The choice between vocational and higher education – Grattan Institute and State Library Victoria

This evening’s seminar is held on the homelands of the Woiwurung people of the Kulin nation and I would like to acknowledge them as the traditional owners and pay my respects to their elders past present and emerging along with the elders of other communities who may be here tonight. Let me also give a very warm welcome to friends of the library to members of the Grattan Institute and their supporters and of course to tonight’s speakers from my side here Frances Coppolillo, Professor Linda Kristjanson and Professor Peter Noonan and Andrew Norton who is going to be our host this evening. So we meet tonight for this discussion which is very very pertinent a subject that’s in play you might say it once again and that is about post school options both vocational and those to do with higher education. Now just recently ahead of the August COAG meeting Prime Minister Morrison proclaimed that TAFE is as good as uni vocational education he said is as good as university. But it’s interesting isn’t it. With enrolments in vocational courses continuing to decline that confidence I think we can say is not necessarily shared by students. We are also hearing from many in the business community who say they want urgent action to revamp vocational education to attract more young people into the trades and head to head off what they see as current and future skill shortages. Now at the same time we have university leaders who are calling for the reinstatement of demand driven funding which will let them enrol unlimited numbers of bachelor degree students so we have to ask ourselves are these goals intention. And what advice should we give to people to young people thinking about their post school options. Assuming of course they will listen to us. Now to our panel leading tonight’s discussion is is Andrew Norton now. Andrew is known to many of us he is the higher education program director at the Grattan Institute is the author or co-author of many articles his pieces I think are always worth reading in In The Australian. In fact essential reading. His most recent report though is on the student choice between higher education and voc ed. In 2013 he was the co-author of a governance government commissioned review of the Higher Education demand driven funding system. And Andrew I gather this is going to be one of your last events as a member of Grattan But we don’t need to say farewell just yet. Okay but Andrew Andrew is joined by Frances Coppolillo, Chief Executive of the Melbourne Polytechnic. Francis is just here next to me by Professor Linda Kristjanson, Vice-Chancellor of Swinburne University and Professor Peter Noonan Professor of Tertiary Education Policy at the Mitchell Institute at Victoria University. So Andrew we’ll handover to you now as host. For decades we’ve worried about this balance between vocational and higher education. And this has become more acute over time. But as the number of students going into university increases the TAFEs sector in the vocational sectors very concerned that it’s not getting all the students that it needs. And so as Maxine said a final Grattan report was really looking at this choice between vocational and higher education for four the lower eight students so between 50 and 70. Admittedly using the limited metrics of employability and earnings obviously not the only things that people want to get out of education and we came to some quite mixed findings. What we found was that for young men at least if they’re willing to do construction engineering some business related qualifications they probably could earn more in a vocational after vocational education than doing a bachelor degree. So for them the usual story about bachelor’s great average earning more than the vocational qualifications may not be true for women. We found a different story which is that when they do go into engineering construction which is quite rare. Often they don’t earn very much and they leave when they go to other occupations which are more flexible but pay less. But in the courses they often do do in university like teaching and nursing they have good employment outcomes good earnings across the ATAR range. So we did find that we thought that for many young women going to university despite a low eight are probably is a pretty wise choice but there are lots of complexities to this and I think we can start unpacking them with this panel we’ve got tonight. The reason for choice was that Linda is V.C. of a university that’s a dual sector so as both a TAFE and a university. Peter is a veteran of these policy issues going back many decades and trying to deal with the awkward relationship between vocational and higher education. And Francis is the CEO of Melbourne Polytechnic which is a leading TAFE. I’d like to start with you Francis which is that as the leader of a TAFE do you feel like you are competing directly with higher education or is it a case of you dealing with different markets. I think it be simple to give you a simple yes and simple now and I don’t think that’s the situation I think. I don’t think we’re competing with universities. I think that as much education as our community can get the better that is both for individuals and for society in general. I think though that our major competition has come from the markets nation of the VET sector over the last number of years and that’s caused a fracture to our development. I would imagine. I think that. We were also a higher education provider and in that sense I also don’t think we compete with universities because we don’t get access to the same sorts of funding that universities do although we’re equally regulated in the same way. So I think there’s a there’s room for vocational provision and vocationally orientated degrees as well. Certificate through to degrees. I think government policy and funding structures have impeded us more than competition from the different sectors. I think we need more flexibility in the sector. However we probably aren’t as good both ways from a higher ed perspective and TAFEs in pathways and articulation in the way that we can so that we’re presenting to students a seamless continuum of education and flexible entry and exit points into work and back again. We see a number of students universities come back in a kind of reverse articulation if you like. And I think it’s different also in different industries and what they require in terms of qualifications on entry. And then as you progress through that industry Linda could ask you a similar question. You are a dual sector doing both vocational higher education. Do you feel like they are competing with each other or do you ever. And does your organization ever tell someone applying for one to go to the other or anything like that. We don’t think of this as a competition. We think of it as well I think a dual sector is the new black. I think it’s a wonderful opportunity because it means that students can come with a range of backgrounds and a wide range of preparations and our job is to help them match and fit where they’re most interested. It was most evident at our open day recently where we had our our teachers and our academics in vocational and higher education meeting with people alongside each other so that we can offer people a course either in a certificate but all the way through to a peer each day. And the students understand the difference. Yeah. And we have the highest proportion of students who transfer from vocational to to higher ed. And part of the reason why I think that works well is because it’s seen as one universe in one place so students can come to Swinburne they can begin they can if they have a lower ATAR or they may have experience of educational disadvantage they’re not unintelligent but they may have had some challenges during their childhood or in their adolescent life. We can give them a pathway we can find them at or away and then they can take the steps in. The other thing that we’re able to do which I really am enthusiastic about is helping students who may be doing a higher education qualification also pick up a vocational qualification and become more marketable. We have an example of one doing it right now who’s doing her degree in psychology but she’s also picking up a certificate for in mental health. And for her that’s a terrific opportunity gives her some very practical contextual learning while she’s doing that degree. So rather than think of it as a pathway from one to the other in a more hierarchical way we prefer to think of it as more of a matrix. So in this report that we did we did some work on schools careers education and found that it was very patchy. Some schools do quite well. Others offer very little. And the recent Joyce review of vocational education policy found that seem to be significant confusion over even whether you needed to go to vocational higher education for your given occupational goal. Do you believe this is a problem that the schools just don’t give sufficient advice. I think it is it is difficult and I think that there are efforts particularly within Victoria to try and and create the story on a page so that career counsellors can be helped to know how to guide people and make that straightforward and simple. I think the other thing that is challenging is that the work of the future know is changing and the skills that are needed and the capabilities are indeed needed are different. I think the days when people thought of vocational education as dangerous dumb and less important I think are changing and so therefore I would challenge the views around a low a time means you got to go into vet if you’re going to be working in some of these more challenging skills based vocational areas. You need a lot of mathematics. You need to understand critical thinking and problem solving. So I think it’s our responsibility as educators to work with the schools and secondary schools to help them understand the pathways the careers of the future help the parents understand the careers of the future so that they can map in in the less judgmental way the pathways for their child that suits them best. I’d also add that we should only be thinking about high school leavers under 30 percent of our students that are being educated in our pathway and vocational education division are over 30 and so as we think about the careers of the future. The roles that are going to be needed it will be important to keep those doors open and invite people back in for further education for another bite of other learning that they can build in a way that that stacks there they’re learning and helps them to remain relevant and and able to respond to the future of work. So how do we deal with careers advice for the older people. Because we’ve got a captive audience at school but how does it work for people already in work. Well we’ve already got a number of I think points of entry right now we’ve had about 800 people that have come through for our vocational programs who are in the mature age categories that have been helped through the skills and job centres that the Victorian Government has supported. So I think there can be some easy doorways and I think the other is to really you know it behoves us to get the message out about what those opportunities are. Work with employers and help employers now how to redirect people and help them to to find ways for people to retrain and find new skills and opportunities. I think the the view that learning was linear progression was linear in any industry is really been challenged and so we have we’ve got to think much more flexibly as capabilities such as those that Linda was talking about become important at all levels of education so whether it’s in a cert III or it’s in a bachelor program or in a diploma you have to grapple with those capabilities as much as you might grapple with more technical technical skills or knowledge that you need to undertake. So those things are becoming much more integrated and they’ve integrated in the jobs as well. I think one of the challenges we do have also is parents. They are key influencers of young people and also the experiences we have even as young adults or adults in the workplace. We we we gain knowledge from our experience and what the workplace of the future is showing us is that we haven’t experienced what that is potentially going to be like. And so we need we need flexibility in education both in terms of technical capability and knowledge sets that enable people to transfer a lot more. And that’s quite challenging to grapple with in a career education system in Victoria which hasn’t been well resourced in the past. So Peter you are doing a review of the Australian qualifications framework and this is the rules that set out what the different qualifications. Certificate one to four basically vocational education diploma and because of higher ed and vocational education better above Higher Ed. Do you think the AQF maps neatly onto the current work or future work or do it. Do we need hybrid qualifications. Linda was suggesting yes just a moment ago. Because we’re just about to submit our report. You understand it to be very careful. Yes. Look at no one report anything from this meeting. Of course not. Look I think the short answer is probably no because it tries to define at levels the attributes the graduate attributes at a single level for a whole vast different range of qualifications. So one of the things we’re looking at is how we can use it as a much more flexible instrument. But rather than one would prescribe that graduates at this level will regardless of whether they’re doing a Bachelor in physiotherapy or an arts degree in ancient Greek at the moment the graduate learning outcomes are defined in this ubiquitous sort of same way. So we’re looking at how about how the AQF which can better define and differentiate different qualification types but also how it can be used far more flexibly then rather than having all these levels kind of rigidly locked in in a lockstep way. And it looks hybrid qualifications in a sense can already be created. I mean some university for example I’m sure it happens at Swinburne does happen at value where you can’t have nested qualifications where people will get a big qualification outcome while doing a degree. The problem is one of overlapping and dual regulation so I know there are cases where in order to create a hybrid qualification you run the risk of being at variance with either the higher ed standards or the RTA training package standards. And of course funding rules can can kick in as well. So for example Linda and I were talking about the example that she mentioned just coincidentally happened that I know a young woman who’s in exactly that set up the degree with a Cert IV in mental health. And I asked her why she’s doing it concurrently at the moment. And of course it’s because if she completes a degree next year she’ll be an eligible. So she couldn’t do the certificate for and on because it would then be you know a high level qualification. And of course the other disincentive is that if it’s on the free time of course that’s fine. If it’s not she’ll get a hex loan to get a hex loan for an individual hybrid qualification. She could be paying upfront fees for a vet or TAFE qualification. So there’s a whole range of regulatory and funding inconsistencies that don’t work well from the point of view of flexible course design and flexible delivery. And one of the things that Mitchell Institute that we’ve been trying to do is decide that rather than tying the two sectors should system should merge. We should think about making sure there is a differentiated and distinct set of offerings but a better connected and and where there is there are not. There are normally anomalies and disincentives in terms of the choices that students make. So that was a reference to you can’t get public funding for a qualification hard when you’ve already done that right. You could. Here it does. You have hybrid qualifications. How do they work. Yes we do just as we described in this way we handled it because we have the benefit of of the range of offerings we can Nesta vocational qualification and higher ed. And we can also create those pathways for people to complete a pathway or a vocational program into higher ed so that helps. It’s not easy because of the funding arrangements. So when you you made your opening remarks Andrew you spoke about the students going into higher education and they’re not going into that and that that people would like more students. I think we should return to the why here. This is not about us trying to get more students. It’s about the workforce we need at the future and we’re very concerned that we are seeing if the policy settings stay as long as they are that there will be a downturn in the