1. Recent shifts in the
governance of education
towards markets and
privatization and their
implications for
educational opportunities
for all
Privatisation as a concept can be defined in
numerous ways and with it connotations as to
its intent and social objectives. Belfield and
Levin (2002) provide a broad definition in
terms of privatisation of the education system
in which they state that “privatization is the
transfer of activities, assets and
responsibilities from government/public
institutions and organizations to private
individuals and agencies” (Belfield & Levin,
2002, p.19). Education at all levels is
experiencing significant adjustment in
response to growing global competition and
pressure on governments to rein in the
ballooning expenditure associated with the
provision of education. Belfield and Levin’s
(2002) definition of privatisation tends to
oversimplify the mechanisms by which
privatisation is being implemented and
rationale that has shifted a fundamentally
supply driven model to one where the
demand of the market dictates. Their
definition as succinct as it is raises questions
as to the future role of the State and
economic levers it will retain to fulfil the
social responsibilities entrusted to it.
Lundberg (1994) in his early and arguably
insightful analysis of Australia’s reformist
educational policy exposes the reality behind
the political vernacular concealed within the
rhetoric of ‘competition’, ‘open’ and ‘free’ as
acknowledgement that markets and with it
privatisation of vocational education had
deep ideological roots. The foundations of
vocational training had been set though the
implications of open market regimes were yet
to be realised. Lundberg however highlights
the implications associated with relinquished
control of centralised education by the State
and intimates the requirement for regulatory
control to ensure integrity and industry
confidence is maintained. While much of the
discourse tends to concentrate on
privatisation of the school and university
sectors, the trend is one that is being
replicated in the vocational education and
training field. Parallels clearly can be drawn
across all sectors though in the VET sector the
drivers tend to be expressed in economic
imperatives rather than social equity
measures. Australia’s VET system had
matured and was exposed to the realities of
global competition. The humanist influences
that underpinned the Keynsian philosophies
of the Kangan reforms had run their course.
The paradigm of neoliberal principles was
consolidating what was to become a quantum
shift in the future of vocational training
provision and with it questions of social equity
and quality outcomes. The die had been cast
and with it vocational training was to be
inextricably connected with the fluctuations
of markets and the foibles of domestic and
global policy.
Internationally, the World Bank paved the
way for emerging third world economies
identifying the growing demand for skilled
labour and technicians as the basis upon
which to build economic prosperity through
increased productivity. Education in terms of
‘private consumption’ varied significantly
across the OECD nations with levels of
expenditure ranging from 2 per cent in
Portugal and Sweden to 22 per cent in
Germany and the United States (WTO, 1998).
Across sub-Saharan Africa however and
nations such as Togo, Nigeria, Brazil, and
Colombia there was a sense of urgency for
governments to address the reality that global
competition and demand for skilled labour
would dictate their capacity to participate and
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2. prosper on the world stage (Middleton,
Ziderman & Van Adams, 1991). The World
Bank's position was unequivocal arguing that
the role of the private sector and its
engagement in vocational training provision
across the developing world would form the
basis of economic reform and future global
prosperity. The Uruguay round of meetings of
the World Trade Organisation (WTO) signalled
the impetus for change and questioned the
hegemonic dictum of the State as education
providers (Fitz & Beers, 2002; Hirtt. 2002).
Liberalisation of the education system and
support for open markets were now the
mantra of international reformist discourse
(Hirtt, 2000).
Anderson (2005) in his analysis of the VET
reforms that were reshaping the Australian
Vocational Education and Training (VET)
landscape argued that the language of supply
and demand based economic principles was
promoted on the basis of ‘competition’ and
‘choice’. In many ways the departure of
governments as the traditional provider of
training was mirroring neo-liberal policy being
embraced internationally. Conjecture remains
as to whether social equity as opposed to
economic pragmatism was the overwhelming
driver across nations that were facing
expanding education costs with managing
competing fiscal obligations. In the Essential
Service Commissions review of fee structure
of Victoria’s VET system cost, content and
quality were common to all stakeholders
though acknowledged that governments and
policy makers also had a role to ensure
equitable access to education and training
was not hindered by policy outcomes
(Essential Services Commission, 2011). A new
obligation of the State was also identified
within this report which was to manage the
risk associated with market failure.
