VET changes must better support access and skills development

Clamping down on vocational education (VET) providers that have abused the trust of learners, government and the community by rorting the VET FEE-HELP (VFH) scheme is vital. Quality providers, both public and private, have long called on the Federal Government to make changes to VFH to protect students from unscrupulous operators. I fully support halting their access to taxpayer-funded monies and the introduction of targeted measures to ensure only high-quality providers have access to the new VET Student Loans program.

However, if Australia is to successfully transition to a highly skilled and productive economy, we need a vocational education and training system that will deliver for learners and employers. This means policy must support high-quality providers whose primary purpose is education, and who achieve high completion rates and strong employment outcomes.

VET policy needs to be well designed, implemented and monitored. This has not been the case with VFH and many stakeholders have played a role in where we are now.

Governments have not successfully articulated the place and purpose of VET. We have seen numerous policy changes, poor policy design and implementation, poor regulation and poor oversight. Where governments provide funding and subsidies they must be accountable for managing and monitoring the market. They have not done this well.

Regulators have failed to deliver best practice, risk-based case management and have not acted decisively against those abusing the system. Within the industry, the peak body ACPET experienced difficulty introducing new measures to improve standards of membership and governance structures that affected their capacity to remove poor performers.

Media and commentators have been selective with data, using a small number of examples to denigrate the whole private training sector while omitting data that shows similar results in parts of the public sector. This has created a false belief that all private training providers are driven by profit, not education.

Let’s look at the facts about government-funded VET. According to the National Centre for Vocational Education Research, an Australian government owned not-for-profit organisation, there were 4.5 million enrolments in 2015. Private providers delivered over three million enrolments and TAFE delivered nearly one million.

Over 85 per cent of graduates were satisfied with the overall quality of their training and over 80 per cent of employers with apprentices and trainees were satisfied they were obtaining the skills they require, up 2.9 per cent from 2013 and above satisfaction rates a decade ago. Most importantly, over 85 per cent of graduates from VET programs were employed or enrolled in further study after training.

These are the kinds of outcomes Australia needs to build the skills of our future economy. They should be front of mind as parliament considers needed changes to the proposed new loans program.

First, access for providers should be based on outcomes, not on whether they operate in the public or private sector. There is clear evidence of poor providers in both the public and private sectors. Similarly, there are many great public and private providers who continue to deliver quality outcomes.

Second, the government must consider the impact changes will have on skills development. The VET sector provides access to industry relevant training for learners of all ages and backgrounds. It’s a path to a meaningful first job for school leavers and the unemployed. It’s also critical in upskilling Australians whose jobs are in transition and affected by automation and technological disruption.

Imposing loan caps will reduce access to tertiary education for these learners. They will be forced to pay upfront fees, seek out a higher education qualification that may be less suited to their needs, or they’ll disengage completely. In the health sector, for example, the establishment of a $10,000 loan cap for nursing qualifications, where the costs of delivery are significantly more, will create a disincentive for these learners to pursue further education, diminishing Australia’s ability to meet this critical skills need.

Finally, rationalising course lists and introducing price caps will have an impact on quality and hinder Australia’s ability to develop skills for future industries. Learners and employers are better than governments at responding to supply and demand signals. The list of eligible courses focuses on current areas of skills needs at the expense of emerging industries.

A great example is creative industries, where employment opportunities have grown 40 per cent faster than the broader economy in recent years. A blanket loan cap of $10,000 is a disincentive for industry-recognised niche providers to develop high-quality courses that prepare Australians for future jobs. It also undermines the Federal Government’s agenda to secure Australia’s economic prosperity through innovation.