Next Steps for
Refocusing Vocational
Training in Victoria –
Supporting a Modern
Workforce
Published by the Communications Division
for Higher Education and Skills Group
Department of Education and
Early Childhood Development
Melbourne
January 2013
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Minister’s Foreword
Our Government is committed to entrenching Victoria’s position as Australia’s knowledge industry
capital. As we become more service-oriented and our industries adopt new technologies and expand
into new markets, employers are calling for a workforce that is more highly skilled and capable.
As outlined in the Government’s economic strategy Securing Victoria’s Economy – Planning. Building.
Delivering, the Victorian Government is building a modern vocational training system that has more
people gaining the skills they need to get a better job. To do this, we are developing a training system that:
• provides for as many people as possible to develop skills that lead to real and sustainable jobs
• gives people confidence that getting a qualification will lead to a more certain future
• gives businesses and industry confidence that they can access the skilled people to grow their businesses or improve their
services
• ensures that high priority areas are supported and that public resources are allocated effectively
• is responsive and can meet the needs and preferences of different learners, regions, and industries.
This means that the whole system that delivers vocational training in Victoria needs to refocus.
In May 2012, the Government announced changes to make Victoria’s training market the most dynamic, efficient and responsive in
the country. Our Refocusing Vocational Training in Victoria reforms have:
• provided for the highest level of budgeted funding for training delivery ever ($1.2 billion per year, on training subsidies alone,
over the next four years)
• improved the way we fund vocational training to better link it to employment outcomes
• created new ways to help students make better choices with the new website, the Victorian Skills Gateway
• established better links between industry, employers and training providers, and with Government
• established stronger entry requirements for training providers seeking to deliver Government-subsidised training in Victoria
• created a new vocational training market monitoring unit to monitor levels of competition, and trends in quality and price.
These changes are working. The refocus has encouraged more Victorians to take on training, with more than 510,000 Victorians
enrolled in government-subsidised training in 2012 – up 18 per cent on the previous year. Around 163,000 enrolments were in
specialist occupations and in industries experiencing skills shortages – up 19 per cent in 2012.
This document explains further the redesign of the vocational training system, and the support available for TAFE institutes, other
training providers, industry and individuals to adapt to the changes.
We are committed to a sustainable TAFE sector
As part of the Refocusing Vocational Training in Victoria reforms, the Government established an independent TAFE Reform Panel
to advise on actions to foster a strong, sustainable TAFE sector in an open and competitive training market. I would like to thank
Panel Chair Dr Ken Latta PSM, Mr Peter Ryan, Ms JoAnne Stephenson and Ms Yvonne von Hartel AM for their valuable insights and
recommendations.
The TAFE Reform Panel’s A strong and sustainable Victorian TAFE sector report provides a clear roadmap that sharpens the
Government’s role as the owner of TAFE institutes. It focuses on what is necessary to deliver stronger regional presence and
support, and create a more competitive and autonomous TAFE sector.
Our TAFE institutes are, and will continue to be, educational leaders. Many of our TAFE institutes are already pursuing innovative
strategies for growth and further specialisation, increasing collaboration with other vocational training providers and creating
stronger partnerships with business. While education continues to be the core business of TAFE institutes, they need to
become more commercially focussed and develop business strategies that maximise opportunities based on the needs of their
communities and industries.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 1
We know that the TAFE sector plays a critical role in community and regional development across Victoria. We will support our
regional and rural TAFE institutes to:
• sustain a strong local presence in regional communities, by providing a clear expectation and financial support for planning
towards financial sustainability
• roll out a pilot for technology enabled learning centres in Gippsland, so that students in different areas can be taught
simultaneously
• encourage and support stronger relationships with schools and universities to improve progression into further learning and
enable life-long learning.
To place all of our TAFE institutes on a stronger competitive basis with the private sector, TAFE institutes need to become more
autonomous. To facilitate this we will:
• increase the commercial focus and operating autonomy of our TAFE institutes, balanced with accountability and transitional
support
• remove constraints on productivity by freeing TAFE institutes to negotiate enterprise bargaining agreements, streamlining
reporting and enabling them to better use assets
• implement legislative changes, which support commercially-oriented and skills-based boards.
A summary of the TAFE Reform Panel’s nineteen recommendations and the Government’s responses are detailed in this document,
along with the Government’s actions to date to support TAFE institutes through the transition process. The Government fully
supports 12 of these recommendations, supports six in principle, and does not support the recommendation to integrate the
governance and management structures of regional TAFE institutes.
The Hon Peter Hall MLC
Minister for Higher Education and Skills
March 2013
2 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
Contents
1
Victoria needs a modern vocational training system
4
1.1 Our system has evolved over a period of 20 years.................................................................................... 5
1.2 Further change is needed to respond to today’s challenges.................................................................... 6
2
Refocusing vocational training will allow more people to build skills that lead to better jobs
8
2.1 The Victorian Training Guarantee has supported positive outcomes for students and business.......... 8
2.2 Implementation of the Victorian Training Guarantee also revealed opportunities
for further improvement............................................................................................................................10
2.3 A more modern vocational training system is now required................................................................... 11
3
Our reforms recognise the importance of system design and management
13
4
The reforms create opportunities and challenges
21
4.1 The Government has achieved a number of milestones in vocational training
over the last 18 months.............................................................................................................................21
4.2 There are special arrangements in place for TAFE to adjust to changes –
Government’s response to the TAFE Reform Panel’s recommendations............................................... 23
4.3 Other aspects of the system will need to be monitored and adjusted over time.................................. 26
4.4 The vocational training system also requires continual monitoring and improvement........................ 28
Appendix
29
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 3
1Victoria needs a modern vocational
training system
High-quality education and skills training is essential for Victorians to access the opportunities of a growing and changing
economy, and an increasingly sophisticated and information-rich society. Education and training benefits individuals by enabling
them to better access work and participate in society, and benefits the wider community through the enhanced economic and
social contribution of individuals.
Vocational training is a key part of this system. In 2012, more than 510,000 Victorians accessed Government-subsidised vocational
training courses, in addition to others who accessed accredited training that was funded by themselves or their employer. This
level of participation has not been achieved overnight, but through a continuous process of system reform and improvement over
more than 20 years.
In response to changes in the economy and society, the vocational training system has grown to place greater emphasis on
enabling students, business and industry to choose and influence the vocational training that they use. The changes have led to
more types of training and providers for students to choose from. The system has, over time, taken on market characteristics,
where people are able to decide what is best for them and where providers compete to offer services that meet this need.
The Refocusing Vocational Training in Victoria reforms respond to emerging challenges facing the current training system while
also best positioning the sector to provide high-quality training to meet the future needs of individuals, the community and the
economy. The reforms also aim to support the initiatives outlined in the Government strategy to strengthen Victoria’s economic
future, Securing Victoria’s Economy – Planning. Building. Delivering.
In designing and delivering these reforms, the overarching objectives of the Government have remained the promotion of an
efficient and responsive level of vocational training activity, to provide fair access to training opportunities, to ensure training
activity creates public value, and to improve the quality of training to better support job growth. However, as the vocational
training system has become more market-based, to meet these objectives the role and form of the Government’s involvement in,
and management of, the training system is also changing. Table 1 sets out the Government’s objectives for a vocational training
system and the main forms of Government involvement that address these under a market-based approach.
Table 1: Objectives for vocational training and Government involvement
Objective
Government involvement in a market-based vocational training system
Efficient and responsive provision of
vocational training
• Design and manage a strong market that operates with maximum choice and
competition, and enables all participants to pursue their objectives
• Where necessary, pursue specific interventions that encourage students,
businesses and providers to deliver desired vocational training outcomes
Fair access to vocational training
opportunities
• Promote and assist access to vocational training by providing additional financial
assistance (such as higher subsidies, fee concessions or income-contingent
loans) to individuals who face significant financial barriers to participation
• Ensure (through subsidy) an adequate supply of places
Ensure public value is derived from
vocational training
• Invest in vocational training through public subsidy, sharing the cost with private
beneficiaries (students and businesses)
Ensure quality training is delivered
• Strengthen quality assurance frameworks
• Improve availability and quality of training information to support better
decision-making
4 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
1.1 Our system has evolved over a period of 20 years
Over more than 20 years Victoria’s vocational training system has evolved from a TAFE-centred, contract-funded model; first to
a Government planned purchaser-provider model, and then to a more student-centred, demand-driven system. This trajectory
coincided with periods of considerable structural change to the state’s economy and workforce profile to which Government had
to respond. The response focused on increasing system efficiency during the mid to late 1990s and on increasing participation and
responsiveness from the late 2000s.
This trajectory has run in parallel with broader public management reform trends through the 1990s and 2000s. In fact, Victoria’s
vocational training system has often been a public sector reform leader. The vocational training reform trajectory is illustrated in
Figure 1 below.
Figure 1: History of vocational training reforms in Victoria
Early 1990s
Profile funding
No market
TAFE budget funded through contract
TAFE attracts students
Mid 1990s – 2000s
Purchase-provider
Portion of funding contestable
Government-purchased places,
mostly with TAFE
Planned course provision with
capped places
Subsidy based on historical cost
Profile of activity funded
Fees regulated/capped
Regulated fees
Goal: Fund TAFE
2008 – 2012
Student entitlement
Open contestable market
Student entitlement and choice of provider
Uncapped places
Subsidy based on course cost
Fees regulated/capped
Goal: Increase participation
2012 –
Refocusing VET
Fully contestable market
Student entitlement and choice of provider
Uncapped places
Subsidy reflects supply/demand
and public value
Flexible fees
Goal: Improve effectiveness
Goal: Drive efficiency
At each stage of system reform, the focus has been on building on past successes while improving public investment in vocational
training. For example, the shift from public monopoly service provision through government owned and operated TAFE institutes
to a purchaser-provider model in the mid-1990s built on the existing concept of planned ‘profile’ of activity and added the financial
discipline of costed inputs (hours) for vocational training. Initially based on historic costs, these subsidy rates were amended over
time to reflect observed practice and drive efficiency. Progressively, contestability was introduced as a growing number of places
were purchased from non-TAFE institutes.
