Australia’s Skills System Continues to Crumble After COVID

A new report by Centre for Future Work offers a comprehensive review of vocational education and training (VET) in Australia, confirming Australia’s VET system shows growing signs of erosion, fragmentation and dysfunction. Several high-profile government announcements during the pandemic designed to address skilled labour shortages have not altered the VET system’s worrying trajectory.

Fragmentation & Photo-Ops: The Failures of Australian Skills Policy Through COVID by Senior Economist Alison Pennington reviews official data on VET funding, enrolments, and apprenticeships. The statistics paint a grim picture of a VET system starved of consistent funding or focus, fragmenting into scattered offerings of non-accredited and ‘micro-credential’ courses, mostly provided by private for-profit training companies.

“Continued decline in enrolments and eight years of declining apprenticeship completions make it very clear: Australia’s domestic skills pipeline is in disarray,” said Alison Pennington, Senior Economist at Centre for Future Work and the report's author.

The report urges a stronger focus on a more pro-active, hands-on approach to workforce training and planning. A new approach to training would support training in comprehensive, quality, accredited qualifications, rather than short-term fragments of training, with revitalised TAFE institutes leading the nation’s skills reconstruction process. The report proposes that a minimum 70% of public VET funding be reallocated through the TAFE system.

Key findings include:

  • New supports announced during COVID boosted government VET spending by $1.6 billion in 2019-20 from its five-year low, however deep and long-standing problems with Australia’s VET system have not been resolved – and in some cases, have worsened.
  • All VET enrolment growth between 2015-20 has been in non-accredited training, growing by almost 70,000 enrolments, while properly regulated, accredited program enrolments have plunged by over 500,000.
  • After eight years of marked decline, apprenticeship numbers showed a partial rebound in 2020-21. However, Australia still has 173,000 fewer apprentices and trainees in training than it had in 2012 - one-third below 2012 levels.
  • A moderate increase of around 74,000 apprentices and trainees in training over 2020-21 was spurred by rich subsidies (up to $28,000 per apprentice per year through the $3.9 billion Boosting Apprenticeship Commencements program) for employers taking on new apprentices and trainees.
  • Empirical evidence shows rising apprenticeships ‘on the books’ are not being matched by any rise in completions. The number of apprenticeship and traineeship completions collapsed to a new low in the year ending June 2021, with just 77,000 completions – down almost two-thirds from 2013.
  • Government wage subsidies are creating strong incentives for employers to recycle heavily subsidised short-term apprentices. No requirements on employers to ensure apprentices finish programs, offer jobs after completion, and lower 5-10% subsidy rates under the government’s companion program Completing Apprenticeships combine to reinforce apprentice ‘churn’.
  • Three key feminised sectors facing huge shortages of qualified labour (nursing, education, and welfare programs) have all seen continued decline in numbers of apprentices. 3 in 5 new apprentices in-training over the year to June 2021 were men.
  • VET’s effective privatisation continued throughout COVID with VET providers receiving a growing share of all VET activity, and cheaper short-form, piecemeal training experiencing stronger growth than job-qualifying accredited training.
  • In 2021, the proportion of government-subsidised VET students studying with TAFE fell to less than half of all government-funded students (49%) – an historic low. 33% of government-subsidised students are attending for-profit private providers.
  • TAFE staffing and funding have also eroded further, as federal VET subsidies are diverted in favour of private for-profit providers. Failed market-based policies and TAFE defunding has seen over 8,800 full-time equivalent TAFE positions cut since 2012 across five states and territories.
  • Without renewed investment in TAFE programs, the significant annual economic benefits generated by the stock of TAFE-trained skilled workers in the labour force estimated at $92.5 billion per year will decay.

“Deep failures in VET policy reflect broader failures of Australian economic policy to encourage far-sighted investments of any kind in the economy: physical capital, innovation, or skills.”

“Government COVID-era skills policies throw money at employers taking on apprentices and trainees, but have failed to fix the training system. There is no evidence the skills pipeline has been either protected or replenished under current VET policies.”

“Feminised industries with the most pressing labour shortages continue to see weak participation in accredited programs, traineeships, and apprenticeships. 3 in 5 of the additional apprentices and trainees in training over the year to June 2021 were men. Once again, women’s jobs and demands have been deprioritised in favour of the optics of high-vis photo-ops.”

“Australia must commit to rebuilding the TAFE system’s leading role in reliable vocational education – the national skills policy infrastructure that can restore Australia’s long-term investment vision in its people, skills, and innovative sustainable industries.”

For more details on the continuing crisis in Australia’s VET system, please see the full report Fragmentation & Photo-Ops: The Failures of Australian Skills Policy Through COVID, by Alison Pennington.


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