Claire Field on the Productivity Commission skills report

Rebuilding employer satisfaction must be a key TAFE, and broader VET, priority


The  final report of the Productivity Commission’s review of the National Agreement for Skills and Workforce Development is released. It is a mammoth report with a raft of useful findings and sensible recommendations (although I do not agree with them all).

Unsurprisingly, given the Commission’s longstanding belief in market mechanisms and with states and territories having already agreed to increased contestability in the next National Skills Agreement, the report recommends greater contestability in VET funding. The report states that “some participants (in the review) suggested that the increased use of private RTOs has decreased the quality of the VET system over time. However, most available evidence suggests that student outcomes are broadly similar regardless of the type of provider” (p. 102).

Specifically, the Commission finds that:

“Broadly, students are equally satisfied with public and private RTOs — about 88 per cent of students at both provider types report being satisfied with their training. This is largely the same across most student cohorts with a few exceptions amongst students experiencing disadvantage.” (p.102)

“Students are about 5 percentage points more likely to be employed after training at a private RTO (after controlling for demographic factors), but once previous employment status is controlled for, the difference is no longer statistically significant.” (p.103)

Of concern, though to the TAFE sector (and ministers) will be this finding:

“… employer satisfaction is significantly higher among those who use private RTOs. These differences persist after controlling for the employers’ industry.” (p.102)

This is a serious problem particularly given the wider trend of declining employer satisfaction and use of VET and the fact that the Commission also recommends the trial of an income-contingent loan scheme to expand access to non-accredited training.

The restructuring of TAFE Institutes in some States may have affected their employer engagement activity (although NCVER data does not show a perfect relationship between declining employer use of TAFE in States which have consolidated their TAFE systems). Rebuilding employer satisfaction must be a key TAFE, and broader VET, priority.

 Claire Field is the host of the ‘What now? What next?’ podcast. In the latest episode she unpacks the Productivity Commission report in full and discusses its likely impact on the sector.