Stronger national regulation of for-profit vocational training providers is required after the decision by the Victorian Government to withhold $19.6 million in payments from BAWM (a subsidiary of ASX-listed company Vocation) for failing to provide a proper standard of training.

Australian Education Union Federal TAFE Secretary Pat Forward said opening up vocational training in Victoria to private providers had allowed for-profit providers to take advantage of lax regulation to make huge profits from government subsidies.

“The current regulation system is confused and piecemeal, and is allowing for-profit companies to milk the system and pocket millions of taxpayers’ dollars with little regulation,” Ms Forward said.

“Regulations need to be changed so that only organisations whose primary purpose is to provide vocational education are eligible for funding subsidies, to ensure that the VET system is not undermined by providers whose main purpose is making profits.

“The Federal Government must also clean up loopholes in the system which allow Registered Training Organisations to subcontract or channel delivery to secondary providers, many of whom are not even registered with the appropriate bodies.

“The decision by the Victorian Government to withhold $19.6 million from BAWM for failing to provide the proper standard of training, should be a warning about the dangers of uncontrolled deregulation of vocational training.

“We have seen thousands of students ripped off by a company that has failed to provide the training the Government has paid them to provide.

“Concerns were raised about the conduct of BAWM by the Victorian Registrations and Qualifications Agency as early as July, 2013, yet they were allowed to continue providing training and receiving subsidies.

“An auditor’s initial report in July 2013 found that BAWM did not meet the requirements to become a training organisation for the courses they had applied for, yet this opinion was ignored.

“Our concern is that this is just one example of a broader pattern which sees for-profit providers take advantage of lax regulation and cherry-pick students and courses, as well as reducing the length and quality of courses to maximise profits.

“Deregulation has been a bonanza for private providers, at the expense of taxpayers and students.

“We need tougher controls and better monitoring of training providers by the Australian Skills Quality Authority, otherwise cases like BAWM will keep happening.

“Companies like Vocation are operating nationally and taking advantage of State Governments following Victoria’s example and opening up vocational training to competition. They are receiving huge subsidies from taxpayers to provide training and they need to be held to account.

“The Victorian Government’s decision to slash funding to TAFEs and open up government subsidies for vocational training to for-profit providers has led to a decline in quality of training.

“BAWM was penalised for its poorly supervised use of third parties to provide training, which is a major issue in the sector.

“The tragedy of a case like this is that it undermines trust in the whole vocational training system. Students need to be able to trust their course providers, and know that they are getting proper training that will equip them for the workforce.

“We need stronger national regulation to make sure that poor quality for-profit providers do not undermine the quality and integrity of our training system.”

Media Contact: Ben Ruse 0437 971 291