THE SOCIAL AND ECONOMIC IMPACT OF FUNDING CUTS TO CHISHOLM INSTITUTE ON THE SOUTH

EAST COUNCIL AREAS OF METROPOLITAN MELBOURNE

JANET STANLEY

MONASH SUSTAINABILITY INSTITUTE

WITH

NATIONAL INSTITUTE OF ECONOMIC AND INDUSTRY RESEARCH

2

ISBN: 978-0-9870821-7-6

Report Number: 13/4

Acknowledgements:

The authors would like to thank Chisholm Institute and those who gave their knowledge and time to add considerable value to this report. They are not responsible for any errors in the report.

Citation:

Stanley. J. and NIEIR (2013) The social and economic impact of funding cuts to Chisholm

Institute on the South East Councils of Metropolitan Melbourne, MSI, Monash University, May.

3

CONTENTS Summary............................................................................................................................................................................... 4

1 Background ................................................................................................................................................................ 5

1.1 Introduction ..................................................................................................................................................... 6

1.2 Chisholm Institute ......................................................................................................................................... 6

1.3 Chisholm operating revenue ..................................................................................................................... 7

1.4 Chisholm courses ........................................................................................................................................... 7

2 Social and economic positions of the South East Metro Council areas ............................................. 9

2.1 Regional Employment Plan ....................................................................................................................... 9

2.2 Seifa Index....................................................................................................................................................... 10

2.3 Measures of socio-economic disadvantage ....................................................................................... 10

2.4 Drivers of Social Exclusion ....................................................................................................................... 13

2.5 Unemployment ............................................................................................................................................. 14

2.6 Income and Educational attainment .................................................................................................... 16

2.7 Migration ......................................................................................................................................................... 22

2.8 Conclusions .................................................................................................................................................... 22

3 State Government funding changes and response by Chisholm Institute .................................... 23

3.1 Government changes .................................................................................................................................. 23

3.2 Changes at Chisholm Institute ................................................................................................................ 23

4 Impact ........................................................................................................................................................................ 27

4.1 Direct Impact on Chisholm and the higher education sector in 2013 ................................... 27

4.2 Indirect impact on SE Metro Councils ................................................................................................. 31

4.3 Impacts on Specific LGAs .......................................................................................................................... 31

4.4 Reductions in income and employment as a result of cuts in TAFE funding ...................... 34

5 Conclusions .............................................................................................................................................................. 39

References .......................................................................................................................................................................... 41

APPENDIX A: SUBMISSION TO TAFE REFORM PANEL ................................................................................... 44

APPENDIX B: Discontinued courses at Monash University .......................................................................... 52

APPENDIX C: Spreadsheet for calculations of impact of tafe cuts on local economy ......................... 53

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SUMMARY This report aims to explore some the social and economic impacts on the SE Metro Region of

Melbourne which may arise as a result of the Government cuts to the TAFE education sector.

These significant cuts were estimated to be in the order of $30 million annually for the Chisholm

Institute. This amount will be slightly less, as a total of $50 million to all Victorian TAFES was

returned in March 2013, but this was after the initial restructuring had occurred.

The SE Metro group of councils, along with some LGAs in the outer West, bears the burden of a

high proportion of disadvantaged households when compared with Metropolitan Melbourne as

a whole. Particularly high levels of socio-economic disadvantage can be found in Greater

Dandenong, over double that found in Melbourne as a whole. This is also reflected in high

unemployment rates in Dandenong (9.3% in September 2012) and high levels also found in

Frankston.

The SE Metro area is heavily dependent on the TAFE sector for post-school education, when

compared with the rest of Melbourne. Over the Melbourne Metropolitan area, Dandenong (along

with three northern Melbourne LGAs) has the highest proportion of households with the lower

levels of TAFE qualifications (Certificate I or II). Low post-school educational attainment is also

present in Frankston and Casey. Thus the region, and particularly the above mentioned LGAs,

are likely to be particularly disadvantaged where there are cuts to the TAFE system of education.

The TAFE cuts will be manifest in the cessation of some courses, particularly those at the lower

Certificate level, there being an increased emphasis on higher qualifications, as well as likely

increased fees and a reduced education support service. This is likely to particularly

disadvantage lower qualification courses commonly taken by early school leavers, who are left

with few other training options. This is also likely to adversely impact on residents with a

disability, women seeking to return to work and recently arrived migrants seeking training. It

would appear that Greater Dandenong will experience the hardest impact arising from these

cuts, with the highest number of low income and disadvantaged residents and many early school

leavers.

These impacts are likely to have the unfortunate impact of compounding place-based

disadvantage, where multiple disadvantages in terms of poor education, low income,

unemployment or poor job security reduce housing affordability and may lead to poor health

and other adverse outcomes. Given the limitation of the modelling assumptions, the reduction

of the flow of funds (TAFE funding cuts) from the state and federal governments into the SE

Metro regions and the reduction in the productivity of labour in the region reflected in a

reduction in wage incomes, will result in a reduction in local spending power and in the sales of

local businesses. The outcome is that there is a loss of earned income in the region of $24 million

a year, rising to $48 million a year after 15 years. There is also a cost to gross regional product of

$40 million a year, rising to $73 million dollars a year.

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1 BACKGROUND

1.1 INTRODUCTION

The Report explores some impacts of the funding cuts to Chisholm Institute on the social and

economic outcomes for the South East Metro Council areas. The South East Metro Councils is a

coalition of Local Governments (LGAs) who work together on common issues and priorities. The

Councils which form this coalition are Frankston City Council, Greater Dandenong City Council,

Kingston City Council, Casey City Council, Cardinia Shire Council and Bass Coast Shire Council,

including Mornington Peninsula Shire Council for this study. Their locations are shown in Map

1.1.

Map 1.1: Locations of LGAs which comprise the South East Metro Councils

The Councils are concerned about the socio-economic impact of the cuts in TAFE funding to

their region and seeking to better understand the likely impact. This report investigates this

issue as far as possible. A submission to the TAFE Reform panel has already been completed and

can be viewed, together with the accompanying letter, in Appendix A. This submission drew on

information from key local experts.

Bass Coast

(s)

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The report outlines the range of courses offered by Chisholm and the size of the student

enrolment. It examines the present social and economic status of the SE Metro Council areas,

looking issues such as the extent of disadvantage, education, employment and levels of migrant

settlement, in comparison with other areas of Melbourne. The funding changes are documented,

together with the likely resultant changes associated with Chisholm. This is followed by a

discussion of the impacts of these cuts on the region, including the impacts on each LGA and the

income and employment impacts on the region.

1.2 CHISHOLM INSTITUTE

The dominant government TAFE provider in the SE Metro Councils area is the Chisholm

Institute. In 2011, it had 56,924 course enrolments across eight campus locations, off-shore

education delivery and on-line courses. The campus locations are based in each LGA area, except

Kingston. Kingston also hosts one of three campus sites for the government provided

Holmesglen TAFE.

Private providers also offer courses in these LGAs and beyond. A cluster of SE Metro LGAs

encompassing Cardinia, Casey, Frankston, Greater Dandenong, Kingston and Mornington

Peninsula, not Bass Coast, but including Glen Eira, Port Phillip, Stonnington and Bayside has the

following enrolments: about 40% of technical and trade education students enrolled in a

government TAFE, 50% in a private training provider and about 10% in Adult Community

Education. The latter program is where students learn generic skills, also known as

employability skills, life skills, or key competencies, in a less formal setting, such as

Community Learning Centres, Adult Education Centres or Neighbourhood Houses (Department

of Education and Early Childhood Development, 2012). The inclusion of the higher socio-

economic LGAs and the exclusion of Bass Coast, is likely to over-estimate the proportion of

students attending a private (fee paying) training centre in 2011 in the Chisholm catchment

area.

Table 1.1: Relative importance of Chisholm Campus locations, 2011 and 2012

Campus locations for Chisholm Course enrolment* and per cent of total enrolments 2011

Course enrolment and per cent of total enrolments 2012

Greater Dandenong 14,744 (25.9%) 15,468 (27.2%) Frankston 14,536 (25.5%) 14,896 (26.2%) Workplace 12,642 (22.2%) 12,658 (22.2%) Offshore delivery 5,493 (9.6%) 3,677 (6.5%) Berwick & Berwick Technical College, City of Casey

4,882 (8.6%) 5,102 (9%)

Cranbourne 2,241(3.9%) 2,034 (3.6%) Mornington Peninsula (Rosebud) 1,252 (2.2%) 1,216 (2.1%) Bass Coast (Wonthaggi) 623 (1.1%) 752 (1.3%) On-line 506 (0.9%) 629 (1.1%) Chisholm @ 311 (Dandenong) Not offered 514 (0.9%)

* This is course enrolment, not number of students.

