tafe funding: the need for a new deal 2003 update

TAFE Funding:TAFE Funding:

The need for a new dealThe need for a new deal

2003 Update2003 UpdateWorth Fighting ForWorth Fighting For

Quality For AllQuality For All

TAFE WorksTAFE Works

Funding EqualityFunding Equality

Authorised and published on the internet by R. Hewett, AEU Federal TAFE Secretary, 120 Clarendon Street Southbank VIC 3006

Contents:

• A brief history of ANTA funding• Commonwealth funding for TAFE and VET• Unit costs• Unmet demand• Impact of the resource pressures• Impact on teachers’ work• Student fees and charges• Government ‘offer’ for 2004-2006• AEU funding claim• What you can do

Funding Overview

Governments provide 78.8% of recurrent revenue for publicly funded VET.

The Commonwealth provides:

28% of recurrent government funding

53% of capital expenditure.

The states and territories continue to provide the bulk of recurrent funding.

The 1992 ANTA Agreement

The Commonwealth provided:

an initial $100 million for VET

an additional $70 million per year (cumulative) to fund enrolment growth.

The states and territories were required to maintain their effort.

Commonwealth Budgets,

1996 and 1997

Imposed a $240 million cumulative reduction in Commonwealth funding for VET.

Cuts to labour market programs also impacted on VET funding.

Funding under the 1998 ANTA Agreement was on this reduced funding base.

The 1998 – 2000 ANTA Agreement

Commonwealth funding for enrolment growth was abolished.

The states were required to achieve “growth through efficiencies” in return for the Commonwealth maintaining its funding in real terms.

The NSW DET estimated the loss of cumulative growth funding cost $138 million for NSW. This would be about $377 million across the country.

ANTA Agreement 2001 – 2003

2001 2002 2003New Growth Funds $50m $25m $25m

• Cumulative total over 3 years $230m• States had sought $900m

Conditions for the states and territories:

match the increased funds

fully implement User Choice

increase New Apprenticeships by 20,000 by 2002

Total C’wealth funding for 2001: $1002.8m

’93-94 budget projection for ‘97-98: $1008.6m

The Commonwealth total contribution to VET operating revenue fell by $34.3m.

The states and territories provided $220.7m more in 2001 than in 1997. NCVER 2002, Financial Data 2001

Commonwealth Funding for VET 1997 - 2001

COMMONWEALTH CONTRIBUTION TO VET/TAFE REVENUE

947.2

865.6

823.7 835

912.9

700

750

800

850

900

950

1000

1997 1998r 1999r 2000r 2001

$ m

illio

n


Operating revenue by source

56.1

25

9.3

4.1

5.5

56.7

22.1

10.8

4.4

6.1

0 10 20 30 40 50 60

StateGovernment

CommonwealthGovernment

Fee forService

Student Feesand Charges

AncillaryTrading &

Other

per cent1997 1998 1999 2000 2001

Commonwealth contribution:

25% in 1997 22.1% in 2001NCVER 2002, Financial data 2001


Funding for Non-TAFE Providers, 1995 - 2001

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1995 1996 1997 1998r 1999r 2000r 2001

pe

r c

en

t

Funding for non-TAFE providers:

$58.6m in 1995 $318.7m in 2001

Proportion of students, 2001:

TAFE: 73.7%

Community: 13.1%

‘Other’ RTOs:

13.2%

7.3% of all expenses

NCVER 2002, Financial Data 2001, Statistics 2001

Expenditure to non-TAFE providers increased by $51m or 19% between 2000 and 2001. Between 2000 and 2001, their share of funds increased in all systems except Western Australia. NCVER 2002; 1997- 2001 in accrual format.

