Vocational Education: Fix Supply to Meet Demand

Australia has a supply and demand problem with skilled workers. In April, the Australian Financial Review (‘AFR’) reported that resources industry is facing a massive skills shortage exacerbated by interstate border shutdowns.[1] The AFR then reported in July that forklift licence in more demand than a bachelor’s degree – according to data from the National Skills Commission.[2]

Although cherry-picking headlines is far from being an objective test, it is clear that available data and evidence point toward a demand for skilled workers that Australia has not been able to address over the past decades or so.[3] To meet this shortage, we have traditionally relied on the double-fulcrum of domestic students trained by our public-private vocational education system and the skilled worker migration program. However, the second piece of this fulcrum now proves problematic with national borders closed due to the Coronavirus with no real timeframe for reopening in place. Furthermore, whether and when our national borders reopen is also dependent on factors beyond Australia’s control – such as the discovery and delivery of a potential vaccine, the domestic policies of other countries and supply of skilled migrants.

Therefore, this leads us to consider the key question: Why not just invest locally in Vocational Education and Training (VET) to meet our skilled needs? Instead of looking outwards and internationally for skilled workers, the obvious alternative would be to instead invest in vocational education.

Skill shortages potentially crippling

According to latest statistics from the Australian Government Department of Jobs and Small Business, Australia has skill worker shortages in Child Care Occupation, Automotive Trades, Construction Trades, Engineering Professions, Food Trades, Engineering Trades, Health Professions, Nurses and School Teachers.[4] The more glaring shortages have been reproduced below:[5]

  • Construction Trades
    • Eight of the nine construction trade occupations assessed in 2018 were found to be in national shortage. Five years ago, only one of the same nine occupations (stonemason) was in shortage
    • Advertised positions attracted, on average, one suitable applicant per vacancy.
    • With only 44 per cent of vacancies filled, 41 per cent of employers did not attract any suitable applicants
  • Automotive Trades
    • Only 30 per cent of vacancies filled, 51 per cent of employers did not attract any suitable applicants
    • Labour shortages have been reported frequently in the automotive trades since 2007, with shortages in some occupations persisting for decades. In 2018, for the fourth consecutive year, all occupations assessed were found to be in shortage
  • Engineering Trades
    • Only 49 per cent of vacancies filled, 76 per cent of employers did not attract any suitable applicants
    • All ‘engineering trades’ occupations have had key shortages in this labour market since 2017.

This problem is not new; this problem is not an unknown. Back in 2017, the Business Council of Australia warned that the nation would be facing a potentially crippling skills shortage.[6] The Business Council estimated that one million new jobs will be created between 2017-2020 – of course before taking into accounting the mitigating effect of Covid-19[7] – with many of those jobs potentially facing skilled shortages.[8] It has warned that funding to Australia’s VET have left it unable to generate the supply Australia’s demand for workers require. This is evidenced by the Federal Government unveiling a ‘commitment to overhaul the VET system’ with JobMaker although there have been no real commitment in increasing funding or any concrete details on changes introduced.[9]

Taking into account the Covid-19-recession-skilled-migration-slowdown dichotomy, rapidly ageing population, major infrastructure stimulus projects and renewed housing market activity, there is still a net-demand for skilled workers.[10]

Death by a thousand (funding) cuts

According to data from the National Centre for Vocational Education Research (NCVER) illustrated above, the hours of delivery for government-funded VET courses have declined from 2014.

This is worrying, especially so now with Australia needing the right mix of skilled workers to drive our post-Covid recover. The Australian Industry Group (AIG) has stressed that developing the right skills and supply of skilled workers to drive the post-Covid-19 recovery will be vital.[11] Moreover, the AIG has expressed concerns that the VET system is ill-equipped as they are currently struggling to deliver the skills that the economy requires.[12]

The answer is not to further privatise and deregulate, but to increase investment in Australia’s pre-existing TAFE system. Research from the NCVER have reinforced the correlation between strong regulatory frameworks and higher quality VET sectors.[13] This means that the solution would not be deregulation and privatization; the solution is to reinvest in a regulated TAFE system that is able to respond to labour market requirements and government policy aims.

A case study close to home: TasTAFE in crisis

Having examined the problem, the solution is as clear as daylight: reinvest and properly fund TAFE.

