by CLAIRE FIELD
The Victorian Government requires the TAFE Institute directors to work miracles as it performs a smoke and mirror trick with the dollars
The Victorian Auditor-General’s new report exposes the challenges facing the TAFE sector.
Collectively Victorian TAFEs reported a $43.8 million deficit in 2019. This was a significant deterioration from the $67.7 million surplus achieved in 2018.
The ability of TAFE CEOs to sustainably grow their Institutes and deliver quality training has been hampered by the Victorian Government’s decisions.
In 2019 TAFE Institutes earned $78 million more in contestable funding than in 2018 – mainly through the introduction of the “free TAFE” initiative. This was offset by a reduction of $85.1 million in TAFE operating grants.
Institutes might have been able to cover this funding gap but employee expenses also increased – up $76.9 million following the government’s 2018 decision to raise TAFE teacher salaries.
And then came COVID-19.
The Auditor-General was only able to have confidence that TAFEs’ financial statements could be prepared on a “going concern” basis after the government issued letters of financial support to all Institutes with an undertaking to “provide adequate cash flow to TAFEs, should the need arise, until April 2021.”
“Free TAFE” is now being expanded with $163 million for 10,000 more places. Will TAFE operating grants quietly be cut again…?
These funding challenges are not uniquely Victorian – they are simply less visible in other jurisdictions because of the structure of their TAFE systems. And of course, funding instability impacts all VET providers and students – more money for TAFE usually means less for other providers and vice versa.
The Productivity Commission is reviewing the Commonwealth-states VET funding agreement. They see merit in greater contestability, student vouchers, and the removal of price controls.
The Auditor-General’s report reminds us that there will need to be some funding certainty underpinning any future changes.
Otherwise TAFEs and other VET providers will struggle, and confidence in the system will be further tarnished.
Claire Field is an adviser to the tertiary education sector