The year to date

11 March 2016

There’s a lot to catch up with but, as they say, plus ça change, plus c’est la même chose (which is, according to the estimable Wiktionary, an epigram by Jean-Baptiste Alphonse Karr in the January 1849 issue of his journal Les Guêpes (“The Wasps”), meaning “the more it changes, the more it’s the same thing.”)

VET FEE-HELP

As previously reported, changes to the VET FEE-HELP (VFH) scheme legislated late last year provides some better protection of students from the carpetbaggers who have looted the scheme and dudded the students. The government proposes to spend this year look at ways to rort-proof it from the likes of Phoenix. But as so many people have asked: how did it get to this?

Part of the answer is a near pathological obsession by governments – of all stripes – with “deregulation” and “marketisation”. As former Australian Competition and Consumer Commission (ACCC) chair observed last year, “…..this huge waste of government money is the “inevitable consequence” of governments funding the private sector to deliver a public good. From the home insulation debacle to export market development grants, film industry tax incentives, health and education subsidies, Samuel says the same thing has been happening “as long as I’ve been alive”:

Business is much, much smarter than governments, and business knows how to exploit and you can’t deal with that using people sitting in Canberra or Spring Street. The rogues – and they’ll be there in any industry – they say with glee, all the way to the bank, ‘Come in spinner’!”

This is not to argue against competition and a role for private providers but you have to have, among other things, a robust regulatory system. Quite evidently, this has not been the case.

In a discussion paper released in January, the Commonwealth department more or less conceded that ASQA has been a paper tiger:

Under its legislation, ASQA has a broad power to cancel qualifications where it is satisfied of certain matters, including where it is satisfied that a RTO did not provide the assessment necessary for a student to demonstrate they have achieved the relevant learning outcomes…..To date, ASQA and its predecessor VET regulators have not implemented the wholesale cancellation of qualifications as part of their regulatory approaches. In the four years since its establishment, ASQA has exercised this power sparingly, involving approximately seven RTOs (or former RTOs), 350 individuals, 250 qualifications and 225 statements of attainment.

ASQA has broad powers generally but has been timid in exercising them, seemingly because of the costs. The same discussion paper notes:

A series of civil penalty provisions is set out in the National Vocational Education and Training Regulator Act 2011 (NVETR). Where one of these is breached, ASQA make seek a civil penalty order through the courts. This is likely the strongest of the enforcement options available to ASQA.

The relative failure of ASQA to rein in rorters may have spared its budget but has led to massive costs for the public purse and for individuals. It’s been left to the ACCC to take on the rorters (see).

And it seems that there’s been a fair dollop of administrative incompetence, as well. A recent ABC Background Briefing revealed a “communication breakdown”, whereby the Commonwealth education department did not share VFH data with ASQA until early 2015. Such data might have allowed ASQA to judge which training organisations were growing fastest and therefore posed a high regulatory risk. ASQA has strongly refuted that there was a breakdown of any consequence and points out that, “following liaison with DET”, it launched a targeted program of 21 audits of training providers approved to offer courses under VET FEE-HELP. Three RTOs were assessed as being critically non-compliant with the requirements of the VET Quality Framework at the conclusion of the audit process and, following a ‘show cause’ process, had their registrations cancelled. These RTOs were:

Unique International College
Cornerstone (Empower)
Australian Institute of Professional Education.

In addition, ASQA has cancelled the registration of the Phoenix Institute.

Each of these for four “providers” have been hauled by the ACCC into the Federal Court, along with Acquire Learning, which is an education broker, for among other things, allegedly making “false and misleading statements and engaging in “unconscionable conduct”. The ACCC is seeking recovery of VFH payments and cancellation of VFH student debts. Just to give you the flavour of this, in 2014 Cornerstone’s Empower Institute enrolled 5,000 students, charging them about $15,000 for an online business diploma course. It received $46 million in VET FEE-HELP payments and graduated just 5 students: that’s right, nearly $10 million a pop!

