Federal Labor’s commitment to Australian vocational education and training

April 18, 2018

The Labor Shadow Minister for Skills Senator Doug Cameron has re-stated Labor’s commitment to Australia’s community education providers. In a speech last Friday – 13 April 2018 – to the AEU National TAFE Council, Senator Doug Cameron said:

The current vocational education and training system is flawed and it needs to be fixed – but the problems in VET are a manifestation of deeper ideological trends that have shaped policy development in Australia for far too long. Inequality is growing. Trickle-down economics – and relying on the good agencies of rich corporations to share wealth – always a delusion – has now been comprehensively discredited.

It is my view that the rise in inequality has been exacerbated by the misuse and misapplication of competition policy – the slavish adherence to increasing competition, privatisation and outsourcing has done considerable damage. In 1996 98% of students receiving publicly funded VET were in TAFE (with 83%) or not-for-profit community education providers (with 15%) but, by 2016 this had fallen to 52% and 6% respectively.

That is why Labor have already announced we will return the $637 million the coalition stripped from VET in the last budget and why we have committed that at least two thirds of all government funding for vocational education will go to TAFE. The balance will go to not-for-profit community educators and only the very best of the private providers with demonstrable links to specific industry requirements.

My comments in my capacity as CEO of Community Colleges Australia (CCA):

I am pleased to hear that Shadow Minister for Skills Senator Cameron has re-committed Federal Labor to supporting Australia’s community education providers.

When Senator Cameron spoke to the CCA conference in July 2017, he said similar things. We are pleased that Labor has maintained its commitment to Australia’s community education sector, as an important complement to the VET anchor institution of TAFE.

Senator Cameron’s analysis is consistent with CCA’s own interpretation of VET policy and recent history. We are keen that all sides of politics recognise the important role of Australia’s community providers in building our nation, and commit to proper funding of our sector. It’s no longer acceptable that community providers receive the crumbs from the table.

The challenge for the current government and the Assistant Skills Minister is to elaborate on a vision that is also compelling. Erasing the much-based VET FEE-HELP program, replacing it with VET Student Loans, was a great start – but not nearly sufficient. Announcing the Skilling Australians Fund is an interesting innovation. Unfortunately neither one of these programs have much resonance or relevance to Australia’s important community education sector.

Excerpts from Senator Cameron’s Speech to the CCA Conference in July 2017

The following are excerpts from Senator Cameron’s speech presented at the CCA national conference in Melbourne on 26 July 2017:

Community Colleges and the people who work in them, excel at assisting disadvantaged learners. You work with individuals to achieve goals they had thought were beyond their reach – providing critical literacy and numeracy skills and assisting them to gain important foundation life and employment skills.

You give young people, alienated from formal schooling, a second chance at education. Your colleges also offer quality, vocationally-focused training and education to people seeking to start work, return to work, change jobs or keep their job. Community-based education is a critical launching point for disadvantaged learners into further education and into work; particularly in regional and rural communities where the support is especially valuable and needed.

Importantly, adult and community education institutions build and sustain local communities by bringing people together through their shared interests; by forging partnerships with other local organisations; and tailoring courses from the community and for the communities they serve.

In a world where inequality, fragmentation and isolation are growing, the work community educators undertake – creating and sustaining local connections; nurturing resilient, engaged and involved citizens; and smoothing transitions into work and further learning – is of enormous value. The socially, politically and economically engaged communities you foster are the foundations upon which strong democracies are built.

More extracts from Senator Cameron’s speech on 13 April 2018

The evidence shows that the training market in Australia has led to:

  • an overall decline in the outcomes for students – the latest official annual survey of VET students taken in mid-2017 found that of students who graduated during 2016 and were employed, just 30% were in an occupation group related to their training
  • a decline in quality– the government’s own regulator has called the training market “a race to bottom” – which has placed enormous pressure on providers like TAFE working to maintain quality
  • the proliferation of wasteful and rigid bureaucratic processes – that have seen the development of 17,000 units of competence and 1,400 different qualifications, many of which remain unused
  • dissatisfied employers continuing to complain of skill shortages and gaps – despite being given the authority to lead the system
  • cherry-picking and rent seeking by for-profit providers
  • insufficient investment in infrastructure and in teacher qualifications and resources
  • money wasted on marketing, promotion and advertising
  • the development of a market for low quality courses
  • and, at its very worst, the defrauding and exploitation of citizens trying to improve their lives through gaining education and qualifications.