The implication of market reform centred on
privatisation of education needs to be
evaluated on numerous levels. Economic
benefit may well be the underlying intent
however equity, opportunity and diversity of
educational experience which is the politically
palatable argument needs to be tested as do
the unintended consequences that
privatisation has revealed. Australia as with
many nations across the OECD have
embarked upon neoliberal reform across all
sectors of education. Vocational training and
its Keynsian ideologies have been supplanted
by the vagaries of market dynamics within the
ideological veil of free enterprise, competition
and social equity.
Globalisation’s influence continues to steer
the direction of education policy and
stimulates debate as to the social and
economic implications of those that guide it.
In the analysis that follows, education and in
particular vocational training has been
influenced at both the global and domestic
level. Globally, the leitmotif of governments
globally is managing competing demands on
the finite economic resources at their
disposal. Education remains a significant
economic impost for nations that have
established their credentials however for
those emerging nations riding the crest of the
economic wave, a skilled workforce is likely to
come crashing down on foreign shores.
Privatisation – An
International Perspective
Privatisation of education is a phenomenon
being adopted by governments around the
world invariably cloaked in terms such as
'choice', 'accountability', contestability' or
'effectiveness' (Ball & Youdell, 2007;
Anderson, 2005). While reference to
privatisation of public education does not
enter into the lexicon of government, the
desire to emulate the strategies applied
within the private sector is being adopted by
governments around the world. Ball and
Youdell (2007) categorise privatisation of
public education on the basis of how change
is superimposed over the often entrenched
workplace practices. Commercialisation of the
public sector and transfer of practices more
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3. akin to those perpetuated in private business
is characteristic of 'endogenous' privatisation
governments may adopt. Conversely, a free
enterprise approach where public entities are
placed in direct competition with private
sector entrants is characteristic of 'exogenous'
privatisation. Belfield and Levin (2002)
however argue that privatisation policies are
instigated by governments through a variety
of mechanisms, often in combination and
invariably influenced by economic reality or
ideological faith in free markets. They argue
that privatisation is introduced by
governments increasing competition by
opening up the education market to private
providers. Alternatively the costs of education
are progressively transferred to the
consumers (parents, employers, students) or
in other instances education providers are
afforded greater autonomy with decision
making coming from within rather than from
the State.
The significance of vocational education as a
vehicle to drive the transformation of
emerging economies has not been lost on
governments. Sharma (2014) succinctly
describes the transformation that will have to
take place across the Indian vocational
training system if it is to compete on the
international stage. The magnitude of the
challenges that face this nation is reinforced
in Sharma’s analysis of the economic upheaval
that this nation is about to confront. Over the
next 20 years India is anticipating a million
people each month to enter the labour force
(Sharma, 2014). Underlying all this is the
capacity of the nation to service the skills
needs that will be the driving force of the
nation’s economy. For developing economies
such as India the capacity to meet the skills
and educational development of its
population are immense and will constitute
significant changes in how training is
provided.
Privatisation of the training system is
presented as a plausible solution to the rapid
and viable development of the nation’s
populace. Contrary to the concerns raised
within the west, the embracing of
privatisation of the education system is both a
pragmatic and economic response to meeting
the nation’s demand for skilled labour. The
‘Three Buckets of Reform’ proposed by
Sharma reinforces the recalibration of training
provision in India to better align with the
vocational skilling system’s capacity to
provide ‘quantity’, ‘quality’ and
‘inclusiveness’. With over half of the youth in
India being either skill deprived or un-
employable the motivation to address these
deficiencies is both poignant and palpable.
