May 2021 Budget: the most important for ACE providers in years

This week’s Commonwealth Budget is the most important one for the Australian adult and community education (ACE) sector in many years.

The Federal Budget in 2021/22 and the ACE Sector

“Federal Government budgets don’t usually mean much for the operations of Australia’s not-for-profit ACE providers, even though they enroll almost half-million (almost 12%) of the country’s 4.2 million vocational education and training (VET) students. ACE providers deal primarily with state and territory governments, which fund most of their government-subsidised programs, such as the NSW ACE Program and the Victoria’s Learn Locals,” said CCA’s CEO, Dr Don Perlgut.

“This year is different. Because this year the Commonwealth has committed to major training and skills investments in two areas where ACE organisations excel: supporting foundation skills (language, literacy, numeracy, digital and employability) and improving the abilities, capabilities and numbers of Australia’s aged care workforce. Both of these areas will be examined closely at CCA’s June 29^th National ACE Summit in Sydney,” said Dr Perlgut.

“We are at an important ‘inflection point’ in Australian training and skills – the Department of Education Skills and Employment’s VET Reform agenda has been well-managed over the past two years,” said Dr Perlgut.

A major outcome of the VET Reform process will be a new National Agreement for Skills and Workforce Development (NASWD) between the Commonwealth and the states and territories, concluded by August 2021. This process has included a detailed review by the Hon Steven Joyce (2018-19) and then the Productivity Commission (2019-20).

A budget acts as a mirror on the nation. It’s what the government of the day thinks we are and should be. – Peter Fray in Crikey.

Major Training Expenditure Planned for 2021/22

The “big ticket” training expenditure of this year’s Budget is the commitment of an additional $500 million, to be matched by state and territory governments, to expand the JobTrainer Fund by a further 163,000 places (on top of the estimated current 300,000) and extend the program until 31 December 2022. CCA understands that this will probably be a continuation of existing JobTrainer arrangements with the states and territories. The Fund will support training in digital skills and upskilling in critical industries like aged care, to which 33,800 Certificate III Individual Support (aged care) places will be allocated. See CCA's report on the Budget and the expansion of and training for the aged care workforce.

Other big training commitments (all up, totaling about $6.4 billion) include:

• $2.7 billion extension of the Boosting Apprenticeship Commencements wage subsidy;
• Additional measures focused on women, youth and digital skills;
• $53.6 million to support international education providers and providers most affected by COVID-19 (previously announced); and
• $23.6 million to support access to foundation skills for Australians with low levels of language, literacy, numeracy and digital literacy: see CCA's report on foundation skills and the Budget.

Also, read the full Skills Portfolio Budget papers here.

BUDGET COMMENTARY

It Could Have Been a Champion Budget

“The ‘couldabeen’ budget. Scott Morrison and Josh Frydenberg had the makings of a champion of budgets, but their courage failed them. It’s not a bad budget. Most of the things it does are good things to do. Its goal of driving unemployment much lower is exactly right. Its approach of increasing rather than cutting government spending is correct, as is its strategy of fixing the economy to fix the budget. But having fixed on the right strategy Morrison, reluctant to be seen as Labor lite, has failed in its execution…. Some are calling this a big-spending budget. It isn’t. Frydenberg has kept his promise that it would be no “spendathon”. As a pre-election vote-buying budget it hardly rates…. Politically, this budget had to offer a convincing response to the report of the royal commission on aged care. Reports have suggested fixing the broken system would take extra spending of about $10 billion a year. Had he accepted that challenge, Morrison would have put himself head and shoulders above his Liberal and Labor predecessors. He settled for spending an extra $3.5 billion a year. Major patch-up at best. The scandals will continue.” – Ross Gittins, Sydney Morning Herald

Healthy, Sustainable Economic Growth

What this year’s budget tacitly acknowledges is that recovering from the coronacession isn’t the real problem. We seem to have that well in hand. The real problem is that returning to the pre-virus status quo doesn’t get us to where we need to be: enjoying healthy, sustainable economic growth. - Ross Gittins, Sydney Morning Herald

