ITECA RTO Business Summit 2025

Introduction

“Australia needs a VET sector that provides high-quality, responsive and accessible education and training to boost productivity and support Australians to obtain the skills they need to participate and prosper in the modern economy.”

Good morning and thank you for the opportunity to speak today.

A you will be aware this is the vision statement for longer-term vocational education and training (VET) reform endorsed by the National Cabinet on 31 August 2022.

When we speak of “high-quality, responsive and accessible education” it is my firmly held view that we speak of choice and how it can enable a high quality, responsive and accessible education.

Choice relates to the value of freedom; freedom cannot occur without choice. Choice helps empower the individual, and helps drive performance – it is a value I believe in.

Ongoing workforce shortages

I recall last year the presentation in this room of the Business NSW survey data and the challenges faced by the skills shortage. I do not need to labour the point, but it is clear we are still facing significant challenges in meeting the skills needs of our state.

The Jobs & Skills Report 2024 “Better Together” tells us;

“Employers continue to experience challenges finding suitably skilled workers to fill vacant positions. While the average number of applicants per vacancy has generally been increasing over the last year, there has only been a marginal increase in the average number of suitable applicants per vacancy, suggesting shortage pressures persist in the labour market.”

Further, 36% of occupations have been described as undergoing a national skills crisis. This is 5% higher than in 2022.

Foundry Industry

Last year I visited Hycast Metals in Sydney. This is a third-generation business, currently lead by Annie Keeler. What inspired me about Annie’s business was the care for her team – with many on the team being in the business for 20+ years. But this also reveals the issue confronting the foundry industry - an aging workforce.

Pattern making is identified as one of the professions critically in decline, along with toolmakers. Currently, only 411 of these trades are held by people under 40. The last census indicated there are only 2,220 toolmakers and engineering pattern makers in Australia, which has declined by 70% between 2006 and 2021.

Some 12 months after meeting Annie and her amazing team the same issue remains.

Just last week, National Vice President at Australian Foundry Institute, Alan Cooke stated that many training opportunities are severely limited. Currently there is only one accredited TAFE apprenticeship for patternmaking located in Queensland, and one private program offered in Victoria.

The growth of choice in the VET sector

 Over decades, and across political lines, the Vocational Education & Training Sector has been transformed with an increasing opening up to non-public providers recognising the benefit of choice.

In late October 1990 the Hawke Government began to lay the groundwork for the changes that are taking place in the present day. According to Glenn Milne, writing in The Australian, “Federal cabinet has endorsed proposals to deregulate the technical and further education system, encouraging the private sector to compete for public training funds and lifting the ban on TAFE colleges charging fees.” Dawkins, in announcing the changes, made a fundamental statement on the future direction of policy: The public training system needs. . .to. . .compete. . .with. . .private providers. TAFE must lose its monopoly position in respect of many aspects of training.

In 1992 the Keating Government proceeded further towards the introduction of the “purchaser/provider” framework: establishing the committee of inquiry into national competition policy. The following year the committee issued its report in which it brought to the fore the term contestability.

The Rudd government also expanded the presence of commercial operators in service delivery. In the National Agreement for Skills and Workplace Development (NASWD), as summarised by Phillip Toner, “Australian governments agreed to make all public VET funding open to competition between public and private providers”. Section 25 of the NASWD declared that, “All parties commit to. . .[enabling] public providers to operate effectively in an environment of greater competition”. Rudd also established a new research and advice organisation: Skills Australia.

Parallel to the Rudd Government’s conclusion of the NASWD, Julia Gillard (as Minister for Education) commissioned Professor Denise Bradley to undertake a review of higher education. A key recommendation of the Bradley review (later introduced into financial arrangements for VET) was that of an “entitlement” to funding.

Indeed, as Kevin Rudd’s minister for education she had declared that: We should acknowledge the power of market competition. . .in combination with. . .empowered, demanding users.

In the same year that the Bradley review was released, an OECD review of VET in Australia similarly emphasised the key component of such an arrangement [an] entitlement ties funding to the student rather than to the provider. . .it implicitly allows students to buy their services from the providers of their choice.

In 2008, Victoria (with John Brumby as Premier) became the first state government to substantially transfer government funds to commercial training providers, through a new policy: Securing Jobs for Your Future – Skills for Victoria.

