5 June saw the release of the Productivity Commission’s interim report.

It is recommending wide-ranging reforms to “make the VET system a more efficient, competitive market with the flexibility to deliver a broad suite of training options.”

A time for change?

One of the things COVID-19 has done for vocational education is to make people think innovatively and maybe work more collaboratively. And this is just what we need right now.

In a speech to the National Press Club, the Prime Minister said VET was a complex system “that is clunky and unresponsive to skills demands” with a funding system “marred by inconsistencies and incoherence.” Spending on it has gone down, he said, and:

“Currently, the average timeframe to develop or update training products is 18 months.”

On the other hand, he said, “trade and skills jobs [need] to be aspired to, not looked down upon or seen as a second-best option… It is a first best option.”  Amongst other things he wants to move to a system which is simpler with increased funding better linked “to actual forward-looking skills needs, based on what businesses need.”

As the press release from ITECA suggests: VET is not broken, but there is room to improve. In their press release, the Australian Education Union advocates an increase in TAFE funding as a central response. The Australian Chamber of Commerce and Industry’s press release sees funding as the elephant in the room. Finally, TAFE Directors Australia has quite a lot to say about the report in its weekly newsletter. It characterises its reception as ‘lukewarm’ and believes it has “failed to see the ‘abundant lessons’ that the market did not have all the answers for the training system.” We return to that point later in this article.

What does the Productivity Commission think needs to change?

The reform options they are putting forward include “expanding access to VET Student Loans by relaxing loan caps and course and qualification restrictions, underpinned by strong risk management.” This, they suggest, “may be a preferred option to any additional subsidies.” Poor risk management has been how things came unstuck previously.

In addition, they propose simpler subsidy arrangements, using student vouchers instead of subsidy payments to RTOs to facilitate user choice and “moving away from, or complementing, incentives to employers to train apprentices by using other approaches to support apprentices, including mentoring and pastoral care.”

Vouchers are not a new idea as a paper published though NCVER and authored by Dr David Lundberg in 1992 shows! Back then he cautioned that:

“Despite the attractions of individual empowerment and freedom of choice, these principles need to be weighed with questions of educational quality, industry needs, equity of access, limits on choice, access to information necessary for informed choice, practical factors affecting the effective purchasing power of vouchers, and the risks of fraud.”

So, the move to voucher systems and any other funding approaches adopted will need to draw heavily on the experiences of VET-FEE-HELP and what happened under entitlement funding where, in Victoria and South Australia the Productivity Commission’s interim report reminds us, “concerns emerged about the value of some subsidised training, higher than expected budget costs, and unscrupulous conduct by some providers.”

Subsequently, both states tightened their subsidy programs and entitlements and moved to systems that were ‘less demand driven a more demand managed.’ So, perhaps we need to learn as much as possible from the past as we move to the future.

Readers can access the overview and full draft reports through these hyperlinks. The report’s website also has a useful ‘At a glance’ section highlighting the key points.

Making your contribution

In its press release, the Productivity Commission hopes “the report will provoke a broad discussion of big reform.” Let’s see. A submission or  brief comment can be made through their website, and you can access the relevant submission and comments pages using the links in this article. Submissions can be made until Friday 17 July 2020. Their final report is due in November.