TAFE NSW - HUNTER INSTITUTE ADVI 6 I C ~ " 'O 7r\

1- R E c E l v m y f CIL 121 r l .z J.F€B

24 February, 2006 Locked Bag 45

Hunter Regional Mail Centre NSW 2310

Phone (02) 4923 7567 Fax (02) 4923 771 1

Dr Michael Keating AC Chairman Review of Skills base in NSW and the Future Challenges for Vocational Education and Training Independent Pricing and Regulatory Tribunal of New South Wales PO Box Q290 ,QVB Post Office NSW 1230

Dear Dr Keating

On behalf of the TAFE NSW - Hunter lnstitute Advisory Council please find attached our submission to the Review of Skills base in NSW and the Future Challenges for Vocational Education and Training for your consideration.

We look forward to the release of the report.

Yours sincerely

Greg Hopper Chair TAFE NSW - Hunter lnstitute Advisory Council

Attachments: 1. Hunter lnstitute Advisory Council's submission - hard copy 2. Hunter lnstitute Advisory Council's submission - electronic copy

HUNTER INSTITUTE TAFE NSW - Hunter lnstitute Advisory Council

Response to:

"Review of the Skills Base in NSW and the Future Challenges for Vocational Education and Training"

Issue paper published by the NSW Independent Pricing and Regulatory Tribunal as part of its "Review of the Skills Base in NSW and the Future Challenges for Vocational Education and Training."

, l

Introduction:

The following submission addresses the focus issues and questions of the IPART paper released on December 15 2005.

The comment is provided from the perspective of the TAFE NSW - Hunter lnstitute Advisory Council. Although Council is comprised of individuals with various industry and community affiliations and extensive experience, the submission does not reflect the view of any individual member of Council or of any individual industry, except where attributed in the text.

The comment is organized under the sub-headings of the original IPART paper, with the heading, followed by the IPART paper focus issues/questions in italics, followed in turn by lnstitute Council response under the title "Comment." The paper concludes with a set of recommendations from the Hunter lnstitute Advisory Council, drawn from Council comment on the IPART focus issues and questions.

4.1 Forecast supply and demand for skills in NSW over the next 20 years

The Tribunal invites views on:

What types of skills are currently in short supply within NSW?

Are these skills shortages likely to be resolved through the normal operation of the labour market or do they require specific attention?

What skills and occupations are likely to be in demand in NSW over the next 20 years? Are these skills and occupations likely to be very differentfrom those in demand now?

Comment:

Current skill shortages in the Hunter are broadly in accordance with those previously identified by the Commonwealth DEST and NSW Department of State and Regional Development, with particular difficulties experienced in trade occupations.

However, because of the make up of the Hunter economy, the problem with trade occupations is more acute in the following major industry sectors:

p. 1 Submission to iPART "Review of the Skills Base In NSW TAFE NSW - Hunter lnstitute Council.

Engineering Manufacturing Power Generation Mining (black coal)

The Australian Industry Group (AIG) has published detailed data for the above industries, based on a major employer survey conducted by AIG in 2004. Council recommends this report to the Tribunal:

"Apprentice Training in the Hunter - a study on apprentice intake, awareness o f pathways and issues related to the training o f apprentices for the manufacturing, engineering, construction, automotive and related service industv sectors." Published by AI Economics. February 2005.

The principal findings of the AIG report are copied below

The greatest vacancies identified (in the s u ~ e y ) were at the trade level (70% of vacancies) with a further 9% at the post trade level. Skill vacancies were also highest amongst smaller firms (30 or less employees) who register a vacancy for every four members of their workforce. Given the extent of the problem at-the trade level, longer-term solutions to skill shortages will involve taking on apprentices.

In summary, the apprenticeship study has found: 9 Overall there was a 25% increase in the direct employment of first year

apprentices between 2004 and 2005 of the 328 employers responding to the survey who currently employ 1629 apprentices directly.

9 There was considerable variation in the intake of apprentices in 2005 compared to 2004 across firms of different size and sector:

lntake fell amongst small employers (less than 30 employees) by 22%. Intake increased amongst both medium size and large firms but this was strongly influenced by direct employment by group training companies responding to the survey. Excluding the responses of group training companies, the employment of first year apprentices amongst medium sized firms (31-100 employees) increased by 51% and in large firms (more than 100 employees) by 27%. The responding group training companies have increased their apprentice intake numbers by 63% between 2004 and 2005. Amongst the industry sectors, manufacturing employers had the greatest increases in direct apprentice intake for 2005, up by 33%, while both the construction and automotive sectors recorded drops of 17%.

% While more than half of the total number of apprentices were employed by 6% of firms classified as large employers (more than 100 employees), this fell to 29% once group training company information was removed from the analysis. Medium sized firms (between 31 and 100 employees) while making up 14% of firms employed 18% of total apprentices and 24% once GTC numbers were excluded.

9 In 2005, apprentice intake in the firms responding to the survey was highest in the fabrication trades, representing 25% of the total :ntake, an additional 164 apprentices. Twenty three% of the overall intake was mechanical engineering apprentices, an additional 144 in training. Electrical apprentices made up 19% of the intake, an additional 120

p. 2 Submission to 1PART"Review of the Skills Base in NSW TAFE NSW - Hunter institute Council.

apprentices, followed by 13% in the automotive sector representing an additional 81 apprentices in training.

9 Despite the relative growth in apprentice intake through GTC's, on average only 14% of firms responding the survey employed apprentices through GTC's. Medium sized firms were the largest users of GTC's (29% of these firms).

9 The survey respondents hosted GTC employed 115 apprentices. 9 Four in five firms responded that TAFE or private providers met their skill

requirements for apprentice training. 9 Eighty six percent of firms believed that the apprenticeship system still

met their trade skill development needs. P Of those responding that the system required change, most requested

greater choice in training content of apprentice programs to reflect their skill requirements, greater employer incentives to take on apprentices or reduce the on-costs of their employment, an increase in the availabilityof courses within the region or to improve professional development of teachers delivering apprentice training.

Study of skills shortages 9 Despite there being little suggestion that the structure of apprentice

training should change, 61% of employers overall supported more flexible entry and exit from apprenticeships.

9 Prevocational training was strongly supported by respondents as a preferred pathway to traditional apprenticeships (74% overall) with the greatest support amongst medium sized firms (80% of these firms).

9 Employers registered strong interest in workplace delivery of apprentice training (74% overall) with almost one in two firms interested in joint workplace training initiatives.

9 Awareness amongst respondents of new training initiatives, such as the accelerated apprentice training program for existing workers or those with previous industry experience, was low. While 36% of medium sized firms were aware of the program, only 15% of small firms were aware. Two in three firms are seeking more information on the program.

9 While awareness of school-based traineeships was higher (on average 67% of firms), this fell to 41% for small employers. More than one in two firms were seeking additional information regarding school-based traineeships.

