Business Council of Australia proposes a single tertiary education funding model

The Business Council of Australia (BCA) has launched a discussion paper that runs headlong into ongoing national debates about university and VET funding. But instead of engaging in the debate about how those sectors are funded, the BCA has set out to take the discussion in another direction altogether. It wants to put tertiary study money into individual learning accounts for every Australian.

It’s a beguiling idea, explained by BCA Jennifer Westacott on ABC Radio like this:

‘…we have too many people doing university degrees, we’ve let the VET system fall, I guess, away as a second-class option for people, we’ve got the apprenticeship system in decline. We need to get a system that puts them all on the same playing field. And what we’re calling for is each Australian to have a Lifelong Skills Account and they would decide the provider they go to, they would decide the courses they undertake, and they could do that not just as an undergraduate but for the whole of their lives.’

Dealing with uncertainty about the future of work

The discussion paper is titled Future-proof: Protecting Australians through education and skills (68 pages). Why ‘future-proof’? As the BCA sees it, the world of work is changing too rapidly for any of us to claim we know what it will look like ten years down the track. Technological innovations and robotics are taking off, for example, and we can’t predict where they will land. More people are working in the gig economy, or setting up their own businesses. It a trend that seems likely to continue.

The BCA is banking that the best way to minimise risk, to protect ourselves from the downsides of change, is through lifelong education and skills development. Encouraging people – everyone – to take that lifelong journey means having some certainty about how to fund it. That’s where the Lifelong Skills Account (LSA) comes in.

In addition to a user choice principle about what course and which provider an individual selects, the BCA proposes two design features for LSAs:

  • Access to a government subsidy for accredited learning in VET or higher education (lifetime cap of a set number of years of accredited learning, for example 10 years)
  • Access to an income-contingent loan for accredited learning at AQF Levels 5-9 (lifetime cap, to be determined).

Better support for VET

When she introduced the paper, via a speech at the National Press Club, Westacott put a lot of emphasis on better supporting VET and improving the public perception of VET as a smart choice, not a second choice:

‘My focus is on building the tertiary sector as a whole, and in particular, restoring the status of our neglected VET system. This tertiary system must be joined at the hip to industry so that workers of any age can access the new skills they need to stay in work… Once and for all we need to fix this cultural bias, reinforced by a funding bias, that a VET qualification is a second-class qualification to a university one. It isn’t. In a world where machines and people will work together and technical skills will be needed by all workers, that cultural bias can only create damage.’