next decade in the number of students completing both higher education and vocational qualifications and a real workforce shortage. The reason more students came into higher education is they could get an income contingent loan. So if that’s the doorway to go through that’s great it was actually cheaper to come in and do a degree in nursing than it was to do a diploma you would earn less and you would have to pay more upfront fees for a diploma than a degree. So I think there are some real anomalies to the way the funding structure has has created this disconnect. And that’s the piece that needs to be smoothed out so that students can choose the right program for themselves and also have access to the right funding support because ultimately we are going to find ourselves with a growing number of young people who will be wanting to go to university or some form of tertiary education. And we will have a capped environment. We will not have the funding support to help them get through the doors and we will have a disenfranchised group in the next generation. And that creates a lot of social risk. I’ll come back to the funding issues in a moment. Francis do you have this issue as well of trying to run hybrid courses and the funding system not supporting it and you have to charge full fees for your higher education courses as well. Look I think everything that Linda said was reflected with us as well. We there are a range of barriers whether they be regulatory or funding basis that makes that difficult. It makes staffing difficult across both both sectors as well under different awards and those kinds of things become barriers. We work very hard in our higher education provision to ensure that that’s quite practically focussed. So working on knowledge and theory of course but also ensuring that that is applied which is a mark of what we attempt to do as a number of universities do as well. And then we would be providing almost skill sets that are above the degree if they can’t be integrated within it. So what was the background in deciding to go into higher education. Well the then Minister Lynne Kosky created the idea of the vocational degree where we would be able to develop degree programs in areas that were pathway from our vet provision and that were industry focussed and so that’s how it began about 15 maybe 15 years ago. Let’s move on to the funding issues in more detail. So Peter the Mitchell Institute has done some work showing some significant declines in public funding over time for vocational education. Can you give us the background as to why this has happened and how big is it? Well it’s substantial. And I do want to take a step back because I was on the Bradley Review which recommended the introduction of demand driven funding in higher ed but we made a very important statement and a recommendation in fact is a very clear statement that there is a risk if demand driven funding was introduced in higher ed we warned of the risk of the state withdrawing funding in there and the discrepancies and anomalies we’ve talked about. And unfortunately at the time the government only adopted the demand driven funding for higher ed and completely neglected the arguments around the broader tertiary funding and then here we are 10 years later looking at the problem that frankly was anticipated which is very disappointing because we’re now in a much more constrained fiscal environment. So certainly income contingent loans is part of it. The the per course subsidy right where states basically slashed the subsidy rate for a whole range of causes. The disaster with VET FEE help where again some states shifted publicly funded courses not so much in Victoria but some states shifted publicly funded diplomas and advanced and was completely inhibit say he’ll allow providers to charge outrageous fees in time can’t triple the cost of delivery and then of course we had a catastrophic meltdown and that then left a problem because of courses had been defunded. They weren’t they weren’t eligible necessarily for the Vocation Student Loans program so they now will in some cases they had to be discontinued and now that the caps have come on and we’ve only got modest population driven increasing in quick increases in higher ed we now have the perfect storm because we’ve got limited capacity for higher education to grow and on the Mitchell scenarios significantly significant anticipated ongoing declines in debt. Linda’s point is that in the next decade we’ll we need substantial growth in participation. You can argue about whether our scenarios are optimistic or pessimistic but nobody said that they’re not going to go down any of them. So Frances you’ve been sort of in the eye of the storm here. So when this funding disappears how does an organization like yours react do you cut the courses do you increase fees how do you deal with this difficult chaotic environment. We’ve done all of those things. We had diplomas go from you know seven dollars to a dollar fifty an hour. I say for a dollar fifty an hour and some of those were just simply unsustainable. We met some of that the gap with price increases layered over the top of that were the eligibility rules which further made it more difficult for people to actually come to TAFE. So it’s been quite a complex quite a complex system. And also one where the. It was really difficult with the completely unregulated openly contested contestable market for the student to find the difference between a public provider and a high quality private provider. And others who you might say were far less interested in the education more than they were interested in the public dollar that was available. So how do you create brand in vocational education so like in higher ed we haven’t really had these problems because there are strong brands in the universities and students have a reasonable idea of who does what. How do you fix that in vocational college? Your organization changed its name was that sort of part of the rebranding exercise? It wasn’t driven so much by the changes in vocational education funding and those sorts of things. For us it was driven by the fact that we had higher education programs and vocational programs and it was a way of describing the many different things that we do without our higher education staff actually saying well no actually I do higher education in a tough college or so Melbourne Polytechnic was a way of describing the total in the continuum of provision that we offered. I think it was really interesting in the in the days of full blown contestability. Most of the TAFEs if you look around dropped the name TAFE. So we have Canyon Institute,, we’ve got Chisholm Institute we’ve got a whole range of institutes but not so many TAFEs of light. That’s changed. I think TAFE as a public provider and the ability to use the word public provider has come back into the discourse. It certainly was not the case. So we struggled very much to differentiate ourselves from an open market place. Yeah but are we now at a point that the private sector has been tarnished because even though it was a relatively small number involved in the VET FEE HELP scandal people don’t know who’s what, has it that shifted the market? It’s interesting with you know the private public thing. I think private providers have been in the system for an extremely long period of time. I think what happened was that the policy settings and the funding arrangements brought in an influx of providers that really did not have a history. They created themselves in the in the policy and funding landscape. They actually were not education providers. So if you if you think about the creative arts for instance they’ve always been very good, quite focussed. Private providers in that space and they’ve coexisted and enterprise based vocational training providers was the funding setting state has just opened the floodgates which made it incredibly difficult for anyone who was trying to deliver a quality provision to students to continue to do that. Linda what’s your experience of this? Pretty personal actually. It was tough. We had you know a real downturn with funding cuts in Victoria in 2012 and we had to find 40 million dollars out of the business right away. So that led to redundancies. And we had to reshape our courses and really think about what it was we would offer. So we did that in alignment with our university vision which was to be a leading university of