Let the Dance Begin

Craig Robertson, CEO, TAFE Directors Australia

Remember those school dances. A night of great anticipation, full of anxiety, lots of letdown with occasional triumph. But you had to be there, right?

You put on your finest to cover as best you can the oddities of a teenage body. The girls mingle on one side, boys the other. The air is thick with Brut 33 cut with body odour from sweat inducing anxiety. The word is given… find your partner.

Were you the one full of brim and strut finding the prettiest girl, or the hunkiest of guys? Or did you hang back, not sure of your place in the order of things? Hesitant steps, scanning the line for an affirming glance, the awkward nod and then on to the dance floor, and huge relief. Or did you retreat to safe ground – dancing with a group of girls or hands in pocket clustered in the corner with the other boys. (My therapist said it would be good recounting the more traumatic events of my teens.)

The dance between the Commonwealth and the states and territories was kicked off by the Prime Minister last Tuesday.

On this page we provide some reflections on the speech. The Prime Minister has set new expectations of vocational education but seems to think there is too much choice and points to the hospital agreement as a model for the future.

Industry leaders supported the Prime Minister’s commitment and called for more funding and point to the AQF Review as a good starting point for reform of vocational education content.

Get dressed for the dance

Get the flares out and the platform shoes on for the dance.

We at TDA will bring you the facts and comment about the dance.  We’ll unpack the claims, counter‑claims and over-claims so you can understand the implications.

This coming Friday the Productivity Commission releases its much-awaited green paper on reforms to VET financial relationship between levels of government, currently known as the National Agreement for Skills and Workforce Development. It’s not too hard to imagine that the Prime Minister had an advanced copy of the report in preparing his speech.

The Department of Education, Skills and Employment, the federal department responsible for skills is also gearing up for the negotiation, with senior staff changes announced on Friday. From tomorrow Mary McDonald will establish the VET Funding Reform Taskforce to lead negotiations, and Renae Houston is promoted to First Assistant Secretary, VET Quality and Policy, replacing Mary.

Tiffany Blight, after less than six months in VET compliance moves to bolster the National Careers Institute along with Kelly Fisher who moves from MySkills to support the data crunching for the Institute digital platform. Having completed the VET reform implementation and the Road Map, Matthew Hardy moves to head up the VET compliance division.

VET is first best option

The aspiration for VET has been set. The Prime Minister said in his headland speech for COVID recovery that he wants ‘trade and skills jobs to be aspired to, not looked down upon or seen as a second best option, it is a first best option’. He is true to form. He said the same earlier in the year. He places blame on the complexity of the system facing students, whose careers would be enhanced through vocational education.

Too much choice

Streamlining of VET seems to be the first up strategy. The Prime Minister said that for students, ‘the large number of choices that they face for qualifications can be bewildering and overwhelming. Compounded by a lack of visibility over the quality of training providers and the employment outcomes for those courses.’

Simple.  Training for industry requirements could come down to less than 400 qualifications and stringent requirements on the education capability of providers would halve their number.

Prime Minister calls out delays in qualification development

The Prime Minister called out the delays in developing qualifications – an average of 18 months, with many over two years to update. Industry has had responsibility for qualifications development for over 30 years. One of the most frustrating things for TAFEs is the criticism they face from businesses and students for courses being out of date and out of touch. TAFEs must wait for qualifications to be updated, otherwise they risk offering vocational education outside of the training package and at risk of sanction from ASQA.

Watch this space for more views about modernising VET qualifications.

Industry welcomes promise of VET reform, funding boost

Jennifer Westacott AO, CEO, Business Council of Australia
Innes Willox, Chief Executive, Ai Group
Shannon Fentiman MP
James Pearson, CEO, Australian Chamber of Commerce and Industry

Industry organisations reacted positively to the Prime Minister’s commitment to broad reform of the skills and training system.

The Business Council of Australia said the PM’s plan was a welcome step, in light of the flaws that COVID-19 had exposed in the training system.

“Our skills system is clunky and out-dated, distorted funding between VET and Higher Education has created a skills mismatch and workers and students don’t have the information they need to make good decisions,” Chief Executive Jennifer Westacott said. 

Ms Westacott also told ABC RN Breakfast that reform had to remove “the cultural and funding bias” that sends some people to university when they would be better doing a VET qualification.

