Commonwealth Budget – What it means for Australia’s community education providers

CCA’s CEO, Dr Don Perlgut, provides the following analysis of this year’s Commonwealth Budget and its implications for Australia's not-for-profit community education providers.

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The Commonwealth Government’s 2018/19 Budget – announced last night (Tuesday 8 May) – brings a mixed bag for Australia’s not-for-profit community education providers, with little joy or excitement. (Click here to read CCA's analysis of the Labor Budget reply.)

On the upside

The More Choices for a Longer Life Package includes “$17.4 million over four years to establish the 'Skills Checkpoint for Older Workers' program, designed to support employees aged 45-70 to remain in the workforce.” This can only be positive, considering the ability of community education providers to reach and re-train older workers, outstripping both TAFE and for-profit VET providers.

“The Australian Government will provide $6.7 million over four years to build the outcome measurement capacity of the impact investing sector,” notes Krystian Seibert on Twitter. Impact investing "aims to generate a social or environmental return - such as affordable housing or a reduction in greenhouse emissions - as well as a financial one." It may become a useful tool, especially for larger community education providers.

Regional Australia also appears to be a big winner this year:

The Budget supplies almost “$125 million for about 2000 additional student places across three regional universities.” From the Department of Education and Training’s website: "After considering the findings of the Independent Review into Regional, Rural and Remote Education, the Government will invest $42 million to expand accessibility for rural and regional students through the creation of 500 Commonwealth supported sub-bachelor places, and a further 500 additional Commonwealth supported bachelor places for students at regional study hubs. To support these students, funding of $16.7 million is available for the development of up to eight regional study hubs." From the Regional Universities Network (RUN): “The budget focus on new places at regional campuses recognises the key role that regional universities play in regional employment and productivity," said Professor Greg Hill, Chair of RUN. The Budget also supplies three-year funding to the Regional Australia Institute.

Comment: Given the large number of community providers in regional and rural Australia, CCA welcomes the additional emphasis on regional education, although notes the new funding focusses on the tertiary (university) sector, with little or nothing for vocational education and training (VET). CCA reiterates its call for a national investigation into rural and regional VET.

On the downside

Not much is happening in VET: The biggest disappointment is that the Budget does nothing to alleviate Australia’s VET crisis, a crisis of both confidence and funding. Tim Dodd (Higher Education writer) in The Australian: “This is a disappointing, do-nothing budget for tertiary education. It could have been better. The problem that needs to be addressed is widely recognised. We have a massive imbalance between the higher education side and the vocational education side of tertiary education. Higher education … is relatively well-off … Meanwhile vocational education … is dying on its feet, the victim of the VET FEE-HELP loans scandal and state governments that have shifted money to other priorities.”

ASQA’s total resources appear to be declining (even before inflation), from $54,976,000 in 2017/18 to $54,290,000 in 2018/19, according the Department of Education and Training Budget papers. Comment: Given the enormous challenges facing ASQA in the continuing wash-up from the VET FEE-HELP disaster, I would have preferred to see an increase rather than what appears to be a small decrease. (Note that this analysis is based on the Budget papers alone, and may be subject to other factors or information that is not immediately accessible.)

By contrast, the Tertiary Education Quality and Standards Agency (TEQSA) has been given an increase in funds (from $21,233,000 in 2017/18 to $26,961,000 in 2018/19) “to cope with the increased numbers of non-university institutions that are applying for higher education status,“ writes The Australian. Comment: Although I applaud the additional resources for TEQSA, this is NOT good news, because it indicates the continuation of a concerted and systematic push by the for-profit higher education sector to gain market share in Australian university education, accessing government-supplied loans. We all know where that went in VET FEE-HELP.

Labor’s Shadown Treasurer Chris Bowen says: “It fails the fairness test on education – Turnbull is still cutting $17 billion from schools, and has $270 million in new cuts to TAFE.” Comment: This $270 million cut has been quoted elsewhere, and is very difficult to find in the Budget papers. Senator Doug Cameron's press release notes that this was a cut "to the Skilling Australians Fund"; and that "skilled migration changes in the Budget – such as refund and exemption provisions – leav[e] $270 million less going towards skills and training of young and working class Australians."