Source: "Apprentice Training i n the Hunter" AI Economics (AI Group), Feb. 2005 pp. 2 - 4.

Significant HunterICentral Coast region skill shortage areas not covered by the scope of the AIG survey and report are:

9 Building and construction: in line with other areas of NSW and Australia affected by the building boom of the past few years, the Hunter and Central Coast regions have both experienced trade shortages in this sector.

9 Tourism and Hospitality - growth industries for the Hunter and Central Coast.

Arguably, "the normal operation of the labour market" will eventually produce some form of resolution of the skill shortages. It is certainly true that market forces have resulted in a sharp rise in employer creation of apprentice places in many of the affected industries over the past two years and locally TAFE NSW, through Hunter Institute, has demonstrated a high level of commitment to meeting the resultant increase in demand for training.

p. 3 Submission to IPART "Review of the Skills Base in N S W TAFE NSW - Hunter institute Council.

For example: In 2004 the lnstitute created 13 additional tradelapprentice training classes in skill shortage areas to meet increased demand, in the areas of: . Carpentry and Joinery

Plumbing Dry Wall Plastering . Eiectrotechnoiogy - Electrician Civil Engineering Commercial Cooking

in 2005 the lnstitute created 16 additional classes in skill shortage areas to meet increased demand in the areas of:

Air conditioning and climate control Heavy Vehicle mechanics Light Automotive Electrical Trades . Fitting and Machining Hairdressing Commercial Cooking Bricklaying Floor and Wall Tiling Construction Carpentry Rigging and Scaffolding

In 2006, as of mid February, the lnstitute has created a further 29 additional classes in skill shortage areas such as:

Electrical Trades Electrical Engineering . Fitting and Machining Metal Fabrication Light Autgmotive Plant and Heavy Vehicle Commercial Cookery Hairdressing Plastering

However, it can also be argued that "normal operation of the labour market" has in part contributed to the problem - eg. through large employers, in the past, moving from traininglapprentice creation to "poaching" of skilled staff from other employers and industries by offering above award wages and conditions. As a consequence, small to medium enterprise has borne a disproportionate level of responsibility for training1 apprentice creation. There is also evidence that low profile industries (eg specialist manufacturing) have struggled to compete for skilled labour against high profile industries (eg coal mining).

Although industry generally has increased employment of apprentices the "normal operation of the labour market" wiii not necessarily remove the inequalities and stresses referred to above.

For that reason, lnstitute Council supports initiatives such as Group Training Companies which assist employers - particularly small to medium enterprise - in meeting skill needs and creating places for apprentices.

p. 4 Submission to [PART "Review of the Skills Base in NSW" TAFE NSW - Hunter lnstitute Council.

Council also supports initiatives for increased funding to support training in skill shortage areas, such as the Emerging Priorities and Skill Shortage funding provided lo TAFE NSW in 2004 and 2005 by the NSW Board of Vocational Education and Training (BVET).

Council notes that some of the most productive and successful programs to assist industry have occurred through combinations of the above, with TAFE NSW - Hunter lnstitute working in partnership with Group Training Companies and specific employers to create pre-apprenticeshiplpre-vocational courses in specific skill shortage areas and to assist employers to identify suitable candidates for employment in Apprenticeships. Very high student employment and employer satisfaction levels have resulted.

With regard to "...skills and occupations ... likely to be in demand in NSW over the next 20 years," Council would like to make the following comment.

Although the "traditional trade" and current skill shortage areas of Manufacturing and Engineering have decreased as a percentage of total employment, in the Hunter as well as state and nation wide, they remain critical to this region and to the future of NSW and national economic health. The broad range of occupations and skills they cover remain highly relevant into the future and will evolve with developments in technology. Council members also express a consensus view that management skills are vital to the growth and well being of all industry sectors, but that staff with real management competence are in short supply. This represents something of a hidden skills gap, despite the proliferation of courses1qualifications in business management in VET and the Higher Education sector, including the increasing popularity of the MBA qualification. The labour market for competent managers is now a world market, and there is a drain of competent people overseas and into multi-national companies. A related skill need cited by Council is that of entrepreneurship. The training system, employers and government need to ascertain how the creativity and initiative of young people, and indeed of all age groups, can be encouraged and nurtured to build new business opportunities. Competent sales staff are likewise in short supply, and there is a need - particularly in small to medium enterprise -for technical staff to develop both management and sales skills. A technician sent to a client to install or maintaln equipment is in effect a sales representative involved in customer relationship management. The quality of their "soft skills" will help determine whether their employer retains and grows business with that customer. Specific occupations and skills are certain to change over time in response to technological and industrial evolution, demand trends and other market forces. TAFE and other VET providers need to maintain close linkages with industry to ensure that training evolves in parallel. This includes some challenges detailed later in this submission -particularly the cost of continual course development in terms of equipment/facility upgrades, staff training and curriculum revision. Likewise service industries such as Tourism and Hospitality are long term growth areas. Tour~sm and Hospitality has made major advances in the Hunter and Central Coast. interstate and international tourism fluctuates, but the iong term population growth of the Hunter and Central Coast ensures a long term strong future for hospitality and for other service industries. For the same reason - iong term population growth - and because of the ageing demographic, skill shortages are likely to develop in areas of Age Care and Allied Health. The number of older persons as a percentage of total population will start to climb rapidly over the next three decades, forcing an increase in facilitieslservices and a consequent demand for trained staff.

p. 5 Submission to iPART "Review of the Skills Base in NSW" TAFE NSW - Hunter Institute Council.

Personal and Community Services will likewise remain growth areas, in line with population growth in the Central Coast and Lower Hunter driven by the expansion of the Greater Sydney metropolitan area. The draft "Lower Hunter Development Strategy" recently released by the NSW Government predicts a "mid range estimate" population growth for the Lower Hunter of around 125,000 or 25% over the next 25 years. The NSW Property Council and the Housing Industry Association consider this to be an underestimate. Although the housing boom has dissipated nationally, and the build~ng and construction industry tends to demonstrate wide cyclical fluctuations, the long term trend for the Hunter is likely to be one of growth, again driven by population increase and the need for increased housing stock and the refurbishment of existing stock. The draft Lower Hunter Development Strategy predicts a need for 95,000 new homes in the Lower Hunter over the next 25 years. Growth rates in the Central Coast, though off a smaller base, are equally high. In Wyong LGA, for example, firm plans are in progress for a mini city of an additional 40,000 residents in the previously semi-rural WarnervaleNVadalba area. Short term downturns will inevitably occur iflwhen interest rates rise, but the long term future is of assured growth.

A detailed response to the question "Are these skills and occupations likely to be very differentfrom those in demand now?" is beyond the scope of this submission. However, the short answer is a qualified "yes." Some occupations may not change markedly - eg. Age Care - but areas of Manufacturing and Engineering are evolving rapidly as technology advances. Changes in equipment, materials technology and the convergence of previously distinct technologies - eg as with IT and Manufacturing hardware - are constantly forcing the development of new skill sets.

