1. Refocusing VET in Victoria - Meeting with the Municipal Association Victoria Hon. Peter Hall, Minister for Higher Education and Skills Friday 31 August 2012

2. The changes that bring us here today are about Government’s efforts to build a modern VET system that:  Provides for as many people as possible to develop skills that lead to jobs  Gives people confidence in the training system – so they know their qualification will lead to a better job or more certain future  Gives businesses confidence that they can access the skilled people they need  Government is able to monitor – to ensure good quality training  Supports priority areas and allocates resources where they are most needed  Is easier to navigate and understand  Is responsive to Victoria’s changing employment needs

3. To understand the changes we need some background  Prior to 2009: Government purchased a fixed number of training places from a group of approved providers – the great majority of training delivered by TAFEs.  From June 2009: Victoria commenced implementation of an uncapped, market driven VET system.  From January 2011: A fully demand driven system – underpinned by the Victorian Training Guarantee.

4. So what happened in response to these changes?  The number of training providers contracted to deliver government-subsidised training has risen from around 250 (in 2008) to over 600 (in 2011).  Training enrolments have increased by 44 per cent.  Investment in training has risen from around $800 million (circa 2008) to in excess of $1.3 billion in 2011/12.

5. The costs of the system far outstripped what was provided for in previous budgets, or the projected costs of the reforms * Note: 2012-13 figures are estimates only. No definitive level of expenditure can be given due to the demand driven nature of the system. 2012-13 Budget Actual spending Original projections Pre skills-reform ~ $800m a year Original provision 2011-12 ~ $900m Expected expenditure 2011-12 $1.3bn Future provision 2012-13+ $1.2bn

6. This extra investment achieved a lot that was good  Opened opportunities for more people to gain qualifications – in both regional and metropolitan Victoria  Initiated more innovative and responsive practice from training providers to better meet the needs of industry  Provided incentives for people to keep learning and deepen their skills and qualifications  Gave many unqualified and disadvantaged Victorians the chance to gain their first qualifications However, a number of challenges and opportunities were also identified…

7. So what were some of the challenges? What went wrong?  Too much training in some areas which contribute less to employment, productivity and skill acquisition (for example a 1,955% increase in funding for fitness instructors; massive growth in some low level qualifications that did not lead to jobs)  Opportunistic behaviour by some training providers  Some concerns about quality – due to the way the system used to operate  The VET system became too difficult for people to understand, navigate and work out if a course will lead to a good job All of the above resulted in a system that delivered inadequate public value, and was financially unsustainable. Further reform was needed to create a modern VET system that builds skills that lead to better jobs…

8. So how are we building the modern VET system we need? A more flexible and responsive system A new industry participation model More direct relationships between employers and training providers – less reliance on intermediaries Higher expectations of training providers Stronger powers of inspection and enforcement for the VRQA Stronger entry standards for training providers wishing to deliver government subsidised training A new Market Monitoring Unit to monitor how the market is functioning including issues of quality, price and competitiveness Real consumer choice and better information Roll out of a one-stop-shop training website for employers and students Trialling new quality metrics, including industry ratings and industry-moderated assessment Continued and greater investment in skills that get people jobs All apprenticeship subsidies increased 21 per cent of courses (> 220 courses) have a higher subsidy than the previous small TAFE rate 150 courses largely unchanged, with subsidy rates within 5% of current levels Separate payments to TAFEs redirected into high value courses Removal of controls on fees – but continued support for low income students; unqualified young people; Indigenous Victorians – and fee free training for young people in State care/care leavers

9. Eligibility for the Victorian Training Guarantee:  Victorians aged under 20 can access training at any level, regardless of any qualifications already held.  Those aged 20 and over can gain access to training in any qualification higher than they already hold.  Access to Foundation level skills is unlimited to all Victorians, regardless of age or qualifications already held.  Access to training in an apprenticeship qualification is similarly unlimited, regardless of age or previous qualifications.

