THE SOCIAL AND ECONOMIC IMPACT OF FUNDING CUTS TO CHISHOLM INSTITUTE ON THE SOUTH EAST COUNCIL AREAS OF METROPOLITAN

MELBOURNE

JANET STANLEY MONASH SUSTAINABILITY INSTITUTE

WITH

NATIONAL INSTITUTE OF ECONOMIC AND INDUSTRY RESEARCH

ISBN: 978-0-9870821-7-6

Report Number: 13/4

Acknowledgements: The authors would like to thank Chisholm Institute and those who gave their knowledge and time to add considerable value to this report. They are not responsible for any errors in the report. Citation: Stanley. J. and NIEIR (2013) The social and economic impact of funding cuts to Chisholm Institute on the South East Councils of Metropolitan Melbourne, MSI, Monash University, May.

CONTENTS
Summary............................................................................................................................................................................... 4 1 Background ................................................................................................................................................................ 5 1.1 1.2 1.3 1.4 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 3 3.1 3.2 4 4.1 4.2 4.3 4.4 5 Introduction ..................................................................................................................................................... 6 Chisholm Institute ......................................................................................................................................... 6 Chisholm operating revenue ..................................................................................................................... 7 Chisholm courses ........................................................................................................................................... 7 Regional Employment Plan ....................................................................................................................... 9 Seifa Index....................................................................................................................................................... 10 Measures of socio-economic disadvantage....................................................................................... 10 Drivers of Social Exclusion....................................................................................................................... 13 Unemployment ............................................................................................................................................. 14 Income and Educational attainment .................................................................................................... 16 Migration ......................................................................................................................................................... 22 Conclusions .................................................................................................................................................... 22 Government changes .................................................................................................................................. 23 Changes at Chisholm Institute ................................................................................................................ 23 Direct Impact on Chisholm and the higher education sector in 2013 ................................... 27 Indirect impact on SE Metro Councils ................................................................................................. 31 Impacts on Specific LGAs .......................................................................................................................... 31 Reductions in income and employment as a result of cuts in TAFE funding ...................... 34

Social and economic positions of the South East Metro Council areas ............................................. 9

State Government funding changes and response by Chisholm Institute .................................... 23

Impact ........................................................................................................................................................................ 27

Conclusions .............................................................................................................................................................. 39

References.......................................................................................................................................................................... 41 APPENDIX A: SUBMISSION TO TAFE REFORM PANEL ................................................................................... 44 APPENDIX B: Discontinued courses at Monash University .......................................................................... 52 APPENDIX C: Spreadsheet for calculations of impact of tafe cuts on local economy ......................... 53

SUMMARY
This report aims to explore some the social and economic impacts on the SE Metro Region of Melbourne which may arise as a result of the Government cuts to the TAFE education sector. These significant cuts were estimated to be in the order of $30 million annually for the Chisholm Institute. This amount will be slightly less, as a total of $50 million to all Victorian TAFES was returned in March 2013, but this was after the initial restructuring had occurred. The SE Metro group of councils, along with some LGAs in the outer West, bears the burden of a high proportion of disadvantaged households when compared with Metropolitan Melbourne as a whole. Particularly high levels of socio-economic disadvantage can be found in Greater Dandenong, over double that found in Melbourne as a whole. This is also reflected in high unemployment rates in Dandenong (9.3% in September 2012) and high levels also found in Frankston. The SE Metro area is heavily dependent on the TAFE sector for post-school education, when compared with the rest of Melbourne. Over the Melbourne Metropolitan area, Dandenong (along with three northern Melbourne LGAs) has the highest proportion of households with the lower levels of TAFE qualifications (Certificate I or II). Low post-school educational attainment is also present in Frankston and Casey. Thus the region, and particularly the above mentioned LGAs, are likely to be particularly disadvantaged where there are cuts to the TAFE system of education. The TAFE cuts will be manifest in the cessation of some courses, particularly those at the lower Certificate level, there being an increased emphasis on higher qualifications, as well as likely increased fees and a reduced education support service. This is likely to particularly disadvantage lower qualification courses commonly taken by early school leavers, who are left with few other training options. This is also likely to adversely impact on residents with a disability, women seeking to return to work and recently arrived migrants seeking training. It would appear that Greater Dandenong will experience the hardest impact arising from these cuts, with the highest number of low income and disadvantaged residents and many early school leavers. These impacts are likely to have the unfortunate impact of compounding place-based disadvantage, where multiple disadvantages in terms of poor education, low income, unemployment or poor job security reduce housing affordability and may lead to poor health and other adverse outcomes. Given the limitation of the modelling assumptions, the reduction of the flow of funds (TAFE funding cuts) from the state and federal governments into the SE Metro regions and the reduction in the productivity of labour in the region reflected in a reduction in wage incomes, will result in a reduction in local spending power and in the sales of local businesses. The outcome is that there is a loss of earned income in the region of $24 million a year, rising to $48 million a year after 15 years. There is also a cost to gross regional product of $40 million a year, rising to $73 million dollars a year.

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1.1

BACKGROUND
INTRODUCTION

The Report explores some impacts of the funding cuts to Chisholm Institute on the social and economic outcomes for the South East Metro Council areas. The South East Metro Councils is a coalition of Local Governments (LGAs) who work together on common issues and priorities. The Councils which form this coalition are Frankston City Council, Greater Dandenong City Council, Kingston City Council, Casey City Council, Cardinia Shire Council and Bass Coast Shire Council, including Mornington Peninsula Shire Council for this study. Their locations are shown in Map 1.1. Map 1.1: Locations of LGAs which comprise the South East Metro Councils

Bass Coast (s)

The Councils are concerned about the socio-economic impact of the cuts in TAFE funding to their region and seeking to better understand the likely impact. This report investigates this issue as far as possible. A submission to the TAFE Reform panel has already been completed and can be viewed, together with the accompanying letter, in Appendix A. This submission drew on information from key local experts.

The report outlines the range of courses offered by Chisholm and the size of the student enrolment. It examines the present social and economic status of the SE Metro Council areas, looking issues such as the extent of disadvantage, education, employment and levels of migrant settlement, in comparison with other areas of Melbourne. The funding changes are documented, together with the likely resultant changes associated with Chisholm. This is followed by a discussion of the impacts of these cuts on the region, including the impacts on each LGA and the income and employment impacts on the region.

1.2

CHISHOLM INSTITUTE

The dominant government TAFE provider in the SE Metro Councils area is the Chisholm Institute. In 2011, it had 56,924 course enrolments across eight campus locations, off-shore education delivery and on-line courses. The campus locations are based in each LGA area, except Kingston. Kingston also hosts one of three campus sites for the government provided Holmesglen TAFE. Private providers also offer courses in these LGAs and beyond. A cluster of SE Metro LGAs encompassing Cardinia, Casey, Frankston, Greater Dandenong, Kingston and Mornington Peninsula, not Bass Coast, but including Glen Eira, Port Phillip, Stonnington and Bayside has the following enrolments: about 40% of technical and trade education students enrolled in a government TAFE, 50% in a private training provider and about 10% in Adult Community Education. The latter program is where students learn generic skills, also known as employability skills, life skills, or key competencies, in a less formal setting, such as Community Learning Centres, Adult Education Centres or Neighbourhood Houses (Department of Education and Early Childhood Development, 2012). The inclusion of the higher socioeconomic LGAs and the exclusion of Bass Coast, is likely to over-estimate the proportion of students attending a private (fee paying) training centre in 2011 in the Chisholm catchment area.

Table 1.1: Relative importance of Chisholm Campus locations, 2011 and 2012 Campus locations for Chisholm Course enrolment* and per cent of total enrolments 2011 14,744 (25.9%) 14,536 (25.5%) 12,642 (22.2%) 5,493 (9.6%) 4,882 (8.6%) Course enrolment and per cent of total enrolments 2012 15,468 (27.2%) 14,896 (26.2%) 12,658 (22.2%) 3,677 (6.5%) 5,102 (9%) 2,034 (3.6%) 1,216 (2.1%) 752 (1.3%) 629 (1.1%) 514 (0.9%)

Greater Dandenong Frankston Workplace Offshore delivery Berwick & Berwick Technical College, City of Casey Cranbourne 2,241(3.9%) Mornington Peninsula (Rosebud) 1,252 (2.2%) Bass Coast (Wonthaggi) 623 (1.1%) On-line 506 (0.9%) Chisholm @ 311 (Dandenong) Not offered * This is course enrolment, not number of students. Source: Chisholm Institute Annual Report 2011and 2012

The relative size of each Chisholm campus is shown in Table 1.1. The relative sizes remained fairly constant between 2011 and 2012. Frankston and Greater Dandenong campuses comprised about half the Chisholm enrolments, both Dandenongs and Frankstons share increasing between 2011 and 2012, especially when the new campus is considered. About onefifth of courses were undertaken from a workplace. Chisholm offers on-line courses and offshore delivery, as well as satellite facilities such as city classrooms and the Phillip Island Education Centre. Chisholm @ 311 was opened in August 2012, offering higher education qualifications and graduate programs.

1.3

CHISHOLM OPERATING REVENUE

In 2012, Chisholm had 17,826 students enrolled in a Government Funded Accredited Program and 21,278 in a Fee for Service Program. Of these, 1,481 students were enrolled in both funded and fee paying courses. The Chisholm Annual Reports gives the sources of Operating Revenue, the proportions of each source shown in Table 1.2. Most funding comes from the state government, with just over one-quarter of the revenue coming from student fees. The 2011 Annual Report also notes that the total average cost per student contact hour for the year ending 31 December 2011 was $11.04 (excluding depreciation).

Table 1.2: Source of Operating Revenue for Chisholm, 2011 and 2012 Chisholm Operating Revenue Victorian Government funding Fee-for-service Other (investment interest, donations, trading activities etc) % of Total Operating Revenue 2011 2012 69.4% 69 % 28.1% 26.3% 2.5% 4.7%

Source: Based on the Chisholm Annual Report, 2011, p.22 and 2012, p. 9

1.4

CHISHOLM COURSES

Chisholm offers the Victorian Certificate of Applied Learning (VCAL), the Victorian Certificate of Education (VCE), certificates, diplomas, bachelor degrees and graduate certificates. Courses are categorised in distinct levels, up from the basic Certificate I. Many of the courses offer experience in the workplace and/or simulated workplace training VET IN SCHOOLS Students can include Vocational Education and Training (VET) programs as part of their senior school studies. These programs count towards a Victorian Certificate of Education (VCE) and an ENTER score for eligibility assessment for Further Education. VCE AND VCAL Chisholm offers senior secondary school certificates at Year 11 and Year 12 - the Victorian Certificate of Education (VCE), and the Victorian Certificate of Applied Learning (VCAL). VCAL is 7

a hands-on option for students in Years 11 and 12. It offers practical work-related experience, as well as literacy and numeracy skills and personal skills. There are a number of VCE subjects offered at Chisholm Dandenong and Frankston. Themed VCAL courses are offered at Chisholms Berwick Technical College, and at Chisholm Frankston and Dandenong. PRE-APPRENTICESHIPS A pre-apprenticeship is a certificate course that introduces the skills required by industry, and prepares the student for an apprenticeship. Unlike a full apprenticeship the student doesnt need to be employed to do a pre-apprenticeship, although a place may be dependent on an interview or exam. Courses take from 11 weeks full time, with most averaging around six months. APPRENTICESHIPS AND TRAINEESHIPS Apprenticeships and traineeships combine training with full time or part time employment. To be accepted, a student has to be 15 years or over and have a formal Training Agreement with an employer who is registered with an Australian Apprenticeship Centre. Traineeships can take up to two years, and apprenticeships up to four years. FOUNDATION SKILLS COURSES Chisholm offers a range of English language, literacy, self management and job readiness courses as preparation for work or study. TAFE CERTIFICATES

Certificate I
Certificate 1 courses cover base-level skills for completing predictable or repetitive work.

Certificate II
These courses prepare students for entry-level positions or apprenticeships in a variety of industries.

