Skills shortages make training a hot election issue

The big increase in Australian government funding in 2020 is largely due to spending on employer incentives for apprentices and trainees. The Australian government has said that in the 2021-22 financial year, its total financial contributions to VET will increase to $7.8 billion.

While policy has focused on apprentices and trainees, the VET system provides training for a wide range of professions.

About 6.5 million people are employed in occupations with a skill level that matches a VET qualification, and about 41% of the employment growth projected until November 2025 is in skill-aligned occupations of VET.

What are the major issues?

Apprentices are an important option for young people and account for around 10 per cent of the pathways young people take from school to work.

Apart from apprentices and trainees, the VET sector continues its long decline as a sector. In 1986, there were about the same number of young people aged 15-24 enrolled in VET institutions as in higher education institutions. In 2016, the split was 78% for higher education and 22% for VET.

Part of the reason for this decline is the sector’s chronic underfunding. Mitchell Institute analysis shows that universities receive roughly double the amount per full-time equivalent student as providers of vocational training.

Universities are also more able to supplement domestic student income through international students. International students from VET providers, however, are concentrated in non-public providers. TAFEs are the largest providers of VET, but they enroll only around 5% of international VET students.

Much of the government’s response to wider vocational training needs comes through JobTrainer, which it says will provide “450,000 places for young school leavers and job seekers to upskill”. Although 450,000 sounds like a lot, what constitutes a place or enrollment in VET can vary wildly and range from a half-day first aid course to a four-year apprenticeship.

The most recent cumulative data shows that while government-funded full-time equivalent enrollments increased in 2021 compared to 2020, they did not exceed pre-pandemic levels.

What are the major parties proposing?

The memory of political disasters and current skills shortages mean that the main battlegrounds for VET will be sector management and the sector’s role in meeting skills needs.

As evidence of its support for the VET sector, the Coalition will highlight its funding of apprentices and trainees during the pandemic, swapping the public association of apprentices with VET at large.

The Coalition can argue that federal investment in VET is at record highs due to its policies, although this is largely due to the wage subsidy program that employers receive instead of general investment in the sector .

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The Coalition will highlight the $3.7 billion over five years for the newly announced news. But analysis shows the amount brings Commonwealth funding back to pre-pandemic levels. It is also unclear whether states and territories will agree to the conditions imposed on the funding.

Labor structures its VET policy around a restoration of locally made products and green skills. Labor is embracing the “free TAFE” schemes that have sprung up in states and demanding that 70% of Commonwealth funds go to public providers.

The Greens have the most ambitious policy in providing free education at all levels of education and emphasizing the public provision of education. This involves the removal of funding from any for-profit education provider and the abolition of student debt.

What the main parties seem to be arguing about is who is best placed to restore VET so that it responds more effectively to skills needs and functions as a pathway for young people.

Sectoral reform that could address structural problems and underfunding that would enable VET to reverse its long-term decline in enrollment relative to the higher education sector is absent from the political platforms of major parties.

Peter Hurley is a policy researcher at the Mitchell Institute at the University of Victoria.