Source: Chisholm Institute Annual Report 2011and 2012

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The relative size of each Chisholm campus is shown in Table 1.1. The relative sizes remained

fairly constant between 2011 and 2012. Frankston and Greater Dandenong campuses

comprised about half the Chisholm enrolments, both Dandenongs and Frankstons share

increasing between 2011 and 2012, especially when the new campus is considered. About one-

fifth of courses were undertaken from a workplace. Chisholm offers on-line courses and offshore

delivery, as well as satellite facilities such as city classrooms and the Phillip Island Education

Centre. Chisholm @ 311 was opened in August 2012, offering higher education qualifications

and graduate programs.

1.3 CHISHOLM OPERATING REVENUE

In 2012, Chisholm had 17,826 students enrolled in a Government Funded Accredited Program

and 21,278 in a Fee for Service Program. Of these, 1,481 students were enrolled in both funded

and fee paying courses. The Chisholm Annual Reports gives the sources of Operating Revenue,

the proportions of each source shown in Table 1.2. Most funding comes from the state

government, with just over one-quarter of the revenue coming from student fees. The 2011

Annual Report also notes that the total average cost per student contact hour for the year ending

31 December 2011 was $11.04 (excluding depreciation).

Table 1.2: Source of Operating Revenue for Chisholm, 2011 and 2012

Chisholm Operating Revenue % of Total Operating Revenue

2011 2012 Victorian Government funding 69.4% 69 % Fee-for-service 28.1% 26.3% Other (investment interest, donations, trading activities etc) 2.5% 4.7%

Source: Based on the Chisholm Annual Report, 2011, p.22 and 2012, p. 9

1.4 CHISHOLM COURSES

Chisholm offers the Victorian Certificate of Applied Learning (VCAL), the Victorian Certificate of

Education (VCE), certificates, diplomas, bachelor degrees and graduate certificates. Courses are

categorised in distinct levels, up from the basic Certificate I. Many of the courses offer

experience in the workplace and/or simulated workplace training

VET IN SCHOOLS

Students can include Vocational Education and Training (VET) programs as part of their senior

school studies. These programs count towards a Victorian Certificate of Education (VCE) and an

ENTER score for eligibility assessment for Further Education.

VCE AND VCAL

Chisholm offers senior secondary school certificates at Year 11 and Year 12 - the Victorian

Certificate of Education (VCE), and the Victorian Certificate of Applied Learning (VCAL). VCAL is

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a hands-on option for students in Years 11 and 12. It offers practical work-related experience,

as well as literacy and numeracy skills and personal skills. There are a number of VCE subjects

offered at Chisholm Dandenong and Frankston. Themed VCAL courses are offered at Chisholms

Berwick Technical College, and at Chisholm Frankston and Dandenong.

PRE-APPRENTICESHIPS

A pre-apprenticeship is a certificate course that introduces the skills required by industry, and

prepares the student for an apprenticeship. Unlike a full apprenticeship the student doesnt need

to be employed to do a pre-apprenticeship, although a place may be dependent on an interview

or exam. Courses take from 11 weeks full time, with most averaging around six months.

APPRENTICESHIPS AND TRAINEESHIPS

Apprenticeships and traineeships combine training with full time or part time employment.

To be accepted, a student has to be 15 years or over and have a formal Training Agreement with

an employer who is registered with an Australian Apprenticeship Centre. Traineeships can take

up to two years, and apprenticeships up to four years.

FOUNDATION SKILLS COURSES

Chisholm offers a range of English language, literacy, self management and job readiness courses

as preparation for work or study.

TAFE CERTIFICATES

Certificate I

Certificate 1 courses cover base-level skills for completing predictable or repetitive work.

Certificate II

These courses prepare students for entry-level positions or apprenticeships in a variety of

industries.

Certificate III

Students develop skills, theoretical knowledge and problem-solving abilities in career-relevant

Certificate III courses. This is commonly equivalent to trade level qualifications.

Certificate IV

Designed for supervisory and management positions, Certificate IV courses typically target

people wanting to advance their careers in the industry they already work in, or further develop

skills acquired through previous study.

TAFE DIPLOMAS

Diploma

Diploma level study develops both broad and in-depth skills in professional, technical or

creative fields.

Advanced Diploma

The Advanced Diploma offers high-level practical and professional skills, full-time courses

typically taking two or three years.

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VOCATIONAL GRADUATE CERTIFICATES

These courses are designed for Diploma or Degree graduates of other disciplines, or people with

substantial work experience, who wish to further their knowledge and broaden their skills

through study that applies theory to practice. These qualifications may also lead to qualification

for membership of various industry associations.

DEGREES

Chisholm is increasingly offering degree courses.

FURTHER STUDY

TAFE Certificates and Diplomas can provide occupational and educational pre-requisites for

further study. In many cases, Australian universities will also allow prior TAFE study to count as

credit towards a degree course.

Module load completion, defined as rate scheduled hours assessed as passed or satisfactorily

completed, is reported as 83.96% in 2011 (Chisholm Annual Report 2011, p. 98). About half the

students enrolled in 2011 were 15 to 24 years of age, the rest in the age range of 25 to 64 years

of age.

2 SOCIAL AND ECONOMIC POSITIONS OF THE SOUTH EAST

METRO COUNCIL AREAS

This section gives an overview of social and economic aspects of the SE Metro Council areas in

order to better understand the implications of TAFE cuts.

2.1 REGIONAL EMPLOYMENT PLAN

In the 2011-2012 budget, the federal government announced it would spend $3 billion in skills

and training initiatives. SE Melbourne (Frankston, Dandenong, Cardinia and Casey) was

nominated as one of 20 priority employment areas. It is unclear if this has occurred as yet, but

on May 1, 2013 an industry Innovation Precinct at Monash, was announced.

In a SE Melbourne employment plan, Baker (2012) notes that the area has a:

High unemployment rate

High youth unemployment

Low level of educational attainment, particularly higher education

High concentration of employment in manufacturing and retail trade, industries

sensitive to economic downturns. Manufacturing, which is in decline in Victoria at

present, accounts for 19.8% of total employment, compared with 10.7% nationally. The

major employment activity in Casey, Frankston and Cardinia is carried out by small and

medium enterprises, mainly in motor and building industries. Retail trade is 12.7%

compared with 11.7% nationally.

High proportion of people from a non-English speaking background

Workforce that is aging

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Baker (2012) also draws attention to the absence of transport infrastructure in the rapidly

growing areas of Casey and Cardinia, thus the need for the local development of jobs. This will be

are difficult task. Baker notes that the opening of the Eastlink freeway has had the negative

outcome of increasing competition for local jobs. However, it has also provided better access to

more distant jobs.

The suggested solutions to these issues in Bakers report all centre around skill development:

Support employment and skill development

Help retrenched workers into employment or training

Facilitate employment and training for job seekers, including those experiencing

disadvantage with a focus on industries with skill shortages.

2.2 SEIFA INDEX

The extent of disadvantage is often measured using the ABS SEIFA scores (Socio-Economic

Indexes for Areas). The Index of Relative Socio-Economic Disadvantage (one of three SEIFA

indices) measures relative disadvantage and is derived from characteristics such as low income,

low educational attainment, high unemployment, and jobs in relatively unskilled occupations.

Many decisions, including federal and state resource distribution for welfare related programs

are allocated on the basis of where the LGA sits on this index. The scale orders LGAs in Greater

Melbourne from the most disadvantaged, to least disadvantaged. In the 2011 rankings of

Melbourne City LGAs, Greater Dandenong was placed as the most disadvantaged, as in 2006.

Frankston was ranked as 4th disadvantaged down from 8th in 2006 and Casey came in at 9th,

down from 11th in 2006. Mornington Peninsula, Cardinia and Kingston were rated in the middle

order as 13th, 14th and 17th of 31 Councils.

The Shire of Bass Coast is not rated in the Greater Melbourne index. However, Bass Coast sits on

the third decile on the 2011 Victorian wide index of Relative Socio-Economic Disadvantage,

where 0 is highly disadvantaged and 10 is highly advantaged. For comparative purposes, Greater

Dandenong sits at the 2nd decile level, while the other LGAs sit in the 6, 7 and 8 range (ABS

2011a). This suggests that considerable disadvantage is present in Greater Dandenong,

Frankston and Casey, with some concerns in the other LGAs.