Certificate III
Students develop skills, theoretical knowledge and problem-solving abilities in career-relevant Certificate III courses. This is commonly equivalent to trade level qualifications.

Certificate IV
Designed for supervisory and management positions, Certificate IV courses typically target people wanting to advance their careers in the industry they already work in, or further develop skills acquired through previous study. TAFE DIPLOMAS

Diploma
Diploma level study develops both broad and in-depth skills in professional, technical or creative fields.

Advanced Diploma
The Advanced Diploma offers high-level practical and professional skills, full-time courses typically taking two or three years. 8

VOCATIONAL GRADUATE CERTIFICATES These courses are designed for Diploma or Degree graduates of other disciplines, or people with substantial work experience, who wish to further their knowledge and broaden their skills through study that applies theory to practice. These qualifications may also lead to qualification for membership of various industry associations. DEGREES Chisholm is increasingly offering degree courses. FURTHER STUDY TAFE Certificates and Diplomas can provide occupational and educational pre-requisites for further study. In many cases, Australian universities will also allow prior TAFE study to count as credit towards a degree course. Module load completion, defined as rate scheduled hours assessed as passed or satisfactorily completed, is reported as 83.96% in 2011 (Chisholm Annual Report 2011, p. 98). About half the students enrolled in 2011 were 15 to 24 years of age, the rest in the age range of 25 to 64 years of age.

SOCIAL AND ECONOMIC POSITIONS OF THE SOUTH EAST

METRO COUNCIL AREAS

This section gives an overview of social and economic aspects of the SE Metro Council areas in order to better understand the implications of TAFE cuts.

2.1

REGIONAL EMPLOYMENT PLAN

In the 2011-2012 budget, the federal government announced it would spend $3 billion in skills and training initiatives. SE Melbourne (Frankston, Dandenong, Cardinia and Casey) was nominated as one of 20 priority employment areas. It is unclear if this has occurred as yet, but on May 1, 2013 an industry Innovation Precinct at Monash, was announced. In a SE Melbourne employment plan, Baker (2012) notes that the area has a: High unemployment rate High youth unemployment Low level of educational attainment, particularly higher education High concentration of employment in manufacturing and retail trade, industries sensitive to economic downturns. Manufacturing, which is in decline in Victoria at present, accounts for 19.8% of total employment, compared with 10.7% nationally. The major employment activity in Casey, Frankston and Cardinia is carried out by small and medium enterprises, mainly in motor and building industries. Retail trade is 12.7% compared with 11.7% nationally. High proportion of people from a non-English speaking background Workforce that is aging

Baker (2012) also draws attention to the absence of transport infrastructure in the rapidly growing areas of Casey and Cardinia, thus the need for the local development of jobs. This will be are difficult task. Baker notes that the opening of the Eastlink freeway has had the negative outcome of increasing competition for local jobs. However, it has also provided better access to more distant jobs. The suggested solutions to these issues in Bakers report all centre around skill development: Support employment and skill development Help retrenched workers into employment or training Facilitate employment and training for job seekers, including those experiencing disadvantage with a focus on industries with skill shortages.

2.2

SEIFA INDEX

The extent of disadvantage is often measured using the ABS SEIFA scores (Socio-Economic Indexes for Areas). The Index of Relative Socio-Economic Disadvantage (one of three SEIFA indices) measures relative disadvantage and is derived from characteristics such as low income, low educational attainment, high unemployment, and jobs in relatively unskilled occupations. Many decisions, including federal and state resource distribution for welfare related programs are allocated on the basis of where the LGA sits on this index. The scale orders LGAs in Greater Melbourne from the most disadvantaged, to least disadvantaged. In the 2011 rankings of Melbourne City LGAs, Greater Dandenong was placed as the most disadvantaged, as in 2006. Frankston was ranked as 4th disadvantaged down from 8th in 2006 and Casey came in at 9th, down from 11th in 2006. Mornington Peninsula, Cardinia and Kingston were rated in the middle order as 13th, 14th and 17th of 31 Councils. The Shire of Bass Coast is not rated in the Greater Melbourne index. However, Bass Coast sits on the third decile on the 2011 Victorian wide index of Relative Socio-Economic Disadvantage, where 0 is highly disadvantaged and 10 is highly advantaged. For comparative purposes, Greater Dandenong sits at the 2nd decile level, while the other LGAs sit in the 6, 7 and 8 range (ABS 2011a). This suggests that considerable disadvantage is present in Greater Dandenong, Frankston and Casey, with some concerns in the other LGAs.

2.3

MEASURES OF SOCIO-ECONOMIC DISADVANTAGE

To examine the nature of this disadvantage further, work done by the National Institute of Economic and Industry Research (NIEIR) is now reported. This work derived measures from a range of available material from the ABS Household Expenditure Survey and modelling done on estimates of population composition and unemployment (NIEIR 2009). The findings apply to households where the oldest adult is between 26 and 64 years of age. It excludes homeless households, group houses, which would include rooming houses, and households experiencing temporary or short term difficulties. These omissions would tend to under-estimate the number of disadvantaged households. The findings are based on actual data up to 2009.2*, and projected data 2009.3 to 2012 based on impacts arising from macroeconomic drivers of disadvantage. The major influence on outcomes
*

The last digit refers to the quarter in the named year.

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is the level of unemployment an important driver for social inclusion and wellbeing. Unemployment is defined for the purposes of the analysis as those who want paid work but are not able to get it. This definition is a little different to the federal governments definition as the NIEIR analysis takes account of people who have given up looking as they believe there is little hope of getting work and also accounts for those who have moved to a disability pension in preference to continual unsuccessful looking for work. Those who have been unemployed for a long time tend to move to a pension or benefit. This particularly happens during an economic downturn and therefore the official government figures under-estimate the true unemployment levels. The extent of youth unemployment also tends to be under-estimated in the official figures, as their unemployment doesnt commonly increase the number of non-earning households, the basis for the government unemployment rate calculations, as they commonly remain at home or move to a group household, or they may become homeless. This under-estimation of the true level of unemployment is supported by the AASW (2012) who note that the official employment figure assumes that people have found at least an hours paid work in the previous week. Thus, the official unemployment records do not take account of hidden unemployment and those who would work if conditions were more favourable. The official unemployment rate is therefore an extremely poor indicator in disadvantaged regions (NIEIR 2009). Information for three of the measures is given in this report, being: Financial Vulnerability, Socio-economic Disadvantage and Serious Disadvantage. These are defined as follows:

1. Financial Vulnerability
Households were placed in this category where they satisfied the following three criteria: Low liquidity less than $500 in a bank account Low disposable income equivalised income less tax of less than $300 per week per person in the household where an adult was rated as 1, subsequent adults at 0.5 and children at 0.3 each. No household member in employment Such a household will be in difficulties in an emergency and would probably need to resort to loans from welfare agencies or a high interest loan from a finance company.

2. Socio-economic Disadvantage
A household was placed in this category where it suffers from three or more of the following disadvantages, where they could not afford: a night out a special meal to invite people home for a meal a holiday new clothes a hobby or recreation These are not basic necessities, but all involve interactive type activities, so a failure to engage in these activities will reduce the opportunity to obtain social capital and connect with their community. 11

3. Serious Disadvantage
This is where households are suffering from one or more of the following events: Missed meals Unable to heat their home Pawned or sold something Obtained material help from a welfare agency Households engaged in one or more of these events are likely to be doing without necessities in life. It was found that 62% of those who missed meals also experienced one or more other listed deprivation, therefore all are closely related. Table 2.1 gives the proportion of people in each category for the SE Metro Councils (excluding Bass Coast) and for Greater Melbourne (excluding Port Phillip). In the SE Metro Councils, Financial Vulnerability is slightly higher than the Melbourne average. However, the gap widens for Socio-economic Disadvantage and Serious Disadvantage, with the SE Councils having a higher proportion of households in this category than the average for Greater Melbourne. Table 2.1: Proportion of disadvantaged households in SE Metro Councils and Metropolitan Melbourne, 2012.2 Measure SE Metro Councils* 8.8% 15.9% Metro. Melb.** 8.2% 12.8% 9.5% Range - Low 0.6% 6.2% 3.9% Range - High 17.8% 22.1% 14.5%

Financial Disadvantage Socio-economic Disadvantage Serious Disadvantage 11.3% * This excludes Bass Coast **Port Phillip is excluded due to data difficulties Source: NIEIR 2009

In Table 2.2 it can be seen that Frankston, Cardinia, Casey and Dandenong have comparatively high numbers of people experiencing Socio-economic Disadvantage and Serious Disadvantage. At 22.1% of households, Dandenong has the highest level of Socio-economic Disadvantage of all Melbourne Councils, with Cardinia coming fifth. Frankston is second highest for Serious Disadvantage at 13.7% of households. The serious disadvantage in Cardinia is also concerning, it being the fourth highest in Melbourne.

Table 2.2: Proportion of households experiencing disadvantage, 2012.2 Measure Financial Vulnerability Socio-economic Disadvantage Serious Disadvantage Source: NIEIR 2009 Dandenong 9.9% 22.1% 10.9% Frankston 7.7% 15.1% 13.7% Casey 11.8% 16.3% 11.1% Cardinia 10.0% 16.7% 13.1% Kingston M. Pen. 6.8% 6.7% 13.2% 9.4% 12.1% 9.7%

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An Overall Disadvantage Index was created, defined as including all households with adults aged 25-64 who suffered from one or more of Serious Disadvantage, Socio-economic Disadvantage or Financial Vulnerability. Using the Overall Indicator and looking at Melbourne and Geelong, the most disadvantaged LGAs in 2012 were projected to be Greater Dandenong, followed in order by Hume, Melton, Maribyrnong, Whittlesea, Brimbank, Wyndham, Casey, Frankston and Cardinia (NIEIR 2009).

2.4

DRIVERS OF SOCIAL EXCLUSION

One way of examining the issue of the wellbeing of a person and place is through an examination of social exclusion. Social exclusion can be described as the existence of barriers which make it difficult or impossible for people to participate fully in society (Social Exclusion Unit 2003). Commonly, the barriers are said to relate to five dimensions: income, employment, political engagement, social support and participation (Gordon et al., 2000; Burchardt et al. 2002; Stanley 2011). The literature suggests that people who may be at risk of social exclusion include those on a low income, those who are unemployed, aged people and youth, new migrants, people who live in isolated areas, single parents, people with poor health and who have a disability. Recent research based in Victoria has undertaken empirical measurement of social exclusion and wellbeing, exploring the association between these concepts and the precursors for achievement of a good outcome (Stanley et al. 2011). It was found that there was a strong statistical association between social inclusion and self-assessed wellbeing, the higher a persons social inclusion, the greater their wellbeing. The most critical precursors which lead to social inclusion were found to be good social capital, relatively high income and relatively high trip rates (travelling from their house and back by any means of mobility) and having the personality characteristic of extraversion. Factors in addition to social inclusion which led to greater personal assessment of good wellbeing, were environmental mastery (the capacity to manage effectively one's life and surrounding world , positive relations with others and self-acceptance (despite weaknesses), as well as having a positive sense of their local community. Thus, factors such as education attainment and employment opportunities, which lead to an improved income in addition to other capability benefits, become important for achieving social inclusion and therefore personal wellbeing. Social exclusion is multi-faceted and negatively reinforcing both on an individual and community scale. Thus where a person has a low income, it may be common to find that the person also has a low level of education, and perhaps other barriers such as poor health or poor mobility. The drivers of exclusion and low wellbeing are also multi-faceted and relate to institutional conditions or available resources such as available and accessible employment, education and transport; situations specific to individuals, such as age, language and culture, social capital; and external factors such as government policy, the state of the economy, societal values and environmental conditions (Stanley 2011). Where many of these adverse drivers are present, disadvantage and exclusion may become compounded and opportunities for positive change diminish.

