TAFE re-structure 2012/13

The recent Victorian State Budget introduced major changes to the funding of vocational education and training (VET) in the State and to the funding of TAFE institutes. These changes follow on from cuts to VET and TAFE funding announced at the end of last year and result from the increased costs to the State government associated with the dramatic rise in the number of students undertaking VET programs under the Victorian Training Guarantee.

The cuts to TAFE funding are both large and swift to come into effect. The new funding arrangements begin to take effect from 1 July 2012 and are fully operational from 1 January 2013.

There are two major changes to funding for TAFE institutes:

  • the additional funding that TAFE has received as a public provider of education and training (for TAFE staffing, services and infrastructure) will end, with both public and private providers of accredited training receiving similar funding in Victoria from 1 January 2013;  and
  • the funding for VET courses has been overhauled, with reductions in funding being made to the majority of programs beginning on 1 July 2012. Programs such as business, hospitality, fitness, etc., will suffer major funding decreases.

The net funding impact of these two changes on the University has been modelled and is shown in the table below:

 2011 TAFE
actual
funding situation
2012 TAFE
pre budget
funding situation
2012 TAFE
post budget
funding situation
2013 TAFE funding
situation based on
2012 profile
Income$49,811,000$43,465,000$43,020,000$29,453,00
Expenditure$50,479,000$48,152,290$48,152,290$49,048,185
Surplus/(Deficit)($668,000)($4,687,290)($5,132,290)($19,595,185)

In summary, the projected net funding impact on the University from the State Budget announcements is approximately $20 million, or put differently, the University has to reduce its total TAFE activity by around 30-40% by the beginning of 2013, and reduce services and costs elsewhere in the University, or otherwise begin to carry a major loss of up to $20 million by the end of 2013. Normally in these circumstances, governments allow transition arrangements for institutions to cope with these types of funding circumstances, but there is no period of adjustment or grace factored into the State Budget announcements.

Contact us

Phone: 5327 9514

Email: TAFErestructure@federation.edu.au

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