From 2008 a significant change commenced with the introduction of the Victorian Training Guarantee (VTG). Before the VTG, a
limited number of places were allocated to each provider, meaning students could only access subsidised training if they found
a provider with a vacant training place. But following the introduction of the VTG, eligible students were entitled to access a
subsidised training place in the course of their choice1 and at their preferred provider. To facilitate this entitlement, the overall
number of training places was uncapped and places were no longer allocated to particular providers. Instead, providers were
allowed to compete for students and funding “followed the student” to their chosen provider.
In recent years, and especially since the introduction of VTG, these changes to the demand side and supply side of the system have
created a more market-based system. On the demand side, students have been given more choice through the opportunity to use
their entitlement funding, while on the supply side, the system has opened up with more courses and more providers competing to
attract students. This was the breakthrough of entitlement reform and was a major conceptual shift beyond government planning
and direct government influence though the purchase of places.
1
To promote the attainment of higher level qualifications needed in an increasingly complex and higher skilled economy, students must generally be “upskilling” and
undertaking a qualification at a higher level than their existing qualification attainment. The upskilling requirement does not apply to persons aged 20 years or under,
or persons undertaking a Year 12 Certificate or equivalent, an apprenticeship or a foundation skills course.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 5
As a result of this reform trajectory, training activity now increasingly occurs outside of publicly owned TAFE institutes. TAFE
market share has decreased from over 90 per cent in 1993 to 42 per cent in 2012 as illustrated in Figure 2 below.
While government funded enrolments for TAFE institutes in 2012 are higher than in any of the previous ten years, the rate of
enrolment growth has been relatively slow since the introduction of the VTG. Performance has varied between TAFE institutes, with
many of those that have made major changes to their business models, benefitting from higher than average enrolment growth.
Figure 2: Change in market shares over last twenty years
Pre 1993
1993 –
Purchaser Provider model
Profile funding
Phased introduction of contestable training funding from 1993
2008 –
2012 –
Student Entitlement Refocusing
Phased increase in
VET
contestability from 2009
1993
1997
2006
2008
2012
TAFEs : 32
TAFEs : 25
TAFEs : 19
TAFEs : 18
TAFEs : 18
100%
90%
65%
66%
42%
TAFE GF enrolments
Non-TAFE GF enrolments
Size of GF enrolments indicative
However, the growth in the vocational training market has not been as effective as it could have been due to an absence of
appropriate market management tools. This meant that some of the growth was attributable to the skewing of delivery patterns
in courses where subsidies and fees did not reflect public value, and by a small minority of providers that did not aspire to deliver
high quality training.
1.2 Further change is needed to respond to today’s challenges
While previous vocational training system reforms in Victoria were right for their time, new pressures are now emerging that have
implications for the vocational training system. The Victorian economy is undergoing another period of rapid structural change
and adjustment, with an increasing share of economic activity and employment in the services sector and a shift to higher value
manufacturing and agricultural activity. This has created a demand for employees with different and more complex skill sets.
At the same time, the proportion of the population available to undertake more highly skilled work is starting to be affected
by long-term demographic trends. In response, there is a need to improve the performance of Victoria’s education and training
system, including increasing the attainment of higher level tertiary qualifications, so Victoria has the right human capital resources
local business needs to effectively compete internationally as well as improve the wellbeing and engagement of individuals.
The economic and industrial landscape
Over the last decade the Victorian economy has experienced quite strong growth overall while a number of the State’s major
sectors have undergone significant shifts, as demonstrated in Figure 3. This includes:
• The reliance on the manufacturing sector has reduced, in line with the emergence of the knowledge and services sector.
• Service industries, including information and finance-based industries and personal and health services now claim a greater
share of economic activity and employment.
• In the manufacturing sector, businesses have relocated offshore or restructured to remain competitive.
• The building and construction sector began to boom in the early part of the decade and remained around 5 to 6 per cent of
Gross State Product (GSP) through to the end of the decade.
6 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
Figure 3: Shifts in percentage of Gross State Product of Victoria’s major sectors2
14
12
10
8
6
4
2
0
2000
2001
2002
2003
Agriculture, Forestry, Fishing
2004
Manufacturing
2005
2006
Construction
2007
2008
2009
Financial & Insurance
2010
2011
2012
Professional, Scientific & Technical
2 Australian Bureau of Statistics 2012, Australian National Accounts: State Accounts (cat. no. 5220.0)
These structural changes have resulted in a need for higher skilled and more productive workers. The ageing population and the
long-term fall in birth rates have further contributed to a projected shortfall of adequately skilled workers and the subsequent
need for greater workforce participation.
Continual changes in the economic, industrial and demographic landscape are expected in the future, making it impossible to
accurately predict exactly what the economy will look like, what the labour market will demand and what levels of skills will be
required in future to ensure a productive workforce. This requires greater responsiveness from educational institutions and
students as well as a move towards higher qualification levels and a culture of lifelong learning.
Education and training system
The Victorian Government has ambitious goals for the State’s education and training system – starting with early childhood,
school and tertiary education and continuing through workplace and lifelong learning. It aims to build on the existing strengths of
Victorian education and training to create a system that delivers:
• World class achievement
• Engagement by all in the opportunities that education can bring
• Support for the wellbeing of all
• The most productive use of every education dollar invested.
At the heart of these goals is greater alignment of education providers and services to individual needs. A focus on educational
pathways and lifelong learning, combined with policy settings that encourage higher levels of educational learning, have
increased the demand for tertiary education.
To successfully navigate the broad range of educational offers available and exercise choice, individuals require more options and
sufficient information. To enable this, barriers to pathways between courses and institutions need to be removed and funds need
to be allocated in a way that maximises the public benefit associated with the acquisition of skills and knowledge. In addition,
controls and incentives are required to preserve the integrity and quality of the system and ensure equity of access for all.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 7
2Refocusing vocational training will allow more
people to build skills that lead to better jobs
In the context of Victoria’s fast changing economic and educational landscape, a market approach is the best way to deliver a
responsive and dynamic vocational training system that will help as many people as possible build skills that lead to better jobs.
This is most evident in the results of the market approach embodied in the VTG, which has achieved positive outcomes for both
students and the economy.
However, the experience of operating a market-based system has also revealed that some of its features could be contributing to
undesirable outcomes for some students, businesses and taxpayers. This has included concerns over quality raised by providers,
industry and consumer advocates. In response, a new round of reforms were required to adjust these market design elements and
provide additional system supports to ensure that the successes of the vocational training market are sustained and expanded.
The Refocusing Vocational Training in Victoria reforms are designed to satisfy important criteria for a strong vocational training
market. Through these reforms the Government will be able to more effectively manage the training market, ensuring that the
vocational training system continues to produce positive outcomes for students, businesses and Victoria.
2.1 The Victorian Training Guarantee has supported positive outcomes for
students and business
The introduction of student demand-led funding under the VTG resulted in strong growth in training. More people are now taking
part in training and more providers are offering training to students and businesses. The number of private providers increased
from 201 in 2008 to 445 in 2012. In 2012, private providers delivered 46 per cent of government-subsidised training in Victoria, up
from 14 per cent in 2008.
Public funding has supported this growth, with government investment in training increasing by more than 65 per cent, from
around $800 million in 2008-09 to over $1.3 billion in 2011-12. In 2011, Victoria invested more money into training than any other
Australian jurisdiction, significantly above its share of the population (see Figure 4). Moreover, the Victorian system remains
highly efficient, with the lowest rate of real recurrent government expenditure per hour of load pass rate of any jurisdiction.3
Figure 4: Proportional state/territory investment in training4
35%
30%
25%
20%
15%
10%
5%
0%
NSW
VIC
QLD
WA
SA
TAS
NT
Share of total state & territory training investment
ACT
Population share
3 See Steering Committee for the Review of Government Service Provision Report on Government Services 2012, Productivity Commission, Canberra figure 5.14 p 5.31
4 NCVER Australian Vocational Education and Training Statistics Financial information 2011; ABS Australian Demographic Statistics, March 2012 (cat. no. 3101.0)
8 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
This investment has resulted in key successes including5:
• Higher participation: Government-subsidised enrolments grew from approximately 380,000 in 2008 to more than 670,000 in
2012 (Figure 5).
• Unemployed engagement: The percentage of enrolments in government-funded vocational training places by unemployed
people has grown from 17 per cent in 2008 to 24 per cent in 2012, on top of significant growth in total participation.
• Regional growth: There has been strong growth in regional vocational training delivery and student choice, with a 46 per
cent increase in student enrolments and 33 per cent increase in the number of providers offering courses in regional Victoria
between 2008 and 2012.
• Access for a diverse range of learners: More indigenous students and students with a disability are taking part in training.
There were approximately 6,200 indigenous students and over 40,000 students with a disability undertaking training in 2012,
an increase of 11 and 18 per cent respectively from 2011. (see Box 1)
• Strong vocational benefit: Most of the growth has been in areas of training that will help people get fulfilling and sustainable
jobs and perform their jobs more productively (Figure 6). However, there has also been some growth in courses of limited
vocational benefit, particularly where the subsidy and fees offered has not reflected public value.
