How dare the Government apply demand-supply principles in VET… errr, wait. Microeconomics 101

eggs

Irony in voc.ed. & training – Proponents of privatised/commercial voc. ed. & training aghast that the Government has applied Demand – Supply principles to the courses they will subsidise. Low completions and low job prospect courses not being subsidised.

More irony in voc. ed. & training – proponents of a marketised model of voc. ed. & training being outraged that marketing models are being implemented to recruit students.

Part one – headline

TIM WILLIAMS, THE ADVERTISER, MAY 21, 2015, http://bit.ly/1FrBzA1

Changes to training subsidies put up to 100 training businesses and thousands of jobs at risk, industry leaders warn

CHANGES to training subsidies that give TAFE a “monopoly” will force up to 100 private providers to close their doors and put thousands of jobs on the line, industry leaders warn.

The State Government has allocated 46,000 of the 51,000 new subsidised training places for 2015/16 to TAFE SA under its new WorkReady policy.

The move has outraged the private sector, which says TAFE was already receiving subsidies up to three times higher than private providers, which have now been robbed of any chance of competing.

The Australian Council for Private Education and Training says the policy breached national skills agreements and called on the Federal Government to withhold $65 million of training money to SA over the next two years to force the SA Government to back down.

CEO Rod Camm said the changes would “destroy student choice” and have disastrous economic consequences.

“There are a multitude of arrangements between South Australian businesses and private providers for traineeships that will effectively cease under the new arrangements,” Mr Camm said.

“The flow-on effect to associated business activity could result in approximately 10,000 job losses.

“If the decision is based on the need to rationalise funding, the facts are that TAFE alone is a far more expensive alternative.

“The subsidy rate for TAFE SA per student is two and a half times greater than that paid to private providers.

“This decision rewards inefficiency and effectively gives TAFE SA a monopoly on the training market.”

Master Builders Association SA training director David Thompson said for every 50 training positions run by TAFE SA, the private sector could train 100 students “at the same cost to taxpayers”.

“This has to raise questions about how taxpayer funds are invested, particularly at a time when households are facing a 9 per cent hike in the Emergency Services Levy,” he said.

He said the new policy could lead to construction skills shortages and higher costs for future home buyers.

Sport SA boss Jan Sutherland said loss of revenue from training “threatens the existence” of her organisation, “purely to prop up TAFE”.

Skills Minister Gail Gago said the changes would help TAFE “transition to a more innovative and flexible training delivery model, and to become sustainable in the competitive training market”.

“We expect TAFE SA and private providers to be operating on an equal subsidy rate for commercial courses by 1 July, 2019,” she said.

Ms Gago said 16,000 students already enrolled with private providers would continued to be supported with $30 million of subsidies.

Opposition training spokesman David Pisoni called on all Upper House members to support a proposed parliamentary inquiry into the State Government’s handling of vocational training.

“The Weatherill Government’s funding restrictions will drive private RTOs to the wall, costing jobs and reducing the quality and quantity of vocational training in South Australia,” he said.

Part two – behind the headline

SA Government cuts subsidies to 200 TAFE and vocational courses

ABC-SA NEWS, MAY 22, 2015 http://ab.co/1caGQBl

Government subsidies for about 200 vocational courses in South Australia, including several with an automotive focus, will be scrapped because of low job prospects and completion rates.

From July, the number of TAFE and other courses receiving State Government subsidies will be cut from 900 to 700 to better align training with local job opportunities.

About a dozen certificates in automotive technology, administration and sales are on the list of courses that will lose the funding.

Other subjects to have tuition subsidies cut include printing and graphic arts, animal studies and business administration.

Minister for Higher Education and Employment Gail Gago said the courses would continue to be offered, but at full price.

The overall number of subsidised spots in vocational courses will remain about 81,000, Ms Gago said, with funding shifted to courses that offer graduates better employment prospects.

She said decisions about which courses should have subsidies cut had been made in consultation with industry.

“It was industry itself that determined what courses were redundant and obsolete and which courses were really priority areas,” she said.

“They told us they wanted the training list streamlined so that those courses that were no longer being used, or had a low public value, were removed.”

Ms Gago said many of the affected courses have declined in popularity.

Private provider Celtic Training said the decision will force it to cancel the majority of its courses.

Celtic offers training in fields including health, community services and management.

Its owner, David Leigh-Ewers, said up to 70 students have already applied and are going through the selection process for courses that will no longer be funded.

He said the decision is unfair on private providers, which have high course-completion rates.

“TAFE are getting 95 per cent of the funded places for the next six months so in fact there is nothing for us, no funding available for us for the next six months for any of the courses that we run,” he said.

A spokesperson said TAFE SA is “working through the implications of the new subsidised training list” and would be “in a position to comment further within weeks.”

Part three – demand and supply

Part four – shift in demand and supply

 

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