VICTORIAN GOVERNMENT RESPONSE TO SKILLS AUSTRALIA CONSULTATION:
Creating a future direction for Australian Vocational Education and Training
SKILLS VICTORIA
JANUARY 2011
Page 1 of 29
Contents
EXECUTIVE SUMMARY ................................................................................................... 3
THE NEED FOR REFORM................................................................................................. 8
Guiding Principles .................................................................................................. 9
Overview of Victoria’s reforms ............................................................................ 11
Matching delivery to demand .............................................................................. 14
GOVERNMENT INVESTMENT IN VET............................................................................ 14
STRUCTURAL AND SYSTEMIC REFORM ........................................................................ 16
Regulation and improving quality ........................................................................ 16
Market information and student management systems .................................... 17
Industry engagement and market facilitation ..................................................... 18
Capital Infrastructure ........................................................................................... 19
QUALIFICATION AND CURRICULUM DEVELOPMENT AND DELIVERY .......................... 19
Training Packages................................................................................................. 20
Promoting pathways to work and further study ................................................. 21
Youth pathways and school-based learning ........................................................ 21
Core skills in literacy and numeracy .................................................................... 23
VET Workforce ..................................................................................................... 23
TARGETED EFFORT ....................................................................................................... 25
Apprenticeships ................................................................................................... 25
Hard to reach learners ......................................................................................... 26
Locational disadvantage ...................................................................................... 27
BEYOND TRAINING: UTILISING SKILLS IN THE WORKPLACE ........................................ 28
GOVERNANCE AND COMMONWEALTH/STATE RESPONSIBILITIES ............................. 29
Page 2 of 29
EXECUTIVE SUMMARY
Victoria welcomes the opportunity to contribute to a national debate about the
future of the vocational education and training (VET) system in Australia and
supports the majority of policy priorities identified by Skills Australia.
However, Victoria considers that systemic reform to the VET sector’s funding,
delivery and regulatory system are required if Australia is to achieve the increases in
VET access and participation needed for today’s labour market.
The policy and funding settings of Australia’s VET system reflect previous shifts in the
structure of the Australian labour market (the decline in immigration leading to a
renewed focus on apprenticeship training in the 1970s, followed by the award
changes in the 1980s which linked training to labour needs across all areas of VET
training). Both of these shifts occurred in periods characterised by an excess of
available labour.
In contrast, today’s labour market is quite different – facing recurrent shortages of
skilled labour and a trend towards higher level, skilled occupations – requiring an
altogether different VET system.
Victoria strongly suggests that Australia’s VET sector would benefit from reforms
that place the needs of the learner at the centre.
This response sets out why Victoria has implemented a user-driven system, how it
has been done, and proposes that a similar approach be taken across Australia in
order to benefit both new entrants to the labour force and existing workers, and to
facilitate improved labour productivity.
In line with Victoria’s existing system, an investment model which supports upskilling and reflects the varying rates of return of training to government, industry
and individuals should be applied.
Investment in VET
The Victorian Government has continued to invest in the quality and capacity of the
VET system whilst maintaining the highest level of efficiency in the country. 1
Consequently, Skills Australia’s general claim that state funding has declined since
2001 is not accurate with respect to Victoria.
Further, Victoria maintains that investment in VET should reflect the relative returns
of VET across government, industry and individuals. In this context, the investment
by employers and enterprises in the training of their workforce should be
encouraged. In addition, supporting the availability of Income Contingent Loan
1
As measured by Government real recurrent expenditure per annual hour (less than $12 per hr in
Victoria compared to $13.03 per hour nationally). (Productivity Commission (2009) Report on
Government Services).
Page 3 of 29
Schemes is important to ensure increased tuition fees do not act as a barrier to
training.
Victoria’s VET system
In 2008, Victoria restructured the funding and delivery environment of its VET
system to ensure its users (individuals and businesses) became the central focus of
the skills system. To support this, significant investment has been provided and
changes have been made to ensure users are well informed and providers have the
flexibility and capacity they need to respond to training demand.
Victoria’s reforms to VET, which precede the Commonwealth’s Bradley reforms to
Higher Education, mean that by 2012 Victorians will be offered a broad entitlement
to tertiary education – not offered to residents of any other jurisdiction. Victoria is
continuing to strengthen the linkages between these two sectors and is working to
deliver an integrated policy response to tertiary education.
The core principles underpinning the Victorian reforms are: the central role played
by users (as purchasers of training) in setting the direction of delivery; increased
competition, market information and reporting standards; a revised role for industry
(from shaping supply to influencing demand); government and private contributions
which reflect the varying rates of return of training; strengthening capability in the
VET sector; and an ongoing focus on stimulating demand among harder to reach
learners.
The benefits of Victoria’s new system are borne out by the data – since 2008, enrolments
at higher levels have increased (preliminary data)2 and the number of registered training
organisations (non-TAFE) contracted to deliver government subsidised training has
almost doubled (increasing from 270 in July 2009 to 528 as at December 2010).3
Victoria will continue to monitor rollout of the reforms closely, to ensure that the policy
objectives are being met. In particular, evaluations of the reforms will need to look
closely at whether all groups are benefiting from the reforms (including Victorians from
lower socio-economic backgrounds and/or regional Victoria, and Indigenous Victorians).
The impact of uncapped higher education places will also need to be carefully
monitored. Removing the cap on tertiary education places is likely to result in people
being diverted to higher education rather than vocational education, potentially
resulting in skills shortages.
Market Information and student tracking mechanisms
Victoria supports ongoing work to improve the data available to students and
businesses to enable them to make informed choices regarding their training. In
2
Skills Victoria (2010) Securing Jobs for Your Future – Skills for Victoria Progress Report Year to date,
30 September 2010 http://www.diird.vic.gov.au/diird-strategies-and-initiatives/securing-jobs-foryour-future-review/securing-jobs-for-your-future-a-skills-for-victoria-progress-report. Uses
preliminary data based on provider submissions updated monthly.
3
Skills Victoria unpublished data as at December 2010.
Page 4 of 29
particular, Governments and users need to understand the ways in which students
engage with the VET sector over their lifetime.
Good student tracking mechanisms are critical to ensure that governments are able
to evaluate the effectiveness of the VET system, and to support students to identify
the training pathways that best meet their needs. Victoria supports efforts to
progress work on a national Unique Student Identifier, noting COAG’s
implementation deadline of 2012.4 However, while noting the need for consultation
and careful consideration of costs and benefits, Victoria considers that MCTEE must
progress this work at the utmost urgency so that a clear picture of individual
performance in the VET sector can be developed.
Role of Industry
A user-driven system would continue to require a critical role for industry to
facilitate demand, invest in training, and advise government on supply side issues as
they emerge. The benefit of industry bodies in an effectively functioning market
based system lies in their ability to promote the value of training to members (firms
and workers) and to draw in those who may not otherwise participate.
In some cases however, there is a risk that intermediaries take on existing activity or
activity that would more appropriately be the responsibility of the firm or individual.
Intermediaries’ success must be measured by their ability to bring the hard to reach
learner into the system or identifying and securing the training opportunity that
would not exist in the normal course of events. Industry also plays an important role
in providing advice to users and government on labour market trends and
implications for training (market information).
In particular, more needs to be done to improve industry confidence with the
training system, and to increase industry’s involvement in and commitment to
increasing the skills levels of their employees. Victoria also supports ongoing
investment by industry in training, reflecting the gains expected from a more highly
skilled workforce, and considers that training needs a tripartite commitment
between employees, employers and providers. While the support of unions and
associations is important, the ultimate test of industry confidence comes via the
support and commitment of firms and enterprises as end users of the training
system.
