The Grattan Institute think tank has released its Commonwealth Orange Book 2019: Policy priorities for the Federal Government, aimed at helping the next Commonwealth Government set priorities for reform. The massive document (182 pages) identifies policy changes for a future government in the areas of economic growth, tax reform and sustainable budgets, cities, transport, energy, school and higher education, health, and the state of our political institutions and democracy itself.
The Grattan Institute focusses on these because “they make a big difference to the lives of Australians, because analysis can chart a path to better policy, and because outcomes are too often driven by vested interests rather than the public interest,” and that “these areas cover about three-quarters of Commonwealth Government spending.”
CCA has reviewed the Grattan Institute report in the areas of higher education and vocational education and training (VET) and provides the following summary.
Higher education and VET priorities
The report identifies the following priorities in higher education and VET:
- Restore the demand-driven higher education system (called an “priority”)
- Reduce upfront fees in vocational education to make that choice easier for students who may be better off in vocational education (lower priority)
- Give prospective students more information about their chances of course completion (high priority, “easy win”)
- Dis-enrol students who are not engaged with their studies so they don’t incur HELP debt (high priority, “easy win”)
Although the report (full report available here PDF, 3.1 mg) spends more attention on higher education, it makes the following comments about Australian VET (pp. 118-120):
“Growth in higher education participation coincided with a decline in vocational education, especially in the major cities. Some students who chose higher education may have had more employment opportunities with a vocational education qualification. Skills shortages are much more common in the technical and trades occupations served by the vocational education system than the professional occupations requiring university degrees. The recent Joyce review of vocational education presented survey evidence that nearly half of school-leavers aspiring to a job that needed a vocational education were planning on getting a bachelor degree.
“Capping higher education places or funding is not the solution to this problem. Pushing young people into courses by cutting off their other options is not a solid basis for committed careers in those fields.
“Change requires clarifying the education required for jobs, persuading young people that there are good jobs linked to vocational education, and removing obstacles to them choosing vocational education. In the 2019-20 Budget, the Government announced a new National Careers Institute to improve careers advice for young people and others. Increasing the profile of vocational education is one of its aims. The Opposition also wants improved career advice that puts ‘appropriate value’ on vocational education. Such initiatives could help re-balance tertiary education at low cost.
“Funding differences between vocational and higher education are also an issue. From a student perspective, government financial incentives often favour higher education over vocational education. In higher education, students can defer all their tuition charges through the HELP income-contingent loan scheme. In vocational education, funding arrangements vary significantly between states and courses. Some courses are free, and tuition fees are typically lower than in higher education. But when fees are charged, loans are unavailable or limited to a fixed amount, which may be less than the cost.
“Labor promises a major review of post-secondary education, which would examine funding issues. State-based initiatives are already increasing the number of free vocational education courses. But many courses still have upfront charges which may deter potential vocational education students. However, the VET Student Loans system should only be extended cautiously. Its predecessor VET FEE-HELP scheme was widely rorted. And vocational education leads to some low-earning occupations, which means that a relatively high proportion of student loans will never be repaid.”
The Grattan Institute has been highly critical of Labor’s plans to subsidise the pay of childcare workers, wondering “how much will this policy really benefit the workers it is designed to help?” By contrast, the Institute believes that Labor’s plan to cut childcare costs was the biggest economic news of the campaign, “likely to produce a bigger bang for each dollar spent than the tax cuts proposed by either of the major parties.”
Community Colleges Australia comment
CCA CEO, Dr Don Perlgut, comments:
“The Grattan Institute analysis is well-considered, and highlights a number of important challenges for Australia’s VET sector, including that skill shortages are more common in VET technical and trades than many university degrees. Yes, careers advising is important, but both the Commonwealth and various state governments start up promotional campaigns that appear to make little discernible difference in the status of VET.
“The funding differentials within VET is important – VET can be funded in various ways and is often confusing even for ‘insiders’.
“There are at least three major issues missing from the VET analysis. The quantity of funding available for Australia’s VET sector is one, with funding languishing behind all other education sectors, according to detailed analysis by the Mitchell Institute.
“The Grattan report does not mention the still-powerful need for education and training in adult literacy and foundation skills, much of which is increasingly undertaken by not-for-profit community providers.
“The Grattan report also does not mention of the unbalanced nature of Australian VET, with steep declines in TAFE delivery, less steep but still significant declines in the not-for-profit community sector, and a corresponding rapid growth in the for-profit private registered training organisations (RTOs). Why is VET the only educational sector of Australia with a large majority – greater than 60 percent – of its students enrolled in for-profit institutions? Increasing more VET loans, without changing any other policy settings, will only serve to strengthen the hold that for-profit companies have on Australian VET.
“As Professor John Quiggin writes: ‘Billions of dollars have been wasted on ideologically driven experiments in market competition and commercial provision, most notoriously through the rorting of the FEE-HELP system. Most of the leading large-scale [commercial] providers have been exposed as essentially fraudulent, exploiting government subsidies and leaving students with worthless qualifications. But the pressure to respond to market competition has also had damaging effects.’”
“CCA believes that making a profit out of education – and especially out of education funded by government – is inappropriate and against the best interests of the students. For-profit institutions will always have pressures to reduce quality of teaching, of student services and of hours delivered, and to increase the quantity of students to obtain maximum profit. All of this means poorer training as a result,” said Dr Perlgut.