The capture of public wealth by the for-profit VET sector

In 2012, the [Australian] Commonwealth and all states and territories agreed upon a new market-driven funding model for vocational education, intended to promote opportunities for for-profit registered training organisations (RTOs) at the expense of public [technical and further education] TAFE institutes. The centrepiece of this reform was a national training entitlement, or a minimum guarantee that all working age individuals could access subsidised training up to Certificate III level at a vocational education provider of their choice, provided they satisfied various eligibility criteria that vary among the states and territories. This demand-driven funding model has been the primary means of opening up contestable funding to for-profit training providers, and forcing TAFEs to compete in a competitive market. It followed the earlier implementation of the model in Victoria (2009), with the rollout across other states currently in motion. This report shows that the reforms have led to a sharp reduction in government spending per hour of [vocational education and training] VET delivery and a massive transfer of wealth from taxpayers to the owners of for-profit training providers.

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