Key reform areas
Victoria considers that the following areas need to be addressed at the national level
to improve overall market design and efficiency in the VET system, guided by a
user-focussed, market design policy framework:
 Systemic and structural levers (such as regulation and quality controls and
student management systems)
 Industry engagement (including market information and facilitation activities)
4
In December 2009 COAG gave its in-principle support for the introduction, from 2012, of a national
unique student identifier for the VET sector that is capable of being fully integrated with the entire
education system, and could involve early childhood education.
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


Qualification and Curriculum development and delivery (including core skills)
VET Workforce development, and
Skills utilisation in the workplace, to ensure businesses are supported to
effectively capitalise on the skills and abilities of their workers.
Monitoring demand patterns across particular groups, to ensure that all learners are
afforded equal opportunities to access tertiary education, is also critical to future
reform discussions. Groups of particular interest are:
 Apprentices
 Harder to reach learners and those who may not be actively pursuing training
(including Australians with particular or acute learning needs); and
 Australians residing in areas of limited provision (for example rural and
regional Australia).
Victoria’s position with respect to these policy areas is outlined in this submission.
Commonwealth-State arrangements for VET
Tertiary education is critical to state economic development and Victoria expects to
maintain an active role in policy development, system management, purchasing and
the delivery of tertiary education, particularly VET. Victoria calls on the
Commonwealth to support ongoing reform to VET while enabling each jurisdiction to
manage their own VET systems matched to local priorities. The need for states to
manage their own liabilities in relation to training is particularly acute in Victoria
given its reformed system.
One matter of particular importance for Victoria is the retention of regulatory
control of VET. In Victoria’s user-centred, entitlement-based system, regulation is of
increased importance, as control of supply is not a lever for Government. It is critical
that Victoria retain its significant role in VET regulation, which reflects the economic
importance of workforce development to the State.
The national VET system will be stronger from Commonwealth Government
leadership of it, not its intervention into it.
However, there is a strong opportunity for Australia to pursue reform. In particular,
Victoria notes that the reform directions articulated in the existing National
Agreement on Skills and Workforce Development support greater responsiveness to
user needs.5 While the Commonwealth expressed an appetite for reform during the
5
The reform directions articulated at Paragraph 38 of the National Agreement on Skills and Workforce
Development are:
(a) Reforming training products, services, information systems and regulation to meet a more demand
and client driven system;
(b) Driving further competition in current training arrangements and strengthening capacity of
providers and businesses to build the foundation and deeper and broader skills required by the 21st
century labour market;
(c) Creating an investment environment and settings that optimises investment from all sources
(governments, individuals, businesses and industry) including funding for delivery, tax policy,
employment programs and incentives;
Page 6 of 29
negotiations of the last national agreement in 2008, this was retracted in November
of that year by the then Deputy Prime Minister at the Ministerial Council meeting in
Darwin. Recent Commonwealth decisions (for example, the limited term extension
of funding for Productivity Places) suggest a retreat from the pursuit of broader
market mechanisms in VET. Victoria considers that a clear and sustained direction
from the Commonwealth in support of market reform will be critical to the future
structural redesign of the VET system.
(d) Renewal of governance framework to reinforce the role of industry and maximise effectiveness
and efficiency in intergovernmental relations;
(e) Ensuring that skills are fully utilised and wastage of human capital is reduced; and
(f) Identify barriers and implement changes needed in the structure and operation of the training
system (both nationally and locally) to improve qualification completions and participation in higher
level qualifications by Indigenous Australians.
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THE NEED FOR REFORM
The VET sector in Australia is diverse, with over 5,000 registered training
organisations across both public and private sectors and a growing level of
investment from private revenue.6 At the same time, an evolving labour market in
Australia is increasing the demand for flexible training, particularly at higher levels,
to achieve sustained growth over the longer term.
While starting from a relatively strong base — Victoria is the only Australian
jurisdiction where the VET participation rate and the higher education participation
rate are above the national average — Victoria recognises that improvements to
Australia’s access, participation and attainment rates must continue.
Victoria supports the majority of policy priorities identified by Skills Australia,
including the need for increased investment at the national level. Victoria considers
that future policy directions must reflect the changing nature of the VET sector,
which in large part needs to reflect the needs of the Australian labour market.
Victoria also recognises that strategic debate will clarify policy direction in a number
of key areas.
However, piece-meal, incremental change or an over-reliance on government and/or
intermediaries will not be enough. Victoria considers that fundamental reform to the
VET sector’s investment, delivery and regulatory environments is required to achieve
the growth in participation and attainment needed. Change is also needed to
implement the recent changes to the Australian Qualifications Framework7 to ensure
that qualifications and assessment frameworks deliver stronger employment and
learning outcomes and student pathways.
Why choose a user-driven model
The current system for VET delivery in Australia lacks sufficient flexibility and
coordination and limits the capacity of providers to respond to immediate training
demands. Victoria strongly supports the need to provide a ‘better deal for learners’
in tertiary education and considers that any future conversation on VET reform
should place the needs of the user at its centre.
A user-driven funding model is the most effective way for government to support
greater expansion in delivery and participation, drive greater competition (thereby
achieving increased accountability, accessibility and quality) and respond more
effectively to changing labour market needs. This has been recognised by a growing
body of evidence and is reflected in Victoria’s reforms of recent years.
.
6
Productivity Commission (2010) Vocational Education and Training Workforce Draft Research
Report.
7
Changes to strengthen the AQF were agreed by the Ministerial Council on Tertiary Education and
Employment (MCTEE) in November 2010.
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VICTORIAN CONTEXT
In 2009, the publicly funded VET system in Victoria trained 494,300 students and
delivered 135,894,400 training hours. Government subsidised training is delivered
by 18 TAFE institutes in Victoria, including four dual-sector institutes, around 500
private providers (with rolling contracting arrangements) and over 100 ACE providers
(receiving government support to deliver accredited VET training). In total there are
more than 1,200 Registered Training Providers in the state8 and Victoria enjoys a
strong fee for service market, across both public, ACE and other private providers.
Victoria has higher proportions of people with Year 12 or equivalent qualifications,
post-school level VET qualifications and tertiary level qualifications than any other
Australian state.9
Victoria supports the need to lift enrolment rates in education and training. The
national data used by Skills Australia to map enrolment growth masks significant
variability across jurisdictions (since 2005, the numbers of students in the Victorian
VET system has grown at an average rate of 1.9 per cent each year10 compared to
the national rate of 0.8 per cent).11 However, given the relatively static participation
rate over the same time period (both state and national), the bulk of enrolment
growth appears limited to international education. To maximise benefits to
Australia’s economy and society over the longer term, domestic enrolments must
increase beyond natural growth rates. To achieve this, systemic reform is needed.
Guiding Principles
The case for a market design approach to VET in Victoria, with funding allocated
through an entitlement model, responded to a building case of evidence suggesting
that the current system lacked flexibility and capacity.
At the time of the reforms, Victoria enjoyed the largest contestable funding market
of all jurisdictions and had a demonstrated record of successful private delivery of
VET training. However, significant levels of unmet demand in VET (approximately
27,000 nationwide in 2007)12 raised questions about the validity of a capped funding
model, and led Victoria to recognise that access to subsidised training needed to be
expanded and better targeted.13
8
1232 providers were operating in Victoria as at 30 June 2010 (Victorian Registration and
Qualifications Agency (2010), Annual Report 2009-10).
