Universities face further cuts in the Federal Budget, but vocational training providers say investment in skills training is well overdue

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  • The Federal Budget revealed investment unevenly distributed across the country’s higher education and vocational training sectors, with the latter winning out.
  • The JobTrainer program has gained additional funding, with the government’s apprenticeship program winning an additional $1.2 billion.
  • Peak university bodies argue they’ve missed out, while vocational organisations say the allocation of funds is the best way to get Australians into jobs.
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The 2021 Budget followed familiar trends for the Morrison government when it came to higher education and vocational training: dismissal of the former in favour of investment in trades and manufacturing.

Peak bodies have reacted accordingly, with those in the university sector speaking out about what it considers another gut punch following the loss of more than 17,000 jobs since the start of the pandemic in March 2020 — not to mention the financial impact of plummeting international student numbers.

Conversely, vocational education organisations have said low apprenticeship numbers and chronic mismanagement within the sector can be solved with investment in putting Australians to work in in-demand jobs.

Skills and training are some of the big winners in this Budget, with a JobTrainer program targeting 18-24 year-olds providing an extra $500 million, matched by states and territories, and resulting in an extra 163,000 places.

The scheme, a key plank of the Morrison government’s plan to reduce youth unemployment during the peak of the pandemic, was extended in March this year.

The Budget also provides more money for apprenticeships. The successful Boosting Apprenticeship Commencement program, which gives employers $7000 for the first year of an apprentice’s salary, will become its own demand-driven system. Places will be uncapped and the government estimates this will cost an additional $1.2 billion.

Universities in for another tough year

In contrast, the government’s Jobs-ready Graduates program — which makes in-demand courses including Law and Communications more expensive than nursing, agriculture and teaching, and comes into effect this year — will lead to lower overall funding for domestic students.

“Expenses under the higher education sub-function are expected to decrease by 8.3 per cent in real terms from 2020-21 to 2021-22 and decrease by 9.4 per cent in real terms from 2021-22 to 2024-25,” the Budget states.

“The decrease in expenses primarily reflects the cessation of additional funding to maintain universities’ research efforts in response to the challenges caused by the COVID-19 pandemic.”

Education and training organisations respond

Universities Australia said the Federal Budget assumptions that Australia’s borders will remain shut until mid-2022 poses serious challenges for the nation’s universities.

Catriona Jackson, chief executive of the peak body for the sector, said the Budget suggests that in 2021 “the picture for universities will get worse.”

“There will be significant flow-on effects for the nation’s research capacity and jobs inside and outside universities,” she said in a statement, adding that the outcome would be diminished talent within the Australian workforce.

“Australia’s university sector cannot sustain these losses without serious damage to national productivity and the country’s knowledge base,” she said.

Similarly, Dr. Alison Barnes, president of the National Tertiary Education Union (NTEU) commented in a statement that the Jobs-ready Graduates program will result in a funding cut to the sector of 9.3% over the next three years, despite its claims to the contrary at the time.

“The Government is hanging university workers and Australia’s future out to dry,” Barnes said, arguing that the country’s fourth-largest export sector deserved more.

“If this Government was serious about wanting to invest in skills, education, and training to tackle unemployment, it would invest more in higher education than just 5,000 short course places,” she said.

Writing in the Australian Financial Review, Julie Hare argued that the Budget offered a necessary correction, providing funding for a vocational skills sector historically plagued by “a stream of poorly designed policies and declining per-student funding,” the result of which has been spiralling apprenticeship numbers.

Independent Tertiary Education Council Australia (ITECA) welcomed the Budget’s investment, calling it “the largest skills investment in a generation.”

It said the focus on making it easier for Australians to train for jobs in areas like aged care, as well as easing the costs of facilitating apprenticeships would boost employment in growing sectors.