Upskilling: VET overhaul needed to create a training system that works for all

For years, Australian industries recruited the skilled workers they needed through the migration program. COVID-19 has thrown a spanner into that easy fix, forcing government and business leaders to think about how to better develop our homegrown talent.

As it happens, COVID hit after the Victorian government ordered an independent review of vocational education and training (VET), with a particular focus on the role of Tertiary and Further Education (TAFE).

For years, the position and status of VET has been fragile, as few of our political, business and community leaders know it or understand it. Yet a VET qualification is the highest held by one in three Victorians, and TAFE in particular is a trusted brand in our suburbs and regions.

Yet TAFE has also been derided as a second-rate option, competing with the higher education sector on the one hand, and private training providers on the other.

“The risk for TAFE institutes is that they go the way of the Commonwealth Employment Service [the public employment services provider that was abandoned by the government in 1998],” says economist Rod Glover. “And that would be a tragedy.”

Professor Glover and his policy team at Monash Sustainable Development Institute contributed to the recently released review Future Skills for Victoria, chaired by former federal government minister Jenny Macklin.

“Most of the review was conducted in the COVID period,” he says. “So we saw providers quickly pivoting to new models of delivery, to new ways of working that for years had been too hard, widely adopting digital technologies and embracing online teaching.

“We saw institutions collaborating, and the rapid development of product – there’s been innovation throughout the system.”

He describes COVID as a “disruptive crisis”, which he contrasts with the “creeping crisis” that better describes the long-term problems facing the VET system.

“If you look at the current system, it’s not delivering what government and taxpayers need it to deliver,” he says. “It’s not delivering the skills that business needs to adapt to change. And, most importantly, it’s not delivering what students need to get ahead in the labour market.”

Today’s VET students can’t tell whether the course that interests them will lead to a job, for instance. The link between the fees they pay and the quality of training provided is unclear.

Some potential students have even complained that the process of making sense of this is so confusing that they’ve given up on study altogether.

“We need to be able to explain how this system works,” Professor Glover says, “to give people confidence that the courses being developed, the students being employed, and the government and taxpayer money being spent, have an evidence base and logic behind them.”

Connecting with the economic imperatives

The review proposes a restructure that better connects training with what the economy needs.

The plan recognises that targeted, quality training is crucial if we’re to rebuild an economy damaged by extended lockdowns and closed borders. It proposes a path forward that better prepares Victorians with skills that align with three work categories that are expected to grow – digital; the clean (or green) economy; and the care sector.

The report recommends:

• An independent body, FutureSkills Victoria, be set up to provide skills policy advice to government. Business, unions, communities, students and TAFEs would all be represented, reflecting the shared stewardship that the VET system needs to embrace.

• The skills Victoria will need over the next decade, and the education and training this will require, will be set out under an annually updated Victorian Skills Plan.

• Future Skills Labs are proposed for the digital, clean and care sectors. These labs would work with industry to anticipate growth needs in their sector, particularly the skills and training opportunities. The labs will contribute to the Victorian Skills Plan.

• A new website for students, businesses and communities to learn about what jobs and skills are in demand (and what courses will allow them to acquire those skills). The aim is to streamline information in a way that’s useful to individuals, businesses and communities planning their future.

“The Australian economic model has been heavily dependent on migration flows,” Professor Glover says, acknowledging that “this has been a great strength”.

But post-COVID, it’s time to consider “what the next economic model for Australia looks like – what’s the growth model we’re going to build from within, based on the skills of our people and the capabilities of our businesses?”.

“There’s an opportunity for us to think about how we connect our skills and innovation systems differently.”

Typically, VET has been seen as focusing solely on the “technical and practical aspect of doing a job”, he says.

But future work will require broader skill sets.

“You do need digital literacy. But you also need to be able to engage and interact with people who might come from different sectors or disciplines to you. You need to be able to solve problems that there’s no rule book for.”

Much of this kind of training once took place on the job, he acknowledges, and hands-on experience will always be important, “but you can learn about entrepreneurial, collaborative and creative skills” as part of vocational training, too.

Data to inform industry and community needs

The proposed new system will gather data about what skills industry needs, what skills community members have, and how the gaps can be filled in regions and communities. It also proposes a role for unions in FutureSkills Victoria, alongside industry and education providers.

“How we understand the working class has shifted dramatically with changes in the structure of the Australian economy,” Professor Glover says. “It’s no longer just blue-collar blokes in manufacturing or trades. It’s an incredibly diverse group of people from different sectors, often in the services sector, and they’re often characterised by insecure work.

“While part of that insecurity relates to the rise of the gig economy and the growing flexibility granted to employers, it also relates to a structural weakness in our VET system’s ability to counter such forces.”

“There’s an opportunity for us to think about how we connect our skills and innovation systems differently.”

Learning begets learning. It’s a sad fact that those most in need of training are least likely to pursue it. Many insecure workers don’t seek further training – some can’t afford it, some don’t know where to look, and some see themselves as having more pressing needs.

“We see an awful lot of people fall through the cracks,” he says. In Australia, the “training market conversation” has been dominated by the language of “efficiency” and “competitive neutrality”, he says. “In the report, we really try to reject that language.”

Efficiency is important, he acknowledges, but so is effectiveness. “And we’re not just talking about a market here, we’re talking about a system that has to serve a whole range of public needs, and policymakers have lost sight of that”.

The proposed restructure would see TAFEs working more like a network, rather than always competing with each other for market share, which has proven “incredibly inefficient”. Instead, they’d be a key part of the system that partners more directly with communities and industries.

Another suggestion is for the Commonwealth government to set up a system of “lifelong learning accounts”, enabling all Australians to access training over the course of their working lives, as their skills evolve and the workplace changes.

The accounts would operate “like superannuation, as a saving system, which are contributed to on an ongoing basis. This would be integrated with the HECS system, but it wouldn’t just be a debt component. It would be an asset component as well,” Professor Glover says.

“You think about an asset in a different way,” he explains. “So if you think of the barriers to training, sometimes it’s affordability, but sometimes it’s also behavioural and cultural. Often, unless there’s a prompt for you to think about your training, you don’t do it.”

Lessons from Singapore and France

Singapore and France have similar models in place that Australia could learn from.

“One of the great tragedies of our skills and our economic debate is that the voice for TAFE and VET is not a loud one,” Professor Glover says. “Vocational education and training is responsible for the highest qualification for one in three Victorians, but its voice in the national economic debate doesn’t speak to that.

“We have to elevate the status of VET, and TAFE within it, to ask ourselves, what would the best public training system in the world look like? And why do we not have that?”