Vocational Training in Victoria: Reform & Performance

We need higher level skills to arrest Victoria’s declining productivity… 2001 to 2005: Victoria’s multifactor productivity growth rate was half the national average 2006 to 2010: Victoria’s growth rate declined at five times the average annual rate of NSW Only half of working age Victorians have the core literacy and numeracy skills they need for work at a time of increasing structural change in our economy... We need to increase workforce participation to mitigate the costs of an ageing population and key workforce shortages (e.g. community services)… But 625,000 low skilled Victorians are in low skilled work or disengaged from work… A higher skilled workforce will be critical to securing Victoria’s future competitiveness

Victoria’s VT system has been on a reform trajectory from a centrally planned model to a demand-driven model Problems with centrally-planned models: Inefficient system with misaligned activity, both unmet demand and churn Objectives not being met

The introduction of the Victorian Training Guarantee in 2009 placed purchasing power in the hands of students Victorian Training Guarantee: Victorians aged under 20 can access training at any level, regardless of prior qualifications Victorians aged 20 or over can access training in qualifications higher than those they already hold Access to apprenticeship qualifications is unlimited to Victorians, regardless of age or prior qualifications

The role of industry and employers in the training system has evolved, from passively lobbying government for places to actively engaging with individuals and providers Students access places on a first-come first-served basis Training Providers offer fixed number of subsidised places Government allocates fixed number of training places in specific courses Industry & Employers lobby for training places to meet skills needs Training providers Compete to attract students & employers Students Personal entitlement to subsidised training at provider of choice Government Funds Facilitates Regulates Old model: Passive industryNew model: Active industry Industry & Employers Influence student choice and provider offerings

Recent growth in national context…

‘Refocusing Vocational Training’ builds on the gains of the demand- driven system, while improving core elements of market design Supply-driven system Unbalanced public investment TAFE transition ACFE 10 year strategy Subsidies targeted towards real job pathways Deregulation of fees Concessions and loadings for effective participation Government policy constraining market-driven industry restructuring Better commissioning Improved monitoring of provider and market performance Gaps in quality assurance & market oversight Redesign of industry engagement Improved information to the market Entitlement Victorian Training Guarantee retained Diversity of providers Funding directed to providers who meet quality requirements and attract students Differentiated subsidies Lower subsidies for higher quals that deliver greater private returns, but income –contingent loans so no upfront-fees Fundamentals retained Gaps addressed

Enrolments patterns to Q Patterns of Delivery to Q Apprenticeship and Traineeship trends to Q Training activity to Q1 2013

Activity is moving towards courses of higher public value and labour market need

Direct Consultation Skills Portfolio Wendy TimmsJohn SpasevskiLee-Anne Fisher Building & Construction Agriculture, Forestry, Fishing Food & Beverage Wood, Pulp, Paper Hospital, Medical, Health Care Residential Care & Social Services ICT, Financial Service Furniture, Admin & support Education Machinery, Equipment, Transport, Manufacturing, Auto Road &Rail Transport Water, Air & other Transport Warehousing, Logistics & Storage Services Accommodation & Food Services, Personal Services Retail & Wholesale Trade Metals & Metal products Petroleum, Coal, Chemical, Polymer & Rubber products Non metallic & Mineral Products Electricity, Gas, Water & Water Services, Mining, Professional & Scientific Services TLFC, Property Services, Printing The Minister for Higher Education and Skills talking directly to industry and employers DEECD Market Facilitation and Information Industry Skills Consultative Committee meets 3-4 times a year Industry Skills Consultative Committee meets 3-4 times a year Monthly Industry Forums hosted by the Minister Seven to date Monthly Industry Forums hosted by the Minister Seven to date Industry Associations Employers HESG Regional Facilitation Managers

The objectives of vocational training delivers a productive and highly skilled workforce enables all working age Australians to develop the skills and qualifications needed to participate effectively in the labour market contributes to Australia’s economic future supports increased rates of workforce participation National Agreement for Skills and Workforce Development

In shortage and specialised occupations

Enrolments in Victoria’s largest employing industries 54% enrolments in Victoria’s five largest employing industries (51% employment) Enrolment shares exceed employment shares in health and construction - areas of relatively high shortages Gap in Professional Services largely reflects the need for degrees or above

Health care and social assistance Enrolments patterns to Q Enrolments by Provider Type, Q Enrolments in specialised & in-shortage related courses to Q Top 5 Qualifications in Q1 2013

Construction Enrolments patterns to Q Enrolments by Provider Type, Q Enrolments in specialised & in-shortage related courses to Q Top 5 Qualifications in Q1 2013

Manufacturing Enrolments patterns to Q Enrolments by Provider Type, Q Enrolments in specialised & in-shortage related courses to Q Top 5 Qualifications in Q1 2013

Victorian Training Market Quarterly Report Q available at: