The forgotten side of the VET review – comment by CEO Craig Robertson

For a prime minister claiming economic management credentials, Scott Morrison seems to have overlooked one of the basics of economics.

In the terms of reference for the review of vocational education and training he announced last Wednesday, he’s forgotten the basic principle of demand and supply.

The riding instructions ask the reviewer, Stephen Joyce, the Kiwi National (not Australia’s own National, Barnaby) to hold roundtables with industry, employers, student and workforce groups, as well as states and territories. There’s no mention of provider groups – the supply side of VET.

It’s hard to read this government. At one point it was contemplating nationalising power generation, such was the concern for baseload supply. But not for VET, it appears.

Raucous students were not in charge of the Gonski review; Denise Bradley didn’t contend with pimply undergraduates on her panel; and ailing senior citizens aren’t reviewing aged care. No appendectomy patient takes the lead in the case-mix activity-based funding for public hospitals. There’s good reason for that. Customer views are important but, on their own, they miss the big picture. Engaging with industry and interest groups, even students as the paying side of the demand side of the equation is vital, but leaving out the supply side is plain silly.

That aside, let’s look at a simple starting point. The core contribution from the Commonwealth is underwriting student loans and financial transfers, under national agreement, to states and territories which, last time I looked, had constitutional responsibility for VET.

I’ve commented before about the limitations of VET Student Loans. Such is its red tape and low loan amounts, I’ve heard it makes even Kim Carr blush.

The National Agreement on Skills and Workforce Development passes $1.5bn to the states and territories each year and funding levels to 2021-22 only keep up with inflation, compared to the guaranteed growth of 19 per cent over that period under the hospital national agreement. That agreement also caters for up to 6.5 per cent growth per year if population pressures lift hospital costs. There’s nothing like that for the skills system which is facing the same population growth.

The Skilling Australians Fund relies on taxes on employers who bring in skilled workers and it has already been reduced in size so churches don ‘t pay to bring in clergy.

The generous side of me sees TAFE’s omission as an oversight in the rush to get the review up, and it was a rush, I hear. The foreboding terms of reference and submission deadline (while we are at the beach) makes the realist in me fear the solution is already in the bag.

All of us can understand funding ephemera to prop up election promises, but it is core funding to states and territories and reasonable loan conditions which ensure the baseload power of VET.

Recently, I likened the audit findings into VET Student Loans to a hospital with no patients. This review looks like all patients and no hospital.

It will be too late once TAFE campuses are closed and industry trainers let go to have wished this review had the right balance.

The only certainty is that before May next year, citizens will get to mark the success of the government in key services, including its support for TAFE.

Next week is our last newsletter for the year. We’re logging off to get our submission done over our Christmas pudding.