Train Funds Governance in Vocational Education and Training System in Australia Essay

Train Funds Governance in Vocational Education and Training System in


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The purpose of this review is to study the governance of train funds in the Vocational Education and Training (VET) system in Australia.  The evaluated information is gathered from peer reviewed scholarly journals and books that discuss the Australia’s Vet system.  The VET system is efficiently established with the aim of providing technical ability or skills that can match the current market and economic conditions.  This review critically analyses the funding programs and the appropriation of funds to courses that will give the students the knowledge required to meet the industrial expectations.  The review is based on the argument that the funding of the VET system is more focused on industrial level than educational level and this will compromise with the general educational requirements of the students at the future.   However, it is a dilemma situation in which a rapid globalization effect requires a highly competitive labour force that can place Australia in a top position economically.  The VET system is therefore based on competency training as opposed to the general education which the educational sector recommends.  Should governance of funding be executed from the educational or industrial sector? Which of the two has the maximum benefits for both the learner and the nation?  Further studies should be prospective in nature in order to establish how the governance of the VET’s train funds will benefit the people and the nation in future.



Literature Review


The vocational education and training (VET) system in Australia is a program in which the participants learn with the aim of getting jobs (Rauner & Maclean, 2008). The Australian VET system was initially run by states and territories exclusively but currently most of its features are determined at the national level (Karmel, 2007).  The National training reform has sought to involve national consistency through the states and territories cooperation (Foster, 2001).  The Department of Education, Science and Training in the Australian government is responsible for directing funding arrangements of the VET system program on behalf of the government and this is done through a legislative framework.

This review will focus on the nature of funding for the Australian VET system and the kind of governance for the train funds.  The impact of the competence based training system to the economy and the learners will be highlighted. Lastly, the review will evaluate the challenges in governance and give suggestions that can solve some of the challenges.


In Australia, the business industry widely influences the Australian VET because the enterprise detects what is taught, assessed, and the principles of VET (Billet, 2004).  Vocational education is also used to transform the schooling system (Lasky & Tempone, 2004; OECD, 2008).  Australia’s VET system is well developed and people have confidence with it.  Employers’ engagement in the system is strong and the national qualification system is well understood and established.  Furthermore, the VET system is flexible and incorporates a fair share of local autonomy and innovation in order to adapt the learning to the local job conditions (Karmel, 2007).

On the other hand, the governance of Australia’s VET system also faces some challenges.  For instance, it is known that both the Australia’s government and the Commonwealth share responsibilities in running of the system.  However, the boundary for division of responsibilities is unclear.  The processes of development of the training package and implementation are inefficient.  There is also the problem of the ageing teacher labour force (Santoro & Reid, 2006).

Despite the challenges, the Australian VET system is one that requires appropriate management especially in the funding area so that it can continue benefiting the number of individuals who aim to get jobs after the training (Polesel, 2008).  A national approach to the Australian VET system that is consistent is crucial for the most effective skill delivery that will enable the Australians to support the community well-being and economic growth of the country (Polesel, 2008).

Funding for the Australian VET system

Funding has been one of the key determinants for policy implementation in the national VET system since the traditional times (McFarland, 1994).  Governance of the train funds should shape the policy on fund allocation and should also influence the direction of funding towards the priorities of skills or deliverance of desired outcomes (Star & Hammer, 2008).

Funding for VET is based on calendar years and the Australian government in the year 2006 provided over 1.2 billion dollars to the states and territories and associated bodies such as the National Centre for Vocational Education Research (Karmel, 2007).  The provision of the fund was based on the 2005 to 2008 Commonwealth-State Agreement for Skilling Australia’s Workforce for strategic national initiatives, and recurrent and capital purposes.  Recurrent funds were paid in quarterly basis to the states and territories only after planning requirements were met. Recently in 2007, the Commonwealth has funded the Australian Technical Colleges.

Under the agreement, the funds are provided to the state and territories for the purpose of supporting physical and ICT infrastructure that underpins the national training system (Star & Hammer, 2008).  The government department administers capital funds estimated at $200 million which are directed to states and territories for development and maintenance of infrastructure.  Part of the funding is also directed to skill centres and the Australian Flexible Learning Framework (Karmel, 2007). The states and territories put the fund into use by assisting to pay the costs of the normal operations of their corresponding VET system.