2.3 MEASURES OF SOCIO-ECONOMIC DISADVANTAGE

To examine the nature of this disadvantage further, work done by the National Institute of

Economic and Industry Research (NIEIR) is now reported. This work derived measures from a

range of available material from the ABS Household Expenditure Survey and modelling done on

estimates of population composition and unemployment (NIEIR 2009). The findings apply to

households where the oldest adult is between 26 and 64 years of age. It excludes homeless

households, group houses, which would include rooming houses, and households experiencing

temporary or short term difficulties. These omissions would tend to under-estimate the number

of disadvantaged households.

The findings are based on actual data up to 2009.2*, and projected data 2009.3 to 2012 based on

impacts arising from macroeconomic drivers of disadvantage. The major influence on outcomes

* The last digit refers to the quarter in the named year.

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is the level of unemployment an important driver for social inclusion and wellbeing.

Unemployment is defined for the purposes of the analysis as those who want paid work but are

not able to get it.

This definition is a little different to the federal governments definition as the NIEIR analysis

takes account of people who have given up looking as they believe there is little hope of getting

work and also accounts for those who have moved to a disability pension in preference to

continual unsuccessful looking for work. Those who have been unemployed for a long time tend

to move to a pension or benefit. This particularly happens during an economic downturn and

therefore the official government figures under-estimate the true unemployment levels. The

extent of youth unemployment also tends to be under-estimated in the official figures, as their

unemployment doesnt commonly increase the number of non-earning households, the basis for

the government unemployment rate calculations, as they commonly remain at home or move to

a group household, or they may become homeless.

This under-estimation of the true level of unemployment is supported by the AASW (2012) who

note that the official employment figure assumes that people have found at least an hours paid

work in the previous week. Thus, the official unemployment records do not take account of

hidden unemployment and those who would work if conditions were more favourable. The

official unemployment rate is therefore an extremely poor indicator in disadvantaged regions

(NIEIR 2009).

Information for three of the measures is given in this report, being: Financial Vulnerability,

Socio-economic Disadvantage and Serious Disadvantage. These are defined as follows:

1. Financial Vulnerability

Households were placed in this category where they satisfied the following three criteria:

Low liquidity less than $500 in a bank account

Low disposable income equivalised income less tax of less than $300 per week per

person in the household where an adult was rated as 1, subsequent adults at 0.5 and

children at 0.3 each.

No household member in employment

Such a household will be in difficulties in an emergency and would probably need to resort to

loans from welfare agencies or a high interest loan from a finance company.

2. Socio-economic Disadvantage

A household was placed in this category where it suffers from three or more of the following

disadvantages, where they could not afford:

a night out

a special meal

to invite people home for a meal

a holiday

new clothes

a hobby or recreation

These are not basic necessities, but all involve interactive type activities, so a failure to engage in

these activities will reduce the opportunity to obtain social capital and connect with their

community.

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3. Serious Disadvantage

This is where households are suffering from one or more of the following events:

Missed meals

Unable to heat their home

Pawned or sold something

Obtained material help from a welfare agency

Households engaged in one or more of these events are likely to be doing without necessities in

life. It was found that 62% of those who missed meals also experienced one or more other listed

deprivation, therefore all are closely related.

Table 2.1 gives the proportion of people in each category for the SE Metro Councils (excluding

Bass Coast) and for Greater Melbourne (excluding Port Phillip). In the SE Metro Councils,

Financial Vulnerability is slightly higher than the Melbourne average. However, the gap widens

for Socio-economic Disadvantage and Serious Disadvantage, with the SE Councils having a

higher proportion of households in this category than the average for Greater Melbourne.

Table 2.1: Proportion of disadvantaged households in SE Metro Councils and

Metropolitan Melbourne, 2012.2

Measure SE Metro Councils*

Metro. Melb.**

Range - Low

Range - High

Financial Disadvantage 8.8% 8.2% 0.6% 17.8%

Socio-economic Disadvantage

15.9% 12.8% 6.2% 22.1%

Serious Disadvantage 11.3% 9.5% 3.9% 14.5%

* This excludes Bass Coast

**Port Phillip is excluded due to data difficulties

Source: NIEIR 2009

In Table 2.2 it can be seen that Frankston, Cardinia, Casey and Dandenong have comparatively

high numbers of people experiencing Socio-economic Disadvantage and Serious Disadvantage.

At 22.1% of households, Dandenong has the highest level of Socio-economic Disadvantage of all

Melbourne Councils, with Cardinia coming fifth. Frankston is second highest for Serious

Disadvantage at 13.7% of households. The serious disadvantage in Cardinia is also concerning, it

being the fourth highest in Melbourne.

Table 2.2: Proportion of households experiencing disadvantage, 2012.2

Measure Dandenong Frankston Casey Cardinia Kingston M. Pen.

Financial Vulnerability 9.9% 7.7% 11.8% 10.0% 6.8% 6.7%

Socio-economic Disadvantage

22.1% 15.1% 16.3% 16.7% 13.2% 12.1%

Serious Disadvantage 10.9% 13.7% 11.1% 13.1% 9.4% 9.7%

Source: NIEIR 2009

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An Overall Disadvantage Index was created, defined as including all households with adults aged

25-64 who suffered from one or more of Serious Disadvantage, Socio-economic Disadvantage or

Financial Vulnerability. Using the Overall Indicator and looking at Melbourne and Geelong, the

most disadvantaged LGAs in 2012 were projected to be Greater Dandenong, followed in order by

Hume, Melton, Maribyrnong, Whittlesea, Brimbank, Wyndham, Casey, Frankston and Cardinia

(NIEIR 2009).

2.4 DRIVERS OF SOCIAL EXCLUSION

One way of examining the issue of the wellbeing of a person and place is through an examination

of social exclusion. Social exclusion can be described as the existence of barriers which make it

difficult or impossible for people to participate fully in society (Social Exclusion Unit 2003).

Commonly, the barriers are said to relate to five dimensions: income, employment, political

engagement, social support and participation (Gordon et al., 2000; Burchardt et al. 2002; Stanley

2011). The literature suggests that people who may be at risk of social exclusion include those

on a low income, those who are unemployed, aged people and youth, new migrants, people who

live in isolated areas, single parents, people with poor health and who have a disability.

Recent research based in Victoria has undertaken empirical measurement of social exclusion

and wellbeing, exploring the association between these concepts and the precursors for

achievement of a good outcome (Stanley et al. 2011). It was found that there was a strong

statistical association between social inclusion and self-assessed wellbeing, the higher a persons

social inclusion, the greater their wellbeing. The most critical precursors which lead to social

inclusion were found to be good social capital, relatively high income and relatively high trip

rates (travelling from their house and back by any means of mobility) and having the personality

characteristic of extraversion. Factors in addition to social inclusion which led to greater

personal assessment of good wellbeing, were environmental mastery (the capacity to manage

effectively one's life and surrounding world , positive relations with others and self-acceptance

(despite weaknesses), as well as having a positive sense of their local community. Thus, factors

such as education attainment and employment opportunities, which lead to an improved income

in addition to other capability benefits, become important for achieving social inclusion and

therefore personal wellbeing.

Social exclusion is multi-faceted and negatively reinforcing both on an individual and

community scale. Thus where a person has a low income, it may be common to find that the

person also has a low level of education, and perhaps other barriers such as poor health or poor

mobility. The drivers of exclusion and low wellbeing are also multi-faceted and relate to

institutional conditions or available resources such as available and accessible employment,

education and transport; situations specific to individuals, such as age, language and culture,

social capital; and external factors such as government policy, the state of the economy, societal

values and environmental conditions (Stanley 2011). Where many of these adverse drivers are

present, disadvantage and exclusion may become compounded and opportunities for positive

change diminish.

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In Melbourne, the trend over the past few decades has been that an important institutional

driver of disadvantage has been housing affordability. House prices have risen where there is

proximity to jobs, transport, cultural activities and parks and a leafy environment. The most

affordable houses have been on the fringe of Melbourne, but this is now moving further out into

the peri-urban areas, such as in Bass Coast (Birrell et al. 2012). The outer suburbs of Melbourne,

such as Casey and Cardinia, are also highly transport disadvantaged, and poor public transport

options have led to the importance of car ownership. Once people have been attracted to the

fringe because of the lower house prices, they find the cost of transport is high. Those people at

risk of social exclusion undertake less trips (Stanley et al. 2012). They also have lower levels of

social capital (especially bridging social capital, important for improving employment options),

lower attachment to the community, and lower income and wellbeing.