This shift towards market lead systems has its
detractors particularly where the explosion in
numbers of private education providers are
destabilising the dominance of the centralist,
government funded public system. Private
Training Establishments (PTEs) in New Zealand
are experiencing unprecedented growth as it
has maintained a liberal and open market
approach to competition from the private
sector (Hirtt, 2000; Appanna & Gounder,
2011). Stimulated by the New Public
Management (NPM) model the traditional
role of the public service provider is being
challenged on numerous economic, political,
global and as Gruening (2001) argues a
behavioural-administrative science front. For
publicly funded training systems such as those
in New Zealand and Australia and the
underlying classical democratic theory that
has been the cornerstone of these
institutions, the future of TAFE in Australia or
PTEs in New Zealand as the dominant training
provider is being sorely tested.
New Public Management (NPM) stems from
the United Kingdom under Margaret Thatcher
and local governments in the United States as
a reaction by government public
bureaucracies to fiscal restraint and economic
recession (Hood, 1991, Gruening, 2001;
O'Flynn, 2007). As a management philosophy
it has cemented its credentials in the
teleological realm of public sector
bureaucracy beyond the global north and
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4. been embraced within the public sectors of
New Zealand and Australia. Interestingly Hood
(1991) associates the stimulus that has
contributed to this reformist policy of the
public sector as promulgated from the
endogenous and exogenous forces that Ball
and Youdell (2007) identify as influencers of
public policy.
Gruening (2001) however questions whether
NPM constitutes a paradigm shift as such
though acknowledges that it is how
governments in New Zealand have packaged
managerial elements of this reformist
movement that signify real change. In his
detailed analysis of theoretical approaches to
public sector management he identifies
characteristics in each that correspond to
those now labelled as NPM. Characteristics
that encompass 'budget cuts', 'customer
concept', 'competition' and 'privatisation' are
on their own strategies often employed by
government agencies. As strategies in their
own right they are by no means revolutionary.
What is transformative is that each has
coalesced into a reform movement that
influences not just those organisations at the
centre of government service provision but
many such as public training providers who
have more recently been placed on the
periphery of the public domain.
Exponents of the NPM movement of which
New Zealand and Australia had embraced was
for the public service a quantum shift in
administrative organisation and indirect
acknowledgement that governments had
continued to fail in delivering efficiencies and
transparency (O'Flynn, 2007). The role of
government as service supplier was being
scrutinised with separation between purchase
and supply of services by the State reinforcing
the support of market efficiencies to expedite
social reform. Flynn (2007) and Gruening
(2001) acknowledge NPM as a force driving
change from within though neither critically
analyse the global externalities that may be
driving reform. Appana and Gounda (2011)
however implicate globalisation and
competition based efficiencies as causal
agents.
Education across most OECD countries
represents a significant part of their
respective government's expenditure and
during periods of fiscal restraint the capacity
of nations to maintain funding levels
continues to experience pressure from
competing public demands. Growing disquiet
first during the Regan presidency and
continuing through the Clinton
administration, the attention of policy makers
was drawn to what was seen as a failure of
the public education system in America
(Fusarelli & Johnson, 2004). Growing criticism
of the school system was directed at a public
entity that was unaccountable and
uncoordinated in the services it provided.
Cohen, March, and Olsen, (1972) associated
the policy disconnect and identified failure of
the education system as characteristic of
‘organized anarchies’ built on fluid
arrangements and inconsistencies resulting in
lack of coherent direction. Drawing upon the
management practices of the private sector,
public education embarked on major reform
that embraced market based philosophies
where output is measured and competition is
encouraged.
In what Fusarelli and Johnson (2004) refer to
as a 'neo-corporatist' approach, the school
system was being coerced to embrace the
NPM practices of corporate America where
competition and the power of free enterprise
were destined to deliver efficiencies and
increased productivity. The ‘Garbage Can
Model’ elucidated by Cohen et al., (1972)
presents a school management system based
on decision making that was at best well
intended though fundamentally flawed. The
‘Garbage Can Model’ as a repository for
potential solutions to problems may well
archives its objective though as a decision
making tool its effectiveness is questionable.
