1 VET and higher education funding: is it lifting social inclusion? Gerald Burke and Peter Noonan ‘Where to now with VET and social inclusion?’ 17th Annual National CEET Conference - Friday 1 November 2013 Monash Conference Centre – 30 Collins Street, Melbourne

Benefits and policies Postsecondary students Funding CEET2

Employment benefits of qualifications ( Persons Australia 2011) CEET3

Policies: More training, more inclusive, better focus and use Core skills, literacy and numeracy Additional wrap-around support for less advantaged VET and higher education system 3% p.a AWPA, more COAG Lift quality in teaching and assessment Assess specialised occupations, lessen shortages Workforce development to reduce under use of skills 4

Policies and benefits Postsecondary students Funding CEET5

Enrolment rates by age 2010 CEET6

Postsecondary students Australia 2010 CEET7 VET Higher education Total Total students '000 1,8001,2003,000 Students two lowest SES quintiles ‘ %% Female International (excludes private providers in VET) Part-time Indigenous 513 With a disability 635 Language at home Non-English and over Major cities

Background – policies and benefits Postsecondary students Funding CEET8

OECD classification of countries’ finance models 1 no/low tuition fees; generous student support 2 high tuition fees; well-developed student-support 3 high tuition fees; less-developed student support 4 low tuition fees; less-developed student-support CEET9

Funding of universities 2013 Funding Cluster Government contribution Maximum student fee Revenue per student 1 Law, accounting, administration, economics,$1,900$9,800$11,700 2 Humanities$5,400$5,900$11,200 … 7 Engineering, science,$16,600$8,400$25,000 8 Dentistry, medicine agriculture$21,100$9,800$30,900 CEET10

Government expenditure per student or hour CEET11 Government secondary schools VETHigher education

Key aspects of funding Fees since 1989 Loans from 1989 income contingent, Australian government funded repay through income tax system if income $51,000+ about 30% of HELP cost covered by government Income support grants for less advantaged—eg Youth Allowance (Some) extra funding for tuition/mentoring of less advantaged ‘Entitlements’ to government supported places –unlimited in higher education so far –Complex/varied in VET; not all supportive of less advantaged –Open to private providers in VET CEET12

COAG reform council projections of people without a higher level qualification CEET13

Additional commencements required in TE to meet COAG target CEET14 Source : ACIL ALLEN CONSULTING ANALYSIS Additional 1.7 million commencements over 8 years from Will require $20 billion additional expenditure.

VET government revenues constant 2012 prices Australia $ million CEET to to 2012 NSWTotal Commonwealth %-13% Total state 1,174 1,089 1,165-1%7% Total Government 1,590 1,717 1,7098%0% VICTotal Commonwealth %-6% Total state 893 1,239 1,54773%25% Total Government 1,202 1,662 1,94662%17% QLDTotal Commonwealth %3% Total state %-6% Total Government 927 1,072 1,04112%-3% WATotal Commonwealth %-11% Total state %-13% Total Government %-13% AUSTTotal Commonwealth 1,719 2,380 2,32535%-2% Total states 3,569 4,114 4,33321%5% Total government 5,288 6,494 6,65926%3%

Funding outlook and COAG targets VET funding outlook well short of requirement to meet COAG target without further major drop in per student funding. COAG target rationale not clear and should be reviewed if a target is retained. –However target has clearly help drive increased attainment levels Quality and level of skills utilisation also need to be considered. CEET16

Implications for entitlement models Different eligibility rules, rationale for public subsidies and student contributions across VET and between VET and HE Tension between public value and priority needs role of VET and general goals to lift workforce participation levels and social inclusion –Highest public subsidies likely to go to areas of highest private return Case for better targeting of entitlement – e.g. school leavers and new workforce entrants and different funding model for existing workforce CEET17

That’s all Thanks CEET18

Key messages  Disadvantaged have been helped but not as much as hoped  The VET sector is the main provider for disadvantaged  Indigenous/those with disability increased in the VET sector.  Low SES improved share when rapid expansion in HE and VET  Leads to enhanced employment if good quality education  Difficulties in sustaining funding and quality  Disadvantaged suffer when poor quality: less informed, lower cost CEET19

 Quality –lack of funding for good teaching –inadequate assurance of assessment –poor information –Bradley -- a regulatory and quality assurance agency for whole of tertiary  Efficiency and use of funds – more for less –outcome based funding –competitive funding –better management and new technology  Funds –Bradley -- national TERTIARY entitlement funding model –Australian government to take over government VET funding –increase fees and HELP –increase employer contributions eg National Workforce Development Fund –more indexed public funding for tuition and support of less advantaged CEET20