The NSW government will push ahead with controversial vocational training reforms, forcing TAFE to compete with the scandal-ridden private sector for half of its funding next year.
A document seen by The Sun-Herald shows direct NSW government funding will be reduced to half of TAFE’s income in 2016, according to formal estimates prepared by the department.
To fill the gap, the 10 TAFE NSW institutes will have to compete with private colleges to attract state government funding based on enrolment numbers, strike private training deals with companies, and earn revenue from full-fee paying international students.
The acceleration of the Smart and Skilled reforms by NSW Skills Minister John Barilaro comes despite the alleged rorting of billions of dollars in Commonwealth subsidies by training colleges, recently exposed by the consumer watchdog.
The Turnbull government has frozen the level of student loans, known as VET FEE HELP, that can be pocketed by private training colleges next year, after it was revealed the colleges paid recruiters thousands of dollars to sign up disadvantaged students who weren’t capable of completing courses.
The NSW Greens and Labor claim that reducing TAFE’s guaranteed funding from three-quarters of its income in 2014, to half next year, risks repeating the TAFE collapses seen in Victoria.
“At the exact time that Australians are discovering that unrestrained public funding of private providers leads to large-scale rorting and exploitation, Skills Minister John Barilaro is throwing TAFE into competition with non-government providers for a rapidly growing share of its income,” said Greens MP John Kaye.
“The Baird government is handing almost half of the public system’s budget to a market that will attract the same dodgy private providers who have comprehensively rorted the federal scheme.”
“TAFE can’t operate without secure funding,” said Labor’s skills spokesman David Harris.
He compared the increase in government funding for private training colleges to the Rudd government’s discredited “pink batts” scheme.
“You have the good, the bad and the ugly turning up. The good guys get driven out,” he said.
Multiple private colleges are facing court action by the Australian Competition and Consumer Commission for collecting Commonwealth subsidies based on thousands of enrolments, despite only 5 per cent of students graduating in some cases.
A spokesperson for Mr Barilaro said: “The NSW Budget for 2015/16 commits a $1.99 billion investment into TAFE NSW. Decisions regarding future budget allocations will be made as part of the regular government budget process.”
A NSW parliamentary inquiry into vocational training will report its findings next week.
Mr Barilaro has refused to tell to the inquiry how much of the vocational training budget will be “contestable” between TAFE and private trainers next year, citing “commercial in confidence contracts” with the training organisations.
But the former TAFE managing director, Pam Christie, told the inquiry “the expectation of the government is that we reduce our reliance on operational base funding”.
Ms Christie said the funding TAFE received under Smart and Skilled “puts pressure on our budget and the amount of time we can allocate to delivery”.
To compete with private colleges, TAFE NSW has reduced its class hours, increased class sizes and slashed fulltime teacher numbers by a third, said Mr Harris.
“Some head teachers have been in tears because they have been asked to sign off that a student has completed competencies that they haven’t. I am hearing about 40-minute videos being shown in plumbing classes.”
Mr Barilaro’s spokesman said that unlike the reforms made in Victoria, NSW regulates training prices and won’t allow private colleges to undercut TAFE fees.
Around 400 private colleges have been vetted by the NSW government for inclusion in Smart and Skilled.
The NSW government deregistered eight private colleges from the funding scheme in 2015, including one with links to Careers Australia, which was the second-biggest recipient of VET FEE HELP loans worth $146 million.
The NSW department of industry and skills has identified 61 colleges receiving Smart and Skilled funding that also received the Commonwealth subsidies, and will audit them to assess their financial stability in light of the recent restrictions placed on the Commonwealth scheme.