Business SA has joined calls for the Federal Government to intervene following the furore over the State Government’s changes to vocational education and training (VET) that has seen warnings of job losses and business closures.

The State Government’s announcement that 90 per cent of 51,000 new subsidised training places for 2015 would be allocated to TAFE SA generated unanimous anger and alarm from private training providers, industry organisations and the state Opposition.

Business SA director of policy Rick Cairney said last week’s policy decision was made with no consultation with the key VET players and the training programs of registered training organisations (RTOs) have been thrown into disarray because the new regime takes effect from 1 July.

“Creating the training needed for a skilled workforce and improving the job prospects for South Australians, particularly our young unemployed youth, is a very important policy area,” Cairney said.

“The Weatherill Government’s decision has caused chaos and uncertainty in the sector with the very real prospect of serious job losses and business closures because so many of the subsidised training positions have been quarantined for TAFE.

“The Government’s decision is not only bad policy it also represents an effective dumping of the efforts to reform training and generate a highly skilled workforce that is at the heart of the National Agreement for Skills and Workforce Development to which all State Governments and the Commonwealth are signatories.”

The agreement commits parties to follow a number of reform directions including those that:

• Encourage responsiveness in training arrangements by facilitating the operation of a more open and competitive training market.
• Strengthen the capacity of public and private providers and businesses to deliver training and support people in training.
• Increase industry’s engagement with the VET sector to ensure training outcomes are high quality and relevant to the needs of employers to improve skills utilisation and workforce development.

Business SA representatives are currently in Canberra and yesterday raised the SA Government’s position and its inconsistency with the agreement with Senator Simon Birmingham, the Assistant Minister for Education and Training.

The national body representing private sector training providers, the Australian Council for Private Education and Training (ACPET), responded to the State Government’s decision by calling on the Federal Government to withdraw $65 million in funding for South Australia.

“This decision to effectively ignore private training providers not only destroys student choice and some 20 years of progress achieved through National Competition Policy in this country, it is also a breach of South Australia’s obligations under the National Agreement for Skills and Workforce Development,” ACPET chief executive Rod Camm said.

“On this basis, ACPET believes the $65 million of Federal Government funding allocated to South Australia for 2015-16 and 2016-17 should be withheld.

“There are a multitude of arrangements between South Australian businesses and private providers for traineeships that will effectively cease under the new arrangements (and) the flow on effect to associated business activity could result in approximately 10,000 job losses.”

Critics of the Government’s Work Ready program point not only to the loss of work for the private sector but also the fact that TAFE training is estimated to cost about two and a half times the cost of private sector training.

Another concern is that students in the country will not be able to access training where TAFE is not represented in particular regions – but an RTO might be available – and employers may not be able to afford to send employees to Adelaide for training.

The Minister for Employment, Higher Education and Skills, Gail Gago, maintains that private providers will have greater opportunities in the future.

Announcing the new regime, Gago said: “After the first year of the Work Ready strategy, during which TAFE SA will be supported to become more sustainable, the number of training places for private providers will be boosted”.

Gago added: “More new subsidised training places will be progressively offered on a competitive basis between TAFE and private providers, as Work Ready is implemented over coming years”.

“A large number of students are already receiving a subsidy for training courses they are undertaking. In future years, as these students complete their training, the budget available for providers to offer new subsidised places will increase,” she said.

Business SA’s Rick Cairney said the minister’s comments were “confusing and illogical”.

“A private training provider cannot simply suspend their business, with all the staff and operational costs that involves, for as long as it takes the State Government to decide it might send some business towards the private providers again,” Cairney said.

“If the State Government does not put this mess on hold while they undertake some proper consultation and redesign the scheme to become an effective training regime, we really do need the Federal Government to step in and use its funding as leverage to enforce the agreement that all states and the Commonwealth have signed.”

The state’s second largest training provider after TAFE, the Civil Contractors Federation’s Civil Train business – which trains up to 8,000 students a year for the civil construction and related sectors – says it’s Thebarton training facility will become “a white elephant” if the Government does not reverse its Work Ready decision.

CCF (SA branch) president Gerard Beltrame said “every private sector training organization has been absolutely blind-sided by this ludicrous and short-sighted decision”.

Civil Train’s $12.2 million, state-of-the art training facility was funded in part by an $8.2 million Federal Government grant four years ago.