Poor institutional resources, such as mobility options and opportunities for education, have

been shown to compound disadvantage. In the chain of drivers, skill development leads to

improved employment competitiveness and higher earnings, leading to improved inclusion and

wellbeing. Thus, cutting infrastructure resources for TAFE institutions, which develop personal

skills and employment training, risks compounding disadvantage and social exclusion. Aspects

of factors leading to social exclusion are now examined further for the SE Metro region. Of

particular relevance to exploring the impact of TAFE cuts are levels of unemployment, income

and educational attainment, as well as the migrant experience.

2.5 UNEMPLOYMENT

Unemployment has adverse psychological impacts around feelings of self-worth, which often

heighten as the time out of work increases. The structure of a working week is not there, and a

major source of social contact through work is lost. Thus, long term unemployment risks that

basic needs may not always be met, it also diminishes a persons capabilities to meet their own

higher needs through participation and social contacts.

The Australian government defines unemployment as:

1. Persons aged 15 years and over who were not employed during the reference week, and:

had actively looked for full-time or part-time work at any time in the four weeks up to

the end of the reference week; and

2. Persons were available for work in the reference week; or

3. Persons were waiting to start a new job within four weeks from the end of the reference

week and could have started in the reference week if the job had been available then.

(http://www.abcdiamond.com/australia/definition-of-unemployment/)

The official unemployment rate for the Melbourne Metropolitan area was 5.5% in September

2012 (Table 2.3). As a whole, the unemployment rate for the SE Metro area is a little higher than

for Melbourne as a whole, Greater Dandenong with a high rate of unemployment at 9.3%. The

NIEIR unemployment rate (see explanation for this page 11) for 2012 in the South East Metro

Councils, excluding Kingston and Bass Coast, is 9.0%, thus based on the NIEIR definition,

unemployment in Dandenong would be much higher than 9.3%. Similarly, AASW reports that

when the unemployment rate was 5.2%, the ABS statistics indicate that 12.6% of Australians

who want a job, dont have one (AASW 2012).

15

While averages are given here, there is high variability in different locations within LGAs. For

example, Casey has unemployment at 3.8% in Berwick and 7.3% in the Cranbourne area.

Between 2006 and 2011 there has been a much stronger growth in part time than full time

work. This is especially so in Dandenong, where the growth rate over this time was 28.7%,

compared with the growth in Greater Melbourne of 18.9%. Over this period full time work in

Frankston and Dandenong grew at a slower rate than the growth in population in these LGAs.

Thus again, under-employment is likely to be high in Dandenong.

Table 2.3: Per cent unemployed in SE Metro Councils and Victoria

Area Unemployment rate September 2012

Youth unemployment rate (15 to 19 years) July 2012

Cardinia 5.0% SE Melb 22.8%

Casey 5.7% Frankston 6.4% Greater Dandenong 9.3% Kingston 6.5% Mornington Peninsula

4.7% 26.2%

Bass Coast 4.7% Gippsland 30.4% Average for SE Metro Councils

6.0% 19.3%*

Melbourne 5.5% Victoria 5.4% 29.5%

*This covers November 2011 to October 2012, Source: ABS Labour Force Survey February 2013

Source: DEEWR Small Area Labour Markets, 2012, ABS Labour Force data, July 2012, ABS 2006

Census of Population and Housing

Youth (15 to 19 years of age) unemployment in Victoria was an alarming 29.5% in July 2012. As

noted before, these official government figures are thought to under-estimate actual level of

unemployment. Casey and Dandenong have 14% of their population aged between 15 and 24

years, just above the Melbourne average of 13.8%, therefore youth unemployment would be a

greater drain on the LGA than found in many LGAs with a smaller proportion of youth.

Again, as can be seen in Table 2.4, Greater Dandenong stands out as having a high number of

jobless families with children under15 years of age (28%). The high number of jobless lone

parent families is particularly troublesome now that the Federal Government has moved single

parents on to Newstart allowance when the youngest child turns eight years of age. This

allowance is $130 below the poverty line ($244.85 per week) and only 65% of the Aged Pension.

16

Table 2.4: Characteristics of jobless families in the SE Metro Councils

Region* No. of jobless families with children under 15 years, 2006

Proportion of all families that are jobless with children under 15 years, 2006

Proportion of couple families that are jobless with children under 15 years, 2006

Proportion of lone parent families that are jobless with children under 15 years, 2006

Cardinia 700 11% 3% 44% Casey 3,600 13% 5% 46% Frankston 2,100 16% 4% 47% Greater Dandenong

3,500 28% 17% 61%

Kingston 1,300 9% 3% 37% Victoria 300,600 14% 5% 47%

*Excludes Mornington Peninsula and Bass Coast

Source: Neville, 2012, drawn from ABS 2006 Census of Population and Housing

2.6 INCOME AND EDUCATIONAL ATTAINMENT

The average household income within SE Metro Councils is below that of Metropolitan

Melbourne, the average being $1,133 compared to $1,333 for Melbourne as a whole (Table 2.5).

This is despite the fact that there are a lot of two income households in the growth areas of

Melbourne. However, between 2006 and 2011 median household income grew at about the

same rate as Metropolitan Melbourne. There is considerable variation between Councils, with

Bass Coast being the lowest at $855 median household income per week, followed by

Dandenong with $953. Cardinia and Casey have the largest incomes, Casey being just above the

Melbourne average, at $1,342 per week. As Casey is rated as fairly disadvantaged in the SEIFA

index, this suggests that Casey has high income inequality present.

The SE Metro Councils have a higher number of TAFE educated residents and trade and

technical occupations than the average for Greater Melbourne (Table 2.5). Frankston (8.9%) and

Dandenong (9.4%) have the highest levels of TAFE qualifications of the SE Metro Councils, well

above the Melbourne share of 7.2%. The SE Metro Councils have well below average levels of

Tertiary or University education when compared with the Melbourne average (9.2% vs 17.4%).

All the SE Metro Councils have a higher proportion of those who are engaged in an occupation,

working in a technical or trade occupation, when compared with Melbourne as a whole. While

the Melbourne rate sits at 13.4%, Bass Coast, Cardinia, Frankston and Mornington Peninsula

have a proportion of 18% or over. In contrast, the proportion of the working population who

are engaged in a profession are all below the Melbourne average. While Greater Melbourne sits

at 24.1%, the average for the LGAs is 15.8%, with Greater Dandenong was 12.4% and Frankston

15.5%. However the growth in professional occupations in Frankston and Dandenong, between

2006 and 2011, was at a higher rate than Melbourne as a whole, suggesting some gentrifying in

the region.

17

Table 2.5: Income, education and occupation of residents of the SE Metro Councils, 2011

Area Median Household Income p.w.

% of pop. 15 -24 years

% of pop. With TAFE edu.

% Uni. or Tertiary edu.

% in technical and trades of those occupied

% in Profess-ional occupation of those working

Bass Coast $855 9.1% 7% 4.5% 18.0% 14.5% Casey $1,342 14% 8.2% 9.3% 17.2% 13.8% Cardinia $1,303 13.6% 8.1% 7.4% 19.0% 13.9% Frankston $1,140 13.4% 8.9% 8.9% 18.0% 15.5% Dandenong $953 14% 9.4% 12.5% 15.9% 12.4% Kingston $1,292 11.9% 7% 14.3% 14.4% 22.3% Morn. Pen. $1,054 11.2% 7.2% 7.5% 18.7% 18.2% Total (av) $1,133 13.5% 8% 9.2% 17.3% 15.8% Greater Melb.

$1,333 13.8% 7.2% 17.4% 13.4% 24.1%

Victoria 13.9% Source: ABS 2011a, 2033.0.55.001 - Socio-economic Indexes for Areas (SEIFA), Data Cube only, 2011

Maps 2.1 to 2.3 visually show just how much the SE Metro region has a high dependence on the

TAFE sector for skills attainment when compared with the other Melbourne LGAs. The area has

a proportionally high number of households with Certificate III and IV, when compared with the

rest of Melbourne, except for Dandenong which has many households with the highest education

attainment being less than Certificate III. Casey and Frankston also have a high proportion of

households with no post-school qualifications.

