Vocational Training in Victoria: Reform &
Performance
A higher skilled workforce will be critical to securing
Victoria’s future competitiveness
Only half of working age
Victorians have the core
literacy and numeracy skills
they need for work at a time
of increasing structural
change in our economy...
We need higher level skills to arrest
Victoria’s declining productivity…
2001 to 2005: Victoria’s multifactor
productivity growth rate was half
the national average
2006 to 2010: Victoria’s growth rate
declined at five times the average
annual rate of NSW
We need to increase workforce
participation to mitigate the costs of
an ageing population and key
workforce shortages (e.g. community
services)…
But 625,000 low skilled Victorians are
in low skilled work or disengaged
from work…
Victoria’s VT system has been on a reform trajectory from a centrally planned
model to a demand-driven model
Problems with centrally-planned models:
• Inefficient system with misaligned activity, both unmet demand and churn
• Objectives not being met
early 1990s
Profile funding
No market
TAFE budget funded
through contract
TAFE attractsstudents
Profile of activity funded
mid 1990s- 2000s
Purchaser provider
Portion of funding
contestable
Government purchased
places, mostly with TAFE
Planned course provision
with capped places
Subsidy based on historical
cost
Fees regulated/capped
Regulated fees
Goal: Funding
TAFE
Goal: Drive
efficiency
2008 - 2012
Student entitlement
Open contestable market
Student entitlement and
choice of provider
Uncapped places
Subsidy based on course
cost
Fees regulated/capped
2012 Refocusing VET
Fully contestable market
Student entitlement and
choice ofprovider
Uncappedplaces
Subsidy reflectssupplydemand and public value
Flexible fees
Goal: Modern
Goal: Meet student system based on
demand
choice and
competition
The introduction of the Victorian Training Guarantee in 2009 placed
purchasing power in the hands of students
Victorian Training Guarantee:
• Victorians aged under 20 can access training at any level,
regardless of prior qualifications
• Victorians aged 20 or over can access training in
qualifications higher than those they already hold
• Access to apprenticeship qualifications is unlimited to
Victorians, regardless of age or prior qualifications
The role of industry and employers in the training system has evolved, from passively lobbying
government for places to actively engaging with individuals and providers
Old model: Passive industry
New model: Active industry
Students
Personal
entitlement to
subsidised
training at
provider of
choice
Government
allocates fixed
number of training
places in specific
courses
Training Providers
Industry &
Employers
offer fixed number of
subsidised places
Influence student choice
and provider offerings
Students
access places on a first-come
first-served basis
Training providers
Compete to attract students &
employers
Industry &
Employers
lobby for
training places
to meet skills
needs
Government
Recent growth in national context…
% change in number of students in AQF courses of study 2008 to 2012
(NCVER prelim June 2013)
70%
61%
61%
60%
50%
40%
30%
28%
24%
17%
20%
9%
10%
10%
0%
-3%
-10%
ACT
NSW
NT
Qld
SA
Tas
Vic
WA
‘Refocusing Vocational Training’ builds on the gains of the demanddriven system, while improving core elements of market design
Entitlement
Fundamentals
retained
Diversity of providers
Differentiated subsidies
Unbalanced public investment
Supply-driven system
• Victorian Training Guarantee retained
• Funding directed to providers who meet quality requirements and
attract students
• Lower subsidies for higher quals that deliver greater private
returns, but income –contingent loans so no upfront-fees
• Subsidies targeted towards real job pathways
• Deregulation of fees
• Concessions and loadings for effective participation
• Redesign of industry engagement
• Improved information to the market
Gaps
addressed
Gaps in quality assurance & market
oversight
Government policy constraining
market-driven industry
restructuring
• Better commissioning