9
ABS (2007) Survey of Education and Work 6227.0. Of all jurisdictions (including territories) the
Australian Capital Territory has the highest education levels across all three indicators.
10
NCVER (2010) Australian vocational education and training statistics: Students and courses 2009
11
In particular, the national enrolment growth rate is affected by small average increases in NSW
(which could in part be a result of changes to reporting arrangements in 2007 and 2008) and no
growth in Queensland. In contrast other jurisdictions have experienced significant increases,
particularly WA (4.8 per cent average annual growth).
12
ABS (2007) Survey of Education and Work 6227.0.
13
Victorian Government (2008) Securing our future economic prosperity: Discussion Paper on Skills
Reform
http://www.skills.vic.gov.au/__data/assets/pdf_file/0017/11366/SkillsReformDiscussionPaper.pdf
Page 9 of 29
The Government also recognised occupational analysis undertaken (most notably by
CEET) 14 which showed that most Victorians would work in an occupation that would
demand post school qualifications and that those without such qualifications would
be at significant disadvantage in the labour market. This provided a case to extend
the current entitlement of 12 years of schooling to include a post school
qualification, with the analysis on rates of return (through increased income) also
demonstrating that to some extent the cost of that post school qualification could be
borne by the individual.
Of particular concern was the capacity of a centrally planned system to deliver to all
Victorians. VET participation by different cohorts varied significantly, suggesting that
where allocation of places was left to providers some individuals had difficulty
accessing a place. This included a high number of Victorians who required more
flexible delivery options due to work or personal commitments that were not
necessarily being met by the current system. In many cases those individuals
experienced many forms of disadvantage in competing in the labour market and an
entitlement removed at least one of those and improved opportunities available to
them.
It also recognised that the high number of people employed in areas that were not
linked to their qualifications suggested that VET delivery could be better matched to
labour market needs.15
An entitlement model recognises that well informed individual choice is a more
reliable indicator of training needs than centralised planning. It acknowledges the
dynamic and constantly evolving nature of the Australian labour market, highlighting
the importance of flexibility in delivery16 and an understanding that well informed
individuals and employers are able to make sound decisions about the best post
school opportunities for them.
Australia’s labour forecasting models lack the precision needed for a centralisedallocation of funding in VET, creating difficulties for central planners and data models
to predict demand in any great detail and over longer time periods (2-5 years).17
Researchers have also noted that centrally planned allocations also risk path
dependency, creating pressure on government to maintain existing delivery profiles
14
Shah and Burke (2006) The Labour Market and Qualifications in Victoria Centre for the Economics
of Education and Training, Monash University.
15
This is not to discount the value of generic skills acquired through VET training that can be highly
relevant to future vocational pathways (see, for example, Productivity Commission (2009)).
16
Evidence continues to acknowledge the dynamic nature of the labour market, continually evolving
due to demographic and economic (both structural and cyclical) change, and the resulting need for
flexibility and responsiveness in VET delivery. (Productivity Commission (2010) Vocational Education
and Training Workforce Draft Research Report).
17
Richardson, Sue and Tan, Yan (2007) Forecasting Future Demands: What We Can and Cannot
Know”, National Institute of Labour Studies, Flinders University. Published by NCVER as part of the
Well-Skilled Future program http://www.ncver.edu.au/publications/1744.html.
Page 10 of 29
and limiting the capacity of the system to adapt to new conditions.18 Instead,
research suggests that government effort is best applied to assessing overall
increases and declines in projected occupations at a broad level (using a variety of
sources) and providing scope for user choice.19
In 2007, a review undertaken by Boston Consulting Group found that a user-driven
funding model would give providers the flexibility needed to respond quickly to
changing market conditions.20
This was supported by the 2008 OECD review21 of Australia’s VET systems, which
presented a number of arguments in support of an entitlement funding model. The
OECD argued that increasing student choice would incentivise providers to improve
flexibility in response to individual and workforce needs and would capitalise on
individual students’ assessments of their own interests, skill and potential. It would
also drive greater competition, information and accountability across the system,
thereby improving quality and accessibility.
Victoria’s model also includes a focus on up-skilling, by limiting the training
entitlement to qualifications at a level higher than that already held (or at any level
for those aged twenty years and under). This focus reflects the body of evidence
identifying the value of higher level qualifications to both individual and economic
returns. For example, the Commonwealth Government’s 2010 intergenerational
report found that the more we develop the skill level of each worker, the higher the
potential productivity of the labour force. The level of educational and skills
attainment also significantly influences an individual’s future labour force
participation and earnings potential.22
Overview of Victoria’s reforms
Under previous funding arrangements for VET, government subsidised training was
determined by the Victorian Skills Commission (VSC) allocating funding to
predominantly public providers (that is, TAFE institutes)23 to deliver a profile of
training based on identified industry priorities and specific needs of groups entering
or within the workforce.
18
This is a particularly salient risk for VET systems with a strong presence of public (TAFE) providers,
such as in Australia. (Source: Keating, Jack (2007) Current vocational education and training strategies
and responsiveness to emerging skills shortages and surpluses, Centre for Post Compulsory Education
and Lifelong Learning, Monash University. Report published by NCVER as part of the Well-Skilled
Future program).
19
Richardson and Tan (2007).
20
Boston Consulting Group (2007) Skilling Australia’s Workforce 2005-08: Mid Term Review,
Department of Education, Science and Training
http://mediacentre.dewr.gov.au/NR/rdonlyres/FAC260D8-3C93-4C88-8515DC162800E7CC/0/FinalReport.pdf
21
Hoeckel, Kathrin et. al. OECD (2008) Learning for Jobs: OECD Reviews of Vocational Education and
Training – Australia http://www.oecd.org/dataoecd/27/11/41631383.pdf
22
Australian Government (2010) Australia to 2050: Future Challenges.
23
Although Victoria offered the largest amount and proportion of public funding to private providers
of any jurisdiction.
Page 11 of 29
The new system in Victoria, introduced in 2008 and progressively implemented from
July 2009, is a user-driven system and creates a new role for industry in stimulating
and shaping demand. The following core principles guided design of Victoria’s new
system:
 The central role played by users (as purchasers of training) in setting the
direction of delivery, rather than governments or third parties (such as
industry bodies or unions);
 Increased competition in the provider market;
 Improved market information and reporting standards;
 A revised role for industry to support flexibility and responsiveness in the
system, shifting from helping to shape the supply of places to working with its
member businesses, training providers, government and prospective sources
of labour to stimulate and shape demand for training (market facilitation);
 Government and private contributions at levels which reflect the varying
rates of return of training to individuals, industry and the economy;
 Strengthening capability in the VET sector in order to minimise the potential
for market failure; and
 An ongoing focus on stimulating demand among harder to reach learners.
The following diagram illustrates the links between these overarching principles and
specific elements of the new system.