18

Map 2.1: Percentage of households with highest qualification Bachelor or Higher,

projected for 2012

Source: NIEIR 2009

19

Map 2.2: Percentage of households with highest qualification, Certificate 11I/1V,

projected for 2012

Source: NIEIR 2009

20

Map 3: Percentage of households where highest education attainment is less than

Certificate 111, 2012

Source: NIEIR 2009

The achievement of a Tertiary education is higher in the younger age group, 25 to 34 years

(Table 2.6). However, the rate for a tertiary qualification in the SE Metro region remains low in

comparison to Victoria. The year 12 completion rate is below the Victorian average for all the SE

Councils except Kingston. The higher rate of TAFE qualifications when compared to Victoria can

again be seen in the younger group, except for Dandenong. This younger age group reflects a

different picture when compared with TAFE qualifications for all age groups, where TAFE

qualifications in Dandenong are the highest of all the SE Metro Councils (Table 2.5). It may be

that people train at an older age in Dandenong and/or there is a diminishing trend of TAFE

qualifications in Dandenong. This is a worrying trend as the proportion of people with a Tertiary

qualification is also lower in the younger age group (71.8% for all ages and 67.6% for those 25-

34 years). This suggests that education qualifications are diminishing in Dandenong.

21

Table 2.6: Educational attainment for those aged 25-34 years

Region* % Completed Year 12

% obtained Advanced Diploma or Certificate level

% Obtained Bachelor Degree or higher

Cardinia 55% 40% 16% Casey 63% 36% 18% Frankston 59% 39% 17% Greater Dandenong

67% 27% 23%

Kingston 78% 33% 34% Average for SE group listed above

64.4% 35% 21.6%

Victoria 73% 30% 34%

* Mornington Peninsula and Bass Coast data not available

Source: Neville, 2012, drawn from ABS 2006 Census of Population and Housing

Neville (2012) draws attention to the strong association between educational attainment and

employment outcomes for those in the 25 to 34 age group. Unemployment rates were 5.7% for

those who had completed year 12, compared to 10.3% for those who had not completed year 12.

Unemployment rates were 3.5% for those who had completed Certificate 111 or 1V, 3.5% for

those who had completed a Diploma or Advanced Diploma and 3.4% for a Bachelors Degree or

higher.

Table 2.7 Per cent not obtaining minimum reading and numeracy standards in selected

areas, 2011

Area % of year 9 students who did not meet the minimum standard for reading

% of year 9 students who did not meet the minimum standard for numeracy

Dandenong 17%* 8%* Frankston 14%* 12%* Kingston 10%* 3%* Victoria 4% 4%

*The calculation is based on one representative school in each LGA

Source: Neville, 2012, drawn from Myschool website: www.myschool.edu.au

The poor outcomes in literacy and numeracy in Dandenong and Frankston (Table 2.7) are of

considerable concern when these youth are looking for employment in the future. However, it

needs to be noted that the figures are based on a small sample size. The high levels of

disengagement, that is those not studying or employed, particularly for females in Casey,

Frankston and Greater Dandenong is of considerable concern (Table 2.8). It is known that:

Disengagement from work or study can be debilitating, isolating and incur social, economic

and personal costs to those who are disengaged, the communities in which they live and

to the broader economy (Walsh 2011).

22

Table 2.8: Disengagement in 20 to 24 year olds in selected areas

Area *** Not in labour force and not studying*

Unemployed and not studying**

M F M F Casey 6% 4% 5% 13% Frankston 7% 5% 6% 14% Greater Dandenong

5% 7% 6% 15%

Victoria 5% 4% 5% 9%

* Person doesnt have a job and is not looking for employment

**Person not employed but looking for employment

***Note: Kingston, Mornington Peninsula and Bass Coast not available

Source: ABS 2006 Census of Population and Housing

2.7 MIGRATION

Migration is a considerable issue in some of the SE Metro Councils. Some 28,100 migrants have

settled in Casey, Cardinia, Frankston, Greater Dandenong and Kingston in the past five years

(Neville 2012). Greater Dandenong has over 100 nationalities in residence with 62% of

residents being born outside Australia (South East LLEN 2013).

These migrants have tended to be proportionally more in the family migration stream (37%)

and the humanitarian stream (12%), rather than the skilled migration stream (51%), when

compared with those settling elsewhere in Australia (33%, 6% and 61%, respectively). 71% of

the family and humanitarian streams have no, or poor English language proficiency, many of

these migrants coming from a non-English speaking country, in comparison with those settling

elsewhere. Those migrants coming from a non-English speaking country experience a lower rate

of employment than those from an English-speaking country. Over half (59%) of the working

age population in Dandenong were born in a non-English speaking country.

2.8 CONCLUSIONS

This the picture which emerges from this above analysis is the extent of disadvantage that can

be found in some parts of the SE Metro region, particularly in Greater Dandenong, but also in

Frankston and some districts in the other Councils. This is particularly in relation to

unemployment, youth who are, or at risk of disengagement, sole parent families and migrant

families. While the cause of this disadvantage is complex and includes issues such as a lack of

public transport and other services, education leading to employment and thus the chance of a

higher income, is a key aspect to lowering this experience of disadvantage, both at an individual

level and at a community level. The heavy dependence of the area on the TAFE system for post-

school training is also very clear.

23

3 STATE GOVERNMENT FUNDING CHANGES AND RESPONSE

BY CHISHOLM INSTITUTE

3.1 GOVERNMENT CHANGES

Prior to 2009, the Victorian government subsidized a limited number of places from TAFEs and

some private registered training organizations. In 2009 the Victorian government uncapped the

funding under the Victorian Guarantee. Government funded TAFEs enrolments grew by 4%

between 2008 and 2011, while enrolments in private training operators grew 310% and the

number of private providers more than doubled over the same period, from 202 providers in

2008, to 430 in 2011. The cost of this in the first year was $300 million.

In the May 2012 budget, the Victorian State Government announced a funding cut of 22% from

particular vocational programs from the start of 2013, for public and private technical TAFE

training courses. Support rates for some courses were cut to less than $2 per student contact

hour, from the previous levels of between $6.50 and $10 per hour. It also abolished block

funding to TAFE institutes which had supported activities such as courses to support social

inclusion, support for those students with special needs and other local social justice obligations.

The Victorian TAFE Association has said this cut will be in the order of $300 million (Gordon

2012). Caps on fees which can be charged were also removed, leaving the way open for TAFE

and private training institutions to raise fees for courses.

In March 2013, the Victorian Government announced it would provide an off-setting $50 million

annually over four years, thus reducing the cut to $250 annually (Preiss and Cook 2013). The

number of private Registered Training Organisations eligible to receive subsidised training was

reduced in 2013 by 20%, from around 500 to 400 (Sheehan 2013). The changes to the Victorian

TAFE system were said to make the system more commercially oriented, in line with the

recommendations of the Report of the TAFE Reform Panel (Sheehan 2013).

3.2 CHANGES AT CHISHOLM INSTITUTE

Chisholm Institute believes that these changes will impact on: Course delivery Revenue Students, and Staff

The 2012 Annual Report reports that total income received by Chisholm in 2012 was $132.9

million. Chisholm reports that the financial impact of the most recent government funding cut is

estimated to be a reduction in revenue of $26.5 million for 2013, nearly one-third of government

funding (Peters 2012). In October 2011, Chisholm funding was cut by $4 million. The combined

total of these cuts is about $30 million annually.

Chisholm believes that the most significant budget impacts will be the loss of $16 million of

about $19 million of annual government funding for full service provision. This funding

supported the Institute to meet its community service obligations and to meet wage changes

required under the terms of the public sector Institutes enterprise bargaining agreement.

About $9 million loss relates to the funding of courses.

24

Chisholm estimates that this funding cut will mean a loss of 220 staff, or 20% of EFT staff who

were employed in 2011. 46 courses will be discontinued, with three added, there will be a

restructuring of courses and fees will be charged in some vocational areas. 230 courses will be

continued. Chisholm anticipates growth in Community Services and Health, the Construction

Trades and Telecommunications.

The restructuring was overviewed in a presentation by the CEO of the Chisholm Institute (Figure

3.1). While maintaining strong ties with VET and VCAL at schools, Chisholm will also seek to

offer higher level qualifications through degrees and stronger contacts with Universities.

Chisholm course areas with no or limited resource allocation for 2013 are in the following areas:

Business & Clerical

Legal Services

Retail

Liberal Arts

Hospitality & Events

Marketing

Food and Meat Processing

Ceramics

Professional Writing & Editing

Fitness

Sport & Recreation

Growth is expected in Community Services & Health, the Construction Trades and

Telecommunications (Peters 2012).

Figure 3.1: Restructuring of Chisholm TAFE courses from the beginning of 2013

25

DISCONTINUED COURSES

Forty-six courses have been cancelled for 2013. 2,259 students were enrolled in these courses in

2011. This represents 5.2% of total enrolments in 2011. This averages 49 students per course,

but the numbers undertaking each course varied widely from 1 person in 7 courses to 264

students in one course 2 courses having over 200 students and four with over 100 students. All

campuses are impacted with course closures, Bass Coast losing the most, with 18% of students

who had been enrolled in 2011 in the courses cut for 2013. Most campus had 5% to 9% of

students enrolled in the cut courses, with Mornington Peninsula losing a potential 2% of

students. The number of students in each Campus includes VET enrolled students.

