The Australian Vocational Educational and Training (VET) sector is underperforming, excessively complicated and suffers from ad hoc policy approaches according to an interim report released by the Productivity Commission last week.
The sector costs the government $6.1 billion each year and services 4.1 million students per year but the report’s authors believe that the sector is not targeting that funding appropriately and suggests overhauling the sector with measures such as a new national regulator and reformed course pricing.
"There is substantial scope to reduce waste and better target the $6.1 billion in government spending," said Commissioner Jonathan Coppel in a statement.
"We want to see an improved VET sector that gives students and employers more flexibility and choice."
The vast disparity of course pricing between different states is a major issue according to Prime Minister Scott Morrison.
In an address to the National Press Club last month he told those gathered that there was a lack of information about what future skills were needed and added the funding system was “marred by inconsistencies and incoherence, with little accountability back to any results”.
“Subsidies for a Diploma of Nursing in 2017 varied between $19,963 in Western Australia and $8,218 in Queensland. And all of this is before the question surrounding the quality of that training is addressed,” Morrison said.
“No surprise then that state-subsidised students in Queensland incur VSL debts that are on average more than double that of NSW subsidised students.
“It is no wonder that when faced with this complexity, many potential students default to the university system, even if their career could be best enhanced through vocational education.
"I want those trade and skills jobs to be aspired to, not looked down upon or seen as a second-best option, it is a first best option,” the Prime Minister said.
The productivity commission had a similar focus and pointed out that for one of the most popular VET courses, Certificate 3 in Individual Support – the course you would study to work in aged or disability care – standard subsidies vary by as much as $3700 across Australia.
The report suggests all governments apply a nationally consistent set of course subsidies.
“It is time to think about shifting the focus from funnelling subsidies to training providers to giving students more help to choose the training they need. We now have dozens of different subsidy rates, even for the same courses,” Commissioner Malcolm Roberts said.
The report also suggests that governments should not cap the prices of VET courses as “fixing student fees can stifle competition, inhibit allocative efficiency and reduce incentives to improve the quality of training”.
“The risks of excessive student fees would be mitigated through the provision of information to students and possibly some initial price monitoring,” the report states.
Skills Minister Michaelia Cash said the report underscored the government's view that the old agreement was a major hurdle to improving the system.
"We need a new funding model to better link funding to actual forward-looking skills needs, based on what businesses need," she said.Do you have an idea for a story?
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