science technology and innovation and we moved out of areas that did not align specifically with that that could allow us to really create some clearer pathways between vocational and higher education. I think what was particularly concerning at that time was that was that was the opening up to a range of providers without the right protections in place. And I remember saying to the minister the day that if you want to control quality Minister control your providers don’t chase it later and ask what was meant to be the regulator that was going to protect. But really Asquith had no teeth and it was quite difficult. And so students were captured by a lot of marketing by some providers who weren’t in the education business on Monday but they were on Wednesday and they were offering free laptops or iPads and come along. And so students you know were drawn into this because they wouldn’t necessarily have had the background to to screen for reputation in the way that you described with a university name. And then they squandered their entitlements when this didn’t work out. So to me it was really quite heartbreaking and really not ethical in many instances. So I think that we’ve had some correction now. We are seeing more of the vocational students coming back to the university I think it’s because we’ve been here for over a hundred and ten years and they know we’re going to be there and one hundred and ten years. And so they know that their qualification means something when they get there. They are a vocational qualification from us and from reputable TAFE providers that they’ve known and trusted. So I think there has been damage in the past. I think it’s being corrected and I do think that the free TAFE initiative and I know you want to talk about that later. But it does connect to this point Andrew because the free TAFE initiative has I think brought pride back to to vocational education and you’ve seen a return of students who are finding their way through that doorway now and I think that has spilled over to the vocational area more broadly which is a positive thing. I probably just in terms of brand and student choice and background I think the missing piece in the discussion is vocational programs for senior secondary students. And I put it deliberately that way rather than letting schools because it seems to me that. VET in schools is vocational provision in the average senior secondary school. The average high school is an extremely difficult thing for. With all the goodwill in the world for most schools to do at the breadth and depth and quality that’s required and particularly in terms of the teachers and trainers thinking particularly about apprenticeship in areas in areas where frankly young people need to be working within mental ward by industry practitioners with deep experience so that. So I’m completely sceptical because I’ve just been through too many marketing campaigns saying let’s build the image of it. We know that social marketing campaigns don’t work because it’s very hard to change entrenched social and cultural attitudes through marketing a line really gets changed through experience. I don’t know why young people if they are entitled to access the school the schooling resources package the funding that flows to schools why they shouldn’t be entitled to carry that funding to complete a senior secondary education at a tough Institute. Possibly possibly in partnership with the school. I’m not arguing for the reintroduction of technical schools as they were. And of course there are technical centres at home schooling and I think Melbourne poly but they’re not widespread. It’s certainly a problem in regional areas. And I think if you could do one thing to provide a much better understanding and experience of the range of it offerings and the opportunities that come out of it it would be to a label to enable young people at an earlier age to participate become immersed to experience it and then to go through logically through a pathway directly into TAFE. And in many cases I would go with credit but at the moment that is not the case often with my very school structured and delivered and offer. And the thing that particularly incentives and outrages me is when you see the continuing practice of schools despite constant guidelines and statements from the department from the Minister about charging to see working class kids being charged fees to do it unit because quote we’re not funded for those we funded to the academic programs. So you’ll find that kids are often forking out or their parents forking out sometimes thousands of dollars to do various schools units when in fact the the schooling resources package is meant to cover the total provision of all senior secondary subjects including vet ones. So I think the various schools and vet for senior secondary students area is the one that requires the most fundamental rethinking of of all of the policy areas. I think that’s the one that this most important area to start. So is there a problem with you know encouraging people to finish year 12 which makes the school the owner of these students when they should be allowed to leave and that is it. I mean the incentive with the way that funding works is the incentive is to retain kids and I’m I’m not saying it’s easy because of course a lot of young people will will want to complete senior secondary with a cohort of students I started with I want to go to graduation balls and all of those things at school sports I’m not saying it’s easy but for a whole range of students particularly one to achieving at school who aren’t happy who need to be in a different environment often I think an adult learning environment. To be frank for a lot of young men I suspect it would probably be actually working with older men in the trades and things like that if I sounded a bit gendered to side but I think it’s actually the reality out there particularly in some of the outer metropolitan suburbs and regional areas. And even if it’s not where they end up with a successful experience at least they’ve got an experience of a different world and different way of learning than the one that they’ve probably failed in over many over many years. So I’m not arguing that we need to as I say introduce a sort of a dual system with you bringing back the old tech schools I think that’s far too simple. But if you look at the richness of what’s available for senior secondary students in time and in the VET system why they can’t be exposed to it earlier and properly resourced and funded to do it is it’s a mystery to me. Frances you. I agree with Peter I think we should be providing young people in schools a lot more flexibility than we do. The courses are there for that to happen. They should be able to finish off with their friends and go to their you know graduating bowls etc. but also be able to complete a vet qualification or units out of a bachelor program if that’s what it is that they want to do. I think the. The more diverse the offering the more it’s going to reflect the needs of young people. I think we try and either put them into one pathway or another as though they’re the only two pathways that are possible and in fact what we know from young people is that they want a lot more diversity in the options that are offered to them. And so I think it is around trying to hang on to territories that that becomes the difficulty. And it’s not as though it in schools funding hasn’t tried to be addressed in a significant number of times and we just haven’t been able to crack that one. Click onto this free TAFE. Has this had a big impact on demand and if it has does that signal that the fees were a major issue in the market. Frances look what we’re seeing at the moment is we’ve seen certainly an increase in enrolments through free tape. It’s been a very positive thing it’s great to see the return of a lot of students back into TAFE and having very vibrant campuses you know particularly particular areas where we’ve seen increases in cyber security community services horticulture a whole range of areas. And I think it’s been a very positive thing. I think fees is an issue where someone may not have may not think that they can also study as well as other financial pressures that they have free time spend an opportunity to address that financially and I think in certain parts of Victoria that’s even more so than others. And I think that’s been a very positive thing. Grey I think it’s