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Double Standards Fund Tertiary Education

Unequal funding is costing Australians more than money

· Sam Perkins,Education

Commonwealth policy treats vocational and higher education as two distinct practices, to the detriment of the real purpose of the whole tertiary education system; to prepare motivated people for the roles we need to fill in the faster-paced, knowledge-based 21st century.


Traditional thinking sees the role of higher education as a production line for critically thinking and “well rounded” twenty-somethings, while vocational and technical (VET) education produces technicians and manual workers. This distinction is an artificial one, and the Australian Qualification Framework (AQF) all but recognises it as such. The spectrum of ten levels from Certificate I to Doctoral Degrees is an indication of the complexity, depth of achievement and autonomy, and AQF’s website even depicts them as a wheel.


A continuum of complexity from the simple and applied, through to the advanced and original would imply a continuum of funding solutions; a system that treats each of the ten levels of qualification as roughly analogous to its immediate neighbours. Instead, there is a substantial jump when a student moves between diplomas, associate diplomas and bachelors. Allowing for some exceptions, since diplomas and associate diplomas can be vocational or higher education depending on arbitrary factors, the funding system treats these students as being substantially different from each other.


Higher education students have access to income contingent loans to help pay for courses subsidised by the Commonwealth, while vocational students pay the full amount required either up front or with substantially less generous loan schemes. The recent shift to VET Student Loans has made this discrepancy much more obvious; it is perfectly possible for providers to charge more than the maximum loan amount for a type of course and so to require a student to pay part of the costs upfront. A comparison of VET Student Loans to HECS-HELP would make it look to the casual observer that vocational education was by far the lower priority of the two. Aside from offending the average Australian’s idea of fairness, this distorts the decisions of students as they enter the formal tertiary education system and risks placing students in courses that are not best aligned with their goals. Inefficiencies like this in the formal education system negatively impact on productivity growth, since an appropriately trained workforce is an essential part of a developed economy. As we continue moving into an exponentially more competitive global economy, this kind of inefficiency presents an unacceptable risk to Australia’s prosperity.


In practice, plenty of bachelor degrees teach skills with little regard for higher order thinking while plenty of diplomas encourage theoretical appreciation. A sharp discrepancy between how they are financially supported by government means vocational providers must try far harder than they ideally would to attract students who, all else being equal, would do more advanced vocational courses. As they are drawn by the cultural inertia and generous financial support offered by the higher education system, the decisions made by students seeking an education around AQF levels 4 to 6 are distorted.


Chronic underfunding of VET compared to secondary and university education exacerbates this problem further. As underlying capacity in the VET sector shrinks and students increasingly look to bachelor degrees because of the additional support HE gets, the pressures put on the HE system by the demand-driven model will only get worse.


If achieving a system that is consistent across the tertiary education sector is a goal for government, federal policymakers will need to move to reconcile the two funding systems. Reflecting the fact that this area is more heavily influenced by history than strategy, it is often said that all higher education policy is, to some degree, autobiography. In this environment it will be difficult to ensure that HE-VET funding consistency gains the airtime that it needs.

Sam Perkins is a Policy Analyst at FPL Advisory, writing on political risk and change management in regulatory affairs