Unity in purpose and clarity in funding – comment by CEO Craig Robertson

Tomorrow marks five weeks to the federal Budget. In between we expect Steven Joyce to release his report on the review of VET in Australia.

His first term of reference is to consider how funding, policy and regulatory settings can be optimised to support both school leavers and workers to maximise achievement. ‘Optimise’ reminds me of the time I wanted to bring to life my first car, a 1970 Hillman Hunter, with a fuel additive! It died!

Looking at VET funding is really a story of a love match of Romeo and Juliet proportions.

In mid-2012 then Prime Minister Gillard and first ministers agreed to a national partnership for VET reform – an agreement which brought to fruition entitlement and choice to lift participation in VET and the human capital base of the working-age population.

States guaranteed a training place, at least at Certificate III level, for their post-school residents who had not reached that level. Central was the opening-up of funding and places to a wider group of providers beyond the TAFEs and user-choice providers for apprentices and trainees. In return, the Commonwealth expanded VET FEE-HELP as a deferred repayment loan for students of diploma and advanced diploma courses. This opened the door for most states to redirect their subsidy funds previously committed to diplomas and advanced diplomas to cover the expansion in certificate level courses. The love match was made.

We all know the open door allowed in a class of providers which aggressively marketed to students but failed in due diligence to them. We all accept the scheme needed to close but VET Student Loans effectively tore up the nuptials. We estimate the core demand for student loans, even accounting for the closed providers, is about $1bn per annum. The Government’s own Budget allows for just over $1bn, but in 2018 only $289m was borrowed. I’ve commented previously that VSL is manifestly inadequate when the limit on loans is around $5000, $10,000 or $15,000 per course. The Government is effectively asking providers to ‘optimise’ delivery, ie deliver more with less. The sector has been doing this for the last 20 years. Quality is the first sacrifice followed closely by students’ interests. Yet we don’t seem to learn.

The states were also marooned. They had restructured their supply channels and their finances, including increasing student fees for certificate courses, some by large amounts. Constrained VSL at diploma and advanced diploma and high fees for Certificate courses. It’s little wonder students seem to be voting with their feet, either to university or straight into the workforce.

What’s then the optimisation? Bring the love back to Commonwealth and State relations! Sort out in a meaningful way the financial responsibilities and the funding relationships.

Of love, Shakespeare says – These sudden joys have sudden endings. They burn up in victory like fire and gunpowder – and advises moderation. This rings true if we reflect on the last few years. It took the death of Romeo and Juliet to end the feud between the Capulet and Montague clans. Let’s hope Steven Joyce can bring unity in purpose and clarity in funding between the Commonwealth and state clans. This is before discussions on the quantum can start, but more on that next week.