Figure 5: Enrolment growth, 2008 to 2012
700
Enrolments (thousands)
600
500
400
300
200
100
0
2008
2009
2010
2011
2012
Enrolments in government funded places
Figure 6: Vocational benefit of courses
500
Enrolments (thousands)
400
300
200
100
0
2008
Foundation
2011
Specialised/in shortage
Significant benefit
Limited benefit
5 Department of Education and Early Childhood Development data
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 9
Box 1: Improved access for learners
Based in Ballarat, BGT, or Central Highlands Group Training, specialises in helping disadvantaged and disengaged members
of the community throughout the Grampians, Geelong and Melton regions. Working with industry, schools and community
organisations, it has increased its student numbers by around 150 per cent since 2010.
Through innovative training, BGT has provided career opportunities and further study options, including a program for young
single mothers to help them develop the skills they need to find ongoing work. In 2011 it successfully trained and helped more
than 40 people find work in the manufacturing industry.
This growth and diversification in the vocational training system demonstrates the overall success to date of the VTG. The
evolution of Victoria’s system has also created a strong platform for further reform, with:
• a more competitive and responsive system
• improved understanding of economic and industry trends
• a broader range of programs being delivered
• a greater focus on higher level skills which are vital in Victoria’s changing economy
• more dynamic and adaptable public, community and private providers – many with significant national and global economic,
business and industry connections
• a system that is more effective in the quality and quantity of training it delivers, and that is more efficient in using public and
private funds.
2.2 Implementation of the Victorian Training Guarantee also revealed
opportunities for further improvement
The full implementation of the VTG in 2011 succeeded in improving participation, driving choice and increasing competition.
However, during implementation it was apparent that a number of elements of the vocational training system design were suboptimal. As a result, the Government identified that a number of system design changes were needed to improve effectiveness
and confidence in the system.
In particular, the following issues were highlighted:
• a more comprehensive market monitoring framework was needed to provide oversight of market health and performance
• pricing was inflexible which sent weak signals about value, supply and demand
• inadequate information was available to assist the training decisions for students and businesses
• gaps existed in the quality assurance and regulatory framework
• subsidy settings were inconsistent between public and private providers and incompatible with fair competition.
These issues led to a number of unintended consequences including:
• particularly strong growth in some areas of training which were misaligned with the skills needs of businesses, risking poor
vocational outcomes for students
• emerging quality concerns that could undermine public confidence in vocational training.
Table 2 summarises the issues identified.
10 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
Table 2: System design weaknesses identified following the implementation of the VTG
System design weakness
Detail
Weak price signals
• Prices (both subsidy and student fee) are highly regulated and unable to adjust
to equalise changes in supply and demand
• Inflexible prices sending weak signals about vocational training needs and
preferences of students, businesses, industry and government
• Fees unable to fully reflect value placed on course by student and provider
Limited and poor quality information
• Poor information for students and businesses about course quality, vocational
outcomes and prices
• Poor information available to providers about labour market needs and student/
business preferences
Gaps in Quality Assurance Framework
• Quality assurance is market entry and input focussed
• Ongoing quality assurance is overly process based
• Insufficient controls on provider capacity and commitment to deliver high-quality
courses that satisfy industry and student needs and can compete nationally and
internationally
Inconsistent competitive environment
• Outdated TAFE institute governance and accountability arrangements that hinder
competitiveness, opportunities for further efficiency and innovation
• Different subsidies between public and private providers which disadvantages
private competitors
Limited market oversight capacity
• Limited detail on overall performance of the market, and its performance in
certain sectors, including regional and “thin” markets
• Insufficient understanding and monitoring of prices and fees
• Limited oversight of the level and quality of information available to market
participants
2.3 A more modern vocational training system is now required
The Refocusing Vocational Training in Victoria reforms have responded to these issues, seeking to improve system design and
management while at the same time preserving key strengths in the market approach – especially the emphasis on maximising
the number of people who can access training, provision of choice for students, and competition among providers.
These reforms also provide the Victorian Government with additional ways to better monitor the performance of the training
system. This will ensure the effectiveness of the Government’s investment in vocational training, and allow government to more
accurately target future interventions and influence outcomes.
There is substantial value that arises from participation in education and training (including vocational training) for both the
community as a whole as well as employers and individuals.
• Public benefit comes from the productivity and economic growth that results from a highly skilled workforce, and the social
gains that result from more educated citizens. This public value proposition supports the case for government investment in
vocational training through the provision of a funding subsidy.
• Private benefits accrue to individuals through better job prospects and higher incomes, and to businesses through the
productivity gains that come from higher skilled workers. These benefits justify private investment, in the form of student fees
and business spending on training, as well as a government contribution.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 11
This means that government, businesses and individuals need to share the investment and engagement in the training system.
The alternative, centrally planned approach is not sufficiently agile enough to meet the needs of students and employers in a
fast changing, competitive economy. In particular the centrally planned approach does not allow end users to directly engage in
choosing and influencing the training they need.
A market approach provides the best opportunity to deliver public and private benefit
A market approach provides the best opportunity to achieve the flexibility needed to increase participation, deliver value and
provide the greatest return for the Government’s investment in the training system. Such an approach emphasises informed
choice for students and wide competition among providers. It also provides additional benefits including:
• efficiency and transparency in funding, by directing public and private investment to the highest value training, and promoting
the most effective use of resources in the delivery of training
• greater opportunity for choice and influence by students and businesses
• greater responsiveness to the training needs and wishes of students and businesses by providers
• more innovative training as providers compete for students and businesses
• greater chance for influence by industry as it engages more directly with businesses, providers and students to shape choices
and training provision.
These additional benefits are significant and have been recognised in many areas where governments are seeking efficient and
responsive delivery of public services through market-based approaches.
The recent intergovernmental agreement between all Australian Governments emphasised this by committing to a national minimum
training entitlement for vocational training. Victoria’s system continues to exceed the national minimum training entitlement.
Supporting safeguards are required to ensure the market operates effectively
A market delivering complex offerings combining public and private value with significant public investment cannot simply be left
to itself because of the risks of market failure and sub-optimal outcomes.
The most likely failure in such a system relates to information – where students, businesses and providers do not share the same
information and so do not have full understanding of one another’s needs, motivations and willingness to pay. This would mean
that misalignment of training decisions and poor allocation of resources could occur. For example: too much training in areas
without strong job prospects, or too little training in some regional or “thin” markets.
For this reason, government involvement is needed to monitor the market and its performance, and to identify and address any
significant market failures that might arise. The Refocusing Vocational Training in Victoria reforms include new provisions for such
market monitoring and corrective action where necessary.
12 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
3Our reforms recognise the importance of
system design and management
The experience of the VTG has confirmed that the Government cannot ‘set and forget’ a market-based model. While the
Government no longer has a direct role in planning and directing training activity, successful ongoing operation of the vocational
training market will require an active role for government. This role is a combination of market design and ongoing management
activities that will inform intervention and corrective action when required.
Figure 7: Government’s ongoing role with the vocational training market
Establish framework,
regulation and institutions
Design
Management
Intervention
Strong market
Ensure continuous
functioning and the
successful achievement
of VET objectives
Respond to market
monitoring to sustain
the market’s
operation
Monitor the health
and outcomes
delivered in the
VET market
•
•
•
Refine market design
Specific interventions
where necessary
Balance priorities
Figure 7 illustrates the Government’s core roles as market designer and manager. The market design and management tasks,
followed by ongoing monitoring, intervention and re-design are continual, influenced both by the lessons learned through
continuous review and by the need to balance a range of public policy objectives.
While the Victorian Government plays a leading role, in some important cases (e.g. quality regulation, standards development and
financial assistance through income contingent loans), the Australian Government and industry are important system design and
management partners.
Seven criteria have informed the design of a better vocational training market
There are seven key criteria that a market operating within the vocational training system must embody in order to effectively
deliver on government’s objectives to maximise public value from training (see Figure 8). As well as an effective market design,
ongoing management and monitoring is also required. The changes to system management and monitoring are addressed further
in section 4.4 of this paper.
Figure 8: Criteria for a strong vocational training market
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 13
The Government’s market design task is to establish the framework, institutions and regulations that meet these criteria to deliver
on its vocational training policy objectives. The market management and intervention task is to inform and adjust settings and
initiatives over time, with the aim of continually meeting and balancing these criteria and policy objectives for vocational training.
Table 3 sets out how each criterion assists in establishing a strong market in the vocational training system.
Table 3: Seven criteria for a strong vocational training market
Criteria
How this achieves a strong vocational training market
Competitive market structure
• The market offers choice between a diverse range of training services from a diverse
range of providers
• The market is contestable – a diversity of providers can enter and exit the market
• The market is competitive – providers compete to offer students and businesses
training services that best meet client needs, driving efficiency and innovation in
training
• There is robust demand and supply, including in regions and specialist areas of training
Flexible prices
• Prices (a combination of government subsidy and student fee) signal the value
students, businesses and governments place on vocational training and the quality
providers are offering
• Prices (subsidy and fee) adjust to respond to demand and supply, encouraging and
enabling students to take part and providing financial incentives for providers to offer
efficient training services
Quality products
• Quality assurance of training products and providers underpins confidence for
students, businesses and industry
• The quality of training increases the benefits of training to students and employers
Informed decisions
• Informed, engaged and active students and businesses make better training decisions
based on clear, robust and widely available information about providers, courses and
prices, and quality of outcomes for students and businesses
• The training market is more responsive due to active industry and business
involvement in information provision, influencing choices and shaping vocational
training offerings
• Government interventions in the training market are more effective as they are
informed by clearer and more robust evidence of need
Industry relevance
• Courses and qualifications are designed to deliver the technical skills and wider
capabilities needed to participate effectively in the modern workforce
• Training choices made by individuals align with the skills and employment needs of
business and industry, as well as the policy objectives of government
Efficient investment
• The costs for individuals, businesses and providers associated with participating in the
training market are minimised – i.e. transaction costs are minimised
• The costs for individuals, businesses and government associated with investing in
training reflects their respective benefits from that investment (allocative efficiency)
• The desired training services are delivered and training outcomes achieved at least
cost to the public and private purse (productive efficiency)
Access to opportunity
• The system architecture supports students to obtain higher skills or re-skill based on
their specific learning pathways
• Learners are provided with support to access and succeed in vocational training
14 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
The Refocusing Vocational Training initiatives resolve weaknesses satisfy the criteria for a strong market
As the vocational training system in Victoria continues to evolve, many of the key elements of the training market that were
established under the VTG remain in place. These include:
• a student entitlement under the VTG, where a public subsidy follows the training choice of an eligible student
• a contestable and competitive market
• provider and training course regulation, where vocational training regulatory bodies enforce national standards for provider
and course quality.
