Independent skills training and higher education providers from across Australia have told a clear story: they are operating in an economic and business environment that is uncertain and unreliable. Fuel is obviously a factor, but there are obviously a range of other factors being experienced every day that are damaging business.
Growth is patchy at best, and business confidence has fallen 29 points to similar levels experienced during the Global Financial Crisis, according to the NAB Business Confidence Index. Governments are under significant pressure. We also maintain a national need to respond to persistent skills shortages, housing demand, pressures in aged care, early learning, transport, logistics, supply chain and civil construction to name just a few. The national productivity challenge is going nowhere fast.
Recent research estimates that over half of all Australians rely on the government or government spending for the majority of their income. We can alleviate that in part by renewing our focus on skilling our population to deliver productivity benefits. That inevitably means using policy levers that support rather than weaken fee-for-service delivery, which supports industry endorsed training and respects what business needs with the primary focus being on student need.
This is the setting where independent skills training and higher education providers thrive and prove their value.
On the other hand, mass-expansion of fee-free places to public institutions or giving all public institutions in the tertiary education system Commonwealth Supported Places may amount to mass subsidised welfare for public institutions. It follows then, that this would likely act as a drag on those institutions should they seek to try and become more productive. In effect, the taxpayer is paying those institutions to be less productive.
Regulation is an obvious pressure point for business. Pleasingly, governments and regulators are increasingly focused on quality and integrity in the tertiary education system, looking towards student outcomes and accountability. Regulators should have no tolerance for non-genuine providers or poor performance. The playing field must be levelled, and more transparent so that it gains greater credibility.
Despite our persistent skills crisis, it is difficult to see governments moving away from investment in themselves through direct and indirect funding of public institutions. Serious concerns persist about apprentices remaining connected to their employers and their training providers in the current environment. In a challenging economy, investing in learners is the best option we have.
Continuing to invest in institutions, including through outdated place-allocation models does not reflect rapidly moving economies, communities and student preferences.
Worse still, successive Federal Governments have persisted with a policy of taxing students at 20% of their VET Student Loan or FEE-HELP Loan if they learn at an independent provider. This is a tax on learning and a tax on skilling the economy that suppresses the supply of skilled workers in the economy.
There has been some commentary that business must ‘lean in’ to investing in tertiary education. Business is the single biggest investor in skilling already, estimated to be over $12 billion annually. From here, given the economic environment and the lack of policy stability and certainty, it is expected business will be more cautious in making those decisions.
For independent providers, the next 12 months will reward agility, industry connectedness, demonstrated quality delivery and student outcomes. There may be more pronounced challenges for those with narrow course offerings, weaker compliance systems or poor learner success. Strong employment outcomes, flexibility of delivery, and genuine partnership with industry are better placed to attract both students and investment.
Australia’s three pillars of policy ambition, robust regulatory frameworks and investing in need are rapidly moving out of balance. Australia needs a responsive tertiary system that supports productivity, mobility and innovation. On our current path, the sector will become less diverse, less responsive and less dynamic, and eventually unable to meet the nation’s skills needs unless significant changes are made.
Felix Pirie
ITECA Chief Executive Officer
Further Information —
If you have any questions regarding the above, please contact the ITECA team at [email protected].