The Hunter and Central Coast regions contain many businesses which are actively developing new technologies, processes, products and services. Some of these are unique. Support for all industry sectors needs to be predicated on an assumption of ongoing and accelerating change. Skill provision through VET needs to ensure that students receive a balance of specific industry relevant skillslcompetencies and a flexible approach to problem solving and innovation. Anything less is a recipe for long term stagnation.

What are the strategies that need t o be used in addressing skill shortages and other strnctnral issues in rural, regional and remote labour markets? How are training opportunities t o be provided equitably and effectively across NSW in order to meet the needs of regional communities and industries? How can the needs of regional communities undergoing significant demographic change or economic restructuring be addressed?

Comment:

As mentioned above, the Hunter lnstitute Council supports a partnership approach between TAFEIVET providers, Group Training Companies and industry (including industry peak bodies). Council believes that TAFE NSW - Hunter lnstitute follows this approach consistently and with demonstrated success.

An important additional element is the development of educationltraininglempioyment pathways, which link school education, TAFEIVET educationltraining, employment and higher education. The TAFE NSW TAFE Delivered VET in Schools initiative is a good example. So too is the extensive system of articulationlcredit transfer negotiated between Hunter lnstitute and the University of Newcastle. Other innovative

p. 6 Submission to lPARTmReview of the Skills Base in NSW" TAFE NSW - Hunter lnstitute Council.

schoollTAFElemployment programs have been developed between Hunter lnstitute and local employers.

There are particular difficulties in regionailrural and remote communities, related to thin markets and the economics of VET. In the Upper Hunter, with relatively small dispersed populations, Hunter lnstitute maintains a campus at each of Singleton, Muswellbrook and Scone. It is clearly impossible to offer all training programs at all locations, and in a Campus with an enrolment of, say, 800 students, service provision needs to focus on subjectslcourses where viable class sizes can be maintained.

In the case of Hunter Institute, it is generally not economically possible to run a face to face delivery class for less than 15 students. Some subjects can be, and are, delivered by the lnstitute through distance mode to dispersed popuiations, or through block release arrangements negotiated with students and employers. Evolution of educational technology and consumer acceptance of new technologies is likely to increase the number and range of innovative delivery options and Hunter lnstitute is regarded nationally as a major innovator in this regard. Development co$ts can be significant, and Commonwealth and State funding for the development of VET innovations has been a vital pre-requisite. Ongoing additional funding for product development is essential if Hunter lnstitute and other TAFEIVET providers are to evolve in line with industry and community needs and expectations.

Council considers the further development of flexible delivery and improved options for distance education as extremely important for rural and remote area communities. They are also important for employers - providing greater flexibility in training arrangements, allowing training to occur in a more employment friendly manner with less disruption to business.

A major strength of the Hunter lnstitute approach to regional and rural VET is its engagement, dialogue and partnership with regional industry/employers, communities and local government to identify local needs and to develop effective solutions.

A vital issue for addressing skill shortages in all geographic areas is the need to improve the image of many skill shortage occupations and relevant industries, and to improve the information made available to school students about career and VET opportunities. Training providers and employers need a better understanding of the factors which motivate career and training choices of young people.

Whilst it /S noted that some schools are closely connected with regional employers and VET providers, there is scope for industry and VET providers to become more engaged with school career information and visits by employers to schools.

Council endorses a similar finding by the Australian Industry Group:

"Young people do not see manufacturing as an attractive option for work and career. Without exception ail of the AiGroup skill shortage projects highlight the negative image of manufacturing with young people and their parents and more importantly with career counselors. Inaddition to changing the image of manufacturing to demonstrate th.e opportunities it provides there is a need to provide more flexible education and training pathways to work in manufacturing. Some of these pathways may need to be outside of the AQF framework as specified by the training packages. There needs to be a range of pathways that lead to trade and technician outcomes that meet the needs of today's young people through a mix of school based VET combined with relevant work practice that provides articulation into training package qualifications and tertiary ranking without the requirement to be in a contract of training."

p. 7 Submission to [PART "Review of the Skills Base in NSW TAFE NSW -Hunter Institute Council.

(Source: AIG & Engineering Employers Assoc. of SA: Submission to the Senate Employment, Workplace Relations And Education References Committee Inquiry Into Current And Future Skill Needs March 2003. p. 32)

The Tribunal inuites views on the difficulties in calculating and forecasting the demand for skills and potential skill shortages in thefuture.

Comment:

As mentioned above, the key to this is dialogue with industry and employers, but also monitoring of regional, state and national economic and industry data. Locally, Hunter lnstitute business intelligence has benefited from the work of the not for profit Hunter Valley Research Foundation, which conducts extensive research into economic trends and indicators for both the Hunter and Central Coast.

Other valuable data is collected by Area Consultative Committees, Chambers of Commerce and Industry and other industry peak bodies. The AIG survey of Apprenticeship trends in the Hunter has already been referenced and is an excellent example of industry led research.

Nevertheless, accurate forecasting of training needs is difficult and training providers need to remain as agile as possible. State TAFE systems need to ensure that TAFE Institutes have a large degree of local autonomy in budget allocation and management, so that delivery plans can be adjusted swiftly to match actual demand trends as they arise.

Hunter lnstitute Council notes that the Higher Education sector has a planning advantage which is not shared by TAFE. Triennial funding arrangements negotiated between the Commonwealth and Universities allow for more effective medium term planning than is possible in TAFE NSW, which receives funding on a financial year basis through the normal State budget process.

The Tribunal invites views on the increased labour mobility and the tendency of workers of different ages to change careers morefrequently and the reasons underlying these trends.

Comment:

Increased labour mobility and regular career change are generally accepted as ongoing trends in the labour market. The reasons for that are outside the scope of this submission but from a TAFE lnstitute Advisory Council perspective the important issue is the implication of this trend for TAFENET provision.

The principal consequences for Hunter lnstitute are: An increase in the volume of training requiredldemanded by any given population -as workers up-skill and re-skill to make career changes. This is further driven by technological change, as workers who remain in one place are required to learn new skills for new technologies introduced into old jobs. A consequent increase in the number of mature age students and an ongoing rise in the average age of TAFE students. For example, although nearly 50% of Hunter lnstitute students are still under the age of 25 years, the average age of lnstitute students has been rising slowly and is now around 31 years. In 2005, the lnstitute enrolled over 15,000 students in the age group 15 - 19 years, but a further 8,000 students were aged 45 years or older.

p. 8 Submission to iPART"Review of Ule Skills Base in NSW" TAFE NSW - Hunter lnstitute Council.

