Is Australian VET up for addressing the challenges of inequality?

Is vocational education and training (VET) up for addressing the challenges of inequality in Australia?

It should be, says Dr Don Perlgut, CEO of Community Colleges Australia (CCA). Because it’s the post-secondary sector most able to perform.

Popular concern for inequality is rising, according to a number of studies released recently, including two by the Committee for Economic Development for Australia (CEDA).

The CEDA report How Unequal? Insights on inequality noted: “There has been a greater focus on inequality in Australia in recent years. This has occurred despite the fact that broad measures of income inequality have not worsened since the Global Financial Crisis. However, some measures of wealth and income disparity at the extremes (for example income share of the top 1%) are higher than they have been for some decades.”

“A significant majority – some 79% – of Australians do not believe that Australia’s wealth gap is an acceptable consequence of economic growth,” reports CEDA’s Community pulse 2018: the economic disconnect. Australians don’t feel they have benefited from record economic growth: only 5% of people believe they have personally gained a lot, 31% of people find it difficult to live on their current income, and 74% of people believe large corporations have gained a lot.

Stephen Koukoulas, writing in Business Insider, points out the positive consequences of reducing inequality:

“The economic debate on inequality of income and wealth shows, unambiguously, that as inequality increases, the rate of economic growth slows or at least is slower than it would otherwise be. In simple terms, the link between more equality and stronger economic growth is based on the observation that if, for example, a low income earner gets an extra $20 a week in their pocket, they are more inclined to spend most if not all of it, whereas a $20 a week extra to a very high income earner – think a billionaire – will have little influence on their spending patterns…. Policies that reduce income equality and improve access of low income people to education and health care is good for GDP.”

So what of Australian VET? Recently released data from the National Centre for Vocational Education and Research (NCVER) on 2017 government-funded VET shows that:

  • Nationally, 47% of Australian government-funded VET students fall into the bottom two socio-economic quintiles. As the bottom 40% of Australian households have effectively no net wealth at all, they are clearly the broad target group.
  • The government-funded VET students in the bottom two quintiles figure rises to 53% of community education students nationally, and 63% of NSW community education students.

CCA research shows that:

“If you are serious – really serious – about reaching the most vulnerable and disadvantaged VET students, you must start with community education providers,” said Dr Perlgut.

“Two years ago, 60% of top Australian economists agreed that Australia would receive a bigger economic growth dividend in the long-run by spending on education than offering an equivalent amount of money on a tax cut to business. There’s no reason to believe their opinions have changed,” said Dr Perlgut.

View Dr Don Perlgut’s recent conference presentation on Inequality in Australia: What can vocational education and training do?

Comments are closed.