Speaker 1: 0:33

Welcome to the RTO Superhero Podcast with me Angela Connell-Richards and co-host Lauren Hollows. Welcome, lauren, hey, hey. So we've got a hot topic today and Lauren's going to be interviewing me. With regards to the hot topic that's going around is government funding and whether it's fair that majority of the funding is going to TAFE and what the impacts are being on private RTOs. Let's dive into it, Lauren. Love to have you back on the show.

Speaker 2: 1:10

Yeah, very exciting. So obviously, as many people will now be aware, the new smart and skilled contracts have come out. New South Wales allocated approximately 80% of its total smart and skilled funding to TAFE New South Wales, leaving about 20 percent for the other providers combined. Angela, you've been leading a lot of discussions in and around this topic, so I guess the first question I'll ask you is it's just do you think that having that really heavy concentration of funding on one provider is going to be sustainable, or are we missing an opportunity here, you know, to innovate through more balanced models?

Speaker 1: 1:52

I think it's very hard to say that any system can be sustainable when 80% of the smart and skilled funding is funneled into a single institution being the public sector.

Speaker 1: 2:05

In particular, when we look at the outcomes that TAFE have had and it's clearly on the records of NCVER with regards to the amount of money and we've worked out that the average is, for each dollar that you spend with the private sector, you're spending $3.34 in the public sector. So it's a lot more expensive to run government-funded programs through TAFE. And we've just found out that TAFE have also just had a payroll increase as well, so that's going to now even cost even more. So that's not just an imbalance, it's a bottleneck. While TAFE plays a critical role, innovation thrives in ecosystems where there is competition and, in particular, when you've got the diversity of private providers who can easily respond to industry changes and deliver training that is specific to the industry needs. Private RTOs often specialise and regionalise and pivot faster to meet emerging workforce needs. So if we want a VET sector that's future fit, we need a funding model that supports a broad ecosystem, not just one giant.

Speaker 2: 3:26

So you know you brought up a couple of interesting points there that supports a broad ecosystem, not just one giant. So you know, you brought up a couple of interesting points there and obviously you know the outcomes that we get from that is something that you know a lot of people do like to focus on. Tafe New South Wales has around about a completion rate of about 43% and that's obviously based on sort of NCVR data, which can you know? Look, it can be a little bit, and private providers average closer to 54% across AQF levels. Again, look, it can be a little bit hard to track that through NCVER data. But if private providers are delivering higher completion rates at lower costs, right, what is the argument for supporting more through TAFEs? You know what do you believe the rationale is behind that?

Speaker 1: 4:17

I think the rationale is the government just want to look good. I think it was a political promise that they made that there will be fee-free places and I think most ministers don't understand what thefree places in TAFE, not understanding the impact that that's going to have on private RTOs and the fact that private RTOs not only cost less per course or training that they're delivering, they also have a much higher satisfaction rating when it comes to the delivery of that training by both the students and employers the employers actually. They actually prefer the outcomes that they get from private training organisations and that has come up in the NCVER reporting as well, that there is a much higher satisfaction rating.

Speaker 2: 5:31

Yeah, so we actually did pull that data. So that's the vet student outcomes. For anybody that's interested, you can go into the data builder. And so when we look at the comparison of TAFE institutes versus private training providers, what we see there, for example, is they do track things like you know how they would recommend the training provider. Now, I think overall, the data is pretty positive for our industry. But if we look at just a couple of the different points recommend the training provider, I think it's, you know, around about between 85% and 86% across providers. When we look at things like satisfied with the support services, 77% of students were satisfied with TAFE institutes and 82% with private providers. Satisfied with the learning resources 82% with TAFE and 85% with private providers. And satisfied with the training, overall, 89 and 90%. So I mean it does say that you, that you know, broadly, I think, students are happy with the training that they're receiving in our industry.

