Reality check: is VET really an exemplar for the marketisation agenda?

David Freeman has worked on Australian skill reform resources and research since 1993.  He is currently completing a history of its three decades to 2016.

1.  Introduction

Some have suggested that vocational education and training in Australia provides an exemplar for the further marketisation they urge within health, community and educational services.  A reality check seems in order.  Overall, VET’s marketisation has not gone well.

Over and above vast consequences for individuals, there are three important reasons this is significant:

  • the integrity of VET’s content, delivery and accreditation goes to the heart of VET’s efficacy;
  • the integrity of VET goes to the heart of the efficacy of multiple other systems that today rely upon VET as bridge, hinge, engine room and building block; and
  • the false, possibly dishonest, conclusion that VET’s marketisation has gone well may be adduced as if legitimation and valid premise for marketisation of other fields across education, health and community services.

Because so consequential, getting the analysis right matters.  Along the way, honesty will also honour students, teachers, employers, taxpayers and equity groups treated poorly by VET’s marketisation.

VET does have several remarkable attainments of the past three decades - notably massification, articulation with other spheres, and multiple equity breakthroughs.  Compromised by context, contingency, and topsy-turvy policy and funding ruptures, they are achievements nonetheless.  But the positive attainments are scarcely due to VET marketisation.  They are largely attributable to massive state and individual investment and persistence, dedicated, gifted individuals in every space and realm, intermittent state problem-solving and even (the domestic equivalent of) statecraft, and skill reform’s original tripartite governance comprising government, business and trade unions.  Over three decades of skill reform since 1987, VET has been simultaneously triumphant and catastrophic.  Marketisation has little to do with the former, and a good deal to do with the latter.  That is bankable fact.

2.  Rehearsing latest crises

I unpack momentarily several explanations of crisis.  I first establish the field as one ripe with difficulties.  Recent mainstream media reports provide a starting place.  Serial scandals in the VET sector have triggered alarm bells for most Australians.  The previous couple of years leaves most with jaws agape.  It is hard to know where to start, let alone focus one’s alarm.  Let’s reel off some entrée choices.  Federal police raids on VET private Colleges have triggered court action by the Australian Competition and Consumer Commission (ACCC) against private Registered Training Organisations (RTOs) for egregious breaches of consumer law.  The ACCC is reportedly chasing over $300 million to be repaid to students and taxpayers (VET FEE-HELP loans).  One private provider recently agreed to repay $50 million.  Yes, $50 million - that’s not a typo.  Careers Australia billed the taxpayer for $230 million in 2015.  Pursued by the ACCC, it recently agreed as settlement to forego $160 million in federal funding.  Federal Court Justice Nye Perram is currently hearing an ACCC case to recoup $47 million of VET Fee-Help funding from Unique International College.  On 14 July, Justice Perram observed in court, "It is a huge number for a small school on top of a shop in Granville”.  Quite.

A blowout in VET Fee-Help debt sees over $4 billion written off as unrecoverable by the Feds, with expectation this will exceed $8 billion.  The most common media descriptor alongside ‘vocational education loans’ is surely ‘debacle’.  Completion rates in VET courses have plunged to thirty per cent.  There has been a rapid decline in the numbers commencing apprenticeships and traineeships.  In the four years to 2016, apprentice numbers in Australia dropped from 516,000 to 295,000 – dropping fully twenty percent in the twelve months to December 2015.  One national or state-based parliamentary enquiry after another has documented general degradation of the TAFE system.  Public dismay is evident.  The Andrews’ Labor Government’s November 2014 Victorian election victory is partly attributed to promises to revive TAFE.

If VET rarely receives the public, media or political attention it warrants, there has been outstanding investigative journalism around these scandals.  Substantial resource investment from multiple media outlets discovered numerous problems and terrible injustices suffered by individual students, taxpayers and sector and educator reputations.  We have seen fine pieces in recent months from John Ross, Kylar Loussikian and Julie Hare at The Australian, Fran Kelly’s AM program on ABC Radio National, Quentin Dempster and Eryk Bagshaw at the SMH, Matthew Knott at The Age, Daniel Hurst and Paul Karp at Guardian Australia, Michael Atkin on ABC TV’s 7.30 Report, and journalists and sector insiders at Campus Review.  As scandals and media grist go, VET is an equal opportunity provider.  We can recall the Alcoholics Anonymous axiom that the first step is to admit there is a problem.  We must be just about there.

