Extract from an article by Josh Gordon and Benjamin Preiss
Victoria’s higher-education sector has slumped deeply into the red, with the financial watchdog revealing half of the state’s TAFEs are running at a loss after savage government funding cuts.
A leaked assessment by the Victorian Auditor-General’s Office has found seven out of 14 public TAFEs are in deficit, including two in doubt ”as a going concern”.
The finding comes at an awkward time for the Napthine government, which is desperate to avoid an electoral backlash in rural and regional Victoria less than eight months from the state election.
The briefing document – obtained by The Age – shows state government operating contributions for the sector plunged by $119 million, or 159 per cent, in 2013. Capital funding for buildings and equipment fell by $14 million, or 36 per cent.
The hit was only partly offset by higher student charges, with fee revenue up by $32 million or 9 per cent.
But the report showed the financial health of the sector had deteriorated dramatically. It said underlying profits dropped by 121 per cent, with the sector reporting an overall loss of $12 million.
Recently retired Holmesglen TAFE chief executive Bruce Mackenzie said the training system was ”badly underfunded”.
He said the Victorian government was the ”meanest in Australia” in terms of funding the state’s public TAFEs, and predicted extensive mergers, particularly in regional Victoria.
”It’s just a recipe for a bad economic outcome for Victoria,” Mr Mackenzie said.
The leaked report follows a 2012 decision by the state government to slash TAFE funding by $300 million to help maintain a budget surplus.
After taking over as Premier last year, Denis Napthine announced $200 million over four years for ”innovation and structural reform”. But some critics have said this money will be spent on TAFE mergers.
Concerns about the potential impact of the cuts were echoed in annual reports released last week. Holmesglen chief executive Mary Faraone revealed the institute had posted a deficit for only the second time in 30 years, blaming lower training subsidy rates and the loss of annual funding as a public provider.
Kangan’s annual report shows the institute was able to produce a profit only after slashing average teaching costs by 21.9 per cent in 2013 after a 22 per cent cut in average government funding over the year…(continues)
SOURCE: Josh Gordon and Benjamin Preiss, “TAFE funding in crisis”, The Age, )8 April 2014
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