The Refocusing Vocational Training in Victoria reforms build on this foundation with further improvements to the market design
framework, supplemented by specific interventions where necessary. Together these respond to the need for change to address
the sub-optimal outcomes emerging under the previous system and address the system weaknesses that enabled them to take
place. Together, they build the framework for a more coherent overall system design, continuing the process of improvement that
started over 20 years ago.
Refocusing Vocational Training in Victoria is a package of changes to prices, information and quality, supported by a new
market oversight function through the establishment of a market monitoring unit that collectively address the criteria for a
strong vocational training market.
Table 4 summarises how the major reform elements address the issues identified in order to satisfy the criteria for a strong
market.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 15
Table 4: Refocusing Vocational Training reforms respond to identified design weaknesses and satisfy the criteria for a
strong market
The identified issues
Satisfy criteria for
strong market
Addressed by RVT reforms
Subsidies and loadings
Weak price signals
Inconsistent
competitive
environment
u
• Subsidies for courses vary consistent with different private/
public value gained (see Box 2)
• Efficient investment is achieved through subsidies stimulating
participation in and provision of courses
• Subsidy loadings assist access to opportunities for indigenous,
young under-qualified, and regional students
• Subsidy rates and loadings are equivalent for all providers
(TAFE, adult community education, or private), providing for
more even competition
u
Efficient investment
Access to opportunity
Competitive market
structure
Specific programs
Weak price signals
Weak price signals
Weak price signals
u
• Industry Transition and Specialist Initiative is established
to create greater responsiveness in the training market, and
improve outcomes and benefits. The fund will support industry
endorsed proposals for initiatives that address training market
issues and barriers, and support eligibility exemptions for
retrenched workers.
u
u
u
Income contingent loans
u
u
• Income contingent loans (FEE-HELP) continue to be available and
will become the primary mechanism to remove up-front financial
barriers to study in higher level qualifications where fees are
higher but which provide significant future private benefit
Uncapped fees
• Providers able to set own fees for healthy competition
• Fees flexible to reflect the quality and reputation of providers
and courses (see Box 2)
Access to opportunity
Flexible prices
Industry relevance
Access to opportunity
Flexible prices
Flexible prices
Competitive market
structure
Transparency and disclosure
Limited and poor
quality information
u
• Students are better informed of training options and vocational
benefits of specific courses through the Victorian Skills Gateway
• E-Marketplace enables employers to communicate their training
needs directly to Registered Training Organisations
• Employers have the ability to rate the performance of training
providers in a particular study area against selected criteria by
using the industry rating tool
• Contracted training providers are required to disclose course fee
information
16 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
u
Informed decisions
The identified issues
Satisfy criteria for
strong market
Addressed by RVT reforms
Industry engagement
Limited and poor
quality information
Gaps in Quality
Assurance
Framework
u
• Stronger and more direct industry information loops ensure
that training providers have relevant and timely information
regarding ongoing vocational needs and can adjust course
offerings accordingly
• More intensive government engagement with industry
concentrated in areas of greatest need
• Consultation and feedback between industry, businesses,
government and providers (see Figure 7)
• Strengthened industry capacity to communicate expectations
and satisfaction
u
Quality products
Industry relevance
Informed decisions
• Capacity of employers to make training decisions has been
improved by self help tools
• Providers can ensure course design aligns with industry needs
Contract standards for Registered Training Organisations
Gaps in Quality
Assurance
Framework
Gaps in Quality
Assurance
Framework
u
u
• More rigorous contracting standards with focus on provider
quality will apply to providers seeking to offer government
subsidised places
• Standards address capabilities and performance measures
that are not effectively captured within existing regulatory
requirements
• Stronger enforcement of contracting standards will overcome
key quality concerns and stamp out unscrupulous behaviour
to ensure subsidised training provides outcomes which meet
industry needs
Industry Validated Assessment
• Industry involvement in training provider assessment to improve
confidence of employers and students in the quality of training
courses
u
Quality products
u
Quality products
u
Satisfies all criteria for
a strong vocational
training market
Market monitoring
Limited market
oversight
u
• Ongoing review for continuous refinement of price, information
and quality concerns
• Findings and recommendations will inform future government
subsidy setting and specific programs
• Critical information will be available to fully inform stakeholders
• The quality of VET outputs will be monitored while mechanisms
exist for quality failures to be addressed
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 17
The Refocusing Vocational Training in Victoria reforms produces a vocational training system that has active involvement of key
players and sends clear signals through prices. This ensures that:
• training is delivered at an efficient price
• students are informed and can make choices about the benefit of particular training
• providers have signals about likely course demand
• the Government is in step with industry needs in order to continually shape the delivery of training.
Taken together, the changes will help to ensure that as many people as possible are training in skills that lead to real jobs.
All players in the vocational training market will be actively engaged
The market arrangements now in place provide a framework for active and ongoing engagement by all participants in shaping
vocational education outcomes. Figure 9 illustrates the market framework now in place, highlighting major areas of engagement
for participants.
• Students are provided with purchasing power and choices about providers and courses. Active engagement requires that
they also make a contribution towards the costs of their training and make informed choices about the training that best suits
their needs. Along with businesses, their activity is stimulated by industry information and can influence the menu of courses
available through their demand for training.
• Businesses are able to influence courses, course design, delivery and the participation of students. Active engagement
requires that they invest in training and facilitate the involvement of their employees in training. Through their industry links
they can influence system wide behaviour.
• Industry has a broad responsibility to influence training by working with its member businesses, training providers and
other education institutions and its employees to inform, stimulate and shape training demand and provision while providing
important feedback to government.
• Providers develop and deliver training programs and compete for students on the basis of quality, accessibility, innovation
and price. Active engagement requires them to work closely with industry, businesses and the community to understand and
respond to training needs as well as shaping recognition of high quality, innovative training options.
• Government designs, regulates, subsidises and monitors the market. All facets of government’s role involve informing its key
participants to ensure the ongoing delivery of public value through education and training.
Figure 9: The market framework and role of key players in the vocational training system
Strong
vocational
training market
Choice and
competition
Choose
and pay
fees
Subsidy
$
Stimulate
Individuals
Businesses
Industry
Engage/
stimulate supply
and demand
Fee $
Inform
Compete
and provide
services
TRAINING PROVIDERS
Monitor
Regulate
Government
18 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
Feedback
Fund,
inform monitor
and regulate
Healthy price dynamics inform a responsive vocational training market
The vocational training system is driven by the supply of training by providers and the demand for training by individuals and
businesses. The delivery of training is shaped by price dynamics between the provider’s price and the student’s fee, which in turn
is influenced by the Government’s subsidy level. Providers are free to compete for students by setting prices that reflect their
position in the marketplace. This structure will drive the price for delivery of courses to a more efficient level while improving
productivity in course offering.
This dynamic is outlined in more detail in Box 2
Box 2: The subsidy, fee and price dynamic for government subsidised student hours
Government
Individuals and
businesses
Providers
Fee
$$
Price
$$$$
Subsidy
$$
The government sets the subsidy
From 1 July 2012 for commencing students and 1 January 2013 for all students, the course subsidy is set by the Government to
influence course uptake by individuals and businesses and course supply by providers while signalling the private and public
benefits of pursuing particular training. The process for subsidy setting has three inputs described in the formula below.
Course subsidy = Benchmark x Weighting x Loading
The benchmark is informed by both the historical cost of delivery and the relative public value and private value in
undertaking certain courses. Since 2009, lower benchmarks have been offered for higher level qualifications.
• Higher benchmarks are offered for Certificates III and IV, foundation courses and apprenticeships which have more direct
vocational benefits than Certificates I and II.
• Lower benchmarks are offered for diplomas and above which have higher private returns.
A weighting is applied to the benchmark based on an assessment of the course’s economic value, informed by Victoria’s
workforce and productivity needs and whether student participation is falling short of, satisfying or exceeding these needs.
The loading is applied to improve critical access concerns.
• Regional loadings apply to courses delivered in non-metropolitan areas.
• Loadings are provided for Indigenous students and for students aged 15 to 19 who have not completed VCE or equivalent
and are from a low socio-economic background to improve access to vocational training.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 19
Box 2: The subsidy, fee and price dynamic for government subsidised student hours
The providers determine the price
The price is set at the discretion of the provider to reflect its competitive position in the vocational training marketplace.
Providers will be free to make commercial decisions which reflect the demand for training, the cost of delivery, course quality
and their reputation. The higher the provider’s price, the higher the fee for students to receive training from that provider. This
will require providers to compete for students by providing additional private benefits to attract well informed students and
businesses.