The commodification of education is summed up by the words of a capital investment adviser spruiking the money-making benefits of education:

“Education is a beautiful business when it works. Fat fees, hefty annual increases, recurring income and high switching costs are just a few traits of high-performing education providers. Investors who have understood the sector’s potential have done exceptionally well…The sector has excellent long-term potential. Not-for-profit education providers…look like sitting ducks as technology eventually reshapes the sector.” (Tony Featherstone, “Top Performing Education Stocks”, 17 March 2014).

About this post

This post is an adaptation of a news item on the Community Colleges Australia website on 13 April 2018; I am re-posting and expanding it here in order to extend the message.

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Australian VET policy just got a lot more complicated

March 13, 2018

Australia’s vocational education and training (VET) policy discussion space has just become a lot more intense with the announcement by the Federal Australian Labor Party of a national inquiry.

On 23 February, Deputy ALP Leader (and Shadow Education Minister) Tanya Plibersek announced a “shake up of TAFE and uni”, stating that “Labor wants prospective students to see TAFE and uni as equally attractive study options.” She also announced, “a once in generation National Inquiry into Post-Secondary Education that will look at every aspect of the vocational and higher education systems, to ensure they can best respond to the needs of Australia’s economy and society.”

The inquiry is to be “ready to go in the first 100 days of a Labor Government.” Labor followed the announcement up by inviting submissions on the scope and terms of reference for the inquiry, which is to be conducted within the existing resources of the Australian Government Department of Education and Training.

The Labor announcement – which received extensive coverage in the press (The Guardian, Australian Financial Review and The Australian. Ross Gittins in The Sydney Morning Herald (28 February) pointed out that there is a long history to the current state of VET stuff ups, recommending that the Turnbull Government should simply join Labor’s call for an inquiry. He notes that the problem goes way back to mistakes by then education minister Julia Gillard), “made worse by state governments of both colours.” While a university demand-funded system went into place, Ross Gittins writes:

TAFE was being hit by sharp cuts in federal funding … and subjected to the disastrous VET experiment…. Parts of the states’ union-dominated TAFE systems had become outdated and inflexible …. Rather than reform TAFE directly, however, someone … got the bright idea of forcing TAFE to shape up by exposing it to cleansing competition from private providers.

The feds extended to the VET sector a version of the uni system of deferred loans to cover tuition fees. State governments happily played their part in this cost-saving magic…. The result was to attract a host of fly-by-night rip-off merchants …. Eventually … the present government overreacted. Now it’s much harder to get federal help with TAFE fees than uni fees.

Far too little is being done to get TAFE training properly back in business after most of the for-profit providers have faded into the night…. Last year’s budget established an (inadequate) Skilling Australians Fund.

The Labor announcement follows on the October 2017 release of a report by the Business Council of Australia (BCA) entitled Future-Proof: Protecting Australians Through Education and Skills.

“When both the ACTU and the BCA – not exactly happy bed-fellows – agree that an inquiry is welcome and overdue, you know that important something is going on,” said Dr Don Perlgut, CEO of Community Colleges Australia (CCA).

“CCA welcomes this attention being paid to the problems of Australian VET. We have been saying for some time that Australia’s lack of a national VET policy is a recipe for disaster,” said Dr Perlgut.

“The problem we see with both the BCA report and Labor’s announcement is that neither of them acknowledge Australia’s community education sector. In 2016, some 378,000 people studied VET with community providers; that’s a full 9 percent of the national total that year,” said Dr Perlgut.

“Both Labor and the BCA have the right idea – Australian VET is in crisis and will not self-correct – but neither of them see the whole picture. CCA believes in the centrality of TAFE to Australia’s VET system, but the complementarity of the not-for-profit community sector is a part of the answer. Our sector has the flexibility, capacity and integrity to do more and expand its role, especially for the most vulnerable and disadvantaged workers and potential workers.

“At CCA’s Annual Conference in Melbourne last July, Senator Cameron – Labor’s Skills spokesperson – acknowledged the importance of the community VET sector. This needs to be incorporated into Labor’s proposed inquiry’s terms of reference,” said Dr Perlgut.

(The item above was originally published in the “news” section of Community Colleges Australia. View the original item here.)


New Report Highlights Contribution to Regional Economic Development by Community Education Providers

February 9, 2018

I have written a report for Community Colleges Australia (CCA) that highlights how NSW community education providers contribute to the state’s regional and rural economic development. The report concludes that the not-for-profit community education sector constitutes a major economic development resource that has been under-utilised by state, Commonwealth and local governments.

The report highlights three needed changes:

  • reducing barriers to participation in government-funded economic development projects;
  • including not-for-profit community education providers in multi-sector regional economic development planning activities; and
  • increasing the capacity of community education providers themselves to participate in economic development through improved facilities and better access to training.