been very positive. We’ve seen the same response in terms of health care community care building construction cybersecurity accounting bookkeeping. So people are wanting to find their way to to an educational experience that will give them a job. And I think that it is signalling that the fees were a deterrent particularly to some individuals who would be the first family to ever consider tertiary education. And so this really does start to look much more accessible. What we have done though is we have also counselled students and sometimes they will say Well in actual fact the course I want to take isn’t the one that’s free but I’m here now and it’s opened my eyes to what else is on the menu. And they might say well I’m going to do this one but later I reserve my right to do one of the free courses later. What we have learned and we had very little preparation for this so we had to move quite quickly is that as you would imagine these courses all require some form of placement or practice experience. And so because we were able through our university resources to dedicate infrastructure support to locating places for these individuals we’ve been able to meet the expectations. But that’s. That’s a key component. The other one that we’ve wondered about and we’re not clear yet is whether attrition will be higher because students don’t have the same investment because it’s free. So what we’ve done is respond with more what we call hyper care to make sure that we are really giving students as much support as possible to keep them enrolled because we would not want this to become a failure or a disappointment in their educational history. So we’re working quite actively to make sure that this is successful. But as I said earlier I think that the overall halo effect of pride and enthusiasm vocational courses and respect for vocational courses that will lead to jobs that we desperately need filled I think has been the major takeaway that we want to reinforce. There’s quite a good television ad campaign as well for I think Robin Andrew is this going to say the relationship between free and retention was something that we also really worried about when as a sector because the experience overseas particularly in New Zealand was that the attrition rate was at 30 percent. And so what we’ve found is that the attrition rate is no different to any other TAFE student at our place. And I think that’s been borne out by and large across the sector albeit there has been additional effort gone in. But it certainly hasn’t hasn’t been borne out that there’s been a greater attrition because it’s free vs. versus paid for. What about the courses where there are still fees as demand for them gone down. To what extent. So we’ve got trade support loans which can help some people doing apprenticeships and we’ve got vet student loans which apply to some diploma courses. What about the other students. How do they know. Are you asking a question of cannibalization between Harley and also just the practicalities of it how the students manage when they’re left with an upfront charge. Well different institutes will have a range of arrangements that will support students to undertake a course of study. There are loan systems or partial payments those kinds of things that are available. As you say the VET FEE HELP is only available at certain levels of the vocational programming but there’ll be part loans and direct debit and those kinds of things available to students. Andrew I think just hark back to I suppose to the work we’ve done at Mitchell Institute over the last several years and we’ll be we’ll be continuing on with this part of the ongoing going going work program which is really the two parts to it. One is the overall issue of participation. So if we do merely see substitution between fee and freight sorry free and fee paying the overall effect on parties position might be minimal because. Because in effect some students will be in free courses and then they may just be a substitution effect and that was certainly an issue. I know with New Zealand that I think without sounding too much like an economic rationalist Go ahead. Well there’s one or two of those in the room already. I think I always have to ask yourself the question if you’ve got three four five six hundred million dollars to spend and your objective is to actually maximise participation and outcome for attention. What’s the best way to spend it. I certainly think we need to look at the whole income contingent why an area as enter in New Zealand. They are available across the tertiary system but the repayment thresholds are much lower which lump sum. So when the thresholds were being lowered in higher education some people oppose it strongly on equity grounds. But. I mean it certainly got on my eye because the same people who would be concerned about the effect of dropping the thresholds for high red students had almost no interest at all in the fact that the vast majority of its students were paying up front. And it seemed to me a reasonable trade off to say that if you could drop the threshold so everybody could get an income contingent loan and then start pay it back at relatively low rates. That to me is a more equitable system than one where only some students in higher education can get an income contingent loan. And it also basically means that the whole VET FEE HELP Project filed it should have been focussed on the subsidised courses particularly quality providers like Time so it could operate like Hicks does with universities rather than creating a full fee market. And so again in the Mitchell SUBMISSION TO THE VET FEE review we argued that it should be refocused on matching with the state subsidy system as part of a rethinking of tertiary education overall. So that in fact at the point of entry for all tertiary students or certainly most full time young people it’s free at the point of entry. I think that’s the critical objective. I’m going to move to audience questions soon so get ready. I just want to keep going with you on your work on participation and attainment. So you put out a report a number of months ago which had some frightening projections can you. Can you explain why this could look ugly by the mid 20s. So all we did was we we map the continuation of the demand driven system based on the trend that had opera pertained over the previous two years. We map the effect of of the funding freeze on enrolments and we met the effect of the trend in enrolments over the previous two years and extrapolate that that over 10 years now could argue about whether that’s a plausible scenarios or not. What. And what we then did was basically looked at the enrolments as a proportion of the population. Now the reason why the participation rates fall particularly in vet is we’ve got substantial population growth. So if you’ve got declining enrolment if you’ve got static enrolments in high rate and growing population then high rate participation will drop marginally over time. If you’ve got declining significant declines in their enrolments and population growth then you’ve got the perfect storm and that’s why the vet participation scenario falls off the cliff. Now we are accused of being alarmist or these are unrealistic and so on in which case I would say to the people who would make that criticism particularly people in government will tell me the policy intervention that’s going to stop the trend going down particularly when we look at the government funded student data again for last year because it continues to decline. So when we update that graph it’ll continue to go down whether the whether it goes as far as we projected or not. I’m not sure and that’s why it’s really good that the whole issue is back on the correct agenda. But that basically the the nation needs to take stock of the fact that investment in tertiary education overall but particularly in vocational education is actually stagnant and declining. And as as his participation the enrolment as Linda said just at a time when the population is increasing and the existing workforce is going to have to support more people who aren’t in the workforce. So it’s not a choice that the country can afford to take lightly. I suggest in the school leaver demographic there’ll be 50000 more 19 year olds 10 years from now than there are today. So. That’s you know for unis alone that’s already worth about 20000 extra commences every year and release similar numbers again