While freedom to set price is important for achieving efficient price setting, providers do not have absolute freedom. Price
setting must be competitive and governments will continuously monitor prices to protect users of the system.
Businesses and individuals pay the fee
The fee is the student’s cost to participate in training. This is the difference between the provider’s price and the Government
subsidy. With providers able to set different prices, students will be able to choose between different fees for different
providers. The fee will influence demand for courses as students and businesses will closely consider courses on the basis of
fees.
• The fee will reflect the private value that students and businesses place on the course.
• Income contingent loans will be available to assist students in higher level qualifications to meet fees and reduce the
upfront financial disincentive to participate in training.
• Fee concessions will be available for lower level courses to certain concession card holders to ease access to training for
those with difficulty meeting upfront fees.
20 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
4The reforms create opportunities and
challenges
For all participants, the arrangements provide new market opportunities as well as challenges as the reforms have significantly
changed the market dynamics for providers, be they public TAFE institutes, community providers or private training organisations.
On the one hand students have been given the purchasing power to be more demanding than ever, businesses and industry will
be more directly engaged and the Government will set differential subsidy rates based on the public value of different vocational
training courses. On the other hand providers will have greater freedom to compete for student custom and to charge prices that
they believe their courses warrant.
Q3
• $20 million Regional Partnerships Facilitation Fund launched
Q4
•
•
•
•
Q1
• Ministerial roundtables on governance continue
• New industry engagement model implementation commences, including steps to abolish
Victorian Skills Commission
• Public Response to the Essential Services Commission’s VET Fee and Funding Review Report
and Recommendations released
Q2
• Refocusing Vocational Training in Victoria reforms announced
• Government announces that TAFE institutes are free to negotiate their own enterprise
bargaining agreements
• Victoria signs National Agreement for Skills and Workforce Development and Skills Reform
National Partnership Agreement or Skills Reform
• TAFE Reform Panel appointed
• Gippsland Tertiary Education Council formed
Q3
• TAFE institutes submit business transition plans
• TAFE Reform Panel consults with TAFE institutes and invites submissions from key
stakeholders
Q4
• Amendments to Education and Training Reform Act 2006 passed by Parliament introducing
skills-based Boards
• Dandolopartners review of TAFE institute reporting obligations completed
• Draft commercial guidelines, strategic planning guidelines and model constitutions released
to TAFE institutes
• Victorian Skills Gateway launched
• TAFE Reform Panel provides advice to the Government
2011
2011
2012
2012
2012
2012
Essential Services Commission Review of VET Fees and Funding released
Gippsland Tertiary Education Plan released
Technology Enabled Learning Centres Gippsland pilot announced
Ministerial roundtables on governance held with TAFE institutes and universities
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 21
4.1 The Government has achieved a number of milestones in vocational
training over the last 18 months
The training system has reached a number of milestones over the past 18 months (see p 21 diagram) which demonstrates the
progress made to achieving the Government’s vision of a vocational training system that creates opportunities for Victoria youth
and mature workers, responds to industry needs and focuses on providing training in areas where skills needs are greatest.
Emerging innovation in the TAFE sector
Prior to the release of the TAFE Reform Panel’s final report A strong and sustainable Victorian TAFE sector, TAFE institutes had
commenced a number of innovative activities that build on their strengths and allow them to compete more effectively in the
contestable market. Some specific examples are summarised in Box 3.
Box 3: Emerging TAFE reform directions
• Greater use of technology and blended learning: In 2013, TAFE institutes in Gippsland will be the first to pilot the rollout of
new Technology Enabled Learning Centres. Seed funding of $5 million has been provided to develop and install electronic
learning technology at the existing campuses of Chisholm, Gippsland and Advance TAFEs as well as a selection of other
training and education providers. This will allow regional students to access and directly interact with teachers in a wide
range of education services close to home, including courses previously delivered only at metropolitan campuses.
• More partnerships between TAFE institutes and other community organisations: Victoria University (VU) Community
Gateways is an outreach activity that strengthens access to learning and employment in the region. This is achieved by
taking the university out into community space to people who are currently unsure of how to access education and training
opportunities. A community development and capacity building approach has been used to engage with the 75 Adult
and Community Further Education (ACFE) funded community centres as well as neighbourhood houses, libraries, Local
Government activities, youth centres, cinemas and the Highpoint Shopping Centre. Over 3,700 clients have engaged with
Community Gateways and approximately 15 per cent of people who participate in professional careers counselling enrol in
VU courses.
• TAFE institutes forming new partnerships with industry to meet critical training needs: Wodonga TAFE announced in
August 2012 that it was successful in its bid to win a multi-million dollar tender to deliver nursing and paramedic training to
the Australian Defence Force. Programs starting in 2013 under the new contract will provide Defence medics with nationally
recognised nursing and paramedic diploma level qualifications for the first time.
• TAFE institutes trialling innovative new training options that meet community needs: The Government has committed
almost $300,000 to a trade experience pilot project which has commenced trialling a new pre-trade training model for
early school leavers that integrates a pre-apprenticeship into a VCAL program. Led by Victoria University, in partnership
with Chisholm and Kangan Institute, the project aims to encourage early school leavers to continue with general education,
with a focus on building literacy and numeracy skills in particular, while engaging with trades-based skills development
programs.
• TAFE institutes forming stronger collaborations with other tertiary and training organisations: In August 2012, the first
degree program began to be delivered directly from Wodonga TAFE in collaboration with the University of Ballarat. The
degree is the first in a suite of ‘applied degrees’ which Wodonga TAFE is planning to introduce over the next 12-24 months.
Similar collaborations are occurring between the University of Ballarat and five other regional TAFE institutes.
22 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
4.2 There are special arrangements in place for TAFE to adjust to changes –
Government’s response to the TAFE Reform Panel’s recommendations
A modern vocational training system requires well-functioning and modern TAFE institutes delivering high quality training in their
areas of strength alongside other providers. TAFE institutes face particular challenges and opportunities in responding to the
system changes outlined in previous chapters.
The goverance and funding arrangements for Victoria’s TAFE institutes have been evolving since the 1980’s (Figure 10). The autonomy
of the TAFE institutes have been progressively increasing while the funding has been transitioning to a competitively neutral basis.
They have operated in a contestable environment for several years.
Figure 10: Governance and funding changes to TAFE institutes
1980s
Historical
TAFEs begin decade administered by
Department
Control transferred to TAFE Board
Victoria only State to separate TAFE
from Department
Performance agreements introduced
Profile funding
Goal: Separate TAFE
from other education
sectors
Mid 1990s – 2000s
Devolution
TAFEs established as self-governed
statutory authorities
Boards employ staff but subject to
multi-party agreement
Limited commercial powers
Dual sector universities created
Consolidation of specialist colleges
into larger multi-purpose institutes
Goal: Greater autonomy
2008 – 2012
Competition
Better defined reporting and
accountability
Broader commercial powers enabled
Transitional financial and capacity
building support
Enhanced broadband and business
systems
More partnerships with, and diversification
into ACE and higher education
Goal: Adjustment to
a more competitive
environment
2012 – 2013
Commercial
Smaller, skills-based Boards
Clear commercial expectation and
framework for operations
Reclassification of dual sector universities
Legacy constraints removed
Structural adjustment support to build
financial sustainability and competitive
strengths
Goal: Full operational
and commercial
autonomy
They have a long history of working with industry, businesses and their communities and have developed a reputation for delivering
high quality training. TAFE institutes will continue to utilise their significant asset base, including physical campuses, IT networks
and specialised teaching equipment supported by previous government capital investment. In addition, $25 million was set aside
in the 2012-13 Victorian State Budget to support successful infrastructure bids from regional TAFE institutes under the Education
Investment Fund’s Regional Priorities Round.
The TAFE sector required a comprehensive review to ensure that it was prepared for the next phase of reforms. To this end, the
Government established a four-member independent TAFE Reform Panel, who brought a range of educational, governance
and commercial experience, to advise the Government on actions to foster a strong, sustainable TAFE sector in an open and
competitive training market. The Government also asked each TAFE institute to prepare a transition plan detailing how it intended
to respond to the new vocational training environment. Each TAFE institute was provided with financial assistance towards
advisory services to help develop these plans. These plans were examined by the TAFE Reform Panel and the Panel has developed
a number of recommendations which are contained in its report – A strong and sustainable Victorian TAFE sector.
Government’s response to the TAFE Reform Panel report and recommendations
In recognition of its role in supporting the effective operation of the vocational training market, and in particular its role to
support TAFE institutes to adapt to the new market conditions, the Government fully supports twelve of the TAFE Reform
Panel’s recommendations, supports six in principle, and does not support the recommendation to integrate the governance and
management structures of regional TAFE institutes.
A full list of the Panel’s recommendations and the Government’s response is provided at Appendix 1.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 23
Sustainable solutions for rural and regional Victoria
In many parts of regional and rural Victoria, TAFE institutes are currently the largest provider of vocational training. Ensuring
access to vocational training is critical to boosting educational attainment and the restructuring of regional economies. Relative to
most other jurisdictions, regional and rural TAFE institutes in Victoria generally have fewer students and less revenue. The scale
of their operations means they have less capacity to transform their educational services and business operations. They face a
challenging future in an increasingly competitive environment unless they generate greater economies of scale and scope.
The Government will not impose structural change on the regional and rural TAFE institutes. Instead, the Government expects
that, led by skills-based Board, TAFE institutes will develop options that generate greater economies of scale and scope and,
greater capacity for innovation, whether by entering into more partnerships with other education providers, or undertaking a more
formal structural change. It would be expected that through these changes the regional and rural TAFE institutes would become
financially sustainable and move towards meeting their commercial obligations.
