TAFE investment equals $92b annual economic dividend

A new report demonstrating TAFE’s role in Australia’s decades-long economic success story has warned that failing to invest in the sector will destroy one of the primary engines of economic growth, prosperity and equity in the Australian economy.

The report by the Centre for Future Work at the Australia Institute, An Investment in Productivity and Inclusion: The Economic and Social Benefits of the TAFE System, has revealed that despite years of significant funding pressure and policy failure, the TAFE system plays a huge and fundamentally important role in the Australian economy, contributing an estimated $92.5 billion each year.

According to the report, TAFE:

  • creates $84.9 billion in annual productivity benefits, including $25 billion in taxation revenue which alone is more than four times its annual funding
  • has a $6.1 billion economic footprint, including purchases of goods and services, supply chain inputs and employment supporting 48,000 jobs
  • is responsible for $1.5 billion in reduced social expenses annually, lowering unemployment and supporting a healthier workforce and society
  • has created an increase in employment of around 486,000 positions.

AEU Federal President Correna Haythorpe welcomed the report, saying it validated the critical role that TAFE plays in the Australian economy, as well as TAFE’s social purpose in providing high-quality vocational education for all students and in particular, those at-risk and from disadvantaged backgrounds.

“TAFE has made a huge contribution to Australia’s economic prosperity, despite years of what can only be described as policy vandalism of the vocational education sector,” Ms Haythorpe said.

“For too long, governments have focused on marketisation, contestability of funding, student loans, reductions in public VET funding, and the direction of public funding towards privatised VET providers.”

“These are policies which have been detrimental to a vibrant TAFE system, and have had a devastating impact on staffing and students with courses and campuses closing across the nation,” Ms Haythorpe said.

“Right now, what Australian workers need in a post-COVID economy is high-quality vocational education from the trusted public provider, TAFE.”

“For students in rural, regional and remote locations, or from disadvantaged backgrounds, TAFE provides benefits that are critically important in addressing systemic inequality in Australia’s economy and society,” Ms Haythorpe said.

”TAFE has a strong social contract with our communities, and as such, must be supported by governments.”

‘It is TAFE teachers who deliver these annual economic and social benefits despite years of skyrocketing workloads and severe cuts to the TAFE workforce,” Ms Haythorpe said.

“For governments to jeopardise this by failing to recognise and invest in TAFE’s proven economic and societal benefits would be a mistake of historic proportions.”

“TAFE is the only institution with the infrastructure, the workforce and the trusted reputation to be able to provide the high-quality vocational education qualifications that we need today to recover from the COVID crisis,” Ms Haythorpe said.

“The report shows that Australia is no longer replacing previous generations of highly-qualified TAFE graduates at the same rate, due to funding cuts over the last seven years, placing the flow of economic benefits generated by well-trained, better-paid TAFE graduates in jeopardy.”

“The AEU welcomes the report’s recommendations including that there is an urgent need for a comprehensive public-led reconstruction program that invests in the skills and vocational education of workers and young people. TAFE is ready to meet this need but needs the backing of all governments to do so.” Ms Haythorpe said.

“This is an historic opportunity to strengthen the essential role that TAFE institutes already play in labour market planning and coordination.”

“This report shows that Australia’s historic investment in TAFE generates huge economic benefits every year. Australia’s post-COVID-19 response must start with revitalising TAFE as the trusted anchor institution of vocational education, and it must be funded accordingly with a minimum 70% of total government VET funding,” Ms Haythorpe said.

“The Morrison Government must support TAFE in the upcoming October Federal Budget so that it can do what it does best - provide a high quality vocational education for all.”

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