• Improved monitoring of provider and market performance
• TAFE transition
• ACFE 10 year strategy
Training activity to Q1 2013
46%
45%
TAFE
PRIV
ACE
45%
Enrolments patterns to Q1 2013
47%
9%
8%
Q1 2012
Q1 2013
Patterns of Delivery to Q1 2013
Apprenticeship and Traineeship trends to Q1 2013
Activity is moving towards courses of higher public value and
labour market need
Direct Consultation
The Minister for Higher
Education and Skills
talking directly to
industry and employers
Industry Skills
Consultative
Committee meets
3-4 times a year
Monthly Industry
Forums hosted by
the Minister
Seven to date
Industry
Associations
Employers
DEECD Market
Facilitation and
Information
Skills Portfolio
Skills Portfolio
Skills Portfolio
Wendy Timms
John Spasevski
Lee-Anne Fisher
Building & Construction
Agriculture, Forestry, Fishing
Food & Beverage
Wood, Pulp, Paper
Hospital, Medical, Health Care
Residential Care & Social Services
ICT, Financial Service
Furniture, Admin & support
Education
Machinery, Equipment,
Transport, Manufacturing, Auto
Road &Rail Transport
Water, Air & other Transport
Warehousing, Logistics &
Storage Services
Accommodation & Food
Services, Personal Services
Retail & Wholesale Trade
Metals & Metal products
Petroleum, Coal, Chemical,
Polymer & Rubber products
Non metallic & Mineral
Products
Electricity, Gas, Water &
Water Services,
Mining, Professional &
Scientific Services
TLFC, Property Services,
Printing
HESG Regional Facilitation Managers
The objectives of vocational training
• delivers a productive and highly skilled workforce
• enables all working age Australians to develop
the skills and qualifications needed to participate
effectively in the labour market
• contributes to Australia’s economic future
• supports increased rates of workforce
participation
National Agreement for Skills and Workforce Development
In shortage and specialised occupations
Specialised or In Shortage enrolments as
share of all industry -specific enrolments
40%
33%
Q1 2012
Q1 2013
Enrolments in Victoria’s largest employing industries
Employment and Enrolments
2012 (% total)
Employment
Enrolments
Health Care and Social
Assistance
12%
19%
11%
Retail Trade
9%
11%
10%
Manufacturing
9%
Construction
Professional, Scientific
and Technical Services
13%
8%
3%
Source: Monash CoPS
• 54% enrolments in
Victoria’s five largest
employing industries
(51% employment)
• Enrolment shares
exceed employment
shares in health and
construction - areas
of relatively high
shortages
• Gap in Professional
Services largely
reflects the need for
degrees or above
Health care and social assistance
Enrolments patterns to Q1 2013
Enrolments by Provider Type, Q1 2013
Top 5 Qualifications
Q1 2013
Certificate III in Children's Services
8,576
Diploma of Children's Services (Early childhood
education and care)
5,894
Diploma of Nursing (Enrolled-division 2
Nursing)
4,865
Enrolments in specialised & in-shortage related
courses to Q1 2013
Certificate III in Aged Care
4,486
Certificate IV in Disability
2,273
Top 5 Qualifications in Q1 2013
Construction
Enrolments patterns to Q1 2013
Enrolments by Provider Type, Q1 2013
Top 5 Qualifications
Certificate III in Electrotechnology Electrician
Enrolments in specialised & in-shortage related
courses to Q1 2013
Q1 2013
4,902
Certificate III in Carpentry
4,097
Certificate III in Plumbing
Certificate III in Civil Construction Plant
Operations
Certificate IV in Building and Construction
(Building)
3,565
Top 5 Qualifications in Q1 2013
1,793
1,470
Manufacturing
Enrolments patterns to Q1 2013
Enrolments by Provider Type, Q1 2013
Top 5 Qualifications
Certificate III in Process Manufacturing
Q1 2013
3,502
Certificate IV in Competitive Manufacturing
3,079
Certificate III in Engineering - Fabrication Trade
1,543
Certificate III in Competitive Manufacturing
1,478
Certificate III in Food Processing
Enrolments in specialised & in-shortage related
courses to Q1 2013
Top 5 Qualifications in Q1 2013
933
Victorian Training Market Quarterly Report Q1 2013
available at:
www.education.vic.gov.au/training/providers/market/Pages/reports.aspx