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In Melbourne, the trend over the past few decades has been that an important institutional driver of disadvantage has been housing affordability. House prices have risen where there is proximity to jobs, transport, cultural activities and parks and a leafy environment. The most affordable houses have been on the fringe of Melbourne, but this is now moving further out into the peri-urban areas, such as in Bass Coast (Birrell et al. 2012). The outer suburbs of Melbourne, such as Casey and Cardinia, are also highly transport disadvantaged, and poor public transport options have led to the importance of car ownership. Once people have been attracted to the fringe because of the lower house prices, they find the cost of transport is high. Those people at risk of social exclusion undertake less trips (Stanley et al. 2012). They also have lower levels of social capital (especially bridging social capital, important for improving employment options), lower attachment to the community, and lower income and wellbeing. Poor institutional resources, such as mobility options and opportunities for education, have been shown to compound disadvantage. In the chain of drivers, skill development leads to improved employment competitiveness and higher earnings, leading to improved inclusion and wellbeing. Thus, cutting infrastructure resources for TAFE institutions, which develop personal skills and employment training, risks compounding disadvantage and social exclusion. Aspects of factors leading to social exclusion are now examined further for the SE Metro region. Of particular relevance to exploring the impact of TAFE cuts are levels of unemployment, income and educational attainment, as well as the migrant experience.

2.5

UNEMPLOYMENT

Unemployment has adverse psychological impacts around feelings of self-worth, which often heighten as the time out of work increases. The structure of a working week is not there, and a major source of social contact through work is lost. Thus, long term unemployment risks that basic needs may not always be met, it also diminishes a persons capabilities to meet their own higher needs through participation and social contacts. The Australian government defines unemployment as: 1. Persons aged 15 years and over who were not employed during the reference week, and: had actively looked for full-time or part-time work at any time in the four weeks up to the end of the reference week; and 2. Persons were available for work in the reference week; or 3. Persons were waiting to start a new job within four weeks from the end of the reference week and could have started in the reference week if the job had been available then. (http://www.abcdiamond.com/australia/definition-of-unemployment/) The official unemployment rate for the Melbourne Metropolitan area was 5.5% in September 2012 (Table 2.3). As a whole, the unemployment rate for the SE Metro area is a little higher than for Melbourne as a whole, Greater Dandenong with a high rate of unemployment at 9.3%. The NIEIR unemployment rate (see explanation for this page 11) for 2012 in the South East Metro Councils, excluding Kingston and Bass Coast, is 9.0%, thus based on the NIEIR definition, unemployment in Dandenong would be much higher than 9.3%. Similarly, AASW reports that when the unemployment rate was 5.2%, the ABS statistics indicate that 12.6% of Australians who want a job, dont have one (AASW 2012). 14

While averages are given here, there is high variability in different locations within LGAs. For example, Casey has unemployment at 3.8% in Berwick and 7.3% in the Cranbourne area. Between 2006 and 2011 there has been a much stronger growth in part time than full time work. This is especially so in Dandenong, where the growth rate over this time was 28.7%, compared with the growth in Greater Melbourne of 18.9%. Over this period full time work in Frankston and Dandenong grew at a slower rate than the growth in population in these LGAs. Thus again, under-employment is likely to be high in Dandenong.

Table 2.3: Per cent unemployed in SE Metro Councils and Victoria Area Unemployment rate September 2012 5.0% 5.7% 6.4% 9.3% 6.5% 4.7% 4.7% 6.0% 5.5% 5.4% Youth unemployment rate (15 to 19 years) July 2012 SE Melb 22.8% 26.2% Gippsland 30.4% 19.3%* 29.5%

Cardinia Casey Frankston Greater Dandenong Kingston Mornington Peninsula Bass Coast Average for SE Metro Councils Melbourne Victoria

*This covers November 2011 to October 2012, Source: ABS Labour Force Survey February 2013 Source: DEEWR Small Area Labour Markets, 2012, ABS Labour Force data, July 2012, ABS 2006 Census of Population and Housing

Youth (15 to 19 years of age) unemployment in Victoria was an alarming 29.5% in July 2012. As noted before, these official government figures are thought to under-estimate actual level of unemployment. Casey and Dandenong have 14% of their population aged between 15 and 24 years, just above the Melbourne average of 13.8%, therefore youth unemployment would be a greater drain on the LGA than found in many LGAs with a smaller proportion of youth. Again, as can be seen in Table 2.4, Greater Dandenong stands out as having a high number of jobless families with children under15 years of age (28%). The high number of jobless lone parent families is particularly troublesome now that the Federal Government has moved single parents on to Newstart allowance when the youngest child turns eight years of age. This allowance is $130 below the poverty line ($244.85 per week) and only 65% of the Aged Pension.

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Table 2.4: Characteristics of jobless families in the SE Metro Councils Region* No. of jobless families with children under 15 years, 2006 700 3,600 2,100 3,500 1,300 300,600 Proportion of all families that are jobless with children under 15 years, 2006 11% 13% 16% 28% 9% 14% Proportion of couple families that are jobless with children under 15 years, 2006 3% 5% 4% 17% 3% 5% Proportion of lone parent families that are jobless with children under 15 years, 2006 44% 46% 47% 61% 37% 47%

Cardinia Casey Frankston Greater Dandenong Kingston Victoria

*Excludes Mornington Peninsula and Bass Coast Source: Neville, 2012, drawn from ABS 2006 Census of Population and Housing

2.6

INCOME AND EDUCATIONAL ATTAINMENT

The average household income within SE Metro Councils is below that of Metropolitan Melbourne, the average being $1,133 compared to $1,333 for Melbourne as a whole (Table 2.5). This is despite the fact that there are a lot of two income households in the growth areas of Melbourne. However, between 2006 and 2011 median household income grew at about the same rate as Metropolitan Melbourne. There is considerable variation between Councils, with Bass Coast being the lowest at $855 median household income per week, followed by Dandenong with $953. Cardinia and Casey have the largest incomes, Casey being just above the Melbourne average, at $1,342 per week. As Casey is rated as fairly disadvantaged in the SEIFA index, this suggests that Casey has high income inequality present. The SE Metro Councils have a higher number of TAFE educated residents and trade and technical occupations than the average for Greater Melbourne (Table 2.5). Frankston (8.9%) and Dandenong (9.4%) have the highest levels of TAFE qualifications of the SE Metro Councils, well above the Melbourne share of 7.2%. The SE Metro Councils have well below average levels of Tertiary or University education when compared with the Melbourne average (9.2% vs 17.4%). All the SE Metro Councils have a higher proportion of those who are engaged in an occupation, working in a technical or trade occupation, when compared with Melbourne as a whole. While the Melbourne rate sits at 13.4%, Bass Coast, Cardinia, Frankston and Mornington Peninsula have a proportion of 18% or over. In contrast, the proportion of the working population who are engaged in a profession are all below the Melbourne average. While Greater Melbourne sits at 24.1%, the average for the LGAs is 15.8%, with Greater Dandenong was 12.4% and Frankston 15.5%. However the growth in professional occupations in Frankston and Dandenong, between 2006 and 2011, was at a higher rate than Melbourne as a whole, suggesting some gentrifying in the region.

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Table 2.5: Income, education and occupation of residents of the SE Metro Councils, 2011 Area Median % of Household pop. 15 Income 24 years p.w. % of pop. With TAFE edu. % Uni. or Tertiary edu. % in technical and trades of those occupied 18.0% 17.2% 19.0% 18.0% 15.9% 14.4% 18.7% 17.3% 13.4% % in Professional occupation of those working 14.5% 13.8% 13.9% 15.5% 12.4% 22.3% 18.2% 15.8% 24.1%

Bass Coast $855 9.1% 7% 4.5% Casey $1,342 14% 8.2% 9.3% Cardinia $1,303 13.6% 8.1% 7.4% Frankston $1,140 13.4% 8.9% 8.9% Dandenong $953 14% 9.4% 12.5% Kingston $1,292 11.9% 7% 14.3% Morn. Pen. $1,054 11.2% 7.2% 7.5% Total (av) $1,133 13.5% 8% 9.2% Greater $1,333 13.8% 7.2% 17.4% Melb. Victoria 13.9% Source: ABS 2011a, 2033.0.55.001 - Socio-economic Indexes for Areas (SEIFA), Data Cube only, 2011 Maps 2.1 to 2.3 visually show just how much the SE Metro region has a high dependence on the TAFE sector for skills attainment when compared with the other Melbourne LGAs. The area has a proportionally high number of households with Certificate III and IV, when compared with the rest of Melbourne, except for Dandenong which has many households with the highest education attainment being less than Certificate III. Casey and Frankston also have a high proportion of households with no post-school qualifications.

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Map 2.1: Percentage of households with highest qualification Bachelor or Higher, projected for 2012

Source: NIEIR 2009

18

Map 2.2: Percentage of households with highest qualification, Certificate 11I/1V, projected for 2012

Source: NIEIR 2009

19

Map 3: Percentage of households where highest education attainment is less than Certificate 111, 2012

Source: NIEIR 2009

The achievement of a Tertiary education is higher in the younger age group, 25 to 34 years (Table 2.6). However, the rate for a tertiary qualification in the SE Metro region remains low in comparison to Victoria. The year 12 completion rate is below the Victorian average for all the SE Councils except Kingston. The higher rate of TAFE qualifications when compared to Victoria can again be seen in the younger group, except for Dandenong. This younger age group reflects a different picture when compared with TAFE qualifications for all age groups, where TAFE qualifications in Dandenong are the highest of all the SE Metro Councils (Table 2.5). It may be that people train at an older age in Dandenong and/or there is a diminishing trend of TAFE qualifications in Dandenong. This is a worrying trend as the proportion of people with a Tertiary qualification is also lower in the younger age group (71.8% for all ages and 67.6% for those 2534 years). This suggests that education qualifications are diminishing in Dandenong. 20

Table 2.6: Educational attainment for those aged 25-34 years Region* % Completed Year 12 55% 63% 59% 67% 78% 64.4% 73% % obtained Advanced Diploma or Certificate level 40% 36% 39% 27% 33% 35% 30% % Obtained Bachelor Degree or higher 16% 18% 17% 23% 34% 21.6% 34%

Cardinia Casey Frankston Greater Dandenong Kingston Average for SE group listed above Victoria

* Mornington Peninsula and Bass Coast data not available Source: Neville, 2012, drawn from ABS 2006 Census of Population and Housing

Neville (2012) draws attention to the strong association between educational attainment and employment outcomes for those in the 25 to 34 age group. Unemployment rates were 5.7% for those who had completed year 12, compared to 10.3% for those who had not completed year 12. Unemployment rates were 3.5% for those who had completed Certificate 111 or 1V, 3.5% for those who had completed a Diploma or Advanced Diploma and 3.4% for a Bachelors Degree or higher. Table 2.7 Per cent not obtaining minimum reading and numeracy standards in selected areas, 2011 Area % of year 9 students who % of year 9 students who did not meet the minimum did not meet the minimum standard for reading standard for numeracy Dandenong 17%* 8%* Frankston 14%* 12%* Kingston 10%* 3%* Victoria 4% 4%
*The calculation is based on one representative school in each LGA Source: Neville, 2012, drawn from Myschool website: www.myschool.edu.au

The poor outcomes in literacy and numeracy in Dandenong and Frankston (Table 2.7) are of considerable concern when these youth are looking for employment in the future. However, it needs to be noted that the figures are based on a small sample size. The high levels of disengagement, that is those not studying or employed, particularly for females in Casey, Frankston and Greater Dandenong is of considerable concern (Table 2.8). It is known that: Disengagement from work or study can be debilitating, isolating and incur social, economic and personal costs to those who are disengaged, the communities in which they live and to the broader economy (Walsh 2011). 21

Table 2.8: Disengagement in 20 to 24 year olds in selected areas Area *** Not in labour Unemployed force and not and not studying* studying** M F M F Casey 6% 4% 5% 13% Frankston 7% 5% 6% 14% Greater 5% 7% 6% 15% Dandenong Victoria 5% 4% 5% 9%
* Person doesnt have a job and is not looking for employment **Person not employed but looking for employment ***Note: Kingston, Mornington Peninsula and Bass Coast not available Source: ABS 2006 Census of Population and Housing

2.7

MIGRATION

Migration is a considerable issue in some of the SE Metro Councils. Some 28,100 migrants have settled in Casey, Cardinia, Frankston, Greater Dandenong and Kingston in the past five years (Neville 2012). Greater Dandenong has over 100 nationalities in residence with 62% of residents being born outside Australia (South East LLEN 2013). These migrants have tended to be proportionally more in the family migration stream (37%) and the humanitarian stream (12%), rather than the skilled migration stream (51%), when compared with those settling elsewhere in Australia (33%, 6% and 61%, respectively). 71% of the family and humanitarian streams have no, or poor English language proficiency, many of these migrants coming from a non-English speaking country, in comparison with those settling elsewhere. Those migrants coming from a non-English speaking country experience a lower rate of employment than those from an English-speaking country. Over half (59%) of the working age population in Dandenong were born in a non-English speaking country.