"Life long learning'' is already a reality. The importance of this for industry and for TAFENET will only increase as a result of the advancing community age profile. Over the next three decades school leavers will become a smaller and smaller proportion of the general population, and of the working age population. The supply of younger workers to industry will diminish as a proportion of all workers, forcing further retraining and "recycling" of existing staff.

The Tribunal invites views on'the number of workers who work in occupations and industries in which they are not using their skills. I t would also like comments on:

What factors contribute to people working in occupations where they are not using their skills?

Are retention rates for certain occupations affecting the supply of skilled labour?

What are the reasons for some workers with skills and formal training to be detached from the workforce?

\ Comment: i

There is anecdotal ev~dence that some workers are employed in industry areas outside their skill specialisation. There are reports that the black coal mining industry in the Hunter, currently experiencing boom conditions, has been able to offer significant financial incentives which have lured some trade trained workers into lower skill occupations at higher pay rates.

From a training perspective, a poor retention rate in an occupation would exacerbate skill shortages in that occupation and lead to further training needs. The Tourism and Hospitality industry has struggled in this respect. By working closely with Group Training Companies - in particular the Hospitality Training Network - Hunter Institute has managed to identify students suitable for employment in Tourism and Hospitality and help broker the creation of Traineeships for suitable candidates. This process - effectively job matching -helps increase employment of students suited to the industry and reduces employee turnover.

Similar outcomes have been achieved through pre-apprenticeship course provision in Manufacturing, Engineering, Building and Construction.

A significant trend has been the upward movement of technical staff into sales and management. This is a natural career progression in many industries and is a positive development. The difficulty is to replace the technical staff who have moved on.

4.2 Demand for VET if participation rates were to be increased

The Tribunal welcomes views from stakeholders on the demand for VET over the next 20 years if participation rates were to be increased. Stakeholders may wish to distinguish between.

the implications for males and females

the rough balance of skills that should be demanded

the magnitude of the respective training efforts directed a t youth and a t adults who are being retrained or upgrading their skills.

Comment:

p. 9 Submission to iPART "Review of Ule Skills Base in NSW TAFE NSW - Hunter Institute Council.

Increasing participation rates will have the effect of increasing demand for training, along with the previously discussed factors of labour mobilitylcareer change, changing technology and the ageing workforce.

It is not possible to quantify this for Hunter lnstitute on the available data.

There is a current gender imbalance in certain industries- particularly evident inthe traditional trade areas - which is reflected in Hunter lnstitute enrolments. Female enrolments at Hunter lnstitute are around 43% of total enrolments, as a direct result of the relatively high level of apprenticeship training.

In this respect TAFE is simply reflecting the wider community, but industry and TAFE programs are in place to address gender and other equity issues.

As previously mentioned, although young people are and will remain the largest single target group in TAFE, older students are increasing in numbers and as a percentage of all enrolments. This is a long term trend. ABS Census data shows that in 191 1 only 0.2% of persons aged 20 years and above were engaged in some form of education or training. By the 2001 census, that figure had grown to 12.4%. For reasons given above, this growth is certain to continue.

Although TAFE generally regards training of Apprentices (mainly young people) as an absolute community service obligation, and where necessary reallocates resources to meet increased Apprentice training needs, the TAFEIVET system does need to ensure that mature age student training needs are also met. Some level of "unmet demand" is inevitable but Hunter lnstitute works assiduously to assess and prioritise competing demands within necessarily limited resources.

A substantial increase in participation rates will generate a requirement for increased resource allocation to TAFE and other VET providers. The current increase in Apprenticeship creation is already driving us to this point. The additional tradeIApprenticeship classes created by Hunter lnstitute over the past three years have all had to be achieved within existing budgets. This has only been possible through reallocation of resources. le. Additional trade classes have meant reduction in other delivery types.

In part, the lnstitute has been able to do this because of a concurrent, coincidental, decline in demand for training in Information Technology and Business Studies - a State wide trend. The swap of delivery is not one to one. IT and Business Studies ciasses are around half the delivery cost of trade training classes. ie. To create one Fitting and Machining class, TAFE has to cancel two IT or Business Studies ciasses.

In any case, this can only be regarded as a short term solution. It is not sensible to assume that IT demand will continue to languish in this way and indeed there are indications that skill shortages are now commencing in IT related fields. This will, in time, generate increased salary and job opportunities for trained IT staff and a resumption of high demand for IT training. Scope for further resource reallocation of this kind is already minimal. A further expansion of participation rates will require increased resourcing for TAFE to meet the demand.

p

--.-

p. 10 S~brniss on to PART 'R-; ihe NSW - HTAFENSWI~~ lnslitule Co~ncil. .p

---

4.3 Managing the cost of VET and increasing its effectiveness

The Tribunal invites views on the extent to which future changes in the nature of work require changes in training that favour generic and institutional training, for example, to provide more emphasis on foundation skills that promote problem solving and human interrelations.

Comment:

As argued above, the changing nature of work, technology and the demands of a competitive world economy require training for both specific industry relevant skilislcompetencies and a culture of problem solving, flexibility, innovation and ongoingllife long learning.

These more general skills need not be taught in a generic or even an institutional setting. On the job trainingliearning equally needs to provide a balance of specific competencies and adaptability for the future.

TAFE engages in significant amounts of on the job training, in partnership with industry. Even in an institutional setting training for innovation and problem solving can be a part of industry specific programs and need not be generic. Problem solving is traditionally a part of the original apprentice system and is an approach which must not be lost in or obscured by training for specific competency outcomes.

The Tribunal invites views on the outcomes from VET, and in particular, whether the proliferation of New Apprenticeships reflects value for money. Are there any steps that could be taken to improve the value for money of New Apprenticeships, including the possibility of changing their funding in some way?

Comment:

The principal required outcomes of New Apprenticeships are employment for studentslworkers and the provision of well trained staff to meet industrylemployer needs.

The rapid proliferation of New Apprenticeships has resulted in some confusion for employers, and for prospective studentslempioyees and even for careers advisors in the various high school systems.

The process for New Apprenticeships needs to be as streamlined and simple as possible, to reduce confusion and to encourage employer uptake. Council is of the view that employers find the current system overly complex and hard to work with. This is compounded by the fact that the systems and arrangements for New Apprenticeships change often, with changes poorly explained orjustified. It often seems harder to employ staff in training positions, not easier.

Incentives to employers are vital in encouraging employers to create TraineeshiplApprenticeship positions -particularly small to medium enterprise. A complex, unstable system is inherently unmotivating.

One specific change suggested is a better staging process for payment of employer incentives. This should be done on a pro-rata basis. At present, payments are made in

p. 11 S~Dm'sSon to PART -Review of the Skils Base in NSW" TAFE hSW -Hunter l~slilutetio.nci1. -

just three stages. Given the mobility ofstaff, it is quite common for an employer to lose a staff member just before the end of the employee's 4th~pprenticeship year. The old employer, having provided a full Apprenticeship, loses the final payment. The new employer, having provided no training at all, gains the final payment.

