Purpose of the Bill

The purpose of the Free TAFE Bill 2024 (the Bill) is to provide for ongoing financial support to the states and territories (the States) for the delivery of Free TAFE and vocational education and training (VET) places.

Structure of the Bill

The Bill comprises one schedule with a Preamble and 4 parts:

• The Preamble outlines the importance of TAFE, VET and embedding Free TAFE as an enduring feature of the VET system.
• Part 1 contains the preliminary provisions for the Fee Free TAFE Act 2024, including its object and definitions.
• Part 2 sets out the type of financial assistance the Commonwealth will make towards Free TAFE (FT) places, payable to the States in accordance with and dependent upon FT agreements.
• Part 3 defines ‘FT agreement’ and sets out what matters are to be dealt with in them, such as timeframes for FT places and funding, priority areas of study and student groups, and reporting obligations from the States to the Commonwealth.
• Part 4 provides ‘Other matters’, including the requirement that the Minister must consult with the Skills and Workforce Ministerial Council before introducing any legislation to amend the Act.

Background

Establishment of Fee-Free TAFE

In Labor’s 2018 Budget reply speech, Bill Shorten promised that a Labor government would ‘cover all up-front fees of 100,000 TAFE places, in our first term, in high priority sectors.’

In December 2021, Labor pledged to provide 465,000 Free TAFE places, including 45,000 new TAFE places if it came to government. This commitment was costed by the Parliamentary Budget Office in the lead up to the 2022 election. The costings show the intention to fund free TAFE places based on 105,365 commencements per year, as well as create and fund 15,000 additional free TAFE places per year, the latter of which the Government would fund 54% and the states the remaining amount.

At the September 2022 Jobs and Skills Summit, the Government and the states agreed to accelerate the process by delivering 180,000 fee-free places in 2023, with the Government and the states contributing $493 million each. This initial tranche was part of the 12-month Skills Agreement.

Funding for the 12-month funding agreement was included in the October 2022–23 Budget:

The Government will provide 480,000 fee-free TAFE and community-based vocational education places to ensure Australians have affordable access to skills training, especially in areas of critical shortage. As a first step, the Australian Government and all states and territories have committed to develop a $1 billion one-year National Skills Agreement. The agreement will commence on 1 January 2023 and deliver 180,000 fee-free TAFE and community-based vocational education places over 12 months. Support will be targeted to priority groups, including First Nations people and priority areas, including care sectors. From 2024, vocational education and training will be supported by a new longer-term National Skills Agreement. (p. 12)

While negotiating a 5-year National Skills Agreement in April 2023, the Government pledged a further $400 million to support another 300,000 TAFE and VET fee-free places.

The 2024–25 Budget contained an extra $88.8 million over three years toward 20,000 new fee-free training places (p. 74).

The Department of Employment and Workplace Relations website currently states that overall the Government and the states have partnered to deliver over $1.5 billion funding for 500,000 Fee-Free TAFE and VET places over 2023 to 2026.

Administration of Fee-Free TAFE

Fee-Free TAFE was initially part of the Commonwealth and States’ 12-month Skills Agreement, and now falls under the Fee-Free TAFE Skills Agreement (FFTSA).

According to the FFTSA, the Commonwealth and States must agree on bilateral Implementation Plans (p. 6).  Implementation plans are to include:

• agreed implementation arrangements so that there aren’t service gaps across years
• allowance for variation to the Implementation Plan to ‘assist States to manage demand for places, including by counting over-enrolments in areas of national priority towards places for the following year’ (p. 7).

For both the first tranche of enrolments (from 2023, Appendix A) and the second (from 2024, Appendix F) the States determine the courses to be funded under the agreement to deliver national and/or State-based priorities. National areas of priority are listed as:

1. care (aged care, childcare, health care, disability care)
2. technology and digital
3. hospitality and tourism
4. construction
5. agriculture
6. sovereign capability (for example manufacturing, and Defence)
7. VET workforce (from 1 January 2024) (pp. 17, 28)

The States are to administer learner eligibility for Fee-Free TAFE and prioritise the following groups:

• First Nations Australians
• young people (17-24)
• people out of work or receiving income support
• unpaid carers
• women facing economic insecurity
• women undertaking study in non-traditional fields
• people with disability
• certain categories of visa holders (pp. 17, 28)

For tranche 1 (Appendix A) the States are to specify an initial list of courses and address how the list meets the national and/or State priority areas and how the list may be updated (p. 17).