The report reviews challenges facing the regional NSW economy and the delivery of regional and rural VET, analyses the scope of activities and economic impact of community providers, and includes recommendations that span NSW and Commonwealth regional development programs. The report utilises the results from a survey of all regional and rural community education providers, a forum held at Byron Community College’s Mullumbimby campus and consultations with stakeholders.

CCA has found innovative ways that our members can add to NSW regional economic development. These include training under-utilised older workers, collaborating with Aboriginal land councils, expanding business incubators, encouraging entrepreneurship and social enterprises, leveraging philanthropy and extending the same opportunities to Western Sydney.

Read the Executive Summary and Recommendations here.

Read the full report (PDF) here.


Getting Serious About Australian Unemployment

September 11, 2017

Is the Australian Government giving up on reducing unemployment

It’s time to get serious about reducing Australia’s unemployment rate. We need a national training policy that gets Australians to work.

Those were the words that came to me when I read Stephen Koukoulas’ article, “Australia has given up on solving unemployment”, (The New Daily, 17 August 2017).

“It is a sad state of affairs to realise that the current crop of Australian policy-makers have effectively given up on reducing unemployment. Treasury reckons that the lowest the unemployment rate can go without there being a wages and inflation breakout is around 5.25 per cent,” Koukoulas writes.

“The Reserve Bank of Australia notes something similar, forecasting that even when the economy is growing strongly at an above-trend pace, the unemployment rate will hover between 5 and 6 per cent,” he continues.

Australian unemployment remains persistently high

Australian Bureau of Statistics (ABS) July 2017 figures show unemployment in Australia at 5.6%, an official figure of 728,100 people: “Enough to fill the Melbourne Cricket Ground about seven times,” Koukoulas writes.

Koukoulas analyses Australian Treasury and Reserve Bank of Australia (RBA) reports, and concludes that, “Australia will never see fewer than about 700,000 people unemployed – no matter what kind of improvement we see.”

He’s not the only one outlining that prospect. Trading Economics, a New York City company that analyses 196 countries, including “official sources of historical data for more than 20 million economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices”, also predicts that Australia’s unemployment rate in 2020 – 3 years from now – will be … 5.6%. That’s correct, no change at all.

Koukoulas compares Australia internationally: “It seems to be a peculiarly Australian issue. In the US, the unemployment rate is 4.3%, in the UK it is 4.5%, in Japan it is 2.8% while in Germany, the unemployment rate is 3.9%. It is clear the government has given up on reducing unemployment.”

Unemployment hits the most vulnerable and most disadvantaged in Australian society

What Koukoulas does not detail are the social, economic, regional and generational costs of persistent unemployment. This is how the Australian Parliament’s Standing Committee on Employment, Education and Workplace Relations describes the consequences of unemployment:

Unemployment is a major life event. It can have a devastating impact on people’s lives. It affects not just the unemployed person but also family members and the wider community. The impact of unemployment can be long-lasting. As unemployment becomes more long-term, its impact becomes more far reaching, often affecting living standards in retirement. The loss of income by the parents can damage the prospects of the next generation.

Unemployment disproportionately impacts Australia’s most disadvantaged groups: young people, Indigenous Australians, rural and regional residents and people with disabilities.

Young people (generally ages 15 to 24) in Australia had an official unemployment rate (July 2017) of 12.9%, more than double the national rate of 5.6%. According to Dr Patrick Carvalho:

– The damaging effects of youth unemployment can persist into adulthood, with different intensity and longevity depending on the length of the unemployment period and on individual conditions such as education levels and socioeconomic background.

– There is no minimal or safe threshold regarding the length of early unemployment experience…. the longer a person is unemployed, the longer the perversive effects are likely to last.

– Such negative long-term consequences of early jobless spells are commonly referred to in the literature as the “scarring effects”. (p. 19, Youth Unemployment in Australia, Centre for Independent Studies, November 2015)

Youth unemployment impacts are not felt uniformly, with the national figure masking high concentrations in many locations, especially regional and rural Australia: unemployment rates of 28.4% in outback Queensland, 21.8% in NSW Hunter Valley (outside Newcastle), 20.5% in Cairns, 19.6% in southeast Tasmania, 19.5% in mid north coast New South Wales, 19.4% in mid north South Australia and 18.4% in south eastern New South Wales. (Source: “Australia’s Youth Unemployment Hotspots: Snapshot”, The Brotherhood of St Laurence, March 2016.)

