It is now clear that a review of the vocational education sector in Victoria is needed urgently.

In late October, the story broke that Holmesglen TAFE made a $6.5 million loan -- that is, public money -- to a private training provider. Holmesglen signed a deal to lend $6.5 million to cash-strapped provider Carrick, with an option to convert that to a 40 per cent stake in the company.

An Auditor-General's Office investigation has found the financial arrangement was outside Holmesglen's legal authority. More than that, it also found that neither Skills Victoria nor the Victorian Skills Commission (VSC), the peak advisory body to the minister, have the leadership skills required to effectively govern TAFE in the new competitive VET environment.

As a case study of TAFE governance arrangements, the report paints a grim picture of Victoria's management of the VET sector over the past decade.

The report noted that consistency [in VET] is established through compulsory compliance with national standards called the Australian Quality Training Framework (AQTF), monitored by ASQA. But TAFE teachers have known for years that the AQTF standards do nothing to ensure that students receive quality teaching and learning.

A recent survey found that 77% of TAFE teachers believe that the quality of education has fallen since the introduction of the Skills Reform Policy, which forced TAFE to compete against private training companies on the open market.

Now the Government has announced that TAFE funding will be cut to pay for the funding blow-outs that the AEU predicted would occur when the flawed Skills Reform Policy was forced on the sector. In other words, the Government has used taxpayers' money to subsidise private companies to make millions of dollars in profit by offering often dodgy training in areas with little employment prospects.

TAFE, on the other hand, is still trying to meet its obligation of providing accredited training by fully qualified teachers that meets significant skills shortages -- on an ever-shrinking budget.

It is now obvious that those responsible for supervising and managing this crucial public service clearly do not have what it takes. Skills Minister Peter Hall must acknowledge that the VET system in Victoria has failed to ensure a vibrant and successful public TAFE.

Minister Hall must honour his pre-election promise of a full review of the VET sector and stop applying bandaids to the failed market-based experiment in education and training.

— Posted by Greg Barclay, AEU deputy vice president, TAFE