in vocational education with a system that’s in decline. So Linda put on your high red hat. Things haven’t been nearly as bad for you wearing that has wearing a top hat. But we’re now in our second year of declining real funding of higher education. What impact is that going to have on your capacity to live a student places over time. It is a challenge. It is a constraint. And it’s a conversation that all of the vice chancellors I think are having with our ministers and different parts of the country as well as our federal minister to really foreshadow the risks that are emerging for the Australian community. I just locate this in in concerns about our future workforce. We talk about a knowledge economy. We talk about Industry 4.0 and the jobs of the future that are going to require increased qualifications both in VET and higher ed. And if we settle on these kind of locked in frameworks for higher education and a capped environment we are just simply not going to be able to take in students are not going to be producing the graduates that are needed. We’ve got the baby boomers coming along. The Costello Howard baby boomers and so there’s going to be an increased demand. And yet the places will not be there. Universities have been criticised for recruiting international students. But if you’re capped at domestic students and you don’t have any funding support for vocational students or an income contingent loan scheme that would encourage them to participate more fully then that becomes your only lever. And that balance is one that has to be very carefully managed. Our only university is probably about 80 percent. It is 3 percent domestic students so we really are a work engine for the domestic workforce. But you can bring in some more international students and you need to to spread the risk around that. But if you get too far with the imbalance between domestic and international students you’re changing the nature of the Australian educational experience so that one is not a good medium term solution. So I think it means engaging actively with the wider community with the business community to help think about how we can influence policy settings to to really demonstrators other countries are doing that investment in education is an investment in our future. So would you prefer the demand driven system to return. Yeah I think so. And contrary to Maxine’s opening comments about you know uncapped going on forever when you really looked at the data over the period of time when we had an uncapped market it was not unfettered and out of control enrolments. Universities do care about their brand. They do care deeply about quality and we wanted to be able to attract students into a range of programs. What we want is and this is where I think building on the AQF review is going to be very helpful to look then at the co-ed conversation and ways in which we could build a more seamless and connected tertiary system which would give us the freedom and flexibility to help attract students to the right course for them at the right time. But if the only door that was open was uncapped and nothing in that and that was where the students went. So I do think we really need to look at that uncapped market again. I know it may seem like a difficult one to imagine but I do think that we’re going to have to have a much more assertive approach to growing places for our domestic students. I did check and found that most of these young people are in Liberal held seats so maybe that will change the earth. The calculation cuts time for audience questions. I do have some that were submitted prior but is there anyone in the audience who’s got a question can be to the whole panel or or to some on a particular one over here. So once you. Thank you. I don’t really know. I’m. I find it extraordinary that the federal government doesn’t take some role in determining what tertiary vocational courses are offered. I work in the health field and there are various health professions that are desperately needed. And yet there aren’t training places for enough students and yet there are other health professions that the association is trying to caution and say you don’t need any more of this particular health profession being churned out because there aren’t places for the students but the universities are opting for I think it’s the cheaper course to run the ones that are more costly because of equipment related to the aspect of the work are the ones that aren’t offered. What do you think that the unit that the that there should be some coordination and direction provided in this area. Well so again in the in the Bradley Review recommendations. There was a recommendation was certainly a point that was made that in cases of clear what we call market failure of great use over supply or where there were serious shortages that it was a legitimate role for government in the public interest to to step in and help shape provision. Now having said that I think Andrew and I both both would share a similar scepticism about the ability often for government to get this right. And having run a central planning and purchasing system in a state based system I’m not a fan of those models because I often end up in it with serious lag effects. The intelligence you use is often state or national in character so it doesn’t reflect regional or local needs and as and you can get the sort of the awful effect of winner picking where subsidy rates get increased or decreased to try and influence what institutions do. But in fact it’s actually student demand that drives provision rather than what causes universities you usually put on. So this is an area of under serious undersupply. Usually you’ve got to look at the more fundamental reasons why that’s a factor. And it’s often due to wages and conditions labour market factors the why the occupations structured a whole range of complex things rather than simply the course that the institution put on. Yes so people room or you’ve heard me before or so I know that I’m very concerned about the way the government promoted science courses for example over the last decade which was a successful campaign that enrolments boomed but now we’ve got very very poor outcomes. People strip people in the biological sciences where it is not nearly enough jobs relevant to their skills. Well the demand driven system did see the biggest absolute increases in the health fields which were the main areas of skill shortage prior to the demand driven system. And even though there are bottlenecks in the health training system because of the clinical training element which limits the capacity to increase student numbers you know I would class that as one of the bigger successes of the demand driven system that it did accelerate that at a faster rate than would have been likely under any other system because I think the other risk that we carry with a capped environment right now is that the cluster funding is so uneven across the different courses that we may find ourselves in a few years having many fewer STEM graduates because there is more it’s more efficient to move the places into areas like accounting and line business. And that won’t be spotted until a few years out and then there’s still wonder why we don’t have the STEM graduates not was standing the employment issues. We do need those graduates and we do need those for the careers of the future. So the cluster funding is also a barrier in a captive environment when you you have to just move the money around and get the most from it by the cluster funding is the amount per student that the unions get. In the most inaccessible seat Leslie Ann Hawthorne, University of Melbourne. I’ve got two quick questions. One is I read some very alarming attrition rates and the period that was the high point of the uncapped enrolments at universities a couple of years back. And I just wondered if there could be some comment regarding that. The other thing is we’re talking so far as if international students are totally decoupled from the domestic workforce. That’s absolutely not the case. So if I look at a field like nursing just taking health sitting sample given the previous question. If you looked about six years back a third of the nurses who gained permanent migration status had Australian qualifications. By last year it was 80 per cent. So there is an absolute feedback loop for many fields of qualification into the domestic workforce. Thank you. I’ll