Share of funding for Non-TAFE Providers in the States and Territories

0.0

5.0

10.0

15.0p

er

cen

t

1997 3.4 3.8 8.1 4.2 6.2 2.7 5.2 4.3 4.4

1998r 3.8 6.2 10.5 3.7 5.6 2.6 5.1 5.0 5.5

1999r 4.0 8.2 8.8 6.1 8.6 3.6 10.4 6.4 6.4

2000r 4.4 7.7 9.1 5.7 7.8 4.7 6.9 8.3 6.4

2001 5.2 8.7 11.0 5.3 8.5 4.8 7.3 8.9 7.3

NSW VIC QLD WA SA TAS NT ACTAUS

T

From 1997-2001, the cost per adjusted AHC across Australia fell 16.3% in 2001 prices. ANTA 2002

Unit Costs per AHC

UNIT COSTS - STATES/TERRITORIES IN 2001 PRICES (ACCRUAL)

$0

$5

$10

$15

$20

$25

$30

$35

1997 15.97 11.10 15.79 16.55 16.06 20.15 30.54 18.28 14.84

1998 16.24 11.05 13.04 14.42 14.22 17.62 29.45 18.18 14.10

1999 15.45 9.88 14.19 12.49 13.84 16.83 20.85 16.07 13.37

2000r 14.41 9.92 14.34 12.73 13.39 15.91 21.56 13.67 13.11

2001 13.03 10.75 12.90 11.36 13.73 14.32 19.73 11.98 12.42

NSW VIC QLD (a) SA WA TAS NT ACT AUST

Falling Unit CostsFrom 1997 to 2001:

TAFE student places increased by 153,700, VET by 298,200;

employee costs fell from 62.1% to 60.3% of total expenditure;

$182.4m was spent on redundancies;

expenditure on student services fell from $96.2m in 1999 to $88.1m, or from 2.5% to 2.1% of total expenditure.

(NCVER 2002, 1999)

Unmet Demand for TAFE

Unmet demand for VET is back to 1998 levels.

Two thirds of those unable to gain a place in post school education and training sought access to VET.

Unmet demand for VET was 2.7% of all those who did participate in VET in 2001.ANTA 2002, ABS 6227.0, 2002

TAFE student places:1998 35,200 2000 40,500 2001 34,6002002 39,600

Total VET:48,10054,30046,70048,100

Other VET*:12,90013,80012,000 8,500

‘Other’ includes programs that do not result in a recognised qualification.

Impact of the Resource Pressures

Concerns re quality: Schofield, 2000 Senate report.

Higher class sizes, rationalisation and reductions in TAFE courses, cuts to student services,

amalgamations and closures and colleges facing significant financial difficulties.

The overall failure/withdrawal rate for students has increased from 13.7% in 1997 to 18.9% in 2001. (NCVER 2002,1998)

Growth in precarious employment (but some recent moves back to more secure employment).

Increased workload and stress for teachers, erosion of ability to maintain professional standards/provide quality education.

0 20 40 60 80 100

Per cent

STRESS

WORKLOAD

TECHNICAL SKILLS

DecreasedNo changeIncreased

IMPACT OF THE CHANGES ON WORK/LIFE

AEU National Survey, TAFE Teachers: Facing the Challenge, June 2001

Workload has increased and intensified and stress is high.

Impact of the Changes on Teachers’ Work

86% of VET teachers claimed their work responsibilities had changed a lot (63%) or to some extent.

It was 97% of staff in public providers.

Harris & Simons 2003Paper for the 2003 AVETRA conference

0 10 20 30 40 50 60 70

Per cent

FAMILY LIFE

STUDENT RELATIONS

PROFESSIONAL RELATIONS

PROFESSIONAL STANDARDS

Improved No changeEroded

IMPACT OF THE CHANGES ON WORK/LIFE

AEU National Survey, TAFE Teachers: Facing the Challenge, June 2001

68% of TAFE Teachers say their ability to maintain professional standards/provide quality education has been eroded.

Impact of the Changes on Work and Life

64% of VET teachers said relationships with colleagues had changed.

61% said relationships with students had changed – 54% of staff in public providers.

Harris & Simons 2003Paper for the 2003 AVETRA conference

0

10

20

30

40

50

Per cen

t o

f teach

ers

30 35 38 40 45 50 55 60 65 70 75 80 85Actual / paid weekly hours

PAID HOURS ACTUAL HOURS

FULL TIME PAID & ACTUAL HOURS

WorkloadAEU National Survey, TAFE

Teachers: Facing the Challenge, June

2001

Full time teachers work an average of 7 hours overtime per week.

