Public losses, private profits and a proud Premier

Maurie Mulheron

Imagine an Australian institution that was once the envy of much of the world.

Imagine that for every taxpayer dollar it received, it returned six times as much to the economy.

Imagine an institution that was once available to all Australians regardless of where they lived, their ability or their capacity to pay.

Imagine an institution that was the engine-room of training, skills and employment.

Imagine an institution that directly or indirectly benefited every Australian.

Imagine an institution that provided a second chance to countless numbers of Australians who without it might never have gained work or an education.

Now, imagine that Australian politicians have deliberately set out to destroy that institution.

This is what has been happening to our TAFE system in NSW and in other states since a Council of Australian Governments (COAG) meeting in April 2012.

Governments have conspired to destroy TAFE by redirecting VET funding away from the public provider and handing it to private colleges that operate on a for-profit basis. Their profits are generated by a combination of government funding, money that has been cut from TAFE, exorbitant fees and student debt.

We are witnessing, in essence, a dramatic transfer of public wealth to private profit through a contestable funding model in which TAFE and other providers compete for funding in a vocational and training sector version of the ‘hunger games’.

A University of Sydney study released earlier this year revealed that the profit-margin of publicly-listed for-profit private colleges is about 30 per cent. That means, for every public dollar these colleges receive from the government, 30 cents goes directly to

There is no cap on the amount of funding that is made contestable. In states like Victorian and South Australia, the level of guaranteed funding for TAFE has dropped to around 25 per cent. In NSW, the last of the states to fully implement the model, the level of contestable funding is increasing each month and is predicted to be almost 50 per cent by the start of 2016.

The language of TAFE management reflects a brave new world. Whereas once TAFE enrolled students, it now attracts clients. A TAFE college once had a guaranteed budget, now it generates income.

The recently released NSW TAFE 2015 annual report has revealed the extent of the devastation. In June 2012, TAFE NSW employed 15,822 teachers and support staff. By June 2015, this had dropped to 11,177. In three years, TAFE NSW has made 4645 teachers and support staff redundant.

At a critical time of high youth unemployment and a growing skills shortage, the policy of the NSW Government has been to dismiss teachers, cut courses, close colleges, sell off assets and then transfer the savings to for-profit college owners. The policy is called “Smart and Skilled”.

The mounting debt that is now forced on students and their families is growing at an exponential rate. The amount of government funding available through VET FEE-HELP has grown from $25 million in 2009 to more than $1.6 billion in 2014. If this trend continues, the total VET FEE-HELP debt for 2015 will exceed $4 billion.

Who does VET FEE-HELP actually help? Certainly, the owners of private profit driven colleges are helped. More than 75 per cent of this student debt from VET FEE-HELP goes directly to the private VET sector.

The first lie is that vocational training is a commodity that can be bought in a competitive market place by consumers. Education and training is an experience that can only be judged as to its worth and quality after the course.

So what is the worth and quality of the private for profit colleges?

A recent report compiled by the Australian Education Union is revealing: “The Australian Competition and Consumer Commission has launched action against two colleges, The Australian Careers Network (ACN), which runs the Phoenix Institute faces charges brought by the ACCC which include the college paying an unemployed man $100 to assist it enrolling others in a public housing estate in its courses. The ACCC alleges that Phoenix also enrolled a woman on a Disability Support Pension living in public housing, despite being told she could not undertake the course. Since ACN acquired Phoenix in January 2015, the amount of funding obtained under VET FEE-HELP jumped from $1.90m in 2014 to $106m.”

This is far from an isolated case. The first stock exchange listed private for-profit college, Vocation Limited, is now under administration.

The owner of the training college, Australian Institute of Professional Education (AIPE), with a college in Surry Hills, boasted to a Senate inquiry earlier this year that his company represented the best of the industry. The Sydney Morning Herald (November 30) reported the Australian Skills Quality Authority (ASQA) was threatening to cancel its registration and AIPE had until December 2 to respond to complaints that it was enrolling students in courses without their knowledge or permission, and had used third parties to induce students into courses and was not necessarily providing accurate information regarding fees.

The Sydney Morning Herald reports that this year AIPE received $104 million of federal funding. Last year it received $110 million, yet only 117 AIPE students graduated in 2014.

Fairfax media has alleged door-to-door salesmen for other training colleges have signed up vulnerable welfare recipients for online diploma courses costing $20,000.

Perhaps the final word belongs to the NSW Premier, Mike Baird, in an answer to a question in Parliament, “What the Government is accomplishing in the TAFE sector and the VET sector, more broadly, is something of which we are very proud.”

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