Experts and insiders raise a complex list of additional concerns.  These are noted in reports by or for Federal and State Governments, Parliamentary enquiries, the National Council for Vocational Education Research, TAFE Directors Australia, the Council of Australian Governments, and all the rest. 

This brief scan illustrates that it is simply untenable to list VET as marketisation exemplar.  In just a couple of thousand words, why might this be so?  Reasons include the interplay of positive and negative elements within two fields I shall unpack serially:

  • factors not specific to VET but often present when a field or industry experiences marketisation; and
  • idiosyncratic factors unique to VET and its marketisation.

A third category of problem can only be gestured toward here, (unforeseen) interactions between these first two categories.

3.  Connecting VET to common tendencies during marketisation processes

We turn to difficulties in VET’s marketisation that are non-specific to VET and often present within fields or industries experiencing marketisation.

The first is public fund diversion to private profit.  Gavin Moodie observes (The Australian, 20 July 2016) that the British Government is moving toward a rejection of for-profit educational markets and competency-based training, and predicts this will influence Australia.  The British conclusion, reports Moodie, is that publicly funded VET should be delivered “under not-for-profit arrangements”, in part so surpluses can be reinvested.  He contrasts this with the explosion of privately delivered, publicly funded Australian VET from 29% in 2011 to 46% in 2015 (69% in Queensland).

Rapid provider proliferation poses profound challenges to regulators and quality assurance.  That much of VET has been privatised in the past two decades away from TAFE and toward 5000 private RTOs means, controversially, that these RTOs are the carriers of a significant proportion of VET public funding, policy, expectations and institutions.  Proliferation’s rate and extent is unimaginable for Australian Universities, suggestive of a status and regard differential for VET students and content.  A National Council for Vocational Education Research report (18 July 2016) found Australia’s VET sector vast and unwieldy, with the smallest 2000 providers creating problems for students and regulators alike.  This report found that Australia has a VET college for every 3000 adults, 12 times the provider ratio of Universities.

Competition is supposed to bring down cost, provide flexibility, and ensure quality.  Yet privately provided VET costs to users have ballooned relative to those of TAFE, while quality is at best variable.  VET FEE-HELP’s vast wealth transfer to private providers – (when an equity-related proposal) – reads as B-movie script, so improbable as liable to be dismissed on grounds of extravagant imagination.  Did a Michael Moore doco about the American private health system ever have this much material to work with?  It is as if there was a conscious desire to demonstrate more pungently than crude 1990s hard-Left globalisation critiques ever did, that globalisation can mean the privatisation of public assets and socialisation of private debt. 

In fairness, while the jury is out on flexibility, it may have been delivered rather well by private VET providers.  They have been aided by fortuna, because the era of digital transformations enables curriculum delivery and assessment that drives down teacher, assessor and other provider costs.  Yet VET is vulnerable to digital education’s downside.  Without massive pedagogical investment, both VET and digital education can play into competency-based training’s Achilles heel, perfunctoriness of skill conception and assessment that potentially deskills skilling.  Preventing this requires expert vigilance and intervention, with the presence of this capacity questionable in an era of small private provider proliferation.