The Government will be open to all proposals for collaboration opportunities, including integrated governance and management
structures, that are developed by the TAFE institutes.
The Government will provide time-limited and contestable structural adjustment funding to TAFE institutes of $200 million over
the next four years to support innovation, collaboration, structural reform and business transformation to ensure their ongoing
financial sustainability.
TAFE institutes will be invited to submit funding proposals to support innovation, collaboration, structural reform and business
transformation, with detailed business cases. Funding will only be provided for projects that deliver genuine improvements in
financial sustainability and demonstrate a pathway to meeting commercial obligations.
Regional TAFE institutes will be supported by an independent facilitator, and will be provided with funding for expert commercial
and restructuring support to work through the implications of the recommendations of the TAFE Reform Panel.
Greater commercial and operating autonomy and removal of legacy constraints
TAFE institutes need to have the autonomy, capacity and flexibility to compete with other training providers (particularly with
for-profit private providers who have significantly increased their market share) and be driven to pursue similar commercial
imperatives.
Central to this is the removal of existing arrangements that may constrain TAFE institutes in competing with other providers
such as providing greater flexibility in negotiating enterprise bargaining agreements, and the ability to register as group training
organisations.
Government supports in principle, and will work towards arrangements that will give TAFE institutes greater ability to manage
their assets so they can generate higher utilisation rates and move towards an asset profile that better meets the needs of
students and employers. To achieve this, the Government will work towards enabling TAFE institutes to access more flexible
financing arrangements for capital and other significant business activitiesas structural and governance reforms are implemented.
It will also continue to consider proposals from TAFE institutes to retain the proceeds from the sale of land to support transition
arrangements and future infrastructure investment, subject to government processes.
24 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
Clearer accountabilities and fit-for-purpose governance, monitoring and reporting
To support greater autonomy for TAFE institutes, the Government will set all institutes a commercial objective to maintain the
Government’s investment by fully recovering their costs, including depreciation charges, and earning a financial return. Before the
start of each year TAFE institutes will be required to agree with the Minister for Higher Education and Skills the financial return that
they will achieve.
The commercial focus of TAFE institutes should be reflected in their legal structure and governance arrangements. The new legal
structures and governance arrangements will sit alongside clear accountability and reporting requirements back to government.
Reforms to TAFE governance and accountability arrangements will be implemented with the aim of enabling TAFE institutes to
stand independently in the market place, operate in a commercially sound way and be accountable to the Government as public
sector enterprises.
The Government has already taken significant steps in improving governance and oversight arrangements for TAFE institutes,
including passing amendments to the Education and Training Reform Act 2006 which will require TAFE institutes to have skillsbased Boards that can manage the commercial realities and challenges they face in the market place. TAFE institute Boards will be
reconstituted in the near future to meet the requirements of this legislative change.
The Government will also shortly remake TAFE constitutions and finalise new commercial guidelines and strategic planning
guidelines to ensure that TAFE institutes have a clear framework for operating their businesses that is best practice.
Consistent with the Government’s new regulatory reform agenda which aims to reduce the regulatory burden on the community
and business, actions will be taken to streamline the reporting obligations faced by TAFE institutes. A review of TAFE reporting
obligations has been completed and the Government will use this as a basis for making changes that will free up TAFE institutes to
focus on growing their business.
In parallel with these changes, the role and responsibilities of the Department of Education and Early Childhood Development
(DEECD) are also changing. DEECD will work with the TAFE institutes to develop a compact which sets out the roles and
responsibilities of DEECD and TAFE institutes in the new environment. DEECD is also ensuring it has the appropriate skills and
experiences for this new environment.
These governance reforms will give TAFE institutes more autonomy and flexibility. For example, as a result of flexible governance
arrangements, a TAFE institute should be able to determine the mix of courses, campuses and collaborations that best meet its
commercial objectives, consistent with the needs of their students, industry and community.
Facilitating student pathways and outcomes
A key objective of Victoria’s reforms to the vocational training system is to ensure that students can progress through to higher
qualifications in order to meet their vocational goals and to find meaningful employment that meets the needs of industry and the
economy. This will require the development of strong partnerships between organisations, as well as a commitment to removing
existing barriers to student participation and progression.
To continue to build a dynamic and high quality vocational training system the Victorian Government:
• supports a wider range of choices for students in higher education, including through vocational training providers
• calls on the Commonwealth to refine their risk-rating system and extend streamlined visa requirements offered to universities,
to other appropriate settings.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 25
4.3 Other aspects of the system will need to be monitored and adjusted
over time
Beyond this response, a number of major issues will need further consideration to take the next steps in designing the vocational
training system.
Developing a more performance focused approach to the regulation of providers
The regulation of vocational education providers – both through national regulatory standards and through Victorian contracting
requirements for funded providers – is an important pillar to ensure a high-quality Victorian training market. While Victoria has
significantly strengthened its contractual requirements for publicly-funded providers, further work at a national level needs to be
done to ensure regulatory frameworks support a high-performing vocational training system.
Current regulation sets market entry standards for providers through the registration process for providers. Currently, these
standards have a disproportionate emphasis on processes and inputs for registration which, although important elements of a
regulatory framework, do not in and of themselves ensure quality outcomes. In addition, a lack of robust data on quality makes
it difficult for regulators, system managers, training providers and clients to effectively and objectively identify high-performing
providers.
A move towards more performance based regulation, which focuses on the performance of providers including further education
and labour market outcomes, could complement recent reforms that have facilitated better information provision to assist student
choice and training provider competition. It may also create opportunities to streamline contractual requirements where any new
regulatory measures create duplication.
To achieve this will require, at a minimum, agreement on clear and valid quality metrics that can be objectively measured and
tracked by regulators and funders. The Victorian Government will seek to work with other jurisdictions to develop a performance
framework for providers at the national level – to ensure that the regulatory burden on providers is minimised and contractual and
regulatory standards are complementary, and not duplicative.
Victoria will continue to engage closely with the National Skills Standards Council’s Review of Standards for the Regulation
of Vocational Education and Training to ensure that a more effective and performance-based regulatory framework for the
vocational training sector emerges from the review. The Victorian Government will also consider how its contractual arrangements
with providers can better focus on the quality of training outcomes.
Enabling a diverse range of learners to succeed
Vocational training is a critical pathway for a range of Victorian learners. Learners, including those who have not achieved a
senior secondary certificate or equivalent and who are unemployed or in low skilled work, are one group most likely to benefit
from vocational training. The introduction of a student training entitlement has increased the participation of these groups.
For example, from 2008 to 2012 there are 184 per cent more unemployed students, 40 per cent more young students without a
senior secondary certificate and 112 per cent more older adults with a prior qualification less than Certificate III participating in
vocational training.
However, there remain significant numbers of Victorians without formal post-secondary qualifications. Moreover, for students who
do enter formal training, the low number of vocational training sector completions is an issue recognised nationally, with the latest
research conducted by the National Centre for Vocational Education and Research (NCVER) estimating national completion rates
across the vocational training sector at 31.7 per cent in 2009. Victoria’s completion rate has historically sat below the national
average, despite rising almost 4 percentage points from 2008 to 2009, to 28.8 per cent.6
In recognition of the need to increase completion rates overall, there is a need to both improve the practices of training providers
in reporting qualification completions and then to use this performance information to incentivise providers to see more students
through to completion. For example, the 2013 Victorian Government contract for subsidised training has increased the focus on
6 National Centre for Vocational Education Research (NCVER), Australian vocational education and training statistics: the likelihood of completing a VET qualification,
2006–09, 2012
26 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
the requirement for providers to issue qualifications and report regularly on completions and the Government is continuing to
advocate nationally for provider performance, including completion rates, to be used by regulators to target regulatory oversight.
Research suggests that some learners face a range of particular barriers to access, succeed and progress in education, training
and work.7 Best practice models suggest these barriers are most effectively tackled through a strategy that encompasses
outreach to improve access, recognition of the range of obstacles a learner may face that impacts on their capacity to participate, a
teaching and learning approach that is tailored and responsive and a clear pathway to further education, training and employment.
Many providers including TAFE institutes, private providers and community owned and managed Learn Local providers (or Adult
Community Education) organisations adopt these best practice approaches. The Learn Local sector in particular currently provides
an important service to a range of adult learners seeking to progress through pre-accredited or entry level vocational training.8
The Government will continue to work with providers to extend best practice more broadly across the system as well as working
with the VET Development Centre to build professional practice that results in success for the diverse range of Victorian learners.
Supporting the Learn Local sector to adapt and compete
The Learn Local sector forms an integral part of Victoria’s vocational training system. Learn Local can provide a strong pathway
for individuals to enter further vocational training and work, building individual capabilities, which in turn improves economic and
social participation as well as health and wellbeing.
The reforms in Refocusing Vocational Training in Victoria will act to raise standards of training quality, in line with the expectations
of communities, employers and learners, but will also place more obligations on providers. Government acknowledges that
increased obligations may present challenges to smaller and more specialised providers.
Responding to these challenges and opportunities, the Government has consulted with the Learn Local sector and developed key
objectives for the Learn Local sector that aim to:
• refine the role of Learn Local to increase the capacity of the sector to support learners who have the biggest hurdles to
overcome in entering and remaining in work and/or are socially isolated
• foster durable networks and co-location of services to improve pathways and sustainability – by incentivising providers to
develop partnerships and new business models, as well as facilitating integration of adult learning with other education and
employment services
• build Learn Local sector capability to deliver high quality education services – by harnessing broader vocational supports and
improving administrative and strategic capabilities.