Politically, the solution was simple. The
education system required the stimulus from
the commercial world to engender a sense of
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5. competition and response to market demand
by overlaying the desire to succeed in
contrast to a public instrumentality that was
seen to be complacent and unresponsive to
change. For the established private education
providers this shift in government policy
presented opportunity to further consolidate
their position as a serious player within an
increasingly more open and competitive
market.
Privatisation of education systems in parts of
the world has seen the expansion of lucrative,
corporate entities or ‘Education Management
Organisations’, attracted by neoliberal
governments that are receding from their
traditional supply oriented role to one
influenced by market demand. England and
the United States are nations that have well
established policies that have liberalised
education provision though as Fitz and Beers
(2002) suggest, the approach adopted is
different. Reganomics and Thatcherism of the
1980s reflected a period in education policy
formation where governments were looking
towards the private sector as models of
efficiency and business acumen during a
period of increased fiscal restraint and
diminished capacity of governments to service
burgeoning social welfare demands. The
exposure of the ‘new and juicy targets’ (Hirtt,
2002) to free enterprise or the ‘predators’ of
free enterprise was the depiction conveyed by
commentators such as Hirtt in reference to
the Millennium Round of the World Trade
Organisation (WTO) meeting in Seattle.
Similar disparaging remarks were directed at
private education providers in Chile with
private education providers described as
‘creaming’ the system in the advent of
privatisation (Torche, 2005).
Zajda (2004) in his critique of global education
reform argues that there is a paradoxical
ambivalence by the State in their pursuit of
free markets maintained under the guise of
purported decline in education standards.
Failure of United States education in the
1980s and early 1990s were also being
questioned as student graduating were falling
behind comparable nations (Milne, 1998).
Milne's historical analysis of America's
education policy during this period captures
the attitude of policy makers at the time that
attributed failure directly with educators and
fundamental teaching standards. The paradox
however persists within decentralist rhetoric
yet surreptitious hegemonic policy of the
State that welcomed privatisation as the
panacea of economic and social stability. The
paradox referred to by Zajda (2004) is
epitomised in the United States neo-liberal
and increasingly corporatisation vocational
education policy that accentuates social
stratification and educational inequity (Lakes
& Carter, 2009).
Neoliberal driven reform of education
systems across many OECD nations has its
basis in ideology as much as it does in
economic pragmatism. In 1981 Chile
implemented a rapid and expansive
restructuring of its education system in
response to identified inequities across the
diverse socioeconomic groups. Reformist
policies in Chile provide one example of an
education system that has experienced radical
change as a result of internal political
upheaval and market oriented economic
transformation (Torche, 2005), (Tapia, 2003).
Chile’s implementation of a voucher system
paved the way for subsidised education to be
provided to the public as well as the growing
number of private schools therefore
effectively allowing fundamental market
mechanisms to determine the future of the
school system. Enrolments in the private
sector schools increased from 15 per cent to
33 percent between 1981 and 1996 (Belfield
& Levin, 2002). Decentralisation of public
education and introduction of a voucher
system was formulated around increasing
access to education. However as Torche
asserts the strategy only confirmed the
embedded social inequities or “persistent
inequality” that has been replicated by
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6. governments intent on broadening access to
education.
Chile’s liberal reform of the education sector
was predicated on the decentralised provision
of education and transfer of responsibility to
private entities with the intent to encourage
increased equity and economic efficiencies
(Martinez, 2001). The socioeconomic
stratification of Chile’s education system was
accentuated as students from wealthier
sectors of the community gravitated to the
fee paying private schools. Likewise, private
schools were also drawn to regions where
family incomes could sustain the additional
fees. The public schools by default met the
needs of low income families and unlike the
private system they were compelled by law to
accept all voucher funded students (Torche,
2005). Liberalisation of education and access
to public funding afforded to the private
sector instigated an exodus of students from
the public municipal system to the subsidised
private provider. Consequently, there has
been a marked decline in the resourcing of
public education as the State relinquishes
responsibility and participates as a passive
observer and increasingly submissive
facilitator (Tapia, 2003). As Tapia succinctly
stated 'the state had washed its hands of
overseeing public education...' (Tapia, 2003,
p.6). Essentially education equity and access
was delivered however only to those who
could pay and for the public system they were
to be sustained on dwindling government
expenditure.
