Resourcing vocational education and training in Australia

This report provides an overview of funding arrangements implemented as a result of the 1992 Australian National Training Authority (ANTA) Agreement. It describes the vocational education and training (VET) policy environment leading to the Agreement and the prevailing policy environment 10 years on. It discusses the outcomes of government, industry and individual investment in training, and includes examples of overseas funding models.

The report begins by outlining the major developments between 1970 and 1999—from the Kangan report (1975) through to the Finn report (1991) and the establishment of ANTA. The opening chapter highlights the situation of young people and their participation in the labour market. During the 1980s, 100 000 young people who left school undertook no further preparation for employment, which was a cause for some concern. Initiatives implemented by the Kirby Committee (Kirby 1985), such as the Australian Traineeship System, sought to improve this situation. However, these were not as effective as hoped. In 1991 the Finn report (1991) reviewed young people's participation in post-compulsory education and set target school retention rates for 2001. While these targets were not met by 2001, they did help contribute to the momentum leading to the ANTA Agreement in July 1992.

In 1992 the heads of government entered into the ANTA Agreement which sought to establish a unified national system of vocational education and training with joint Commonwealth, state and territory responsibility for funding. At this stage, funding for training-based labour market programs was not included in the scope of the ANTA Agreement. The change in social philosophy during the 1990s caused governments to change the nature of their training and labour market interventions. In the VET context this philosophy was reflected in the development of training markets with a wide choice of training providers and an industry-led training system.

This report discusses the allocation of ANTA funds by training area and observes that some industries rely largely on public funding for their training needs (for example, construction, tourism and hospitality), while some do not (for example, retail, finance and insurance). The discussion focuses on which industries spend the most on training and how much individuals contribute to their own training. In 1998 ANTA estimated that expenditure on VET was $8.5 billion: 45% contributed by enterprises; 44% contributed by government; and 11% contributed by individuals.

The challenge for the funding of VET over the next few years is to improve the level of integration between public and private VET expenditure, and to address the inequities resulting from these funding anomalies. Adopting a more holistic approach to the provision and funding of VET is vital for both economic efficiency reasons and equity.

However, better integration in funding is just one issue. Australia's public commitment to post-school funding is lower than comparable Organisation for Economic Cooperation and Development (OECD) countries and young Australians continue to be excluded from the education and training system. Increased VET participation among young people who drop out of all education should be a policy priority.

Future debate on VET funding should embrace the needs of the unemployed or those facing redundancy. Making individuals responsible for their own VET funding has the potential to increase social inequity. Comparing overseas funding models like levy schemes, and approaches which aim to increase demand for training, such as tax incentives, vouchers, loans and learning accounts, may be useful in helping Australia achieve greater educational equity.