Relative to TAFE, marketised VET has a diminished amenability to coordination.  Section 4 that follows makes plain why coordination especially matters in the case of Australian VET.  Let me establish in this section a sliver of the conceptual field, place limits around my advocacy of coordination, and pre-empt a Judith Sloan straw-man about wistfulness for the Eastern Bloc or even Sidney Webb.  Anyone who supports statism snoozed through the twentieth century.  It is not only totalitarianism; consider the self-evident thrust from the title (and disturbing case studies) of James Scott’s (1998) Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed.  But with a thrust as equally self-evident from its title, simultaneously consider Paul Du Gay’s (2000) In Praise of Bureaucracy: Weber – Organization - Ethics.  These two texts might be usefully deployed here as if counter-narratives, mutually interrogatory creative tension, neither simplistically pro-or anti-state.  In this light, the questions become nuanced ones of proper spheres and domains.  We might ask: what can only the state do?  The question that follows is: of those things that state and non-state actors can both do, what functions, if any, is the state more likely to be able to do well?  Du Gay offers something to the present discussion.  Du Gay argues vigorously that the bureaucratic ethos that came into existence over a century ago remains integral to democratic objectives and good government.  He finds that late twentieth century critiques of the British public service, along with resultant new policy sets, fail critical examination against these standards.

We need Weber’s sense of proper domains and spheres.  There can be skills and approaches that government and not-for-profits may share, but which markets may be less likely to acquire.  Without failure by any party, there can be low compatibility of purpose between projects of commerce and those of health, education and welfare.  And the latter can be internally differentiated.  Small providers can add value in the not-for-profit human services sector.  Being local and community-based can assist credibility, presence, history and relationships.  But in education, a critical mass of teachers (therefore institutional size), some with longevity in that institution, builds thick pedagogical mastery and culture, experience, mentoring, teaching resources, institutional memory.  It makes more fit-for-purpose sense for a domestic violence shelter to be a tiny entity than a VET institution.  Yet tiny VET providers can accumulate significant public largesse, as Justice Perram noted earlier in this article.

Marketisation presumes such staples of orthodox economics as rational, self-maximising homo economicus.  But public goods that are then marketised can be subject to commercial advertising processes.  Contemporary behavioural economics, the power of advertising, and corporate secondment of behavioural research challenge the assumption that this will avoid tears before bedtime.  Slick advertising might sound as if from the same stable, but is no faithful servant of the rational operation of free markets and market choice.  It is wicked to frame this observation as an assertion that most people are stupid or cannot exercise autonomy, as if the observation challenges agency or the logic of democracy.  Rather, advertising has gamed the discipline of psychology.  TAFE would not regard it as conscionable to utilise such tactics, nor divert scarce funds into relentless TV advertising in tandem with simultaneous sophisticated call centre and internet sales tactics.  To add complexity, claims by rival private VET providers can be difficult for consumer adjudication, each provider seemingly reliant upon superlatives and stylistic makeovers of career training that fuse the American Dream with New Subjectivity.  A consistent revelation in media exposés of private Registered Training Organisations has been entire cohorts ruthlessly targeted in that space between individuals and all Australians, such as disabled students and remote Aboriginal students on missions.  Those with less historical access to education, and such educational concomitants as critical thinking and consumer rights savvy, had their efforts to expand their educational experience exploited by…their educational institutions.  Is there a single person in Australia who believes TAFE would do this?

A system with disparate parts needs a cohering centre.  Providers are VET’s centre.  How can this centre comprise 5000 newish pieces (RTOs)?  The consequences are revealed more fully in the following section.

Once a public good such as education is privatised, we may no longer contemplate it as a space for citizenship rights and its potential breach.  Now, a consumer rights model provides notional protections and redress.  Yet there is a problem of fit.  Once VET becomes just one more market, the ACCC comes into play, pursuing miscreant consumer law breaches and commencing lengthy processes to extract refunds.  Infinitely better than nothing, and with an abiding respect for ACCC investigators and prosecutors for forensic persistence and profound public service…but education is different.  It is not comparable to the right to obtain a refund for a basketball because a leak appears three weeks after purchase.  Students may have invested several years of their life, a vast leap of faith that entrusts their future, self-actualisation, their own or family debt and lifelong income into the provider’s hands.  A student may consequently drop out of a course, or be oblivious to their training’s inadequacies until seeking or entering employment.  Consumer law’s restitutive principles barely suffice.  Lost years, possibilities, motivation and workplace merit-building are non-refundable.  At the upper end of possibility, an ACCC-triggered student refund may reimburse fees.  It would be mute on opportunity cost, future income foregone and expenses incurred.  While all students ought be encouraged toward due diligence, a trusteeship principle is tacitly assumed by students by virtue of regulators allowing a VET provider to trade.  We now know that this expectation is presently unwarrantable.

