Funding issues in VET Gerald Burke

1. Funding issues in VETGerald Burke AEU National TAFE Council AGM 16 January 2010 Conferences on Clarendon, 120 Clarendon Street, Southbank, Melbourne 1

2. Contents • Background: funding and enrolments • Funding for what: expansion, equity, new directions, quality • Incentives and cost sharing • International students and regulation 2

3. Background: enrolments and completions • Enrolments • Current and projected completions • Projected with higher student numbers • Projected with higher completion rates

4. VET and higher education domestic students 2001 to 2008 , '000s

5. Projected course completions, Australia ‘000

6. Funding levels and sources • VET sector funding • Public recurrent expenditure per publicly funded hour • Only partial indexation of grants for cost increases • Fund not counted in the NCVER data • Problems with data on hours

7. VET income: all funds of public providers and public funds of private providers

8. Government recurrent expenditure per publicly funded annual hour

9. Commonwealth and State commitments • Open ended entitlements for higher education and partial in Victorian VET • Productivity Places Program PPP adds about 10% to places • Almost full indexation for costs in higher education, less for VET • Some increase in funds per student in higher education • No indication of reverse to decline in VET funds per hour • COAG agreement eg % 20 to 64 year olds with Cert III+ to rise from 50% to 75% by 2020 • Some start up scholarships in higher education, not in VET

10. Not the full picture: (not in the NCVER VET finance data) • Examples • Employer incentives -- Commonwealth and States • Apprenticeship centres and other Commonwealth programs • Also excludes • Revenue of private RTOs except for public monies • Student assistance –Youth Allowance, Abstudy, Austudy • Employer training expenditure that does not go to public RTOS

11. Projected Commonwealth VET related $ bill (NCVER data shows $1,700 billion 2008)

12. Funding for what: expansion, equity, quality, new directions More training, better quality, better focused and used • Skills deepening: aim for big lift persons with qualification • Better planning of specialised occupations to lessen shortages • Core skills, literacy and numeracy - for less advantaged • Workforce development activities to be increased, reduce under use of skills • Capacity of VET and higher education system to be lifted to ensure quality staff Population and participation–see next 4 slides • Importance of changing age structure • Labour force participation rates to rise – especially among less advantaged

15. Labour force participation rates by age Australia 1999 and 2009

16. Labour force participation rates by age Australia 1999 and 2009

17. Review funding models, incentives, regulation and information • Coordinate the various levers: • more students especially less advantaged to enrol/complete • students to take programs in specialised/shortage areas • providers to retain students/better completion rates • employers to take on more apprentices • employers to provide more support for training • employers, workers, providers expand workforce development • ensure qualifications represent the standards prescribed • No simple mix • more public funds, review incentives, examine fee structures and loans, explore leverage of employer funds including levies, give the new national regulator capacity and independence, close off incentives to poor quality performance, require much more public information

18. International students and regulation • Effects of international students on reputation of VET • Huge numbers in 2009 mainly with private providers • Awaiting changes in immigration rules • Key factor - the points allocated for Australian qualifications • Tightening of rules for registration, increased public information on performance of RTOS, possible moderation of assessment, national regulation 18