House of Representatives Committees

Standing Committee on Employment, Education and Workplace Relations

Inquiry into the Role of Institutes of TAFE
Submissions

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Submission 53

National Tertiary Education Union

Submission to the House of Representatives Committee on Employment, Education and Training

November 9 1997

Recommendations

Recommendation 1

Governments should, as a matter of urgency, introduce legislation designed to ensure the quality and accountability of private tertiary education. In particular, the Commonwealth should move to amend the Higher Education Funding Act to regulate the relationships between institutions listed in the Act, on the one hand, and other public and private institutions on the other, along the lines of the policy outlined as Appendix B to this submission.

Recommendation 2

The following measures are recommended:

(i) Provision of higher education by TAFE/VET institutions

TAFE or other VET providers should not be eligible for Commonwealth funding for the purposes of higher education provision except where such providers are accredited and monitored through the academic processes of an existing higher education institution which is empowered by State or Federal statute to grant degrees. The degree-level credentials offered by such providers should be credentials of the accrediting institution.

(ii) Credit transfer and articulation from VET to higher education

The development and expansion of schemes linking VET and higher education study by means of systematic, explicit credit transfer and course articulation should be encouraged and facilitated by both relevant levels of Government. Nevertheless, such schemes should be regulated in order to ensure that educational quality and the principles of access and equity are preserved, especially where commercially-based (fee-paying) VET provision is involved. This regulation should be achieved by amendment to the Higher Education Funding Act, and should, among other things:

limit the proportion of a course leading to a higher education credential which can be undertaken by study in courses leading normally to VET credentials, offered either within or outside the higher education sector by means of credit transfer and/or advanced standing arrangements;
regulate course articulation arrangements between non-higher education institutions and higher education institutions to ensure that the VET components of such arrangements are appropriately accredited and monitored by the normal academic processes of the relevant higher education institution;
ensure that such arrangements between VET and higher education providers are accessible on a HECS-related or non-commercial (publicly funded) basis at both levels, and are not limited, or predominantly limited, to fee-paying students;
are appropriately resourced and funded.

Cross-sectoral developments should only occur in full consultation with the relevant staff and student organisations, and with affected and potentially affected general and teaching/academic staff.

(iii) Articulation and credit transfer from higher education to the VET sector

As far as possible, credit transfer from higher education to VET should be available in the form of explicitly established articulation arrangements rather than on an ad hoc basis. The needs of individual students, however, should also be accommodated wherever possible. Funding for curriculum development and related costs should be available through HEFA for such purposes.

Recommendation 3

In -order to develop a national approach to the provision of vocational education and training, and to foster appropriate co-operative and joint developments between VET and higher education, the Commonwealth should:

(i) assume full responsibility for the funding and co-ordination of the public TAFE system;

(ii) develop a national accreditation system for all VET provision, including consistent national standards for accountability, educational quality and financial probity;

(iii) devise and fund schemes designed to encourage and facilitate intersectoral collaboration, joint projects and, where appropriate, cross sectoral facilities and institutions.

Recommendation 4

The Commonwealth should encourage the development of models for cross-sectoral collaboration which suit particular circumstances. It should require institutions embarking upon such developments to do so in full consultation with relevant unions and campus student organisations.

Recommendation 5

In the interests of stability, the maintenance of quality and efficiency, the Commonwealth should not introduce a broadly-based system of competitive tendering as the basic mechanism for public funding in tertiary education. If an element of competition is to be introduced, the policy should be implemented incrementally, should involve detailed regulation of the market I and should initially be experimental and small in scale.

Recommendation 6

Where economies of scale and other efficiencies can be generated, the Commonwealth should provide financial and other forms of encouragement for the development of joint VET-higher education facilities and ventures in rural and regional Australia.

Recommendation 7

The Commonwealth should provide adequate funding for the purchase, installation and associated staff development requirements associated with new technology and other approaches to flexible teaching and learning in public tertiary education. These funds should be available on the basis of sound educational benefit and should include financial assistance to ensure that students enjoy adequate access to such programs, and facilities, regardless of personal means.

Recommendation 8

Cross-sectoral co-operation and joint developments should be planned and implemented in full consultation with, and with regard to the professional and industrial interests of, affected staff. This consultation should take place under the auspices of the relevant unions.

Recommendation 9

The Government should exercise caution in the area of student financing policy in VET. Before any decision is made to introduce a deferred-payment option for fees in the VET sector, the Government should commission a detailed review of existing arrangements which includes an analysis of the potential effects of proposed changes to student financing arrangements, including future rises in the levels of fees charged.

SUBMISSION TO THE HOUSE OF REPRESENTATIVES COMMITTEE ON

EMPLOYMENT, EDUCATION AND TRAINING INQUIRY INTO

THE ROLE OF INSTITUTES OF TECHNICAL AND FURTHER EDUCATION

1 Introduction

The National Tertiary Education Union (NTEU) is the Union which represents academic and general staff in universities and research institutes and also, in Victoria, general staff in TAFE institutions. The Union has coverage of several institutions in various states and territories which are cross-sectoral or dual-sector in character, involved in the provision of both higher education and vocational education and training (VET). NTEU has approximately 25,000 members across Australia.