Speaker 2: 6:31

There's definitely an argument out there that, um, you know private providers and we've seen the terminology over and over again this year private providers are dodgy, uh, they're providing less quality, they're providing less quality, they're providing, you know, less quality training, shorter timeframes. You know, we've all heard the arguments. This data doesn't back that up, so do you think that there really is? It's a you know? Is it a problem for our private providers that we have not been able to escape that stigma of you know the dodgy private provider?

Speaker 1: 7:12

And you know what. So I've got two sides to this. Tafe don't get called dodgy. However, they are often very non-compliant and we've seen on a number of occasions like South Australian TAFE it had major non-compliances a few years back and those non-compliances were identified as critical non-compliances and they were given an extra three months to rectify those non-compliances, whereas if it had been a private RTO, it would have been very, very different. They would have most probably had face cancellation. So it's unfair how ASQA are even that are the private RTOs that hit the headlines and not the TAFE providers that are also non-compliant. So I think it's unfair what hits the headlines. But also, yes, there have been dodgy providers in the private sector, but why are they highlighted over the outstanding providers that we do have in the private sector? But why are they highlighted over the outstanding providers that we do have in the private sector?

Speaker 2: 8:50

Yeah, yeah, I do think that is a big issue for us is we don't spend enough time highlighting the amazing work that is done in our sector. You know, like I, work with some great organizations that you know deliver regional training out in the Pilbara, or you know have spent, you know, a huge amount of money investing in million dollar technical facilities to be able to deliver telecommunications training. You know so, and a lot of these things don't go, they don't get highlighted and quite often is because the business owners are in the process of, you know, delivering training and running a massive business, so you know that takes up their time as opposed to going out and self-promoting themselves or promoting the industry and things like that.

Speaker 2: 9:37

so yeah focus on delivering quality education. Yeah, absolutely so. You know, as you said, the data supports the fact that you know, there is a lot of quality outcomes being delivered in the private market and, as we've said, the average price per qualification to completion is sitting at a lot lower with a private provider than a funded provider. This is now going to lead us into the fact that we've got a huge amount of training that's going to be diverted supposedly diverted to TAFE, and I guess one of the questions that I will ask is whether or not you think TAFE is actually going to have the capacity to deliver on this, because we've certainly seen it in the past.

Speaker 2: 10:21

We saw it in South Australia it happened about five years ago where all the funding was diverted to SA TAFE. It lasted for about a year and then the government had to reel in reverse course because the TAFE just simply didn't have the capacity to be able to deliver. You know, do you think we're going to see something similar here, whereby you know that they're just not going to be able to, or are we going to see something like what we saw in Victoria, whereby the Victorian TAFEs just basically went out, set up a huge amount of third party agreements with private RTOs, and so the training looked like it was being done on the books by the TAFEs, but I would say there was a good solid proportion of that that was actually being done by private RTOs via third-party arrangements.

Speaker 1: 11:05

And I think well done, victoria for doing that. That makes it a lot more even playing field. But let's be honest, TAFE can't do it all. They don't have the infrastructure, they don't have the team, they don't have the tech technology. They've got staff shortages. They don't have the facilities, for example, for age care, delivering age care and digital access issues. They also don't have the infrastructure, in particular, when it comes to delivering training in regional areas, which is where a lot of the small RTOs are being impacted, because in regional, they're not getting the government funding either and they're out there delivering in those smaller regional areas. So I think, in a snapshot, no, I don't think TAFE has the infrastructure there when it comes to the delivery of training.

Speaker 1: 12:03

And then the other side of this and this is something I've been pointing out with our petition is with the reduction. Yes, it could be. You know, private providers they need to lay off staff or they'll be laying off trainers, they'll be laying off admin staff. They're not all suitable for TAFE. So, even moving over to TAFE and there are some providers that will need to shut down those owners of the RTOs they're not going to work for TAFE, like you can't have people, entrepreneurs working in a government-framed system. I know this personally because I've done it myself and it didn't work. So we and that's the thing with entrepreneurs they're a lot more innovative, they're a lot more flexible, they can change and meet industry needs a lot quicker than TAFE can, and where TAFE are right now, they definitely don't have the infrastructure to be able to do this.

