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VET and Australia’s future: where we’ve been and where we’re headed in Australia’s post-COVID-19 recovery – Part 1

This blog post is Part 1 of a 2-part series on key challenges facing Australia’s Vocational Education and Training system and how VET can drive Australia’s post-COVID-19 economic recovery. You can read Part 2 here. The blog series is based on AATIS’s full report which is available here.

Australia faces significant challenges on its road to recovery from the COVID-19 pandemic and the economic challenges that have arisen in its wake. Since the pandemic’s outbreak, numerous economic solutions have been proposed for Australia, exhibiting a spectrum of proposals for restoring pathways to prosperity. Often these visions have overlapped in identifying the role of Vocational Education and Training (VET) in a skills-driven recovery.

Throughout the literature, it is often held that a VET-led recovery can equip emerging generations – those that have borne the brunt of COVID-19-related social and economic shocks – for not only participation in the post-pandemic economy, but also for the future of work that is taking shape at growing speed. The VET sector can provide future generations with the skills, training and qualifications they need to build careers and generate Australia’s economic and social recovery from the pandemic.

But at present, the VET sector faces significant barriers to delivering this future. Although apprenticeships and traineeships have long supported Australia’s industrial transformation by catering to skills and training demands, an increased policy and funding focus on the contribution of higher education to the economy has diminished awareness of VET’s role amongst the public as well as policymakers, presenting a challenge to ensuring that post-COVID-19 policy initiatives reflect the importance of VET to recovery and are designed to draw on the sector’s strengths.

For more than fifty years, apprenticeships and traineeships have prepared workers for lifelong jobs and ongoing skills development for work in industries ranging from manufacturing to hospitality. In nations throughout the world, VET provides the skills and experience necessary for individuals to become competent in their chosen field of expertise. Explaining why governments in many nations therefore provide public funding and resources to VET, Oliver, Yu and Buchanan (in Guile & Unwin 2019, p. 118) argue that VET embodies ‘public good’ benefits, “from having a workforce trained in transferable skills, providing a skilled labor resource of benefit to a wide range of potential employers.”

However, as Australia’s economy has expanded and diversified over the past four decades, so too have education options and career pathways. The result is that today more Australians hold university degrees or are studying towards a higher education qualification today than three decades ago when VET was a far more common education and training pathway than university. Whether a direct result of this or not, throughout this period apprenticeships and traineeships – although still a chosen pathway for many – has declined as an option pursued by an increasing majority of Australians.

Altogether, research and data point to a long-term trend in preference for university instead of VET, despite the viable career pathways apprenticeship and traineeship pathways offer to students and the high-skill, high-income occupations they often lead to. But furthermore, university is frequently chosen by young people whose talents and indeed their preferences, may more suitably steer them towards VET (see Chesters 2015, 2018).

How did we get here?

The policy decisions of federal governments over the period in question sheds light on What might have contributed to more young people today choosing tertiary education pathways even when it may not suit their career objectives. In 1988, the ‘Dawkins Review’ acted as a significant federal government initiative to reform higher education by injecting greater equity, access and choice to the system and increasing its international competitiveness.

This apparent success story obscures shortcomings that have contributed to challenges that the VET sector faces today. As more and more students have gone to university, more and more students have not pursued an apprenticeship or traineeship. The Longitudinal Study of Australian Youth (LSAY) undertaken by the National Centre for Vocational Education Research (NCVER) reported that between 2009 and 2019, university completions increased, with the proportion of 25-year-olds undertaking further university study growing from 6 per cent to 9 per cent, whereas the proportion choosing VET has declined in the same period (Forrest & Scobie 2020).

So too has gone the bulk of funding for VET. Analysis of federal government funding to VET by researchers at The Mitchell Institute revealed that VET funding in 2019 was lower in real terms than it was in 2008 – more than a decade earlier and in the wake of the Global Financial Crisis (GFC) (Hurley & Van Dyke 2019). This means that most states and territories today invest less in VET funding in real terms than they did a decade ago. A Department of Education and Training report (DET 2015, p. 4) shows that in absolute and real terms, direct funding for teaching, learning and research in higher education has increased between 1989 ($3.2 billion) and 2014 ($15.4 billion). The negative, long-term consequences of the disappearance of equity in government support to VET can be clearly speculated in apprenticeship commencements over the period in which the Dawkins Review had an impact, as shown in Figure 1 below. Despite steady increases in trade and non-trade VET participants between 1988 and their peaks in 2012, participation in both categories has seen rapid decline thereafter.