NTEU is pleased to contribute to the House of Representatives Committee Inquiry. In its submission, NTEU will attempt to reflect the interests of both its TAFE and its higher education members. The Union also has a broad policy interest in Australian tertiary education and is an active participant in public debate and other aspects of the policy process in this area. The submission is informed by this more general perspective.

The starting point for NTEU in considering the current and ideal future role of TAFE institutions, and in particular their role in the provision of higher education, is the issue of access for Australian students to high-quality, publicly-funded tertiary education. The efficient and equitable provision of both vocational and general education is, the Union believes, a primary responsibility of Government, whether

Federal or State. Thus the Union is committed to the maintenance and strengthening of the public system of technical and further education, and to the retention by Government of responsibility for planning, funding and ensuring accountability of VET institutions. NTEU believes that only by means of a strong, central role for Government will equity, access and overall quality in tertiary education be achieved and maintained.

2. Current sectoral roles in tertiary education

Although the respective roles of various parts of the tertiary education sector are becoming blurred in some areas and moving closer together in others, there remains a clear delineation between the core functions of higher education on the one hand, and vocational education and training (as carried out by the VET sector) on the other. Essentially, the higher education system (largely universities) provides degree-level and postgraduate education in both professional/vocational and generalist disciplines, and carries out research including fundamental or basic research. The VET sector, on the other hand, provides vocational education and .training leading to qualifications included within the Australian Qualifications Framework (AQF), and also adult education. This training and education provides credentials at Diploma and Certificate levels and below. TAFE and some other VET institutions are also involved to some extent in some secondary-level education provision.

It is the implications of the role of universities in research, however, which distinguish them most clearly from other tertiary institutions. This role necessitates an international orientation in terms of scholarship and communication. It also informs, and is in many respects intrinsic to, their teaching function and activities. The links between teaching and research in higher education are mutually essential and fundamental.

Universities' roles in research, research training and other postgraduate education have major implications for their resource needs. These extend to libraries, computing facilities, communications, laboratories and also to staff resources especially the time for academics to undertake research and scholarly activities. Undergraduate degree teaching also necessitates considerable resources in these areas. Thus the average cost per student in higher education is considerably higher than the comparable measure in the VET sector.

While some public TAFE institutions are involved in research and development, this involvement tends to be applied and practical in nature, or else to be closely related to their pedagogical role - it is often directly connected to curriculum development or other aspects of their teaching and training functions. Teaching drives research. Private-sector VET providers are far less likely to engage in research; rarely do VET institutions engage in basic or fundamental research.

Where the dividing line between VET and higher education has become blurred, this has happened in structural and administrative aspects of their functions, and also in the teaching role. The most common phenomena are:

credit transfer and articulation between VET and higher education, whereby studies undertaken in one sector are recognised for some purposes in the other
movement from higher education to VET, with credit; this traffic has increased markedly in recent years and is actually much heavier than movement in the opposite direction
the provision of Graduate Certificate and Diploma courses, in specific vocational
areas, by VET
cross-sectoral institutions, variously structured and administered
the provision under licence by VET (usually TAFE) institutions of parts of higher education courses, which occurs largely in regional areas.

In addition, formal relationships and arrangements exist across the sectors in the international education (education export) arena, and in other co-operative developments involving the sharing of facilities and joint projects.

Scope of current cross-sectoral relationships

Cross-sectoral arrangements and developments, however, are limited in scope. They are restricted and encumbered by the sharply differing funding mechanisms and sources applying to the respective sectors, with higher education funded and coordinated at Commonwealth level and VET on the other hand, administered principally by the States and Territories, and funded by both levels of Government. The majority of VET's public funding, though, emanates from the States. Funding formulae, mechanisms and levels vary significantly between the sectors, as do industrial awards and agreements. Reporting requirements and statistical collection methods also differ substantially. Finally, while universities are exclusively standalone, autonomous institutions vis a vis Government, this is not yet true of publicly funded institutions in the VET sector. In some States, notably Victoria, there have been moves to grant TAFE institutions considerable independence but, even in that State, wages remain determined centrally, and many industrial and policy matters are similarly handled.

Cross-sectoral institutions

Beyond credit transfer agreements and course articulation between discrete institutions on either side of the existing sectoral divide, cross-sectoral institutions which in various ways straddle this divide - have for many years been a feature of the Australian post-secondary education landscape. No single pattern or model for such developments, however, dominates the scene. The institutions vary in the degree of structural and financial integration, as well as educational or curriculum integration, which they exhibit. There are examples of joint developments where campuses are contiguously situated or co-located, such as Monash University and Casey TAFE, where discrete institutions have taken advantage of the opportunity of co-location to facilitate co-operation in course delivery as well as other areas. In other cases there are substantial joint facilities and extensive course articulation, with students able to study simultaneously for a VET and a higher education credential. An example here is the Coffs Harbour campus development, where the campus is occupied by a senior secondary school, a TAFE institution and a university (Southern Cross University), all with their own staff and internal structures, but boasting as well a joint management structure where all three come together. In some instances there is a single governing body but separate formal substructures, one for each sector: RMIT is an example. There are also fully integrated models - such as the Northern Territory University - where the separate funding sources both feed a single entity which is managed as one.

