[Greens-Media] TAFE Struggling under funding cuts

[Michelle.Panayi at parliament.vic.gov.au]

Media Release – 13 June 2013

Struggling under funding cuts

The TAFE sector is struggling under funding cuts imposed by the current 
state government and the impacts of the competitive funding model that was 
put in place by the previous government and has been continued by this 
government, Greens Education spokesperson, Sue Pennicuik said in 
parliament yesterday.

Speaking on the Auditor-General's Report on the Results of the 2012 
Audits, Ms Pennicuik said that the Audit finds that the operating results 
for TAFEs deteriorated again in 2012.

"Based on the three-year trend, TAFEs are heading for an overall 
operational deficit. For individual TAFE institutes, operating results 
were lower for 10 institutes in 2012 compared with 2011, with four TAFEs 
recording deficits and two with marginal surpluses," Ms. Pennicuik said. 

"The Audit found that the underlying results for the TAFE sector have been 
declining over the last five years, posing a long-term risk to the 
financial sustainability of the entire TAFE sector," Ms. Pennicuik said. 
"One-third of TAFEs face a more serious medium-term risk to their 
sustainability."

"The capacity of TAFE institutes to self-finance has fallen over five 
years and that this poses a number of problems for TAFEs, including an 
inability to replace assets in a planned and timely manner and the risk 
that the asset base will deteriorate over time if asset renewal falls 
below depreciation rates." 

"This five year period coincides with the imposition of the market 
contestability on the TAFE sector by the previous government and continued 
by this one," Ms. Pennicuik said. "It should be ringing alarm bells as to 
the impacts of this inappropriate funding model on our public TAFE 
sector." 

"The Audit revealed that the average underlying result for TAFEs has 
decreased since 2010, highlighting the challenge for the sector to achieve 
positive financial operating results following changes in the funding 
model and the capital replacement indicator also declined over the 
five-year period."

"The Audit also found that changes in the funding model have resulted in 
TAFEs cutting expenditure viewed as 'non-essential' and that changes to 
the legislative framework and funding model ... mean that TAFEs are more 
reliant on tuition fees for generating a major portion of their operating 
revenue."

"The issues pointed out in this Audit Report should concern us all as to 
the impacts and risks that the competitive funding model and huge funding 
cuts have imposed on the TAFE sector, undermining its proud history of 
providing affordable training and re-training for Victorians," Ms. 
Pennicuik concluded. 

For further comment: Sue Pennicuik –  03 9530 8399





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Parliament of Victoria                                                                                                                    . 
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