Perceptions are not reality

One in five Australians (21%) believe one of the main reasons Australians are increasingly choosing to undertake university courses over VET/TAFE courses is because of the perception that VET graduates earn lower wages than university graduates.

Of these Australians, 68% indicated that they believe the average VET graduate earns at least $10,000 less than the average university graduate. Close to one in three (31%) believe that the wage gap is more than $20,000.

FACT: VET graduates earn wages comparable to, if not exceeding, that of university graduates

The median full-time income for a VET graduate is $56,000. The median graduate salary for students completing a Bachelor’s degree is $54,000.

VET graduates also have the capacity to earn higher salaries than many Bachelor degree graduates: the highest average starting salary for a VET qualification (Certificate IV in Hazardous Areas – Electrical at $85,400) is higher than the highest starting salary with a Bachelor-level degree (Dentistry at $80,000).

For more information, or to view the full report, click here.

In Australia today, it is a commonly held view that university is the only road to a full-time career. Nearly three in ten respondents (28%) felt that the main reason Australians chose university over VET is because university graduates find work more easily.

FACT: VET graduates have a higher employment rate than undergraduates. More than 78% of VET graduates are employed after training.

Despite university enrolments continuing to rise, the proportion of university graduates in full-time employment post-graduation continues to fall. Between 2008-2014, the proportion of bachelor degree graduates in full-time employment post-graduation fell from 86% to 68% (the lowest number in three decades) and still remains low at 69%.

Comparatively, 78% of VET graduates are employed after training and 82% of graduates who participated in VET as part of an apprenticeship or traineeship are employed after training. The graduate employment rate of VET students who train as part of a trade apprenticeship is as high as 92%.

For more information, or to view the full report, click here.

Three in five Australians (59%) agreed with the statement that in a globally competitive world we need university education more than VET. Nearly half suggested that VET is no longer as relevant as university (47%).

FACT: VET courses have adapted more readily to changing workforce needs

According to the Commonwealth Government Department of Employment, the VET sector currently provides training courses for 9 out of 10 occupations predicted to have the greatest growth of new jobs over the next five years. This shows that VET is more relevant than ever when it comes to preparing Australia to be more globally competitive.

For more information, or to view the full report, click here.

Unemployment was estimated to cost the Australian Government nearly $11 billion in benefit payments alone between 2015 and 2016.

At the same time, an unusually high underutilisation rate (unemployment and underemployment) suggests there is an oversupply of labour which is being left unused. The result of this is a unique economic challenge whereby high labour demand is not being solved by high labour supply.

The key to resolving these issues lies in skilling our labour force through bolstering vocational education and training.

Figures show that those with only a high school level of education represent the largest proportion of long-term unemployed people, and figures also strongly point to the fact that employability increases as education increases. VET is the most accessible and cost effective way to engage and benefit those with no post-school education.

Completion of a VET qualification has been shown to lower the likelihood of an individual becoming long-term unemployed.

In 2016, the average single person with no children receiving the maximum Newstart Allowance received $13,926 per annum. According to the latest industry reports, VET graduates working full-time after training earn a median income of $56,000 per year, meaning that, in their first year after study, the average VET student pays roughly $9,747 in income tax.

The result of this is that an unemployed individual who participates in VET training can transition from costing the Australian Government at least $13,746 a year to benefiting the government $9,747 a year in tax revenue. This represents a net gain to the Commonwealth Budget of roughly $23,493 per person in the first year of employment alone.

This information has been summarised from the full report, which you can view here.

According to survey by the Commonwealth Government Department of Employment, between 2015 and 2016, more than a third (36%) of occupations reported a shortage of labour. The biggest shortages were in the supply of technicians (specifically automotive and food) and trade workers.

During the 2015-2016 period, fewer than two-thirds of technician and trade vacancies were successfully filled (63%), leaving almost two in every five job requests unfilled (37%). These shortages, and many others, would traditionally be filled by VET training programs, but they remain unfilled. Young people are seemingly discouraged from entering these programs and filled these vacancies due to the many misconceptions surrounding VET and its effectiveness.

According to employers, these vacancies remain largely unfilled due to the lack of applicant experience. Other reasons include applicants being unqualified, lacking specialist skills and not holding the required licences.

The changes to the Temporary Work (Skilled) visa 457 program announced in April 2017, involving the removal of more than 200 eligible skilled occupations, will place even greater reliance on Australia’s VET sector to fill the labour and skills gap. Sectors which have heavily relied on skilled migration in workforce planning, such as technology and technical fields and hospitality will face a greater skills challenge.

Encouraging young Australians to pursue VET qualifications where they are made ‘skills ready’ means they are much less likely to face long-term unemployment in the years ahead.

This information has been summarised from the full report, which you can view here.

Currently, it may take between 3-10 years before first-year University students pay income tax or begin to contribute towards the repayment of their debts. This negatively affects the economy by impeding the government’s ability to collect tax revenue.

VET courses, however, vary in length and are much more dynamic.

Certificates I-IV range in duration from 6 months to 2 years. Diploma courses typically require 1 or 2 years, Advanced Diplomas usually take between 18 months to 2 years, a Graduate Certificate typically takes 6 months to 1 year and a Graduate Diploma usually takes between 1 and 2 years.

This means VET students can take as little as 6 months to requalify and reskill. Once retrained, they will not only contribute to the overall productivity of the Australian economy (through their individual output) but, also, contribute their share of taxes.

In 2014, there were 507,629 students receiving HECS-HELP. The government paid $3.91 billion to higher education providers on behalf of students with HECS-HELP loans. In 2014, VET FEE-HELP was estimated to cost the government $1.76 billion on behalf of 131,344 students.

This information has been summarised from the full report, which you can view here.

Between 2005 and 2013, Bachelor students recorded a completion rate of 73.6%. This rate dropped to 58.5% for students over the age of 25, and less than half (49.2%) for part-time students. The Parliamentary Budget Office finds that 21.8% of new loans each year are unlikely to ever be repaid.

Noticeably, for students from lower socio-economic backgrounds, the recorded completion rate (68.9%) was lower than the average. This suggests that not only are these students from disadvantaged backgrounds struggling to enter university, but nearly a third (31%) are leaving in a worse financial state than when they started – with increased debt and no qualification.

To learn more, click here.