A recently released report has detailed just how essential TAFE’s $92.5 billion output is to the economic recovery of Australia during and after the pandemic.
According to the latest report from the Australia Institute’s Centre for Future Work, while the costs of running TAFE amount to $5.7 billion annually, that is dwarfed by the $92.5 billion in benefits to the economy.
That amounts to around $16 dollars returned on every dollar spent on TAFE, according to the report which you can read in full here.
The Centre for Future Work states that in spite of massive funding shortages, TAFE is able to offer the Australian economy $92.5 billion in benefits in the form of higher incomes, productivity generated by a ‘TAFE-credentialed workforce’ and lower social benefits costs.
Key findings from the report include the fact that a TAFE-trained workforce generates $84.9 billion in business productivity and incomes, and that the $5.7 billion required to run TAFE per year represents just 0.3% of national GDP.
Authors of the report point out that “extra tax revenues received by government 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.”
This is in addition to the fact that TAFE provides employment for 48,000 people, and adds on average 39% to the wages of graduates, compared to individuals without tertiary education.
Alison Pennington, Senior Economist and author of the report has said that “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,” Pennington writes.
The release of the report comes as the number of apprentices and trainees has dropped significantly in the past few years.
According to a report from The New Daily, “The Australian Education Union says the government has cut funding to TAFE by $3 billion since 2013, with the number of apprentices falling by 140,000 people over that same period, and the number of TAFE providers declining by almost 40 per cent in the past five years alone.”
“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,” Pennington continued to explain.
According to a concluding note in the report, “rebuilding the economy after COVID-19 will take many years, but that historic challenge will take even longer without a strong, co-ordinated, public-funded VET system to facilitate job transitions and open opportunities for young workers.”
“Billions of dollars in public finding have been wasted trying to build an inefficient, uncoordinated private VET training market that has failed workers, businesses and government alike.”
Last month, Scott Morrison announced that his JobTrainer package would see the federal government invest half a billion dollars into vocational education. The Centre for Future Work has said that this $500 million figure needs to be raised to $2 billion per year, which could see certain courses deemed as a priority offered to students fee-free.
Author of the report Ms Pennington has said in response that “I think JobTrainer is going to be weaponised to undermine state-level responses to invest in their TAFE systems.”
“Because it’s a provision of $500 in Commonwealth funding, only on the condition that, first of all, states match that funding, but also that they sign up to a national agreement on the expansion of a VET training market.”
“We don’t have all the details of what that agreement is… but we can pretty much bet that that’s going to be an expansion of the existing private training market,” Pennington concluded.