1. Potential opportunities in the new entitlement model - The Victorian experience Nita Schultz March 6, 2013 Victorian TAFE Association Inc 1

2. Implementation VICTORIA 2009 (July 1): entitlement model for Skills Deepening (Diplomas/Advanced Diploma quals) 2010 Skills Deepening & Youth compact & retrenched workers training entitlement 2011 – 2012 All providers/all courses (differential funding for TAFEs below Dip.) 2013 – All providers/all courses (no differential funding, ‘full service’ provider funding to TAFEs withdrawn) 2 NSW 2014 Certificate II and III, apprentices, trainees, select foundation 2015 unknown if coverage will extend Differential funding designated as ‘community services’ funds

3. Implementation…. in simple terms VICTORIA Eligibility: based on citizenship/permanent residency Access: open ended up to age 20 + Foundation courses + apprentices (not same for trainees) Access: over 20 years: need to enrol in higher qualification Only two course enrolments permitted per annum in subsidised training Subsidy used to manage market - 5 bands level Band A (apprenticeships) funded @ greater than $10 per SCH and Band E funded @ less than $2.00 per SCH No prices fixed (Market Monitoring by DEECD) Concessions (@20% price)/very limited exemptions (out-of-home care/state guardian) Rural loading 5%/ youth weighting if low SES VET FEE-HELP 3 NSW Eligibility: based on citizenship/permanent residency/some visas Access: open ended up to age 17 Access: 15 years+ live/work in NSW Place based funding – linked to priority needs, govt set, annual review Prices per qualification fixed Concessions & exemptions Loadings – rural, remote, disadvantaged groups VET FEE-HELP

4. What happened - 2011? (1 st full year of model) 4 Source: Vic Training Market Quarterly Report Full Year 2011

5. Q3 2012 - Students 5 Source: Vic Training Market 2012 Highlights Chart 1: Government Subsidised & TAFE Fee for Service Enrolments, 2008 to 2012

6. Q3 2012 - Enrolments 6 Source: Vic Training Market Quarterly Report Q3 2012

7. Q3 2012 - Age Profile 7 Source: Vic Training Market Quarterly Report Q3 2012

8. 2012 resembles 2011 2008-2011 % change enrolments: C1-2 = +37%, C3-4 = +74%, Dip & above = +55% 2012 - Spread of Qualifications Victorian TAFE Association Inc 8 Source: Vic Training Market Quarterly Report Q3 2012

9. 2008-2011 % change enrolments: +43% 2012 % change enrolments Q3 compared to Q3 2011 = +21% Completions diploma and above – slight improvement to10% Completions C3-4 increased more markedly to 57% VET Government funded students with a disability 9 Source: Vic Training Market Quarterly Report Q3 2012

10. 2008-2011 % change enrolments: +28% 2012 % change enrolments Q3 compared to Q3 2011 = +20% Completions diploma and above increased to 7%, C3-4 from 43% this time last year to currently 52% VET Government funded indigenous students 10 Source: Vic Training Market Quarterly Report Q3 2012

11. 2008-2011 % change enrolments: +67% 2012 % change enrolments Q3 compared to Q3 2011 = +39% Completions diploma and above decreased from 23% to 17%, C3-4 from 58% this time last year to currently 64% VET Government funded CALD background students 11 Source: Vic Training Market Quarterly Report Q3 2012

12. 2008-2011 % change enrolments: +60% 2012 % change enrolments Q3 compared to Q3 2011 = +21% VET Government funded youth transition 12 Source: Vic Training Market Quarterly Report Q3 2012

13. 2008-2011 % change course enrolments: +66% 2008-2011 % change up-skilling: +105% 2012 % change enrolments Q3 compared to Q3 2011 (both groups) in vicinity of 40% VET Government funded older students with low prior qualifications 13 Source: Vic Training Market Quarterly Report Q3 2012

14. 2008-2011 % change course enrolments: +74% 2012 % change enrolments Q3 compared to Q3 2011: 132% Growth occurs across all age groups. 15-24 highest rates. 81% TAFE TAFE delivers 73% of all Foundation level training. Mostly C1 GEA, C2 GEA, C1 Voc Prep, C3 GEA VET Government funded enrolments foundation courses 14 Source: Vic Training Market Quarterly Report Q3 2012

15. Alignment to change occupational structure of the Victorian economy notably for child carers, aged and disabled carers, carpenters and joiners and electricians. Burst in courses in business, management, retail, warehousing ops, business administration and customer contact. Overall responsiveness 15 Source: Vic Training Market Quarterly Report Q3 2012

16. Apprentices and Trainees 16 Source: Vic Training Market Quarterly Report Q3 2012

17. Government funded delivery by provider type 17 Source: Vic Training Market Quarterly Report Q3 2012

18. TAFE Market Share Victorian TAFE Association Inc 2012 Q3 - Government funded: TAFE: 46% Private: 43% Adult and Community Education: 11% 18 Source: Vic Training Market Quarterly Report Q3 2012 More stringent govt Contract has reduced private RTOs in market from 411 to 311 as at end January 2013

19. Observations in transition Don’t underestimate the nimbleness of the private sector Invest in professional development of all staff about the changes to ensure consistent information Marketing and promotion of the TAFE brand vs individual courses. TAFE value-add Ensure engagement/retention of students is front of mind for all staff and they understand why 19