2.8

CONCLUSIONS

This the picture which emerges from this above analysis is the extent of disadvantage that can be found in some parts of the SE Metro region, particularly in Greater Dandenong, but also in Frankston and some districts in the other Councils. This is particularly in relation to unemployment, youth who are, or at risk of disengagement, sole parent families and migrant families. While the cause of this disadvantage is complex and includes issues such as a lack of public transport and other services, education leading to employment and thus the chance of a higher income, is a key aspect to lowering this experience of disadvantage, both at an individual level and at a community level. The heavy dependence of the area on the TAFE system for postschool training is also very clear.

22

STATE GOVERNMENT FUNDING CHANGES AND RESPONSE BY CHISHOLM INSTITUTE

3.1 GOVERNMENT CHANGES
Prior to 2009, the Victorian government subsidized a limited number of places from TAFEs and some private registered training organizations. In 2009 the Victorian government uncapped the funding under the Victorian Guarantee. Government funded TAFEs enrolments grew by 4% between 2008 and 2011, while enrolments in private training operators grew 310% and the number of private providers more than doubled over the same period, from 202 providers in 2008, to 430 in 2011. The cost of this in the first year was $300 million. In the May 2012 budget, the Victorian State Government announced a funding cut of 22% from particular vocational programs from the start of 2013, for public and private technical TAFE training courses. Support rates for some courses were cut to less than $2 per student contact hour, from the previous levels of between $6.50 and $10 per hour. It also abolished block funding to TAFE institutes which had supported activities such as courses to support social inclusion, support for those students with special needs and other local social justice obligations. The Victorian TAFE Association has said this cut will be in the order of $300 million (Gordon 2012). Caps on fees which can be charged were also removed, leaving the way open for TAFE and private training institutions to raise fees for courses. In March 2013, the Victorian Government announced it would provide an off-setting $50 million annually over four years, thus reducing the cut to $250 annually (Preiss and Cook 2013). The number of private Registered Training Organisations eligible to receive subsidised training was reduced in 2013 by 20%, from around 500 to 400 (Sheehan 2013). The changes to the Victorian TAFE system were said to make the system more commercially oriented, in line with the recommendations of the Report of the TAFE Reform Panel (Sheehan 2013).

3.2

CHANGES AT CHISHOLM INSTITUTE

Chisholm Institute believes that these changes will impact on: Course delivery Revenue Students, and Staff The 2012 Annual Report reports that total income received by Chisholm in 2012 was $132.9 million. Chisholm reports that the financial impact of the most recent government funding cut is estimated to be a reduction in revenue of $26.5 million for 2013, nearly one-third of government funding (Peters 2012). In October 2011, Chisholm funding was cut by $4 million. The combined total of these cuts is about $30 million annually. Chisholm believes that the most significant budget impacts will be the loss of $16 million of about $19 million of annual government funding for full service provision. This funding supported the Institute to meet its community service obligations and to meet wage changes required under the terms of the public sector Institutes enterprise bargaining agreement. About $9 million loss relates to the funding of courses. 23

Chisholm estimates that this funding cut will mean a loss of 220 staff, or 20% of EFT staff who were employed in 2011. 46 courses will be discontinued, with three added, there will be a restructuring of courses and fees will be charged in some vocational areas. 230 courses will be continued. Chisholm anticipates growth in Community Services and Health, the Construction Trades and Telecommunications. The restructuring was overviewed in a presentation by the CEO of the Chisholm Institute (Figure 3.1). While maintaining strong ties with VET and VCAL at schools, Chisholm will also seek to offer higher level qualifications through degrees and stronger contacts with Universities. Chisholm course areas with no or limited resource allocation for 2013 are in the following areas: Business & Clerical Legal Services Retail Liberal Arts Hospitality & Events Marketing Food and Meat Processing Ceramics Professional Writing & Editing Fitness Sport & Recreation Growth is expected in Community Services & Health, the Construction Trades and Telecommunications (Peters 2012). Figure 3.1: Restructuring of Chisholm TAFE courses from the beginning of 2013

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DISCONTINUED COURSES Forty-six courses have been cancelled for 2013. 2,259 students were enrolled in these courses in 2011. This represents 5.2% of total enrolments in 2011. This averages 49 students per course, but the numbers undertaking each course varied widely from 1 person in 7 courses to 264 students in one course 2 courses having over 200 students and four with over 100 students. All campuses are impacted with course closures, Bass Coast losing the most, with 18% of students who had been enrolled in 2011 in the courses cut for 2013. Most campus had 5% to 9% of students enrolled in the cut courses, with Mornington Peninsula losing a potential 2% of students. The number of students in each Campus includes VET enrolled students. 66% of enrolments of the courses dropped were undertaken by females. Most people undertaking these courses were between 15 and 24 years of age (Figure 3.2), although the full age range is well represented in the courses.

Figure 3.2: Age of students doing the courses in 2011 which have been discontinued for 2013
800 700 N u m b e r 600 500 400 300 200 100 0 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+ Age

Source: Derived from data provided by Chisholm Institute

Most people undertaking these courses in 2011 were medium socio-economic status few being in the high category (Figure 3.3). The course with the clearest exception to this, which had more participants from the higher socio-economic category, is the Diploma of Management.

The ABS defines socio-economic status as a relative concepts which defines peoples access to material and social resources and their ability to participate in society (ABS 2011b).

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Figure 3.3: Socio-economic status of those undertaking the courses in 2011 which have been discontinued for 2012.
1400 1200 N 1000 u m 800 b 600 e 400 r 200 0 Low Medium Socio-economic status High

Source: Derived from data provided by Chisholm Institute In relation to prior qualification, most students (70%) had no previous qualifications for whatever level course is chosen (Figure 3.4). While this lack of prior qualifications is highest for Certificate courses, over 30% at Diploma level have no previous qualifications. It would seem that about 20% of students doing a Cert 1 or 11 had done a higher or equivalent qualification prior to their current one. Thus, as government funding support is only for a pathway progression through one discipline, this suggests that 20% of students were paying their own course fees. The proportion paying course fees heavily reduced to only 4% of students for Cert IV level qualifications. Figure 3.4: Prior qualifications for those undertaking courses in 2011 which have been discontinued in 2013.
70 60 50 40 30 20 10 0 Total Cert 1, 11

P e r c e n t a g e

Prior qualification

Source: Derived from data provided by Chisholm Institute

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NEW COURSES Chisholm has notified that a Certificate 11 and 1V in Fitness is now a one year full time course. A Diploma of Sport Development/Diploma of Sport and Recreation Administration is offered as a one year full time course and a two year full time Diploma of Arts Therapy is being offered for 2013.

IMPACT

Overall, it appears that the impact of funding cuts to Chisholm TAFE will be felt most by students already experiencing some social exclusion and disadvantage. In general, it would appear that most courses that have been terminated are the lower qualification certificate courses, some subject matter being offered at the Advanced Diploma level. Web site for course changes: http://www.vtac.edu.au/courses-inst/courseupdates.html The big unknown is the number and type of courses where fees will be charged, or increased, and the rate of fee charging. While this aspect is unknown, it is likely that there will be high elasticity for fee rises. This means that changes in price are likely to have a relatively large effect on the quantity of people enrolling for a course. This will be particularly so for students who are disadvantaged and have a low income. This will be compounded by the significant loss of funding for support for special need students who were assisted under the community service obligations. It is likely that without this support, there will be a higher drop-out rate from courses from those students experiencing disadvantage who do undertake a course. Overall, 6,700 government funded students at Chisholm in 2011, were low Socio-Economic Status with most of these students undertaking Certificates 1V and Diplomas, rather than apprenticeships where the funding support has been maintained. It is likely that a proportion of low SES students will not be able to afford to pay TAFE fees in 2013 and beyond. The loss of the additional support structures where most funding has been cut will compound the difficulties for low socio-economic students. Thus, there is a risk of a significant loss of students up to 37% maximum (the proportion of low socio-economic students).

4.1

DIRECT IMPACT ON CHISHOLM AND THE HIGHER EDUCATION SECTOR IN 2013

The following are likely direct impacts to the Chisholm Institute and students. 1 IMPACT ON COURSES The cut of funding has led to a reduction in courses which can be offered, although funding for apprenticeships, courses in Disability and courses in Aged Care has gone up, as has funding for apprenticeships. 2 LOWER NUMBER OF STUDENTS AT CHISHOLM The impact on student numbers is uncertain, although the totality of impacts, 220 less staff, net loss of courses especially at the lower qualification level and rise in some course fees, suggest that total number of enrolments will be down in 2013. Chisholm anticipates that student numbers will be reduced for the subsequent three years and then will re-build. It is uncertain where the replacement students who are able to pay fee costs will come from. It appears that 27

Chisholm is hopeful that they will take the higher qualification courses and degree courses, subsidized by the federal government HECS scheme. 3 INCREASED FEES FOR SOME COURSES Some fees increased from 1 July 2012 and others were increased from the beginning of 2013. Where this is occurring and the extent of the rise in fees, is not clear. The change in fee structure has differentiated between apprenticeships and traineeships. It is likely that this will result in a decline in traineeships by about 80% (opinion of person in the sector). Funding for apprenticeships has increased. Apprenticeships cover major building trades, plumbing, electricians, automotive, hairdressing, chef etc. There is no age barrier for entry to these and the training costs are funded. It could be a school-based traineeship. Traineeships cover other areas, such as retail, business, finance and accounting, sport, fitness, floristry, HACC services and aged care, health services, child care. There is no funding if a potential student already has a qualification in another field - the person will have to pay the full fee rate. This disadvantages females who have a previous career and decide to, say, enter the health care sector after a time out of the workforce raising children. They could do an apprenticeship but this may not be in an area of interest, especially for females, and the course structure may not suit, such as length of training. The funding for traineeships, previously $9 an hour, has now gone down to $1 an hour, thus the student will need to now pay $8 an hour where a course is offered. Trainees do approximately six hours a week training while they are employed in the sector. 4. CHANGES IN STUDENT PROFILE The courses cut were taken by younger age students and those with no previous qualifications. The profile of TAFE students is likely to move to those with a higher qualified education background, less younger students, possibly more part time students, and fewer students from a lower socio-economic background. Thus, the important role that Chisholm TAFE was provider as a means for skill development for those with fewer opportunities to gain this elsewhere, has now diminished. 5 INCREASED COMPLEXITY AND LACK OF COHERENCE IN COURSE PROVISION AND FUNDING The scheme called FEE-HELP, will assist students to pay for Diploma level courses, but this is not available outside a Diploma level. VET FEE-HELP is an income contingent loan scheme that assists eligible students to pay for all or part of their VET tuition fees when studying one or more of the following accredited VET courses at Chisholm: Diplomas, Advanced diplomas, Graduate certificates. A different form of the loan scheme, FEE-HELP, is available for Chisholm degrees. Students do not have to repay the VET FEE-HELP loan - which is provided by the Australian Government until their income is above the minimum repayment threshold for compulsory repayment. An eligible student must be an Australian citizen or permanent humanitarian visa holder who is resident in Australia for the duration of study. There is no age restriction on VET FEE-HELP. Some fields or disciplines have clear pathways through the different levels of training, some of which will now be disrupted. For example, if a school offers, Certificate 1 or 11 through VET at schools, then this wont impact on funding eligibility for further courses at TAFE if the person is 28

under 21. However, if a person wanted to do a course as an adult, say a women returning to work, as noted earlier, and they already had some training, they would not receive funding to train in another area. If it is not viable to run a parent program say at Diploma level, then the courses leading to this, such as Certificate 111 and 1V would also not be viable. However, as noted earlier, not all students follow the prerequisite pathway. 6 LOSS OF SOME OF THE SUPPORT STRUCTURE FOR STUDENTS GENERALLY AND PARTICULARLY
DISADVANTAGED STUDENTS