Government is developing a Learn Local strategy which will set out these objectives for the Learn Local sector in more detail, and
outline how Government and the ACFE Board will work with stakeholders to achieve the desired outcomes.
Removing barriers between senior secondary school, vocational training and higher education
The Government is considering how to better link vocational education with schooling on the one side and higher education on
the other. The focus will be on enabling students to make choices across all systems driven by their educational, employment
and social needs, and ensuring that these choices are not distorted through differences in funding arrangements or sectoral
regulation.
Vocational education in the secondary school system has a key role in ensuring young people are ready for stable employment,
further education or training. However, evidence suggests that secondary students undertaking vocational courses are less likely
to make good transitions to employment or further education and training, compared with students not taking up this option.
DEECD will work with schools, training providers, industry and other stakeholders to examine how effectively vocational education
is being delivered in senior secondary schools, how well government investment is being used to achieve results for students and
how well the current system is placed to continue to deliver job and study ready students into the future. The outcomes of this
work will inform further government decision making about how to make vocation pathways for young people more effective,
efficient and sustainable.
7 Davies, M, Lamb, S and Doecke, E, Strategic Review of Effective Re-Engagement Models for Disengaged Learners, October 2011
8 Pre-accredited training is funded outside of the VTG and available only to Learn Local providers registered with the ACFE Board. In 2012 310 providers were registered
with ACFE, of which around half were also Registered Training Organisations eligible to offer accredited training under the VTG.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 27
4.4 The vocational training system also requires continual monitoring and
improvement
The Government will continue to monitor the performance of Victoria’s training market and respond where there is evidence
of a market failure, or credible risk of failure, impacting on particular groups of learners, particular industries, or particular
communities.
An essential part of Government’s role in supporting an effective training market is ensuring that market failures are identified
early and addressed as quickly as possible. Government has established a Market Monitoring Unit (MMU) in DEECD that will lead
the task of monitoring and reviewing market settings.
The MMU is an independent unit within the Regional Support Group, DEECD that operates at arms-length from the Department’s
Higher Education and Skills Group which has day-to-day responsibility for operation of the training market. The MMU’s findings
will be provided to the Minister for Higher Education and Skills for consideration. It will also publish reports of its activities and
market findings.
The MMU will monitor, analyse and report on matters relating to the efficiency of the Government subsidised vocational education
and training market in Victoria and specific market segments. When examining the efficiency of the market, the MMU will have
regard to price (subsidy level and fees), quality and other market dynamics, more specifically:
• subsidy level - monitor and analyse subsidy levels for priority market segments, where market activity, and fee data and/or
market intelligence suggests inefficiencies
• fees - monitor the impact of fee deregulation, with a view to identifying any markets that are not competitive
• quality matters - evidence of zero or low fee or excessive pricing may also inform analysis of quality matters
• other market dynamics, including those damaging to competition. Examples may include thin markets, provider behaviour to
drive up prices, arrangements to divide up the market, cream skimming activity, or compromised quality training.
Much of the MMU’s work will look at system-wide issues and will be informed by both analysis of data, as well as intelligence from
key stakeholders. In some cases the MMU will commission further analysis or investigation. Where it is found that community
training needs are not being met well by the market then the Government may decide in certain cases to take action (see Box 4).
Box 4: Market monitoring may reveal the need for additional government action: Auslan case study
An urgent review of Auslan training in Victoria was commissioned in mid 2012. The review was conducted by the Centre of
Excellence for Deaf and Hard of Hearing in partnership with Grant Thornton Australia.
The review highlighted the lower take up of Auslan courses in recent years, and that the limited number of training providers
offering the course means it is not best suited to delivery through the Victorian Training Guarantee. Given the social and
economic importance of the delivery of Auslan, the Government instead decided to initiate a competitive tender for delivery of
a capped number of Auslan places for commencement during 2013.
In addition, the MMU will commission a comprehensive review of market settings to help shape the funding arrangements from
the beginning of 2014. This review of subsidies will enable the Government to ensure it continues to target public investment to
areas of greatest public value into the future.
28 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
Appendix 1:
Victorian Government response to the TAFE Reform Panel’s recommendations
Recommendation
Government response
1
Support
It is critical during the transition period that
the Government closely monitors trends in the
vocational training market to prevent market
failures, including the provision of capital
intensive training, through the Market Monitoring
Unit and other departmental intelligence tools.
As part of the Refocusing Vocational Training in Victoria reforms,
the Government has established a dedicated Market Monitoring
Unit within the Department of Education and Early Childhood
Development specifically to monitor the vocational training market.
The Market Monitoring Unit will monitor the competitiveness of
market segments across industries and regions, and identify gaps in
provision or participation.
In addition, the Department of Education and Early Childhood
Development will continue to publish quarterly reports on training
activity. These reports provide detailed analysis of participation in
training. Reporting is segmented by level of qualification and area of
study, as well as by learner cohort and region.
2
The Government should take advantage of this
significant opportunity to enhance educational
services for regional communities, strengthen
organisational capabilities and address
immediate financial viability issues with some
regional and rural TAFE institutes, by integrating
governance and management structures for:
a) Hume region: Wodonga and GOTAFE
Not support
The Government is committed to a strong and sustainable TAFE
sector, particularly in regional and rural areas. The Government
notes that Victoria’s TAFE institutes in regional and rural areas are
small compared to those in other states and do not necessarily have
the economies of scale and scope to continue to meet the needs of
their local community in their current form.
b) Gippsland region: GippsTAFE and Advance
TAFE
However, the Government considers that it is not appropriate at this
time of significant change to impose structural change.
c) Barwon South West region: The Gordon and
South West TAFE
The Government will provide time-limited and contestable structural
adjustment funding of $200 million over four years, including
$100 million in infrastructure funding, to support innovation,
collaboration, structural reform and business transformation to
ensure the ongoing financial sustainability of TAFE institutes.
d) Loddon Mallee region: Bendigo and
Sunraysia.
The Government should commission integration
plans by January 2013, for completion by the end
of March 2013, which include a regional tertiary
education needs analysis; assess the costs,
benefits and risks of the integrated governance
and management structure; and develop high
level implementation frameworks. Integrated
Boards and governance should be in place by
April 2013, to enable organisational structures,
common business systems and appropriate
operating models to be implemented by
1 January 2014.
TAFE institutes will be invited to submit funding proposals
for innovation, collaboration, structural reform and business
transformation, with detailed business cases for funding. Funding
will only be provided for projects that deliver genuine improvements
in financial sustainability and demonstrate a pathway to meeting
commercial obligations.
Regional TAFE institutes will be supported by an independent
facilitator, and will be provided with funding for analytical support
to work through the implications of the recommendations of the
TAFE Reform Panel in proposing business transformation solutions
for funding.
The Government will be open to all collaboration proposals,
including integrated governance and management structures, that
are developed by the TAFE institutes.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 29
Recommendation
Government response
3
Support
The Government should monitor regional
provision of, and participation in, vocational
training in regional Victoria, to provide an ‘early
warning’, particularly in thin markets, of risks
of market failure. Specifically, the Government
should monitor whether the regional loading
is adequate to secure sufficient provision of
courses that are important to supplying skilled
workforces into regional economies.
In Refocusing Vocational Training in Victoria, the Government
committed to establishing a Market Monitoring Unit to continuously
monitor the impact of the new subsidy levels for vocational training,
ahead of a more comprehensive review of subsidy levels within
two years.
The new subsidy levels include a 5 per cent loading for all subsidised
training delivered in a non-metropolitan area, for commencements
from 1 July 2012. This is referred to as the regional loading.
As part of the scheduled review of subsidy levels, the Government
will examine the adequacy and impact of the regional loading.
4
The Government should articulate the following
clear expectations of TAFE institutes:
a) display teaching excellence and quality in
training delivery
b) foster industry and community development
c) operate as sustainable businesses in the
community.
Consistent with the Victorian Government’s
competitive neutrality principles and the
expectation that the TAFE institutes operate
as sustainable businesses, the commercial
objective for the TAFE institutes should require
them to maintain the Government’s investment
by fully recovering costs, including depreciation
charges, and earning a return on fixed assets
that is equal to the TAFE institute’s weighted
average cost of capital.
5
Support
The Government supports articulating clear expectations to the TAFE
institutes and notes that this has been done in part through recent
amendments to the Education and Training Reform Act 2006 which
include a new section 3.1.12A with the objectives for TAFE institutes.
The Government has also drafted commercial and strategic planning
guidelines which provide a set of principles and outline the process
for the development and conduct of commercial activities of TAFE
institutes, to maximise the benefits and to minimise the risks to the
TAFE institutes undertaking such activities.
The draft guidelines include a clear commercial objective for the TAFE
institutes and require the TAFE institutes to outline in their strategic
plan the transition over time to meeting the commercial objective.
The Government will continue to work with the TAFE institutes to
finalise the commercial guidelines and strategic planning guidelines.
The Government should:
Support in principle
a) take a strategic State-wide approach to
providing capital grants to vocational training
providers (public and private) to ensure that it
does not replicate existing facilities
The Government is committed to full competitive neutrality in the
vocational training sector, including providing TAFE institutes with
the ability to better manage capital investment decisions.
b) ensure that, if through Government
intervention a TAFE institute is not able to
dispose of an asset to meet its commercial
objective, it should not be financially
disadvantaged
The Government will work towards enabling more flexible financing
arrangements and transferring title to TAFE institutes as structural,
governance and performance reporting changes, and asset
management reforms are implemented. As part of this process, TAFE
institutes will also need to demonstrate the capacity and capability
to operate commercially.
c) provide TAFE institutes with borrowing
powers, limited to a commercially accepted
debt/equity ratio
d) transfer to the stand-alone TAFE institutes the
title to all assets they operate, that are not in
their name.
