From the President: Save TAFE now

In the aftermath of a federal election in which much was made of economic management and pandering to the “big end of town”, one massive issue was largely ignored: the future of TAFE.

The parlous state of policy on vocational education and training and the struggles of the TAFE system that has led education in this space for more than 130 years have been widely canvassed within the industry. At a state and federal level, largely under LNP governments, policy settings have created a market-focused malaise that is rapidly robbing the sector of its potential.

In late 2015, following a myriad of scandals, the Australian Senate conducted a review of funding of private training providers in this country. The opening line of their final report is telling: “The committee has been provided and has heard harrowing and concerning evidence of misconduct by private VET providers. The private VET sector has been subject to a range of allegations in the public arena not limited to that of exploitative conduct, shoddy training and massive profits at the public expense.”

A recent report in the Australian Financial Review (21 May, 2016) blames the explosion in spending on student fees in private training contexts as a consequence of “business greed, political inertia and bureaucratic fumbling”. The cost to the Australian taxpayer is a large proportion of the $6.2 billion spent on course fees for students since 2009.

The past six months have continued to produce extraordinary stories of what the Australian Competition and Consumer Commission (ACCC) describes as “unconscionable conduct” and “false and misleading representations”. One company, successfully prosecuted by the ACCC, claimed $229 million from VET FEE-HELP in 2015 alone. This company has now been forced to pay back some $44.5 million to the Australian Government and has forfeited a further $110 million in potential earnings from ongoing enrolments. Other successful actions would see other large sums reclaimed.

Another company in the public spotlight is reported in the Sydney Morning Herald (8 December, 2015) to have claimed $1 million per graduate in government funding in 2014 with $111 million claimed for a total of 117 graduates.

The total cost of student fees has grown from just $325 million across the nation in 2012 to $3 billion in 2015. The 2016 bill to the Australian taxpayer and students, much of which continues to be subject to profiteering, could be $5 billion or higher. A significant number of companies have grown from nothing to multi-million dollar enterprises in that timeframe and then gone suddenly bankrupt on the back of massive profits to owners and directors while leaving huge debts for students.

A critical factor is the massive expansion of costs for students. Course fees are now in the order of tens of thousands of dollars for programs delivered entirely online. Another factor is the funnelling of government payments into profits rather than quality training. One company exposed by (11 February, 2016) raked in $83 million in the last financial year, making a $17.95 million profit in 2015 and paying its directors a whopping $14 million in dividends.

The more enlightened state governments are struggling to save TAFE as a respected public provider of high quality training. Market-based models of training have failed and must be abandoned. The ugly side of the private training industry that has been exposed is just the tip of the iceberg according to the Australian Senate, and urgent national leadership is needed from the new government to reverse a growing disaster. TAFE cannot and should not compete in this corrupted market place. We must save TAFE now.

Kevin Bates                                                                                                                   President

Queensland Teachers' Journal, Vol 121 No 5, 15 July 2016, p7