The privatisation of Australian childcare – like the privatisation of Australia’s aged care providers – provides a salutary lesson for the present and future of Australia’s vocational education and training (VET). At a time when governments are increasing their financial commitments to post-secondary skills development, how we shape the future of the VET sector is more important than ever. CCA’s Dr Don Perlgut reports below:
The Effective Privatisation of the Australian VET
According to the National Centre for Vocational Education Research (NCVER), in 2019 a large majority – 3 million (72.1%) – of Australia’s 4.2 million VET students studied with a private for-profit provider. In addition, 11.6% studied with a not-for-profit community education provider, 18.6% enrolled in TAFE; 1.8% with university providers; 2.6% with school providers and 3.0% with enterprise providers. (*)
The good news from NCVER data is that government funding to private for-profit VET providers remains relatively low, at 31.1% (357,400 students) in 2019, of the total 1,150,700 students who received government funds to study. TAFE continued to gain the majority with 53.4% of students; not-for-profit community education providers enrolled 6.2% of students; and other training providers enrolled 8.6%. (**)
Thus government funding for VET remains primarily in the hands of government and not-for-profit providers, despite persistent, ongoing and aggressive efforts to shift more to for-profit providers (see CCA’s summary of submissions to the Government’s Productivity Commission current Skills and Workforce Development Agreement Inquiry).
However, with almost three-quarters of VET students enrolled with a private for-profit provider, the majority of Australia’s total VET system has, effectively, been “privatised”. This has occurred through a series of government actions undertaken by both sides of politics on a national and state/territory level, over the course of many years.
Lessons to be Learned from Australian Childcare
In a recent article published on the Pearls and Irritations (2 September 2020), Lisa Bryan discusses how “how market forces are failing us in opting out to private and for-profit child care”. Below are selections from Lisa Bryant’s article, which provides important guidelines for Australia’s VET system:
Lisa Bryant: “All education and care services in Australia are rated against the National Quality Standard. Some 41% of not-for-profit services exceed the standard, whereas only 18% of for-profit ones do. Moreover, only 14% of not-for-profit providers are not yet meeting the standard compared to a massive 24% of for-profit operators.”
Comment: There is a clear pattern here. The profit motive reduces quality of care. Full stop.
Lisa Bryant: “The sector receives more than $8 billion in subsidies a year, so it attracts its fair share of those keen to rort government money. Yet despite the large subsidies it offers, the government has little resolve to demand greater accountability for the funding it provides to operators.”
Comment: We definitely see the similar pattern developing in Australia VET, with the new National Workforce Heads of Agreement including the phrase “with contestability in VET markets, to ensure high quality training and student choice.” Will this include greater accountability?
Lisa Bryant: “In a sector dominated by for-profit provision, it does not take long before the lobby groups of the for-profit providers becomes the mouthpieces of the sector. These lobby groups successfully advocated for the return of the government subsidies without the requirement to provide free childcare and without the obligations required of them as a result of receiving JobKeeper…. Childcare educators thus became the first workers in Australia to lose their right to JobKeeper payments…. For-profit operators have an outsized effect on public policy and an influence over government decisions to suit their needs.’
Comment: When a sector becomes so privatised, it can hold the government hostage to its demands, especially during a crisis such as COVID-19.
Lisa Bryant: “There are other ongoing issues of what happens in childcare because of the domination of for-profit providers. These include the need for complex regulations to control the sector yet when the government needed to step in to provide a rescue package, their ability to do so quickly was hampered by the morass of regulations designed to stop rorting within the sector.”
Comment: VET is similarly beset by extensive, often complex regulations, established to “safeguard quality provision” for the sector. Following the arduous – but ultimately successful – clean-up of the VET FEE-HELP scandals that resulted from actions by a number of private for-profit providers (and not just “a handful”), how well is VET positioned to deal with a new crisis now?
Notes: (*) The percentage totals above add to more than 100% as some students enrolled in with multiple provider types. (**) “Other providers” category includes secondary schools, non-government enterprises, professional associations, industry associations and manufacturers.