Tafe system 'crumbling from neglect and policy vandalism', report warns
Australia’s Tafe system generates an estimated $90bn in economic benefits each year but is “crumbling from neglect and policy vandalism”, according to a new report.
At a time when the Morrison government is vowing to reform the skills and training system, the report by the progressive Australia Institute makes the case for a strong, well-funded Tafe to deliver the workforce the country needs for post-Covid reconstruction.
But the report’s author is alarmed the government did not even mention Tafe when it announced its jobtrainer package last month – and suggests a forthcoming national agreement could entrench “failed” policies and see an increase in funds flowing to private training providers.
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The Australia Institute’s Centre for Future Work calculates the direct operation of Tafe institutes and related supply chains generate about $6bn in economic activity each year – but that the benefits are far wider than this initial activity.
It estimates an additional $85bn in benefits each year – including increased earnings and productivity – based on the Tafe system’s accumulated contribution to the skills of Australians.
The report, published on Thursday, points out that employees and owner-managers with VET qualifications receive 39% more in wages than people whose highest educational attainment is Year 12 or below.
The calculations also take into account the contribution of a more highly skilled workforce in delivering productivity benefits to employers and higher tax revenues for government.
The report says the benefits far exceed the $5.7bn annual cost of the Tafe system – a figure that includes funding provided by federal, state and territory governments, students and employers.
Alison Pennington, a senior economist with the Centre for Future Work and the author of the report, said it was “remarkable” that Australia continue to receive such strong benefits from historic investment in Tafe.
But she likened the Tafe system to a house that needed major repairs after years of funding cuts and policies that favoured market solutions and private providers.
“That house is now crumbling from neglect and from this policy vandalism,” she said during a media briefing.
The report calls for 70% of total VET public funding be provided to Tafe institutes, rather than private providers. It also calls on the federal government to fund free Tafe courses in priority areas, supporting 300,000 public-paid Tafe positions per year at an annual cost of about $2bn.
Pennington said Australia would “squander the demonstrated economic benefits generated by our investments in the Tafe system, and unnecessarily limit our post-Covid recovery if we don’t act quickly to reinstate the critical role that Tafe plays in the VET system”.
Pennington argued that Tafe institutes were long-standing and reliable “anchors” of vocational training and should be at the centre of an economic reconstruction process.
The Australian Education Union welcomed the report and called on the Morrison government to use the October federal budget to invest in Tafe.
“For too long, governments have focused on marketisation, contestability of funding, student loans, reductions in public VET funding, and the direction of public funding towards privatised VET providers,” the AEU’s federal president, Correna Haythorpe, said in a statement.
“Tafe is the only institution with the infrastructure, the workforce and the trusted reputation to be able to provide the high-quality vocational education qualifications that we need today to recover from the Covid crisis.”
Last month, Morrison vowed to increase investment in skills and training if the states and territories sign up to an overhaul of the VET sector that would create a consistent funding model and improve transparency.
The prime minister announced $1.5bn in new funding to expand and extend an existing wage subsidy for apprentices and trainees.
He also pledged to contribute $500m, with matching contributions from the states, for free or low-cost training programs to be delivered by public, private and not-for-profit providers to enable reskilling.
The overhaul will involve governments signing up to a new heads of agreement that will specify reforms to the VET system, including an efficient price for skills training.
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Morrison has been foreshadowing skills as a priority area for the government for months.
In a National Press Club address in May, Morrison said the current arrangements needed reform because the federal government gave the states and territories $1.5bn a year in untied funding, “with no end date and no questions asked” and “no line of sight on how states use this funding”.
But the Australia Institute’s report argues the signals from the government “suggest that it still refuses to acknowledge the central role of public VET services, and Tafe in particular, in improving Australia’s skills system”.
The report comes ahead of the publication of the latest monthly labour force figures on Thursday, which are expected to highlight the scale of the challenge facing the Australian economy.
