Who is best to determine value? – comment by CEO Craig Robertson

The most apocryphal story of King Solomon comes from two women claiming motherhood of a boy child. Coming to the wise king for a judgement to overcome the stalemate Solomon commanded soldiers to cut the boy in half – one half for each. One consented but the other offered the child to the other to save his life. It was the latter to whom Solomon gave the child – the love for (her) child outweighed the property motive of the other (one can only assume the dispute was over earning capacity the boy would bring to the household at some point).

The wisdom of Solomon may be needed to divine the funding models the Morrison government is wanting to operate across Australia’s tertiary sector. And a lot of it comes to the question of value.

Much has been written this past week about the changes in higher education funding announced by Minister Tehan Friday week ago. In the fee‑capped domestic bachelor monopsony market the Government has decided to reduce its subsidy to the humanities and upped the private contribution from students choosing this field. The savings in subsidy outlays has been directed to other courses the government deems are demanded in the economy and pays for more places over time.

As the purchaser of these places, the Government is expressing the value it places on the humanities. The subsidy represents about 10 per cent of the cost of delivery. That’s right, it sees little public benefit that warrants government expenditure.

VET faces the same questions about value. The Productivity Commission in its far-reaching report contended that the wage returns from training represents enough value to students that they ought to pay for the training. To be fair to the PC though it does raise the prospect that there is some public good from VET but queries the evidence.

The PC laments that the VET sector is not customer centric to the extent of disability care and Indigenous services. VET services should be centred on ‘customers’ (students and employers in the case of VET) it says. TAFEs couldn’t agree more. It is students who enrol and employers who give graduates jobs.

The PC seems to ignore an important piece of the value puzzle – the product.  It is the value of the VET qualification upon which a student can stake their future at the hands of the employer.

Who sets the product? Industry does. Industry sets the scope and content of qualifications which is dutifully enforced by the regulator. Students easily assess the value proposition before them, especially in terms of wage and job security. Declines in participation would suggest that neither the product, nor the outcome it leads to, is cutting it.

Employers seem to be saying much the same. The Australian Industry Skills Committee, the ultimate industry authority in the VET sector, on its website[1] puts adaptability, collaboration, analytical and digital skills as the highest order priorities before it comes to occupational skills. Yet Training Packages in the hands of industry stubbornly reflect industry specification of micro-level occupational tasks.

In the PC view of things, it would seem industry needs to pay if that’s their expressed demand.

Too much, too far, Craig, I hear you say. The problem is that VET the sector is full of value propositions with as many different perspectives on the level of that value as there are stakeholders, clients and customers.

Ultimately, the Productivity Commission places faith in students making the best choice to suit their circumstances and aspirations. It is difficult to disagree. Prospective students are no fools.

Despite the Government’s value on humanities, there are numerous reports from prospective university students that they will follow their aspiration and aptitude rather than be swayed by an economic transaction. In the end someone who likes making things lands somewhere in that endeavour, others who like care end up somewhere in that field and those who love cerebral pursuits often end up there, not that any of the others do not entail cerebral effort.

Society is better off with general and transferable knowledge in ways that is difficult to predict from the centre. The value to society from all tertiary study should be indisputable, especially in these troubling times. As Nicholas Whitlam wrote in The Australian during the week:
There is a profound case for pursuing knowledge for its own sake. The humanities are at the heart of all learning: language, literature, philosophy, religion, art, music, ­psychology. These are the things that distinguish us from beasts.

The same proposition should apply to VET students – qualifications and support from Government that generate a return that is more than just value to industry.

Think about this over your morning tea. Firstly, do the competing women reveal the clash between capital and labour – the market over the heart? Secondly, Solomon had no superior knowledge to discern who was the mother but he had the wisdom to create the environment where they revealed that themselves.

Apologies for the obtuse – I took an esoteric pill and it worked a treat!