Insights Blog

The marketisation of TAFE

The marketisation of TAFE

17 July 2013, by Assoc Prof Leesa Wheelahan

Leesa Wheelahan is an Associate Professor at the LH Martin Institute.





TAFE is not a ‘provider’ of vocational education and training; it is an educational institution which, like schools and universities, is essential to Australia’s social cohesion, productivity and international economic competitiveness. But TAFE is being wrecked.

Victoria is leading the charge. TAFE’s share of publicly funded students in Victoria declined from 67 per cent in 2008 to 42 per cent in 2012, while private providers’ share increased from 16 per cent to 46 per cent over that time.

Private providers are now the majority providers in 11 of 19 industries in Victoria, and they dominate in industries where programs can be run cheaply and in high volume. For example, they now have 92 per cent of publicly funded enrolments in financial and insurance services, 74 per cent in administration and support services, 78 per cent in public administration and safety, 75 per cent in retail trade, 72 per cent in transport, postal and warehousing, and 83 per cent in wholesale trade.

In contrast, private providers have only 4 per cent of enrolments in mining, 6 per cent in professional, scientific and technical services (which includes a lot of engineering) and 11 per cent in information media and telecommunication. Why? Because it costs a lot of money to run programs in these areas and monstrous profits can’t be made.

TAFE’s share of publicly funded students is declining nationally, and this will accelerate as the other states catch up to Victoria and implement similar policies. For example, in 2008, TAFE taught 74 per cent of all publicly funded students nationally; this declined to 60 per cent in 2011.

The Victorian government seeks to put TAFEs and private providers on an “equal footing” in the market that it has created, but TAFE is clearly being hammered. The Victorian government has stripped millions of dollars from TAFE institutes and then told them that they have to become just like private providers, just another provider that doesn’t do anything particularly special.

The Victorian government made this clear in its submission to the current House of Representatives Inquiry into the role of TAFE saying, “TAFE institutes should no longer assume that they are required to deliver community service obligations that are not explicitly required and funded by government”.

Instead of supporting TAFE, the Victorian government is reducing it to a residual institution that provides programs private providers do not, will not or cannot do. This is what markets do to TAFE, when it is required to compete with private providers that can choose what to teach and who to teach, while not providing students with the kind of support that TAFE provides. The Victorian government is prepared to wreck one institution – TAFE – so another institution – the market – can dominate.

There is no evidence anywhere in the world that fully contestable markets in education have delivered the outcomes governments seek. The evidence is, in contrast, that the pursuit of markets is driven by an ideological belief in their fitness for purpose for all areas of social life.

In a frank article in Campus Review in 2008, Robin Ryan, who was involved in the development of marketisation policies in VET, argues that these policies were developed on the basis of little evidence.

He says ‘the fundamental point of the desirability of market forces in VET has almost always been resolved simply by assertion, often with reference back to a report which had previously made the same act of faith’.

The question that market proselytisers are not able to address is: how are the social and public good purposes of VET to be articulated, implemented and advanced? They seem to believe that these purposes will be met through Australia’s 5300 VET providers all responding to market signals.

It is based on a belief that because VET provision is a ‘product’ like any other product (for example, widgets), then all that is needed is for ‘customers’ to articulate their demands and entrepreneurial providers will respond. However, rather than consolidation, this is leading to fragmentation.

The key difference between education and a market in widgets is that educational institutions have a key role to play in responding to society’s needs, in articulating what those needs are and developing appropriate responses which are further developed and changed as society changes.

Universities do this through research, the creation of knowledge, serving as society’s conscience and critic and education for the professions. Schools do this by ensuring that young people have the foundational knowledge they need for their lives as citizens and as workers. This changes as society changes.

TAFE does this through its support for disadvantaged students and in developing the knowledge and skills that are needed for an innovative, competitive workforce. It anticipates, develops, codifies and institutionalises knowledge and skills needed the workforce now, but also in the future. It is not just a matter of responding to existing demand and to work as it is currently. TAFE’s role in workforce development is not limited to relationships with employers; it supports industries and the workforce more broadly and anticipates the future.

