Why the issue of for-profit Australian VET doesn’t go away

By Dr Don Perlgut, CEO Community Colleges Australia

Why won’t the issue of for-profit Australian vocational education and training (VET) go away, even with the long-awaited and much-welcomed replacement of the flawed loan program VET FEE-HELP with VET Student Loans?

I put it this way. There is an essential contradiction between quality, outcomes-based skills training for the whole of Australia – including regional and rural learners, Indigenous Australians and other vulnerable and disadvantaged Australians – and providing education using the “for-profit” model.

Unfortunately, the overwhelming majority – yes, two-thirds – of Australian’s VET delivery is now undertaken by for-profit private institutions. In addition, students at private colleges undertake fewer subject hours than those at TAFEs to achieve the same qualifications. “Is that greater efficiency or is it lower quality?” National Centre for Vocational Education Research (NCVER) Craig Fowler has asked.

The latest proof of this showed up last week in The Sydney Morning Herald (23 March): the collapse of the company Get Qualified Australia (GQA) left 2000 students without certificates or refunds. The chief executive of the company blamed the Australian Consumer Competition Commission (ACCC) and the national VET regulator ASQA for the collapse.

Over-regulation by the ACCC and ASQA?  Not likely, given the often limited powers that those regulators have to control behaviour that is much short of illegal.

Interesting that GCA was NOT a recipient of VET FEE-HELP.  So why this collapse? One clue is digging deeper into the article: “$1.5 million remains owing to unsecured creditors, which include Facebook and Google Adwords, owed $364,779 and $450,000 respectively.”

Did you get that, the GCA owes $814,779 for outstanding advertising fees? Imagine how much was spent each year on advertising – an expenditure that does not correlate in any way to quality education and training, and is a direct result of “marketisation” (privatisation) of this sector.

This month has brought other news (Melbourne Age, 13 March 2017) – the demise of Australian Careers Network (ACN), which was founded by two people who invested “their last $500 to register their first vocational training business in 2012. Just two years later, they joined the ranks of the BRW Young Rich List in 2014 with a stake in an estimated $177 million fortune when ACN was listed on the Australian Stock Exchange.”

There are many quality for-profit VET providers, but they tend to be ones with histories that pre-date the “free for all” market approach of recent years. The new ones have become successful by cherry picking cheap to run courses at high student volumes, and accessing government loans.


Postscript on 30 March 2017:  The bad behaviour of the private for-profit colleges has a “long tail”, so the issue won’t be gone for some time yet. News on the latest addition comes from today’s Sydney Morning Herald andAustralian Financial Review:


Postscript on 5 April 2017: There’s more change to come in the VET private for-profit market, according to Australian business news website SmartCompany, which reported last week:

The chief executive of training organisation Republica Education says Australia needs to rethink how private colleges, TAFEs and universities deliver higher education after government policy contributed to Republica entering liquidation this week. The company’s chief executive Ryan Trainor told SmartCompany the liquidation of Republica Education Pty Ltd, which until recently had five specialist training schools in the area of beauty and design under its umbrella, is part of a restructure and “pivot” on his part away from accredited education.