Commencing under Pinochet’s authoritarian
regime the Chilean education reform agenda
was purported to be motivated by social
equity issues and the right of citizens to freely
engage with new education opportunities.
Privatisation of the dominant public education
system was to be the wedge that would foster
free enterprise and expand education’s reach
to those who had been excluded. Educational
stratification that Tapia (2003) and Torche
(2005) identify as inadvertent consequences
of market operated mechanisms has been
experienced across both developed and
developing nations around the globe. While
the discussion so far has focused on primary
and secondary schooling and to a lesser
extent university education, the vocational
system has also been subject to significant
change. Middleton et al. (1991) had some
years earlier identified the contribution of
vocational training particularly in the third
world however emphasised that the function
of the State was to manage economic
‘distortions’ that may arise in a training
environment that was entrusting the private
sector to deliver. More recently vocational
education has experienced significant growth
accounting for 53 per cent of all enrolments
with 500,000 workers annually participating in
enterprise based ‘non formal vocational
training’ (Martinez, 2001). Martinez while
acknowledging the growth of the private
sector delivery of training, maintains that
State involvement is sustained through
consultative arrangements. The establishment
of Regional Councils for Work-Related
Education (CRETs) provides a forum by which
government can affect policy under the
auspices of free enterprise. Chile's education
reform continue though now it is the Bachelet
government that faces protests from students
and the Confederation of Parents and
Guardians (Confepa) opposed to further
reform of an already heavily privatised
system. Chile's enthusiasm for privatisation
continues to generate disquiet among
segments of the population with concerns
that liberal policy will encourage private
education providers to increase fees, further
disadvantaging the poor who have no
alternative other than attend an already
under resourced public system (Radio New
Zealand News, 2014).
Vocational education has been subject to
similar neoliberal reform as has primary and
secondary school systems around the globe.
Global economic forces and exposure to
growing competition and preference towards
market oriented policy has seen governments
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7. progressively relinquish direct control of the
publicly funded vocational system. While
Spöttl (2008) provocatively asserted that
education providers should be focusing their
sites on the epitome of consumerism and the
free market reality of the stock exchange.
Vocational training as with the rest of the
education system were being criticised for
their disconnect with the shifting economic
and social demands of increasingly
interconnected nation States. The era of
Fordist principles was coming to an end and
attention towards the capability of the
broader education system to support an
increasingly competitive and dynamic global
economy was exposing the perceived inertia
of the public vocational system to meet
growing economic demands.
Privatisation of VET in
Australia
To appreciate the significance of the
structural changes that have taken place
within the Australian vocational system there
is a necessity to firstly look at the
transformation from a historical and
evolutionary perspective. Post-war
development was founded on Australia’s
strengthening relationship with America and
fundamental capitalist policies of the then
Menzies coalition government. In terms of its
historical development, vocational training
was built upon the desire to support those
within society that were prone to the
adversity and inequity of economic
development while meeting the needs of
industry hungry for skilled labour. For what
was later to become the brand, Technical and
Further Education (TAFE) the polarity
between pedagogic aspiration and economic
reality has remodelled the existing vocational
stage. It was the release of the Kangan Report
in 1974 that not only established TAFE as a
name but articulated the social obligations
that vocational education was to be
entrusted. Contrary to views held today,
Kangan did not see the role of TAFE merely as
the servant to industry and provider of skilled
labour but had a responsibility to service the
vocational interests of all people (Clarke,
1992). This position however was later to be
challenged as Keynsian economic settlement
made way for the free markets of neoliberal
policy.