start with you Tricia. So it’s come back down again now to below what it was when the demand driven system started. I think there was some learning going on and part of it was that your institutions that you talk about that. But some universities moved into completely new fields that they had not done before or new modes of delivery and it took some time in some cases to learn how to do it properly that most of the deterioration of ingress and attrition was actually down to three universities rather than the whole sector and all of them worked out how to improve it after that sort of ironed out some and Swinburne online was one of those ones actually you should talk about. If you look at our on campus students it was as good or better than the national average in terms of attrition but because we opened it up very quickly and grew our numbers in our online delivery online deliberately delivery worldwide has higher attrition. We were meeting the needs of students that were generally older that were coming back for a further qualification. The majority of them were part time. We had a higher proportion of people who were indigenous a higher proportion with low socioeconomic regional and rural. So we were at more like 60 65 percent completions. So that that can be a criticism on the other hand you’ve got people who would otherwise never touch a campus. Now getting some access to education. But what we found was that as we learned about how to engage people more actively in an online environment keep them motivated keep them participating and trialling different approaches in real time which we could do in an online environment. We actually started to see some real benefits of how to decrease attrition not only in the online mode but on the on campus as well. So I think it was frankly a bit of alarmist reaction to a to a short term change but it was about building opportunities for students and we’ve been really pleased with how that’s improved. Well I as somebody from value of course I couldn’t let the opportunity or so go unremarked about the success of the block model of of of teaching units away intensively in the way they’ve been that way. That’s being done at the U. And I think what that suggests is that there is scope and capacity for a lot more innovation in in delivery and including I think not only between vision higher education in terms of dual qualifications and those sorts of things but I think if we read it we conceived the senior secondary years in the early years of tertiary as a more of a coherent bloc of learning for young people to move through a lot of the issues around attrition that arise because young people find themselves in quite unfamiliar learning environments or unsupported or you know not having friendship groups all the reasons why people what we mean young people often drop out for reasons unrelated to the quality of teaching and learning. And I think if they get a better sense at a younger age about what the whole tertiary experience is going to be and they get to experience tertiary at a younger age I mean let’s face it young people you know we treat the last bit of the architecture of if you like the post compulsory system or the Post’s 15 system that’s really unreconstructed is the concept. But at the end of twelve years of schooling you have this sharp break with a big Capstone assessment to sift and sort people into pathways rather than actually connecting with the real lives of young people and thinking about the age of say 16 to 19 16 to 20 as an opportunity for a discrete and an intensive period of of of learning and workplace engagement and so on. I think from that we would probably deal a lot with attrition rates as well. You know we see schools like Temple Stowe high school now ask young people to plan their their futures in year 8 in Year 9 and do their five year plan start to explore a whole range of settings and engaging in different ways of learning that place them in the community place them in universities in tastes and expose them a lot more to a range of settings. I think traditionally schools have been very good at keeping young people inside the gates. And so you know when they first join a university campus or they come onto a tough campus you can see who they are really immediately they they’re just a bit of a loss of how to function in a place that is not like a school which can be quite institutionalized and so schools are working I think in recent years to kind of break that up again a bit and expose their students to a range of settings. So you’ll often see students visit TAFE campuses and universities. There are programs that are offered by TAFE and universities to school students both with us going into the schools but also with young people visiting campuses. We haven’t answered the question on international students. So this is a huge source as international students it’s migration more broadly. So I think the numbers we have in our report about 25 percent of graduates aged 25 to 34 have other overseas qualification or noncitizen holders of an Australian qualification. So we want to track some of these numbers as sort of my my last few weeks at Grattan. But clearly migration as paid as big a role as demand driven funding in changing the nature of the graduate labour market and therefore in thinking about the the way that the tertiary system needs to work. We need to think about what are the flows coming from outside Australia as well as the flows coming through the school system and into our tertiary institutions. The Dan Hanrahan the University of Melbourne. The vast majority of people that a designing post secondary tertiary education policy like politicians says staffers. People at the Department of Education as well as people influencing the debate about the future of work with their guesses of what will happen have primarily done university degrees and I would guess not that many of them have done that degree so don’t understand it that much and probably value the university experience they had quite highly. How do you shift or how do you bring more people that have done that degree and experience that into the policymaking discussions and process. It’s absolutely spot on question. Absolutely spot on. And certainly in my experience in Victoria and in Queensland I saw the loss and erosion of people out the industrial training system. The. I suppose the that you know the continuing rise of the end of the you know the educated professional middle class the professionalisation of the public service and so on. I might say it’s not only in the public service it’s also in teaching as well. I remember going to a one of the technical education centres attached to a high school where there was a absolutely fantastic Swiss hospitality teacher with a certificate for in his 50s totally committed to the program. He was running for hospitality students in the in the outer east of Melbourne in know underprivileged area being told that basically he qualified for his degree the following year he would be out because he wouldn’t he wouldn’t be able to be a registered teacher. And I and I think that’s part of so actually rather than looking at what he brought to the learning and the educational environment the judgment was that he wasn’t suitable simply because he didn’t have a professional qualification well for some at the age of 54 55. He was now in the world is going to go on to a degree part time. So I just think we need to to rethink the whole concept of the skills and knowledge and capabilities that are required to as you say to to design it and staff and run the the education systems education bureaucracies and and bring back into the system particularly in vocational education. A lot of the traditional strengths of the people who used to be there but you know I’ve certainly saw pretty much from the 1980s were phased out by the increasing professionalization through traditional degree requirements of those people. I mean they are the retired or weren’t replaced or in some cases they were just made redundant because they were seen to no longer cut the mustard. You know the question around how you get policymakers to be sensitized and understand much more what happens in TAFE institutes. You know this may sound flippant but I think you know having having those people visit and understand what is going on and be exposed to you see the responsiveness of and he may not think so but you see the responsiveness