The NSW government will today release details of its proposals to follow the same failed experiment in market reform of its TAFE system which has led to the decimation of TAFE institutes in Victoria.

In a cruel irony which will not be lost on the TAFE teachers at Sydney Institute of TAFE, the government will make its announcement at the very same TAFE where less than a week ago, the institute announced the “deletion” of hundreds of jobs and courses, increased fees and slashed resources for students.

The NSW government has already announced a $1.7b cut to education in NSW, which for TAFE included an estimated $80m cut. This follows the $54m reduction to the state training budget in June. There will be a loss of 800 jobs in TAFE, course delivery will be rationalised within Institutes and some courses will be cut altogether if other providers can deliver them more effectively or are seen as more appropriate providers. There will be a reduction of procurement spending across TAFE.  TAFE teachers are subject to the labour expense cap, low-demand courses are to be “rationalised”, and the 4000 or so fine arts students made to pay full commercial rates. Fees will be increased by 9.5%. This will result in charges of $506 for a CI & II; $793 for CIII; $1078 CIV as of Jan 1 2013. Those in receipt of Centrelink benefits will now pay $100 per course.

All these announcements precede the long awaited, and feared, NSW government response to its Smart and Skilled strategy “consultation” process, concluded almost a year ago, but shrouded in secrecy ever since. TAFE students and teachers now know what the government intends.

What exactly does all this mean for students and TAFE in NSW?

TAFE students in NSW face the reality of increased fees for courses because the NSW government will implement Income Contingent Loans, or HECS arrangements in TAFE and a “national entitlement” to training. The COAG agreement restricts this entitlement to the first qualification up to a Certificate 3, and the entitlement can be used at a TAFE or at private providers.

The effect of this agreement on TAFE and its students will be significant and it will set NSW down the same path as Victorian TAFEs. In Victoria, where a student entitlement system has been in place since 2008, student fees and charges have trebled and the VET sector has been inundated with voracious for-profit private providers. The number of private providers operating in Victoria and accessing government funds has grown from around 225 in 2008 to more than 528 in 2011. At the same time, TAFE “market share” has plummeted – from 75% in 2008 to 48% in 2011. Private provider share of the market has trebled to almost 40%. Many Victorian TAFE institutes, particularly in regional and rural areas are struggling to survive.

In the May budget, the Victorian government announced cuts to TAFE in the order of $290m, punishing TAFE institutes and TAFE students for a massive blow-out in the VET budget, the only beneficiaries of which were voracious, for-profit private providers who milked the Victorian open market for every cent available. Since then, TAFE institutes have announced job cuts of more than 2000, literally hundreds of course closures, increases in fees in the order of hundreds of percent and campus closures across the state.

The real losers in these dangerous market experiments are TAFE students. Until recent times, NSW   students studying a government subsidised TAFE Advanced Diploma in NSW paid either a concession fee of around $50, or a maximum of about $1570. Under the new arrangements, these fees stand to increase to $4000 immediately, and $5000 in July 2013. This is because the both the NSW government and the Commonwealth have agreed to set an “average price” for these student loans – and this means effectively that training providers, TAFEs or private, will be able to charge students much more for their training – and students will need to take out loans to pay for it.

Reforms announced in NSW today mean that students in NSW will be offered an “entitlement” to VET training for qualifications up to certificate 3 – but only for the first qualification. This means that students in NSW may now only get one chance to study at TAFE in these courses, after which they will be required to pay full fees – often thousands of dollars – for any qualifications up to this level. For people who have been retrenched, or who are unemployed, for those returning to the workforce with qualifications which may be decades old – this would be an absolute disaster. It would put TAFE training out of the reach of many people in NSW, denying many the second chance at education that TAFE has always provided.

This “one chance” at a qualification has been roundly condemned in Victoria, where many students have been enticed by poorly regulated private providers and the offer of financial inducements and iPads into worthless qualifications.

The recently signed COAG agreement has established the blueprint for a VET system which will be dominated by dodgy private for-profit providers offering only courses that make them money, and leaving TAFE with more expensive training in areas of skills shortages. What has happened in Victoria under this same model is that TAFEs are struggling to survive financially – and this puts at risk much of the essential training that Australian industry requires.

The NSW government did not have to proceed with these damaging reforms. The Premier could have stood up for his TAFE students and insist, as he is able to do under the COAG agreement, that the national entitlement in NSW only be offered through public TAFE institutes.

NSW could have said no to a HECS in TAFE. The experience of HECS in universities shows that governments increase the costs over time – HECS charges trebled in the first ten years.  The policy settings for the implementation of HECS in TAFE would see a trebling of costs to students overnight, with no protections against ongoing increases over time.

There is a great deal at stake in NSW TAFE, and it is now time for the Federal Government to act. It has the power to do so in the National Agreements. It must refuse to agree to a NSW Implementation Plan which drags money out of its TAFE system through a misguided attempt to mimic the failed Victorian experiment.

-Pat Forward is the Australian Education Union’s Federal TAFE Secretary