To address Australia’s skill shortages, the re-alignment of education and training with industry-skills requirements must occur. This synergy can only occur when employment trajectories are underway, in relation to sectors and subsectors and the skill profiles of the community, and access to education and training is available. It is essential that, to prepare the regional workforce for the jobs of the future, skill supply aligns with skill demand. This is truer now in the Covid-economy than ever before. Government funding to VET must increase commensurate to market requirements to both supply workers desperately needed by employers and sectors, and to transition unemployed or underemployed Australians into jobs.

Anecdotally, students in Tasmania have felt the effects of an under-resourced TasTAFE that is groaning under funding pressure.[14] Students have their courses cancelled mid-semester and staff continue to resign. Furthermore, a corporate plan released by TasTAFE reveals that its infrastructure is subpar and there is no plan for investment. The State and Federal Governments are currently on course for cutting funding to TasTAFE – with no policy reversal in sight – which would be a death knell to vocation education in Tasmania

Funding cuts to TasTAFE have catapulted students into personal and professional limbo as courses were cancelled without warning. Instructors and teachers are being worked to the bone and pushed into doing more classes because they are being forced to work with reduced resources, creating even more pressure on the institution.

The fact that information technology students had their course cancelled while in the middle completing it is extraordinary.[15] A right-to-information (RTI) request shows that between May 2017 and August 2019 ten teachers have resigned from TasTAFE.[16] This staff walkout is definitely a great indication of an organisation in crisis – apart from the statistics evidencing this.

The Federal Government has unfortunately cut over $3 billion from TAFE apprenticeships and vocational education.[17] TAFE campuses have been closed, and jobs and vocational education courses have been lost while government funding for private for-profit operators has soared. What we have seen is the proliferation of unscrupulous operators looking to cash in by charging exorbitant fees for poor quality training. This has shattered employment opportunities and enrolments in TAFE. Nationally, enrolments have declined nearly 800,000 since 2015 to 680,000 in 2017.[18] More should be done and can be done.

Conclusion: A No-Brainer Investment

We need to educate young people and we need to educate the workers of the future with the skills that they need. Nothing could be more important to regional economies. Nothing could be more important to the social fabric of our communities. It is indisputable that creating and retaining regional jobs are the most significant issues of our generation. All levels of government must be 100 per cent focused on ensuring that we meet this challenge. This is truer now in the wake of Covid-19 than ever before with the tone and tenor of the economy, jobs market and skill requirements set to change.

This inaugural research article is a vision scoping exercise to kickstart the CJRE’s first research series: “The Supply-and-Demand of Education and the Economy”.

[1] https://www.afr.com/companies/mining/border-shutdown-will-exacerbate-skills-shortage-wages-20200407-p54hsb

[2] https://www.afr.com/policy/economy/forklift-licence-in-more-demand-than-a-bachelor-s-degree-20200707-p559ob

[3] http://www.airc.gov.au/snr2005/aig/AiGsub2005_Annex4.pdf

[4] https://docs.employment.gov.au/collections/national-occupational-cluster-reports

[5] https://www.employment.gov.au/national-state-and-territory-skill-shortage-information

[6] https://www.abc.net.au/news/2017-11-30/skills-shortage-coming-due-to-vet-business-council-say/9175516

[7] Ibid

[8] Ibid

[9] https://www.4bc.com.au/prime-minister-commits-to-overhaul-of-fundamentally-flawed-vocational-education-system/

[10] https://www.abc.net.au/news/2020-08-01/wa-regional-pubs-desperate-for-workers/12512096

[11] https://www.theguardian.com/business/2020/jun/07/we-will-lose-a-generation-why-australia-must-fix-apprentice-and-job-training-post-covid

[12] https://www.theguardian.com/business/2020/jun/07/we-will-lose-a-generation-why-australia-must-fix-apprentice-and-job-training-post-covid

[13] https://theconversation.com/deregulating-tafe-is-a-big-risk-to-the-labour-market-54171; https://www.ncver.edu.au/research-and-statistics/publications/all-publications/regulating-and-quality-assuring-vet-international-developments

[14] https://www.examiner.com.au/story/6440225/4m-refurbishment-slated-for-alanvale-campus/

[15] https://www.examiner.com.au/story/6430582/three-years-for-a-certificate-tastafe-delays-cause-headaches/

[16] https://www.examiner.com.au/story/6523031/tastafe-highs-and-lows-lead-to-a-brighter-future/

[17] https://www.canberratimes.com.au/story/6296188/apprentice-system-needs-reform-labor/?cs=14264

[18] https://www.aph.gov.au/DocumentStore.ashx?id=6b3910f6-b1f4-45f4-aeb8-49d9ea8097cf&subId=672887

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