While Australia is better known in international education circles as a major player in the international HE market, it is less well-known in the Vocational Education and Training (VET) sector. Locally, the government sector runs under the acronym of TAFE (Technical and Further Education) with private players operating as Registered Training Organisations (RTOs).
Traditionally dominated by state TAFE colleges, over the last 5 years there has been a significant shift to private providers as part of state-based VET reform. As in the UK, both TAFE colleges and private providers have moved into HE, adding complexity when trying to understand the sector. Competition between the two sectors is tough and there have been ongoing problems with recruitment, teaching quality, course completion, student welfare and other issues. This has led to interventions by federal and state government to try and maintain stability and international confidence in the sector, including disbanding the VET standards body, The National Quality Council and replacing it with the National Skills Standards Council (NSSC). Whether swapping one quango for another will make much difference is debatable, but John Dawkins, Head of NSSC (and a former federal Treasurer and Education Minister) highlighted the scale of the challenges when he commented, ‘At the moment we’re not even sure how many people are enrolled in VET’.
Just this week the National Centre for Vocational Education Research released a report lauding TAFE as ‘an international success story’. The headline figures are:
- Revenue A$7.1bn (up 6.2% from 2009 and 34% from 2006)
- Total operating expenditure A$7.5bn (up 11.3% from 2009 and 38% from 2006)
- VET sector Net Assets A$10.3bn (up 2.2%)
- Payments to non-TAFE (private sector) providers up 121% between 2006 to 2010
- Employee costs, the largest area of expense, up 27% between 2006 to 2010
- Overseas training contracts up by 33% (A$30m) in 2010 to A$90m
- Offshore student numbers up 280% from 23,000 in 2004 to 65,000 in 2009
These are sizeable numbers, but you don’t need to dig far to see:
- A system struggling with the impact of reform and competition from the private sector
- Inconsistent federal and state policy-making (often driven by ideological politics)
- A weak understanding of the international VET market at an institutional, state and national level
- The need for a single VET and HE regulator – there is a separate HE regulator, the Tertiary Education Quality and Standards Agency TEQSA.
To survive, many TAFE colleges are focusing on international expansion and the 280% increase in offshore students shows that this is a viable option. In The Australian newspaper, Michael Knight, a former state politician who conducted a review of Australia’s student visa program, ‘stressed the advantages of offshore (TAFE) provision in India, where millions of potential students can’t afford to come to Australia’. This success came from the sophisticated recruiting channels that TAFE and private providers built to tap into key the Asian and Indian markets.
However, looking forward, I think the TAFE sector will struggle to maintain, let alone expand market share for several reasons including:
- A lack of funds at an institutional, state and federal level to invest in short, medium and long-term market development programs
- More intense competition in the international VET market from major players like Pearson (e.g. IndiaCan JV with EDUCOMP), Kaplan (who purchased local VET players Carrick Education and Franklyn Scholar) and SEEK (owners of IDP and the Think Education Group)
- A serious lack of joined-up educational policy development at state and federal level, e.g. in Victoria when Holmeseglen TAFE invested in Carrick Education, the deal was supported by the Labour administration, but killed off when a new Liberal (Conservative) government was elected.
- VET is the rough diamond of the Australian education sector
- Competitive turbulence between TAFE and private sector providers will continue for some time
- Local politics and a lack of policy development are a serious threat to Australia’s ongoing educational export success
- Private sector providers will outperform TAFE sector domestically and internationally
- Rating as an investment opportunity 3.5/5.