Reducing all relationships to market signals is to reduce them to transactions and there is no role for these developmental purposes. For example, all TAFE directors and senior staff are on local regional economic development committees and they play a role in supporting and developing the economic and social infrastructure in their communities and in workplaces. TAFE teachers are engaged in their industries, in workplaces and with their communities.

This is the ‘invisible’ work that TAFE undertakes, yet this is at stake in current marketisation policies and funding cutbacks. A transactional basis for the provision of VET narrows the role that institutions are able to play in supporting students from disadvantaged backgrounds. Markets in VET will result in institutions (including TAFEs) pursuing activities that result in a profit, and this will become the most important criterion in deciding what provision should be offered.

Governments may be prepared to fund specific activities when there is market failure or thin markets and they perceive that this is having negative consequences for equity and for regions.

However, this moves working with disadvantaged communities from being an intrinsic part of what TAFEs do, to being ‘extra’, requiring additional funding, and TAFEs won’t be able to do this work without additional funding. It isn’t just a matter of government providing specific funding to run a program at a loss for a disadvantaged group to try to address these problems; rather, current policies removes working with disadvantaged students as a key defining purpose of TAFE and all that it does.

Governments should think very carefully before they wreck an institution, because once it’s gone, it is very hard to put it back together again. The Howard, Rudd and Gillard governments have tried very hard to reintroduce technical high schools without real success. If a whole sector is fragmented, we lose institutional capacity for the future.

This article appeared in Campus Review, 15 July 2013.

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July 25th, 2013 at 5:58pm
Ian Gostelow
It would be interesting to know how the proportion of publicly funded enrollments for the industries mentioned above in the Victorian case, compare across other states? Presumably the different policy positions in each state will have significant effects on the level of marketisation. And I wonder if there is a State which has the current policy settings about right in balancing marketisation with maintaining institutional capacity ?
July 26th, 2013 at 9:37am
Paul Rasmussen

While I agree with your points around TAFE assisting Students with disadvantages and certainly being a vital piece of the workforce participation puzzle, I am less convinced by some of your other statements.

Also you make a critical error in positions by simply describing the situation within Australia to be a system where there are two players, namely TAFE and 'Private Providers.' There is a third player which is often neglected and that is the Enterprise RTO. This is organisation or idustry group who have chosen to have RTO status in order to at least primarily train their own staff or people from or interested in their sectors. A large number of these RTO's (represented by the Enterprise RTO Association (ERTOA) , are quite large providers who are no interested in providing VET as a 'widget', but far more interested in being able to have a stable, well trained and agile workforce.

I am also very usure about your statements that TAFE 'anticipates, develops, codifies and institutionalises knowledge and skills.' A significant reason why large number of employers have moved away from TAFE or become ERTO's themselves is due to a dissatifaction with the services provided by TAFE. I am not here just talking about the 'widget' service, but the wider service, I can think of quite a number of examples where TAFE have been behind industry needs in terms of the knowledge and skills, certainly are not anticipating where business is going and in a lot of cases 'develops' in name only. In addition from a business point of view why utilise a person trained through a TAFE who has had a very generic training and needs substantial additional training to be organisationally work ready, when organisations can either through private providers or their own inhouse services create, well reasearch and evidence based programs , which meet both the legistative requirements in terms of skils and knowledge as well as the business needs.

I also think that your painting of private providers as simply responding to market signals is incorrect, particularly in the case of ERTO's but also in general case. Organisations and some private providers, do extensive research and evaluation around upcoming trends and needs both for individual business and for their sectors and that knowledge flows through to the wider education community.

Now dont get me wrong, I firmly believe that public education in the VET sector is vital for our ability to have a skilled workforce both for now and the future, to increase workforce participant and to generally raise the educattion standards across the country. I also applaud the work that TAFE does in disadvantaged areas and for peope with disadvantage, but they are not the only ones who do this.

TAFE needs to be supported, but it also needs to be providing the services that we require in a way that meets the needs of its users.

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