Chisholm Institute offered considerable supports for students with special needs, such as those with a disability, sole parents with young children, assistance with literacy and English as a second language, as well as classes for youth not succeeding in a school environment. It is likely that these services will now be discontinued or considerably reduced, thus again this will adversely impact on those who experiencing disadvantaged. 7 COURSES IMPACTED IN OTHER TERTIARY INSTITUTIONS AND SCHOOLS Work had been done over the past few years to develop a pathway of TAFE students to Monash University at both the Frankston and Berwick campuses. This was particularly for students qualified in: Sport and Recreation Business Tourism Hospitality Allied health assistance and massage therapy These fields sit in areas where courses have been cut. The course cancellations by Monash University are shown in Appendix B, Table B.1. While not a lot of students come from Business, Tourism or Hospitality at Chisholm, a more common pathway for TAFE students is to enter Monash through a Diploma of Tertiary Studies offered by Monash which could then assist entry into Business at Monash after one year, subject to a good standard of marks. About 80 students take this course their living location is unknown. Entry is about 10% to 20% lower than the general Tertiary Entry score. About 50% of students go on to nursing, business and education. With TAFE cutting Diploma level courses, there will be a stronger demand for this Diploma of Tertiary Studies, however the level of intake is capped by federal funding. Allied health assistance and massage therapy offered a pathway to Occupational Therapy and Physiotherapy at Monash University. The nursing pathway from Chisholm to Monash offers an intake at second year at Monash from a Diploma of Nursing at Chisholm for about 40 students. While Diploma of Nursing is not a course that has been cut, it is a more complex and expensive course to run as it needs specialised facilities, so may be vulnerable in the future. It is common for students to do Certificate 111 and 1V and then do a single year 3 for a Diploma. Cutting out the Certificates has the impact of students entering other courses and the workforce with less experience and less maturity.

29

About 80 students in the past six years have come through to Education at Monash from Chisholm, doing a four year double degree for Primary or Secondary Education. This pathway from Chisholm represents about 15% of each years intake at Monash. To speculate: the cuts to Chisholm will impact on 15% to 20% of student intake levels at Monash in some courses, and it is possible that future developments at Monash Berwick are now at risk. 8 POSSIBLY SOME INCREASED PLACES IN PRIVATE TRAINING CENTRES There are a wide range of private providers of training which enrol, in total, a similar number of students to Chisholm. For example, local fitness centres and Crown Casino offer training and get state support for this. It is possible that private providers will pick up on courses discontinued at TAFE; however, they tend to offer both lower cost courses and courses attractive to those who can afford a course fee. However, in some situations, private providers may also not continue with some courses because it may be felt that there are an insufficient number of students who are able to pay fees. This is the case with Certificate 111 in Finance, provided in the Dandenong area where one school decided not to offer the subject. There are eight courses not being offered in schools in Dandenong. This has disrupted pathways for disciplines for some subjects, especially those popular with females retail, hospitality and business administration. There is anecdotal evidence which questions the quality of training provided by some private training facilities, while the quality is good in other facilities. Courses can be very short and offer little hands-on experience or personal contact. One consequence of this is their low employability even although the course has been undertaken. There are also some known instances of a lack of sustainability of some private trainers, leaving some students unable to start or complete their courses. 9 STAFF LOSS AT CHISHOLM Chisholm has reduced staff numbers by 220 People. The mix of educators, administrators and support and maintenance staff, is unclear. However, the loss of 20% of staff suggests that it will be more difficult to maintain the comprehensive service offered previously. 10 DISCONTINUITY IN RELATIONSHIP BUILDING AND COURSE INTEGRATION BETWEEN INSTITUTIONS Education coordination and cooperation has been taking place over the past few years across tertiary education providers. Schemes such as shared teaching and shared staffing were developing. Certificate 111 and Certificate 1V were being embedded in courses at Monash with shared credits. Early 2013, these opportunities were said to have stalled. 11 UNCERTAINTY ABOUT THE FUTURE Planning is difficult due to the uncertainty of response of potential students to the changes. Courses are being offered at the more qualified end of education where there is greater certainty of affordability to students. The researcher also learned of the hope to establish Frankstons future strengths around a knowledge centre and education hub close to central Frankston. This is less likely to be achieved in the context of the TAFE cuts. A two-tiered community where there are diminished opportunities for people experiencing disadvantage, and possibly an increase in numbers of people experiencing disadvantage, will be less cohesive and less successful overall 30

(Wilkinson and Pickett 2010). The psychological impact of this is also an important factor, for both industry and community wellbeing and resilience.

4.2

INDIRECT IMPACT ON SE METRO COUNCILS

PERSONAL ADVERSE IMPACT ON SOME GROUPS OF PEOPLE There appears to be a general belief both in the literature and those people with whom the researcher spoke, that people already experiencing disadvantage and social exclusion will be the hardest hit by the TAFE cuts. However, the extent of this is uncertain. For example, people with a disability have a low average level of income. 7.2% of TAFE students have a disability or longterm medical condition, compared to 3.5% of university students, so TAFE is an important training institution for this group of people (Stone 2012). Chisholm has 10,000 students from a culturally and linguistically diverse background, with the majority having less than year 9 qualifications (5,500 students). The outcomes for this group are strong due to the levels of support they receive, which Chisholm believes may be in jeopardy. Women wishing to gain qualifications to return to work will find this more difficult. This is particularly troublesome with the federal governments recent changes which place single parents on Newstart payments when their youngest child reaches eight years of age. POSSIBLE ADVERSE IMPACT ON REGIONAL BUSINESSES IN THE AREAS OF TOURISM, HOSPITALITY, HEALTH AND AGED CARE . Regionally, there may be a large impact on employment, not only in relation to fully trained workers but also those undergoing training. The students are often employed on the basis that they have achieved Certificates and work part-time while they continue with higher training. This will impact on people working in care, after school programs, swimming pools and gyms. For example, students with Certificate 111 and 1V often work in aged care part time while studying nursing. Thus the regional casual and lower end workforce is at risk. LESS EXPERIENCED PEOPLE GOING INTO THE WORKFORCE The lack of funding for traineeships for older people returning to work will reduce the maturity and life-experience of the workforce. The greatest adverse impact is likely to be in aged care. OTHER IMPACTS A need to build support and welfare structures to cater for more people, especially youth Continuity of inter-generational disadvantage Adverse impact on communities already struggling with disadvantage Impact directly counter to federal governments desire to increase tertiary education options for low socio-economic people Possible oversupply of trades-people where the funding for apprenticeships has not been cut

4.3

IMPACTS ON SPECIFIC LGAS

This section provides a view on the possible impacts on specific LGAs. Table 4.1 shows the potential loss of students in each LGA if only low-socio-economic students drop-out.

31

Table 4.1: Characteristics of 2011 students doing the discontinued courses Living No. of No. of No. of Potential Low location of students students students loss of socioChisholm enrolled enrolled in who did the students economic students at government now in each status, who took the Chisholm funded discontinued LGA * 37%, now campuses places & % courses assume discontinued of spread courses enrolments evenly** Mornington Peninsula Casey Frankston Kingston Cardinia Greater Dandenong Bass Coast

Potential loss of students in each LGA if only Low socioeconomic students drop-out 2.7% 3.4% 3.4% 2.2% 3.9% 2.6% 6.5%

5,959 8,799 5,105 2,218 2,115 3,936 2,437

4,008 (67%) 7,162 (81%) 3,568 (70%) 1,127 (51%) 1,455 (69%) 3,299 (84%) 644 (26%)

291 660 328 68 155 232 113

7.3% 9.2% 9.2% 6% 10.7% 7% 17.5%

108 244 121 25 57 86 42

*There is the assumption that students are not able to move to another course. ** Assumption that only the proportion of low socio-economic students will not transfer to another course. Source: Information provided by Chisholm TAFE

Depending on the fee rise for other courses, and the size of the rise, it is likely that there will be a drop-out rate beyond those who had intended to do the discontinued courses. The total number of low socio-economic students at Chisholm in 2011, was 6,700. GREATER DANDENONG It is suggested that Dandenong will be the hardest hit LGA. Dandenong has the highest number of low income and disadvantaged households of the SE Metro Councils. In 2011, 3,936 residents of Greater Dandenong were enrolled with Chisholm (all funding sources including fee for service courses). Of these, 19.4% had completed Year 12 and 46% had completed Year 9 or less. The highest enrolments (651) were in English language courses to improve language and numeracy levels to enable them to participate more effectively in further training or employment, English as a second language, and English for Employment. It is unclear if these courses were funded under the block funding grant for social inclusion, which has now been discontinued. If this is so, the impact on Dandenong will be severe as a further 19.7% of students from Dandenong will be likely to be disengaged in these courses. Greater Dandenong also had the highest proportion of Chisholm students in government funded courses. Greater Dandenong and Frankston have campuses of 14,744 and 14,536 students, many of whom travel from other areas, both in the SE Metro Councils and elsewhere. These are three times the size of other campuses. The likely reduction in student numbers will be felt on the economies of these two LGAs. It is uncertain where the staff lived who have been retrenched, but at least some are likely to be locally based.

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CASEY Casey is likely to be also impacted by the TAFE cuts. While its disadvantage scores are not as high as Greater Dandenong or Frankston, it has a high enrolment in Chisholm TAFE and a high proportion of these were in government-funded places. Casey also had a much higher enrolment in the courses that are now discontinued, than other LGAs. FRANKSTON Frankston is likely to be adversely impacted by the cuts to Chisholm. It has relatively high rates of people experiencing Serious Disadvantage and one of the higher levels of unemployment, particularly in households with children. Frankston also had high numbers of government funded students enrolled in Chisholm. Chisholm notes that it is expected that: There will be a reduction in 2013 in the number of students at the Frankston campus, with a gradual return to present numbers over three years Youth will be affected e.g. VCAL, Pre apprenticeships Disadvantaged groups e.g. women, unemployed will be adversely impacted Pathways will be restricted in some industries and this affects pathways across the full range of qualifications Increases in tuition fees may impact on low-SES students adversely, however Frankston has the fewest low SES students (27% of campus) There will be no business, marketing and management courses left at Frankston There are few gaps in training at Frankston: business services (but accounting remains), events (but tourism remains), Hospitality and Retail Chisholm sees opportunities as: Growth in key employment sectors, e.g. Health Frankston Tertiary Centre development Staged tuition fee payment system CARDINIA While average unemployment is low in Cardinia, there are pockets of Serious Disadvantage. Cardinia has the lowest number of Chisholm enrolled students of all the SE Metro Councils. However, Cardinia is the highest LGA with trade and technical employment and has a high potential proportional loss of students. MORNINGTON PENINSULA Mornington Peninsula, having an older population, has a low unemployment rate and lower levels of Serious Disadvantage (this measure excludes those of retirement age) than found in other SE Metro Councils. Mornington Peninsular had the third highest enrolments in TAFE and had high numbers of government places, about 1 in 5 of the students, attending outside the local Mornington Peninsula campus most travelling to Frankston. About 300 students had completed the now discontinued courses. Chisholms view is that in the Mornington Peninsula, it is expected that: Gaps in training in Business Services, Aged Care/HACC (both had been in decline) will lead to lower numbers of trained staff 33

Increases in tuition fees may impact on low-SES enrolments (34% of the campus) Peninsula TAFE has a focus on disadvantaged groups e.g. women returning to study and Youth. These groups will be influenced by the fee increases and reduction in courses

Chisholm sees the opportunities to include: Growth at Mornington Peninsula campus, in the traditional construction trades, childrens services and commercial cookery Staged tuition fee payment system Technical Trade Centre Connectivity to other campuses BASS COAST AND KINGSTON These are likely to be the least impacted LGAs. Kingston has lower levels of disadvantage, although a fairly high unemployment rate. Bass Coast has an unemployment rate lower than the state average, although this may change now the construction of the desalination plant has finished, thus reducing available employment options.

