1. Changing Government policy and participation in contestable markets RMIT VET Link- Informed and Ready – 25 th of September 2009

2. RMIT University©2009 Chancellery / Planning Group 2 Change of Preference TAFE First Preferences for Government Funded Places: Market Share

3. RMIT University©2009 Chancellery / Planning Group 3 Change of Preference TAFE First to Third Preferences for Government Funded Places

4. RMIT University©2009 Chancellery / Planning Group 4 CONTESTABLE MARKETS FOR GOVERNMENT SUPPORTED PLACES (GSP) Much remains the same. We are used to competition – for government grants, international students, AFP students, research grants… …but now the market allows for greater mobility of demand and supply of GSP. FROM Government ‘bulk’, passionless purchasing Institutions deliver to an agreed GSP ceiling with relative certainty in discipline and location Students apply for available places TO Students (enabled by government) make purchase decisions (program, institution, location) Institutions vary supply based on demand and strategy Governments set broad performance targets (quality, socio- economic)

5. RMIT University©2009 Chancellery / Planning Group 5 Market Design / Managed market reforms for a National Tertiary System Students Governments Intermediarie s Industry Education institutions

6. RMIT University©2009 Chancellery / Planning Group 6 STATE OF THE NATION (and State) Victorian VET market National HE market RMIT load (2009) (m SCH) (EFTSL)

7. RMIT University©2009 Chancellery / Planning Group 7 GOVERNMENTS Federal / Higher education Focus on quality, student choice and increased engagement 40% of 25 to 34 y.o with a UG qualification by 2025 24,000 new graduates per annum / 360,000 over 15 years Increased focus on equity with 20% of students low SES State / VET Industry led with student choice Performance driven funding Eligibility rules for a GSP: Under 20 – open Over 20 – only for a higher qualification Very limited exemptions VET FEE-HELP (the student pays – albeit in the longer term) CoAG targets / entitlements: Halve those of working age without a Cert III or higher Double those with a diploma or advanced diploma 90% of young people 20-24 will have a year 12 or equivalent 15-19 yo will be entitled to an education or training place for any government subsidised qualification; 20-24 yo will be entitled to an education or training place for any government subsidised qualification resulting in a higher level qualification Commonalities Student choice, industry engagement, labour market / socioeconomic objectives, governance, funding mechanisms, quality / performance

8. RMIT University©2009 Chancellery / Planning Group 8 EDUCATION INSTITUTIONS – VU Case study Undergraduate Australian FT Workers 2 nd Generation Australians International students Aspirations Work circumstances Socio-economic status Migrant status / language Understand need Target services Develop pathways Understand need Target services Develop pathways Professor Elizabeth Harmon, Vice-Chancellor, Victoria Univedrsity. Higher Education Summit. Malbourne, April 2009

9. RMIT University©2009 Chancellery / Planning Group 9 STUDENTS Factors of importance for deciding where to apply Student group Cluster of most important factors (in descending order) Young (under 21 years) Offered the right subject, overall image, social life, teaching reputation, employment prospects, entry qualifications Older mature (25 yrs+) Offered the right subject, attitude to mature students, teaching reputation, academic support facilities, distance from home Vocationally qualified/access Offered the right subject, teaching reputation, academic support facilities, employment prospects Connor et al (1999), Making the right choice: How students choose universities and colleges. Institute for Employment Studies / Universities UK.

10. RMIT University©2009 Chancellery / Planning Group 10 STUDENTS 14 factors influencing choice Curriculum and course availability Location / distance from home Relevance of course to chosen career path Reputation of the institution Job placement and careers counselling Costs associated with attendance Admissions criteria Prestige and status of the institution Educational facilities Campus size and type Extra curricular opportunities (clubs, sports, etc) Campus facilities Student welfare programs Teaching and research staff, qualifications and experience Brennan, L. (2001). How prospective students choose universities: a buyer behaviour perspective, PhD thesis, Centre for the Study of Higher Education, The University of Melbourne.

11. RMIT University©2009 Chancellery / Planning Group 11 THE OTHER MARKET PARTICIPANTS Industry Key agent in purchase decisions Suasion with governments and regulators Collaboration with providers Support for education industry reform (qualified) Intermediaries GUG VTAC Rankings Unions / professional associations Peak bodies (eg ATN, TDA, UA)

12. RMIT University©2009 Chancellery / Planning Group 12 CHALLENGES In the shift to the demand side we will need a very good understanding of the market, motivations of the individual and activity of competitors. Understanding our position/s in the market and responding: Nimble cherry picker ‘Base load’ provider Discipline specialisations A combination How will we manage the tension between contestable markets, institutional objectives and government expectations (equity, engagement, age based targets)? In the convergence of government policy (State / Federal, VET / HE) how do we optimise our dual sector status? Systems and processes that can manage greater load and capacity changes than has been the case historically.

