The Australian Industry Group’s concern over the drop in apprentice numbers and quality has thrown a spotlight on an issue that the Group Training Association of Victoria has been pointing to for the past four years.
Victoria, which is ahead of the rest of the nation in VET (vocational education and training) policy reform, is feeling this most acutely. There are lessons to be learnt from its unenviable position as the canary down the VET coalmine.
Here we are seeing a growing number of unscrupulous registered training organisations (RTOs) making a nonsense of the state government’s attempt to address youth unemployment and create a pipeline of new workers to support economic growth.
According to a recent report on marketing practices in the VET sector by the Australian Skills Quality Authority, 45 per cent of registered training organisations “were marketing and advertising false material”. The report concluded that these sites offered qualifications in unrealistically short times, provided false information about their affiliations (some are not even affiliated with an RTO, meaning they are nothing more than “non-specific brokers”) and failed to withdraw superseded or no longer available courses from their websites, among other misdeeds.
What the report did not mention was the common practice of unethical RTOs channelling young people into programs that are lucrative for the provider but, in practice, tend to damage the young person’s prospects of finding employment and use up their government-funded training entitlement.
This problem is the result of a badly designed government program that tries to encourage training in industries affected by skills shortages by applying widely disparate funding to different qualifications. The program has created an incentive for RTOs to push their young clients towards qualifications in the most lucrative fields, regardless of how suited the individual is to the industry or whether the RTO has an employment opportunity for the young person upon completion of the course.
The funding is calculated according to how acute the skills shortage is perceived to be – ranging from $1.50 an hour for a business administration trainee, through to $14 an hour for a bricklayer’s apprentice – and in many cases the RTO receives the money whether the young person ends up working in the industry or not.
Let’s also make one thing clear: the students aren’t seeing a cent of this money. In most cases, they aren’t even aware there is such a scheme. They are simply lured in by grandiose promises and exploited by the RTO to make the most profit.
On completion, they discover there is no job available to them and often that the skills they have acquired aren’t of a quality that is accepted by employers.
Maybe the RTO convinces them to undertake the next “level” certificate and that realisation is delayed. Either way, the training incentive money, which is a one-off from the government for each individual in training, is gone, and with that, their chances of finding another training placement with real prospects are significantly compromised
VET researcher and analyst Dr John Mitchell lays the blame squarely on policymakers, arguing that “the proliferation of unscrupulous RTOs using misleading marketing was predictable and avoidable because “VET reform was ill-thought out, rushed and botched”. He cites an inquiry by the Independent Commission Against Corruption in NSW, which determined that the training providers were “rorting the system, either providing no training whatsoever or just minimal training”.
As a result, while Victoria is training more people than ever, youth unemployment remains intractable, even rising over the course of the last year.
Victoria, which leads the nation in VET policy reform, is unique in feeling the effect of this policy failure at this time.
Essentially, the government has allowed the market to be driven by the RTOs rather than employers. We need only look to the universities and their glut production of fashionable degrees to demonstrate that this approach is less than ideal.
State governments across Australia must learn quickly and reform the way VET funding is allocated. Funding must be offered equally wherever there is a job waiting to be filled, as the ultimate goal is surely to place young people in work and support the wider economy.
Inevitably many of these waiting jobs will be in skills shortage industries. So let’s reward honest training organisations and support employers who provide sustainable employment.