Page 12 of 29
Core guiding principles and policy responses in the Victorian VET system
Principle
Policy Response
• Entitlement-based funding model (the Victorian Training Guarantee (VTG) and
uncapped places)
Improving contestability
• Increased provider market (more private providers delivering training since
introduction of the new arrangements)
Improving market information
• Improved information accessed by users (enhancements to the VRQA
information portal and qualifications navigator)
• Improved reporting requirements (monthly reporting against an expanded suite
of performance and quality indicators)
Promoting a flexible and responsive • Market facilitation initiatives to identify and stimulate demand (including
training system
integrating the skills agenda into broader industry and investment policy)
• Promoting the value of training to employers and facilitating linkages between
providers and industry
• Revised role and membership of the Victorian Skills Commission
• Workplace and regional skills audits to identify training needs
Investment linked to private and
• Variable fee structure with increased private contributions at higher level
public returns
qualifications (matched by the extension of income-contingent loans for
subsidised Diplomas and Advanced Diplomas) based on the individual’s expected
future income
• Eligibility requirements to promote up-skilling (by limiting the government
entitlement to qualifications to a level higher than that already held). Under the
Victorian Training Guarantee, young Victorians aged 20 years and under are able
to access training at any level regardless of existing qualifications.
Strengthening capability
• VET workforce initiatives
• TAFE Governance
• Regional provision
• Strengthened ACE sector
• IT functionality investments
• Capital infrastructure program
Stimulating and supporting demand • Ongoing monitoring of take-up and delivery to ensure equitable access and
for all Victorians
participation for hard to reach learners (including concession fees for the most
disadvantages)
• Funding to enable institutes to provide case-by-case exemptions to eligibility
requirements
User-driven system
There is an indication that enrolments have increased over 2008 to 2010, demonstrating
that changes are being felt since introduction of the new system in July 2009. For
example, preliminary 2010 data24 indicates a significant increase in training delivery.
Across both Skills Deepening and Youth Compact enrolments, there have been over
13,000 more enrolments reported in the first nine months of 2010 than for the full year
2008.25
Skills Deepening enrolments (Diplomas, Advanced Diplomas, Vocational Graduate
Certificates and Vocational Graduate Diplomas) have increased most markedly
among older Victorians. Year to date 2010 enrolments by those aged 40-59 are
23 per cent higher than the full year 2008 number.
92 per cent of ACE provider respondents to a 2010 survey have indicated they intend to
provide new services to learners in 2011, with 80 per cent of the new learners likely to
24
Preliminary data are based on provider submissions updated monthly.
Skills Victoria (2010) Securing Jobs for Your Future – Skills for Victoria Progress Report Year to date,
30 September 2010 http://www.diird.vic.gov.au/diird-strategies-and-initiatives/securing-jobs-foryour-future-review/securing-jobs-for-your-future-a-skills-for-victoria-progress-report
25
Page 13 of 29
include the unemployed, underemployed, and those with less than Year 12 or equivalent
attainment seeking to gain new skills and qualifications.26
The changes have also led to significant changes in the training provider market. 44 per
cent of private providers surveyed for an implementation review of the new system
reported increased enrolments27 and there are now more training providers contracted
to deliver government subsidised training (increasing from 270 in July 2009 to 528 as at
December 2010).28
Matching delivery to demand
Providing flexibility in the system to respond to user demand is a critical first step to
reforming the VET system. This moves away from a direct role for industry and
government in setting the levels of training required for specific industry areas.
However, to ensure that training investment is appropriately targeted, Victoria
recognises that close monitoring of the system is critical to ensure that delivery is
matched to need. This includes ensuring there are sufficient opportunities for people to
re-skill in areas of emerging skill need, and providing flexibility to enable those who are
no longer able to work in their existing field (i.e. due to changing economic conditions or
personal circumstances) to return to training. For example, additional support has been
announced to expand eligibility exemptions and enable concession card holders to realise
maximum benefits from the new Victorian training market.
Victoria would welcome the opportunity to work closely with the Commonwealth to
continue to analyse labour market trends and training outcomes for different groups of
learners.
Another development which may affect user demand is the move towards uncapped
higher education places. The impact of this reform will need to be carefully
monitored, to assess how increased access to higher education places affects the
vocational education sector, and to mitigate any risk of a decline in the number of
people seeking to train in skills shortage areas.
GOVERNMENT INVESTMENT IN VET
The Victorian Government has continued to invest in the quality and capacity of the VET
system whilst maintaining the highest level of efficiency in the country.29 In particular,
the reforms to the VET system announced in 2008 were accompanied by a significant
26
Colmar Brunton (2010) ACFE Capacity Initiatives Evaluation 2009-2010, report prepared for the
Victorian Government Department of Planning and Community Development, September 2010.
27
Ernst & Young (2010) Review of the Implementation of Securing Jobs for Your Future - Skills for
Victoria, report prepared for the Victorian Government Department of Innovation, Industry and
Regional Development, August 2010
http://www.diird.vic.gov.au/__data/assets/pdf_file/0014/212603/2010-Review-of-theImplementation-of-Securing-Jobs-for-Your-Future---Skills-for-Victoria-Report.pdf
28
Skills Victoria unpublished data as at December 2010.
29
As measured by Government real recurrent expenditure per annual hour (less than $12 per hr in
Victoria compared to $13.03 per hour nationally). (Productivity Commission (2009) Report on
Government Services 2009.
Page 14 of 29
increase in state investment to facilitate the shift to a new system and to increase the
number of subsidised places available for Victorians.
Skills Australia’s general claim that state funding has declined since 2001 masks some
critical facts and is not accurate with respect to Victoria.
The NCVER Financial Report 2009 reports that state government revenue in Victoria has
increased by 31 per cent between 2004 and 2009 (nominal terms), in comparison to an
average state revenue increase of 24 per cent over the same period.
Operating revenues, by category, for government training departments, 2005–09 ($ million)
Revenue
NSW
category
State/territory government
Vic.
Qld
WA
SA
Tas.
NT
ACT
DEEWR
Total
3210.4
2009
996.1
765.4**
635.8
376.5
224
81.2
67.3
64.1
-
2008
1016.5
773.9
579.5
326.6
190.9
76.4
65.4
62.3
-
3091.4
2007
994
723.1
524.3
335.4
219.6
72.9
62.8
60.5
-
2 992.7
2006
977.8
681
438.1
336.8
200
65.1
63.2
59.5
-
2821.3
2005
934.9
Australian Government
638.7
445.7
339.9
186.9
60.1
66.4
57.8
-
2730.4
1918.7
2009
459.4
394.3
283.3
160.7
108.7
31.8
38.1
26.7
415.5
2008
360.6
267
223.8
111.4
88.8
29.3
36.7
20.4
350.9
1489
2007
354.5
259.6
216.7
106.8
84.6
28.6
29.2
20.3
338.2
1438.6
2006
341.9
249.7
202.8
101.4
80.9
27.5
26.7
19.5
178.8
1229.3
2005
328
240.7
198.1
95.7
79.9
26.5
22.9
18.9
161.6
1172.4
Source: NCVER Financial Reports 2008 and 2009. Comparable data for 2001-2004 is not readily available.
**Note the change in funding arrangements in July 2009 affects comparisons to previous years. In Victoria, NCVER
reporting is subject to a time lag resulting from the flow of Commonwealth revenue via State treasury rather than
direct to the Victorian Skills Commission (hence the appearance of a small decline from 2008 to 2009, which has
occurred due to additional reconciliation requirements).
However, the table above shows that a reduction in real investment has occurred in
some jurisdictions. In particular, the jurisdiction with the largest investment (NSW) has
reduced support in real terms over 2005 to 2009 while Victoria’s investment has grown
at more than twice the standard inflation rate.30 Coupled with the Commonwealth’s
changes to funding streams over the past decade – where revenue flow to the states was
reduced in exchange for increased investment in direct funding (through, for example,
the Productivity Places Program) – these changes affect the overall funding picture.