Australia's vocational education and training
system has been the centre of turbulent and
sometimes vibrant debate. Kim Beasley in
1974 as Minister for Education in the Whitlam
Labour government epitomises the political
rhetoric with the educational reality that
contributed to the diminished status of
vocational training. As highlighted by
Rushbrook (2010), Beazley's commitment to
addressing the 'Cinderella' status of
vocational training was in part
acknowledgement of successive government's
neglect of the system though recognition of
its role as a training provider in delivering the
skills to meet the needs of industry.
Education as a social equity debate was a
fundamental part of the Labour doctrine
however at a time when Keynsian settlement
and the Welfare State were making way for
neoliberal reform the social democratic ideals
were being circumvented by the economic
reality of an increasingly global economy.
Indications that Australia's training system
was soon to enter a new phase was intimated
in the review conducted by Dawkins and
Holding (1984). It was here that the primarily
TAFE sector who delivered vocational training
for industry was to gain some sense that
change and with it their dominance was likely
to be tested. Dawkins and Holding were
calling for a VET sector that was responsive to
the emerging needs of industry but was also
able to provide a quality outcome that would
allow the nation to compete on the
international arena. The call to have increased
private sector investment in training was the
precursor to the open training markets that
exist today.
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8. Goozee (2001) in her historical analysis of the
vocational system in Australia, presents a very
different picture to the one that resides
today. From its inception it was an institution
based on the simple premise that training and
education is a right not just to the privileged
but to those who k the fundamental basis
upon which nation's wealth was to prosper.
Though TAFE as is understood today is a far
cry from how it was conceived, the
fundamental social obligations that has been
its foundation is in the light of the globalised
economy being challenged by successive
governments and the very industries it was
designed to serve. The TAFE system is in many
ways at a watershed in terms of its relevance
to a dynamic and increasingly global
workplace and its ability to recalibrate the
way it provides the future training needs of
industry.
The significance of the transformation
emerging needs to be interpreted as Chappel
(1998) refers to as the era of 'new
vocationalism' in which fundamental changes
within the VET system is currently reshaping
the future of education and training in
Australia. The identity of TAFE as the sole
provider of vocational training has been
relinquished however Chappel argues the
pedagogy and institutional practices of
trainers has also been forfeited. Chappel is
fighting multiple fronts all of which have some
substance though the implications of change
that have had a negative impact on the public
system have also reverberated throughout
the private RTOs though with contrasting
repercussions.
In May 1990 the joint meeting of state labour
education ministers set terms of reference for
an enquiry into the provision of vocational
training in Australia as well as industry’s
contribution to the reform agenda. Later to
become known as the ‘Deveson Report’ the
comprehensive assessment set the stage for
what was to become a major shift away from
the social welfare obligations of TAFE as
outlined in the 1974 Kangan Report. By
September of that same year, and under
growing government concerns of increased
global fiscal debt the report’s findings
reiterated the economic imperative for the
vocational sector to respond to the needs of
the economy (Deveson, 1990). For TAFE this
report signalled that governments were
questioning their capacity to sustain
ballooning training expenditure, a concern
further reinforced by the economic turmoil
that was attributed to the lack of financial
restraint that was the hallmark of the 1980s.
Deveson (1990) found that the TAFE system
was failing to respond to the needs of the
industry it was designed to serve, to the
extent that businesses were withdrawing
support for the public provider. Industry was
not solely dependent upon the TAFE system
to service its skills requirements with data
contained in the report indicating 51 per cent
of the Australian industry training market
being expended on salaries for in-house
trainers. The report’s findings suggested that
TAFE providers were becoming unresponsive
and increasingly less relevant to industry.
What McDowell, Oliver, Persson, Fairbrother,
Wetzlar, Buchanan and Shipstone (2011)
highlighted in their report and followed over
twenty years later was that the financial
burden of training was to be shared by
industry as well as government. Mc Dowell et
al. (2011) however was primarily focused on
apprenticeship recruitment though industry’s
vocational training disconnect had been well
entrenched. Employers having effectively
abandoned the VET system in preference to
customised programs that satisfied their
immediate requirements was a signal for
reform. The role of the State as supplier of
vocational training was changing and
Australia’s VET system was progressively
being remodelled by market demand.