10. Concessions and loadings for priority groups remain  Who qualifies for a concession?  All Health Care Card holders, or their dependents  A range of loadings exist:  Regional loading – a 5% loading for any training undertaken in a regional location  Indigenous loading – a 50% loading applies to all Indigenous students  Youth loading – a 30% loading for any 15-19 year old student from a low SES background who does not have a senior secondary certificate

11. Examples of subsidy changes CourseOld rate - Small TAFE Old rate - Large TAFE Old rate – Non TAFE New RateNew rate + regional loading (5%) New rate + youth multiplier (1.3) Cert IV Agriculture 10.3910.109.2410.00 10.5013.00 Cert IV in Children's Services (Outside school hours care) 6.936.746.16 8.00 8.4010.40 Cert IV in Aged Care 9.539.268.4710.00 10.5013.00 Cert III in Hospitality 7.797.586.93 1.50 1.581.95 Cert III in Hospitality (Commercial Cookery) 10.3910.109.2411.50 12.0814.95

12. An example of how concessions work – Certificate III in ABC  Non-concession student:  Government subsidy:$1.50 per s.c.h  Student fee: $4.50 per s.c.h  Qualification requires 200 s.c.h  Government pays 200x$1.50:$300  Student pays200x$4.50:$900  Training provider receives $1200  Concession student:  Government subsidy:$1.50 per s.c.h  Student fee: $0.90 per s.c.h (20% of non-concession student fee)  Government pays:subsidy, 200x$1.50=$300 plus concession reimbursement$432 (60% foregone revenue) $732  Student pays200x$0.90:$180  Training provider receives$912

13. “A strong public training provider network will continue to be a vital feature of this system. Our TAFEs and dual-sector universities are highly valued by Victorian learners and businesses. They will continue to play a critical role in delivering training that meets the needs of their communities. In particular, government will continue to support the TAFEs to: lead the development of high-quality and innovative curriculum, teaching practices and assessment, including for learners with complex learning needs build on their strengths in exporting education services interstate and overseas foster participation in higher level qualifications and in higher education through clear pathways, strong partnerships with universities and other higher education providers and through higher education delivery within the TAFE be efficient and able to effectively compete in a demand-driven, contestable training system, including by applying technology to improve access to and the efficiency of education and training delivery.” Source: Refocusing Vocational Training in Victoria (released in 2012-13 Budget) TAFEs remain a vital part of the system - the removal of central planning and government constraints means they can become more innovative and flexible in order to better meet the needs of industry

14. The TAFE Transition process  The TAFE transition process is overseen by an independent four-member body, the TAFE Reform Panel, which is chaired by Mr Ken Latta.  TAFE institutes are developing Business Transition Plans which the TAFE Reform Panel will assess and use to inform the development of a Roadmap for the sector.  The TAFE Reform Panel is supported by a TAFE Transition Taskforce which is facilitating regular discussions with TAFE institutes on their plans, and holding monthly meetings with TAFE CEOs.  All Councils have been invited by the Panel to provide submissions on key issues. Assessment and feedback on Business Transition Plans by TAFE Reform Panel AugSepOctNov2013Dec Roadmap (early 2013) Document to communicate changes in sector to stakeholders Implementation of changes through 2013 Jul Business Transition Plans (due Sep 7) Plans developed by TAFE institutes setting out how they will respond to changes over next three years

15. What else is happening to strengthen our training market?  Continued roll out of the $20 million Regional Partnerships Facilitation Fund – a second round of grants to be announced later this year  Skilling the Valley – working with local councils, industry and others to meet the skill needs of the Latrobe Valley  Establishing seven Technology Enabled Learning Centres across Gippsland – bringing study opportunities to local areas  Reviewing the role and structure of Learn Local (ACE) provision – as part of better meeting the needs of disadvantaged and hard to reach learners

16. Good News Stories  Advance TAFE OneHarvest partnership– 800 employees  Wodonga TAFE Australian Defence Force (ADF) - $10m contract  The Gordon NBN - $1m contact  Chisholm Institute ADF School of Catering – 10 year anniversary partnership  GippsTAFEWaratah Restaurant and Leongatha campus  Technology Enabled Learning Centres Up to 22 locations across Gippsland  Teaching PartnershipsGOTAFE  DECA  William Angliss Institute ‘Reach Out’ teaching  Bowens HardwareSimonds House of Learning – 800 employees  VTAMint Group

17. Questions?