The growing youth under-employment – those who wish to work more than they do – now at 18% (February 2017), “is the highest in the 40 years since the count officially began,” according to the Brotherhood of St Laurence’s “Generation Stalled” Report. Add the two figures together – unemployment and under-employment – and you get a staggering 31%, almost one-third, of young Australians who are “underutilised”. Surely this “underutilisation rate” will be much higher – possibly 50% or more – in many regional locations. Are we in danger of allowing a sub-generation of unemployed and underemployed young people to “fall through the cracks”, with long-term life consequences for them, their families, their communities and our country?

It’s not just young people:

It’s time for a national training policy that targets reducing unemployment

Australian unemployment should be below 5%, not drifting towards 6%. “In addition to the obvious social benefits of having a highly skilled population, maximising training and educational attainment should be an uncontroversial policy aim,” Koukoulas says.

Koukoulas believes that the Australian “unemployment rate is being skewed by a number of longer-run structural factors,”, including an “education and training system mean that those who are unemployed do not have the requisite skills for the modern Australia economy.” Australia is “heavily reliant on imported skilled workers who arrive here via the 457 visa program,” he writes.

“Yet the government imposes cuts to trades training, is underfunding school education, ramping up university fees and forcing those who get a degree to pay for it more quickly,” he continues.

It’s not too late to invest in Australian training. Australia is endowed with extraordinary natural resources, extensive wealth, dynamic and hardworking people. We have one of the most welcoming societies in the world and are the “most successful immigrant nation on Earth”, according to demographer Bernard Salt.

Despite years of vocational education and training (VET) policy chopping and changing by governments of all political stripes, we have still maintained the framework of an internationally recognised and admired training system.

We have the capacity. We have the skills to make it happen. What we need now is the will and the focus. The desire to place training at the TOP of the national policy agenda, not an “also ran” issue.

Australia’s Community VET sector

Australia’s community education VET sector can and will do its part to address unemployment. The year 2016 saw a rise of the community sector’s VET students to 9% of the national total.  The community education sector does very well at ensuring unemployed people can be lifted into employment: according to the NCVER, in 2016 community education providers topped all categories (TAFE, private for-profit, university), with almost half (48.9%) of graduates employed at the end of the training that had not been employed prior to commencing their study.

We address the needs of vulnerable and disadvantaged people, and we over-perform in regional and rural Australia, where VET is most needed and valued.

(Note: This post was originally published by Community Colleges Australia on 11 September 2017. View the original version here.)


July 24, 2017

I have just published an article about the latest news coming from the for-profit vocational education and training (VET) sector in Australia. You can read it on the Community Colleges Australia (CCA) website here.

And it’s not too late to sign up for the CCA conference, happening in Melbourne this week from Tuesday evening, 25 July through Thursday 27 July.


The Australian Government moves to start investing in vocational education and training

May 3, 2017

The Australian Government looks like it is about to start investing in vocational education and training (VET) again. It’s about time.

It’s also important to examine some recent history. Last July, Malcolm Turnbull’s Coalition ran its election campaign under the slogan “jobs and growth”, although announced no new training policies or programs. Instead, it promoted a $48 billion tax cut for business, part of which has partially been approved by Parliament.

In June of last year, Monash Business School and the Economic Society of Australia (ESA) polled the ESA National Economic Panel for their opinion on this proposition: “Australia will receive a bigger economic growth dividend in the long-run by spending on education than offering an equivalent amount of money on a tax cut to business.”

Economists are famously not the most left-leaning group of professionals, but their responses to this question – while not uniform – were overwhelming: almost two-thirds of the panel (19 of 30) “agreed” or “strongly agreed” with the statement, with only 6 economists disagreeing and 4 “uncertain”. Comments included:

  • Bruce Chapman: “Literacy and numeracy skills of the population are the most important contributors to long-run growth. So long as the additional education contributes importantly to these capacities there should be little doubt that expenditure in this area is of the most critical significance.”
  • Chris Edmond: “Business tax cuts offer a ‘one-off’ level effect and so has no long-run growth dividend at all, while investment in education has a very real prospect of increasing the growth rate of real GDP over an extended period.”
  • James Morely: “Estimates on returns to education are larger and more precise than estimates on the effects of tax cuts on investment and long-run growth.”
  • John Quiggin: “Social and private returns to education are higher than marginal returns to business investment.”

One of those who disagreed – Professor Rodney Maddock (who will be speaking at Community Colleges Australia’s Annual Conference in Melbourne in July) – cautioned that, “I do not expect any payoff from increased educational spending unless there are very significant reforms to the system.” In other words, it’s not just about investment, but also about how the system uses that investment.

