Proposal for Federal Government to Take Over TAFE

A new proposal released by the Turnbull Government this week, reveals a plan for the Commonwealth to take over the nation’s TAFE funding within the vocational training market.

Under the proposal which was obtained by Fairfax Media, the Turnbull government are proposing to deregulate TAFE fees and ensure that TAFEs receive the same levels of funding as private colleges, in a bid to increase competition in the sector.

The proposal states that “while prices will be deregulated, basing subsidies on analysis of the cost of delivery will increase competition and improve choice in the sector and see all providers competing on value for money and on the quality of their learning and training product.”

The proposal also mentions that States can top-up government-owned providers, “but only to the extent necessary to achieve competitive neutrality with non-government providers.”

This proposal is a significant aspect of the federal government’s pledge to overhaul the VET sector, after numerous scandals broke through out last year relating to the federal government’s HECS-style vocational scheme, VET FEE-HELP.

Over the last year the Australian Competition and Consumer Commission (ACCC) has launched court proceedings against numerous private training colleges who’ve exploited the VET FEE-HELP student loan scheme, in order to receive more government funding.

Despite the government’s assurance that a federal TAFE funding system will help resolve this, there are growing critics of this proposal. Former TAFE Directors Australia chairman Bruce Mackenzie, argues that while a federal take over would put downward pressure on fees, it would also mean students will face higher costs and be saddled with increased debts.

Meanwhile both the NSW Coalition Government and the Victorian Labour Government told ABC news that they did not have faith the Government could run the sector, considering their management of VET FEE-HELP has turned into such a ‘debacle’.

“We need a system that puts students first but most importantly completion rates first, and at this stage I have no confidence that we can get this at a national level,” NSW Skills Minister John Barilaro said.

The transition of state to federal funding for TAFE may also not be a welcome transition for many private providers already in the vocational training market. Australian Education Union federal TAFE secretary Pat Forward made a statement this week arguing that this proposal  “heralds a transition to a privatised, user-pays system. It would basically transform TAFEs into private providers which compete for federal funding.”

Pat Forward went on to state the transition could create a paradox; reversing the fate of private training providers. They will now have to compete twice as hard to receive funding to run their business, and a decreased level of funding could in turn have a detrimental affect on the quality of training they provide to students…despite quality training being one of the key aspects plaguing VET education currently.

The state governments spent about $4 billion on VET, while the Commonwealth spent $3 billion during the last financial year. This didn’t include the almost $2 billion spent in 2014 on VET FEE-HELP loans.

The Turnbull Government proposal has been circulated to state governments this week for discussion ahead of a planned Council of Australian Governments (COAG) meeting in March. The government has also assured that this proposal is a ‘work in progress’ that will likely be refined before COAG meets in March.

No doubt all within the VET sector will await with baited breath for what these refinements will be…

To access the full proposal published by Fairfax Media, click here