Selling TAFE

The essence of capitalism—and the source of its fundamentally destructive character—is the never ceasing encroachment of commodity relationships into all aspects of existence. What we have been experiencing for the last thirty years is the intensification of this process. Post-war social democracy attempted, through the creation of welfare safety nets and labour market regulation, to shield some basic aspects of social existence from the ravages of the market. The goal of neoliberalism has been to strip even these meagre protections and to expose everything to the discipline of the market.


Education is now at the forefront of the process of intensified commodification. The preponderance of government provision in education at all levels for a long time served to help keep the forces of commodification at bay. But the expansion of private education has been encouraged by governments for decades, with rapid growth under the Howard government: one fifth of Australian public spending on education now goes to private institutions.


The neoliberal approach—as taken by ALP and Coalition governments alike—has been to put more money into individual consumers’ hands to spend on private consumption—including private education—rather than using taxation to fund collective consumption. This approach leaves governments with no means to direct overall society-wide spending into socially useful or necessary channels. Thus we are richer than ever before but cannot, apparently, afford free education. Thus we spend about as much on new cars each year as we need to make the whole economy run on renewable electricity. Thus our lounge rooms are dominated with massive television sets and our roads awash with SUVs at the same time as the planet careers towards ecological oblivion.


The illogical nature of neoliberalism can be seen in the Victorian VET (Vocational Education and Training) system. According to the Baillieu model, students making decisions about their own private needs in a market-driven system will somehow—by some invisible hand—allow for the rational, efficient and effective determination of the provision of skills training across the state. Well, the chaos in the Victorian VET system puts the lie to that theory.


The Baillieu government’s cuts to TAFE are unprecedented: around $300 million per year for the next three years. The damage to TAFE institutes is enormous, with well over 2000 jobs and hundreds of courses to be cut, and campus closures.


In 2008 the ALP introduced the policy of contestability of funding (whereby private companies are allowed to compete with public TAFE institutes for government funding) in a system with no caps on student enrolments. It was pointed out by education unions, the Victorian TAFE Association and others at the time that this would benefit private providers as they are able to compete off a much lower cost base because they do not have the broader social policy, equity and diversity responsibilities of TAFEs; they do not have the same maintenance and fixed asset costs; they employ staff on inferior terms and conditions; they are often much less concerned with educational quality; and their readiness to compete on the basis of cost was bound to undermine quality. All of these concerns have been borne out.


As a result of the policy of full contestability, private providers began to cherry pick the most profitable courses and enroll large numbers of students in them, with all sorts of inducements, such as payments to sporting clubs to enroll members in weekend courses, the provision of iPads and so on. The number of students enrolled by private providers expanded extremely rapidly—from 54,022 in 2008 to 220,608 in 2011. Over the same period, TAFE enrolments increased marginally, from 236,617 to 246,997. This was, to all intents and purposes, privatisation of the VET sector.


A large proportion of the increase in enrolments was in courses such as personal training and business. There is no point in trying to argue about the relative value of particular courses. This is the government’s key defence—that it is only cutting ‘lifestyle’ and ‘mickey mouse’ courses. The point is that courses either have a social value—social inclusion is an important role that TAFEs play—or that nearly all courses have an economic and skills value, which the government fails to recognise. Yes, traditional trades training is important, but so is training in hospitality and, yes, so is training in health and fitness. The point is to make sure the supply of students trained in such areas does not exceed the demand for jobs.


In a free market system driven by student demand it is almost entirely impossible to rationally allocate training places or to attempt to match training provision with skills needs. The only tool available to governments, as wielded so brutally by the Coalition, is to manipulate the student subsidy rate, to try to give public and private providers alike some sort of price signal as to where the government wants the focus to be. However, this has at least two effects: changes in subsidy render previously viable courses suddenly unviable; and the ‘gaming’ of the system by private operators doesn’t end—it just shifts focus to the courses that are still getting relatively high subsidies. So the private providers, having spoilt the game for everyone in a number of skills areas, are free to do the same thing in other areas, like apprenticeship training.


The inevitable result of all this has been a big blow-out in the state budget for VET because private training organisations were able to enroll as many students as they wanted and get the full government subsidy for them, with no thought of the necessity or desirability of the courses being offered or the demand for the qualifications. But instead of trying to rein in the private providers, where the rorting of the system has gone on, and where quality is lowest, the government has decided to cut the subsidy for 80 per cent of courses and completely remove the full service provider money that TAFEs received for all the services they provided, such as libraries, student services, maintenance and the like.


The subsidy cut affects all providers, public and private, but it is unfair to TAFEs which were not rorting the system in the first place, maintained quality and had not massively expanded enrolments in areas of little economy-wide skill demand. It is also a big hit on TAFEs because they have large institutional investments to protect, whereas many private providers are little more than fly-by-night operations that can pack up easily and move on to the next quick profit opportunity.


The cut in the full service provider money is the most egregious. It has very broad social justice ramifications, because the services it funded allowed TAFE to provide pathways for disadvantaged and working-class students (including people with poor educational experiences in the past, workers made redundant, migrants, refugees, people with disabilities) into further education, into jobs or simply back into society.


In the months since the cuts were announced, many people have said to me that the government is foolish to have attacked TAFE in such a way. This suggests that Baillieu doesn’t know what he is doing. That is a grave error. The TAFE cuts, together with the marketised system, are a deliberate strategy to shift resources to the private sector and drive TAFE institutes into the straitjacket of a privatised market system. All Australians should be aware that such a strategy is being pursued also by the NSW and Queensland governments, driven ultimately, and to its shame, by the federal ALP government.


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