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Skills, Training and Workforce Growth – TAFE Funding

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Thursday, 8 June 2023

Tags: TasTAFE, State Budget

Dr WOODRUFF - Thank you. Minister, in last year's budget for TasTAFE, it had the grants revenue for 2025 26 budgeted at $109 million. In this year's Budget, the number has decreased to $107 million. Where did that cut come from? Is it reflected in the policy and parameter statement?

Mr ELLIS - Can you just repeat the question, Dr Woodruff?

Dr WOODRUFF - The TasTAFE grants revenue for 2025 26 in last year's budget was reported that it would be $109 million but in this year's Budget that number has decreased to $107 million, a $2 million cut. What's going on?

Mr ELLIS - Sure. We're making some major investments into TasTAFE currently. This will reflect where election commitments have concluded, like the transition fund for example. We are working on rolling out a really significant program of works for TasTAFE. We're looking at opening the new Water and Trade Centre of Excellence this year. We're also looking at opening -

Dr WOODRUFF - Point of order, Chair. A direct answer to that question would help, please.

Mr ELLIS - As I mentioned, this reflects where election commitments have included, like the transition fund, for example. I might pass over to the team to provide more information.

Dr WOODRUFF - It's not an investment, it's a cut.

Ms PATERSON - In relation to the funding to TasTAFE, the grants line in the Budget in my understanding, and I will confirm this with TasTAFE, that's not just State Government grants. There are other sources of grant funding in there also. In relation to the Government's investments, there are a number of election commitments that come in to an end in the forthcoming years. That does speak to a decline in some of those TasTAFE line items in the Budget.

Dr WOODRUFF - Those election commitments would have been reflected in last year's budget for 2025-26. Why has there been a two-year cut this year?

Mr ELLIS - In the Budget footnote one, the variation in grants reflects the profile of funding for the Freer Farm Centre of Excellence and TasTAFE priority infrastructure upgrades initiatives and the completion of the initiatives funded in prior years' budgets. Similar around the 100 teachers commitment that we've made as well.

Dr WOODRUFF - Just to be clear, none of that actually stacks up. They were commitments that were made at the 2021 election. We're talking about the budget that was delivered last year and the projections for 2025-26. This year, the Government's decided to claw $2 million out of TasTAFE's future funding, presumably to make savings elsewhere across the Budget.

Mr ELLIS - As I said before, the variation in grants reflects the profile of funding. I will pass over to the team if they have anything further to add.

Ms PATERSON - In terms of the recurrent training funding that's allocated toward TasTAFE in the 2022-23 Budget, there is an allocation in terms of deed funding of $85.3 million and in 2021-22 it was $82.5 million. That has gone up again in 2023-24. In terms of the actual deed allocation amount, as in accordance of the Government's 80 per cent commitment of the current training funding they're going to take -

Dr WOODRUFF - Thanks. I was talking about the 2025-26 Forward Estimate projection.

Ms PATERSON - There is a note in the Budget papers in relation to the funding for the Freer Farm Centre of Excellence, which I think the minister referred to, and the TAFE priority infrastructure upgrades, which were effectively on top of the 80 per cent deed funding, so they come to an end.

Dr WOODRUFF - Thank you. Minister, TasTAFE's net operating result is projected to be negative $17.8 million in 2025-26. That is $10 million greater than last year's budget projected it would be for that same year. That is a negative result that increases each year throughout the Forward Estimates. It looks like the Government's funding levels aren't high enough. Are you expecting TAFE to make cuts in order to balance their books?

Mr ELLIS - No. We are not expecting that. We want to continue to invest in TasTAFE to provide important services. We've had a huge spike in learners in Tasmania, it should be said. We had a commitment to deliver a 40 per cent increase in apprenticeships in Tasmania by 2025. We delivered that commitment four years early in 2021. COVID-19 had an extraordinary boost and the strength of our economy has meant a massive uptick in training.

The former federal government, had a range of subsidies available for learners. The Albanese government has decided to remove those, that'll mean returning to a more normal level of apprenticeships and training in Tasmania, but we still want to make sure support continues to be available. I'll pass over to team if there's anything further to add to my remarks.

Ms PATERSON - Just coming back to the minister's comment earlier about the new national skills agreement that is currently being negotiated, in the outer years for the forward Estimates we expect an uplift to occur through those negotiations. In terms of that sustainable funding profile for the skills portfolio, that's not currently reflected.

Dr WOODRUFF - By how much?

Ms PATERSON - It's subject to negotiation.

Dr WOODRUFF - What are you hoping for? At the moment, we're looking at a nearly $18 million operating deficit in two years’ time. That is kind of devastating, that in line with what you're saying about people wanting to more of these skills, the Government is continuing to uninvest in TasTAFE.

Mr ELLIS - As we mentioned, Dr Woodruff, funding for skills in Australia is a partnership between state and federal governments. In my opening remarks I mentioned the 12-month skills negotiation that we've delivered, that helped provide 3800 fee-free places for TAFE and vocational education and training.

As part of current ongoing negotiations with the Commonwealth and states through our skills ministers’ council, we're currently negotiating a five-year agreement, which will take in the forward Estimates years that you're referring to. We'll be working really closely with the federal government on that. We've already begun negotiations, working through matters at an official level as well as a ministerial level. We obviously want to drive the best deal for Tasmania. That's going to be really critical, because we know we have so many of the opportunities that the federal government are really looking to drive in our national economy.

The federal skills minister, Mr O'Connor, who I work closely with, has spoken nationally about the need for clean energy skills, sovereign capability, and the care industry as priority areas to make sure we're delivering in partnership together. Tasmania is ideally placed; this is what we do best. Advanced manufacturing to address sovereign capabilities, our -

Dr WOODRUFF - Minister, on the money, I can't imagine the Commonwealth Government is going to come to the table unless Tasmania is prepared to step up. At the moment we're seriously underinvesting. If you want to get more money out of the feds, you have to make a commitment to put money in from Tasmania - it's not just going to come one way. Are you committing to make up that $18 million shortfall, at the moment, as you go to the table with the feds?

Mr ELLIS - As I say, we're going to drive the best deal for Tasmania as part of those negotiations. We make absolutely no bones about it -

Dr WOODRUFF - You'll have to stump up some more money, because you're cutting it to the bone.

CHAIR - Order.

Mr ELLIS - Dr Woodruff, you've asked a question. One of the things that was noted in our 12-month skills agreement is how much investment Tasmania is making into the skills sector. That compared very favourably to our counterpart jurisdictions around the country. The federal government really recognised that when we were talking about those investments and those negotiations.

We're really proud of the increased training that we're doing here in Tasmania. Meeting our commitments, meeting our targets four years early, but also continuing to invest and negotiate with the feds. We’ve got $118 million in new commitments for TasTAFE since 2021. That's a massive investment, because we recognise - and I think our nation is recognising - that you don't need to go to university to have great opportunities in life. As we continue to grow that investment -

Dr WOODRUFF - Thank you minister, I think I have enough information.