13. RMIT University©2009 Chancellery / Planning Group 13 EDUCATION INSTITUTIONS “…you can’t afford to do this in the typical research intensive universities or universities that have a significant research function” Professor Alan Robson, Go8 Chair and Vice-Chancellor of the University of Western Australia “…if you give these sorts of entitlements to students and let them go where they want to go, that will determine the structure of the sector” Professor Ross Milbourne, ATN Chair and Vice-Chancellor of UTS Higher Education supplement – AFR, Monday 4 th of May, 2009

14. RMIT University©2009 Chancellery / Planning Group 14 Questions to think about and action! How do we contribute to the Governments targets? –Possibly in improving on our 20% Tafe articulation to Higher Ed would help in the 40% degree, 20% Equity and increasing the number of completions.

15. RMIT University©2009 Chancellery / Planning Group 15 Questions to think about and action! How do we contribute to the Governments targets? –Possibly in improving on our 20% Tafe articulation to Higher Ed would help in the 40% degree, 20% Equity and increasing the number of completions. How can we engage better with industry in increasing our brand and accordingly our commitment to WIL?

16. RMIT University©2009 Chancellery / Planning Group 16 Questions to think about and action! How do we contribute to the Governments targets? –Possibly in improving on our 20% Tafe articulation to Higher Ed would help in the 40% degree, 20% Equity and increasing the number of completions. How can we engage better with industry in increasing our brand and accordingly our commitment to WIL? How do we continue the work on ensuring we improve Quality, Viability and Relevance? Hence maintaining our market position and demand and revenue.

17. RMIT University©2009 Chancellery / Planning Group 17 Questions to think about and action! How do we contribute to the Governments targets? –Possibly in improving on our 20% Tafe articulation to Higher Ed would help in the 40% degree, 20% Equity and increasing the number of completions. How can we engage better with industry in increasing our brand and accordingly our commitment to WIL? How do we continue the work on ensuring we improve Quality, Viability and Relevance? Hence maintaining our market position and demand and revenue. How do we position ourselves when a large number of students (in particular programs) have become ineligible (Higher Level Qual)?

18. RMIT University©2009 Chancellery / Planning Group 18 Questions to think about and action! How do we contribute to the Governments targets? –Possibly in improving on our 20% Tafe articulation to Higher Ed would help in the 40% degree, 20% Equity and increasing the number of completions. How can we engage better with industry in increasing our brand and accordingly our commitment to WIL? How do we continue the work on ensuring we improve Quality, Viability and Relevance? Hence maintaining our market position and demand and revenue. How do we position ourselves when a large number of students (in particular programs) have become ineligible (Higher Level Qual)? In preparation for the increase in contestable load (approx. 25%), what is it that you can do to “contestable-proof” your program?

19. RMIT University©2009 Chancellery / Planning Group 19 Questions to think about and action! How do we contribute to the Governments targets? –Possibly in improving on our 20% Tafe articulation to Higher Ed would help in the 40% degree, 20% Equity and increasing the number of completions. How can we engage better with industry in increasing our brand and accordingly our commitment to WIL? How do we continue the work on ensuring we improve Quality, Viability and Relevance? Hence maintaining our market position and demand and revenue. How do we position ourselves when a large number of students (in particular programs) have become ineligible (Higher Level Qual)? In preparation for the increase in contestable load (approx. 25%), what is it that you can do to “contestable-proof” your program? How quickly/effectively do we respond to government initiatives (Extra hours on offer)?

20. RMIT University©2009 Chancellery / Planning Group 20 Questions to think about and action! How do we contribute to the Governments targets? –Possibly in improving on our 20% Tafe articulation to Higher Ed would help in the 40% degree, 20% Equity and increasing the number of completions. How can we engage better with industry in increasing our brand and accordingly our commitment to WIL? How do we continue the work on ensuring we improve Quality, Viability and Relevance? Hence maintaining our market position and demand and revenue. How do we position ourselves when a large number of students (in particular programs) have become ineligible (Higher Level Qual)? In preparation for the increase in contestable load (approx. 25%), what is it that you can do to “contestable-proof” your program? How quickly/effectively do we respond to government initiatives (Extra hours on offer)? Where do you see your program/school in 5 years time?