4.4

REDUCTIONS IN INCOME AND EMPLOYMENT AS A RESULT OF CUTS IN TAFE

FUNDING The reduction in the finance available for TAFE courses primarily reflects the priorities of the Victorian government. However, given the heavy dependence of state governments on funds raised by the federal government, the Commonwealth cannot escape its share of responsibility. Expenditure cuts at state level are the inevitable result of federal small government policies which prioritise low taxation over government services. Whereas at local government level it is possible to have a rational discussion about the balance between taxation (rates) and services provided, at federal level the issue seems to be decided by combinations of ideology and lobbying. Rarely is there any attempt to weigh the costs of Commonwealth/state parsimony against the benefits of low taxation. This section is intended to contribute to the debate by assessing the costs to the community in South East Melbourne of the cuts to the funding of Chisholm Institute and consequent reduction in the provision of courses. It is emphasised that this is no more than an order of magnitude study, heavily dependent on simplifying assumptions. The simplifications arose partly from lack of data and partly from limitations in the resources available for the study. It is common procedure in economics to use simplifying assumptions to yield preliminary results on the basis of which it can be judged whether additional work to relax the assumptions is warranted. The basic methodology involves comparison of a base case in which TAFE funding continues at 2011 levels and a policy case in which funding is reduced. The funding cuts have two main effects: Cancellation of courses and A reduction in employment in the provision of TAFE services. Assumptions were made to quantify both effects.

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REDUCTION IN EMPLOYMENT IN EDUCATION As reported above, Chisholm Institute has published estimates of the reductions in employment and wages which are expected to result from the budget cuts. NIEIR allocated these to the employment levels by LGA according to student numbers in each facility. The reductions were as follows: Greater Dandenong $6.9m (2012$) Frankston $6.8m Casey $3.4m Mornington Pen $0.5m Bass Coast $0.4m The total is $18m a year, which translates directly into similar reduction in Gross Regional Product. It is frequently argued that such reductions are self-correcting, mainly through price effects. For example, it could be argued that this reduction over-estimates the likely reduction in employment since it does not take into account the possibility that private providers will jump in with substitute courses, so increasing employment in the private education sector. However, such courses would be fee-financed and cannot realistically be incorporated into the assessment without allowance for this. In effect, the private courses would substitute finance by local consumers for finance from federal/state sources, with resulting pressure on household disposable incomes. Unless there is a substitute flow of funds into the region to make up for the loss of inflow from state/federal sources, it is difficult to envisage employment being maintained. REDUCTION IN COURSES The above discussion of the number of potential students likely to drop out of further education as a result of the course cuts is distilled into the assumption that, in each year from 2013 on, the number of students dropping out will equal the number of low-SES students who did the now discontinued courses in 2011. We assume that all drop-outs would have been candidates for Certificates I or II. The number is given for each LGA of residence in Table 4.2. The drop-out rate so assumed, expressed as a percentage of a one-year cohort of students in each LGA, is as follows. Table 4.2: Reduction in student numbers in relation to a one-year cohort LGA Number Percentage (males) Percentage (females) Mornington Peninsula 161 5.2 11.7 Casey 299 4.8 10.4 Frankston 174 6.3 14.3 Kingston 49 1.8 4.3 Cardinia 82 5.0 10.5 Greater Dandenong 102 3.7 8.3 Bass Coast 158 29.3 64.5 Source: Table 3.2, ABS 2011 Census, Note: The one-year cohort is the population aged 17; discontinuing students assumed to be twothirds female. In strict terms this assumption is unrealistic. Some low-SES students will find alternative courses; some higher-SES students will drop out. It is adopted here as an order of magnitude 35

as can be seen from Table 4.2, the assumption is that a significant but not overwhelming proportion of each age cohort will drop out. It is further assumed that the same number of potential students will drop out in each succeeding year, as compared with the base case. (This assumption disregards population growth, which arguably would increase the number dropping out each year.) The number of (mostly) young people who have dropped out accordingly accumulates year by year. It was assumed that all students gain the qualification they enrol for, though not necessarily in minimum time. The penalty for dropping out is assumed to be a loss of income; not a reduced chance of employment. Table 4.3 gives average incomes, by qualification, from Census 2011. Unfortunately the readily available population characteristics do not include the income of unqualified persons, so labourers have been put in to represent them. Again, earnings are not readily available by sex, which prevents this distinction being included in the analysis. Table 4.3: Average Census income by LGA of workplace by qualification, 2011 $/week LGA Labourer Certificate I,II Certificate III, IV Casey 590 659 896 Frankston 605 676 877 Cardinia 612 592 878 Mornington Peninsula 615 645 904 Kingston 662 766 1002 G Dandenong 685 806 1029 Bass Coast 1005 696 1210 Source: ABS 2011. Note: Includes all persons in the workforce, including those working zero hours. Average income calculated by mid-pointing the Census ranges.

Bass Coast is atypical because the desalination plant was under construction when the Census was taken and there were many labourers working long overtime. The typical differentials for the other LGAs of $60 a week between labourers and workers with Certificate I or II and $300 a week between labourers and workers with Certificate III or IV were adopted as measures of income lost through qualifications not attained. Assumptions are also required as to career progression. In the base case, it is assumed that students gain a Certificate I or II the year after they enrol and then gain the assumed wage differential. We further assume that, four years later, a third of them upgrade to Certificate III or IV and gain the relevant wage differential. It was assumed that they do so by part-time study which does not affect their earnings. In the policy case, it is assumed that the drop-outs remain in the workforce as labourers for five years from their age when they dropped out. After this, it is assumed that 40% of them gain a Certificate I or II after studying part-time with low loss of earnings, 20% gain Certificate III or IV after similar study and the remaining 40% continue without qualification. The relevant income differentials are applied to each group. It is further assumed in both the base and policy cases that, each year, 5% of the population leave South East Melbourne. This reduces the loss to the concerned municipalities though not to the country as a whole. 36

These assumptions entail that there is no increase in unemployment in the policy case as against the base case. This is unrealistic in that it assumes that employment in the region can be maintained in the face of declining labour productivity. The results are therefore biased towards underestimating the costs of cutting courses. Even so, in the policy case income falls below the base case with the differential increasing year by year as the pool of unqualified people increases. After fifteen years the differential is of the order of $20 million a year in 2011 prices. FURTHER IMPACTS The two sets of assumptions adopted above specify: A reduction in the flow of funds from state and federal government sources into the region and A reduction in the productivity of labour in the region, reflected in a reduction in wage incomes. These two effects combine to reduce employment and income, which results in reductions in local spending-power and hence reductions in the sales of local businesses not directly affected by the course abolitions. These effects were assessed using the NIEIR model of each of the concerned LGAs (see attached result sheet). The model includes input-output relationships and assumes that local businesses in general maintain the spare capacity required to meet fluctuations in demand of the order of those analysed in this study. Reductions in sales therefore result in reductions in income without the range of compensatory price effects which in some economic models dampen the flow-on effects of policy changes. The results in the first year after the cuts depend almost entirely on the reduction in TAFE employment and the accompanying fall in local purchasing power. Because of the assumption that all persons who drop out from education find employment at labourer wage rates, the main employment effect is due to the reduction in TAFE employment with moderate multiplier effects. However, as the years pass the lower level of qualifications of the workforce translates into lower productivity and lower incomes and by the fifteenth year the reduction in resident income from this source is roughly equal to the reduction due to the reduction in TAFE employment. Stated baldly, the State/Commonwealth governments save $18 million a year from their budgets at a cost to the earned incomes of the citizens of SE Melbourne estimated at $24 million a year, rising to $48 million a year after fifteen years, and at a cost to gross regional product initially of $40 million a year rising to $73 million. Figure 4.1 provides the annual regional loss for 15 years. This loss increases each year, from a loss of $39.5 million in year one, until it plateaus from year 12. Figure 4.2 shows the total of the annual losses for each LGA by year 15. The greatest loss overall will be experienced in Frankston, followed by Casey and Dandenong.

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Figure 4.1: Gross Regional Product: Total Annual reduction from 2013 to 2028

Figure 4.2: Total of annual loss for each LGA by year 15

It is not claimed that this brief exercise in cost evaluation is definitive. The reduction in the inflow of state/federal funds to the region is reasonably certain but the effects have been merely sketched and alternative, more complex scenarios would be more realistic. Similarly the dropout rate resulting from course abolition has been estimated very roughly. With additional data on dropping out by sex, earnings by sex and qualification progression rates it would be possible to improve the estimates considerably. A more definitive study would also relax the assumption that all who drop out from education find work at labourer pay rates. It could easily turn out that under-qualification causes as serious a rise in unemployment as is directly caused by the reduction in the flow of outside funds into education.

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CONCLUSIONS

The report has identified areas of disadvantage in the SE Metro area, including high levels of severe disadvantage in some areas. It has also shown the importance of the TAFE sector to the region for job training and future employment options. The SE Metro Councils comprise an area low in professional skills, but dominated by TAFE education and employment. Thus it is of major importance to keep the opportunities for TAFE training in the region. The reduction of funding to the TAFE sector in general, and Chisholm Institute particularly, means that rationalization of funding needs to take place if the TAFE education sector is to remain financially viable. Thus, there is a need to change the target of services to more costeffective areas. This is resulting in a shift from the Certificate level courses to the higher qualifications where students have more experience and are more independent in terms of financial backing and study skills. Some more expensive courses to run will be dropped. The higher education qualifications (degrees and above) are also supported under a HECS fee support structure from the Commonwealth, a service not offered to lower qualifications. The special need education which was provided by TAFE is now less likely to occur. This will disadvantage those needing a strong support structure to maintain learning: those with low literacy, single parents, disability, behavioural disturbances, new migrants and refugees, and those returning to work after a long absence. There is also a rise in fees in some courses. The breadth and depth of this rise is not clear, nor is the elasticity of demand at what point in the fee rise will most people now not take the course due to the cost. There are suggestions that this elasticity is very high i.e. many potential students, particularly undertaking the lower qualification courses, cannot absorb even small price rises. Thus, it is likely that there will be a change in structure of the students undertaking a TAFE course to those who are older, more qualified, and have a higher income. There is likely to be fewer women with children aged eight years and older (who may have undertaken training to return to work, particularly those being moved to Newstart ) and fewer people with capability issues, such as disability and new migrant status. The lack of public transport may prevent some people travelling to seek places in other TAFEs which may have maintained courses or offer courses with similar outcomes. The train from Frankston and Dandenong allows travel to Melbourne city for those who live near the station, and for those seeking available training accessible from this line, but this opportunity will not be available for most potential students. This review suggests that those who will be missing out the most are those who are already disadvantaged. Thus, those who havent completed schooling, those who come from households with long-term unemployment present, those from very low income families and those experiencing a reduction in capability, such as disability or new to the Australian culture. The share of youth in the SE Metro area, who leave school and don't go on to any form of postschool training, is relatively high. The area has entrenched problems with lower than minimum standards of literacy and numeracy when compared to Victoria as a whole. The disengagement rate for 20 to 24 year olds females is particularly high in Casey, Frankston and Dandenong, a particularly troublesome finding in the light of the gender inequity of the female-based 39