For tranche 2 (Appendix F) the States are to provide estimates of the number of places for each national priority, based on previous delivery patterns and indicative of expected demand (p. 28).

Under the FFTSA, Fee-Free TAFE is effectively restricted to TAFE providers with a few exceptions (the tranche 2 has only slightly modified wording, p. 28):

Fee-Free TAFE will be delivered by a registered training provider that is recognised as a TAFE or public dual sector higher education provider, including TAFE auspicing or partnership arrangements. In limited circumstances delivery may also include community training providers or Indigenous training providers where they are better placed to deliver specialist training, as agreed with the Commonwealth in the Implementation Plan. (p. 17)

Outcome data

In October 2024, DEWR released figures for total enrolments for Fee-Free TAFE from January 2023 to 30 June 2024.

The data shows 508,889 enrolments over this period, and the following numbers by top priority sectors:

• Agriculture: 20,322
• Care: 131,352
• Construction: 34,996
• Early Childhood Education and Care: 35,585
• Technology and Digital: 48,907.

The Minister for Skills and Training, Andrew Giles, issued a media release in September 2024 announcing these figures, and noting that in the first half of 2024, ‘153,332 enrolments were reported, which represents 50.9% of the more than 300,000 places committed to the end of 2026.’

A previous media release from the Government revealed that in the first six months of Fee-Free TAFE there were more than 214,300 enrolments.

In an August 2024 Question Time Briefing Pack for Minister Giles, released by DEWR under Freedom of Information (FOI24-25-411), other data on Fee-Free TAFE is available, including the following:

From the start of Fee-Free TAFE in 2023 to 31 March 2024, there have been 61,072 completions in Fee-Free TAFE courses, representing around 13% of total enrolments for the period. (p. 6)

The brief notes a number of reasons for this low completion percentage, including that ‘most courses supported by Fee-Free TAFE are full qualifications (89%) at Certificate III and above’ and these can take up to 3 years full time study to complete (p. 6).

Further breakdowns covering the period to 31 March 2024, including by tranche and state, are available in the briefing pack.

Previous questions on notice have also provided data on enrolments and other information. Below are several examples:

• Senate Education and Employment Committee, Answers to Questions on Notice, Employment and Workplace Relations Portfolio, Additional Budget Estimates 2023–24, 14 February 2024, Question 43 (SQ24-000079).
• Senate Education and Employment Committee, Answers to Questions on Notice, Employment and Workplace Relations Portfolio, Additional Budget Estimates 2023–24, 26 February 2024, Question 746 (SQ24-000712).
• Senate Education and Employment Committee, Answers to Questions on Notice, Employment and Workplace Relations Portfolio, Supplementary Budget Estimates 2023–24, 9 November 2023, Question 379 (SQ23–001557).

Government rationale

In his second reading speech for the Bill, Minister for Skills and Training Andrew Giles outlines the importance of a strong VET system to enable inclusion and economic equality, and to shape Australia’s future. He states that strong TAFEs are essential to a strong VET sector. Therefore:

Free TAFE will support a prosperous and equitable Australia. It removes financial barriers to education and training. It delivers a coordinated national response to workforce shortages in industries and occupations of local and national priority.

The Bill itself enshrines the Fee-Free TAFE policy in legislation, and thereby,

commits the Commonwealth to ongoing support to states and territories for free TAFE, with implementation arrangements to be agreed between the Commonwealth and the states.

Lastly, the Minister explains the main parts of the Bill and their rationale:

Firstly, this bill commits the Commonwealth to make a grant of financial assistance to states and territories for the delivery of free TAFE places, with states and territories required to enter into a free TAFE agreement with the Commonwealth which sets out the terms and conditions of financial assistance.

This ensures a genuine joined-up approach with states and territories, and that the implementation of free TAFE responds to our national priorities.