This list is not exhaustive. It illustrates, however, a situation where, not only are models created to meet specific needs, but policy-makers and educators are grappling with a fundamentally difficult and complex set of structures and formal requirements - and attempting to solve them as best they can. The problems exhibited by existing and tried models lead to innovation and variation in new ventures, as the instigators try to avoid difficulties experienced elsewhere. In making these comments NTEU does not wish to over-emphasise the negative or daunting aspects of cross-sectoral developments. The Committee, however, needs to be aware that, given the various levels of Government and the fundamentally different structures involved, problems and barriers are inevitable.

Differences between the sectors

Educational links and articulation of courses between VET and higher education are to some extent hindered and inhibited by the radically different contexts and conditions applying in the two sectors. In VET, for example, a competency-based approach to curriculum and assessment, and modular course design, characterise provision. The Australian Qualifications Framework (AQF) and, beneath that, a wide range of national curricula and systems of training modules effectively standardise much provision, limiting institutional autonomy and in some respects also the professional role of the teacher. In higher education, by contrast, academic staff retain considerable professional autonomy in relation to course content, curriculum and structure, and institutions themselves accredit and monitor the quality of their courses through their internal structures such as Academic Boards and periodic reviews of departments and particular courses. Advisory structures including outside professional bodies, employers and so on exist in some, but not all, areas, and are in any case institutionally based.

The backgrounds and qualifications of teaching staff in the two sectors also differ markedly. In higher education, staff are appointed and promoted in large part on the basis of their achievements as researchers and scholars in their respective disciplines it is assumed that the ability to make a contribution to teaching follows at least to some extent from this background. In VET, on the other hand, teachers are generally appointed on the basis of industry experience and professional teaching qualifications. These differences reflect the respective approaches and ethos of the sectors.

Thus it is often argued that there is no easy match nor necessarily a direct pathway from one sector to the other for students, even within a field of study which apparently reaches across the sectoral divide. Staff in universities, for instance, assert that two years of Accountancy in TAFE is not equivalent to the same period in higher education because the aims, approaches and fundamental assumptions associated with courses in the sectors are too different. The truth of this assertion varies in degree according to example and circumstance, but in general terms it could be said that VET/TAFE provides a more practical, "how to" training while universities in similar professional areas place more emphasis on theory. Especially in the early years of vocational courses, however, these differences can sometimes be overstated.

Funding and financing

Where real and profound differences exist between the sectors is in their funding and in the student financing arrangements to which they are subject. Terry Moran, Chief Executive Officer of the Australian National Training Authority, estimated recently that total higher education funding per student currently sits at about $13,800 per year, compared to an average of $7,500 in TAFE/VET. While the Committee will no doubt have before it detailed information on the respective funding arrangements and levels applying to each sector, some of the implications of these sharply different scenarios should be drawn out. Of particular relevance to the current Inquiry is the fact that TAFE/VET courses are provided at significantly lower cost than courses in similar areas in higher education. This fact is reflected in teacher salaries and conditions, in facilities, services, library provision and capital stock, and finally in the modes of course delivery employed. For instance, while VET courses are often delivered in packaged modules where self-paced learning, the use of computers and simulation are featured, university teaching is more commonly of the face-to-face variety, although the use of new technology is now spreading rapidly in higher education.

In public TAFE, upfront fees are imposed upon students. These are relatively modest in comparison with the HECS-fees of higher education (typically a few hundred dollars for a full-time student compared to $3,300-$5,500 per annum in universities). HECS, however, is essentially different from TAFE fees in that it involves a deferred-payment option which is contingent upon the income of the student/graduate. The vast majority - around 75% - of university students opt for the deferred payment, thereby enrolling without incurring substantial immediate costs, aside from student Organisation dues.

This situation is anomalous on several counts. First, the clientele of TAFE tends to come from lower socioeconomic groups than the student body of higher education, yet TAFE students are obliged to find the money for fees before they can embark on their studies. University students enjoy an advantage in this regard. In addition, the HECS scheme, which essentially provides loans to students at a real interest rate of zero percent, effectively subsidises higher education students quite significantly. TAFE students do not have access to such arrangements. On the other hand, the share of costs borne by students in TAFE is substantially lower than that typically borne by higher education students. Under the new differential HECS arrangements introduced by the current Government, students in certain courses pay up to 80% of the actual cost of their education, while the average impost is 42%. In mainstream TAFE courses, students pay no more than 10% of the cost of their tuition, and usually considerably less. The funding and financing disparities outlined here are major issues in any consideration of the respective roles of the two sectors, and have important policy implications on a practical level. These matters will be further discussed in section 4 of this submission.

Successful models

Despite the differences and difficulties alluded to above, there are many examples of successful interaction and co-operation between the sectors in tertiary education. Course articulation and credit transfer schemes across the sectors exist in all States and in a range of disciplines. Many TAFE institutions, through contractual and licensing arrangements with universities, are involved in higher education teaching and other forms of educational support for higher education students, predominantly in the early years of university courses. The fact that these relationships and arrangements are expanding indicates that those in both sectors are confident and comfortable with them. Whether these developments can in practice be satisfactorily mirrored in all areas and disciplines is, of course, another question.