Disadvantage to the VET sector has been reflected in recent decline of funding in real terms, compared with higher education and schooling. Research shows that between 2005-06 and 2015-16, federal government funding to preschool, school and higher education has increased each year, but for VET funding – already well below all other types of education per year – increases in funding turned into decreases each year from 2011-12 (Pilcher & Torii 2017). Even though federal government funding increased between 2006 and 2018, since 2012 this has mostly been due to the introduction of VET FEE-HELP which was largely rolled back to a loan program, given issues regarding the sector’s financial sustainability under that model and the subsequent impact it would have on quality. Researchers at the Mitchell Institute have warned that avoiding poor outcomes for students means further initiatives must “arrive at a sustainable model of VET funding to reverse declining trends in participation, and achieve the right balance between quality and efficiency” (Hurley & Van Dyke 2019, p. 7).

Despite financial strain and relative neglect, VET has demonstrated consistently competitive performance in terms of outcomes, when compared to success rates achieved in higher education. AATIS’s own analysis of the NCVER 2019 Student Outcome Survey (SOS) data suggests that overall, VET delivery across most Training Packages achieves favourable outcomes for the clear majority of apprentices and trainees. Our calculations indicate that across all Training Packages, an average of 80 per cent of apprentices or trainees are employed after their training, with 72 per cent of students employed after training but not before. A total of 67 per cent reported achieving their main reason for training.

Overall, this research and data demonstrates clearly that VET, despite funding and resource challenges, continues to deliver the training and qualifications essential to demands from industry for skilled workforces. However, funding cuts and reforms that have deregulated delivery of VET have contributed to a mismatch between VET’s role and the needs of an economy in transition, presenting challenges to the system and the people that rely on it as we prepare for the post-COVID-19 economic recovery in Australia.

VET at the centre of a post-COVID-19 recovery

There is widespread agreement across business, community and industry that a robust VET system must be at the centre of Australia’s economic recovery from the COVID-19 pandemic, even if the proposed framework for VET’s role may differ across this spectrum (for example, ACTU 2020; AiGroup 2020). A key with which to frame proposed responses across the political spectrum is located within the recommendation of researchers at the Mitchell Institute that information about the VET sector and its opportunities for skills development be improved to help inform student choice within the context of reforms aimed at developing policy leadership, effective quality frameworks and alignment with industry demand (Pilcher & Hurley 2020).

AATIS holds that high-quality and accurate information plays a pivotal role in supporting the choices that prospective apprentices and trainees make within the VET system, but such choices can only be made within an ecosystem influenced by policy responses. At present, we can identify political and economic barriers to how information reaches its target audiences to provide accurate guidance and support for career pathway development.

In the second part of this series, we draw on AATIS’s knowledge of the skills, training and qualifications information it provides to the VET sector as a neutral source of information provision and communications in the Australian Apprenticeships field, to analyse a range of research and policy responses that often inform or shape the environment in which AATIS’s services are designed and delivered.  This information is useful for identifying opportunities proposed within the broader context of national economic recovery that, as the evidence suggests, will be driven in significant part by apprenticeships and traineeships.

Continue reading part 2 here.

References

ACTU (2020). Reforming the NASWD for a better VET system. Australian Council of Trade Unions, Melbourne.

AiGroup (2020). An Apprenticeship Model for the Modern Economy. Australian Industry Group, Sydney.

DET (2015). Higher education in Australia: a review of reviews from Dawkins to today, Department of Education and Training, Canberra.

Chesters, J. (2015), ‘Pathways through secondary school in a comprehensive system: does parental education and school attended affect students’ choice?’ International Journal of Training Research, 13(3), 231-245.

Chesters, J. (2018), ‘Educational trajectories: parental education, pathways through senior secondary college and post-school outcomes in the Australian Capital Territory, Australia’, International Journal of Training Research, 16(1), 19-33.

Forrest, C and Scobie, C (2020). 25 years of LSAY: Research from the Longitudinal Surveys of Australian Youth. NCVER, Adelaide.

Hurley, P. and Van Dyke, N. (2019). Australian investment in education: vocational education and training, Mitchell Institute, Victoria University, Melbourne.

NCVER (2018). Historical time series of apprenticeships and traineeships in Australia, from 1963, https://www.ncver.edu.au/research-and-statistics/infographics/historical-time-series-of-apprenticeships-and-traineeships-in-australia-1963-to-2018-infographic

Oliver, D., Yu, S. and Buchanan, J. (2019). ‘Political Economy of Vocational Education and Training’, in D Guile & L Unwin (Eds), The Wiley Handbook of Vocational Education and Training, Wiley, Sydney.

Pilcher, S. and Hurley, P. (2020). Skills for recovery: the vocational education system we need post-COVID-19, Mitchell Institute, Victoria University, Melbourne.

Pilcher, S. and Torii, K. (2017). Expenditure on education and training in Australia: Update and analysis, Mitchell Institute policy paper No. 05/2017. Mitchell Institute, Victoria University, Melbourne.

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