Secondly, the bill sets out key matters that are to be dealt with in a free TAFE agreement, including the number of free TAFE places, the areas of study, the groups prioritised for access, reporting requirements and financial arrangements.

This establishes minimum terms and conditions for a state or territory to receive Commonwealth support, while providing the flexibility to accommodate local conditions.

Thirdly, the bill will require the Skills and Workforce Ministerial Council to be consulted on any proposed changes to the act.

This recognises the critical role of states and territories and our joint commitment to genuinely collaborative and share stewardship of the national VET system.

Policy position of non-government parties/independents

Shadow Minister for Industry, Skills and Training, Sussan Ley MP, criticised the Bill on the basis of lack of Government information on attrition and completion rates for Fee Free TAFE, and how much it will cost to run permanently. The media release quoted high TAFE fail rates according to industry sources and questioned the argument made in the Minister’s briefing pack (mentioned above) that many Fee-Free TAFE qualifications are 3 years in duration:

Departmental official confirmed last night that the courses with the highest enrollments include:

• Certificate III in Early Childhood Education and Care
• Certificate III in Individual Support
• Certificate IV in Training and Assessment
• Certificate IV in Cyber Security

These courses take at most 12 months. (p. 2)

A preceding media release also indicated the Coalition’s opposition to a policy that it considers prioritises funding to TAFEs at the exclusion of private providers.

The Greens did not criticise the Bill itself, but saw it as evidence that the Government could easily introduce legislation to reduce HELP and other student debt immediately; the Government having recently announced it would make a 20% reduction to student debts after the next election.

Policy position of major interest groups

The Australian Education Union (AEU), the Australian Council of Trade Unions and the Australian Nursing and Midwifery Federation welcomed the Bill, arguing that Fee-Free TAFE removes financial barriers and burdens, and increases skills uptake to address skills shortages. The AEU saw the legislation as providing ongoing certainty for the Fee-Free TAFE policy, and preventing future governments from taking it ‘backwards’.

In his second reading speech, Minister Andrew Giles also quoted TAFE Directors Australia as welcoming the Bill for enshrining the policy in legislation.

The Independent Tertiary Education Council Australia (ITECA) cautiously welcomed additional skills funding, but  criticised the Bill as favouring TAFEs over independent Registered Training Organisations, and therefore limiting students’ choice in where they studied.

Key issues and provisions

The Object section in Part 1 (clause 3) stipulates that the Act aims to provide for ongoing Commonwealth financial support to the States for the delivery of FT places and in doing so ‘support the delivery of at least 100,000 Free TAFE (FT) places across Australia each year’. It also mentions removing financial barriers for those experiencing economic disadvantage, and supporting ‘areas of high workforce demand, with emerging skills needs or that are otherwise a national or State priority.’

The definition of ‘FT Place’ at clause 5 includes ‘a course provided by another VET provider’, which could therefore potentially be a non-TAFE provider. Further detail on eligibility would need to be determined in the Free TAFE agreements (paragraph 8 (1)(i)). A note to the definition explains that an FT place ‘may not be free of all fees’ and that the fees to be covered will be specified in the relevant FT agreement.

In Part 2 the Bill sets out that financial assistance is to be provided to a State if the State is party to a FT agreement, and the funding must be spent in accordance with the FT agreement.

Part 3 defines FT agreements and provides that they must set out the terms and conditions on which financial assistance is to be provided to the States for the delivery of FT places and  relate to the delivery of FT places from 1 January 2027 onwards—the Fee-Free TAFE Skills Agreement expires on 30 June 2027. Part 3 also sets out a non-exhaustive list of terms and conditions that must be dealt with in FT agreements, which includes the timing and funding for FT places, national and State priorities for FT places, eligibility requirements for VET providers to receive FT places, and performance milestones. Paragraphs 8(1)(l) and (m) contain the requirement for the State to provide the Commonwealth with a range of information, including enrolment and completion numbers, according to agreed timeframes.

Part 4 contains other matters, including a requirement for the Minister to consult with the Skills and Workforce Ministerial Council before introducing a Bill to amend the Act, and, if such a Bill is introduced into Parliament, to table a report setting out what consultation has taken place (clause 9).