Since the late 1990s Australia's VET system
has witnessed a progressively diminishing role
of government as the supplier of education
and training. The National Agreement for
Skills and Workforce Development (NASWD)
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9. set ambitious targets to double the number of
people with a diploma or advanced diploma
by 2020 and halve the number or working
Australians with a Certificate III or higher by
2020 (Leung, McVicar, Polidano and Zhang,
2014). Dawkins and Holding (1987) had clearly
identified Australia's declining levels of
education participation and skills acquisition
which presented real barriers to future
prosperity. The TAFE brand was well
established in the Australian training psyche
however governments were cognisant of the
reality that future skills needs of the nation
was predicated on a training system that was
responsive to the changing dynamics of the
economy. Competition which was to drive
training reform was constrained by the
domination of the public provider as was the
industrial award systems of the institutes that
inhibited their ability to compete in an open
market (Anderson, 2005).
Belfield and Levin's (2002) analysis of
privatisation based reform of the school and
tertiary sectors draws a number of parallels to
the transformation underway with the VET
system both in Australia and internationally.
Their 'evaluative criteria' sets out a
framework that examines the ascribed
benefits of privatisation against the inherent
consequences that can be attributed to this
reformist agenda. Questions of choice,
efficiency, equity and social cohesiveness are
objectives that they maintain form the basis
of measuring privatisation's contribution to
civil society. They are equally relevant in
establishing some rational debate over similar
changes across the VET system. Lundberg
(1994) had already signalled that the
dynamics of public training provision had
shifted through the National Framework for
Recognition of Training (NFROT) which
opened up the doors for private providers and
future competition.
The TAFE system in Victoria has been the
educational trailblazer as far as privatisation
and open competition of vocational training is
concerned. In July 2009 the state labour
government instigated a major reform of the
vocational system in response to concerns
from industry that TAFE providers were failing
to respond to the significant changes looming
for the Victorian economy. Victoria with its
traditional manufacturing base was similar to
other sectors of the Australian and
international community that was
experiencing a shift towards new industries
where they could compete globally.
Research conducted by Anderson (2005)
provides some insight into how the
implementation of market mechanisms had
impacted on the VET sector and the reaction
of providers, industry and students to the new
paradigm. His 2001 findings concluded that
over the ten years since in what was to be the
first tranche of national VET reform had
achieved mixed outcomes. Creating a VET
system that was more engaged and
responsive to the needs of major industry
stakeholders was a quantifiable and positive
outcome. The VET consumer was
experiencing greater choice in terms of access
to education which was directly related to
increased private provider entry. Social equity
obligations and economic efficiencies were
however compromised as were accessibility
to training by small to medium enterprises
where thin markets prevailed.
State governments nationally have initiated
variants of the demand driven reform of the
VET system with varying degrees of
enthusiasm and impact. Under the ‘Council of
Australian Governments (COAG) National
Partnerships Agreement on Skills Reform’ a
bilateral agreement between the
Commonwealth and state and territory
governments was established that was to
better align the VET system with the skills
demands of industry. Victoria under the title
‘Skills for Growth’ was the first state to
implement an open and contestable training
market. Other states were to follow having
observed Victoria’s transition to this new
model with initiatives ‘Skills for All’ (South
Australia), ’Great skills. Real opportunities.’
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10. (Queensland), ‘Smart and Skilled’ (New South
Wales) and ‘FutureSkills WA’ (Western
Australia). Victoria incorporated an additional
incentive under the banner of the ‘Victorian
Training Guarantee’ (VTG) which with
additional Federal Government funding
uncapped the number of subsidised
enrolments. The training guarantee was in
effect an entitlement to a guaranteed training
place with a VET provider which was designed
to stimulate competition and access
particularly to equity groups (disabled
students and CALD students) which had
previously been underrepresented within the
VET student cohort (Leung et al., 2014).