Skills and VET

“The Budget’s separate announcements about investing in apprenticeships and traineeships appear significant on the surface. But the government apparently sees no central role for the public system in delivering training and skills. Unsurprisingly, then, the government’s preference for a competitive, market-oriented system would place the development of VET even more in the hands of private providers…. The Budget also announced an extension of the JobTrainer program to the end of 2022. This measure provides $500 million (which must be matched by state and territory governments) to support job opportunities for young workers. But in reality it amounts to little more than a repurposing of the failed JobMaker scheme, in both rhetoric and reality. JobMaker supported a mere 1,100 jobs for 16 to 35-year-olds, and utterly failed to counter the mass unemployment experienced by young workers during and after the pandemic.” – The Australia Institute

No sign of new funding to support the National Skills Agreement

"The Budget papers indicate that negotiations are continuing with states and territories to sign a new national agreement which will set the parameters for the transfer of Commonwealth money and replace the current National Agreement for Skills and Workforce Development (NASWD). Apart from the additional JobTrainer funds there is no indication of additional Commonwealth funds to encourage signing up to the agreement." - Craig Robertson, TAFE Directors Australia

Higher Education

“The past 12 months have been brutal for higher education. Left to wither and die by a government which deliberately excluded public universities from JobKeeper, the sector lost 17,200 jobs and could lose up to $19 billion in revenue over the next three years. And international students — its financial backbone for years — are unlikely to return in numbers any time soon.” Kishor Napier-Raman, Crikey

“The biggest losers are academics and higher education – university funding is effectively being cut despite the urgent need for Australia to be more innovative and creative, and the environment.” – David Crosbie, Community Council for Australia

“The 2021 budget has a major blindspot – an inexplicable unwillingness to invest in higher education. It’s a gap so obvious that many are starting to question whether it is the product of anti-expert animus in Coalition ranks. Whatever the motivation, the current neglect of higher education is criminal. The Morrison government didn’t create the pandemic that triggered the collapse of international student revenue. But it did close the borders, and it is keeping them closed while failing to render anything close to adequate aid to universities. Why? Australia’s higher education system is highly efficient and among the best in the world. Higher education is Australia’s fourth largest export industry. In 2019 it brought in A$9.8 billion and was estimated to be worth close to $40 billion to the Australian economy. If your aim is to stimulate the economy and set Australia up for future success, investment in higher education is a no-brainer…. So far more than 17,000 jobs have been lost in the sector, with more to come. Can you imagine this government being so nonchalant about losing the equivalent number of jobs in any other industry?” - Misha Ketchell, The Conversation

“The 2021-22 budget has added salt to universities’ COVID wounds.” – Andrew Norton, The Conversation

“Higher education has been one of the hardest-hit sectors of Australia’s entire economy throughout the pandemic. Higher education lost 35,000 jobs in the year ending November 2020 – reflecting the catastrophic failure of the Coalition government to include universities in the JobKeeper program, and the loss of international students. At a moment when the need for Australians to gain new skills is probably more acute than at any other time in a generation, this avoidable crisis in Australian higher education reflects a terrible error of judgment on the government’s part. It is particularly perverse for the government to talk about investing in skills, even as it continues to neglect the higher education sector. Tens of thousands of our most qualified and highly skilled educators, researchers, and professional staff have lost their jobs. The tertiary education sector’s exemption from the government’s JobKeeper wage subsidy was arbitrary, ideological and cruel…. The budget confirms the cessation of special measures to preserve research capacity at universities as international student numbers (and fee receipts) dropped during the pandemic. This means that Commonwealth payments to universities will actually fall by 9.3% over the forward estimates, despite the continuing crisis in higher education…. Stabilising and strengthening higher education and research would have knock-on benefits for Australian productivity and innovation throughout the economy.” - Dan Nahum, The Australia Institute

International Students

“The Federal budget has confirmed Australia’s border is likely to remain closed until mid-2022. Most international students must wait another year before they can return – only ‘small phased’ programs for international students will commence in late 2021 and gradually increase from 2022.” – Peter Hurley, The Conversation