industries where training options have been cut. This issue is crucial. Those without any form of post school education will be handicapped for life. TAFE had offered a lifeline. There is a clear moral issue here if this is now removed. With a reduction in TAFE education opportunities for the pre-existing disadvantaged households in the SE Councils area, there is likely to be an even greater increase in inequality in these LGAs. There is uncertainty as to whether the move to offer higher education qualifications will provide more opportunities for people in the SE Councils. The extent of demand for these courses is not known and opportunities for some courses are already available at Monash in Frankston and increasingly from an outreach service from Deakin and LaTrobe University. Other Universities are increasingly providing on-line courses. It is also unclear how employment opportunities will change. Victoria is already experiencing a downturn in manufacturing. There is likely to be an increase in employment opportunities in the service and tourism industries in Mornington Peninsular and Bass Coast Shire, but these training courses have been cut. It is possible that some industries will not establish in the SE Council areas if they believe the employment skill sets needed will not be available. It is also unclear what private training providers will now offer and at what price. However, this is likely to be beyond the reach of many low income potential students and offered in the most cost effective areas for the private institutions, not necessary those where there are present job skill demands. Considerable funding is being provided by the Federal Government to support manufacture, with a precinct being established at Monash. This initiative may be hampered by the inability to find suitably trained staff. It is likely that pockets of severe disadvantage, that are already present in some SE Council areas, will grow. There is a risk that the presence of this disadvantage may flavour the perception of the LGA, thus adversely influencing other potential developments, such as attracting professionals, arts, and higher education to the area. The issue will be the size of the increase in disadvantage and the resources that are available to address these issues. However, the cost of providing intervention services to reduce disadvantage where this has already become firmly established in a community will always be much more than preventing this disadvantage occurring in the first place. The expenditure on welfare programs funded by state and federal government, such as Neighbourhood Renewal and Communities for Children, seem somewhat futile, when the fundamental structural issues, such as education and transport (and affordable housing) need to be put in place first. The remedial task for welfare services will then be considerably reduced. This report shows that within the assumptions of the model, the impact of the TAFE cuts on the SE Metro economy, is also likely to be negative. The modelling suggests that regional income falls below the level prior to the TAFE cuts, with the differential increasing year by year as the pool of unqualified people increases. After fifteen years the differential is of the order of $20 million a year in 2011 prices. The lower level of qualifications of the workforce additionally translates into lower productivity and lower incomes and by the fifteenth year the reduction in resident income from this source is roughly equal to the reduction due to the reduction in TAFE employment, about $48 million after 15 years. Thus, the State/Commonwealth governments saving of $18 million a year from their budgets is at a cost to the earned incomes of the citizens

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of SE Melbourne estimated at $24 million a year, rising to $48 million a year after fifteen years, and at a cost to gross regional product initially of $40 million a year rising to $73 million. To these figures need to added the cost of increasing social disadvantage and reduced inclusion and wellbeing. Indeed, from a public policy perspective, it could be argued that an area with existing disadvantage, such as SE Metro Councils, should have extra resources provided in order to build capabilities. Services, such as TAFE, should be expanded rather than contracted in order to address disadvantage and prevent higher future costs. The rapid growth in private training providers with the consequent outcome of funding cuts penalizing government TAFEs needed to be reviewed. Birrell and colleagues (2009) examined the training of cooks in private training institutions. The numbers of overseas students in cooking courses in Australia rose from 1,019 in 2004 to 8,242 in 2008. Australian cooks undergo training through an apprenticeship. Most of these students have now obtained permanent residence in Australia, but only a minority of these obtain employment positions as cooks in Australia. A similar position existed in relation to hairdressing training (Birrell et al. 2007). There was clearly an issue which needed to be fixed, but the solution has created additional problems elsewhere. The researcher found that the VET systems policies, administrative and funding systems is highly complex, fragmented and very difficult to follow. It is likely that schools will need dedicated staff to administer the system. Potential students would need considerable guidance to negotiate the system and to understand their best options. Research suggests that outcomes for students are not always positive who notes that the VET system does not always provide a coherent pathway to work or higher-level vocational education (Rothman et al. 2011). The researcher suggests that reform is needed to this system.

REFERENCES
AASW The Australian Association of Social Workers 2012, Submission from Senate Education, Employment and Workplace Relations References Committee Inquiry, August, Canberra, ACT. ABS 2006, Socio-Economic Indexes for Areas (SEIFA 2006) cat. no. 2033.0.55.001 ABS 2011a, 2033.0.55.001 - Socio-economic Indexes for Areas (SEIFA), Data Cube only, 2011 ABS 2011b, Measures of Socio-economic Statues, ABS, June http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/367D3800605DB064CA2578B6001344 5C/$File/1244055001_2011.pdf Baker, I. 2012, Regional Employment Plan: South Eastern Melbourne Priority Employment Area, Australian Government. Birrell, B., Healy, E. and Kinnaird, B. 2007, Cooks galore and hairdressers aplenty, People and Place, 15, 1.

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Birrell, B., Healy, E. and Kinnaird, B. 2009, The Cooking-Immigration Nexus, People and Place, 17, 1. Birrell, B., Healy, E., Rapson, V. and Smith, F. 2012 The End of Affordable Housing in Melbourne, Centre for Population and Urban Research, Monash university, June. Chisholm Institute Annual Report 2011 http://www.chisholm.edu.au/About/~/media/Files/About/AnnualReport2011.ashx Chisholm Institute Annual Report 2012 http://www.chisholm.edu.au/About/~/media/Files/About/AnnualReport2012-WEB.ashx Department of Education and Early Childhood Development, 2012, Victorian Training Market Quarterly Report Q2, Victorian Government. DPCD 2011, Change and disadvantage in the Gippsland Region, Victoria, March http://www.dpcd.vic.gov.au/__data/assets/pdf_file/0005/62708/Change_and_Disadvantage_in_the_ Gippsland_Region_-_lower_res_pdf.pdf Gordon, J. 2012, Deeper TAFE cuts revealed in secret documents, The Age September 14 p.3. Neville, I. 2012, Overview of the South Eastern Melbourne Priority Employment Area, DEEWR, Australian Government, powerpoint presentation, unpublished. NIEIR (with Stanley, J.) (2009), Disadvantage in Melbourne Local Government Areas 2008-2012, Report commissioned from Department of Planning and Community development, Victoria. Peters, M. 2012, Refocussing Vocational Training: Impact of Reforms, Powerpoint presentation, 21 September, unpublished. Preiss, B. and Cook, H. 2013, TAFE's new $200m 'no fix for past cuts', The Age, March 13, http://www.theage.com.au/national/tertiary-education/tafes-new-200m-no-fix-for-past-cuts20130312-2fym7.html#ixzz2RoQAO91h Rothman, S., Brown, J., Hillman, K., Marks, G., McKenzie, P. and Underwood, C. 2011, The On Track Survey 2010: The Destinations of School Leavers in Victoria. Statewide report, Melbourne, Department of Education and Early Childhood Development. Sheehan, B. 2013, Napthine falls short: TAFE needs more than a bandaid, The Conversation, 14 March http://theconversation.com/napthine-falls-short-tafe-needs-more-than-a-bandaid-12808 South East LLEN 2013, Environmental Scan 2013, author. Stanley, J.K., Stanley, J.R., and Hensher, D. (2012) Mobility, social capital and sense of community: What value? Urban Studies Volume 49 Issue 16 December 2012 pp. 3595 - 3609. Stone, C. 2012, The neglected sector: The year that changed TAFE in Australia, The Conversation, 20 December.

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VTAC (Victorian Tertiary Admissions Centre) 2012, http://www.vtac.edu.au/coursesinst/courseupdates.html Wilkinson, R. and Pickett, K. 2009, The Spirit Level: Why More Equal Societies Almost Always Do Better, Allen Lane, UK

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APPENDIX A: SUBMISSION TO TAFE REFORM PANEL

This Appendix contains the submission to the TAFE Reform Panel submitted on behalf of Mornington Peninsula Shire and the City of Frankston.

ACCOMPANYING LETTER
Dear Mr Latta, SUBMISSION TO THE TAFE REFORM PANEL Please find attached our submission to the TAFE Reform panel. You will note that our submission is very largely consistent with the submission of Frankston City Council, our partner in the Frankston Mornington Peninsula LLEN (which I chair), and with the submissions of other councils in Melbournes south east. These councils have very similar beliefs in relation to this important issue, and speak with a united voice in seeing TAFE as having a vitally important and central role at the heart of the VET system. A quality, sustainable, vocational educational and training system is vital to the social and economic success of the Mornington Peninsula community. Council understands that State Government has very real budgetary constraints, and also accepts that State Government should review and revise the VET system to optimise its efficiency and effectiveness, which may mean that some courses are better provided by not-for-profit and private providers. Council is concerned, however, that the current proposed reforms put the TAFE system at risk of being weakened, particularly in relation to the provision of courses where, while the need for them is readily apparent, they are not viable in a narrow financial sense. It is particularly important in our region, given the disadvantage experienced here in comparison to inner and middle Melbourne, to ensure that the TAFE sector is able to provide quality, relevant vocational training to our community, which in turn supplies our local economy and businesses with appropriately trained and skilled employees. While acknowledging the important role of not-for-profit and private providers, the current TAFE system should be supported and be made stronger and more accessible, not diminished. A quality TAFE system will provide enhanced services to not only the vocational sector, but to the VET/VCAL sector, and in particular to those who are difficult to engage in education and training. A roadmap for the future TAFE system will include ongoing provision, by means of enhanced resourcing, of high-quality services and commitment to outcomes for the disadvantaged and disengaged. An enhanced TAFE system will actively engage with, and provide opportunities to, disengaged youth. Fundamental to any changes is that services should be embedded in the communities that most require them (the South East region). The TAFE sector should have strong connections with local businesses and community entities to maximise understanding of training needs, to promote flexibility in course content and be responsive to emerging technologies and new industries. 44

The type of training provided by TAFE is by necessity more expensive to deliver: face to face contact is vital in vocational training, as well as being pivotal to the retention of disengaged students who struggle with formal academia and learning in isolation. Appropriate resourcing and support for the TAFE system is necessary to strengthen, expand and formalise opportunities for our community, our businesses and industries with the resultant benefits to our community. We will be pleased to provide any further input that you may require Yours Faithfully Dr Michael Kennedy OAM CEO Mornington Peninsula Shire

RESPONSE TO TAFE REFORM PANEL

MAIN POINTS : 1. A strong vocational education and training and TAFE sector is vital for Victoria, business and industry, regional development, local communities and individuals, especially in South East Melbourne which is already experiencing disadvantages, especially when compared with inner and middle Melbourne. 2. Future planning in the TAFE sector needs to recognise its many strengths and build on this base, rather than a TAFE sector which is weakened by poor resourcing and diminished opportunities for communities reliant on this educational service. 3. The City of Frankston and Mornington Peninsula Shire have lower educational attainment than many other Council areas, and are therefore heavily dependent on a strong TAFE sector to meet their educational needs. Without such access there is a high risk that disadvantage will be compounded resulting in reduced wellbeing, an increased in place-based disadvantage and a diminished local economy. 4. Where the training provider is embedded in the community, as is the situation with Chisholm, there is a higher chance for a quality, innovative and responsive education system which meets the needs of local business and industry. Many strong links and partnerships are already in place and may be jeopardised by a reduction in government funding. 5. The major support needed for the government TAFE sector is secure and adequate funding support to enable this valuable but time intensive education to be done.

A strong vocational education and training and TAFE sector is vital for Victoria, business and industry, regional development, local communities and individuals. The TAFE sector takes a leadership role and drives higher education outside the universities, providing skills, opportunities and capacity building. It drives regional economies by partnering with industry 45

and providing the needed skills and job training. Skill training encompasses those entering the workforce for the first time, those re-entering the workforce, those retraining for a new job, those upgrading skills within an existing job, and providing life-long learning. Without this essential practical training the regional economy will be less competitive, unemployment will rise, and the local consumer businesses will suffer, risking a downward spiral of increasing disadvantage. The backbone structure of the TAFE and VET system in local areas enables individuals to build competencies, confidence, self-esteem and the opportunity to build personal pathways to higher education. An educated community is a well-functioning, dynamic, responsive, supportive and vibrant community where human resources are linked to opportunities and there is growth in social capital, business and personal associations and trust. Frankston and Mornington Peninsula experience comparative disadvantage when compared with many other LGAs in Greater Melbourne. These communities are characterised by higher than average numbers of people on a low income, unemployment, lone parents, rental properties and welfare dependence. The working age population in the area had a below average level of educational attainment, with just 13.7 per cent holding a Bachelor Degree or above, considerably less than the national average, of 19.7 per cent. Only just over one-third (36%+) of Frankston city residents have completed year 12 and over one-quarter (25%+) of households in both Frankston and Mornington Peninsular have Certificate 111 or 1V as their highest qualification. Thus there is a heavy reliance on the TAFE sector for skill development. The Local Employment Coordinator and the Advisory Committee have identified three key goals for employment in the South Eastern Melbourne Priority Employment Area**, much of which would seem require a strong TAFE input. These are: Support employment, workforce participation and skills development including through maximising Government investments; Help retrenched workers transition into new employment and/or training; and Facilitate employment and training opportunities for job seekers, including disadvantaged groups, with a focus on industries experiencing skills shortages.