Speaker 2: 13:06

So you know it's interesting because, like the New South Wales 2024-2025 budget is $2.5 billion for TAFE and further expands out fee-free training under, you know, joint state and federal initiatives that's come out in the New South Wales budget. For those that want to follow up on the source, and there is obviously look, there is obviously the political, as you mentioned, of this sort of like, you know, fee-free TAFE. I guess I'm interested to kind of get your thoughts on. You know, okay, I guess we want to promote, we want to promote the vet sector.

Speaker 2: 13:42

There is a massive, you know, amount of the public that you know, even when I'm explaining what I do, I have to, I often have to go. You know I provide support services to, you know, tafes and private providers who are like private TAFEs. You know I provide support services to, you know, tafes and private providers who are like private TAFEs. You know to sometimes get it across the line. But how do we balance that with one, I guess, a need for more equitable funding. But also, is the fee-free really the way to go about marketing and advertising and bringing more people in?

Speaker 2: 14:14

Because you know part of me looks at it as well and goes well in certain states. There's a reason why students have to pay something, because if you're not willing to pay a dollar for your course, right, what's the value that you see in it? And therefore you know quite often when we do see these fee-free courses, we see completion rates bloody tank through the floor. So you know sort of what's your thought on. You know, quite often when we do see these fee-free courses, we see completion rates bloody tank through the floor. So you know sort of what's your thought on. You know the sort of the political appeal, the fee-free TAFEs, and then also you know giving some value to the training that we're providing as well.

Speaker 1: 14:48

Yeah, and I've seen this myself If there's no buy-in by the student, they tend to, oh, I'll just sign up for this course because I don't have to pay for it, and then they don't even turn up, not even on day one. So, yes, 100,000 fee-free places, but are we actually completing that training? Are the students actually going to fulfil all the training and then get the certificate at the end? And often not, because they don't have that buy-in. And unfortunately, I've seen it many, many times over my 30 years of experience within this training industry is where a student doesn't have buy-in, they tend to not be fully committed to that training and do not complete it. And then you've got the other side, where they're going to job network providers or job active providers who are trying to get them into work and they're just placing them into course after course after course because they can't get the student to complete the training. So once again, the student is not getting the buy-in.

Speaker 1: 15:56

I think there should be a non-animal admin fee for them to commence the training, or even something like where, if there's an incentive if they complete the training, what's that incentive when they get to the end of the training? But you know, then we need to look at it. On the other side, private providers have a much more successful completion rating, and maybe that's because they may even have full fees paid through government funding, but they've got the staff there that are keeping those students going and getting them to complete the training. So you know, maybe TAFE needs to look at how private providers do that or maybe engage more with the private providers. I don't know what makes the difference, but yes, I certainly believe that the buy-in is one very good strategy.

Speaker 2: 16:58

And I mean, I think it's going to be interesting to see, obviously with the new standards that come into effect from the 1st of July course progression is.

Speaker 2: 17:07

You know, is now part of the, you know, usual standards and we've seen it in a lot of government funding contracts.

Speaker 2: 17:13

Obviously it sits in ESOS as well, but you know, it's going to be interesting to see.

Speaker 2: 17:18

There are obviously also a lot of private, like there's a lot of providers out there, private and public alike, that are not used to having you know like you sign up for a course and there's no tracking that occurs after that. Um, so it's, it is going to be very interesting to see. You know, like, having gone through so many RTOs data and I'll go into it you know someone, someone's bought new RTO and I sit there and I go, you've got you know, oh, but we bought 4,000 students. No, you've got 4,000 enrolled, but know, actually you've got 500 students that are regularly completing a unit of competency. You've got three and a half thousand students in there that have been enrolled for more than 12 months and haven't even logged into the system once. So you know, I think that progression component is going to be an interesting part of the new standards and that's then going to tie into, you know, your support services and you know your systematic monitoring of the courses and things like that as well.