The Government will continue to work with TAFE institutes to ensure
that their asset profile continues to meet changing community and
industry needs.
30 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
Recommendation
Government response
6
Support in principle
To remove constraints on the operational
autonomy of the TAFE institutes, the Government
should:
a) streamline approval processes to avoid
delays and enable TAFE institutes to negotiate
productivity gains through their enterprise
bargaining agreement
b) ensure TAFE institutes have the flexibility to
offer competitive levels of remuneration, to
attract highly skilled Board members and
management
c) remove restrictions on TAFE institutes being
registered as Group Training Organisations.
a) The Government has already agreed to provide the TAFE institutes
with the flexibility to negotiate their own enterprise bargaining
agreement. The Government’s Public Sector Workplace Relations
Policies provide flexibility for the TAFE institutes to negotiate
productivity improvements. The TAFE institutes are encouraged
to negotiate such productivity improvements to enable them to
compete effectively with private providers. The Government will
work to introduce a more streamlined approval process for the
TAFE institutes’ enterprise bargaining agreements but notes that,
as the TAFE institutes are publicly-owned, government oversight
and approval of enterprise bargaining outcomes will be required.
b) The Government agrees that the remuneration for Board members
and management should be commensurate with their skills and
experience. However, it does not wish to adjust remuneration
levels with no change in outcomes from the TAFE institutes. The
Government will be reconstituting the Boards in early 2013 as
required under recent amendments to the Education and Training
Reform Act 2006. The Government will consider the remuneration
for each TAFE institute Board as it is reconstituted.
c) The Government supports removing the restrictions on TAFE
institutes being registered as Group Training Organisations and
will make the necessary changes to remove this restriction.
7
8
9
As the vocational training market matures, the
roles and responsibilities of the Department of
Education and Early Childhood Development
will change and it will need to ensure that it has
the appropriate skills and experience for this
changed environment.
Support
To effectively implement its Refocusing
Vocational Training in Victoria reform agenda, the
Government should establish an enhanced and
strengthened governance framework involving
the achievement of the commercial objective over
time, greater autonomy, enhanced accountability
and professional skills-based Boards.
Support
The Government should:
Support
a) streamline the monitoring and reporting
obligations on TAFE institutes
The Department of Education and Early Childhood Development
engaged Dandolopartners in 2012 to review the reporting obligations
on the TAFE institutes and to make recommendations as to how
these could be streamlined. The Government is committed to having
streamlined, but effective reporting recommendations.
b) provide benchmark data to TAFE institutes
so that they can identify opportunities for
productivity improvements.
As part of the Sustainable Government Initiative, the Government is
repositioning the Victorian public service, including the Department
of Education and Early Childhood Development, to be efficient,
responsive and sustainable. As part of this initiative, the Department
has been redesigning its organisation to ensure that it has the
appropriate skills and experience for the new environment.
The Government has been progressing towards an enhanced and
strengthened governance framework. It will work towards finalising
new constitutions and commercial and strategic planning guidelines,
and to reconstitute the TAFE institute Boards in the first half of 2013.
The Government also supports providing benchmark data to the
TAFE institutes as a tool to identify productivity improvements.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 31
Recommendation
Government response
10
Support
The Government should work with the
Commonwealth to reclassify dual sector
universities so that:
c) references to the TAFE division of dual
sector universities in the Education and
Training Reform Act 2006 can be removed
(so that all of the operations of the University
are administered under the University’s
principal Act)
d) their TAFE operations are no longer part of the
State accounts
The Government is working to reclassify the TAFE operations of
the dual sector universities by making the necessary changes to
the Education and Training Reform Act 2006 to implement this
recommendation.
Prior to making these legislative amendments, the Government will
work with the dual sector universities to identify the options to ensure
that the dual sector universities continue to appropriately maintain
assets that are in the name of the Minister or on Crown land.
e) the requirement on dual sector universities
to report on their TAFE operations separately
can cease.
The Government should consider options
to ensure that the dual sector universities
appropriately maintain assets that are in the
name of the Minister or on Crown land.
11
The Government should reassess the need for
funding for the rural institutes when the plans for
integrating the regional and rural TAFE institutes
are complete.
Support in principle
The Government is working closely with regional and rural institutes
through the transition period to ensure they can continue to meet the
needs of their local communities.
The Government should also review the balance
sheets of the TAFE institutes to ensure that they
are able to support borrowing powers. This may
require structural adjustment grants, where the
funding will:
a) increase revenue
b) reduce maintenance costs
c) reduce depreciation charges
d) reduce the size of the asset base.
The following pre-conditions should be
considered before allocating any structural
adjustment grants to a TAFE institute:
a) the development of a strategic plan
b) the development of an asset master plan
c) the reinvestment of funds generated by asset
rationalisation
d) the consideration of adaptable re-use
e) the ongoing costs associated with the
capital expenditure (including maintenance,
depreciation and a return on the asset to
maintain the Government’s investment).
32 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
Recommendation
Government response
12
Support in principle
The Government should consider specific
funding for a transitional period in the areas
of curriculum development, curriculum
maintenance, program delivery, innovative
pedagogy, and new technology, which can be
shared across the sector to reduce duplication of
effort and create areas of excellence.
The Government is of the view that the vocational training market
is sufficiently mature, and the TAFE institutes (and other training
providers) are sufficiently incentivised, to explore the options to
share areas of curriculum development, curriculum maintenance,
program delivery, innovative pedagogy, and new technology.
If it becomes evident over time that this is not occurring and specific
incentives are required to enable appropriate behaviour by market
participants, then the Government will consider the options available.
13
The following principles should guide the
design of future models of school-based
vocational training:
a) The emphasis should be on progression to
further education and training.
b) The quality of provision is paramount and
should be of the same standard as that
offered to non-school based learners.
Support in principle
Victoria as a Learning Community committed to the development of
more purposeful industry-themed pathways, including vocational
pathways in schools. The Government will work with schools and
vocational training providers to continue to develop models of
school-based vocational training that better equip young Victorians
to progress to further education and training and provide pathways
into vocationally-oriented careers.
c) Provision to young students should be
tailored to a young person’s learning and
support needs.
14
The TAFE institutes should be encouraged to
establish relationships with universities, schools
and other training providers to effectively
support regions.
a) TAFE institutes may develop multiple
relationships with universities where there is
a benefit to do so.
Support
The Government notes that most, if not all, stand-alone TAFE
institutes have developed multiple relationships with universities.
The stand-alone TAFE institutes in the regional areas have developed
strong relationships with universities that have a commitment to the
region or regional delivery.
b) In regional areas, TAFE institutes should
establish stronger relationships with
universities that have a commitment to that
region or regional delivery per se.
15
The Government should advocate to the
Commonwealth:
a) that Commonwealth Supported Places
(CSPs) be made available to non-university
higher education providers for applied
degrees that have been accredited by the
Tertiary Education Quality and Standards
Agency (TEQSA), particularly in areas of
skills shortage
Support
The Government supports a wide range of choices for students in
higher education, including through vocational training providers.
The Government will also continue to push for the extension of
streamlined visa processing to other appropriate settings.
b) for streamlined visa processing for
international students seeking to study
at non-university higher education and
vocational training providers, assessed on
a case by case basis, according to risk.
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 33
Recommendation
Government response
16
The impacts of a dual sector university on
the provision of vocational training should be
considered in the future, in particular when
assessing the establishment of new institutions.
Support
The Government should:
Support in principle
a) ensure that vocational training providers
should not be required to subsidise training
for concession card holders
Since the 2012-13 State Budget the Government has agreed
to increase funding to training providers for the enrolment of
concession card holders and will continue to monitor access to
vocational training for concession card holders by public and
private providers.
17
b) commission analysis of the cost of support
required for people with a disability in the
vocational training sector and:
i. if appropriate, make available additional
grants to both public and private providers
for disability support services
A demonstrated commitment to maintaining and expanding
vocational training opportunities, and to maximising pathways
from vocational to higher education would be pre-conditions to the
establishment of any new dual sector, or alternative tertiary provider
model in Victoria.
Funding decisions regarding students with a disability and
at-risk young people will follow normal government processes
for determining need and support.
ii. collect data on the level of disability
experienced by students with a disability
that are enrolled in vocational training
and the additional cost, if any, borne by
particular providers
c) make funding available to enable at-risk
young people to successfully complete
vocational training.
18
The Government should clearly define the
community service obligations that it wishes to
fund in the Victorian vocational training market
and the process for identifying and costing them.
Support
A community service obligation is a service that would not be
provided commercially without additional funding. There are no
requirements that currently meet this definition.
The Government provides significant subsidies through the Victorian
Training Guarantee to support Victorians to train, in particular in
those areas which lead to strong employment outcomes.
The Government has determined that the costs for providing
vocational training to learners in regional areas and higher needs
learners is higher and therefore provides additional loadings.
19
The Government should support the
development of workforce development
strategies to ensure that the vocational training
workforce is well placed to support a successful
transition to the new fully contestable market.
Support
The Government currently provides funding to the VET Development
Centre of around $2.4 million per annum to, amongst other things,
develop workforce development strategies.
34 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce 35
36 Next Steps for Refocusing Vocational Training Victoria – Supporting a Modern Workforce
More information
For further information on how the government is refocusing Victorian vocational
training, including what it means for students and training providers, go to
www.education.vic.gov.au/refocusingvet