Now five years since implementation of the
VTG, Leung et al. (2014) using comparative
data analysis found that enrolments had
increased significantly with most of the
growth within the private sector. Between
2008 and 2011 private provider enrolments
had increased by 300 per cent while the
public TAFE provider experienced minimal
change. Early data suggested healthy
competition was taking place between the
public and private providers and skills
acquisition targets were being achieved.
Victoria has been the trailblazer of VET reform
though state and territory compatriots quietly
observed the repercussions of seemingly
unfettered expenditure within a burgeoning
private sector training system. The Victorian
Training Market Report (DEECD, 2014)
provides some positive insight into the
demand driven training reforms though
overlooks the 40 per cent of VET graduates
surveyed that reported that their training had
not improved their employment status within
six months of completion. Superficial analysis
would suggest that the exploitation of an
open and contestable training market was the
inevitable consequence however the inherent
failure can also be attributed to the
deficiencies in timely regulatory control.
Privatisation of education and training in
conjunction with disjointed policy has
contributed to the fragmentation of the
sector and decline of Australia’s VET sector
(Noonan, Burke, Wade and Pilcher, 2014). In
Noonan et al. in their recent analysis of
education expenditure data suggests that
while Victoria has increased its investment in
the sector other states and territories have
recorded zero to negative growth over the
same period. The investment disparity is
further evident when comparative
expenditure between education sectors
indicates a decline in public expenditure
compared with increased relative investment
in the school and university sectors.
The impact privatisation is having across all
sectors of education continues to polarise
Advocates for reform identify the economic
reality that ever increasing government
expenditure on education is financially
unsustainable and limits their capacity to
service such demands as public health,
national defence and welfare support for the
aged or disadvantaged (Belfield & Levin,
2002).
Belfield and Levin (2002) pose that
privatisation may be motivated by
fundamental ideologies that can be attributed
to the rise of neoliberal oriented policies
across much of the OECD affiliated nations. It
is the right of the individual to choose that is
paramount as it is the right to support free
enterprise. Detractors however argue that the
marketisation of education places in question
the rhetoric of access, equity and increased
quality that free market advocates espouse.
Quality education should not be determined
by affluence and wealth nor should education
become a commodity that generates profits
for opportunistic private enterprises.
Education however is well entrenched in the
principles of free markets and open
competition and as Hirtt (2000) argues the
liberalisation of trade between nations as
ratified within the General Agreement of
Trade in Services (GATS) heralded a
transformative shift in the role of the state in
terms of education provider. Globally,
10 | P a g e

11. privatisation of vocational education presents
mixed response. Education budgets continue
to be stretched with emerging economies
embracing the injection of foreign, private
investment by global education providers.
Free trade agreements have extended their
coverage to private education services in
search of new and potentially lucrative
markets.
The drive to meet growing global competition
through a skilled workforce is a message that
is repeated across nations; large and small,
and emerging economies or those who have
consolidated their global credentials. The
rationale that supports privatisation does not
maintain global consensus though its
influence in the shaping education and
training sectors is profound. Privatisation in
the developing world provides opportunity to
those within the community otherwise
excluded from education either due to
financial constraint of the State or incapacity
to develop the infrastructure required to
support its needs. Conversely, developed
economies such as the United States, Britain
and Australia question the social inequities
that devolution of state responsibilities to
private and profit motivated entities.
The threat of entrepreneurial opportunism of
dubious practices of private education and
training providers continues to capture the
headlines however what this tends to
overlook is the social stratification between
those who can afford to pay and those who
cannot. The policy rhetoric that often
underpins the push towards marketisation of
education is symptomatic of a global trend
towards neo-liberal philosophies that shifts
responsibility of the State to the vagaries of
the free market. The paradox that Zajda
(2004), Hirtt (2002), Tapia (2003) and Torche
(2005) elude to is the hegemonic influence of
the State within a decentralist, open market
policy that promises to drive economic
growth and prosperity in an increasingly
competitive global marketplace. What
remains to be seen is whether diminishing
public provision and funding of education
truly creates opportunity for all or as already
emerging, simply entrench the social
inequities that exist.
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