The phenomena of higher education-to-VET articulation, credit transfer and other _.. forms of student traffic also illustrate the complementary roles which the sectors can . play in education and vocational preparation. In particular, university graduates are increasingly regarding VET as the appropriate venue for postgraduate vocational training which will equip them for the job market in specific, often narrowly defined areas. TAFE/VET professional courses, at Diploma level and above, can build successfully on more general university education, or on a university course in a different discipline, to create a graduate with particular specialised practical skills. This should not be taken to imply that university education is not vocationally relevant; the point is simply that VET qualifications are often designed to fit very narrowly-defined or specific occupations and, when combined with a university degree, may accord to the graduate a competitive edge within the relevant field of employment. In addition, of course, pricing structures across the respective sectors often favour the "cheaper" VET sector; universities' strictly commercial approach to much postgraduate coursework provision - exacerbated significantly by the current Government's decision make substantial cuts to HECS-related postgraduate places means high fees for students.

The experience of various cross-sectoral institutions indicates also that, although there may be significant problems and structural or administrative hurdles to be overcome in these contexts, multi-sector institutions can work successfully in tertiary education. This is not to say that current funding, co-ordination and regulatory arrangements are satisfactory; they clearly are not. It does show, however, that where sufficient rationale and will exist, these difficulties can be handled and contained. Ideally, funding and legislative arrangements in tertiary education should facilitate rational and efficient use of resources across the existing sectors, rather than, as at present, creating barriers to their successful establishment and operation. This issue is dealt with in Section 4 below.

3. Future policy developments

In this section some policy trends, which are likely to have a major impact on tertiary education generally and in particular on the relationship between VET and higher education, will be examined. Many of these trends are deregulatory and shift the balance of funding towards private individuals (students), involving a retreat from public responsibility for funding and planning in tertiary education. NTEU's concerns about this general tendency are outlined under a separate heading below.

The Committee Inquiry takes place in an atmosphere of great change and fundamental review in tertiary education, especially, but not only, higher education. In the VET sector, the Commonwealth has moved to a quasi-voucher, employer-led system of funding in the core area certificate-level trade training (apprenticeships), in the form of the New Apprenticeships Scheme. Meanwhile, one State, Victoria, has embarked upon a major process of restructuring and amalgamation,' accompanied by fundamental changes to funding and co-ordination arrangements, in its public TAFE system. The role of the private sector in VET is expanding rapidly, due to the effects of the New Apprenticeships Scheme and to State-Government policies on contracting out of public-sector functions - the latter also particularly marked in Victoria.

In higher education, the Inquiry follows a series of policy shifts announced by the Commonwealth in the 1996-97 Federal Budget, which represent the most. fundamental change in direction for the system in over thirty years. The introduction of upfront undergraduate fees, the cuts to university operating grants, the advent of unfunded, institution-based enterprise bargaining and other deregulatory moves will profoundly alter the landscape in Australian higher education. At the same time, the Federal Government has initiated a major Review of Higher Education Financing and Policy (the West Review), which is considering a complete reorganisation of the funding and regulatory basis for the system. The Coalition Government's enthusiastic embrace of the former Government's agenda of National Competition Policy will pervade both sectors in tertiary education, as will the rapid globalisation of world markets and communications, and developments in communication technology.

Developments in the VET sector

The most significant policy change to hit the VET sector in the next few years will be the introduction of competition through the New Apprenticeship Scheme and its employer-led approach to the funding and Organisation of trade training. The so-called "user choice" model allows employers of trainees to direct Government funds to training providers of their own choice - whether in-house, private or public TAFE institutions. Aside from the issues of access and educational breadth and quality which this policy raises, its impact will be profoundly deregulatory and will actively entourage the establishment and expansion of private VET provision. It will drive down costs, but, insofar as the policy leads to the proliferation of small-scale, basically temporary, cut-price operations in both the public and the private sector, any cost savings will be achieved at the expense of quality, stability and employment in VET itself. It will undermine and destabilise the public TAFE system and, as a result, TAFE institutions will be obliged to seek means of consolidating themselves by expanding and diversifying their activities outside their current core areas possibly in co-operative relationships with the higher education sector. They may also seek to amalgamate with other TAFE/VET institutions, or with universities. They will certainly attempt to expand the extent and scope of their commercial activities, in order to secure alternative sources of income.

The mooted developments in Victoria, on one reading, provide a possible model for other States in this context. Although the policy process is still in train, it seems likely that Victoria will move towards a deregulated system of partially-privatised, autonomous VET institutions, funded on a competitive basis. TAFE institutions may or may not merge with each other, or with existing universities; presumably several different patterns will emerge. In 1998 a capital charge will be introduced in Victorian TAFE. Driven by the impetus of Competition Policy, this charge will be applied to public TAFE institutions as a form of "rent" on their capital stock, which is owned by the State, and will force TAFE institutes to increase their commercial returns. This will be achieved either through higher fees for students or through job loss and, consequently, reduced services and educational quality.

While all States have in place legislation and regulation relating to private VET providers, there will be increasing pressure on such regulation as the role of private operators in VET grows more prominent. The recent financial collapse of a private VET college in Melbourne highlights some of the emerging issues: the college was - registered in Queensland, which has the least rigorous regulatory requirements of all the States, but nevertheless operated in Victoria, far from the practical reach of the relevant regulatory authorities. . Requirements in some States are lax in the area of financial controls and safeguards, especially relating to the security of student fees. Such regulation is crucial in ensuring quality stability and steady growth, which is especially important in expanding and supporting Australia's burgeoning education export market in mainstream vocational education and training.