The marketisation of publicly funded services has triggered new forms of governance.  Mark Considine’s (2001) Enterprising States: The Public Management of Welfare-to-Work observed state/market hybridity and boundary shifting.  New forms of governmental power can be hybrids, neither bureaucracy nor market, neither private nor public.  Full of inter-organisational collaborations, they represent new strategies of public organization that in some respects exert greater “transformative authority over other institutions of governance” than do private markets or government bureaucracies.  This is true of skill reform for the past twenty-five years.  Coordinated in large part by government, it is premised upon multiple forms of employer voluntarism, powers and cooperation.  Considine observes that hybrid governance can lack the norms, checks and balances of either governments or markets.  This is not the creation, or a failure of, private VET providers.  But it is a murky space for skill reform’s accountability, governance and ethics, rendered more opaque again by VET’s marketisation. 

Finally, marketisation’s assumption that non-state providers are ‘more nimble’ has proven specious in VET’s case.

4.  Idiosyncratic factors unique to VET and its marketisation

We turn to idiosyncratic factors unique to VET that in turn complicate, and are complicated by, its marketisation.  In short, there is a de facto national mega-system around skill formation and assessment.  It is premised upon vast commensurability.  Its VET and non-VET components are highly dependent upon VET system integrity.  To reiterate, new forms of VET provision have recently proliferated, comprising 5000 young private Registered Training Organisations.  And multiple levels of systemic vulnerability depend for their tenability upon the systemic integrity of other system elements that are themselves vulnerable. 

Skill reform since 1987 has conjoined in new ways such key institutions as the nation-state, the vertical division of labour, secondary, vocational and university education, private and public sector employment, welfare, skilled immigration and temporary worker visas.  VET is an export industry, in three senses: foreign students studying in Australia, VET IP sold overseas, and VET courses delivered overseas.  VET has intermittent soft links with Australia’s foreign aid, such as the seasonal worker program for Pacific region workers and advice to other jurisdictions on building a national VET system.  Skill reform has triggered new interactions, and new coordination gaps, between Federal and State Governments, and between three and five ministries in each State and Federal Government.  VET, a competency-based approach to skill, the Recognition of Prior Learning, the Australian Qualifications Framework and multiple entry pathways are among the articulating spines.  These elements interact, often in modular fashion, so substantively and consequentially as to cumulatively build a mega-system.  Their shared imperative is skills for employability.  The rationale from 1987 was that this policy set would simultaneously address key requirements of employers, labour and nation into the twenty-first century.  The superordinate assumption is postfordism’s precept that skill has become the single-greatest predictor of individual, enterprise and national viability.

Over the past two decades, component elements have evolved toward a system of vast complexity and inter-penetration.  For example, VET in Schools has significantly built Year 11 and 12 retention.  Approved training programs can meet Centrelink/Job Search ‘Job Plan’ requirements for four categories of benefit recipients.  VET in Schools and sanctioned welfare to work training typically provide accredited training toward Certificates I, II or III.  This in turn can provide entry into TAFE, an apprenticeship or traineeship.  That can generate a trade qualification or, in many cases, University entry.  For instance, Certificate IV can bridge into a diploma or sometimes University entry, with the option later of converting a full or partially completed diploma toward undergraduate degree advanced standing.  And so on.  Half a dozen key categories of social and economic institution are today highly dependent upon VET processes, systems, qualifications and articulation for their own key performance indicators.  This dependence includes such metrics as enrolments, income generation, equity and completions/graduations.  Academically elite schools and universities are perhaps the only institutions to remain relatively untouched.

