australia’s entire VET system annually.

The AEU also strongly asserts that the review’s proposal of introducing a nationally consistent pricing mechanism fails as it takes no account of the superior courses, wrap around services and pastoral care that TAFE provides. TAFE delivers a much higher level of provision, at a significantly larger cost than the offerings of most private providers and any attempt to introduce consistent pricing without accounting for these can only result in VET delivery declining to the lowest common denominator offered by profit seeking, for profit private providers.

In response to the interim report’s inherent bias towards rampant marketisation the AEU has strongly argued that the Commission recommend a co-ordinated effort to put TAFE at the forefront of the recovery and potential future economic stimulus efforts through immediate increased federal funding support and investment in infrastructure, equipment, staffing and programs, including:

  • Restoration of the more than $3 billion funding cut from TAFE and training since 2013.
  • Implementation of targeted support for the public VET provider, guaranteeing a minimum of 70% of all government VET funding to TAFE.
  • A significant capital investment in TAFE infrastructure, both in terms of improvements to existing campuses and the redeployment of closed campuses in regions without sufficient provision.

A significant reinvestment in the TAFE teaching workforce, to replace the many tens of thousands who have been driven out of the sector over the last ten years, and to alleviate current workloads.



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