The NSW Government has released the details of its Smart and Skilled “reform” strategy.  The reform process establishes the architecture of a fully marketised VET system in NSW. All qualifications up to and including CIII will be open to delivery at TAFE or private providers on a “once-only” basis, for students who don’t already have a CIV, and only for courses on the yet to be devised skills list. It has to be assumed that full fees will be charged for those qualifications or courses not on the skills list. TAFEs will be funded at the same rate per student contact hour as private providers. This is markedly different to what happened in Victoria, where there was initially a higher funding rate for TAFE, although that was progressively phased out. In SA, the funding rate for per student contact hour for TAFE is much higher than private providers. Crucially, even though the government says that it will pay (undefined) community services obligations (CSOs), private providers will also be eligible for these additional funds. In SA, CSO’s are restricted to TAFE, as they were in Victoria until they were completely abolished.

Despite having a year to develop this policy, there is no detail in key areas, including additional quality requirements for RTOs who will be eligible for government subsidy, contracting arrangements and monitoring of these organisations, or student protection (in a climate where students will now be incurring significant debt – including no mention of a Tuition Assurance Scheme or what happens to students if a provider is de-registered or falls over).

The proposals for CIV and above are incredibly light on for detail. This is where students will now have to take out significant loans to pay for their qualifications as the income contingent loans are progressively implemented. It is highly likely that the government will progressively shift subsidy out of this area, increasing the cost to students, again with no proposed additional protections in place.

The reforms propose to avoid the cost blow out which occurred in Victoria by restricting subsidy to skills in priority areas. While this may or may not work, it will do absolutely nothing to stop the shift in training from TAFE to private providers, nor to address the key intention of the reforms which is to turn TAFE into just another provider.

Lack of additional funding for public sector employment conditions will mean that there will be incredible pressure on TAFE institutes, who will have to manage their own budgets, to mimic private provider conditions. This has significant implications for wages and teaching conditions.

Key features include:

  • Commence 2014
  • Can be accessed from TAFE NSW or an approved private or community organisation.
  • Is an “entitlement” to government subsidised training, but on a restricted basis – only “eligible” individuals (15 years and over who have left school, do not have a CIV or higher, who live in NSW) for select foundation courses and qualifications up to and including CIII.
  • student fees will be determined in the same way as the entitlement.(unclear what this means – but could mean that the cost for unsubsidised courses will be the same as the government subsidy would have been – ie – full cost recovery – full fees)
  • A skills list based on industry consultation and labour market research will define which courses will be subsidised by the NSW government.
  • Some pre-vocational training, skill sets and qualifications from CIV to Advanced Diploma will receive an (undefined) government subsidy, but on a restricted basis as the skills list will define which courses are subsidised. Implies full fees for courses not on skills list.
  • Students will pay a fee per qualification instead of the existing annual fee. (unclear whether this is a reference to an additional fee for subsidised qualifications, or the full fees students would pay for unsubsidised qualifications)
  • Students who take a subsequent post-school qualification will pay a higher fee “as they have already benefitted from training”. This is the “firstness” principle so condemned in the Victorian model – you only get one chance at a qualification, and then this implies that you will pay full fees.
  • Student loans (HECS style) available for approved, government subsidised Diploma and Advance Diploma qualification. Given that the Federal Government has set an average $4000 in 2012 rising to $5000 in 2013, it is reasonable to assume that this is the “average” loan that students will need to take out for these qualifications
  • “Apprentices, new entrant trainees and VET in schools students will continue under existing arrangements”… except for paying a per qualification fee as opposed to the existing annual fee.
  • Aboriginal people, people with disabilities and welfare recipients will retain current concessions and fee exemptions.

Details of approved Smart and Skilled” training organisations and courses will be available before implementation – no date for this in the papers

Information will be published on private RTOs  – but no indication of what detail, or where or when it will be published


Smart and Skilled promises quality measures including strong regulation, effective contracting (“strict criteria for training organisations to deliver government subsidised training including sanctions for non performance”), performance monitoring, validation of assessment (independent), consumer (student) protection, teaching and leadership training and evaluation. Despite having had more than 12 months to develop details of the proposed reforms, none of this detail is available for public scrutiny, and much will have significant consequences for TAFE, and for TAFE teachers’ working conditions. The impact of the Smart and Skilled policy, and its points of difference from very similar reforms in Victoria hang entirely on this information.

The policy claims that “TAFE NSW will continue to be the backbone of the training system in NSW”, but proposes a new governance model will include the following features for TAFEs:

  • separation and transparency between TAFE NSW and the Department of Education and Communities (purchaser/provider split)
  • a separate and distinct budget to meet training needs across the state and accountability to meet the expectations of Government
  • more authority to make local decisions to manage their business and tailor training to areas of skills growth and local needs
  • stronger partnerships with industry
  • reform of its employment model to achieve “flexibility”.

This is a crucial part of the reform process, and there is no detail so there can be no certainty about the reforms, or how they will play out differently from Victoria.

TAFE – just another provider in an undifferentiated market

TAFE NSW and ACE providers will receive community service obligation payments to guarantee training in rural and remote areas and “key equity groups”, but approved private providers will also receive additional funding for training in regional locations and for training of disadvantages learners.  In other words, private providers will receive the same additional funding for CSO as TAFE – they will be treated no differently. As well, Piccoli has made it clear in the media that TAFEs will receive no additional support for wages paid to TAFE teachers – this is crucial because of the huge (about $30,000) wage difference between TAFE teachers and those working for private RTOs.

The community of NSW can have no confidence in ideological “reform” proposals from a Government which so blatantly refuses to reveal detail, consult openly, or take account of the evidence of failure of the same reform process in Victoria.