Feds, Vic square off over TAFE cuts

VEILED threats to withhold federal funding over TAFE funding cuts are disingenuous, says Victoria's Skills Minister.

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VICTORIA risks losing up to $196 million in vocational training funds after the federal government slammed it over TAFE budget cuts.

Following yesterday's “emergency meeting” with Victorian TAFE directors, federal Tertiary Education Minister Chris Evans issued a veiled threat that he could withhold funds earmarked for Victoria under a Council of Australian Governments agreement.

“There's a process by which the Victorian government will have to come to us to access that extra funding, and I can't see how these changes fit in with our joint objectives,” Senator Evans said.

“How do you grow quality training and cut $300m out of TAFEs? It doesn't seem to be a proposition that you can defend.”

It's not the first time Senator Evans has raised the prospect of state funding cuts. In March he said he would consider diverting states' training funds into a federal training program if they didn't sign up to federal reforms.

Yesterday he told the ABC that he didn't want to threaten Victoria. “[But] I've said to them quite clearly, this isn't what we signed up for.”

Victorian Skills Minister Peter Hall said the comments were politically motivated.

“If Senator Evans is so concerned about Victoria's ability to meet its commitment, why hasn't he bothered to request a meeting?”

Mr Hall said TAFEs had competitive advantages including their assets, community connections and a well-known brand. “The continued speculation about cuts and job losses is doing potentially irreparable damage.”

Yesterday the Victorian Auditor-General reported that TAFEs' financial indicators were “generally positive”, with healthy liquidity and underlying operating results. However their net earnings had halved last year, with four institutes recording operating deficits, and they couldn't self-fund maintenance or capital works.

TAFEs say the picture has now deteriorated and they've been saddled with cuts triple the size of the state government's projected savings.

The state government wants to stabilise the annual cost of its open training market, which has ballooned about $500m to $1.3 billion, at about $1.2bn.

But the Victorian TAFE Association said it wasn't asking for more money. “It's about the distribution of that money,” said CEO David Williams.

He said the cuts contravened requirements under last month's $1.75bn “national partnership” agreement. Almost $800m of this money  including $196m for Victoria  is tied to 11 “structural reforms”, one of which is enabling TAFEs “to operate effectively in an environment of greater competition”.

“With $290m ripped off us, we cannot operate effectively in this environment of greater competition,” Mr Williams said.

“They're taking money from TAFE to fund an unfettered open market.”

Senator Evans demanded Victoria's modelling of the impacts on TAFEs, and said the cuts undermined the COAG arrangements. “I'll continue to try and put pressure on the Victorian government,” he said.

“Their budget surplus has been built solely on the cuts to TAFE. The bean counters in Treasury have got control of this and taken no account of the educational impacts.”

Interstate bureaucrats have given a scathing assessment of the Victorian reforms. South Australia, which launches its own training market in July, said it had been “looking over the border” at the Victorian developments.

TAFE South Australia chief executive Elaine Bensted said the SA system had been designed differently to allay “an enormous amount of concern that our reforms would simply replicate what happened in Victoria”.

Mr Williams said the budget cuts would cost up to 2100 TAFE jobs, almost a third of them in regional Victoria.

On Tuesday, dual-sector Swinburne University estimated the cuts would cost it about $35m. Vice-chancellor Linda Kristjanson said this would necessitate “difficult decisions” including course cuts and redundancies.

Kangan TAFE said it had been forced to drop its Auslan sign-language courses, even though the government had increased the hourly funding rate for these courses.

Northern Melbourne Institute of TAFE director Andy Giddy said the key problem was the loss of $170m in a special “full service provider” allocation.

“The loss of that support is really hard to get over and it leaves us in a quandary about what we have to offer to our students in terms of support,” he said.

The CEO of William Angliss Institute, which hosted the meeting with Senator Evans, said TAFEs didn’t want protection from competition. “But we want some respect in relation to the role we play in the community, and some recognition of the costs of providing that role,” Nicholas Hunt said.

“If we’re going to be here tomorrow and the next day, that needs to be understood.”