Victoria recognises that if access and participation is to increase at the level required to
achieve ongoing productivity, continued investment will be needed. However, future
investment must be considered in the context of relative returns of training to
government, individuals, employers and industry. The fee structure in Victoria has been
redesigned under the new system, moving from a flat rate to a tiered fee system more
closely aligned to qualification levels. The new structure recognises the benefits that
come with higher level skills, in particular improved job opportunities and higher wages.
30
NSW nominal spend has increased by 8.7 per cent over 2005-09 (compared to a 31 per cent
increase in Victoria and 52 per cent increase in Qld) against a standard inflation rate increase of
13 per cent over this period, calculated using annual average CPI index rates (ABS (2010) Consumer
Price Index, Australia, September 2010 6401.0.
Page 15 of 29
Under the new schedule, fees at the Foundation and Skills Creation levels will decrease to
support access to training for low-skilled Victorians. For government subsidised students
undertaking Skills Deepening courses, Victoria has negotiated an arrangement with the
Commonwealth to enable them to access VET FEE-HELP to finance student fees.
Additionally, the Government is re-introducing concessions at higher levels to further
support participation in training.
The Commonwealth has a key role to play in supporting availability of Income Contingent
Loan Schemes to ensure increased tuition fees do not act as a barrier to training. Victoria
will be seeking the opportunity to work with the Commonwealth to refine the VET FEEHELP arrangements, in order to better meet the specific needs of the VET sector. In
particular, VET FEE-HELP needs to better reflect the sector’s flexible delivery and
enrolment features.
STRUCTURAL AND SYSTEMIC REFORM
Victoria considers that a number of key areas need to be addressed to improve
overall market design and efficiency in the VET system.
An effectively functioning user-driven training system will not be possible through a
new funding model alone. Reforms to other structures of the VET system must also
be made. These include: robust regulatory frameworks to underpin quality; accurate
and transparent data to support informed users; qualifications that provide a strong
basis for employment and further learning; and market facilitation to promote
effective linkages between industry, providers and learners. Each of these areas is
addressed below.
Regulation and improving quality
Victoria supports an increased emphasis on system quality, particularly in an
environment of increasing numbers of providers receiving government funding.
An effective and targeted regulatory framework, including a strategic and robust
data collection process, is a fundamental lever for improved quality. Victoria
considers that regulatory frameworks and data collection processes should be
aligned between public TAFE institutes and those private providers which receive
government funding. Such frameworks must strike an appropriate balance between
achieving rigour, transparency and accountability in quality assurance while
minimising regulatory burden on the VET sector.
To ensure that VET training providers in Victoria operate to the highest standards of
efficiency, quality and integrity, Victoria has recently passed the Education and Training
Reform Amendment (Skills) Act 2010, designed to preserve Victoria's position as a leader
in the regulation of VET. Broadly, the Act aims to improve Victoria's training system in
four main ways. It seeks to:
 protect students' rights and ensure their fair treatment;
 strengthen and simplify the regulatory system for VET;
 reform the governance of the State's TAFE institutions and agencies; and
Page 16 of 29

enshrine in legislation the entitlement to VET.
Importantly, the Act will also implement the new Australian Quality Training
Framework in Victorian legislation.
The new Act will enhance the regulatory and enforcement role of the VRQA. New
powers of inspection and enforcement will enable the VRQA to employ a more
flexible approach to regulation, to encourage a culture of compliance. The changes
also provide for mandatory disclosure by providers to students regarding training
provision, such as whether a provider is a member of a tuition assurance scheme.
This new Act builds on previous work by Victoria in 2009. For example, amendments
to the Education and Training Reform Act 2006 were passed in 2009 to permit public
disclosure of failed providers, as well as allow the VRQA to act more quickly in
dealing with registered training organisations providing courses to overseas students
that were not meeting minimum standards. Work was also done to improve the
provider registration process and give greater certainty to providers who are seeking
to enter the market.
Victoria notes that many of these features are being adopted through the legislation the
Commonwealth has introduced to establish the National VET regulator. Victoria looks
forward to working with the Commonwealth and other jurisdictions in relation to this
national regulation, to enhance Australia’s VET sector, and ensure that level of Victoria’s
policy control over VET reflects the importance of workforce development for the State’s
economy.
Market information and student management systems
To safeguard against market failure, it is critical for user choice systems to be
underpinned by accurate information to enable students and businesses to make
informed choices regarding their training.
Victoria is continuing to improve broader data collection, analysis and monitoring
processes. This work will ensure that accurate and accessible information is
available to advise Government on the alignment between industry need and
training delivery, and to assist potential students in their study choices.
Increased accountability has accompanied Victoria’s expansion of the subsidised
training market. Contracted providers are now required to provide data and
statistics on a monthly basis to Skills Victoria.
Through an online qualifications navigator and widespread marketing campaign, the
Victorian Government is also investing in information dissemination to assist
individual students to chart their own pathways through the VET system. However,
more is needed to provide individuals with clear, coordinated advice on where they
can access government subsidised training in the area(s) of their choice.
Page 17 of 29
Good student tracking mechanisms play an important role in this space. To ensure
that governments are able to evaluate the effectiveness of the VET system, and to
support students to identify the training pathways that best meet their needs, it is
vital to understand the ways in which students engage with the VET sector over their
lifetime. This includes the ability to track completion and attainment rates across
providers and to understand the level at which individuals enrol with multiple
providers over a year. Victoria notes that COAG and MCTEE are continuing to
progress work on a national Unique Student Identifier. However, Victoria considers
that MCTEE must do more to drive a speedy resolution to the complex issues
involved in this space if we are to achieve a full rollout by 2012, or sooner if possible.
Industry engagement and market facilitation
Victoria strongly supports an ongoing role for industry in promoting and supporting
training and considers that training needs a tripartite commitment between
employees, employers and providers. Victoria recognises that more needs to be
done to improve industry confidence with the training system, and to increase
industry’s involvement in and commitment to increasing the skills levels of their
employees. This can be done not only through licensing and accreditation processes,
but also by supporting ongoing workforce development.
Industry will continue to have a role in advising the Government on sector trends
and the implications of this for skills needs. The Victorian Skills Commission plays an
oversight role for the Victorian VET system and will conduct research and provide
advice to Government and industry on responses to skill shortages, thin markets and
market failure, while maintaining its regulatory role of the apprenticeship system.
In addition to information dissemination, Victoria is currently involved in a number
of industry engagement activities in order to stimulate demand for training in
priority industry areas and optimise labour market participation, mobility and
productivity.
The Victorian Skills Commission plays a key role in Victoria’s market facilitation
activities by advocating the skills agenda across industry.
The Government is also working at whole-of-government, regional and employer
group levels to assist industry to:
 Recognise the benefits of training;
 Identify and respond to emerging skills needs in collaboration with training
providers; and
 Integrate the skills agenda into broader industry and investment policy.
At the government level, Victoria is integrating skills into industry, investment and
regional policy to encourage industry to consider training in their broader strategic
planning.
Page 18 of 29
At the regional level, Victoria is supporting structural adjustment programs to assist
workers in declining industries to shift to emerging areas of labour demand in the
region.
At the employer level, Victoria is working with businesses, enterprises and training to
promote dialogue about training needs with providers, including facilitating the
development of training packages to meet particular employer needs, and to run
skills audits within the workplace to identify skills gaps and opportunities for
workforce training.
