TAFE CAMPAIGN 2005

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TAFE CAMPAIGN 2005
National TAFE Funding 2005 Update
May 2005
Michaela Kronemann Federal Research Officer
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Contents

• The Commonwealth role in funding VET
• Impact of the resource pressures
• A new federalism the federal agenda
• Future funding federal conditions
• AEU campaign 2005

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Funding Overview
Governments provide 78.3 of recurrent revenue
for publicly funded VET.

• The Commonwealth provides
• 28.7 of recurrent government funding
• 61 of capital funding.

The states and
territories continue to provide the bulk of
recurrent funding.
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ANTA Agreements- funding
1993-97 An initial 100 million and 70m per year
(cumulative) to fund enrolment growth. States
required to maintain effort. 1996-97 Budget
cuts reduced funding base by a cumulative
240m. Labour market programs
slashed. 1998-00 Growth funding abolished,
Commonwealth funding freeze. Growth
through efficiencies estimated cost of loss of
growth funding - 377m. 2001-03 Limited
growth funding restored, states required to
match. Commonwealth input 230m over 3 years,
states sought 900m.
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Failed negotiations for 2004-06

• Commonwealth offer no additional growth funds
  only indexation of 2003 amount, 119.5 million
  for Welfare Reform Measures from previous
  budgets.
• States argue they need 348m more.
• Minister Nelson imposes penalties for rejecting
  offer.
• States reluctantly sign up to a 12 month rollover
  for 2004
• No indexation of growth funds
• Comm. direct purchase of 7,500 places (20.5m)
• Indexation of base funding, terms and conditions
  apply (eg matching growth funds)

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Commonwealth funding for VET
Cwealth funding is 6.5 less than in 1997 (CPI
adjusted).
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(No Transcript)
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Proportion of revenue by source
The proportion of total operating revenue coming
from the Commonwealth has fallen from 25 to
22.5. The states contribution has fallen from
56.1 to 55.8.
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VET system growth

• Since 1997
• Enrolments increased by 272,100, or 18.8
• Annual hours increased by 78.1 million hours, or
  26.8

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REAL CONTRIBUTION TO VET COSTS PER STUDENT HOUR
( per AHC)
Change () Comm -26.3 States -18.6 Other
-5.8 Total -18.1
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Share of funding for Non-TAFE Providers
58.6m in 1995 316m in 2003

• 79.9 increase since 1997
• Share fell from 6.7 in 2002 to 6.5 in 2003

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Unmet Demand for TAFE

• TAFE student places
• 44,400
• 2000 48,700
• 2001 40,100
• 2002 44,100
• 2003 45,900

Total VET 60,000 65,700 56,600 54,700 55,400
Other 15,600 17,000 16,500 10,600 9,500

• Unmet demand for TAFE is increasing.
• 68 of those unable to gain a place in post
  school education and training sought access to
  VET.
• Unmet demand for TAFE was 3.5 of all those who
  did participate in TAFE in 2003.
• ANTA 2004

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Impact of the Resource Pressures

• Concerns re quality Schofield, 2000 Senate
  report.
• Higher class sizes, rationalisation and
  reductions in TAFE courses, cuts to student
  services, amalgamations and closures and
  colleges facing significant financial
  difficulties.
• The overall failure/withdrawal rate for students
  has increased from 13.7 in 1997 to 15.6 in
  2003. NCVER 2004)
• Growth in precarious employment (but some recent
  moves back to more secure employment).
• Increased workload and stress for teachers
  unpaid overtime equivalent to 6500 teachers.
  (Kronemann 2001)

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Skills shortages

• Unions and employers concerned ACTU estimate a
  shortfall of 130,000 skilled workers over 5
  years.
• Growth in new apprenticeships has been in areas
  like retail rather than trades.
• Industry-led, employer-subsidy driven approach
  has failed to address skills shortages.
• Complex causes and solutions. (ACTU 6 pt plan.)
• Skills shortages are both real and a rationale
  for deregulatory solutions.