In effect, employers who train often feel they are providing training for others.' Employers are looking for ways to shortcut the system. At present, many employers feel that the costs of training-are too high. Instead of engaging in training, they decide to devote resources to above award wages and conditions to attract trained staff from other employers.

The effectiveness of the system is also dependant on the degree to which employers, VET providers and Group Training Companies can work together in partnership.

Options for accelerating the Apprenticeship system have been discussed at length in industry and training circles. Employer and industry views differ widely. In some instances a fast track option is perceived as a highly desirable and effective response to skill shortages. Council members with senior positions in Manufacturing and Engineering are of the view that an accelerated Apprenticeship system would be extremely beneficial.

In others industries - with Commercial Cooking cited as an example - it is seen as compromising staff competence and resulting in the need to pay full adult trained wages to staff who still have much to learn and who are not fully competent in their role.

Pre-apprenticeship courses are generally agreed to be worthwhile and effective - particularly if allied'with job matching and careful selection of applicants. It should be noted, however, that this type of course delivery increases the volume of training required of TAFE and has serious resource considerations.

The Tribunal invites stakeholders to comment on how well Training Packages reflect current workplace requirements and the future skill needs of NSW. Comnrents are invited on the appropriate balance in training between generic skill development and competency outcomes.

Comment:

Training Packages do need to include generic skills, including the so called "soft skills" such as workplace communication. A set of straightforward technical performance competency outcomes is insufficient in itself. Workplaces -particularly small to medium enterprise - need employees who have capabilities which extend beyond narrow technical competency.

The trend in the workplace has been towards multi-skilled, flexible employees, who have a capacity to work in dynamic teams.

A problem exists with regard to the proliferation of short courses marketed as vocational by private training providers seeking to recruit unemployed people, or workers seeking a career change. In general short courses of this type are of limited or no value to employers, and will not help the student in gaining employment. They provide few skills, or very narrow skills which are not transferable. Longer accredited programs provide much better skill levels, and are more attractive to employers. Completion of a longer program indicates to an employer that the student has a real interest in and commitment to the area of studylwork, and has a greater skill base.

p. 12 Submission to IPART "Review of the Skills Base in NSW TAFE NSW - Hunter Institute Council.

The Tribunal invites views on the suitability of the current regulatory and quality assurance arrangements of the VET system in relation to registration, accreditation and auditing in order to best support future skill requirements. What mechanisms can be developed to address the quality assurance of training system outputs including the skills and knowledge of graduates?

Comment:

The lnstitute Council is aware of the extensive regulatory and quality assurance systems and processes with which TAFE NSW generally and Hunter Institute specifically must comply. The lnstitute has just recently undergone a re-registration audit process under the Australian Quality Training Framework (AQTF).

Council notes, too, that Hunter lnstitute in common with all TAFE NSW Institutes has successfuiiy implemented and is certified to the IS0 9001/2000 quality standards. As with other industries which have adopted IS0 9001, this has benefits both in terms of quality assurance and in terms of market perceptions and competitive advantage.

Council would like to emphasise that in addition, due to the extremely wide scope of TAFE operations, TAFE is subject to a similarly wide range of other audit and compliance requirements. An obvious example is the Finance and Audit Act, but some less obvious examples include:

HACCP - NSW Food Safety Program Animal Care and Ethics O H & S . Risk Management NSW Audit Office Management Audits ICT Security Australian Maritime Safety Authority certification . Additional regulatory requirements such as: non-destructive testing; confined spaces; environmental standards: Australian Quarantine Industry Standards

Although ail of the above are necessary, the collective resource burden to meet all current accreditation, registration and audit compliance requirements is considerable.

Councii recommends that a focus on quality assurance of training system outputs is welcome and desirable, but that it should not be accomplished through the imposition of an additional layer of compliance and audit. Rather, it should be accomplished through further evolution and refocusing of the current AQTF with no increase in the current QAlaudit/compliance burden.

The Tribunal invites views on completion rates for VET courses, how they have been Wending, and what this implies for the effectiveness s of these courses.

Comment:

As noted in the IPART paper, completion rates for programs which are an employment requirement, such as Cert Ill Apprenticeship courses, tend to be higher than for other programs. This is understandable and logical.

For other programs the Module Completion Rate (MCR) is a better indicator of success, where students frequently enrol in a program simply to gain specific modules or competencies. Ongoing changes to TAFE NSW module based enrolment processes are reflecting this reality.

p. 13 Submission to IPART "Review of the Skills Base in N S W TAFE NSW - Hunter lnstitute Council.

TAFE NSW Hunter Institute, in line with TAFE NSW generally, has seen a steady rise in MCR since the year 2000. in that year the Hunter Institute MCR stood at 77.8%. Since then it has risen each year to the current level (2004 -latest available data) of 81.3%. This compares favourably with the TAFE NSW average MCR of 79.5% although that too has been rising steadily since 2001 when it stood at 75.4%.

4.4 Factors affecting the take-up of VET

The Tribunal invites views on the actual and perceived retnrns to training for employers and individuals-for example:

Are there differences between the returns for initial trainingfrom those stemmingfrom retraining and upgrading of qualifications?

I f there are differences in the perceived returns to different forms of training, i s the apportionment of funding between different qualifications/courses appropriate in terms of the incentives to undertake training?

How important i s the cost of providing VET for employers, and the cost of undertaking sfndy for learners in determining their take-up of VET?

Comment:

As mentioned above, employer incentives are a key issue for employer uptake of training responsibilities. This is especially true for small to medium enterprise. There are real costs involved in training, and the creation of traineelapprenticeship positions. Cost offsets for small to medium enterprise should be maintained and the payment process improved.

The Tribunal invites views on the impact pay structnres and other aspects of the industrial relations system might be having on decisions to undertake training. For example:

I f competency-based training were accompanied by competency-based pay, what difference would this make to take- up and completion of VET?

Is the shift t o casualisation and part-time employment inhibiting training, and i f so, how could those inhibitions be reduced or offset?

How well is training leading to career paths, particularly in the case of New Apprenticeships?

Has restrnctnring and laborrrflexibility let t o frnncation of career paths in some sectors?

Are there ways in which work and jobs could be reorganised so as to make better use of employees'skills and thus improve incentives?

Comment:

The above matters are largely outside the scope of this submission, which is from a TAFE Advisory Council perspective rather than from the perspective of any particular industrylemployer.

For employers, the issue of a training wage is, however, regarded as significant. in some industry areas - such as Tourism and Hospitality, the lack of a training wage arrangement is a real barrier to employers putting on untrained staff. The productivity of

p. 14 Submission to IPART "Review of the Skills Base in NSW TAFE NSW - Hunter Institute Councii.

untrained staff is relatively low, and employers are reluctant to give them an opportunity without the Incentive of reduced cost.