Jessica Irvine, senior economics writer for Fairfax Media, agrees with focussing on education investment:

Much of Australia’s low-hanging fruit has been picked when it comes to economic reform. We’ve floated the dollar, privatised the banks, deregulated the labour market. There’s less obvious work for government to do to reform the economy. But if I had to nominate the remaining lowest-hanging fruit, it’s spending money to help disadvantaged students get the best out of their education. Kids from low socioeconomic backgrounds are our greatest untapped source of potential growth. They are our most undervalued stock.

Irvine’s prescription:

Want to innovate? Educate. Want to create the jobs of the future? Educate. Want more tax revenue? Educate. Investments in our human capital offer the best returns around.

In May 2016, writing in The Guardian Australia, former Citibank Chief Economist Stephen Koukoulas stated:

The relationship between educational attainment and growth and income is a given. The more skilled and educated a workforce, the better off is the economy and the population. The consequences for countries with a poorly trained workforce are devastating. Australia saw this just prior to the global financial crisis in 2007-08 when the economy ran out of suitably educated people. The “skills shortage”, as it became known, meant that rapidly expanding companies could not find the people needed to work in their bigger and better businesses.

Koukoulas accurately predicted how and why the Coalition Government might turn to investing in skills:

In the period from the end of 2005 to the start of 2009, unemployment hovered around a 30-year low at between 4-5%. In human terms this was around 450,000 to 500,000 people. None of these half a million people had the skills required in a strong economy, so businesses had to resort to hiring foreign workers. While this was appropriate at that time of unforeseen economic strength, it overlooked the issue that the education and training system allowed 450,000 people in the workforce to remain unemployed despite the unprecedented demand for labour.

Fast forward just 11 months to April 2017: The ABC recently reported that the “May budget will establish a training fund worth $300 million, funded by visa charges. This will sit alongside a bigger focus on vocational and non-university skills training.” This announcement is set in the context of abolishing the “457 temporary work visas” and introducing new language and skills testing for foreigners who seek to work in Australia.

So investing in vocational education and training appears to be on the Coalition’s agenda, although (apparently) tied to new immigration rules. Next week’s budget will reveal how much.

(Note: I originally published this article on 27 April 2017, under the title “Investment in Training Back on the National Agenda”, on the Community Colleges Australia website.)


Increase investment in community education to tackle disadvantage and unemployment in rural Australia

March 3, 2017

Community Colleges Australia issued the following press release in late February – reproduced below.

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Australian governments should increase investment in community education to address higher levels of disadvantage and unemployment in rural and regional Australia, according to a new report from Community Colleges Australia (CCA).

The report, The Role of Community Education in Australian Regional and Rural Economic Development, finds that not-for-profit community-based vocational education and training (VET) providers play a disproportionately large role in rural and regional Australia, educating at least 10% of VET students in New South Wales and 20% in Victoria.  This makes community providers a significant national force in providing skills to non-metropolitan Australia.

Participation rates in VET courses are 50% higher in rural and regional Australia than in metropolitan areas. A much larger percentage of rural and regional VET learners also study lower level qualifications: Certificate III and below – just those qualifications that community education providers excel in, with their focus on vulnerable and disadvantaged learners.

“This report shows how community education is crucial in providing skills and in driving economic development in rural and regional Australia, and includes numerous examples of ‘bottom-up’ innovative community-based approaches. Community education providers are uniquely positioned to act as ‘passing gear’ vehicles, accelerating new ideas and helping our regions to prosper,” said Dr Don Perlgut, Chief Executive Officer of CCA.

“Yet governments have not been investing enough in community education, particularly in high need, disadvantaged rural and regional areas where youth unemployment remains stubbornly high. We have not seen any national infrastructure investment in community education since 2009 – it’s now 2017. On top of this, Australia lacks a coherent national statement on the role of community education in VET. This policy vacuum makes it difficult for community providers to operate effectively,” said Dr Perlgut.

“CCA looks forward to working collaboratively with the Australian, state and territory governments to fix these issues, and to utilise the capacity that community VET providers have to meet pressing rural and regional skills needs,” said Dr Perlgut.

The report makes a number of key recommendations, including that the Commonwealth, state and territory governments should:

  • Boost funding for community education, including providing more support for infrastructure, professional development and staff training, pilot funding programs, and community service obligation activities.
  • Utilise regional and rural community education providers to engage with vulnerable and disadvantaged Australians, particularly young people.
  • Develop a coordinated national-state-territory policy statement on the value and place of community and adult education.
  • Examine VET funding programs to ensure community providers are not disadvantaged by unnecessary regulations.
  • Collect and publish annual data on regional and rural student outcomes and provider comparisons.

The full report The Role of Community Education in Australian Regional and Rural Economic Development is available here on Community Colleges Australia’s website.

 

(image below: logging truck driving through Armidale NSW)

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