Critically damaged TAFE must be repaired – report

Australia’s TAFE network is suffering from chronic underfunding and failed market-led VET policies according to a new report from the Centre for Future Work at the Australia Institute.

The study, An Investment in Productivity and Inclusion, said that increased public investment in the skills and earning capabilities of Australians will be critical to our post-pandemic recovery.

The author of the report, senior economist Alison Pennington said Australia’s historic investment in TAFE was still paying dividends in terms of higher productivity, profits, tax revenues, wages and reduced social benefits costs.

Pennington said: “The Australian economy is reaping an enormous flow of economic benefits from a VET ‘house’ built by the TAFE system.

But the ‘house’ that TAFE institutes built is crumbling.

“If Australia wants to secure the benefits of a superior, productive TAFE-trained workforce as we prepare for post-COVID reconstruction, the damage must be repaired quickly.”

The report found $6 billion in economic activity and 48,000 jobs are supported by the direct operation of TAFE institutes and identified another flow of benefits worth $84.9 billion per year.

“Australia will squander the demonstrated economic benefits generated by our investments in the TAFE system, and unnecessarily limit our post-COVID recovery if we don’t act quickly to reinstate the critical role that TAFE plays in the VET system.”

Key Findings:

  • The TAFE-trained workforce generates $84.9 billion per year in higher incomes and business productivity.
  • $49.3 billion is paid in additional earnings to TAFE-credentialed workers (relative to earnings of workers without post-school training); businesses receive $35.6 billion in increased profits from a more productive TAFE-trained workforce.
  • The costs of delivering TAFE are modest – only $5.7 billion per year, or 0.3 per cent of GDP. Extra tax revenues received by governments thanks to the superior productivity and incomes of TAFE-trained workers alone are worth $25 billion per year: 4.4 times more than the total costs of running the TAFE system.

    The TAFE system increases employability and lowers unemployment. TAFE graduates enter the labour force with better employment prospects and skills. The increased labour force participation and employability of TAFE graduates corresponds to additional employment of 486,000.

Pennington said: “Major public skills investments will be best coordinated by TAFE institutes as the longest-standing and most reliable ‘anchors’ of vocational training and must be at the centre of an economic reconstruction process.

“By providing bridges to further education and jobs for regional, low-income and at-risk youth groups, the TAFE system is critically important to addressing systemic inequality in Australia’s economy and society.”

Picture: The Smith Family

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