66% of enrolments of the courses dropped were undertaken by females. Most people

undertaking these courses were between 15 and 24 years of age (Figure 3.2), although the full

age range is well represented in the courses.

Figure 3.2: Age of students doing the courses in 2011 which have been discontinued for 2013

Source: Derived from data provided by Chisholm Institute Most people undertaking these courses in 2011 were medium socio-economic status few being

in the high category (Figure 3.3). The course with the clearest exception to this, which had more

participants from the higher socio-economic category, is the Diploma of Management.

The ABS defines socio-economic status as a relative concepts which defines peoples access to material and social resources and their ability to participate in society (ABS 2011b).

0

100

200

300

400

500

600

700

800

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+

N

u

m

b

e

r

Age

26

Figure 3.3: Socio-economic status of those undertaking the courses in 2011 which have been discontinued for 2012.

Source: Derived from data provided by Chisholm Institute In relation to prior qualification, most students (70%) had no previous qualifications for

whatever level course is chosen (Figure 3.4). While this lack of prior qualifications is highest for

Certificate courses, over 30% at Diploma level have no previous qualifications.

It would seem that about 20% of students doing a Cert 1 or 11 had done a higher or equivalent

qualification prior to their current one. Thus, as government funding support is only for a

pathway progression through one discipline, this suggests that 20% of students were paying

their own course fees. The proportion paying course fees heavily reduced to only 4% of students

for Cert IV level qualifications.

Figure 3.4: Prior qualifications for those undertaking courses in 2011 which have been discontinued in 2013.

Source: Derived from data provided by Chisholm Institute

0

200

400

600

800

1000

1200

1400

Low Medium High

N

u

m

b

e

r

Socio-economic status

0

10

20

30

40

50

60

70

P

e

r

c

e

n

t

a

g

e

Prior qualification

Total

Cert 1, 11

27

NEW COURSES

Chisholm has notified that a Certificate 11 and 1V in Fitness is now a one year full time course.

A Diploma of Sport Development/Diploma of Sport and Recreation Administration is offered as

a one year full time course and a two year full time Diploma of Arts Therapy is being offered for

2013.

4 IMPACT Overall, it appears that the impact of funding cuts to Chisholm TAFE will be felt most by students

already experiencing some social exclusion and disadvantage. In general, it would appear that

most courses that have been terminated are the lower qualification certificate courses, some

subject matter being offered at the Advanced Diploma level. Web site for course changes:

http://www.vtac.edu.au/courses-inst/courseupdates.html

The big unknown is the number and type of courses where fees will be charged, or increased,

and the rate of fee charging. While this aspect is unknown, it is likely that there will be high

elasticity for fee rises. This means that changes in price are likely to have a relatively large effect

on the quantity of people enrolling for a course. This will be particularly so for students who are

disadvantaged and have a low income. This will be compounded by the significant loss of

funding for support for special need students who were assisted under the community service

obligations. It is likely that without this support, there will be a higher drop-out rate from

courses from those students experiencing disadvantage who do undertake a course.

Overall, 6,700 government funded students at Chisholm in 2011, were low Socio-Economic

Status with most of these students undertaking Certificates 1V and Diplomas, rather than

apprenticeships where the funding support has been maintained. It is likely that a proportion of

low SES students will not be able to afford to pay TAFE fees in 2013 and beyond. The loss of the

additional support structures where most funding has been cut will compound the difficulties

for low socio-economic students. Thus, there is a risk of a significant loss of students up to 37%

maximum (the proportion of low socio-economic students).

4.1 DIRECT IMPACT ON CHISHOLM AND THE HIGHER EDUCATION SECTOR IN 2013

The following are likely direct impacts to the Chisholm Institute and students.

1 IMPACT ON COURSES

The cut of funding has led to a reduction in courses which can be offered, although funding for

apprenticeships, courses in Disability and courses in Aged Care has gone up, as has funding for

apprenticeships.

2 LOWER NUMBER OF STUDENTS AT CHISHOLM

The impact on student numbers is uncertain, although the totality of impacts, 220 less staff, net

loss of courses especially at the lower qualification level and rise in some course fees, suggest

that total number of enrolments will be down in 2013. Chisholm anticipates that student

numbers will be reduced for the subsequent three years and then will re-build. It is uncertain

where the replacement students who are able to pay fee costs will come from. It appears that

28

Chisholm is hopeful that they will take the higher qualification courses and degree courses,

subsidized by the federal government HECS scheme.

3 INCREASED FEES FOR SOME COURSES

Some fees increased from 1 July 2012 and others were increased from the beginning of 2013.

Where this is occurring and the extent of the rise in fees, is not clear. The change in fee structure

has differentiated between apprenticeships and traineeships. It is likely that this will result in a

decline in traineeships by about 80% (opinion of person in the sector).

Funding for apprenticeships has increased. Apprenticeships cover major building trades,

plumbing, electricians, automotive, hairdressing, chef etc. There is no age barrier for entry to

these and the training costs are funded. It could be a school-based traineeship. Traineeships

cover other areas, such as retail, business, finance and accounting, sport, fitness, floristry, HACC

services and aged care, health services, child care. There is no funding if a potential student

already has a qualification in another field - the person will have to pay the full fee rate. This

disadvantages females who have a previous career and decide to, say, enter the health care

sector after a time out of the workforce raising children. They could do an apprenticeship but

this may not be in an area of interest, especially for females, and the course structure may not

suit, such as length of training. The funding for traineeships, previously $9 an hour, has now

gone down to $1 an hour, thus the student will need to now pay $8 an hour where a course is

offered. Trainees do approximately six hours a week training while they are employed in the

sector.

4. CHANGES IN STUDENT PROFILE

The courses cut were taken by younger age students and those with no previous qualifications.

The profile of TAFE students is likely to move to those with a higher qualified education

background, less younger students, possibly more part time students, and fewer students from a

lower socio-economic background. Thus, the important role that Chisholm TAFE was provider

as a means for skill development for those with fewer opportunities to gain this elsewhere, has

now diminished.

5 INCREASED COMPLEXITY AND LACK OF COHERENCE IN COURSE PROVISION AND FUNDING

The scheme called FEE-HELP, will assist students to pay for Diploma level courses, but this is

not available outside a Diploma level. VET FEE-HELP is an income contingent loan scheme that

assists eligible students to pay for all or part of their VET tuition fees when studying one or more

of the following accredited VET courses at Chisholm: Diplomas, Advanced diplomas, Graduate

certificates. A different form of the loan scheme, FEE-HELP, is available for Chisholm degrees.

Students do not have to repay the VET FEE-HELP loan - which is provided by the Australian

Government until their income is above the minimum repayment threshold for compulsory

repayment. An eligible student must be an Australian citizen or permanent humanitarian visa

holder who is resident in Australia for the duration of study. There is no age restriction on VET

FEE-HELP.

Some fields or disciplines have clear pathways through the different levels of training, some of

which will now be disrupted. For example, if a school offers, Certificate 1 or 11 through VET at

schools, then this wont impact on funding eligibility for further courses at TAFE if the person is

29

under 21. However, if a person wanted to do a course as an adult, say a women returning to

work, as noted earlier, and they already had some training, they would not receive funding to

train in another area. If it is not viable to run a parent program say at Diploma level, then the

courses leading to this, such as Certificate 111 and 1V would also not be viable. However, as

noted earlier, not all students follow the prerequisite pathway.

6 LOSS OF SOME OF THE SUPPORT STRUCTURE FOR STUDENTS GENERALLY AND PARTICULARLY

DISADVANTAGED STUDENTS

Chisholm Institute offered considerable supports for students with special needs, such as those

with a disability, sole parents with young children, assistance with literacy and English as a

second language, as well as classes for youth not succeeding in a school environment. It is likely

that these services will now be discontinued or considerably reduced, thus again this will

adversely impact on those who experiencing disadvantaged.

7 COURSES IMPACTED IN OTHER TERTIARY INSTITUTIONS AND SCHOOLS

Work had been done over the past few years to develop a pathway of TAFE students to Monash

University at both the Frankston and Berwick campuses. This was particularly for students

qualified in:

Sport and Recreation

Business

Tourism

Hospitality

Allied health assistance and massage therapy

These fields sit in areas where courses have been cut. The course cancellations by Monash

University are shown in Appendix B, Table B.1.