20. Operating successfully in a contestable funded model Three key messages emerged in 2010 /2011 and these remain key issues: 1.massive and difficult change processes for TAFE business systems to ensure quality data collection and compliant reporting arrangements. 20

21. Observations after 2 years Cash flows Pre-2011 – Training plan negotiated annuallyresulting JanDec Salaries paid Reconciliation of fortnightly/funding delivery against received fortnightlyTraining Plan 2011 Funding monthly in arrears based on actual UoC activity salaries fortnightlyfunding monthly based on accurate/complete data JanDec Scenario: enrolment on 1 Feb 400 hours/full-time student. Custom and practice: apportion over twelve months (start and end date) ie activity over 10 months. Assuming active enrolment: 40 hours paid for each of Mar – Nov BUT costs incurred in Feb – June. Institute out of pocket. Compounding problem if withdrawn. Income in Jan/Feb – how much activity in previous month? 21

22. Workplace Relations – Private RTOs Other providers receiving government funding (153 providers) - 4 providers with an enterprise agreement (2.6%) The number of RTOs with enterprise agreements does not necessarily relate to teaching staff industrial conditions Of the total 311 providers, only 16 have agreements (5.1%) only 3 with agreements that have a teaching focus (Careers Australia, Navitas, & MADEC) ie. 0.96%, or in fact 2 agreements 0.64% that operate in Victoria as the Navitas enterprise agreements do not cover employees in Victoria 22 Victorian TAFE Association Inc

23. Modern Award in comparison with the NSW Teachers conditions 23 Teacher salary range - Modern Award $41,418 to $54,211 (12 Levels) VS NSW $73,256 to $86,878 (Level 10 to 13) Casual Teacher Modern Award $39.36 to $51.93 per hour teaching and non-teaching VS NSW $71.59 Teaching rates and between $56.53 to $67.30 non-teaching Victorian TAFE Association Inc

24. Modern Award in comparison with the NSW Teachers conditions (contd) 24 Modern Award no span of hours VS NSW 6.00am to10.00pm Monday to Saturday Modern Award 38 hours per week over 46 weeks of year (excludes 4 weeks annual leave and 10 days public holidays) VS NSW 35 hours per week over 36 teaching weeks and 5 further non-teaching weeks Victorian TAFE Association Inc

25. Modern Award in comparison with the NSW Teachers conditions (contd) 25 Maximum weekly teaching load is 25 hours under Modern Award VS NSW 20 hours Maximum annual teaching load under Modern Award is 38 / 1.5 = 25 x 46 weeks = 1,165 VS NSW 720 hours Victorian TAFE Association Inc

26. MBA versus the Modern Award ConditionMBAModern Award Teacher Salary Range$50,856-$81,050 (T1-T5) $41,418-$54,211 (Levels 1-12) Casual RatesTeaching Rate $61.88 or $64.31 Non-teaching $42.06 or $43.71 $39.36-$51.93 per hour teaching & non-teaching Span of Hours8am-6pm Monday-FridayNo span of hours Maximum Weekly Teaching Load 21 hours25 hours Maximum Annual Teaching Load 80038/1.5 = 25 x 46 weeks = 1165 Teaching weeks in a year (maximum) 42 (can attend more by agreement) 46

27. Excess Teaching Duty Hours within Ordinary Hours Teacher LevelHourly RateMBA loading 50% for each ETDH Kangan loading 75% for each ETDH T 1.1$25.74$12.87$19.30 T 1.2$27.65$13.83$20.74 T 2.1$30.00$15.00$22.50 T 2.2$31.86$15.93$23.89 T 3.1$32.52$16.26$24.39 T 3.2$34.96$17.48$26.22 T4.1$35.88$17.94$26.91 T4.2$38.18$19.09$28.63 T5$41.24$20.62$30.93 Casual RatesTeaching Duty HourNon Teaching Duty Hour Qualified$64.31$43.71 Non Qualified$61.88$42.06

28. Operating successfully in a contestable funded model (cont.) 28 2. understanding the value proposition that puts TAFE front and centre in the client’s mind and changing the focus of Institute marketing accordingly to position TAFE as ‘best of brand’; and 3.the need to direct substantial resources to nurture and build customer services behaviours of front line staff and all staff who interface generally with employers, students and the local community. This has required cultural and behavioural changes and is seen as a positive benefit of being in a competitive VET environment. Staff have been more pro active and entrepreneurial to ensure students enrolled, enjoy and value their participation and remain as students.

29. 29 Key Messages for NSW from others experiences Setting the strong foundations of quality assurance and compliance of Providers is critical – not only at the regulatory / audit stage (ASQA) but on entry to the contestable market / approval to offer govt subsidised training (NSW Govt). Ensure all TAFE student administration and information systems are fully compliant with the requirements necessary for efficient operation in a contestable market. Plan well ahead. TAFE needs a fair outcome from the public provider “Base Cost” funding contribution from govt that matches the real costs of being a public provider. Outstanding customer relations with students, prospective students and employers are essential. Revised commercial focus required from all staff - every $ a TAFE receives is a commercial $, subject to risk in a contestable market.

30. ‘Beware the rise of worthless training’ (SMH June 15, 2012) 30