You need to look very carefully at the papers to find this: The 2018-19 Budget Paper 2, page 90 states, “State and Territory governments will be offered a new agreement which is estimated to provide $1.2 billion over the four years to 30 June 2022.” The Budget Paper also states, “In the absence of levy revenue from the Skilling Australians Fund levy (SAF levy) in 2017-18, the Government has revised the implementation arrangements of the Fund to align to the expected levy arrangements.” This needs to be compared to the previous year’s 2017-18 Budget Paper 2, page 90, which states: “The Government will provide $1.5 billion over four years from 2017‑18 to establish a permanent Skilling Australians Fund…” In other words, it appears that at least $300 million has been dropped from the previously announced but still stalled Skilling Australians Fund.

Other commentators (such as Tim Colebatch in Inside Story and the Centre for Social Impact) appear to agree on VET funding cuts.

Ross Gittins, Economics Editor of the Sydney Morning Herald (“How we arrived at budgets we can't trust”, 13 May 2018), comments that, "We’re used to spin doctors with slippery words. Now it’s spin doctors with slippery numbers. They’re not just gilding the lily, they’re creating an unreal world where the truth is concealed."

The Government has also committed $247 million over four years (2018-2022) to renew the National School Chaplaincy Program (NSCP). This controversial program places 3,000 chaplains recognised by religious groups in schools to provide pastoral care, and has been criticised by the Australian Education Union and numerous other groups. In 2015, the Australian Human Rights Commission reported that complaints were made about the program at almost every public meeting it held. The program was twice struck down by Australia’s Supreme Court, with commentators noting that it “violates the principle of government religious neutrality.” The Guardian Australia notes that “in 2015 federal Education Department officials told Senate estimates that in the previous year, 2,312 of the program’s 2,336 chaplains were Christian. The rest were adherents of Islam (13), Judaism (8) and 1 each from Bahá’í, Buddhism and Aboriginal traditional religions.” CCA Comment: This expenditure is a significant opportunity cost for Australian education, which could be put to much better use. This program has had numerous complaints from the public and from educators. CCA recommends that any funds be directed to more traditional – and proven – youth counselling services. This money could also be used to provide counselling and support to young job-seekers, who are at the greatest risk of long-term unemployment and underemployment, especially in regional and rural locations.

A selection of other budget reactions

“It wasn’t a big budget for education this year, with schools funding already set in the last Budget, and the funding freeze for universities announced in the Federal Government’s mid-year budget update in December.” – Andrew Norton and Glenn C. Savage in The Conversation.

“No sooner have we seen five minutes of budget sunshine then the Government has committed itself to seven years of income tax cuts. This is not a disciplined and responsible approach to budgeting. There is a seven year plan for tax cuts, but where’s the seven year plan for reducing poverty among adults and children, guaranteeing growth funding for health care, and closing the gaps in essential services such as mental and dental health and affordable housing?” – Dr Cassandra Goldie, Australian Council of Social Service.

“If you’re locked out of a job or in an insecure job, this Budget doesn’t even bring home the two-minute noodles.” - Dr John Falzon, CEO of the St Vincent de Paul Society National Council.

“We are much more than individual economic units focused solely on how much tax we pay. A budget for the Australia we want would support the marginalised, not punish them; and prioritise community building and social infrastructure rather than emphasise reducing tax for business.” – Community Council for Australia on Twitter.

“The biggest cause of stagnating living standards in Australia has been the deceleration of wage increases since 2012. The budget assumes that wage growth will suddenly rebound in coming years to more traditional rates (of 3.5% per year). This assumption underpins the government’s revenue forecasts – but there is no plan for achieving faster wage growth. To the contrary, the government’s continuing labour policies will suppress future wage increases.” – Dr Jim Stanford, Centre for Future Work, Australia Institute.

A "missed opportunity": The "Federal Budget, while supporting some promising initiatives, has done little to resource the concerted and comprehensive approach that is required if Australia is to make real headway towards combating disadvantage." - Rob Koczkar, Social Ventures Australia.

The Victorian VET Development Centre has also analysed the Commonwealth Budget and implications for VET.

Feel free to comment on this post on CCA's Twitter or Facebook.

(A note on the links above: all were live when this item was originally posted, but we cannot guarantee that they will remain available due to the ephemeral nature of the Internet.)

Note: This news release was originally published on 9 May 2018 at 10.45am and updated at 4.40pm that day. It was updated again on 14 May 2018, and again on 17 May 2018.

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