Written by:
Fredderick J Maddern OBE, Chairman, WPC Group
The Federal Government’s move to limit new international student visas to 270,000 from next year could help shed light into a dark corner of education.
In the cacophony of university leaders’ voices contesting the move, others are struggling to be heard. The limit also includes slashing 40,000 student visas for vocational education and training (VET) to 94,500, potentially dealing a blow to that sector. Federal Education Minister Jason Clare has tried to headline this in his press conference last month (27 August), saying the “reductions will be largest” in the vocational education sector.
For the past decade, car number plates in my home state of Victoria have featured ‘The Education State’, and now we rely on international education as our largest export sector, bringing in $14.8B in 2023. No doubt international students have been a river of gold to help support Victoria’s TAFE institutes and private vocational providers, as well as universities.
Despite this, TAFE in my state is not fiscally healthy, according to Victoria’s auditor-general’s report issued at the end of July. Victorian TAFE institutes would have been $35M in deficit were it not for government grants and forgiven loans. That’s been consistent since 2018. Staffing costs accounted for most of the expenses, while nine TAFEs fell short in their revenue from training services and programs to meet their employment costs last year. Most striking was this finding: “KPI targets remained largely unmet for all TAFEs, with a noticeable disconnect between estimated and actual figures”.
What contributes to the staffing costs I assume is that Victoria TAFEs have separate boards. It’s unlike how other states run their TAFE system, and being unique comes with hefty costs. Currently, taxpayers fork out $3.14M a year in total to fund Victoria’s 14 TAFE boards. A chair can earn up to $87,289; a member $40,793 a year. The most expensive boards to run are Gordon, and Holmesglen institutes, each at about $454,426* annually. I argue that separate governance structures mean duplication and eats into TAFE’s much-needed funds.
As a legacy of the former premier Jeff Kennett’s neoliberal drive, our TAFE institutes have been governed separately with silo-ed boards with their own TAFE constitution since 1984. At the time, the Victorian TAFE Association unsuccessfully sought clarity on the boards’ legal responsibilities if an institute became insolvent. As recently as 2011, a Victorian Auditor General’s report found TAFE operations had to deal with contradictory legislation and regulations. And, according to the 2021 PhD thesis of Martin Riordan, who was CEO for TAFE Directors Australia for 11 years, Victorian TAFEs have tended to focus on business task activities rather than coherent strategy. In 2014, the late academic Peter Noonan described the then financial crisis in Victoria’s TAFE system as “complex and varied”, including having lost funding for TAFE’s public role.
All this from a state that pioneered technical education in Australia, writes Riordan in this thesis. The momentous occasion happened with the 1870 opening of the Ballarat School of Mines. That Victorian gold-mining town has another claim to fame – just 16 years earlier it was the site of the Eureka Stockade, which kickstarted Australia’s democratic foundations.
It’s thanks to our democracy that we have a Victorian auditor-general scrutinising and number crunching our state TAFE’s balance sheet. Politicians and policymakers also make a feast of the VET sector. Federal and state government policy moves and reviews have picked over TAFE Victoria’s entrails over the years; competition from private registered training organisations continues to make their impact, overall, resulting in what one expert described as “residualising”, effectively kicking TAFE out of business. (Across the country, just 15.1 per cent of students were enrolled in nationally recognised training at TAFE Institutes last year, compared to private training providers who held a lion’s share of almost 78 per cent).
In sharp contrast to Victoria’s TAFE system, a recent review in NSW “re-acknowledged” TAFE as the backbone of that state’s VET system. The review panel’s first recommendation called for the NSW Government to strategise in supporting TAFE NSW as an “exemplar of quality across the system”. It also urged a more collaborative governance model be rolled out to create shared ownership among TAFE NSW, industry, unions and providers.
Can some of those ‘TAFE smarts’ flow down to us in Victoria, please?
*based on the highest figure for each category of chair and member, using the actual number of members these boards have; does not include superannuation or other additional allowances that these board members may have secured