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Education scandal: ACCC hits Phoenix Institute for false, misleading, unconscionable conduct

Unique International College: Amarjit Khela to appeal against accreditation cancellation

ACCC takes action against Sydney college over allegedly forged signatures

Training college Australian Institute of Professional Education has licence revoked by regulator

From policeman to Young Rich Lister: how Ivan Brown found a gap in the private training market

Vocational students may pay as Phoenix Institute takes government to court

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Separate to this, the Aspire group of colleges – Aspire College of Education, The Design Works College of Design, the Australian Indigenous College and the affiliated RTO Services Group and National Training and Development – collapsed in mid-February, affecting thousands of students. With 20 campuses across Australia, the group had $83 million in revenue in 2014-2015 – mostly through VET FEE-HELP payments. Fairfax Media reported that the group had been recently audited by ASQA and found to be compliant.

VET funding

A sustainable and realistic funding model is another prerequisite of an effective VET system. In real terms, VET funding has been declining for years. According to the Productivity Commission’s Report on Government Services, that trend continues: recurrent funding for the VET sector by Commonwealth, state and territory governments totalled $5.2 billion in 2014, a 12 % cut from 2013.

VET assessment

The discussion paper referred to above, in the context of ASQA’s performance, is actually about improving VET assessment practices which I don’t think is a particular issue at this stage. As I told The Australian, and we’ll leave it at that:

Brendan Sheehan said any moves to limit the reputational damage caused to the VET sector by rorting private colleges was welcome, but (he) doubted changing rules around assessment would have any real impact. He said strong policing of the sector and rule changes to ensure dodgy colleges repay government subsidies and VET FEE-HELP advances, such as was now happening in Victoria, would have a much more direct and permanent impact.

The paper suggests that having specialist trainers and teachers who require a diploma to do assessments would have a positive impact. But the real problems lie with online training and companies that have ripped billions out of VET FEE-HELP. I’m not sure if the overall quality of assessment is the actual big issue. Sure, it’s part of it, but it’s not the whole story.

Assessment is hardly the problem when you’ve got outfits like Empower getting just 0.125% of their enrolled students to completion of their courses.

The national market

The drive to create an effective and efficient national training market, enthusiastically embraced by the former Gillard Commonwealth government, spurred on by the innovative approach of the former Victorian Brumby government, has been less than successful (see everything above). A series of NCVER papers shows that what we’ve ended up with is a “hotchpotch of eligibility rules, fees ,subsidies course lists and contract settings”:

Kaye Bowman, first author of all four papers said the differences fly in the face of two decades of reform aimed at building a nationally co-ordinated training system. And they jeopardised course quality, TAFE sustainability and the supply of key skills. Dr Bowman said the entitlement, which guaranteed Australians training at certificate III level, had started out as a narrowly focused equity measure for young people but was extended to older people, retrenched workers and career changers, with every jurisdiction crafting the scheme differently.

Skills Service Organisations

The government has announced the outcome of a process to select Skills Service Organisations to support Industry Reference Committees, as part of revised arrangements to develop and review training packages

Appointments

Leanne Cover, formerly a senior executive in the ACT department of education, has been appointed as CEO of the Canberra Institute of Technology.

Trevor Schwenke, formerly general manager of TAFE Queensland South West, has been appointed CEO of Bendigo Kangan Institute.

The annual ATAR hullaballoo

In January, we had the now annual hullaballoo over the efficacy or otherwise of ATARs as some standard for gaining admission to a university, sparked this year by the decision of some Victorian universities not to publish “clearly in” ATARS for three-quarters of course offers (the point at which a student with a certain will definitely get an offer for course – and may get an with a lesser ATAR anyway). Victoria University’s vice-chancellor Peter Dawkins “boldly stated that ATAR cut-off scores are very often a meaningless piece of information”. Backing him up was Swinburne University’s vice-chancellor Linda Kristjanson, who is also chair of the Victorian Vice-Chancellors Committee.

We really are in a post-ATAR stage. The ATAR is a very blunt and imperfect instrument.

