TAFE is too important to lose

Saturday, June 10, 2017

Like many Victorian TAFEs, Melbourne’s Polytechnic is in decline. Trade training facilities sit idle and rusting away, mere ghosts of their former selves. Student activity in the once grand technical campuses is at a record low in Melbourne. Enrolments have dropped by tens of thousands — an overall decline of 40% — as courses are cancelled, staff made redundant, libraries shut down.

Strip away the paint from the front gate and underneath is the old name, Northern Melbourne Institute of TAFE, which collapsed back in 2014. No doubt TAFE suffered under four years of Liberal government, especially from the $1 billion funding cuts.

Across the state, TAFEs’ annual reports suggest a drop of 20–40% in enrolments over the past two years. Box Hill has lost 30% of students, Sunraysia Institute 21%, GoTafe 12%.

The latest $320 million TAFE rescue package has been supportive but has had little effect on enrolments. The Australian Education Union’s Greg Barclay told The Age: "We hear reports that members are working in empty campuses."

The AEU says 3500 teachers have left the sector or been made redundant. If positions made redundant or outsourced in administration, faculty, library and other essential areas are included, the figure could be closer to 10,000.

Just where and when the TAFE decline began is accepted by policy makers and TAFE insiders. The National Tertiary Education Union’s Policy Coordinator Paul Kniest wrote: “The Brumby Labor Government’s 2008 Securing Jobs for Your Future policy introduced a student-demand driven system in which public funding was fully contestable between public TAFE institutes and private providers … The primary objective of the policy was to increase the number of people undertaking training in areas and at levels where skills are needed for the Victorian economy. The only problem is that this did not happen.”  

Under this policy, TAFEs were obliged to compete for funding with the new Registered Training Organisations (RTOs). The funding system was packaged as “unlimited funding” and non-TAFE providers’ market share increased from 10% to almost 40%. In 2016 the RTO market share peaked at 75%.

The government argued the thousands of new private providers were efficiently and effectively solving the skill shortages. Except, says Kniest, that enrolments in private courses came thick and fast in the areas without skill shortages.

RTOs strategically targeted the highest paying courses and maximised profits in courses such as personal training, cooking, retail and business. RTOs began using the typical tools of a modern corporation to enrol students — cold calls; broker systems; Facebook analytics; and government welfare lists. They even offered free laptops for course enrolments. Government job agencies and private providers partnered and pipelined welfare recipients into courses. RTOs claimed concessional rates and also course fees. Then came the million-dollar certificate “layering”.

Under layering, RTOs enrolled students in multiple courses, sometimes claiming four times the original amount of funding, and four times higher than TAFE. Regulatory bodies were slow in responding or told not to respond. The vocational budget skyrocketed past $1.2 billion in 2013, and the Liberal government slashed funding by $1 billion over two years for all providers, regardless of their behaviour.

Still, the good times for RTOs rolled on. With casual trainers and low building costs, they agilely switched to higher-paying courses, layered new courses and delivered training in under four weeks. For example, 2014–15 vocational figures showed a 250% increase in enrolments of the General Education certificates.

TAFE CEOs who publicly criticised RTO layering and the reactive cuts were forced into retirement, most notably the Box Hill and Homesglen CEOs. Holmesglen CEO Bruce Mackenzie said that with the social and community costs, they couldn’t compete in a low-funding environment. He said at the time: "Private providers are there to make money; it's very different to a public system and that needs to be recognised.”

The newer “cowboy TAFE CEOs” — business people who began to lead TAFEs — began copying the RTO model and commenced layering courses. In one case, Geelong’s Gordon TAFE was accused of layering their own TAFE employees in multiple courses.

Mackenzie dramatically returned last year to head the review into the vocational and TAFE sector. The final report found: “Government cannot simply declare something contestable, open up the market, and hope that it works.” It described “layering, deceptive marketing and commission to brokers” as commonplace, saying they “devalued the training system”.

After the review, Labour cancelled the contracts of 18 private providers and with 43 investigations into private colleges, many other providers face ongoing legal action.

In many respects, the federal two-party system has done much harm to the TAFE sector. Federal Labor’s uncapped university policy unintentionally nudged TAFE students into higher education degrees.

The Liberal’s $2 billion VET FEE-HELP loans (university-style loans up to $95,000) caused a market jolt where RTOs signed up tens of thousands of vulnerable students to online or so-called “quickie courses.” About 40% of students did not complete their VET-FEE courses and many were left with $25,000 loans.

A crisis in confidence in vocational training is decreasing enrolments in TAFE and RTOs. Business exited the system after taking their profits or just vanished like ghosts. RTOs are closing up shop across Victoria; the free market experiment all but over. TAFE advocates see this as an opportunity to go back to a standard TAFE system where students are put before profits and TAFEs can be once again run as public institutions.

Barclay says there is a clear way out of the Victorian experiment in free market training: legislate that 70% of all funding goes to TAFE. This is higher than the 30% increase to TAFE recommended by the TAFE review, and higher than the 20% increase adopted by the Labor party.

Time, however, may not be on the side of TAFE.

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