The Government is also continuing to work with training providers to support the
development of flexible service delivery models to meet specific client needs,
through the development of flexible products and innovative approaches to engage
harder to reach learners. Vocationally oriented training tailored locally can play a
strong role in ensuring successful labour market outcomes for low skilled and/or
unemployed learners.
Victoria is also considering the role of industry training advisory boards and their
relationship to industry skills councils in the context of the revised role for industry
under the new VET system.
Capital Infrastructure
Victoria notes that structural changes to the VET system will have implications for
the funding and design of capital projects across the VET sector. To align with the
changed funding arrangements for VET training, Victoria has introduced an
integrated asset management plan for the TAFE sector which requires all institutes
to reflect the broader policy principle of user need when developing and prioritising
projects for capital investment.
QUALIFICATION AND CURRICULUM DEVELOPMENT AND
DELIVERY
Facilitating the development of flexible and responsive curriculum will be critical to
ensuring that training delivery is best able to meet the demands of individual users,
industry and the nation.
The modular structure of VET qualifications achieves significant flexibility and is a
valuable element of VET training. Since Victoria’s reforms, the data does
demonstrate an increase in the number of students enrolling in higher level VET
qualifications. However, these enrolment increases are low in comparison to rising
numbers enrolling at universities and the increasing numbers of skilled occupations
in the labour market. This raises questions about the nature of training packages at
the Diploma and Advanced Diploma level. In particular, the current barriers in the
training package model to cross-sector articulation must be confronted. Parallel
diploma streams are now emerging, where universities are offering associate and
graduate entry courses to (Commonwealth-supported) courses as an attractive
Page 19 of 29
option for those pursuing further training. The popularity of these suggests that
standard VET diplomas may not be providing learners with the skills they need.
Victoria considers that institutional and bureaucratic impediments to training
pathways (particularly for youth) and an increasing government focus on the need to
lift core literacy and numeracy skills will need to be addressed in future discussions
around the strategic direction for VET curriculum development and delivery.
These changes will also demand adjustments to the VET workforce.
Training Packages
The Skills Australia paper canvasses views on the existing focus on qualifications
rather than discrete modules or skill sets.
The focus on full qualifications may have particularly negative impacts on existing
workers, such as those requiring additional skills sets to meet industry standards or
regulatory and legislative requirements. This will become more pressing in the new
licensing environment.
Victoria recognises that skill sets can offer short-term gains for individuals by
translating into immediate employment outcomes, and that discrete units of
competency (for example First Aid, High Risk Work and Occupational Health and
Safety training in the construction industry) can enhance or specialise a pre-existing
qualification. However, Victoria maintains that government investment should not
be directed towards skill-sets at the expense of qualification completion.
Victoria’s qualification focus reflects the rationale that government investment
should be targeted to lifting the overall qualification level of the population in order
to bring the greatest economic and social benefit to Australia. Long term benefits
are achieved by supporting individuals to increase their qualification level over their
lifetime, and encouraging the portability of skills across career paths. In contrast,
specialised training can restrict the broader transfer of skills, limiting flexibility in the
overall workforce and the capacity for individuals to adapt to future changes in the
labour market. Qualifications are particularly valuable for young people entering the
labour market without workforce experience.
Victorian policy maintains a strong role for industry in the engagement with and
contribution to workforce training. There is a strong rationale for maintaining an
expectation that industry should invest in training in skills for highly specific aspects
of a particular occupation or industry.
Victoria also notes that the lengthy development and approval process for training
packages can impact on the ability of providers to meet immediate training
demands. While in-depth training package development should not be rushed at the
expense of quality, much more use could be made of accredited courses to meet
immediate needs. Under current rules, training packages hold primacy even if they
are out of date or under development. This needs to be addressed.
Page 20 of 29
Promoting pathways to work and further study
Victoria would welcome future discussions on VET qualification and curriculum
development to support pathways to work and/or further learning. The Ministerial
Council on Tertiary Education and Employment (MCTEE) recently endorsed revisions
to the Australian Qualifications Framework in order to strengthen the focus on the
development of knowledge and skills for both strong employment outcomes and for
further education. When implementing these changes, transformations to training
packages and assessment frameworks will need to reflect a balanced approach to
vocational and/or educational pathways.
Recognising that institutions are increasingly delivering across sectoral boundaries,
Victoria considers that the improvement of student pathways, and the capacity of
institutions to deliver this, should take precedence over debates around institutional
type. Policy, funding and regulatory settings need to be carefully set to avoid VET
becoming bifurcated and absorbed into school and higher education.
In a tertiary context, thought could be given at a national level to facilitation of
stronger partnership arrangements between tertiary education, the school and
industry sectors to develop courses that meet new and emerging skill requirements.
Some TAFE institutions in Victoria have advised of an increasing take-up in full-fee
paying higher degree courses, offsetting a decline in some diploma and advanced
diploma courses. This indicates that the current diploma offerings are not meeting
the needs of some learners. There is also evidence of an increasing proportion of
Australians with bachelor level qualifications while the proportion with Diploma and
Advanced Diploma qualifications has remained static.31 Karmel (2010) has identified
that an increasing number of occupations now require bachelor degrees. This trend
will have significant implications for the development and targeting of diploma
qualifications and VET qualifications in general, where specific vocational purposes
may also need to be complemented by the broader purpose of preparing for further
study.
Youth pathways and school-based learning
A particular focus on pathways into and across education and training sectors has
arisen from recognition by all levels of government that the engagement and
retention of young people in education and training requires particular policy
attention.
The latest data indicates that Australia’s young people are continuing to feel the
effects of the economic downturn more strongly than other Australians. Nationally,
the percentage of teenagers not fully engaged in work or study remains at 16 per
cent in 2010, up from 13 per cent in 2008.32 There remains significant jurisdictional
31
Karmel, Tom (2010) “The Future of VET: Or, Allen Ginsburg Revisited” in The Future of VET: A
medley of views, NCVER, ed. Francesca Beddie and Penelope Curtin.
32
The Foundation for Young Australians (2010) How Young People Are Faring 2010 Report
http://www.fya.org.au/what-we-do/research/how-young-people-are-faring-2010-2/
Page 21 of 29
variation in these figures (including a slight improvement in Victoria and Tasmania)
however more needs to be done to ensure that the tertiary education system is
providing adequate pathways from school to further education and/or employment.
Key areas for Victoria’s efforts to improve youth pathways are delivery of
employability skills, lifting qualification completion rates, and continued support for
school based VET.
Increasingly, education sectors and nations are recognising the importance of
employability and generic skills for young people to transition from education to
effective participation in the labour market. In Australia, the schools sector has
responded by incorporating general capabilities in the national schools curriculum.
An increasing number of universities are introducing explicit instruction in, and
assessment of, graduate capabilities. The strengthened AQF recently endorsed by
MCTEE creates the framework within which the VET sector can be a leader in this
area. To realise benefits both in terms of the employability and productivity of VET
graduates and their successful articulation to further education, effective
implementation of the framework in VET products will be essential.
VET qualification completion rates among young people remain unacceptably low,
both in apprenticeships and in institutional pathways. This issue will be a key priority
for the Victorian Government over the next period. Strategies that will be pursued
will go beyond qualification content and the capacity of the VET teaching workforce,
and encompass pastoral care, career advice, linkages to broader youth services and
required resourcing level.