The international education fiascos of the eighties, especially in the ELICOS area, provide an obvious object lesson with broader import, but the regulatory frameworks and provisions subsequently instituted to deal with these disasters are in most cases not the same as those applied to VET operations directed primarily at Australian students. Far from having been settled with the introduction of the AQF and its attendant structures and processes, regulation, including provisions for the accreditation of courses, is an emerging issue in VET.

Higher education

The policy changes currently affecting higher education are at least as profound as those taking place in VET. Rather than outlining them in detail here, a broad-brush picture will be attempted, in order to provide an impression of their extent and scope.

It is clear that the Coalition Government intends to reduce the share of university funding emanating from the public purse. It has instituted significant cuts to operating grants - a total of 6% on Labor's previous forward estimates by 2000 - and has already abolished some discretionary funding pools and programs. It has radically altered the balance between private and public contributions to the cost of higher education by increasing the impost on students through HECS to an average level of 42% of actual course cost. This renders Australia the most expensive country in the entire developed world, in relative terms, in which to study in publicly funded higher education institutions.

As well, the Government has acted to reduce the number of places available on a HECS-related basis at postgraduate level; the area of postgraduate coursework provision is now predominantly commercialised. Potentially, private operators can easily move into this market.

But the most profound policy change wrought so far by the Coalition has been the reversal of the prohibition on undergraduate upfront tuition fees. Universities may now offer places to undergraduate students on a fully commercial basis - within certain constraints. This fundamentally deregulatory and destabilising move will push the system inexorably towards wholesale contestability and, eventually, privatisation. It will encourage the establishment of private providers in the undergraduate market and will increase pressures for universal fee-charging as a top-up to HECS. Coupled with a funding approach on the part of Government based on competitive tendering, it will effectively render meaningless any distinction between "public" and "private" institutions and provision, leaving only the concept of a Government subsidy, which can be allocated selectively direct to providers, or, via students, as a voucher. The administrative and distributional problems associated with vouchers as a means of higher education funding are profound; extracts from the NTEU submission to the West Review of Higher Education Financing and Policy, outlining the Union's views, are attached (Appendix A).

Institutions have already responded to the new competitive environment by shifting increasing proportions of their activities beyond the reach and purview of Government regulation - into the private realm. All have established various commercial companies and corporate arms, through which most of their commercial activities are conducted. Some universities have developed plans to establish virtualmirror images" of themselves in the private sector - notably the University of Melbourne, with its "Melbourne University" proposal, and also the University of Central Queensland. By these means institutions seek to avoid public and Government scrutiny and reporting requirements via the Higher Education Funding Act (HEFA). The difficulty here is that, by means of such devices, institutions will be able to receive and spend large sums of public money on a series of functions quite clearly of vital interest from a public policy perspective - higher education and research - outside an arena where Government can monitor what they do with such funds. In a very real sense, they are no longer accountable to the public for the expenditure of taxpayers' money on the education of young Australians.

The package of reforms known as National Competition Policy, instituted under the aegis of the previous Labor Government, committed the States and the Commonwealth to a systematic process of review of legislation in the light of the agenda of the Policy. In the case of higher education, formal review of the Higher Education Funding Act is not yet finished. Nevertheless, the Coalition has acted to pre-empt the outcome of this review, and also the outcome of its own independent Review (the West Review), by introducing radical reforms to funding and financing arrangements in higher education. These policies will have their own momentum: they will create an environment of competition, user-pays funding and deregulation in the university sector which goes well beyond the limited and regulated competition envisaged for the sector by the instigators of National Competition Policy - the previous Government. The new landscape will, however, closely resemble the scenario for the sector painted in the Coalition's 1992 Fightback manifesto.

The direct impact of the Competition Policy agenda will nevertheless be felt. In particular, the existing public system could become subject to access regimes favouring private providers and will be required to meet the various provisions of the Trade Practices Act relating to anti-competitive practices, collusion and so on. Universities will be subjected to taxes from which they are currently exempted, and will most likely be required to pay a capital charge, along the lines of that to be imposed in Victorian TAFE, to the Commonwealth.

The issues relating to Competition Policy explicitly referred to the West Review by the Government are the questions of, first, criteria for access to the (higher education) market, and the conditions which should attach to eligibility for the receipt of Commonwealth funds. At the moment, the Government says, Commonwealth funds are available to institutions on the basis of their inclusion or otherwise in HEFA's schedule of institutions: To be listed in HEFA is to be eligible for funding. This is all that distinguishes a university which is publicly funded or 'subsidised" from one which is not - Monash, for example, from Bond. Thus a university, or any provider, could in principle become eligible to receive funding for higher education teaching and research purposes by means of a straightforward amendment to the Act. Conditions attaching to the receipt of those funds are, essentially, the provisions contained within the Act itself, and associated guidelines and regulations.

These include detailed reporting requirements, limitations on the charging of tuition fees to undergraduate students, and provisions relating to equity. They also oblige institutions to negotiate with the Commonwealth by means of the process known as "educational profiles" on their course mix and funded student load.

Therefore, depending on the outcome of the West Review, the basis for funding eligibility might change - for example, by establishing an accreditation and registration authority to scrutinise and approve institutions and courses for this purpose. Likewise, the conditions on funding embodied in HEFA may be revised. It is likely that the Commonwealth will consider proposals to streamline entry to the higher education "market" and to simplify and reduce conditions on the receipt of Commonwealth subsidies for higher education provision. All this will facilitate the expansion of the private sector in higher education.

