A TRANSFORMATIONAL shift to the individual with a market-based approach or is it just another power grab by Canberra, which provides for plenty of bureaucratic interference?
A TRANSFORMATIONAL shift to the individual with a market-based approach or is it just another power grab by Canberra, which provides for plenty of bureaucratic interference?
Federal industry advisory body Skills Australia’s Skills for Prosperity report, launched this week, seems to have a bit of everything as it tries to redirect Australia’s vocational education and training sector to meet demand for as many as 12 million new qualifications by 2025.
Skills Australia said that the way the VET sector was currently financed and organised was overly complex, with funding allocation organised on the basis of centralised planning proving less than effective in addressing demand.
“The needs of learners and enterprises are obscured, and their choices constrained by the sector’s supply-side orientation to programmatic responses and detailed funding accountabilities,” the report said. “This has often led to overlapping or competing jurisdictional solutions.”
It wants to see individuals and industry choose where public funding is directed in what it called a market-based solution.
However, the Skills Australia report could not completely embrace the market, suggesting that more regulation would be required and governments should retain some ability to manipulate the numbers in certain areas of training.
It also said a move to focus more on what people and businesses wanted required a more national approach, although the authors of the Skills Australia report anticipated some push back from the states and territories because the proposed new nationally run model would also require additional funding – an average increase of 3 per cent a year to $12 billion in 2020 – and might commit states.
“Not all states and territories have embraced the funding mechanism of individual entitlement — and some opposition might be expected from jurisdictions experiencing budgetary constraints or that wish to introduce their own variations and caveats,” the report warned.
“In particular, states and territories may be wary about implementing an entitlement design over which they have only limited control and which may commit them to uncapped expenditure.
“There is suspicion that the introduction of an individual entitlement will stimulate demand for training, leaving states and territories to carry the residual financial risk while the Commonwealth caps its own financial contribution.
“However, we have argued that the currently fragmented approach to VET financing across jurisdictions contributes to inconsistencies and potential confusion among students and administrative difficulties for enterprises that operate in more than one jurisdiction.
“It is likely that an individual entitlement model would lead to an expansion in the number of enrolments, and hence an increase in government expenditure.”
The report recommended full public funding of courses up to Certificate III level, including those outside the traditional training providers, without limits on the number of participants.
It also wants the introduction of Student Start-Up Scholarships for VET students on Youth Allowance, Austudy and Abstudy.
Despite this desire for a market-based shift to allow individual choice, Skills Australia also sees the need for more regulation to safeguard the sector and wants to provide for governments to exclude, cap or introduce incentives for certain courses of study in alignment with the occupations on Skills Australia’s Specialised Occupations List.