Constriction or reduction of VET and TAFE sector opportunities is likely to result in higher levels of entrenched disadvantage with higher unemployment, higher dependence on welfare benefits, and reduced health and wellbeing. This will occur for those individuals who following resources cuts will be unable to improve their skills as well as for the wider community, as the work done by Wilkinson shows that increasing inequality adversely impacts the whole community,

Baker, I. undated, Regional Employment Plan: South Eastern Melbourne Priority Employment Area, Australian Government. National Institute of Economic and Industry Research, 2009, Disadvantage in Melbourne Local Government Areas 2008-2012, author, Melbourne. ** Baker op.cit.

Wilkinson, R. & Pickett, 2010, The Spirit Level: Why Equality is better for Everyone Penguin, UK.

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beyond those directly impacted. Overall income inequality is rising in Victoria, reflecting differences both between regions, and within Greater Melbourne. The burden of disadvantage entails a high cost on society in terms of loss of production, loss of well-functioning individuals, health costs, crime rates and incarceration and mental illness. Disengaged youth are a high cost to society over a long period. In a period of economic downturn youth are commonly the first to lose their job and the last to be re-employed. Unemployed youth are a cost over their life-time.

A roadmap for the Victorian TAFE system should be built on the strengths of the present system, not a weakened, under-resourced education sector. The strengths of the TAFE system needs to be more clearly elucidated and understood. This includes a differentiation between the components, all of which offer a differing service: the VET/VCAL sectors, and the government and private TAFE sectors. The Government TAFE sector provides core training services, including a service to those more difficult to engage in education and those wishing to continue on with higher education. In three years the private TAFE sector has grown from 200 to 430 providers, seemingly offering courses which are less costly to run and to the easier to engage students. Government TAFE has experience four per cent growth since 2011. A roadmap should aim for the ongoing provision of high quality services and outcomes. The pathway should continue the practical skills training, providing hands-on experience needed by many of those who have not completed secondary schooling. Rather than reducing support, the TAFE sector needs to be strengthened to provide opportunities for those not yet engaged in education. There are many disengaged youth in Frankston. Nearly 22 per cent of 15 to 19 year olds are not involved in any work or study activities, compared to 15.3 per cent in the Southern Metropolitan Area and the Victorian State average of 15.4 per cent***, all these figures being unacceptably high. These youth could be educated in the TAFE sector to meet job demands. For example, a strong regional employment can be found in the health care and social assistance sector, presently offering 17 per cent of employment and due to grow by 18 per cent in the period up to 2016-17. Locally provided education which is embedded in the community is extremely important in terms of promoting community involvement and partnerships with businesses in order to Biddle, N. Montaigne, M. 2012, Australian census: not quite the US, but income gap widens, The Conversation, July. http://theconversation.edu.au/australian-census-not-quite-the-us-butincome-gap-widens-7676

Wheelahan, L. 2012, Victorian TAFE Chaos: A lesson in how not to reform vocational education, The Conversation, 30 May. http://theconversation.edu.au

ABS, 2006. Australian Government Department of Education, Employment and Workplace Relations, Australian Jobs 2012 http://www.deewr.gov.au/Employment/ResearchStatistics/Pages/AustralianJobs.aspx
***

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maximise course relevance, promote flexibility in course content and responsiveness to new industries and technologies. The Mornington Peninsula has a strong economic base in tourism/hospitality, recreation/ leisure, and retail, and Frankston provides regional hospital and medical services all services dependent on skills training arising from the TAFE sector. There is also a need for significant training in the Health and Community Services sector as a result of the age profile of the area. TAFE colleges tend to be strongest in areas with lower socio-economic outcomes in urban centres. They have the advantage that they are usually decentralised and located where people are located. Thus, their relative accessibility to those looking to use their services offers a highvalue service to these communities. Depending on the response of the TAFE sector to the changes in resourcing, the chance of reducing the number of TAFE locations is likely to have serious consequences for individuals and local communities. This is particularly so as public transport tend to be infrequent and not available at all in many of these outer suburbs. This is likely to considerably restrict the opportunity to travel further to receive TAFE services. The roadmap for the TAFE sector needs to ensure financial, social and environmental sustainability. It is difficult to build and expand a resource-weakened sector which is winding down services. Social sustainability is achieved where the sector meets the needs of their catchment population. Thirty-seven per cent of government funded students in 2011 were low socio-economic status, being concentrated in the Certificate 1V and Diploma courses. Chisholm has 10,000 students from a CALD background, over half of these having less than year nine qualifications. Financial cut-backs are likely to jeopardise the strong support given to these students, and thus course completion. The roadmap for the TAFE sector should encompass environmental sustainability, both in terms of sustainable infrastructure and operations, and in the courses it provides. There will be increasing demand for Education for Sustainability in all its courses, including the practical skill development around new technologies. The TAFE sector is central to meeting these requirements.

Both Frankston and Mornington Peninsula Councils have shown leadership in understanding and promoting the educational needs of their constituents. As noted above, there are strong needs for education from the TAFE and associated sectors, there being a lower number of households with a bachelor or higher degree than is found in inner and middle Melbourne. Thus Chisholm is vital for the social and economic prosperity of Frankston and the Mornington Peninsula. This is in terms of training to meet job demands and opportunities to address socioeconomic disadvantage, as well as Chisholm itself being a large employer in the region. In 2011, 3,568 residents in the City of Frankston and 4,008 residents of the Shire of Mornington Peninsula were enrolled in a government funded course at Chisholm and an additional 5,105 from Frankston and 5,959 from the Mornington Peninsula were enrolled in more diversely funded courses, including fee paying.

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Both the City of Frankston and the Mornington Peninsula Shire have been heavily involved in the planning and governance of the TAFE sector activity which highlights just how important the Councils view this education sector for regional wellbeing. The Councils identify local industry requirements and the needs of youth and other individual learning needs. The Councils take an active role in following through with this to ensure these needs are met in the best possible way. This is done through active involvement on Boards and in an advisory capacity with Chisholm as well as organisations such as the Local Learning and Employment Network, Community Houses, local schools and youth services, Economic Development Units and specific industry groups, such as Marine Industries, the Vigneron Association and the Victorian Farmers Federation. Involvement also takes place through facilitation of on-group experience and opportunities. Examples include the highly successful Pelican Pantry Traineeship Program which has facilitated training for 400, mostly young people in the food services sector; the Get Me to Class bus from the Southern Peninsula; and the partnership with Monash University, Frankston, to provide pathways for TAFE students to gain access to a university degree course.

Public and private training providers will provide the training that is needed by industry, the community and individuals where the providers are embedded in the local community. The model outlined above, where local government is viewed as a local expert in identifying needs and facilitating solutions has been shown to work well in the City of Frankston and the Mornington Peninsula with Chisholm TAFE. This process is facilitated by a strong association by all parties with the Local learning and Employment Network. Where such systems are in place and are working well, a loss of resources to meet identified needs will lead to unmet needs, diminished job ready people for local business and industry and lower morale, with resultant adverse impacts on the local economies, communities and individuals. Such models could encompass the private trainers generally to ensure they were responsive to local needs.

In large part the educational support structure is already in place, although there is always room to reflect and improve. The major support needed for the government TAFE sector is secure and adequate funding support to enable this valuable but time intensive education to be done. Without this security there is a risk that the number of students able to undertake a course will be reduced, that class numbers may increase and the range of courses reduced. The TAFE sector cannot maintain high quality services and innovative curricula in an environment where the government budget has been cut by 25 to 30 per cent in two tranches, late 2011 and 2012. One of the major strengths of the TAFE sector is the practical components of education which often necessitates lower student numbers and face to face contact and demonstrations, many of which are resource intensive and may be placed at risk in an environment of financial reduction. There will be a loss of many student support services, such as language and literacy classes, councillors, libraries and learning support - all important components of the government TAFE system. There is a high risk that there will be a loss of intellectual capital and teaching expertise with the loss of experienced staff. It is important that staff are strongly supported to build skills and teaching expertise and offered career pathways to maintain good teaching conditions.

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Temporary and short term contractual staff offer lower staff and student satisfaction and lower quality outcomes.

Security in core funding over time would offer a consolidated base from which to ensure efficient and effective education and training is offered. On-going maintenance of capital assets of Chisholm requires financial certainty and security. The use of technology to teach may be of benefit to some students but this option needs to be closely examined as many government TAFE students and businesses value the practical side of the courses and the highly supportive environment which is offered to many students. In some situations an outreach program where teaching staff spend time at smaller centres, schools or selected work sites and mobile classrooms may be effective teaching options. A Chisholm campus centre at Hastings would be a valuable addition for all stakeholders as there are high levels of unemployed youth in the area with few transport options to attend the Frankston TAFE campus. It would appear that the value of the TAFE sector should be measured to better understand the benefit/costs of outcomes from this form of education. The outcomes for individuals, business/ industry, communities and the regional economy would provide insights to the value of what may be short term costs and financial support for students when compared with the future economic and social costs.

The critical public provider component of the TAFE sector is to offer career pathways to those who are unable to compete in the university sector. There needs to be a right to well-funded public education to those who cannot afford to pay fees for private education options. Again, the main pathway to future strengths is to maintain adequate government financial support to enable the TAFE sector to be responsive to need and build on the existing structures to innovate and expand through offering a more comprehensive service. A reduced resource base will not provide a sustainable environment on which to build longer term capacity of the sector.

There is likely to be strong potential for these services, especially in rural regions of Australia where small, institutions could be established to cater for youth. There is a strong movement of youth moving from rural towns to larger urban areas as their education needs are unable to be met locally. This could particularly be to meet local skills that are needed, such as relating to agriculture, small business, human services and aged care and trades. There is also likely to be opportunities to take education services out to Asia again especially rural areas which are low on education options. Attention would need to be given to target needs. There also may be an opportunity to build on sustainability skill and the development of renewable energy sources. 50

It would seem that there are many opportunities to strengthen, expand and formalise pathways for people from TAFE to higher degrees. However, universities are now suffering from diseconomies of scale so it would be unwise to integrate the two education systems. Both TAFEs and Universities should build on their own strengths and specialisations. The TAFE sector should maintain its competitive edge of practical demonstration of work practices. Chisholm has already facilitated this pathway with existing agreements with Monash University in Frankston where students are able to move from TAFE to a degree course. This offers a strong education system which is able to offer both flexibility and equality of opportunity, both of which benefit individuals, communities and business, as well as the regional economy.

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APPENDIX B
Table B.1: Discontinued courses from Monash University

Monash University 29091, 29093 27251, 27253 30121 30691, 30693 26301 26241, 26244 26251, 26253 30221, 30223 30511 30391, 30393 Peninsula Midwifery Caulfield Gippsland Visual Arts Community Welfare and Counselling (Associate Degree) July 2012 July 2012 September 2012 September 2012

Gippsland Arts and Social Sciences (Associate Degree) Berwick Berwick Berwick

Professional Communication/Professional Writing October and Editing (Chisholm) 2012 Health Promotion Social Welfare October 2012 October 2012 November 2012 November 2012 December 2012

Gippsland Journalism Gippsland Journalism/Science Gippsland Business and Commerce/Visual and Media Arts

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APPENDIX C: SPREADSHEET FOR CALCULATIONS OF IMPACT OF TAFE CUTS ON LOCAL ECONOMY

(See following page)

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