“We’ve got to get the quality of VET up and we’ve got to make sure that industry is absolutely embedded in the process of working out what courses we need, what curriculum we need so that we’re training people for the jobs that are going to be in the market.”

Ai Group said the PM’s VET roadmap needed to be ambitious and include additional funding.

“Current funding arrangements are unacceptably inconsistent and incoherent,” Chief Executive Innes Willox said.

“A completely new funding agreement between the Commonwealth and the States must address efficient national pricing, and better coordinate the combination of subsidies, loans and other funding, as well as addressing the decade-long decline in overall VET funding.

“The VET system overhaul must not stop here. Work must progress at pace to implement the revised Australian Qualification Framework thereby enabling improved, fit-for-purpose contemporary vocational qualifications,” he said. 

The National Apprentice Employment Network said the reforms provided a chance to revive the apprenticeship system which had declined during the COVID crisis.

“There is frustration with the different approaches to skills training across state and territories,” CEO Dianne Dayhew said.

“This has created varying funding and licensing models, diverse availability of courses, inconsistent affordability and inefficiencies in delivering crucial skills development.”

Speaking on ABC PM, industry representatives from TDA and AiGroup, as well as the Queensland Minister for Training and Skills Development Shannon Fentiman discussed some of the reasons why the VET system has struggled.

TDA CEO Craig Robertson said course direction was largely out of the hands of TAFE, with industry pulling the levers.

“Industry has really been driving the curriculum for VET for the last 10 to 15 years and this is the point that we’ve got to,” he said.

“I think what’s happened is we’ve ended up trying to be so specific about the needs of a particular job that it has is become very complex to deliver against and, in fact, very costly.”

AiGroup Head of Workforce Development Megan Lilly said a move to nationally efficient pricing and activity-based funding was a critical and overdue step in the reform plan.

“Were not naïve, it will be a very big piece of work, but an incredibly important threshold piece of work to be undertaken,” she said.

Ms Lilly also underlined the need for the recently revised Australian Qualifications Framework to be implemented as part of the reform process.  

Minister Shannon Fentiman welcomed the idea of moving to a system of tied Commonwealth VET funding to the states but warned it would need to entail increased Commonwealth spending. 

“If we are going to see more students enrolling, more apprentices and trainees, we’re going to need significantly more than what we’re getting right now,” she said.

The Australian Chamber of Commerce and Industry (ACCC) also welcomed the promised VET reform and funding pledge.

“It is to be hoped, however, that VET does not have to wait until reform is completed before that investment is made, as one of the biggest issues has been the lack of consistent, overall funding growth in VET,” CEO James Pearson said. “That is the biggest single reform that needs to be made.” 

Ziffer expresses the sentiment of those who love the VET sector

Daniel Ziffer, ABC finance reporter and author of the A Wunch of Bankers, a personal memoir of the Banking Royal Commission, pointed to the real issues facing the VET sector in his ABC TV News report last Tuesday night.

Referring to a report published by the Mitchell Institute in 2019, he said

“The sector has faced significant funding cuts. State governments and students pay the bulk of costs. State governments have reduced their funding in the past decade. But the Federal government has taken a hammer to TAFE by opening up the sector to private colleges and boosting them by offering loans to students.”

Government investment in education provision in the VET sector (2018 $000,000)

Source: Hurley, P., & Van Dyke, N. (2019). Australian investment in education: vocational education and training. Mitchell Institute, Melbourne.

The introduction of private for-profit colleges and the ill-fated VET FEE HELP loan scheme wreaked havoc on the sector resulting in significant reputational damage. Many students have been left with huge debts and incomplete courses from worthless institutions. He added:

"It’s been a debacle. Many students have been left with huge debts and incomplete courses from worthless institutions, like cooking schools without kitchens. The schemes have been wound back but with huge damage to the reputation of the sector."

Bruce Mackenzie (of the Mackenzie Research Institute) noted that the “silly policy” of letting private sector, for-profit providers into education did not work and was further exacerbated by “a focus on universities at the expense of vocational education and training”.

A sustainable model of VET funding to reverse declining trends in participation, with the right balance between quality and efficiency is urgently needed now.

Bruce Mackenzie, Mackenzie Research Institute

The Prime Minister signals support for TAFEs

The Prime Minister has linked the Morrison government funding of VET with the approach taken for public hospitals. He said, ‘our national hospital agreement actually provides a good model for the changes that I would like to advance. Incorporating national efficient pricing and activity-based funding models would be a real step forward.’

