Some providers take bigger slice than TAFE

Heavy reliance on government dollars

Kerri Carr

Publicly-listed providers have profit margins of 30pc

Some private vocational education and training providers are getting more government funding as a percentage of their revenue than TAFE colleges.

Australian Education Union Federal Secretary Pat Forward said that in the past 10 years TAFE colleges, nationally, have had to rely on fee for service funding for about 30 per cent of their funding. In NSW the figures have been between 22 and 32 per cent for the same period.

“TAFE’s ability to maintain its fee-for-service income is in stark contrast to some of the large and rapidly expanding private providers, who were shown in research by the University of Sydney’s Workplace Research Centre to be more than 95 per cent reliant on government funding,” she said.

The Workplace Research Centre’s The capture of public wealth by the for-profit VET sector report, prepared for the Australian Education Union earlier this year, noted that about 80 per cent of registered training organisations receiving contestable government funding between 2011 and 2013 were for-profit providers.

Publicly-listed providers “sustain profit margins of around 30 per cent”, the research states.

Ms Forward said: “TAFE ‘market share’ of government funded students has decreased by 18 per cent since 2007, from 71 per cent in 2007 to 52 per cent in 2014. At the same time, private provider share has increased by 158 per cent, from 18 per cent in 2007 to 40 per cent in 2014.”

“Private market share has increased by 159 per cent since 2007 and 248 per cent since 2003,” she also said.

The Senate’s Education and Employment Reference Committee recent examination of private vocational education and training providers found much of the taxpayer investment in vocational education via the VET FEE-HELP student loan scheme was “being wasted, or milked for profit”.

Federal Vocational Education and Skills Minister Luke Hartsuyker has introduced legislation to tighten up regulations for VET FEE-HELP approved training providers. The Senate has established an inquiry into the bill to examine the measures proposed to protect students.

The Australian Education Union wants to ensure that at least 70 per cent of VET funding is reserved for TAFEs.

The final report of the NSW Upper House inquiry into vocational education and training in NSW is due on December 15.

Non-completion rates a waste of public funds

Government proposes cap

In the last sitting week of the federal parliament for the year the Federal Government proposed capping the loan amounts available to VET FEE-HELP providers in 2016 at 2015 levels.

AEU Federal TAFE Secretary Pat Forward said: “The Federal Government has effectively admitted the VET FEE-HELP scheme is failing, yet has still committed to accruing at least another $4 billion of taxpayer-funded debt in 2016,” Ms Forward said.

“The cap on funding for the overall scheme and for individual providers to their 2015 amounts will do little to stop the rorting of students and taxpayers…Dodgy operators will simply be limited to rorting the same amount in 2016 as they did this year."

She said there should be a total suspension of any new VET FEE-HELP debts while the many issues surrounding rorting of the scheme are independently investigated and resolved.