Speaker 1: 18:20

And I think that applies for both private and public. I think TAFE are also going to struggle with that because, as we already have seen, completion ratings are not that high when it comes to TAFE. How are they going to manage that as well? And I've been doing a lot of webinars and workshops exactly on this topic and also building our new system, comply Hub, where we manage the continuous improvement and risk assessment through this system, because what I've seen is there is a lot more requirements on that tracking and the focus is on completion ratings. We want to get a higher completion rating, so how are RTOs going to manage that? And I've looked at different strategies that our clients can put into place for managing that. I just can't see TAFE would be able to do that. Not with their current model, that is for sure.

Speaker 2: 19:18

I think, with their current systems as well. So I mean, unfortunately, a lot of the tastes are limited in that they're not allowed to go out and buy commercial systems. They have to build their own systems, which means you know a huge IT infrastructure cost that is then associated with setting up the system and maintaining the system and you know all of the sorts of things that come along with it, and so you often get into a really difficult position whereby you're constantly having to maintain an older system rather than being able to utilize that same amount of money for a commercially available system whereby they've got multiple clients and therefore they can invest in future-proofing and improving and all these sorts of things. So it's definitely a lot of government. There's definitely a lot of limitations that you know occur when you've got such a large infrastructure.

Speaker 2: 20:09

And I've been talking to you know ministers for years and I've always said the same thing why don't you guys have a centralised curriculum development department for all of the TAFEs? You currently pay every single TAFE to create. They've got their own curriculum that they create for the same qualifications. If you centralize that, it would save billions a year, like legitimately, and then you could send it out to everyone and they can contextualize it for their cohort or their thing. But they've got a base there. For I mean there should be within TAFE a database, a base training product and a base compliant assessment for every single unit of competency and training package. They don't have that because it's outsourced to every TAFE individually, like it's just some of those sorts of things where, like from a business perspective, you and I would go.

Speaker 1: 21:00

This is business 101, right and yeah, that's something I didn't know. I didn't know that they did that. That's crazy as a as an entrepreneur.

Speaker 1: 21:09

Uh, there's no way I would do that. You you'd want it. Like when I had my RTO. Um, so I, I had a smaller RTO and I took over another site and I didn't. I took over the students and the trainers and assessors. I didn't take over the RTO, but what I did was, when I went in, the first thing I did I didn't keep their systems. I implemented all of our existing systems into that RTO. Like why run different systems when you've got a system that works really well? Like you should have one really good system that works well and everyone works on that. Like all of the different TAFEs should be working on that same system. And maybe you should have the same curriculum, because it's a national curriculum. But you may have adjustments when it comes to different states with what are the state funding requirements in those individual sectors. But yeah, that's crazy. Yeah, it's crazy right.

Speaker 2: 22:13

It's crazy. So, like you know, I guess on that point, you know infrastructure and staffing limitations. So there has literally just been $190 million in allocation for repairs and IT upgrades. But according to the New South Wales budget and some media coverage, you know, tafe New South Wales campuses continue to face equipment shortages, digital access issues and casual staff turnover. And I think look the casual staff turnover I think that's probably more of an industry epidemic.

Speaker 2: 22:45

Again, we've got the new RTO standards. So anyone that's got just their TAA. They don't have to have the ASS and the LLN unit anymore. That may bring a bit more of some of our, you know, trainers in their like late 50s, 60s and 70s back into that trainer pool to kind of go look, all right, I'll do a couple of days here and there, but you know, can we like if they can't absorb the system's training load and private RTOs are edged out? You know what is the option for businesses and I know that you know, as you said, you've got this. You've got a petition that I think you said has raised about 800 so far. So talk to us a little bit about sort of how, what then happens with training in New South Wales and what you guys are doing on that particular point?