The hospitals agreement is an ideal blueprint. It funds public hospitals only and accepts their central role in health care. Earlier in the morning on Brisbane radio, TDA CEO, Craig Robertson in responding to a call claiming private providers were more flexible, said:

You need TAFEs like you need public hospitals. But public hospitals don’t look after all health needs so you need to be able to supplement that with other providers. We haven’t got a rational approach to that. And if the Prime Minister is prepared to sit down and work with states and territories on a rational approach, then that would be a good thing.

It’s time for blind faith in competition as the salve for perceived ailments of VET to be put aside. The skills-deepening Australia needs for the new wave of productivity gains will not come out of a training package and a leased office. The depth of vocational expertise, the industry breadth and the capital for learning is only available at TAFEs, across Australia.

As Craig went on to say:

One thing that has obviously been proven over the last couple of months through the national cabinet is that national emergencies need joint and unified efforts and for Australia to get out of the COVID crisis and regrow the economy you need a very strong VET system with TAFEs as the foundation for it.

Strong support to take up AQF Proposals

Industry representatives are calling on the Government to proceed with the next stages of reform to the Australian Qualifications Framework proposed by the panel led by Professor Peter Noonan and handed to the Government late last year.

Education Minister, Dan Tehan accepted unilaterally all the recommendations relating to higher education and is already tinkering with the design by introducing higher education certificates, which did not even register in the panel’s report.

In the meantime, the recommendations impacting on vocational education and training are stuck with skills ministers, with no sign yet of a decision. The first step has been to kick off a process of defining micro-credentials in VET but that is still with senior officials.

ANTA Again

Students of the history of VET in Australia would have found alignment between the conditions we face today with those at the genesis of ANTA.

The Australian National Training Authority (ANTA) was established as a Commonwealth statutory authority in 1992 to coordinate across governments the skills development drive as the way out of the 1990s recession. It was established after a flirtatious dance between Paul Keating and Premiers to transfer VET responsibilities to the Commonwealth, but word is Keating forgot to tell Kim Beazley, who was in negotiations with NSW Premier John Fahey, that all other Premiers had agreed. Fahey held out and ANTA was born. You can only imagine the outcome today if Fahey capitulated, as many thought would have happened if both he and Beazley knew the state of the board.

Keating, on assumption of power, had dismantled Hawke’s Premiers Conference in favour of the Council of Australian Governments model, principally to rein in Hawke’s flirtation with transferring tax raising powers to the states.

Coming forward to today, we have JobMaker, a long-awaited focus on skills development, a reformed national decision-making architecture and a Bill in the federal chamber to establish a National Skills Commission.

The Prime Minister rejected any intention of Commonwealth take-over in his Tuesday address.

ANTA isn’t too much of a stretch, though! Many old-timers would be approving.

When the first ministers talk of VET, maybe they’ll invoke the spirit of the great band that powered many a dance – Knowing me, knowing you, maybe it’s the best we can do.

The facts on National Agreements

Much has been made of the $1.5b that the Prime Minister and Minister Cash cite in being compelled to hand to the states and territories with no visibility of expenditure nor accountability.

The National Agreement for Skills and Workforce Development (NASWD) is the formal agreement prescribing the transfer of Specific Purpose Payments to the states and territories for specific purposes. The practice was started by Earl Page when he was Prime Minister and wanted money spent on country roads which rested with states. It’s curious that the federal government feels helpless in handing over that money as it is authorised in the Commonwealth Budget and formally appropriated through the Federal Financial Relations (FFR) Act, both in the charge of the Commonwealth.

The FFR was established in 2009 as part of Kevin Rudd’s reform to the federation. Specific Purpose Payments were not to suffer the interminable political dog fights when they came to renewal. The haggling took place in setting up partnerships for reform where additional funding from the Commonwealth was provided. Both gave states and territories autonomy to administer systems to suit their circumstances, and accountability was exercised through the COAG Reform Council (CRC) which monitored performance of the federation financial relationships. Tony Abbott abolished the council and after his federation reform agenda went off the rails and nothing was put in place.

It’s hard to see who to blame other than the feds on this one.

MaryAnn O’Loughlin was the inaugural CEO of the CRC and is now in the NSW Government looking after VET and will have a heavy hand in negotiations. It will be interesting to keep an eye on the accountability arrangements.