A quality VET system: Is this possible with 3,829 RTOs? – comment by CEO Jenny Dodd

It feels like déjà vu. Australia’s vocational education and training sector (VET) is undergoing another reputational issue with the reporting in the media of non-genuine students being induced to Australia and exploited for sex work.

I add my voice to that of Claire Field, an advisor to the tertiary education sector and reported in Campus Morning Mail on Wednesday 9 November that the regulator for VET, ASQA, must review the finances of for-profit RTOs. But is it more than that? Is it asking the question – are the market settings right?

It is not enough for the regulator to remind providers of their responsibilities. That is like keeping the whole class in because one person did the wrong thing. Quality RTOs know their responsibilities. For those operating unscrupulously these are meaningless words. It reminded me of conversations I had at the time of VET FEE-HELP. I remember being told the providers who took millions of dollars out of Australia and manipulated countless students did nothing illegal. While there may be loopholes in policy and legislation, we clearly need a national training system that stops the entry of organisations which operate for personal gain only.

In Australia there are approximately 3,829 training providers – 29 are TAFEs or TAFE divisions of dual sector universities. That leaves 3,800 training providers which are non-government owned. TAFEs are radically different business models to all other providers. Not only are TAFEs public organisations owned by the States and Territories, with staff who operate to public service codes of conduct, they are large organisations with on average about 900 staff. That compares to the average size of an RTO, being 12 training staff.  This produces a very different business model. It is pleasing to see that the draft revised RTO standards recognise that difference.

We have had a contestable VET market for a long time now. TDA acknowledges the role of enterprise RTOs, we are willing partners with community based not-for-profit RTOs, and we support the role of quality independent for-profit RTOs. However, the level of exploitation that has been revealed by the media recently raises the question whether we should be spending more and more on regulation of the long tail or should we raise the barrier to entry? Even the notion that some people buy and sell RTOs at a rapid rate for investment return calls into question why other RTOs should be paying, through cost recovery, to ensure the regulator has the resources to monitor these activities to uphold quality and the reputation of the sector.

When we think about the revised standards for RTOs and the new ASQA self-assurance model, lots of ASQA resources are being deployed to oversight this market system. Is this helping innovation? Is this developing the skills we need for the future? Has the current market model had its time, and the environment Australia finds itself in now requires different ideology and investment priorities?

Therefore, questions must be asked about the long tail of VET providers.  Some providers will always find loopholes to avoid the key purpose of Australia’s VET system, which is to contribute to building Australia’s skills capability by offering quality outcomes for students. How do we get to a market structure that reduces the cost of regulation, improves outcomes, and ensures Australia’s VET reputation? Reducing the number of providers may be what’s needed now.