In a response that's largely without precedent, the Australian Government's skill funding legislation has been widely rejected by the business community. It's hardly surprising that given that the Australian Government has sought to put "TAFE at the heart" of the skills training system, whereas peak employer organisations and industry associations have argued that policy should recognise the complementary role of independent Registered Training Organisations (RTOs).
The Independent Tertiary Education Council Australia (ITECA) notes that the Free TAFE Bill 2024 (Cth) seeks to permanently provide funding to the states and territories for at least 100,000 fee-free TAFE places. It is the emphasis on funding underperforming public TAFE colleges and not allowing more students to study with independent RTOs that's drawn the ire of employers.
"Although TAFE plays an important role in the skills training system, it lacks the broad industry coverage and geographic reach of independent RTOs. That's why employer organisations support ITECA's position of government policy recognising and supporting the complementarity of independent RTOs and public TAFE colleges," said Troy Williams, ITECA Chief Executive.
Official data from the National Centre for Vocational Education Research (NCVER) shows that students overwhelmingly chose to study with around 4,000 independent RTOs, as they support around 91% of the 5.1 million students in skills training across the country. The Free TAFE Bill 2024 (Cth) currently before the Australian Parliament means that many of these student's would not be able to access a government funded skills training place.
In submissions to the Senate Inquiry reviewing the Free TAFE Bill 2024 (Cth), peak employer organisations have been highly critical of the Australian Governments' response, as noted in the following extracts from the submissions:
"High-quality private RTOs often provide specialised, industry-focused training that gives individuals the critical skills needed in key industries. NCVER data indicates private RTOs deliver not only most short courses but also most higher-level and complex qualifications." Submission - Business Council of Australia (BCA)
"However, by limiting students to only being able to upskill for free through TAFE, rather than through any quality provider, skills shortages are being exacerbated rather than alleviated, as capacity constraints within TAFE limit the system's ability to deliver training of the scale required." Submission – Australian Chamber of Commerce & Industry (ACCI)
"The Australian Government's approach to supporting vocational education and training and workforce development must be grounded in policies that acknowledge the complementary roles of independent Registered Training Organisations (RTOs) and public TAFE colleges. The Free TAFE Bill 2024 (Cth), however, disregards this complementarity, prioritising public TAFE colleges at the expense of independent RTOs. This flawed policy framework undermines small businesses and limits the capacity of the vocational education and training system to meet the diverse needs of students and employers." Submission – Council of Small Business Organisations Australia
It is significant that the nation's peak business organisations have recognised the high-quality skills training delivered by independent RTOs, providing another reason for the parliament to reject the Australian Government's flawed legislation.
"Private RTOs have better completion rates than TAFE and their students have better employment outcomes than TAFE." Submission - Business Council of Australia (BCA)
"Independent skills training providers are integral to addressing skills shortages and delivering high-quality training aligned with industry needs. In many instances, they achieve equal or better outcomes than TAFEs do, in part because they have the size and agility to adapt to changing circumstances faster and more completely." Submission – Council of Small Business Organisations Australia
"Independent RTOs consistently deliver superior outcomes, including higher student and employer satisfaction, better completion rates, and stronger employment outcomes." Submission – Council of Small Business Organisations Australia
ITECA notes that it is not the proposed investment in skills training that's the problem, but rather the Australian Government's intent to prioritise its investments with the underperforming public TAFE system. Clearly, peak employer groups such as the BCA, ACCI and COSBOA believe that governments should fund students, not systems, as preferencing TAFE in funding decisions denies students the opportunity to choose the training that best meets their needs.
"Prioritising TAFE over independent RTOs undermines student choice and ignores the proven success of independent providers in delivering quality outcomes," Mr Williams said.
ITECA's approach is to put students at the heart of the skills training system. In this context, good policy supports diversity in education, allowing students to study with the provider of their choice.
"It's unfair and inefficient to force students into TAFE when independent RTOs are better equipped to meet their needs," Mr Williams said.
ITECA is calling on the Senate to reject the legislation given the widespread opposition of the business community and the poor outcomes the Australian Government's approach would deliver for students and taxpayers.
"Prioritising TAFE over independent RTOs undermines student choice and ignores the proven success of independent providers in delivering quality outcomes. That's why the legislation should dispensed with by the Senate," Mr Wiliams said.