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The Coalition agendain brief

• new federalism more control over state
  territory activities through funding conditions
  and direct funding
• Privatisation user choice, tendering, third
  party access, encouraging privatisation
• Industrial relations attacks on worker rights
  and role of unions

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Election announcements(skills shortages skills
shortages skills shortages skills shortages)

• Institute for Trades Skills Excellence
• Australian Technical Colleges
• Some specific measures re apprentices tool kits,
  extension of Youth Allowance, pre-voc places in
  Group Training Companies, scholarships etc.
• post election
• Abolition of ANTA

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Australian Technical Colleges

• 24 ATCs by 2008, 349m over 4 years
• Up to 300 select-entry students or 7,200 total
• Years 11 12, academic and trade course,
  school-based New Apprenticeship
• Need to be registered as schools and RTOs (or
  partnership arrangements)
• Industry led and endorsed, industry Chair of
  Governing Council
• Run autonomously by Principal, offer performance
  pay and AWAs
• Tendering by consortia
• States territories required to provide school
  funding.

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Abolition of ANTA

• Transfer of responsibility to DEST by July 2005
• New Ministerial Council for VE (VE MINCO)
• Replacement of ANTA Board advice with new
  National Industry Skills Committee to provide
  advice to VE MINCO.
• New multi-lateral funding agreement with the
  states national objectives, funding (and
  conditions).
• Bilateral agreements re performance levels and
  implementation of national priorities, can
  include additional conditions.
• New legislation needed to enable new structures
  and funding to proceed.

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Federal funding offer 2005-08

• Reported
• An additional 174.7m over 3.5 years
• Basically redirected money re-inclusion of VET
  Priority Places Program (put out to direct tender
  last year) 3.8m p.a. from Indigenous Strategic
  Initiatives Program, plus indexation for 2004 and
  2005.
• States required to match funds to deliver up to
  116,400 new places by 2008 trades, skills
  shortages (eg child care), mature age, people
  with a disability.

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Federal conditions on funding offer

• Greater autonomy for Institutes, with AWAs and
  performance pay
• User Choice reform and expansion
• Implementation of true competency based
  training by removing impediments in state based
  awards
• Third party access to facilities that get Comm.
  Infrastructure funding
• Adherence to the National Construction Code
  Implementation Guidelines
• Development of a national fees policy to limit
  fee increases
• Joint funding pool for Indigenous Australians
  (3.8m matched by states)

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April MINCO meeting

• ANTA MINCO met 15 April, failed to agree re
  future funding arrangements.
• Agreement to continue current funding until end
  2005 (legislation required to establish new
  structures).
• Further meeting late May/early June (now 8 June).
• State territory communiqué calling for
  increased investment in training concern re the
  conditions.
• Department officers to report back to next MINCO
  re impact of Comm. proposals on availability and
  quality of training before an agreement is signed.

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Federal Budget

• Federal budget on 10 May funds election
  commitments re New Apprentices etc as expected.
  Funding for Welfare to work measures.
• Additional funding offer for 2005-2008 now
  increased from 174.7m to 215m as a result of
  welfare to work measures
• 39m for 2006-08. (bulk is still Priority Places
  funding returned to states and indexation).

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Legislation bombshell

• On 11 May, Government introduces Skilling
  Australia's Workforce Bill 2005 lays out
  funding levels and the conditions which states
  and territories must agree to in order to get VET
  funding.

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Conditions on federal VET funding (1)

• Conditions on funding include
• Offer AWAs to all staff.
• Give more authority to Directors for recruitment
  and remuneration.
• Have performance management systems including
  performance pay and managing underperformance.
• Neither encourage or discourage union membership.
• Change practices and policies except where
  directly inconsistent with a current EBA/Award.

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Conditions on federal VET funding (2)

• Increase entrepreneurialism commercial
  activities.
• Fully comply with User Choice.
• Increase proportion of New Apprenticeships
  eligible for User Choice funding by 5 per year.
• Participate in establishing a national unit price
  band for each New Apprenticeship.
• Remove requirements in awards for time-based
  training.
• Make TAFE facilities available to third parties
  on a commercial basis.
• Have Annual State VET Plan approved by Federal
  Minister.

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No federal funding after July 2005?

• The Commonwealth provides 29 of recurrent
  funding. (Thats about 450,500 student places).
• The legislation would allocate 605.8 million for
  July December 2005.
• States and territories will cease to receive
  funding from the Commonwealth from July 2005
  unless they agree in writing to the conditions
  set out in the Governments legislation if it is
  passed.

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National Campaign 2005

• What you can do
• Support AEU campaign activities.
• Help build activism and recruitment.
• Keep Federal politicians informed about TAFE
  issues and concerns invite them to your
  Institute.
• Inform local employers and unions about loss of
  course offerings student waiting lists.
• Inform your local community, industries and
  students about TAFE issues.
• Keep informed.
• www. aeufederal.org.au

Say NO! to AWAs