Vocational education and training system could fail nation

The Australian, January 30, 2018

The vocational education and training system needs urgent ­reform to save Australia from ­becoming a backwater in the ­global innovation race, a new ­report says.

The Prosperity Through Innovation plan, to be released today by Innovation and Science Australia, calls for an urgent review of VET to make it internationally competitive. ISA deputy chairman Alan Finkel said the nation’s “historically very good” vocat­ional education system had been marred by rorting and funding changes. “The government is ­actively working to fix up the obvious problems,” said Dr Finkel, who is Australia’s Chief Scientist.

“We’re saying it needs a further ­review to make sure it will serve students well going into the ever-more competitive world we envisage by 2030.

“The university sector is doing well. There is pressure on schools but nothing like the problems the VET sector has faced in the last five to 10 years.”

The report says VET-trained people will prove crucial as industries demand higher skills and “more frequent skill updates”. In an age where 70 per cent of new workers’ jobs are vulnerable to automation, VET will be “critical” in ensuring they can embrace new opportunities.

While displaced workers pose a “clear economic and social cost”, the report argues, their successful transition into “high-value-added work opportunities” could boost gross domestic product by $1.2 trillion between 2015 and 2030.

However, the widely rorted VET FEE-HELP loan scheme has exposed multiple failings in the sector, including an inability to ­ensure it helps people get work.

The scheme made multi-­millionaires of college operators who signed up thousands of inadequately prepared people to poor-quality diploma courses that most never completed.

The government recently abandoned any hope of recovering at least one-quarter of about $8 billion of taxpayer funds allocated through the program. Some experts say the biggest victim has been the VET sector itself, after state governments used it as an ­excuse to withdraw funding from their vocational programs.

A recent analysis by Victoria University’s Mitchell Institute found that VET’s share of education spending had fallen 30 per cent in a decade. University of Melbourne vice-chancellor Glyn Davis and former Queensland University of Technology boss Peter Coaldrake have cited VET funding as the biggest issue confronting tertiary education.

In October, the Business Council of Australia said higher and vocational education should be brought together in a single tertiary funding system, although peak body Universities Australia opposes the idea because of possible “unintended consequences”.

Dr Finkel said recent loan scheme reforms had reinstated a “functioning” system where ­people were “not ripped off getting debts but no training”, but this fell well short of the “world-class” sector Australia needed.

The report recommends measures including linking loan funding to employment outcomes and strengthening the powers of the regulator, the Australian Skills Quality Authority.