Under a proposed new model, students at Templestowe College will be given the option of applying for any course at Swinburne University without an ATAR. Entry into the university’s courses – which will include the full gamut of undergraduate degrees – will be based on new measures of student ability: grit, leadership and strong inter-personal skills.

The fact is that that in the demand driven system, where universities will receive funding for every student they enroll, the ATAR is of decreasing direct relevance, though not altogether irrelevant, as a selection tool. The growth in participation in higher education sparks a rather pointless controversy over declining “entry standards”, typified this year by a breathless bit of analysis in the Sydney Morning Herald – NSW universities taking students with ATARs as low as 30.

But as The Scan observed way back in January 2013, why it should come as a surprise to any ATARs for university admission have on average declined in recent years is itself a surprise. The whole point of the reforms arising out of the Bradley Review process in 2008 was is to

increase higher education attainment in the general population
increase higher participation by poorly represented population groups (low SES, regional, indigenous).

To the extent that you achieve one goal, all things being equal (for example, #2 isn’t achieved at the expense of some other group) you also achieve the other. And the overall effect must be that, “on average”, a lower ATAR than had hitherto been necessary (or no ATAR at all) will get some more applicants into a university course than had previously been the case (though not into any university course at any university).

That is, the policy, seemingly, is achieving exactly what it is supposed to achieve.

In 2013, just over a third of university offers were based ATAR as the sole determining factor, and it would be somewhat less now, as universities such as Swinburne, and just about every other university (even Go8 universities), move to more broadly based entrance assessment processes. Next year, UNSW Law School, ranked last year one of the best in Australia and 15^th best in the world, is introducing a Law Admission Test (you’re still going to need a pretty good ATAR).

A recent article by the Grattan Institute’s Andrew Norton shows that stories such as that run in the Sydney Morning Herald are something of a beat-up: final enrolments of 50 or below ATARs from 2013 school leavers in 2014 were only 3% of the school leaver cohort (although total low-ATAR enrolment is higher than this, due to students who finished school in other years). Norton doesn’t entirely discount the usefulness ATAR and ATAR cut-offs/clearly-ins in giving students insight into their possible options (including vocational education and training).

Review of admission transparency

Nevertheless, Commonwealth education minister Simon Birmingham bought into the debate during his address to the Universities Australia Conference (see below), saying that with rapid growth in enrolments under the demand-driven system over recent years there’s a need ensure the system remains sustainable and uncompromising on quality. He asked why, if there’s no an issue, “why do so many people expend so much annual energy on this (issue)?” On the matter of publishing reliable clearly-in data, it’s a matter of transparency:

Students need to have confidence that they know what the real requirements for admission are; not some artificial measure that bears no resemblance to reality… (current)entry requirements are perhaps as opaque sometimes as a double frosted window.

He’s asked the Higher Education Standards Panel to consider how transparency might be improved.

See also

Should we scrap the ATAR? What are the alternative options? Experts comment

The coming date with electoral destiny

It won’t have escaped your notice that we are careening towards a Federal election. As former ALP factional enforcer Graham Richardson recently observed, on the assumption that Malcom Turnbull is not stupid, then the introduction of the Senate voting reforms must mean a double dissolution on 2 July. On the basis that Turnbull has so peed off most of the crossbench, to leave 6 of the troublesome 7 in place for the next term by not having a double dissolution would indeed be stupid (former Victorian DLP Senator John Madigan term expires, anyway and he will surely go down; SA independent Nick Xenophon supports the reforms).

The unusually long campaign (a 51 day campaign rather than the usual 31 day campaign of modern times) is tricky for the government, assuming the election is the government’s to lose (normally the case for a first term government). There’s plenty of scope for stumbles, stuff ups and scares.

The Budget isn’t too tricky an issue as the government doesn’t actually need to bring down and pass a formal Budget: there wouldn’t be time anyway. What the government needs to do is secure supply to fund the ordinary services of government: a huge swathe of Commonwealth expenditure is covered outside of the supply bills these days anyway, through standing appropriations and special appropriations contained in separate legislation (for example, university funding is provided for under the Higher Education Support Act 2003). Despite the government wanting to fight the election around industrial relations issues, budget issues are going to figure prominently, whenever the election is held, so the government may as well make a virtue out of necessity and use the work it’s being doing on the Budget as its economic policy and release details through the course of the campaign.