Future relationships between VET and higher education

Contestability and deregulation in both sectors of tertiary education will inevitably create new opportunities for each to make inroads into the current activities and sphere of the other. There seems no prima facie reason why VET institutions, either public or private, could not tender for publicly-subsidised higher education places and programs - or vice versa. This will have far-reaching implications. If the two sectors effectively become competitors for the public dollar, then their vastly different cost structures and their respective emphases and strengths become crucial public policy issues. Both sectors have clear advantages against this scenario. VET provision is cheaper; higher education institutions, on the other hand, could easily extend and expand into sub-degree provision and would have a different but equally compelling competitive edge. Boundaries between the existing sectors would become much more blurred, and could even disappear altogether. Certainly, some institutions in both sectors will seek to strengthen and consolidate their positions by forging closer relationships across and within existing boundaries.

Whether this outcome is necessarily desirable, from the point of view of quality, pedagogy or even equity, is debatable. In the final section of this submission NTEU sets out what it believes to be appropriate policy limits in this area.

Privatisation and deregulation: some issues

NTEU has a strong and unequivocal policy position that tertiary education should be provided through the public sector. Far from being doctrinaire, this view is based on practical considerations of access, equity, accountability quality and efficient use of resources. A market-based approach to education limits access, especially equitable access, because inevitably, in a resource-intensive and specialised field like education, there will be market failure. Further, since such approaches normally feature a user-pays form of financing, then those who cannot pay, largely the disadvantaged, are denied access. or at the least find their options limited by financial considerations.

Accountability, and with it quality, are considerably more difficult to ensure in the market. Again, this is partly due to the special characteristics of education, which mean that "customer" choice cannot act as proxy for quality control; the potential "customers" by definition have imperfect knowledge and thus are unable to exercise informed choice. Nor does the market, especially a poorly regulated market, bring accountability. The legislative and other regulatory safeguards of the rights and interests of students, enshrined in HEFA and other legislation applicable to the public sector, do not in general extend to the private sector of education. Finally, the planning and co-ordination of resource use in tertiary education is crucial in a country with the scattered and peculiar demographics of Australia: if there is to be a reasonable spread of opportunities across the nation, and if wasteful duplication is to be avoided, then central planning and regulation are necessary.

On a practical level, thought should be given to the nature and background of potential and actual private education providers. Some may be based overseas. Many, however, have their origin in the public sector; they have established themselves as private operators in order to avoid regulation, or else to find alternative employment as Government policies favouring the private sector take hold and shrink public institutions. The shift from public to private is largely ideologically driven, and is not based on any real view that private provision is necessarily better or more efficient. Indeed, its inherent inefficiencies and the practical problems associated with accountability and quality control might lead to the conclusion that, in general, public-sector provision of tertiary education is a more sensible policy.

Where a private sector exists, or where Government deliberately makes room for one to grow, then it is essential that rapid and thoroughgoing regulatory structures be put in place. Especially in the light of the value to Australia of the international education market and other knowledge-based industries, it is necessary to ensure, as far as possible, that the quality of private tertiary education matches that in the public sector. The NTEU policy on how this is to be achieved in higher education, adopted at the Union's 1997 National Council Meeting, is attached (Appendix B).

4. Policy directions: the future role of TAFE institutions

1. Regulation

This submission has argued that the profound policy changes currently under way in both sectors of tertiary education will inevitably force change on the existing roles and functions of each sector, as well as on the relationships between them. In particular, the trends towards deregulation and privatisation will have deep impact on the fundamental shape and nature of tertiary education in Australia. Against this trend, unless State and Federal Governments move to impose regulation and to adopt policies which provide a framework limiting the scope of the private sector on the one hand, and on publicly-funded institutions and their activities on the other, then both VET and higher education will become seriously destabilised and almost completely deregulated.

While the terms of reference of the current Inquiry may seem tangential to this much broader issue, policy options for public TAFE cannot be considered outside of this context. A funding environment dominated by contestability, unless regulated in relevant ways, is ipso facto an environment where competition occurs between existing and emerging higher education providers, on the one hand, and TAFE/VET on the other. Of course, it is also an environment where competition takes place between "public" TAFE institutions and other providers of VET, possibly including some in the schools sector.

Recommendation 1

2. Statutory limits and regulation relating to cross-sectoral activities

NTEU believes that it is in the public interest that the discrete roles and emphases of the two existing sectors of tertiary education be retained and preserved. This is not to assert that the boundaries between them should be rigid and impassable, or to deny that, in some circumstances, institutions located in one sector might be well placed to perform functions usually carried out in the complementary sector - on the basis of efficiency and effectiveness. In particular, a flexible and creative approach to this issue is advantageous when it comes to the provision of tertiary education in rural and regional areas.

However, without a clear and active role for Government in coordinating and planning, it is more than likely that competition for funds, far from encouraging diversity, would lead to undesirable, dysfunctional homogeneity in tertiary education. Providers would tend to expand their activities, to diversify their functions, in order to enhance their potential as competitors. Universities would develop VET offshoots; VET institutions would seek to develop the capacity to offer higher education. While patterns would vary depending on the particular situations and strengths of individual institutions, many providers would feel compelled to broaden their capacities in a fairly undifferentiated manner. Niche providers and specialists would be outnumbered by those trying to position themselves to compete right across the spectrum of possible 'markets".