In the UK, as Michael Barber in his book “How to Run a Government” writes of the Blair Labour government:

“Tony Blair was determined to put choice and competition at the heart of his second-term public service reforms… the introduction of choice and competition empowers the citizen… Blair saw choice as a key ingredient in ‘self-improving systems.’

Barber does caution of the need to protect and enhance equity and also in ensuring that genuinely diverse options are available. The key point though is that choice helps drive performance and this has been front and centre of reforms over decades and across party-lines.

The point I seek to drive is that the opening up of the VET sector is a journey over decades and across both sides of government.

 NSW Government on Funding Reform for TAFE

This should be observed as the backdrop when here in NSW the Minister for Skills, TAFE & Tertiary Education has stated ‘The Government has committed to a key recommendation of the vocational education and training review, which was to remove TAFE from the contestable market’. ‘The contestable market was introduced by the previous Government so that TAFE had to contest with private providers for what amounted to about 30 per cent of its funding’.

Whilst we are yet to see the implementation and outcome of this funding reform, we need to be vigilant that there is not a loss of choice, that there is still room for a vibrant non-public sector, and that there is optimal use of government funds – that is to say taxpayers’ money.

Government should be clear on defining what success looks like, and to be transparent with those markers.

And as Government removes TAFE from the contestable market, Government should not wipe their hands of important work to be done in reforms to funding of the sector – equity loading to better reflect student needs, and enhancements to funding contracts particularly in providing longer term contracts.

Smarter Regulation

One of the reasons cited by the Minister for removing TAFE from the contestable market was due to the administrative workload, saying in Question Time:

“TAFE had to contest with private providers for what amounted to about 30 per cent of its funding. Getting that 30 per cent in funding required a huge administrative workload that tied up head teachers and stopped them from delivering teaching and learning to young people and those wanting vocational training.”

What is good for the goose should be good for the gander. There is a need to improve the administrative workload not just for TAFE, but independent providers should also benefit from reform.

Choice helps drive quality, but choice is not the only driver of quality.

In supporting choice, I recognise that when we are open to a range of providers, challenges can exist, in particular in relation to compliance.

Between October & December last year, ASQA took action against four non-compliant providers cancelling their registrations.

I want to acknowledge the work that ITECA does advocating for a regulation strategy, within a collaborative approach to ensure high quality training and education are the core feature of skills training system, while safeguarding reputable providers.

In particular, calling for an improved intelligence sharing model between governments and training agencies, in a push for smarter and better procedure to benefit ASQA in their regulation of the sector.

It is a recognition that non-compliance adversely impacts all in the sector, and that industry needs to be part of the solution. We cannot allow the actions of a minority lead to a push for removal of choice and competition. High quality providers should not be caught up in regulatory action, while ensuring regulated bodies operate with high precision compliance.

Can I also encourage you to showcase RTO success stories to employers, unions, and media, reinforcing the value you bring.

Departure of Troy Williams

And in speaking here of ITECA’s advocacy, I want to take this moment to acknowledge Troy Williams following his stepping down from the role of CEO in February.

Troy earnt the respect for all levels of government and on both sides of the House due to his tireless work in making ITECA a trusted voice in the training sector.

Thank you Troy for years of dedication, and may I extend my own personal welcome to Felix Pirie as he steps into the role – I look forward to working with you Felix.

Conclusion

There is much that needs to be done and to address the systemic workforce challenges, broader measures are needed. We need to support small businesses that employ apprentices, foster the collaboration between employer and trainer, and support the apprentice to reach attainment.

Such steps would help create a workforce equipped to meet the demands of the future economy, ensuring opportunities for aspiring apprentices in all fields paving the way for a sustainable and skilled workforce. RTOs often do this well, as they are often embedded in the communities and industries they serve.

The future of skills training hinges on choice, quality, and partnership.

TAFE’s strength lies in scale, and we should enable it to do well what it does well. We should not seek it to be everything to everyone and create a one-size-fits-all model. 

The heart of our sector lies in choice. Choice empowers the individual and it helps drive performance and value for investment. Students and employers deserve access to diverse, high-quality education pathways. Independent RTOs have proven their ability to deliver where it matters most-for students, employers, and the economy.

The policy that we shape will be respectful and support of the role TAFE plays. It will also value and foster choice. And I hope that ITECA and its members will help through sharing insights and advocacy help shape such policy.

When RTOs thrive, our state thrives.