Australia’s Tertiary Education system requires comprehensive policy overhaul: Ai Group report

Ai Group today released a wide-ranging report into Australia’s tertiary education system which identifies the formidable challenges that need to be addressed to deliver better outcomes for our community and economy.

The report – Realising Potential: Solving Australia’s tertiary education challenge – identifies those challenges and makes recommendations that would add greater coherence to the policy framework which controls all post-secondary education in Australia.

Ai Group Chief Executive, Innes Willox, said: “We need to rise to the occasion for a comprehensive reconsideration of the state of tertiary education in Australia.

“This report sets the challenge to create an effective education and training system that is both more coherent and more connected.

“Importantly, the report makes a number of recommendations for policy makers including a call for the development of a longer-term vision and policy framework.

“This statement highlights that we have now entered an era of mass tertiary education and the achievement of higher level qualifications that were only dreamt of in the past.

“However, despite this impressive growth the sectors are beset with a range of challenges. Chief among these is seriously unbalanced participation between the Vocational Education and Training (VET) sector which includes TAFE colleges and the Higher Education sector dominated by universities. The recent dramatic falls in VET participation have also been accompanied by declining funding levels which seriously jeopardise the sector.

“For example, over the ten-year period from 2005-06 to 2015-16, higher education expenditure grew rapidly by 52.6%. But the reverse was the case in the VET sector, which importantly trains so many of our skilled trades, which saw expenditure fall by 4.7% over that period and is now lower than at the beginning of the period.

“There is a lack of overall policy direction and governance of the system. Consideration needs to be given to the formation of a central and independent coordinating agency to provide common approaches across the sectors and levels of government. While more effective methods of governance require more than addressing funding levels, a more equitable funding strategy needs to be developed.

“The VET sector is in need of immediate attention in this area. In this context, demand-driven funding models need to be retained but improved to be more equitable than existing practice. The current situation concerning student loans is discriminatory and unacceptable. A way needs to be found to introduce a loans scheme with common characteristics across the sectors, initially for diploma level courses and above.

“If the Australian economy is to continue to prosper and remain internationally competitive, it is vital to have access to a highly skilled and qualified workforce. With the rapid advance of technology and digitalisation, a higher level of skills for the workforce is more important than ever,” Mr Willox said.

Full Report at this link


  • Tertiary education is characterised by a highly unbalanced binary model with no coherent policy and funding framework.
  • There is a need to establish a long-term policy view for tertiary education rather than short-term attempts to address components of the overall system.
  • While recognising the distinctive features of higher education and VET, there is a need for a more coherent and connected tertiary education system to be established.
  • An independent coordinating body should be established and charged with the responsibility of delivering government policy in a more coherent manner.
  • A key function of an independent coordinating body would be to establish equitable funding arrangements across the sectors and between levels of government.
  • Given the increasing diversity of learner needs it is desirable to have a greater variety of provider types within the tertiary education system.
  • Given the low volume of student transfer between higher education and VET there is a need for a model that includes more systematic methods to facilitate movement between the sectors.
  • A universal tertiary education student loan scheme should be established, initially for diploma and above courses, to create a more equitable and cost-effective system.
  • Maintain both the Tertiary Education Quality and Standards Agency (TEQSA) and the Australian Skills Quality Authority (ASQA) as respective regulators for their systems while establishing joint functionality in appropriate and agreed areas.
  • Promote workplace learning as a recognised key delivery component in all tertiary education.
  • The qualifications structure in Australia needs to be reviewed to consider the emergence of micro-credentials and any other developments impacting on the key outcomes of tertiary education.

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