Recommendation 2

The following measures are recommended:

(i) Provision of higher education by TAFE/VET institutions

(ii) Credit transfer and articulation from VET to higher education

limit the proportion of a course leading to a higher education credential which can be undertaken by study in courses leading normally to VET credentials, offered either within or outside the higher education sector by means of credit transfer and/or advanced standing arrangements;

regulate course articulation arrangements between non-higher education institutions and higher education institutions to ensure that the VET components of such arrangements are appropriately accredited and monitored by the normal academic processes of the relevant higher education institution;

ensure that such arrangements between VET and higher education providers are accessible on a HECS-related or non-commercial (publicly funded) basis at both levels, and are not limited, or predominantly limited, to fee-paying students;

are appropriately resourced and funded.

Cross-sectoral developments should only occur in full consultation with the relevant staff and student organisations, and with affected and potentially affected general and teaching/academic staff.

(iii) Articulation and credit transfer from higher education to the VET sector

3. Funding and co-ordination: harmonising the roles and approaches of State and Commonwealth Governments

The sharply differing bases for funding and policy in the two sectors of tertiary education, as already noted, constitute serious impediments to the efficient and rational development of cross-sectoral arrangements. NTEU believes that, as a matter of urgency, the Commonwealth should assume full responsibility for the funding and co-ordination of the public TAFE system, and for the regulation and accreditation of all VET provision. This view is based not merely on considerations relating to cross-sectoral developments and co-operation, but with regard to the potential benefits to the system as a whole, especially efficiency, consistency of approach and regulation and quality assurance, especially in the private sector.

The advent of the Australian Qualifications Framework and, under the aegis of ANTA, nationally-formulated curriculum in mainstream vocational areas, developed on the basis of competency standards, there seems little reason to retain a central role for the States and Territories in VET policy formulation and funding. A consistent set of national standards for accountability, educational quality and financial probity would remove currently-existing anomalies between the States, which presently enable unscrupulous private operators to exploit differences to their advantage, and to the disadvantage of clients.

While it is true to say that, in some respects, closer links are now being forged between VET and the schools sector - in the form of vocational education integrated with school study in the post-compulsory years - developments involving both higher education and VET will be at least as significant and, given the institutional structures and funding regimes in which these take place, then the more sensible approach would be to shift responsibility for VET entirely into the Federal arena, rather than to affirm the status quo, which is essentially a complicated hybrid of shared responsibilities and regulation between the levels of Government. This confusing mixture of funding sources and policy is historical in origin, and reflects today the growing awareness on the part of the Commonwealth of the need to organise vocational education and training along national lines.

Such a policy change would facilitate planning and development in the tertiary education sector as a whole. It would also encourage efficiency in the form of intersectoral co-operation and joint projects, and where appropriate, the establishment of cross-sectoral facilities and institutions.

Recommendation 3

In order to develop a national approach to the provision of vocational education and training, and to foster appropriate co-operative and joint developments between VET and higher education, the Commonwealth should:

(i) assume full responsibility for the funding and co-ordination of the public TAFE system;

(ii) develop a national accreditation system for all VET provision, including consistent national standards for accountability, educational quality and financial probity;

(iiii) devise and fund schemes designed to encourage and facilitate intersectoral collaboration, joint projects and, where appropriate, cross sectoral facilities and institutions.

4. Patterns for cross-sectoral relationships and institutions

Even under a regime where funding and policy were centred at national level, there is no policy compulsion to standardise the formula for intersectoral co-operation. Already, as noted in Section 2 of this submission, a range of different models exists.

All of these models have their strengths and all, it could be argued, have been shaped to fit the particular needs for which they cater. Where problems exist, the discrepancies between funding levels, sources and systems, and other issues including industrial issues - arising from their respective sectoral locations are often the cause. A shift of responsibilities for VET exclusively to the Federal sphere would eliminate or at least reduce these policy tensions. Nevertheless, NTEU would caution against the rigid imposition of a single model for cross-sectoral institutions and joint ventures across the system as a whole. The involvement of campus unions, of students and of the local community in these developments is essential for success and confidence to grow; as a corollary, outcomes in terms of patterns and structures will inevitably vary.

Recommendation 4

5. Competitive tendering across the sectors

NTEU recognises that, as an outcome of the imposition of National Competition Policy throughout the public sector, it is likely that at least some level of contestability will be introduced in an explicit sense to Commonwealth funding in tertiary education. The Union has grave doubts about the wisdom of such an approach. Nevertheless, if competitive tendering is to become part of the basis of the system's funding mechanism, then it would be sensible, given the potentially destabilising effects of such a policy, to proceed with caution. An incremental, experimental policy is essential

As a wholesale replacement for block funding, however, NTEU is far from sanguine about competitive tendering. Some of the Union's concerns are outlined in the attached NTEU submission to the Industry Commission's 1995 Inquiry into Competitive Tendering and Contracting in the Public Sector (Appendix C).

Recommendation 5

In the interests of stability, the maintenance of quality and efficiency, the Commonwealth should not introduce a broadly-based system of competitive tendering as the basic mechanism for public funding in tertiary education. If an element of competition is to be introduced, the policy should be implemented incrementally, should involve detailed regulation of the market and should initially be experimental and small in scale.