Victoria acknowledges the key role school based VET learning plays in supporting
engagement and transition, and Victoria supports the broad policy objectives for
VETiS identified by Skills Australia. VETiS programs in Victoria are expected to serve
the broader purposes shared by all VCE and VCAL programs (such as student
engagement, participation and retention), rather than an exclusive focus on
workplace needs.
Victoria notes that the data presented in Future Directions for VET does not
accurately reflect the differences between these training pathways and the dynamics
evident at the state level. For example, Skills Australia’s focus on the higher ‘failure’
rate of VETiS students in comparison to the VET sector does not acknowledge the
credit arrangements in Victoria (enabling VETiS students to have the opportunity to
complete a senior secondary certificate, even if they do not complete a VET
qualification), nor the higher rate of non-completion in VET. While a larger
percentage of VETiS students fail their VET subject than VET sector students aged 1519 years in Victoria (2008 figures), this is in part explained by the higher noncompletion rate for VET (6 per cent, compared to 0 per cent for VETiS) and the
significantly higher pass rate for VETiS (78 per cent compared to 70 per cent for VET
students).33
33
MCEECDYA VET in Schools Collection (2008) and National VET Provider Collection (2008).
Page 22 of 29
Varying delivery arrangements across jurisdictions are also likely to affect industry
and employer attitudes towards School Based Apprenticeships. In Victoria, more
than 60 per cent of school based apprenticeships are at level Certificate III or IV, in
contrast to Skills Australia's suggestion that most school based apprenticeships are
of a low qualification level.
Core skills in literacy and numeracy
Research has demonstrated a strong link between language, literacy and numeracy
skills and improved labour market outcomes, including participation and wages.34
Research has also linked improved literacy and numeracy levels, particularly among
the lowest skilled, to improved labour productivity overall.35
Victoria supports future initiatives to support the VET sector to lift the core literacy
and numeracy aspirations and attainment of working age Australians, and recognises
the importance of engaging early childhood and school education sectors as well as
industry to boost skills throughout life. In particular, the adult, community and
further education sector plays an integral role in supporting literacy and numeracy
and in lifting the skills of learners with different needs to position them for further
learning and/or work.
In addition to the role of literacy and numeracy in workplace productivity, these skills
underpin the capacity of people to engage in and complete further education and
training at higher qualification levels. For this reason, all VET qualifications need to
focus on the delivery of these skills. This is particularly the case for young people
where governments have heightened social responsibility and aspiration to increase
the proportion of this cohort attaining tertiary education qualifications, as reflected
in COAG and Commonwealth targets.
VET Workforce
Victoria recognises that reform to the VET system will only be achieved if those
delivering the training are appropriately supported. The Victorian Government’s
commitment to teachers is reflected in the appointment of the Minister responsible
for the Teaching Profession, Mr Peter Hall MLC, who is also the Minister for Higher
Education and Skills.
It is acknowledged that the structure, functions and role of the TAFE workforce has
remained fundamentally unchanged for the past two decades. As the system
continues to grow, and the VET market becomes more competitive, it will be
imperative that Victoria has a VET workforce with the optimal mix and level of skills
to drive strategic change in the sector.
34
Productivity Commission (2010) Links Between Literacy and Numeracy Skills and Labour Market
Outcomes.
35
Coulombe and Tremblay (2005) Public Investment in Skills: Are Canadian Governments Doing
Enough? C.D. Howe Institute.
Page 23 of 29
Workforce development and capacity building initiatives across the VET and ACE
sector are elements of the Victorian VET system. A state-wide VET skills
development body (the TAFE Development Centre) allows for private providers to
access the same workforce development support available to public providers.
Recognising the need to lift core skills among the working age population, Victoria
considers that particular consideration must be given at a national level to a strategic
response to the teaching of and planning around literacy and numeracy and other
generic skills in the VET sector. For example, Victoria considers that the teaching
needs to be more systematic and an optimum balance of skills which position the
VET teaching practitioner as both ‘trainer’ and ‘educator’ needs to be sought.
Currently, many existing VET teaching practitioners and industry experts moving into
the VET teaching workforce are not appropriately skilled to address literacy and
numeracy concerns (as they arise in the classroom and/or to diagnose and refer
learners to appropriate expert support). That said, research confirms that
considerable expertise is required to assist learners who have experienced significant
educational disadvantage to acquire an appropriate level of literacy and numeracy
skills for employment, and the role of experts cannot be ignored.
Into the future, Victoria sees a role for governments in considering opportunities to
support:
 Learning techniques to support a diverse range of learning styles and
capabilities and the effective delivery of training in literacy, numeracy and
employability;
 Strengthened knowledge exchange between industry and the VET sector,
particularly in the context of skills shortages and labour supply
constraints;
 Cross-sector collaboration to enable student pathways through and
between sectors;
 Removal of barriers to assist the movement of teaching staff between all
sectors — schools, VET and higher education; and
 Robust reporting and data collection in order to better inform
Government and industry.
Victoria’s focus remains on professional development for VET teachers and
integration across sectors.
Victoria has begun to consider a strategic approach to tertiary workforce
development which will enable greater consistency in teaching and learning
standards and opportunities for enhanced teaching qualifications. The VET
workforce will need to understand and be able to apply processes to support
education and training from foundation level through to higher levels, including at
key transition points (school to tertiary education; training to higher education, and
tertiary education to work).
However, the unique capabilities required in VET means that teaching practitioners
are generally drawn directly from industry. In this sense, while the Skills Australia
Page 24 of 29
paper identifies the ageing of the workforce as an issue — as at June 2009,
68 per cent of TAFE institute teaching practitioners36 were 45 years or older and
91.7 per cent were 35 years or older37 – many of these practitioners have entered
the profession later in their career. For example, 12 per cent of the TAFE workforce
had been employed for more than 20 years or more; while 44 per cent had been
employed for 10 years or more.38
TARGETED EFFORT
Structural change is only part of the picture. A user-driven system needs sufficient
flexibility to enable providers to respond to the needs of their target groups through
innovative and flexible service models.
Victoria supports Skills Australia’s suggestion to look at existing support for apprentices
to see if more can be done to improve completions and pathways to work.
Victoria’s training policy also continues to look at ways in which providers can be
supported to lift both aspirations and achievements, for students in the bottom half of
school testing and deeply disadvantaged groups and communities. This recognises the
benefits to both individuals and to the broader economy of improving access to and
attainment in training. This requires effort to improve learning delivery as well as to
ensure that training continues to be accessed by those who need it. Improved VET
access brings not only personal benefits to those in training, but broader economic
benefits due to increased participation and productivity.
Apprenticeships
National NCVER data illustrates that, in general, there has been an overall increase in
both apprenticeship commencements and completions over the past decade – a
38 per cent increase in commencements (from 50,700 commencements in
December 1999 to 70,200 in December 2009) and a 94 per cent increase in the
number of completions (from 21,000 to 40,800). The latest data shows that
commencements continue to improve from the declines in 2008, with non-trade
commencements showing an upward trend (approaching the peak of March).39
Victoria notes that apprenticeship shortages are concentrated in particular trade
areas, highlighting the need to identify which supply issues will or will not be
addressed by improvements to the apprenticeship system.
36
There is currently little consolidated information on the Victorian private sector VET workforce.
This presents challenges in drawing robust conclusions about the teaching and/or non – teaching
workforce.
37
State Services Authority (2010) TAFE Workforce Data Summary, TAFE Data Collection. Based on Full
Time Equivalent figures.
38
Ibid.
39
NCVER (2010) Apprentices and Trainees Early Trend Estimates September 2010.