While not a lot of students come from Business, Tourism or Hospitality at Chisholm, a more

common pathway for TAFE students is to enter Monash through a Diploma of Tertiary Studies

offered by Monash which could then assist entry into Business at Monash after one year, subject

to a good standard of marks. About 80 students take this course their living location is

unknown. Entry is about 10% to 20% lower than the general Tertiary Entry score. About 50% of

students go on to nursing, business and education. With TAFE cutting Diploma level courses,

there will be a stronger demand for this Diploma of Tertiary Studies, however the level of intake

is capped by federal funding.

Allied health assistance and massage therapy offered a pathway to Occupational Therapy and

Physiotherapy at Monash University. The nursing pathway from Chisholm to Monash offers an

intake at second year at Monash from a Diploma of Nursing at Chisholm for about 40 students.

While Diploma of Nursing is not a course that has been cut, it is a more complex and expensive

course to run as it needs specialised facilities, so may be vulnerable in the future.

It is common for students to do Certificate 111 and 1V and then do a single year 3 for a Diploma.

Cutting out the Certificates has the impact of students entering other courses and the workforce

with less experience and less maturity.

30

About 80 students in the past six years have come through to Education at Monash from

Chisholm, doing a four year double degree for Primary or Secondary Education. This pathway

from Chisholm represents about 15% of each years intake at Monash.

To speculate: the cuts to Chisholm will impact on 15% to 20% of student intake levels at Monash

in some courses, and it is possible that future developments at Monash Berwick are now at risk.

8 POSSIBLY SOME INCREASED PLACES IN PRIVATE TRAINING CENTRES

There are a wide range of private providers of training which enrol, in total, a similar number of

students to Chisholm. For example, local fitness centres and Crown Casino offer training and get

state support for this. It is possible that private providers will pick up on courses discontinued at

TAFE; however, they tend to offer both lower cost courses and courses attractive to those who

can afford a course fee.

However, in some situations, private providers may also not continue with some courses

because it may be felt that there are an insufficient number of students who are able to pay fees.

This is the case with Certificate 111 in Finance, provided in the Dandenong area where one

school decided not to offer the subject. There are eight courses not being offered in schools in

Dandenong. This has disrupted pathways for disciplines for some subjects, especially those

popular with females retail, hospitality and business administration.

There is anecdotal evidence which questions the quality of training provided by some private

training facilities, while the quality is good in other facilities. Courses can be very short and offer

little hands-on experience or personal contact. One consequence of this is their low

employability even although the course has been undertaken. There are also some known

instances of a lack of sustainability of some private trainers, leaving some students unable to

start or complete their courses.

9 STAFF LOSS AT CHISHOLM

Chisholm has reduced staff numbers by 220 People. The mix of educators, administrators and

support and maintenance staff, is unclear. However, the loss of 20% of staff suggests that it will

be more difficult to maintain the comprehensive service offered previously.

10 DISCONTINUITY IN RELATIONSHIP BUILDING AND COURSE INTEGRATION BETWEEN INSTITUTIONS

Education coordination and cooperation has been taking place over the past few years across

tertiary education providers. Schemes such as shared teaching and shared staffing were

developing. Certificate 111 and Certificate 1V were being embedded in courses at Monash with

shared credits. Early 2013, these opportunities were said to have stalled.

11 UNCERTAINTY ABOUT THE FUTURE

Planning is difficult due to the uncertainty of response of potential students to the changes.

Courses are being offered at the more qualified end of education where there is greater certainty

of affordability to students. The researcher also learned of the hope to establish Frankstons

future strengths around a knowledge centre and education hub close to central Frankston. This

is less likely to be achieved in the context of the TAFE cuts. A two-tiered community where there

are diminished opportunities for people experiencing disadvantage, and possibly an increase in

numbers of people experiencing disadvantage, will be less cohesive and less successful overall

31

(Wilkinson and Pickett 2010). The psychological impact of this is also an important factor, for

both industry and community wellbeing and resilience.

4.2 INDIRECT IMPACT ON SE METRO COUNCILS

PERSONAL ADVERSE IMPACT ON SOME GROUPS OF PEOPLE

There appears to be a general belief both in the literature and those people with whom the

researcher spoke, that people already experiencing disadvantage and social exclusion will be the

hardest hit by the TAFE cuts. However, the extent of this is uncertain. For example, people with a

disability have a low average level of income. 7.2% of TAFE students have a disability or long-

term medical condition, compared to 3.5% of university students, so TAFE is an important

training institution for this group of people (Stone 2012).

Chisholm has 10,000 students from a culturally and linguistically diverse background, with the

majority having less than year 9 qualifications (5,500 students). The outcomes for this group are

strong due to the levels of support they receive, which Chisholm believes may be in jeopardy.

Women wishing to gain qualifications to return to work will find this more difficult. This is

particularly troublesome with the federal governments recent changes which place single

parents on Newstart payments when their youngest child reaches eight years of age.

POSSIBLE ADVERSE IMPACT ON REGIONAL BUSINESSES IN THE AREAS OF TOURISM, HOSPITALITY, HEALTH

AND AGED CARE.

Regionally, there may be a large impact on employment, not only in relation to fully trained

workers but also those undergoing training. The students are often employed on the basis that

they have achieved Certificates and work part-time while they continue with higher training.

This will impact on people working in care, after school programs, swimming pools and gyms.

For example, students with Certificate 111 and 1V often work in aged care part time while

studying nursing. Thus the regional casual and lower end workforce is at risk.

LESS EXPERIENCED PEOPLE GOING INTO THE WORKFORCE

The lack of funding for traineeships for older people returning to work will reduce the maturity

and life-experience of the workforce. The greatest adverse impact is likely to be in aged care.

OTHER IMPACTS

A need to build support and welfare structures to cater for more people, especially youth

Continuity of inter-generational disadvantage

Adverse impact on communities already struggling with disadvantage

Impact directly counter to federal governments desire to increase tertiary education

options for low socio-economic people

Possible oversupply of trades-people where the funding for apprenticeships has not

been cut

4.3 IMPACTS ON SPECIFIC LGAS

This section provides a view on the possible impacts on specific LGAs. Table 4.1 shows the

potential loss of students in each LGA if only low-socio-economic students drop-out.

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Table 4.1: Characteristics of 2011 students doing the discontinued courses

Living location of Chisholm students who took the now discontinued courses

No. of students enrolled at Chisholm campuses

No. of students enrolled in government funded places & % of enrolments

No. of students who did the now discontinued courses

Potential loss of students in each LGA *

Low socio-economic status, 37%, assume spread evenly**

Potential loss of students in each LGA if only Low socio-economic students drop-out

Mornington Peninsula

5,959 4,008 (67%) 291 7.3% 108 2.7%

Casey 8,799 7,162 (81%) 660 9.2% 244 3.4%

Frankston 5,105 3,568 (70%) 328 9.2% 121 3.4%

Kingston 2,218 1,127 (51%) 68 6% 25 2.2%

Cardinia 2,115 1,455 (69%) 155 10.7% 57 3.9%

Greater Dandenong

3,936 3,299 (84%) 232 7% 86 2.6%

Bass Coast 2,437 644 (26%) 113 17.5% 42 6.5%

*There is the assumption that students are not able to move to another course.

** Assumption that only the proportion of low socio-economic students will not transfer to another

course.

Source: Information provided by Chisholm TAFE

Depending on the fee rise for other courses, and the size of the rise, it is likely that there will be a

drop-out rate beyond those who had intended to do the discontinued courses. The total number

of low socio-economic students at Chisholm in 2011, was 6,700.

GREATER DANDENONG

It is suggested that Dandenong will be the hardest hit LGA. Dandenong has the highest number

of low income and disadvantaged households of the SE Metro Councils. In 2011, 3,936 residents

of Greater Dandenong were enrolled with Chisholm (all funding sources including fee for service

courses). Of these, 19.4% had completed Year 12 and 46% had completed Year 9 or less. The

highest enrolments (651) were in English language courses to improve language and numeracy

levels to enable them to participate more effectively in further training or employment, English

as a second language, and English for Employment. It is unclear if these courses were funded

under the block funding grant for social inclusion, which has now been discontinued. If this is so,

the impact on Dandenong will be severe as a further 19.7% of students from Dandenong will be

likely to be disengaged in these courses. Greater Dandenong also had the highest proportion of

Chisholm students in government funded courses.

Greater Dandenong and Frankston have campuses of 14,744 and 14,536 students, many of

whom travel from other areas, both in the SE Metro Councils and elsewhere. These are three

times the size of other campuses. The likely reduction in student numbers will be felt on the

economies of these two LGAs. It is uncertain where the staff lived who have been retrenched,

but at least some are likely to be locally based.