The Tribunal invites views on the factors preventing mature workersfrom increasing their skills and undertaking additional training.

Comment:

As detailed above, TAFE NSW has been highly successful in meeting the needs of older students, as evidenced by the high numbers of mature age enrolling each year.

Factors which prevent mature age workers from engaging in training generally relate to schedulingltime allocation issues and worklfamily/study conflicts. Mature age workers are frequently unable to attend in ordinary hours and often prefer options for training after 5 pm. To address this, Hunter lnstitute is investing strongly in the development of innovative and flexible delivery modes. As mentioned earlier, the ability to do this is dependant upon the availability of development funds from State and Federal sources. The ongoing relevance of TAFE to workers and to employers to a large extent depends upon the continuance and even expansion of such development funding.

The other factors inhibiting mature age workers (and the unemployed) often relate to long term absence from formal training and negative perceptions. Hunter Institute maintains a . very strong Outreach program to encourage people back into mainstream education and training.

Many mature age students feel uncomfortable ifplaced in classes in which young people predominate. Timetabling and arrangement of class options for older people have assisted with this at Hunter Institute.

Similarly, there is a feeling that New Apprenticeships and Traineeships are aimed at the young, and older people can feel out of place or uncomfortable about applying.

As with young people, job matching of older students with training and vocational opportunities is an extremely important success factor. Older people need to feel assured that they will be capable of undertaking their chosen occupation, both physically and in terms of their skill set. They need to feel confident that they will be empioyable at the end of their training.

Given their longer history, recognition of existing skills and competence is an important issue for older people. This can reduce the amount of time required for training, increase their confidence and improve their motivation to be engaged in new areas of training and employment.

The Tribunal invites views on the specific issues preventing more youngpeoplefrom undertaking education and training. I t also welcomes views on:

W h a t the VET system can do t o encourage more younger people who are currently not studying or working t o do so.

How w e can ensure that young people in low-skilled occupations receive adequate training that will enhance their employment opportunities over their careers.

Comment:

TAFE has always provided a "second chance" option for young people who have dropped out of school education and who are not in employment. Hunter lnstitute

p. 15 Submission to IPART "Review of the Skills Base in NSW TAFE NSW - Hunter lnstihlte Coundl.

accesses funding for the delivery of specific Helping Young People at Risk programs. The content and nature of these programs vary according to the target group and the needs of particular students, but they include foundation and life skills. Over the past two years, for example, the Institute's Aboriginal Youth Suicide Prevention Project has been widely commended.

In addition the lnstitute offers TAFE NSW qualifications at Year 10 equivalent and Year 12. However, unlike schools, TAFE is not funded to automatically provide school equivalent programs on demand. Each TAFE lnstitute is funded for a certain number of teaching hours per year, and these have to be allocated to meet competing priorities. Accordingly, there are severe economic limitations on the degree to which TAFE Institutes can duplicate school level qualifications and services. Duplication of school services at TAFE is not the answer to falling high school retention rates.

The preferred solution, supported by Council, is for the development of education and education to employment pathways which encourage students to remain engaged in education and training without the full burden falling onto TAFE.

N E T programs are on effective approach. The funding model allows TAFE to resource the TAFE component of studies. Students benefit from a wider subject choice and variety of environments. Schools benefit from higher retention rates.

In school Traineeships are another valuable model, which could be further expanded. The development of in school Apprenticeships proposed for NSW is also supported. Hunter lnstitute has developed an analogous program through partnership with Port Waratah Coal Services (PWCS) - allowing selected senior students to mix Year 12 studies with TAFE Apprentice course modules and work periods at PWCS. This enables the student to complete the HSC concurrently with studies and experience equivalent to the first year of a trade apprenticeship.

There is also an ongoing need to ensure that school students and high school Careers Advisors are well informed of current job opportunities and employment requirements.

Gender issues are noted as significant in many areas of skill shortage. Despite efforts by training providers and by industry, many occupations still have a high gender imbalance in the existing workforce and in new cohorts of Trainees and Apprentices. This in turn is reflected in a level of gender imbalance in Hunter lnstitute enrolments.

The Tribunal invites views on the factors that impact on employers' decision to provide training. For example:

Does the capacity to hold onto skilled staff affect this decision?

Is the VET system offering the right services? Is there suficientflexibility in the system t o accommodate employers' needs?

Has the flexibility from the introduction of user choice increased the willingness t o provide training?

What sort of relationships between employers, training providers and funding bodies could assist the availability of trained staff into thefuture?

Comment:

The various factors impacting employer decisions have been documented by employer groups elsewhere. They include consideration of employee retention and workplace skill

p.16 Submission to iPART "Review of the Skills Base in NSW TAFE NSW - Hunter lnstitute Council.

needs, but also costs, potential disruption to production and the complexity of training arrangements.

Certainly flexibility is a key issue for employers and employees. Close dialogue and co- operation between training providers, employers and funding bodies is essential.

A critical issue for co-operation between employers, training providers and funding bodies relates to job matching. Council members express a general consensus of opinion that effort spent on matching prospective students to available VET courses and TraineeshiplApprenticeship opportunities is more than repaid in terms of staff retention and course completion. Job matching of this type minimizes the chance of a person ending up in an area of traininglemployment for which they are poorly suited or entirely unsuited. This increases the efficiency of the training system and reduces costs to employers.

This, in turn, would act as an incentive for employers to create training positions, or at least remove/minimize a major disincentive - the tendency of staff in training to either leave, or become poor employees unmotivated by and unsuited to their work.

The Tourism and Hospitality industry is an excellent example. Staff require excellent interpersonal skills. By definition, they have to enjoy working in a customer focused environment. A Trainee or Apprentice unsuited to the work can, in a work situation, do -

significant damage to the employer's image and reputation.

4.5 Capacity of training system to provide training required over the next 20 years

The Tribunal seeks views oft the currentflm'bility of the truit~iugsystem. Which aspects of t7te system supportsfler'bility and which aspects need improvements? Of the aspects requiring improvemetrt, how sho~rld these be improved?

Comment:

As mentioned above, the rapid development of New ~pprenticeships, and the relative complexity of arrangements, has led to some confusion amongst employers and prospective students. These are issues best addressed by submissions from employer bodies.

The Tribunal seeks comments on how user choice has been implemented in NSW, including:

W h a t has been the impact of user choice in terms of theflexibility and responsiveness of the trainingsystem?

W h a t have been the impacts of competitivefunding arrangements i n NSW for users and providers of the VETsystem?

W h a t are the implications of user choice for VETgovernance structnres and whether they should be more decentralised to respond to a more competitive training market?

p. 17 Submission to iPART"Review of the Skills Base in NSW" TAFE NSW - Hunter institute Council.

Comment:

User choice has encouraged an increase in the range and number of private RTOs operating in the training market. Many of these provide an excellent service, but there have been examples of poor quality providers. On occasion. TAFE has had to "pick up the pieces" where a private RTO failed leaving students stranded. It is not necessarily easy for employers and prospective students to determine the quality of a provider or service in advance.

