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VET and higher education funding:

is it lifting social inclusion?

Gerald Burke and Peter Noonan

‘Where to now with VET and social inclusion?’

17th Annual National CEET Conference - Friday 1 November 2013

Monash Conference Centre – 30 Collins Street, Melbourne

• Benefits and policies• Postsecondary students• Funding

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Employment benefits of qualifications(Persons 25-64 Australia 2011)

CEET 3

0%

10%

20%

30%

40%

50%

60%

70%

employed full-time employed part-time

Policies: More training, more inclusive, better focus and use

• Core skills, literacy and numeracy• Additional wrap-around support for less advantaged• VET and higher education system 3% p.a AWPA, more COAG• Lift quality in teaching and assessment• Assess specialised occupations, lessen shortages • Workforce development to reduce under use of skills

4

• Policies and benefits• Postsecondary students• Funding

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Enrolment rates by age 2010

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Finland

Sweden

AUSTRALIA

Germany

Korea

NEW ZEALA

ND

Netherla

nds

Norway

OECD average

Argentina

United State

sChile

CanadaSpain

Switzerla

nd

Czech

RepublicIta

lyBrazil

Turkey

United Kingdom

0

5

10

15

20

25

30

35

40

45 Ages 20 to 29 Ages 30 to 39 Ages 40 and over

Postsecondary students Australia 2010

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  VET Higher education Total

Total students '000 1,800 1,200 3,000Students two lowest SES quintiles ‘000 700 200 900  % % %Female 47 56 51International (excludes private providers in VET) 3 28 13Part-time 85 30 63Indigenous 5 1 3With a disability 6 3 5Language at home Non-English 15 17 1625 and over 57 37 49Major cities 56 77 63

• Background – policies and benefits• Postsecondary students• Funding

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OECD classification of countries’ finance models

1 no/low tuition fees; generous student support

2 high tuition fees; well-developed student-support

3 high tuition fees; less-developed student support

4 low tuition fees; less-developed student-support

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Funding of universities 2013

Funding ClusterGovernment contribution Maximum

student feeRevenue

per student

1 Law, accounting, administration, economics, $1,900 $9,800 $11,700

2 Humanities $5,400 $5,900 $11,200…      

7 Engineering, science, $16,600 $8,400 $25,000

8 Dentistry, medicine agriculture $21,100 $9,800 $30,900

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Government expenditure per student or hour

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 Government

secondary schools

VET Higher education

1999 100 100 100

2005 118 93 101

2011 120 75 103

Key aspects of funding• Fees since 1989• Loans from 1989

• income contingent, Australian government funded • repay through income tax system if income $51,000+• about 30% of HELP cost covered by government

• Income support grants for less advantaged—eg Youth Allowance• (Some) extra funding for tuition/mentoring of less advantaged• ‘Entitlements’ to government supported places

– unlimited in higher education so far – Complex/varied in VET; not all supportive of less advantaged– Open to private providers in VET

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COAG reform council projections of people without a higher level qualification

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Additional commencements required in TE to meet COAG target

CEET 14Source : ACIL ALLEN CONSULTING ANALYSIS

Additional 1.7 million commencements over 8 years from 2013.

Will require $20 billion additional expenditure.

VET government revenues constant 2012 prices Australia $ million

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2008 2011 2012 2008 to 2012 2011 to 2012

NSW Total Commonwealth

416 628 544 31% -13%

Total state

1,174 1,089 1,165 -1% 7%

Total Government

1,590 1,717 1,709 8% 0%

VIC Total Commonwealth

308 423 399 29% -6%

Total state

893 1,239 1,547 73% 25%

Total Government

1,202 1,662 1,946 62% 17%

QLD Total Commonwealth

258 347 357 38% 3%

Total state

669 725 684 2% -6%

Total Government

927 1,072 1,041 12% -3%

WA Total Commonwealth

129 213 189 47% -11%

Total state

377 557 483 28% -13%

Total Government

506 770 672 33% -13%

AUST Total Commonwealth

1,719 2,380 2,325 35% -2%

Total states

3,569 4,114 4,333 21% 5%

Total government

5,288 6,494 6,659 26% 3%

Funding outlook and COAG targets

• VET funding outlook well short of requirement to meet COAG target without further major drop in per student funding.

• COAG target rationale not clear and should be reviewed if a target is retained.– However target has clearly help drive increased attainment

levels• Quality and level of skills utilisation also need to be considered.

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Implications for entitlement models

• Different eligibility rules, rationale for public subsidies and student contributions across VET and between VET and HE

• Tension between public value and priority needs role of VET and general goals to lift workforce participation levels and social inclusion– Highest public subsidies likely to go to areas of highest private

return• Case for better targeting of entitlement – e.g. school leavers and new

workforce entrants and different funding model for existing workforce

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That’s all

Thanks

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Key messages

Disadvantaged have been helped but not as much as hoped The VET sector is the main provider for disadvantaged Indigenous/those with disability increased in the VET sector. Low SES improved share when rapid expansion in HE and VET Leads to enhanced employment if good quality education Difficulties in sustaining funding and quality Disadvantaged suffer when poor quality: less informed, lower cost

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Quality – lack of funding for good teaching– inadequate assurance of assessment– poor information– Bradley -- a regulatory and quality assurance agency for whole of tertiary

Efficiency and use of funds – more for less – outcome based funding– competitive funding– better management and new technology

Funds– Bradley -- national TERTIARY entitlement funding model– Australian government to take over government VET funding– increase fees and HELP– increase employer contributions eg National Workforce Development Fund– more indexed public funding for tuition and support of less advantaged

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