Australia needs to boost spending on vocational education and training

October 27, 2020


Despite Australia’s response to the coronavirus being up there with the best in the world, COVID-19 has badly damaged the economy.


The country is now in its first recession in nearly 30 years and the number of people in receipt of unemployment benefits has doubled since February to 1.4 million. Many more workers are underemployed and may yet lose their jobs as the government’s wage subsidies are withdrawn.


As a response to Australia’s last recession the commonwealth, state and territory governments, employers and unions reached agreement on major education and training reforms. Some have had a transformational impact (for example the Finn targets, which increased school retention rates from 71 per cent of 19-year-olds completing Year 12 or equivalent in 1990 to almost 90 per cent today).


Others have had a long-lasting impact but may no longer be fit for purpose in their current state, such as the introduction of ­national training packages that formalised industry input into the development of VET qualifications.


As we look ahead to Australia’s post-COVID rebuild, it is clear that both the VET and higher education sectors will be critical components in our economic recovery. Existing workers will need to upskill and re-skill to help their organisations grow and adapt to a changed environment, and many unemployed workers are likely to need new skills to find new jobs and/or start their own businesses.


And so to the announcements in this year’s federal budget.


The question is: do they chart the right course and will they be sufficient to meet the anticipated demand for tertiary education?


The VET sector has welcomed 340,700 additional places funded by the commonwealth, states and territories through the JobTrainer program. In addition, the commonwealth has committed $4bn in wage subsidies to employers to help them continue to employ their existing apprentices and trainees and to commence new apprentices and trainees over the next 12 months (although it should be noted that concerns have been raised about how many new people will find work through this latter initiative with the commencement wage subsidies being available at this stage to existing workers).


The investment in apprentice wage subsidies does not create ­additional VET places. But if properly targeted it will prevent the loss of thousands of apprentices and trainees from the VET system.


In the higher education sector, the commonwealth is funding 100,000 short courses (half of which are under way and the remainder to be offered over the next two years). In addition, the new Job-ready Graduates package provides immediate funding for 12,000 additional undergraduate places, rising to 100,000 within 10 years.


So while these additional higher education and VET places are welcome, the number of extra ­places on offer is well below the level needed to address Australia’s unemployment and underemployment crisis. Up to one million people could miss out on a tertiary education place if all those in receipt of unemployment benefits want to learn new skills to help them find work.


Beyond the need for more tertiary education places, we also need to make sure the investment is well spent. The sector needs well considered reforms that will set Australia up for the next 25 years.


In higher education, most ­pieces of the government’s reform plans are now in place (albeit without whole of sector acceptance).


In VET there is still much to be done and worryingly the Productivity Commission has announced a delay in their report to government on their review of the National Agreement for Skills and Workforce Development (the agreement with the states and territories on VET investment and reform) and on their proposals for the next agreement. The sector is now not expecting to see the commission’s advice until January at the earliest.


On top of that, and despite all premiers and chief ministers signing on to a heads of agreement for the next National Skills Agreement, there was no indication in the budget of the likely quantum of additional funding the commonwealth will make available through to 2023-24. To read the budget papers it is “business as usual” in VET for the next four years despite Scott Morrison’s commitment to extra funding in the Prime Minister’s National Press Club address in May.


If Australia is to rebuild effectively post-pandemic we need to significantly increase our investment in VET. That investment must be well targeted towards initiatives and programs that specifically assist young people and those facing unemployment to ensure they can play their part in Australia’s path towards a new post-COVID normal.


Claire Field is a board member of apprenticeship provider MEGT and an adviser to the tertiary education sector.


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