Page 25 of 29
Apprentice and trainee seasonally adjusted figures
in each quarter, 1999-2009 ('000)
80.0
70.0
Total ('000)
60.0
50.0
40.0
30.0
20.0
Total Commencements
10.0
Completions
0.0
December December December December December December December December December December December
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: NCVER Apprentices and trainees 2009 – Annual
Victoria notes that Skills Australia is seeking views on the development of an
alternative apprenticeship model. Victoria would welcome the opportunity to
engage with the Commonwealth and other jurisdictions on approaches to increasing
the attractiveness of apprenticeships for employers and apprentices. Victoria
considers that the scope of a future model should consider its relevance for all
apprenticeships and traineeships and address the design and interface of regulatory,
administrative and incentive arrangements.
This process should also facilitate universal implementation of competency based
completions, as agreed at COAG in 2006, as not all states and territories have moved
beyond an interim model. This could also support retention of apprentices.
Hard to reach learners
In order to improve access and participation in VET across the population, Victoria
considers that training providers must continue to be supported to recognise the
diversity of VET learners when delivering their services. This will need to extend
beyond delivery models which respond to the particular needs of their existing
learners, to also consider ways in which training can be promoted and supported for
those who may not currently be considering a study pathway.
Victoria supports ongoing efforts to identify a strategic direction for equity groups in
VET, such as through the National VET Equity Advisory Council (NVEAC)’s Equity
Blueprint 2011-16. At a state level, Victoria has established the Victorian Skills
Commission Equity and Access Taskforce to provide regular advice to Government
on these issues.
Victoria has been investing in adult community education for more than twenty
years, with a particular focus on assisting groups with different needs including
indigenous Victorians, men aged over 45, people with disabilities, those with low
prior educational or economic participation, and people from culturally and
Page 26 of 29
linguistically diverse backgrounds, to acquire and improve their skills. ACE delivers
significant social inclusion results for Victoria. Among the unique features of the
Victorian system is the provision of significant government funding for learners with
different needs to access semi-formal (“pre-accredited”) learning pathways. These
initial pathways to further education and/or employment have proven to be
extremely successful in increasing the participation of hard to reach learners in
education and transitioning them to accredited VET pathways including foundation
courses.
Victoria recognises that both at the state and national level, the recent economic
downturn has resulted in a sharp increase in unemployment for 15-19 and 20-24
year-olds, particularly males. The majority of these young people have not
re-engaged in education, employment or training to date. To address this, additional
strategies are required.
Victoria would also welcome the opportunity to participate in a national research
agenda to look at integrated models of delivery that do not create a proliferation of
case management, but rather improve collaboration and alignment (at a policy and
delivery level) between support services (for example health, housing and
community services), tax and transfer systems, and human capital systems (i.e.
education and training and employment).
Locational disadvantage
Victoria considers that structural reform to VET will also need to respond to the unique
needs of local populations, particularly in regional and remote Australia and also in the
growth corridors of outer-urban regions.
The development of a skilled workforce that meets the needs of both local business and
industries, and the community, is crucial to the economic health of a town or region.
However, there are major challenges facing the capacity of tertiary education providers
to meet the changing nature of regional economies. Young people in regional areas are
less likely to complete further and higher education than their metropolitan
counterparts, and more likely to face unemployment. The ongoing viability of regional
communities is also linked to the numbers of qualified people who choose to live and
work in these regions.
The VET system plays a strong role in regional communities across Victoria. The
Victorian Government is looking at ways to support this by improving linkages within
and between government (local and State) and between local industry and post
compulsory education and training providers to provide greater access to education
and training, relevant to region-specific business and community needs. This
includes continuing to support tertiary education providers to explore new
partnerships and innovative approaches to expand access in regional and outer
metropolitan communities, such as through infrastructure projects under the
Commonwealth’s structural adjustment funding for higher education.
Page 27 of 29
In Victoria, evidence also suggests that access to tertiary education is more limited in
outer metropolitan growth corridors. These gaps in provision correspond to high
concentrations of low SES households and lower levels of educational attainment
and Victoria is continuing to look at ways to maximise access in these areas.
BEYOND TRAINING: UTILISING SKILLS IN THE WORKPLACE
If VET training is to achieve maximum benefits to both individual businesses and the
broader economy, Victoria also recognises that particular attention should be paid to the
application of skills in the workplace.
As noted by Skills Australia, a focus on increasing the skill levels of the population alone
will not achieve the boost to productivity and competitiveness needed to succeed on the
international stage. Consideration also needs to be given to whether an increasingly well
educated workforce is being effectively deployed.
Victoria supports an integrated focus on skills development, skills importation and skills
utilisation and welcomes Skills Australia's exploration of the contribution that training
providers and government can make to workforce development, particularly in relation
to small to medium enterprise. Victoria currently works at the enterprise level to
support small businesses and would welcome the opportunity to discuss opportunities
for future development of this program.
Studies into skills utilisation have produced varying results on the levels of overqualification among the working population in Australia (between 27.1 per cent
nationally using survey data40 and 13 per cent in Victoria using census data41).
There is evidence to suggest that skills utilisation is influenced by individual
characteristics (for example, age and gender) but also by regional location and
employer size or type.42 Poor skills utilisation can occur when an individual chooses
not to engage in the industry or occupation for which their training is intended.
Skills under-utilisation can also occur when industries and workplaces are not
organised to best accommodate and utilise the specific skills of their workforce.
It should be noted however that over-qualification is only one measure of skills
utilisation and may not be an accurate predictor of capacity for innovation and
competitiveness in the workplace.
Victoria considers further work should be done to look at graduate intentions at the
point of entry to particular workplaces or industries, and to better understand the
ways in which employers recognise and harness staff capabilities. Governments and
40
Linsley, Ingrid (2005) Overeducation in the Australian Labour Market: Its Incidence and Effects
University of Melbourne Department of Economics Research Paper no. 939 cited in Watson (2008)
Skills in use: labour market and workplace trends in skills usage in Australia, NSW Department of
Education and Training.
41
Victorian Government Department of Premier and Cabinet, unpublished analysis of 2006 Census
data.
42
Ibid
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industry must effectively encourage employers to redesign jobs and to build resilient
workforces that can adapt to change.
Victoria also notes Skills Australia’s discussion regarding the value of workplace
based delivery. While workplace based delivery can support a graduate's transition
into the field of their study, this may not always be the most efficient method for
providers (given the economies of scale achievable through classroom-based
learning). Through an entitlement model, students may seek training which can
more clearly offer a transition to the workforce, which could support increased
workplace based delivery.
GOVERNANCE AND COMMONWEALTH/STATE
RESPONSIBILITIES
Victoria welcomes the opportunity for collaborative reform.
However, discussions surrounding the future of the VET system must recognise the
importance of a user-focussed system and be ready to pursue widespread structural
and operational change rather than piecemeal, implementation-focussed
discussions. Any major structural changes at the national level should complement
Victoria’s existing reforms rather than contradict or hinder roll-out of systemic
changes already implemented in this state that are working well.
Victoria calls on the Commonwealth to provide national leadership on a way forward
and support jurisdictions to pursue reform. Jurisdictional flexibility will need to be
maintained to ensure that skills needs relevant to the specific economies of
individual jurisdictions are supported, in addition to responding to national priorities.
State and territory governments are also critical for providing much needed on the
ground support to providers and users, in order to enable critical partnerships and
collaboration at the local level.
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