Competitive funding arrangements have led to wider consumer choice and competition. This is aenerallv welcome. There are some difficulties in thin markets - rural areas of dispersed population or subject areas of relati;ely low demand, with too many providers competing for too few students. Funding arrangements need to be as open and transparent as possible.

TAFE governance structures allow a reasonable degree of local initiative in decision making and service provision. It is essential that this be maintained if TAFE is to remain responsive to variations in regional need.

Competitive funding arrangem'ents in NSW oflen fail to address the needs of regional industry and employers. Funding programs administered through State Training Services such as the Competitive Training Program (CTP), have the potential to provide additional training which could greatly enhance the capacity of industry, in the Hunter and other regions.

However the funding priorities set for State Training Services do not necessarily reflect the priorities and needs of local industry and employers, or even the needs identified by other State Government bodies. As a result, there is a pressure for training providers to provide programs which address State Training Services priorities rather than locall regional needs. In the Hunter, for example, it would be highly desirable for funding priorities Lo be aimed at the skill shortage areas documented by industry, or at regional socio-econom'c needs such as those identified bv the Premier's De~artment led Cessnock Community Renewal project.

The Tribunal invites views on the level of decentralisation of the current training system, including

Who determines which type of trainingis provided?

Wil l VET be more responsive to changing patterns of demand if there is more

1 decentralisation to allow for local initiatives within an overall policy framework determined by the State and Commonwealth governments?

Comment:

Current arrangements allow a fair degree of local autonomy in decision making, when it comes to determining the mix of TAFE services to be provided in a given region. In the case of Hunter lnstitute inputs to the decision making process come from many sources. The Institute Advisory Council is one. Other sources include:

DETITAFE state wide priorities (themselves informed by BVET and national priorities) Local and regional industry input - both from specific employers and from peak bodies lnstitute membership of and participation in industry peak bodies and forums Research data on the regional economy and demographics

p 18 S~bm~sslon to IPART Revlew of Uie Skllls Base ~n NSW' TAFE hSW - rlunter Instltule CO-nc --

Customer feedback Trend analysis

The lnstitute "Profile" of service provision is planned in detail 18 months in advance, with progressive strategic reviews and further tactical changes where actual demand varies from predictions. The decision making for this is local, through lnstitute Planning, Finance and senior management forums. The lnstitute Director has final responsibility for sign off, within the parameters of centrally set lnstitute total delivery targets and budget.

Decentralization generally encourages and enables greater responsiveness to locallregional need.

The Tribunal invites coinments on other factors affecting the capacity and flexibility of the training system. What changes in employment conditions and any other changes might improve theflexibility of the VET system t o respond t o changing demands?

Comment:

, 1 Certain changes in employment and other practices will flow from the StatelCommonwealth VET agreement, Implementing the requirements of the Commonwealth Skilling Australia's Workforce Act (2005).

These include: . Introduction of Australian Workplace Agreements Greater pressure for third party access to publicly funded VET facilities . Increased competition

A related but separate change arising from Commonwealth initiative is the development of the Commonwealth funded "Australian Technical Colleges" (ATCs) - with an ATC proposed for the Hunter and another for the Central Coast.

It is too soon to say what the impact of these changes will be on TAFE and the wider training system.

The ATC initiative will increase competition for the relatively small and specialised Year 11/12 VET market. Whether ATCs will prove to be a major distraction from or an effective alternative to current TVET delivery is uncertain. TAFE needs to continue development of effective services for this market in collaboration with public and private school systems.

The Tribunal invites views on the balance between decentralisation and Cominonwealth pressures for national uniformity and transferability of VET qualifications. Are the ways of reconciling these competingpressures without undue damage to either?

Comment:

lnstitute Council considers that the current balance between national uniformity and local autonomy is effective and appropriate. The Australian Qualifications Framework (AQF) and the Australian Quality Training Framework (AQTF) provide national consistency of qualifications, national recognition and nationally consistent quality requirements while stiii allowing a reasonable degree of local and regional customization of service delivery.

The Tribunal seeks comments on the currentfunding arrangements, including:

- .p -- p. 19 Submlsson to ~PART 'Review oftne sklls Base n NSW,, TAFE ~ S W - Hunter nstltLte COL~CII.

What effects have these funding arrangements had on the capacity and flexibility of the training system?

Are there any areas where improvements are needed?

Comment:

Comment has already been provided above to the effect that TAFE would benefit from a more distant funding horizon, along the lines of the current higher education triennial funding model. This would allow improved mid term planning based on better knowledge of resource availability. It is, for example, very difficult for an lnstitute to negotiate with industry for the introduction of a new three year program when the lnstitute has no assurance of resourcing ieveis beyond the end of the current financial year.

The current model acts as a restriction on planning and on TAFE capacity to meet industry needs and expectations.

A more pressing problem relates to funding for capital and equipment, outside of the normal TAFE'operating budget.

A great many TAFE programs, vital to the regional, State and national economy, are highly capital intensive. This is particularly true in the case of trade training, where students need access to industry standard workshops and machinery- all of which must be upgraded in line with changing industry technology.

In some instances access can be negotiated to actual industry workplaces and equipment, but this will never be a universal solution. In many instances employers are unwilling or financially unable to tie up valuable plant and equipment and workshop space for training purposes. In a highly competitive environment, it may not be possible to take that capacity out of production for any length of time.

There are also options for TAFE to investigate other types of partnership with industry, where equipment is provided for TAFE use. Hunter lnstitute has benefited from this in the past with donations1 sponsorship providing such items as passenger vehicles for Light Automotive mechanical courses, computing equipment, and even high end music production and sound editing equipment for Music Industry courses. Such opportunities, however, are limited.

For this reason TAFE has always had, and will always need, extensive facilities and equipment of its own. In recent years the availability of funds to renew and upgrade old or obsolete equipment has markedly reduced. This particularly damages TAFE Institutes, such as Hunter, which have and which need to maintain a high level of trade training.

The problem is not confined to traditional trades, however. Information Technology equipment and networking are a major cost for Institutes and a technical area of obviously rapid technological change.

lnstitute Council strongly recommends that the Tribunal consider the infrastructure costs for TAFE and the need to ensure that the current backlog of equipment replacement1 upgrade needs is reduced and kept at a low level.

There is a further problem for public providers, arising from the funding arrangements for allocation of competitive training programs. The steady increase in the percentage of VET funding diverted to the open training market is driven by an assumption that private l providers need or deserve a greater share of the training market. Effectively, it is a

p. 20 Submission to 1PART"Review of the Skills Base in NSW TAFE NSW - Hunter lnstitute Council.

i !

decision to reduce the market share of public providers when the principle' policy issue .. should be a focus on high quality training which meets industry and community need.