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CASEY

Casey is likely to be also impacted by the TAFE cuts. While its disadvantage scores are not as

high as Greater Dandenong or Frankston, it has a high enrolment in Chisholm TAFE and a high

proportion of these were in government-funded places. Casey also had a much higher enrolment

in the courses that are now discontinued, than other LGAs.

FRANKSTON

Frankston is likely to be adversely impacted by the cuts to Chisholm. It has relatively high rates

of people experiencing Serious Disadvantage and one of the higher levels of unemployment,

particularly in households with children. Frankston also had high numbers of government

funded students enrolled in Chisholm.

Chisholm notes that it is expected that:

There will be a reduction in 2013 in the number of students at the Frankston campus,

with a gradual return to present numbers over three years

Youth will be affected e.g. VCAL, Pre apprenticeships

Disadvantaged groups e.g. women, unemployed will be adversely impacted

Pathways will be restricted in some industries and this affects pathways across the full

range of qualifications

Increases in tuition fees may impact on low-SES students adversely, however Frankston

has the fewest low SES students (27% of campus)

There will be no business, marketing and management courses left at Frankston

There are few gaps in training at Frankston: business services (but accounting remains),

events (but tourism remains), Hospitality and Retail

Chisholm sees opportunities as:

Growth in key employment sectors, e.g. Health

Frankston Tertiary Centre development

Staged tuition fee payment system

CARDINIA

While average unemployment is low in Cardinia, there are pockets of Serious Disadvantage.

Cardinia has the lowest number of Chisholm enrolled students of all the SE Metro Councils.

However, Cardinia is the highest LGA with trade and technical employment and has a high

potential proportional loss of students.

MORNINGTON PENINSULA

Mornington Peninsula, having an older population, has a low unemployment rate and lower

levels of Serious Disadvantage (this measure excludes those of retirement age) than found in

other SE Metro Councils. Mornington Peninsular had the third highest enrolments in TAFE and

had high numbers of government places, about 1 in 5 of the students, attending outside the local

Mornington Peninsula campus most travelling to Frankston. About 300 students had

completed the now discontinued courses.

Chisholms view is that in the Mornington Peninsula, it is expected that:

Gaps in training in Business Services, Aged Care/HACC (both had been in decline) will

lead to lower numbers of trained staff

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Increases in tuition fees may impact on low-SES enrolments (34% of the campus)

Peninsula TAFE has a focus on disadvantaged groups e.g. women returning to study and

Youth. These groups will be influenced by the fee increases and reduction in courses

Chisholm sees the opportunities to include:

Growth at Mornington Peninsula campus, in the traditional construction trades,

childrens services and commercial cookery

Staged tuition fee payment system

Technical Trade Centre

Connectivity to other campuses

BASS COAST AND KINGSTON

These are likely to be the least impacted LGAs. Kingston has lower levels of disadvantage,

although a fairly high unemployment rate. Bass Coast has an unemployment rate lower than the

state average, although this may change now the construction of the desalination plant has

finished, thus reducing available employment options.

4.4 REDUCTIONS IN INCOME AND EMPLOYMENT AS A RESULT OF CUTS IN TAFE

FUNDING

The reduction in the finance available for TAFE courses primarily reflects the priorities of the

Victorian government. However, given the heavy dependence of state governments on funds

raised by the federal government, the Commonwealth cannot escape its share of responsibility.

Expenditure cuts at state level are the inevitable result of federal small government policies

which prioritise low taxation over government services. Whereas at local government level it is

possible to have a rational discussion about the balance between taxation (rates) and services

provided, at federal level the issue seems to be decided by combinations of ideology and

lobbying. Rarely is there any attempt to weigh the costs of Commonwealth/state parsimony

against the benefits of low taxation. This section is intended to contribute to the debate by

assessing the costs to the community in South East Melbourne of the cuts to the funding of

Chisholm Institute and consequent reduction in the provision of courses.

It is emphasised that this is no more than an order of magnitude study, heavily dependent on

simplifying assumptions. The simplifications arose partly from lack of data and partly from

limitations in the resources available for the study. It is common procedure in economics to use

simplifying assumptions to yield preliminary results on the basis of which it can be judged

whether additional work to relax the assumptions is warranted.

The basic methodology involves comparison of a base case in which TAFE funding continues at

2011 levels and a policy case in which funding is reduced. The funding cuts have two main

effects:

Cancellation of courses and

A reduction in employment in the provision of TAFE services.

Assumptions were made to quantify both effects.

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REDUCTION IN EMPLOYMENT IN EDUCATION

As reported above, Chisholm Institute has published estimates of the reductions in employment

and wages which are expected to result from the budget cuts. NIEIR allocated these to the

employment levels by LGA according to student numbers in each facility. The reductions were as

follows:

Greater Dandenong $6.9m (2012$)

Frankston $6.8m

Casey $3.4m

Mornington Pen $0.5m

Bass Coast $0.4m

The total is $18m a year, which translates directly into similar reduction in Gross Regional

Product.

It is frequently argued that such reductions are self-correcting, mainly through price effects. For

example, it could be argued that this reduction over-estimates the likely reduction in

employment since it does not take into account the possibility that private providers will jump

in with substitute courses, so increasing employment in the private education sector. However,

such courses would be fee-financed and cannot realistically be incorporated into the assessment

without allowance for this. In effect, the private courses would substitute finance by local

consumers for finance from federal/state sources, with resulting pressure on household

disposable incomes. Unless there is a substitute flow of funds into the region to make up for the

loss of inflow from state/federal sources, it is difficult to envisage employment being

maintained.

REDUCTION IN COURSES

The above discussion of the number of potential students likely to drop out of further education

as a result of the course cuts is distilled into the assumption that, in each year from 2013 on, the

number of students dropping out will equal the number of low-SES students who did the now

discontinued courses in 2011. We assume that all drop-outs would have been candidates for

Certificates I or II. The number is given for each LGA of residence in Table 4.2. The drop-out rate

so assumed, expressed as a percentage of a one-year cohort of students in each LGA, is as

follows.

Table 4.2: Reduction in student numbers in relation to a one-year cohort

LGA Number Percentage (males) Percentage (females) Mornington Peninsula 161 5.2 11.7 Casey 299 4.8 10.4 Frankston 174 6.3 14.3 Kingston 49 1.8 4.3 Cardinia 82 5.0 10.5 Greater Dandenong 102 3.7 8.3 Bass Coast 158 29.3 64.5 Source: Table 3.2, ABS 2011 Census,

Note: The one-year cohort is the population aged 17; discontinuing students assumed to be two-

thirds female.

In strict terms this assumption is unrealistic. Some low-SES students will find alternative

courses; some higher-SES students will drop out. It is adopted here as an order of magnitude

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as can be seen from Table 4.2, the assumption is that a significant but not overwhelming

proportion of each age cohort will drop out. It is further assumed that the same number of

potential students will drop out in each succeeding year, as compared with the base case. (This

assumption disregards population growth, which arguably would increase the number dropping

out each year.) The number of (mostly) young people who have dropped out accordingly

accumulates year by year. It was assumed that all students gain the qualification they enrol for,

though not necessarily in minimum time.

The penalty for dropping out is assumed to be a loss of income; not a reduced chance of

employment. Table 4.3 gives average incomes, by qualification, from Census 2011. Unfortunately

the readily available population characteristics do not include the income of unqualified

persons, so labourers have been put in to represent them. Again, earnings are not readily

available by sex, which prevents this distinction being included in the analysis.

Table 4.3: Average Census income by LGA of workplace by qualification, 2011 $/week

LGA Labourer Certificate I,II Certificate III, IV Casey 590 659 896 Frankston 605 676 877 Cardinia 612 592 878 Mornington Peninsula 615 645 904 Kingston 662 766 1002 G Dandenong 685 806 1029 Bass Coast 1005 696 1210 Source: ABS 2011.

Note: Includes all persons in the workforce, including those working zero hours. Average income

calculated by mid-pointing the Census ranges.

Bass Coast is atypical because the desalination plant was under construction when the Census

was taken and there were many labourers working long overtime. The typical differentials for

the other LGAs of $60 a week between labourers and workers with Certificate I or II and $300 a

week between labourers and workers with Certificate III or IV were adopted as measures of

income lost through qualifications not attained.

Assumptions are also required as to career progression. In the base case, it is assumed that

students gain a Certificate I or II the year after they enrol and then gain the assumed wage

differential. We further assume that, four years later, a third of them upgrade to Certificate III or

IV and gain the relevant wage differential. It was assumed that they do so by part-time study

which does not af