Policy directions

I’m not bold enough to predict the winner (although Labor has the harder task ahead of it, there’s no lay down misere in the offing, as seemed the case a few months back), but I’m bold enough to state that when the incoming prime minister meets with PM&C and Treasury officials in the afternoon of 3 July and is handed the Incoming Government Briefing Book (Blue Book for the Coalition, Red Book for Labor), you can be reasonably certain higher education will have a prominent chapter. After all, the $20 billion in savings linked to the original deregulation package, including a 20% cut to course funding, remain in the budget projections. How are the parties going to deal with that issue: the savings are either there or they’re not, and if they’re not there, they just can’t be booked into the future, ad infinitum.

Labor’s announced a largely “steady as she goes” course – notably, no funding cuts, no fee deregulation. Universities Australia is pushing for more detail and more dollars, so we’ll have to see if Labor has anything further to say or promise (we wouldn’t think much in the way of promises these straitened times – perhaps a few vague promises about getting higher education spending to the OECD average “over time”).

As for the Coalition, some reformulation of the failed higher education “reform package” will be in the Blue Book. In his speech to the Universities Australia Conference Commonwealth education minister Simon Birmingham said the government “continues to believe that some reform is necessary”:

Our government continues to believe that some reform is necessary. Reform is necessary to support innovation, both within our universities and beyond. Reform is necessary to support the provision of pathways that enhance equitable access. Reform is necessary to protect our reputation for high quality. And yes, reform is necessary to support federal budget sustainability.

But what actually happens will depend entirely on the composition of the new Senate, which won’t be known until some weeks after the election. If there is a Coalition Senate majority, expect game back on for the packages that failed to pass the Senate in 2014 and 2015. Labor hardheads figure that the combination of a double dissolution and Senate voting reform creates that possibility – but it was, of course, these same hardheads (together with their counterparts in the Coalition and the Greens) who negotiated the preference deals that parachuted the micro-parties into the Senate in the first place. I don’t think you could boldly state anything about the composition of the post-election Senate: who knows what unexpected results the new Senate voting system might throw up, what are the Greens going to do with Senate preferences (while Senate preferencing will be of considerably less value, they won’t want to jeopardise their own balance of power possibilities). And what will Greens voters do – whatever Greens leaders advocate, Greens voters are hardly likely to be inclined to support with their preferences the party that cut the tax, stopped the boats, are stalling on same sex marriage and all the rest.

In his speech to the UA Conference (which was mainly about research, innovation and collaboration), UA chair Barney Glover set out in broad terms the university sector’s policy agenda for this election year. He prefaced his comments with the observation that the sector has been subject almost 2 years of policy insecurity and uncertainty which has taken a toll on the ability of universities to plan and allocate resources (it’s actually more like 4 years, taking into account the churn that was going on in the latter days of the Gillard government). He called on the parties to clearly articulate:

the principles that guide and the objectives to be achieved by their higher education policies;
the key reforms that will deliver those objectives;
the proposed means for delivering a sustainable and stable higher education system; and,
the implications of these policies for students, universities, industry and government itself over the longer term.

In October last year, Universities Australia released its policy statement – Keep it clever 2016. This sets out in detail the context of its policy agenda (“universities are really important to the nation’s present and future security and well being”); what’s needed to drive research and innovation; public funding support for students; and government support for international education.

In his speech to, Glover declared:

The sector will never accept that maintaining the level of quality expected by our students, employers and the community can be achieved through reducing the level public investment in universities.

Well, as represented by UA, reducing public investment in universities was exactly what the sector signed up for in 2014, albeit with some disgruntlement in the ranks. And the Keep it clever document is a little less definitive: the policy is not stated as “never accept” but as:

Universities need government to ensure, in the short-term, that there is no decline in the level of per student funding for government supported student places….

In the short-term is a rather significant qualifying statement. So, it all begins again.