Last Saturday, on the 29th of November, Victorians voted to elect the Australian Labor Party (ALP) to government. A change in government will inevitably bring about a change in policy and a change in funding – a large part of which has always involved the education industry and more narrowly, the VET industry. From a business perspective it is important to examine how these macro-changes are likely to affect your training organisation. Will your organisation get access to more funding options? Will your organisation have less access to funding options? In determining changes that are likely to happen, it helps to take a historical approach.
At a federal level, Labor has traditionally had a stronger focus (and proportioned more funding) on education. In the recent 2013 Federal elections, Labor promised $10 billion towards schools across Australia over six years as part of their ‘Better Schools Plan’. It is important to note, however, that $2 billion of this would come from cuts to university funding. The Liberal National party, by comparison, pledged commitment to the first four years of this plan but not after that (a time period where only $3 billion of the total $10 billion would be spent).
In Victoria specifically, Daniel Andrews’ party has pledged $630 million to fix school buildings and $320 million for TAFEs and technical schools. While this number pales in comparison to Liberal Party’s broad promise of $5.4 billion for schools, it is important to note that Labor has addressed the TAFE and Technical sectors specifically. So what does this mean?
Firstly, it’s important to understand that funding or cuts to education don’t always apply to all sectors of education. Schools, universities, TAFEs, technical colleges and the wider VET industry are all different beasts, and benefits to one often come from cuts to another. Look specifically at where your organisation is placed and where macro threats and opportunities are emerging. Secondly, remember that large increases in funding to industries always have significant flow-on effects to organisations upstream and downstream. Are you a secondary market, or supplier to an industry about to receive funding or cuts? If so, is it possible to shift markets with the tides? Thirdly, it pays to keep in mind that not all changes that come with government change involve budgeting. Are policy changes and new compliance requirements proposed or predicted to emerge that will require your business to adapt operations? A good example of this (while not tied to any particular government) is the federal level USI requirements, which take full effect in 2015. This applies to all registered training organisations (RTOs) and has required much planning on the administrative side of training businesses. Organisations that prepared in advance for the USI requirements have now freed up significant time to focus on their core business activities as the requirement date approaches, many having now built effective student management practices into their operations.
Understanding the impact these wider changes can have on your business, both immediately and over the long term, allows you to navigate the competitive waters with more confidence and plan for additional funding sources, market changes and business practice changes.