Vocational Education and Training
Carol Kempner
Vocational education and training (VET) policy has remained
central to the Government’s response to the dramatic change in economic
circumstances that has seen a shift from a labour market characterised by skilled
labour shortages to one of rising levels of unemployment. In the light of these
changing conditions the Government is realigning some of its VET programs to
focus on skills maintenance through support for the unemployed, re-skilling of
mature workers and the achievement of higher level qualifications that will be
required for economic recovery. Some additional funding has also been provided to
the VET sector through its nation‑building package, the Productivity
Places Program and the Education Investment Fund (EIF). In addition, by
extending access to government provided income contingent loans (ICLs), the
Commonwealth is increasing the opportunities to grow the number of VET places
through private sources of funding.
The 2009–10 VET budget, however, held few surprises as the
framework for new funding arrangements with the states and territories,
including their funding levels, was put in place at the end of 2008. Measures
to extend the availability of the relatively new ICLs for VET, known as VET
FEE-HELP, had also been flagged in legislation currently before the Parliament.[1] The savings from the streamlining of Australian Apprenticeship incentive
payments that will enable better targeting in response to changing economic
circumstances and needs was however a new budget initiative. The following
notes provide an overview of these changed arrangements and how they are
presented in the Budget papers.
The Rudd Government’s restructuring of federal financial
arrangements under the Intergovernmental
Agreement on Federal Financial Relations has resulted in changed
arrangements for VET specific purpose payments (SPPs) to the states and
territories to support them in the running of their VET systems.[2] These payments are now being made through what are generically known as
National SPPs. The grants made under the Skills and Workforce Development SPP
are governed by the new National
Agreement for Skills and Workforce Development (the Agreement), which
effectively replaces the former 2005–08
Commonwealth–State Agreement for Skilling Australia’s Workforce.[3] Formerly appropriated by the Skilling Australia’s Workforce Act, these
new SPPs are now provided for under the Federal Financial Relations Act
2009. They are consequently now accounted for under Program 1.7 in the
Treasury’s Portfolio Budget Statements. As determined by the Agreement,
the Commonwealth will provide approximately $1.3 billion in base funding for this
VET SPP in 2009–10 and each of the out years.[4] The Rudd Government, like its predecessor, has merely continued to maintain funding
for these grants in real terms.
An additional funding source for the states and territories is,
however, provided by the Rudd Government’s new National Partnership
arrangements; also accounted for under the Treasury portfolio (Program 1.10). Under
the National Partnership Agreement on Productivity Places Program the
Commonwealth will provide approximately $208 million to the states and
territories in 2009–10.[5] This program, the cost of which was significantly offset by the abolition of
the Coalition Government’s Australian Skills Vouchers, has provided a mechanism
for the Rudd Government to increase the number and determine the type of VET
places in response to changing economic needs. Since the program began there
have been several increases to the number of places being provided. The latest
of these is the additional funding of $77.2 million in 2009–10, provided for in
this Budget, for places at the Certificate III level or higher. This is
estimated to increase the total number of places available during the five years
of this program to approximately 711 000.[6]
The Commonwealth also continues to fund its own VET programs
including Australian Apprenticeships (largely accounted for under the
Department of Education, Employment and Workplace Relations’ (DEEWR) ‘Program
3.5: VET National Support’). The restructuring of the Australian Apprenticeship
incentives will deliver savings in some areas enabling the Government to
maintain expenditure levels by redirecting the savings toward selected trade
and agricultural occupations and adults needing to re-skill to improve their
employment prospects.
Expenditure under Program 3.5 has been primarily boosted in
2009–10 by the VET Training and Learning Capital Fund (TLCF (VET)) which was
announced by the Prime Minister in December 2008 as part of the nation-building
infrastructure package. The $300 million DEEWR component of the $500 million to
be allocated under the TLCF (VET) during 2009–10, is comprised of $200 million
for ‘Training Infrastructure Investment for Tomorrow’ for eligible
applicants, and $100 million for ‘Investing in Community Education and
Training’ for community education and training (CET) providers to develop or
enhance their infrastructure.[7] The remaining $200 million is being distributed to the states and territories
by Treasury to improve infrastructure in TAFEs under the ‘Better TAFE
Facilities’ National Partnership arrangement.
Other capital funding for VET providers has been made
available under Round 2 of the Education Investment Fund (EIF). Twelve of the successful
projects are for VET infrastructure totalling approximately $132 million.
The VET FEE-HELP estimates in the budget relate to the
extension of VET FEE-HELP to state-subsidised students in Victoria to support
that state’s VET reforms. VET FEE-HELP was originally limited to only full-fee
places for specified higher level courses and where credit transfer to higher
level courses was available. Extending availability in Victoria to
state-subsidised students and relaxing the credit transfer requirements will
lead to increased availability. Even before this expansion, it is worth noting
that the 2008–09 Budget estimate of $9.6 million has been significantly revised
to $22.5 million. Following the initiatives in this budget VET FEE-HELP
expenditure is estimated to increase to $72.9 million in 2009–10 and as VET
FEE-HELP becomes more established expenditure is expected to increase even further
to a high of $110 million in 2011–12.
[1]. The Higher
Education Legislation Amendment (Student Services and Amenities, and Other
Measures) Bill 2009 and the Higher Education Support Amendment (VET FEE-HELP
and Providers) Bill 2009.
[2]. See Council of
Australian Governments (COAG), Intergovernmental Agreement on Federal
Financial Relations, COAG, viewed 18 May 2009, http://www.coag.gov.au/intergov_agreements/federal_financial_relations/index.cfm
[3]. COAG, National
Agreement for Skills and Workforce Development, viewed 18 February
2009, http://www.coag.gov.au/intergov_agreements/federal_financial_
relations/docs/IGA_FFR_ScheduleF_National_Skills_
and_Workforce_Development_National_Agreement.pdf
[4]. For National
SPP base funding for 2009–10 and a state by state distribution of National SPP
shares for the first five years see Schedule D of the Intergovernmental
Agreement on Federal financial Relations: Payment Arrangements, pp. D–3,
D–8, D–9, viewed 20 February 2009, http://www.coag.gov.au/intergov_agreements/federal_financial_relations/docs/
IGA_FFR_ScheduleD_Payment_Arrangements.pdf
[5]. For more
information see COAG, National Partnership Agreement for Productivity Places
Program, viewed 14 May 2009, http://www.coag.gov.au/intergov_agreements/federal_financial_relations/
docs/national_partnership/
national_partnership_on_productivity_places_program.pdf;
COAG, National Partnership Agreement for Productivity Places Program: Fact
Sheet, viewed 14 May 2009,
http://www.coag.gov.au/coag_meeting_outcomes/2008-11-29/
docs/20081129_productivity_places_factsheet.pdf
[6]. J Gillard
(Minister for Education, Employment and Workplace Relations), Immediate
access to employment services to support retrenched employees, media
release, 12 May 2009, viewed 14 May 2009, http://parlinfo/parlInfo/download/media/pressrel/ESJT6/upload_binary/
esjt60.pdf;fileType=application%2Fpdf#search=%22productivity%20places%22
[7]. Department of
Education, Employment and Workplace Relations (DEEWR), ‘Teaching and Learning
Capital Fund (TLCF)’, viewed 14 May 2009, http://www.deewr.gov.au/skills/TLCF/Pages/TLCF.aspx
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