The final issue Council wishes to raise in respect of funding improvements relates to ~- timing issues within the system. As noted above, supplementary and competitive funding

programs through State Training Services and the Board of Vocational Education and Training (BVET) are welcome, and can do much to assist industry and TAFE in reducing skill shortages. Unfortunately the systems by which such funding is provided are

~- seriously flawed with respect to the timing of resource allocation. Purchases of competitively tendered VET provision by State Training Services sometimes occur critically late in the calendar year. The same has been true of some BVET Emerging Priorities and Employability Skills funding. The consequence is that Hunter Institute has - been ordered to arrange and deliver programs, and expend or at least commit funds, as late as October - with an expectation that all arrangements would be complete within the calendar year. Such timing ignores the needs of students, and the reality that most prospective students have other plans by the end of the calendar year. It strains the credibility of TAFE with industry and the community.

\ ,> The Tribunal invites comments on impacts of the reforms over the last decade. In particular, has

the shift towards an 'industry-led system' resulted in an over-emphasis on job-specific skills a t a risk to Iater adaptability?

Comment:

As per previous comment for section 4.3 above

The Tribunal seeks comments on the impacts of suggested changes and improvements.

What are the likely implications of Commonwealth policies forfuture TAFE capacity, including the implications of Commonwealth-State agreements?

How well placed i s TAFE to meet the competitive challenges that it will be facing, includingfrom the Commonwealtk, and what changes will be necessary in that regard?

What are the risks t o the VET system if a large part of TAFE funding is contestable and many staff are part-time casuals (given that TAFE is often seen as providing the necessa y reserve capacity for the VETsystem)?

What can be done t o ameliorate these risks?

' 1 Comment:

As mentioned above, it is too soon to assess the impact of changes arising from the Commonwealth State VET agreement and the Skiliing Australia's Workforce legislation

TAFE is well placed to meet competitive challenges. However, whilst cost issues are important and need to be carefully managed, TAFE needs to maintain a focus on quality of service rather than on lowest possible cost. TAFE is much more than just the "reserve capacity" of the VET system - it is by far the largest component of the VET system and the part most critical for maintenance of the nation's economic capacity and competitive advantage. Significant elements of VET funding are already contestable and TAFE competes for them against a very large number of private providers. Many of these have a lower cost structure due to iower pay rates and iower infrastructure costs. There is certainly a tendency for private RTOs to cluster in the low cost, high demand delivery areas and to avoid the high capitallequipment, high delivery cost technical areas and the delivery areas of lower demandllower volume.

p. 21 Submission to IPART "Review of the Skills Base in NSW TAFE NSW - Hunter Institute Council.

Council members express the view that much of the competition in the training market involves private providers seeking to pluck "the low hanging fruit." The emphasis is upon maximizing profit and not upon the overall training needs of employers and a balanced response to the skill needs of the overall economy.

In contrast, TAFE Institutes do not have the luxury of avoiding higher cost areas of training and chasing low cost of delivery to the exclusion of other training needs. Indeed, TAFE has a community service obligation to maintain its support for and commitment to higher cost trade training in support of the national economy. TAFE also has a community service obligation to maintain its support for rural and remote areas of dispersed populations and low volume - equally unattractive to private providers. There is also TAFE's long standing and valuable role with respect to addressing issues of social justice and equity. This includes an enormous range of service provision to address the needs of special groups - young people at risk, mature age students, the unemployed, indigenous students, migrants and students with a disability. None of these areas are attractive to private providers. Very few training providers outside of TAFE meet these needs.

It is vital that changes to training syste'ms and funding arrangements do not either force TAFE out of higher cost into lower cost delivery areas and away from TAFE's commitment to community service or, alternatively, atrophy TAFE by forcing it out of the lower cost, higher volume training and leave it purely as a provider of courses no one else can afford to deliver.

Recommendations:

As with the lnstitute Council comment provided above, the recommendations of this submission are grouped below under the broad headings of the original IPART issues paper.

4.1 Forecast supply and demand for skills in NSW over the next 20 years

lmproved information for prospective students and for employers on the training system - particularly the operation of New Apprenticeships, Traineeships and Open Training Market arrangements. Maintain focus on current skill shortages in trade areas of manufacturing, engineering, construction etc. but include consideration of and planning for looming skill shortages generated by the changing demographics and economy of NSW eg. community services, aged care, personal services etc. Ongoing partnership between TAFE, Group Training Companies and Employers to develop innovative programs aimed at meeting employment needs - including additional resourcing to support TAFE provision of pre-apprenticeshiplpre-vocational programs. lmproved resourcing for development of flexible delivery training options and materials. Co-ordinated activity by VET training providers, schools, employers and Group Training Companies to improve the image of skill shortage occupations and to improve information available to school students on career opportunities. institution of a three year rolling triennial funding system for TAFE NSW, similar to the Commonwealth Higher Education funding model, to improve TAFE's capacity for medium to long term planning of training provision in collaboration with industry.

4.2 Demand for VET if participation rates were to be increased

Support for initiatives to increase participation rates in training, with increased resource provis:on for TAFE NSW to meet the consequent increases in demand for VET.

p. 22 Submission to lPARTnReview of the Skills Base in N S W TAFE NSW - Hunter Institute Council.

l

4.3 Managing the cost of VET and increasing its effectiveness . Increased resource provision for TAFE NSW to meet the ongoing increases in demand for VET - as above. . Move to a pro-rata basis for the payment of employer training incentives, . Ongoing support for the delivery of pre-apprenticeshiplpre-vocat;onai programs, but with specifc identified additional funding to TAFE Institutes to cover this cost. New processes for quality assurance of training system outputs to be introduced with no net increase in the current auditlcompliance burden on training providers

4.4 Factors affecting the take-up of VET . Maintain and improve cost offset incentives for employers to create trainee1 apprenticeship positions. Improve opportunities for, and resourcing of, TAFE Delivered VET in Schools and the development of in school Traineeships. . Co-operation between training providers, industry and Group Training Companies to expand and improve job matching of prospective studentslemployees - to improve retention rates. . Processes for new Apprenticeships and Traineeships to be made as simple as possible, to encourage employer participation and improve uptake.

4.5 Capacity of training system to provide training required over the next 20 years

Maintain relative autonomy of TAFE decision making at regional level, to ensure responsiveness to regional needs. . Funding priorities for competitive training programs and other training initiatives, eg. BVET Emerging Priorities, to include regionalllocal economic and social needs. Improvements to the timing of supplementary funding programs. Introduction of a training wage as an additional employer incentive to engage in creation of training positions . Ensure adequate resourcing for TAFE NSW, in terms of training delivery costs but also with a commitment to improving the capital infrastructure and equipment upon which high quality, technically relevant training depends. ' .

p. 23 Submission to IPART "Review of the Skills Base in NSW" TAFE NSW - Hunter Institute Council.