of policymakers and politicians to chancellors and vice chancellors. It is in their experience and they understand what they get in a university. When we ask them to be responsive to vet they are quite sceptical. We are almost interested parties you can’t trust. There is you trust industry and you don’t trust the TAFE Institute as the educational provider to be working in the interests of the community and industry of which it serves. So there is there is an issue there in in how the sector is seen as a legitimate part of the tertiary sector how we professionalize the staff that are in there and that they are rewarded and recognized for the skills they do bring. And that is seen as a important part of the sector. I don’t think we have that. It isn’t planned in a way that you might like to see it planned in the state in the same way that you might play in secondary schools. So I think those things need to be need to be addressed before we can get any further in the policy space. Time for one more quick. I think another example of the of the cultural problem that the last question related to was that. Central Asian and Treasuries in particular with tertiary educated. I think I’m I’m actually in favour of you know we’ll manage choice and competition in tertiary education to I’m not anti market but to see that turned into a Petri dish for market experimentation around the most sort of far fetched notions of market design and so on without any regard or thinking through the consequences and the full protection of the public university sector in mind no. In my in my sense it was no accident. It was basically well we can afford to play around with this and do a bit of market experimentation because we don’t really care what happens but we won’t do that to the you know the universities. We graduated from because you know we might be frowned on. I mean that sounds like an extreme statement but I think I think it was no accident that most of the people that I worked with in central agencies in particular over that time had no concept of what they were doing or the effect on systems and institutions and student of market design rules and they were just a base basically applying the economic textbooks because I never had the practical experience or the on the ground understanding of what would happen as a consequence of what they of what they did. Got a short question and short answers mine will be short as well. Sam reports out of Wesley College Melbourne I’m in the middle of counselling over 200 year 12 students at the moment I’m one of two careers counsellors there parental expectations. That’s my major problem. Is there any way that we can influence parents into understanding that the effect sector the VET sector is actually a viable option for students. Fed up first here if I could. Look I think trying to influence parents I think is about if you think about what motivates parents to make choices. It’s around future security income. A better life for their children you know than they had and so they can see what a university has bought in the past and what it potentially could bring for their child. So it’s a no brainer right to do that. So I think there is a responsibility for us to be able to demonstrate the possibilities and to go out there and promote some of the outcomes and the and the way in which successful pathways can be generated through the VET system. I don’t think it says it has promoted. We don’t act as a sector. It’s almost. Although there’s diversity in universities to an extent they are seeing more cohesively as what they offer you know whereas a TAFE Institute will offer courses for three months six months a year two years people will come for short courses the greater diversity in the pathways are potentially much more complex and the sense of security in terms of your income and what you get from that is a little bit less predictable for your general person. You know trying to make those decisions for the young for the young people. So I think we need to be able to promote and be able to demonstrate more importantly the outcomes and careers that people have achieved through the tech sector. I think that’s a good note on which to conclude the panel discussion plus across the John Daley who’s the CEO of Grattan Institute. If I can just close this evening by doing two things. Firstly to thank those who’ve made tonight possible. Obviously the State Library our continuing partner in this some policy pitch series. And to Linda Kristjanson and Peter Noonan and Frances Coppolillo thank you very very much for your contribution tonight. Now as was mentioned a little earlier this is indeed Andrew’s last public event for Grattan and it’s also discussing his last report. And so I thought we should mark the occasion just a little because the qualities that Andrew has brought and displayed tonight of course are the qualities that he’s brought to Grattan over so many years. He’s very calm. He’s measured he’s dispassionate He’s unfailingly polite. And we’ve seen all of that despite frankly quite a lot of provocation every so often. He the campus mourning male recently described him as the ultra learned Andrew Norton which I thought coming from a university publication was quite a compliment. But of course it’s true he’s deeply analytic. He has an extremely deep knowledge of the sector based on working on higher education and its policy for essentially all of his working life. And that really shows I think in the work that he’s put out because he has brought this these qualities to Grattan as Tim Dodds in the Higher Education Supplement wrote recently for the past eight years. Anybody interested in Australian higher education policy has come to be highly reliant on the work of Andrew Norton. He’s admired for his independence. He’s insightful in this. His willingness to be provocative and the fact that his policy work is deeply rooted in evidence. And I think all of that is true enabled by those qualities I think Andrew has really left at Grattan and left for the sector an enormous and very important body of work. There is of course the five editions of mapping higher education which one university chancellor told me. He basically sent to all count new council members and told them ask them politely please don’t turn up to your first council meeting until you have read it cover to cover. Not sure whether he in fact administered a test but I suspect so there’s the work that Andrew has done on university teaching on online teaching on the quality of teaching on student attrition and looking at how universities could do better. There is the work he has done on university fees on international student fees. How that intersects with research funding for those of you kind of deeply steeped in political theory. Who would have got the joke about Andrew’s report the cash nexus between international students anyone got the joke which I think was a source of great disappointment to Andrew but at least I got the joke I did find it kind of quite wonderful that the Carlton’s lone classical liberal with the one right Grattan Institute writing a report about the cash nexus otherwise known as a Marxist term. But it’s been fantastic work. And then of course there was the work that Andrew has done on the demand driven system arguing why it was a good idea. I think is one of the very first people to really understand how the demand driven system interacted with the help system and how the sustainability of the health system was key to the sustainability of the demand driven system. And I think that that is something that we’ve kind of all figured out now. But Andrew certainly got there a long time before the rest of us and if we’d all learnt listen a little more carefully than maybe history will be different. So it’s an incredibly important set of qualities that Andrew’s brought to Grattan an extraordinary body of work that he has produced obviously that is not lost. The whole point is it is there to kind of help keep guiding the sector for a long time and I’m very hopeful that Andrew is not going to be lost to the higher education sector. Obviously he worked in it well before he came to Grattan And I’m hoping he will continue to be working in it for a very long time. But I would like to ask you tonight to show your appreciation for the extraordinary contribution that Andrew has made to higher education in Australia at Grattan.

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