The Early Childhood Education and Care Workforce

“The Government has committed an additional A$1.7 billion over five years to reduce the cost of childcare for around 250,000 families with more than one child. Another $1.6 billion is going into ensuring each four-year-old child gets 15 hours of preschool a week. But these budget announcements, framed in part as being a boost for women’s participation in the workforce, hold no good news for the early childhood workforce — 95% of whom are women. More than 150,000 educators and teachers work in the early childhood education and care sector. Most of the sector’s workforce are Certificate III and Diploma qualified educators, but an increasing proportion are degree-trained teachers. Workforce projections to 2024 suggested the sector would need an additional 30,000 educators (a 20% increase) and 7,000 teachers (a 16% increase). Prior to the pandemic, the sector suffered from a turnover rate of up to 30% per year, compared to an average turnover of around 18% in the general workforce. Psychologically and physically unhealthy work environments, and a lack of policy support, play a key role in why childcare educators are leaving the sector.” – Tamara Cumming, Laura McFarland, Rebecca Bull & Sandie Wong, The Conversation

Transformative Change Missed

“The 2021 Budget contains some welcome and overdue investments in the caring economy and in service sectors employing large number of women including in aged care, early learning, mental health and domestic and family violence services. But rather than taking the bold decisions to ensure all Australians can thrive, it reverts to pre-Covid policy settings which risks locking some Australians out of the recovery. The Government has continued to invest in physical infrastructure that will benefit generations to come but in the social sector action has been focused on temporary fixes, not the transformative change Australia will need to ensure that everyone can thrive in this new world order. There are several portfolio areas, such as First Nations, early childhood, impact investing, housing, income support and employment, where big ideas have been left on the shelf.” – Social Ventures Australia

Too Many Left Stranded

“The Budget provides much-needed funding to finally start fixing some of the gaping holes in our aged care, childcare, mental health, and domestic violence services. The Government’s lower unemployment target is welcome and could be lowered further. The long-overdue investment in care services will generate crucial jobs, overwhelmingly for women. While we welcome the expansion of training and local jobs programs for people who are unemployed, there are still 1.3 million people on JobSeeker & Youth Allowance payments.… The Government has given $20 billion in personal tax cuts to people already in paid jobs… plus tens of billions in business tax incentives. But not a single cent more to people living in deep poverty, including women on low incomes.” – Dr Cassandra Goldie, ACOSS

Not-for-Profit Organisations

“This Budget [is] actually aimed squarely at the private sector…. There is little in the budget for not-for-profit groups, or for extending public services to serve the public. Deliverers of aged, disability and children’s care services, which often exploit women workers in low paid jobs to minimise the costs of delivering services, are increasingly for-profit businesses. Yet there is no program funded specifically to raise poor wages and ensure adequate staffing by qualified staff…. Another example is the Budget’s provision of funds for non-tertiary, private English colleges and other such services. The sector is in trouble with the lack of overseas students, but these services are often poor deliverers of adequate qualifications. At the same time, TAFE and other post-school public training services are also in trouble but are not given financial support… The Budget bias in its apparently generous funding of private for-profit community services over non-profit ones, which are often replaced by the private services. Not-for-profit organisations used to respond to diverse community needs, not just try to earn the most money possible although some have recently followed the market models.” – Eva Cox, Pearls and Irritations

Gender Equity

“The substance and focus of this budget has shifted significantly since the last one.” The concentration on aged care and child care “is significant because both these sectors have around 90 per cent female workforces.” – Annabel Crabb, The ABC

“The Government still does not really grasp the challenge and opportunity of investing in women. Even in the face of compelling economic modelling to demonstrate the significant return to be realised through funding the social infrastructure of essential care services in the same way we do traditional ‘hard infrastructure’, policymakers apparently still regard spending on care as a cost rather than an investment.” There is a strong case for a care-led recovery. – Emma Dawson Per Capita

“The budget still favours some male-dominated industries that yield relatively few new jobs…. Consequently, the gender lens brought to the budget is welcome but still not wide enough.” – Carol Johnson, Inside Story

Image source: Pro Bono Australia