Free TAFE causing budget woes for some troubled institutions
Nine of Victoria’s 12 TAFEs were last year operating in the red, now some institutions have pointed the finger at free courses for being partly responsible for their dire financial position.
Tertiary
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Victoria’s TAFEs lost $116 million in a single year leading to demands for emergency relief funding to float the troubled institutions.
Annual reports show nine of the state’s 12 TAFEs were last year operating in the red — only one TAFE reported a deficit the year before.
The Herald Sun understands some TAFEs are planning to slash jobs to cut costs.
All 12 institutions have been issued formal pledges, called a letter of comfort, from the Department of Education vowing to “provide a level of assurance that financial assistance will be made available”.
The figures come despite the State Government’s $172 million Free TAFE program.
Institutions even pointed to Free TAFE, the jewel of the 2018-19 budget, for being partly responsible for their financial position due to a rising wages bill.
Chisholm was the hardest hit, with a loss of $26.5 million from 2018 to 2019, followed by Melbourne Polytechnic (minus $21.7m) and Box Hill (minus $19.2 million).
Only Holmesglen, Sunraysia and Wodonga TAFEs reported a profit last year.
The sharp fall — from the total of Victoria’s TAFEs operating at a $70.7 million profit in 2018 to then dropping to a $45.4 million deficit in 2019 — came before the COVID-19 pandemic.
Australian Education Union Victorian branch president Meredith Peace said it was clear TAFEs needed emergency support given the figures didn’t yet reflect the financial crisis of the past four months and loss of international student enrolments.
“You can’t keep having a VET (vocational education and training) that is essential to the state being constantly under threat — pandemic or not,” she said.
Ms Peace said “the funding model is broken”.
“Is the funding adequately meeting the costs of running the programs?” she asked.
“If that’s not the case, you’re setting them up for failure.”
Some TAFEs incurred extraordinary expense to hire extra staff to run Free TAFE programs.
Gippsland TAFE spent an extra $7.9 million on staff in 2019, partly due to “increased staffing to meet the demand for Free TAFE” while facing a reduction of $1.1 million in government contributions.
South West TAFE also faced increasing salary expenditure of $2.6 million alongside a $3.5 million cut in government grants.
A Department of Education spokesman said TAFEs underwent “a significant year of transition and growth in 2019 with the introduction of Free TAFE and the rollout of the first year of the multi enterprise agreement (MEA).”
He said the quality of training had been lifted with “more permanent and experienced teachers”.
VICTORIAN TAFE FINANCIALS 2019
TAFE — Financial position 2019 / Change to 2018
Melbourne Polytechnic — $10.8m deficit / -$21.7m
Bendigo Kangan — $8.6m deficit / -$10.8m
GOTAFE — $10.8m deficit / -$10.7m
Holmesglen — $10.3m surplus / +$5.5m
Gordon — $7.3m deficit / -$8.4m
William Angliss — $4.9m deficit / -$5m
Sunraysia — $2.2m surplus / -$2.2m
SWIT — $5m deficit / -$9m
Box Hill — $7.7m deficit / -$19.2m
Wodonga — $44k surplus / -$4.7m
Chisholm — $144k deficit / -$26.5m
TAFE Gippsland — $2.8m deficit / -$3.6m
TOTAL — $45.4m deficit / -$116.1m
*Tabled annual reports on Victorian parliament website