TAFE Funding: The need for a new deal 2003 Update

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006 Contents: A brief history of ANTA funding Commonwealth funding for TAFE and VET Unit costs Unmet demand Impact of the resource pressures Impact on teachers’ work Student fees and charges Government ‘offer’ for AEU funding claim What you can do

Funding Overview Governments provide 78.8% of recurrent revenue for publicly funded VET. The Commonwealth provides:  28% of recurrent government funding  53% of capital expenditure. The states and territories continue to provide the bulk of recurrent funding.

The 1992 ANTA Agreement The Commonwealth provided:  an initial $100 million for VET  an additional $70 million per year (cumulative) to fund enrolment growth. The states and territories were required to maintain their effort.

Commonwealth Budgets, 1996 and 1997  Imposed a $240 million cumulative reduction in Commonwealth funding for VET.  Cuts to labour market programs also impacted on VET funding.  Funding under the 1998 ANTA Agreement was on this reduced funding base.

The 1998 – 2000 ANTA Agreement  Commonwealth funding for enrolment growth was abolished.  The states were required to achieve “growth through efficiencies” in return for the Commonwealth maintaining its funding in real terms.  The NSW DET estimated the loss of cumulative growth funding cost $138 million for NSW. This would be about $377 million across the country.

ANTA Agreement 2001 – New Growth Funds$50m$25m$25m Cumulative total over 3 years $230m States had sought $900m Conditions for the states and territories:  match the increased funds  fully implement User Choice  increase New Apprenticeships by 20,000 by 2002 Total C’wealth funding for 2001: $1002.8m ’93-94 budget projection for ‘97-98: $1008.6m

 The Commonwealth total contribution to VET operating revenue fell by $34.3m.  The states and territories provided $220.7m more in 2001 than in NCVER 2002, Financial Data 2001 Commonwealth Funding for VET

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006 Operating revenue by source Commonwealth contribution: 25% in % in 2001 NCVER 2002, Financial data 2001

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006 Funding for Non-TAFE Providers, Funding for non-TAFE providers: $58.6m in 1995 $318.7m in 2001 Proportion of students, 2001: TAFE: 73.7% Community: 13.1% ‘Other’ RTOs: 13.2% 7.3% of all expenses NCVER 2002, Financial Data 2001, Statistics 2001

Expenditure to non-TAFE providers increased by $51m or 19% between 2000 and Between 2000 and 2001, their share of funds increased in all systems except Western Australia. NCVER 2002; in accrual format. Share of funding for Non-TAFE Providers in the States and Territories

From , the cost per adjusted AHC across Australia fell 16.3% in 2001 prices. ANTA 2002 Unit Costs per AHC

Falling Unit Costs From 1997 to 2001:  TAFE student places increased by 153,700, VET by 298,200;  employee costs fell from 62.1% to 60.3% of total expenditure;  $182.4m was spent on redundancies;  expenditure on student services fell from $96.2m in 1999 to $88.1m, or from 2.5% to 2.1% of total expenditure. (NCVER 2002, 1999)

Unmet Demand for TAFE  Unmet demand for VET is back to 1998 levels.  Two thirds of those unable to gain a place in post school education and training sought access to VET.  Unmet demand for VET was 2.7% of all those who did participate in VET in ANTA 2002, ABS , 2002 TAFE student places: , , , ,600 Total VET: 48,100 54,300 46,700 48,100 Other VET*: 12,900 13,800 12,000 8,500 ‘Other’ includes programs that do not result in a recognised qualification.

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 18.9% in ( NCVER 2002,1998)  Growth in precarious employment (but some recent moves back to more secure employment).  Increased workload and stress for teachers, erosion of ability to maintain professional standards/provide quality education.

AEU National Survey, TAFE Teachers: Facing the Challenge, June 2001 Workload has increased and intensified and stress is high. Impact of the Changes on Teachers’ Work 86% of VET teachers claimed their work responsibilities had changed a lot (63%) or to some extent. It was 97% of staff in public providers. Harris & Simons 2003 Paper for the 2003 AVETRA conference

AEU National Survey, TAFE Teachers: Facing the Challenge, June % of TAFE Teachers say their ability to maintain professional standards/provide quality education has been eroded. Impact of the Changes on Work and Life 64% of VET teachers said relationships with colleagues had changed. 61% said relationships with students had changed – 54% of staff in public providers. Harris & Simons 2003 Paper for the 2003 AVETRA conference

Workload AEU National Survey, TAFE Teachers: Facing the Challenge, June 2001  Full time teachers work an average of 7 hours overtime per week.  Full time and part time TAFE teachers are doing unpaid overtime roughly equivalent to an extra 6,500 teachers across Australia.

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006 Student fees 1997 to 2001:  total fees and charges revenue increased from $155.7m to $182.1m  the average fee fell from $0.52 per AHC in 1997 to $0.48 in  Average fees per AHC fell by 15.8% in real terms (CPI adjusted). (NCVER Financial Data: ABS )

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006 Fees overview Average fees and charges in 1997: *fulltime equivalent student ± $400 *across all students ± $ % access fee concessions or exemptions. (Borthwick 1999) 90% study part time. 23.8% of Dip./Cert. students get financial support from employer (and 37% of Cert. III and IV students) 3.9% of non-participants identified cost as a reason (DEST 2002)

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006 Fee for service as a proportion of subject enrolments, 2001 NCVER 2002, Australian vocational education and training statistics 2001

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006 Increasing equity and access No fees in TAFE. In the interim: Consider a cap on annual fees Increase funding to reduce pressure to expand fee for service & maintain low fees Fund increased places for young and mature age people Commonwealth to provide $ for $ funds to assist colleges with high concessions /exemptions. (House of Representatives 1998)

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC Federal offer for Commonwealth offer of $218.7m on top of the current $1.1 billion for 2003: $43.4m in 2004, $74.6m in 2005 and $100.8m in Total “growth” funds $325.5m including indexation – no actual increase over $119.5 million for Welfare Reform Measures from previous budgets – including $29m for Disabilities package not passed by Senate. States required to match growth funding at 2003 level plus indexation ($325.5m) and meet other conditions eg improving User Choice, increased New Apprenticeships. States asked to match the $119.5 million. Total matching funding in offer - $445m

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC to 2006 Projection of Commonwealth ‘offer’

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006 AEU Federal funding claim 2003 The Commonwealth must provide growth funding for new enrolments of at least $1080m for made up of $180m for 2004; $360m for 2005 and $540m for 2006 indexed for inflation. (The system has been growing at about 5.9% per year.) In addition: Commonwealth and State and Territory Governments should fund Quality Improvement Programs (QIP) Governments should jointly establish an Education Equity Program (EEP) The Commonwealth Government should contribute additional funds on a dollar for dollar basis to the states and territories to assist TAFE institutions enrolling a disproportionate number of disadvantaged students. Commonwealth capital funding should be at least maintained in real terms and capital funding to private training providers be reviewed.

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006 What You Can Do  Keep federal politicians informed about TAFE issues.  Inform your local community, industries and students about TAFE issues.  Support funding campaign activities.  Keep informed. www. aeufederal.org.au