This brief sketch flags half a dozen forms of complex articulation internal to VET, and another half-dozen between VET and other systems.  With componentry so modular and articulated, any fragilities or vulnerabilities exponentially increase risk.  As the aphorism has it, a chain is only as strong as its weakest link.  Given everything that must be held together and commensurable, this would be extremely challenging if there was only a single national provider under government direction– call it ‘super-TAFE’.  Even just one provider would still be difficult for all the reasons above, and because warranting skill based, and multiple, commensurabilities is technically difficult.  The competency approach helps in principle, but in practice may make it more elusive.  In either case, it is likely impossible to hold together without a centre.  Such a disparate undertaking cannot otherwise be held together; it is just too complex, too diffuse.  This is not an ideological position that always defends government and criticises the private sector and competitive markets.  Rather, it is an empirical judgement of the consequence of choices made three decades ago: competency, articulation, modularity, national portability, multiple entry points.  It is a system that wants to build the total number of credentials, and award them whenever warranted, but to do so with rigour and consistency.  This requires intense systemic discipline.

There are multiple large systems around VET whose inter-relationships – often via VET – forever feels its way toward an integrated mega-system without ever acknowledging it. All this is virtually unknown to the public - and at most only partially realised by politicians.  Business Council of Australia CEO Jennifer Westacott’s September 2014 speech suggested considerable comprehension when observing that “VET has the most complicated and, arguably, the most important task in the context of economic transition” (

All this makes ironing out skill reform’s kinks, and its links with other sectors, quite the challenge.  Marketisation’s provider diffusion adds complexity again. 

5.  Rules of Evidence, and the Right to Reach and Proselytise Conclusions

Finally, momentarily contemplate what barristers and judges term ‘rules of evidence.’  It is insufficient to ignore VET’s travails extensively available for perusal in mainstream and specialist media, then blithely assert VET as model for further privatising health, education and community services.  Based on what?  To be sure, chutzpah and aggressive reinvention can take you a long way.  They eventually hit natural limits.  Even Donald Trump had to ramp it back a micro-notch when it mattered most, such as accepting the Republican nomination. 

How is it possible to propose VET as marketisation exemplar?  Possibility 1: ignorance, fine in and of itself.  But consider the hubris required to imagine yourself able to then form reliable conclusions – then vigorously prosecute them.  Possibility 2: the limits of their veracity are known to proponents.  But they have a vested interest, or serve those interests, or advocate a consistent ideological line where, in any of these scenarios,  factual accuracy is immaterial.  A desired interpretation just might fly if repeated often enough, marinated in a projected self-confidence suggestive of authoritative knowledge that relies upon most not knowing otherwise.  As Goebbels brilliantly realised, however counter-intuitively, a big lie has greater prospects than a small lie.  The third possibility – of honest difference of interpretation – is ordinarily plausible, even likely.  Liberal democracy is predicated upon its ubiquity.  As French sociologist Luc Boltanski observes, public debate is often premised upon multiple, competing moral vocabularies rather than a simplistic, self-serving binary of ethical and unethical actor.  But it is not plausible here because a bridge too far.  The occasional judicial directive to juries seems apposite: VET as marketisation success is ‘not a conclusion available upon the facts’.  Unless you are a highly profitable RTO, in which case marketisation has gone rather well.

If you can assert as overall public policy assessment that VET’s marketisation is sufficiently successful to be exemplary, and imagine this assertion can stand, there are few limits to what can be claimed.  To channel Stephen Colbert satirising American politics, there cease to be boundaries around truthiness. ­ Stalin reportedly observed ‘he who controls the minutes, controls history’.  VET as marketisation’s poster child simply foists the wearisome, make-work duty upon those familiar with VET’s past three decades and without vested interests in play, to out the outright fabrication.

As flagged at the outset, the (questionable but on balance probably) positive attainments of massification, cross-sectoral articulation and equity openings would have occurred whether delivered by public or private sector.  This is because of policy decisions since 1987, vast investment and effort by the state and individuals, and incremental, originally unanticipated, linkages with non-VET sectors.  They are not explicable by marketisation.  If anything, the precise opposite can be contended: why relatively limited return on massive transfer of public funds?

As flagged in rudimentary form, the take-home message here for policy-makers is both Houston we've got a problem, and that mission control is run out of a shed. 

Thought for the day for those in power, their advisors and acolytes.  Before proselytising VET as exemplar for any proposition, fix it.  What you learn while so-doing may provide insights to temper your extrapolations.

Posted by Luke Craven.