Speaker 1: 23:36

Yeah, so we've had a major impact on vivacity. So we've had a number of our clients who have had to. They haven't left their membership, but they've dropped down in their level of membership and that is due to lack of funds. So there's been like, not only are we dealing with all of these cuts to government funding when it comes to the private sector, we're also dealing with major legislative change and there's more to come. We've still got the Australian Qualifications Framework. That's still to come, those changes in that area. But so we've got all of these RTOs who are struggling to update all of their policies, procedures, forms and documentation to meet the new requirements of the Standards 2025, as well as having all these government funding cuts. So what I see is I'm going to see I'm sure we're going to see over the next year, massive exodus out of the sector because of both of these areas, like, how can they afford to update all of their policies, procedures, forms and documents and whether they're putting their own time in or paying someone else to do it, when they're struggling to get students or struggling to do fee-for-service, or they haven't got the government funding, in particular, those RTOs that have been running on government funding for a very, very long time and we've got one such client who has said that I can state who they are. This is New South Wales Fisheries. They lost 60% of their government funding and their core is government funding. That's what they do. They do boat licensing and it's a requirement in New South Wales to have a boat licence and they need this government funding to be able to do this. And I don't know where the funding is going because there's no TAFE equivalent to the boat licensing that they do and the equipment that they have in place.

Speaker 1: 25:35

So we started this survey. It'll be a week tomorrow, so Saturday, so it's been a week that we've had the survey going. We've now got over 100 on the survey and the whole point of the survey is to support equitable funding for private RTOs in Australia's VET sector and we're looking at the impact that it's having on the private sector and not just private RTOs. It's all of the support services that align with that, such as student management systems, databases, training resources, resource developers, training rooms where they're hiring the training rooms, like it's not just impacting on the private RTOs, it's all of those services that connect with that and, as you already stated, lauren, tafe do all of that internally, so it's going to have an impact. So you know all of this training that they're providing to help, you know, australia, they're putting all these people out of work who are then going to need to go to TAFE and maybe retrain into something else, so they're really going to be impacting.

Speaker 1: 26:53

This. Government funding is impacting more than just RTO private providers and some of the feedback that I've been getting, because I've been sharing this survey around on social media and through emails, and some of the feedback that I've been getting because I've been sharing this survey around on social media and through emails and some of the feedback I'm getting is well, why should it all go to private providers and money hungry private providers and I'm like New South Wales fisheries is a not-for-profit there are a lot of not-for-profits that are also being affected, not just money-hungry RTOs. And I tell you, what if there were money-hungry RTOs, I don't think there are very many out there that are actually surviving on just what they're delivering in for as a training provider. They're surviving because of the other services that they offer outside of being an RTO. There is not a lot of money in RTOs right now unless you're really, really niche and you're delivering training that is specifically meeting industry needs, and that's because of the culture we have in Australia.

Speaker 1: 28:01

In Australia, unfortunately, australians see education and training is a right and they shouldn't have to pay for it, and that's because we have schools that they go to. So they're brought up in schools where the government pays for you to go to school. So their expectation is that you should pay for their education ongoing and then you go to university and you can get a HECS loan and you pay it off through your tax. But we don't have that same in the VET sector, so the expectation is we should get it for free. So we're going to go to TAFE and we'll get our fee-free training at TAFE instead of focused on what is the quality outcomes that we've got. So if anybody wants to sign up to our survey, so go to changeorgau backslash, save underscore, private underscore, rtos and that's the survey that you can go to and the link will be in the show notes for the podcast today as well.

Speaker 2: 29:09

Well, I think that's a really great place to break. I do want to bed down a little bit more and get into the conversation about what equitable funding could look like. We'll talk a little bit about the other states as well, but we might take a break here and we'll see everybody back at the next episode.

Speaker 1: 29:26

Great. Thank you very much, lauren. As you can hear, I'm very passionate about what is happening currently in the training sector. So until next time, we'll see you on the next episode of the RTO Superhero Podcast. Thanks, guys, excellent.