Full time and part time TAFE teachers are doing unpaid overtime roughly equivalent to an extra 6,500 teachers across Australia.


Student fees

AVERAGE FEE PER AHC (estimated 00-01 prices)

0.400.420.440.460.480.500.520.540.560.580.60

1996 1997 1998r 1999r 2000r 2001

$ pe

r A

HC

1997 to 2001:

total fees and charges revenue increased from $155.7m to $182.1m

the average fee fell from $0.52 per AHC in 1997 to $0.48 in 2001.

Average fees per AHC fell by 15.8% in real terms (CPI adjusted). (NCVER Financial Data: ABS 1350.0)


Fees overviewFees overview• Average fees and charges in 1997:

*fulltime equivalent student ± $400 *across all students ± $100.

• 20-30% access fee concessions or exemptions. (Borthwick 1999)

• 90% study part time.

• 23.8% of Dip./Cert. students get financial support from employer (and 37% of Cert. III and IV students)

• 3.9% of non-participants identified cost as a reason (DEST 2002)


Fee for service as a proportion of subject enrolments, 2001

7.7

17.1

11.3

13.2

7.7

14.3

1.1

4.1

11.1

0 5 10 15 20

NSW

VIC

QLD

SA

WA

TAS

NT

ACT

AUST

per cent

NCVER 2002, Australian vocational education and training statistics 2001


Increasing equity and Increasing equity and accessaccess

No fees in TAFE. In the interim:

• Consider a cap on annual fees

• Increase funding to reduce pressure to expand fee for service & maintain low fees

• Fund increased places for young and mature age people

• Commonwealth to provide $ for $ funds to assist colleges with high concessions /exemptions. (House of Representatives 1998)


2003 Federal offer for 2004-06

• Commonwealth offer of $218.7m on top of the current $1.1 billion for 2003:$43.4m in 2004, $74.6m in 2005 and $100.8m in 2006.

Total “growth” funds $325.5m including indexation – no actual increase over 2003.

$119.5 million for Welfare Reform Measures from previous budgets – including $29m for Disabilities package not passed by Senate.

• States required to match growth funding at 2003 level plus indexation ($325.5m) and meet other conditions eg improving User Choice, increased New Apprenticeships.

• States asked to match the $119.5 million.

• Total matching funding in offer - $445m


2004 to 2006 Projectionof Commonwealth ‘offer’

2003 2004 2005 2006actual

Basic Funding (1) 975.4 997.5 1,020.0 1,042.7Indexation 22.1 22.5 22.7 23.6Sub-Total 997.5 1,020.0 1,042.7 1,066.3"Growth" funding 100.0 100.0 100.0 100.0"Growth" indexation 4.0 6.3 8.5 10.7Total "Growth" 104.0 106.3 108.5 110.7Welfare Reform 16.9 35.4 41.8 42.2Total Funding 1,118.5 1,161.8 1,193.1 1,219.2

(1) "Basic Funding" includes major capital, VET in Schools, Skills Centres, National Projects etc


AEU Federal funding claim 2003

The Commonwealth must provide growth funding for new enrolments of at least $1080m for 2004-2006 made up of $180m for 2004; $360m for 2005 and $540m for 2006 indexed for inflation. (The system has been growing at about 5.9% per year.)

In addition:• Commonwealth and State and Territory Governments should fund Quality

Improvement Programs (QIP)• Governments should jointly establish an Education Equity Program (EEP)• The Commonwealth Government should contribute additional funds on a

dollar for dollar basis to the states and territories to assist TAFE institutions enrolling a disproportionate number of disadvantaged students.

• Commonwealth capital funding should be at least maintained in real terms and capital funding to private training providers be reviewed.


What You Can Do

Keep federal politicians informed about TAFE issues.

Inform your local community, industries and students about TAFE issues.

Support funding campaign activities.

Keep informed.

www. aeufederal.org.au

tafe funding: the need for a new deal 2003 update

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