6. Regional and rural Australia

As implied above, NTEU believes that, in regional areas, there may be good reason to support cross-sectoral developments in tertiary education. The policy aim must be to enhance and extend access for rural and regional populations to all forms of publicly-funded tertiary education. Where efficiencies and economies of scale can be generated by means of joint and other co-operative arrangements across the sectors, then these should be pursued

Recommendation 6

Where economies of scale and other efficiencies can be generated, the Commonwealth should provide financial and other forms of encouragement for the development of joint VET-higher education facilities and ventures in rural and regional Australia.

7. Implications of new technology and flexible teaching and learning

In some respects the trend towards augmentation and replacement of classroom teaching by learning packages and computer-assisted learning programs will accelerate the speed of policy change in areas relevant to the current Inquiry. NTEU believes that these developments should be carefully implemented and evaluated, from the point of view of educational quality and from the perspectives of access and equity, before they are adopted with unbounded enthusiasm as the solution to containing costs in an expanding tertiary education system. The Union's policy in this area, adopted at its 1997 National Council Meeting, is attached (Appendix D).

Recommendation 7

8. Industrial and professional issues

Many of the issues discussed in this submission impinge intimately on the working conditions and professional interests of the staff of universities and TAFE institutions. It is crucial, if new structures, arrangements and relationships are to work successfully, that they enjoy the confidence of those charged with responsibility for making them viable, effective and efficient - the staff who are employed in the programs and institutions concerned. The experience of NTEU has shown clearly that, where radically new structures, procedures, professional requirements and contexts are imposed without adequate involvement and consultation with affected staff, problems tend to proliferate.

This is especially important when it is borne in mind that, in TAFE-higher education interactions, industrial conditions and salaries vary markedly between the sectors. The record shows that constructive compromise and rational demarcation can be arrived at, but this must emanate from a process of genuine, inclusive consultation with relevant unions and also, under the auspices of their industrial organisations, directly with affected staff themselves. This point cannot be over-emphasised. If certain forms of joint or co-operative ventures become more prevalent, unions may seek to pursue a common approach to regulation through the Federal industrial sphere. Locally-based agreement on changes to conditions, however, are presently the more common pattern.

From a professional perspective, it should be remembered that teaching staff in particular in the respective sectors hold strong beliefs about the nature and ethos of the type of institution in which they work, and in which they wish to continue "Lo be professionally engaged. These perspectives have much in common across the sectors, but they also vary in important ways connected to the core aims of each. Proposals, or the implementation of plans and policies, which ignore these legitimate differences and variations will fail not only the individual teachers, academics and other staff concerned but will threaten the quality of the educational experience available to students, and the value of the credentials with which they emerge.

Recommendation 8

9. Student financing

It was noted earlier in this submission that student financing arrangements vary sign significantly across the two sectors of tertiary education. Whereas full-time students in both sectors are eligible for Austudy benefits, their contributions to the cost of their study are quite differently set and collected. For students, these variations can influence their educational choices: an upfront fee, as charged in TAFE, may prove a deterrent for some students unable to get hold of the necessary cash. On the other hand, the considerably higher cost of a university place would deter those prepared to pay upfront, but wishing to avoid a sizeable debt paid off after graduation - or, in an increasing number of cases (due to the significant reduction in the compulsory repayment threshold for HECS) paid off concurrently with study.

These differences are clearly anomalies which in some ways are undesirable from a policy point of view. Some have argued that the solution to the problem lies in a shift - to a HECS-style option for payment of tuition fees in TAFE. While this has clear financial advantages from the point of view of students, there are long-term policy dangers. As experience in higher education has shown, the introduction of a relatively benign contribution regime in the form of HECS has proved a Trojan horse: a new Government has simply appropriated the mechanism-n of HECS - as a deferred-payment, income related repayment scheme, but abandoned the rationale on which public acceptance for the Scheme was based. No longer does repayment commence only when a graduate's income reaches the level of average weekly earnings - so that it can be clearly argued that the individual has begun to benefit financially from their higher education. And charges under the Scheme, which previously were in line with those imposed in public systems in other developed countries, have now risen sharply, rendering Australia one of the most expensive countries in which to study at a publicly-funded university. The original purpose and intentions of the Scheme have been seriously distorted.

If such a mechanism were to be introduced in TAFE, the same sleeping problems would be introduced with it. Fees could rise exponentially, on the basis that they would not pose an upfront barrier. Eventually, as the (admittedly early) experience with massive HECS increases has shown, the level of the charges would have a deterrent effect on participation. On balance, therefore, it may be preferable to retain the TAFE upfront charges, as a measure deliberately designed to restrain increases in their levels. In any case, the socioeconomic composition of the TAFE student body is much more representative of that of society as a whole than is the composition of students in higher education; this may indicate that the relatively low level of TAFE charges means that the fee is not a barrier to participation.

Recommendation 9

5. Conclusion

NTEU supports policies designed to expand and enhance access to publicly-funded tertiary education in Australia. The Union has much concrete experience in the area of cross-sectoral relations between higher education and the VET sector, including publicly-funded TAFE. NTEU 'has also played an active role in the long-running policy debates in this and related areas. The Committee is urged to pay close attention to the Union's views, and to proceed with caution and balance in the development of recommendations in this difficult area of public policy.

House of Representatives Committees

Inquiry into the Role of Institutes of TAFE Submissions

Submission 53

National Tertiary Education Union

Inquiry into the Role of Institutes of TAFE
Submissions