There are also national programs that are administered to funds in order to support the industry’s implementation and VET take up.  The range of programs that government department supports include training package development, equity development and training innovation, group training schemes, and industry training advisory procedures.

Training packages at the national level define the competencies that are required across the industry areas whereas the national quality assurance standards and processes assure the training quality that is delivered by registered training organizations and the kinds of qualifications they issue.  Considering that the Australian VET system is skilled-focused, the training packages are the mandated forms of VET qualifications that is publicly funded and this is based on the curriculum’s competency based training (CBT) (Wheelahan, 2009).  All the Australian publicly funded VET qualifications must be based on the training packages in which they exist or on the industry-specified competence units.

Governance involves allocation and administration of public funds.  Regarding governance functions, there is need to forecast the demand and needs of skills in order to inform the allocation of funds.  An objective for good governance of the VET system would be to utilise funding in order to drive changes in the skill culture of Australia, performance, and stakeholder commitment (Werquin, 2007).

According to Karmel (2007) the number of students taking VE courses in Australia has dramatically increased and there is need to deal with challenges that may undermine the intentional outcome of the courses.  A larger number of students for the courses mean that the expenditure on the VET system has risen.  There is need for appropriate governance of train funds as well as the seeking of other financial sources to accommodate the ever increasing number of VE students.

Other than the commonwealth funds, the National Training Reform agenda legitimized the involvement of the private sector in publicly funded training (Foster, 2001).  However, the agenda places the industry as the primary client of the Australian VET as opposed to the education sector.  This reform has been driven by the public choices demand of educational outcomes that suit the industrial and market requirements.

Structure of the Australian VET system and impact on the economy

The business impact on transforming the Australian VET curricular and the government’s complicity are all enmeshed in the Australian economy restructuring.  The governing and consequential restructuring should be performed in such a way that it aligns with the increased competition and a globalized economy.

Billet (2004) argues that the government has granted a significant leadership role in the determination of the VET system.  The business sector that is mostly involved is the private sector and this initially excluded the public sector bureaucracies such as the railway, energy, and public work departments.  However, the deregulation or privatization of several public sectors has ensured that these too are included in the VE dictation.  Nevertheless, there are speculations that most of these united large enterprises that united to address the kind of education to be offered by the VET system, consider mostly their own industrial interests rather than focus at the progress on national level (Billet, 2004).  There is need for the government to assume an overall leadership role at national level.  The government so far has been involved in the funding of the training programs through the Education, Science and Technology Department, and coming up with curricular that suits the market and innovative demands.

The industry participation in the VET system was for the support of competency-based training (CBT) on all vocational education courses because of CBT’s presumed capacity to develop a skilled and also an adaptable workforce.  CBT therefore came to draw a difference between vocational education and other educational sectors. On the other hand Wheelahan (2009) is against the CBT claiming that it results to an impoverished education that deprives students of the knowledge that is required to participate in social conversation and in debates within their practical occupational fields.  VET as opposed to higher education (HE) receives training packages in which the CBT model hinders access to theoretical knowledge and emphasizes on the industrial skills (Smith & Bush, 2006).

Karlsen (2000) focuses on the management strategy of decentralization in governance of education and asserts that the approach is perceived as a market-orientation in which the education offered at school is tailored to meet the demands of the market.  Karlsen (2000) urges that decentralization needs to be considered as a basic educational politics element.  However, a centralism approach should also be incorporated in which the government has an upper hand in ensuring that the strategies applied are fruitful to the nation. This combined management is refereed to as a decentralized centralism and it allows for a continuous adaptation within a pluralistic and highly complex society.  Reich (2008) has termed the governance of learning-work intersection as one that uses a liberal regime.

Reich (2008) asserts that the Australian VET, the approach to solve problems of the industrial skilled worker, and the reassembling of the worker as a learner should align with an internationally economically competitive Australian nation.

Idriss (2002) and Santoro and Reid (2006) highlight the challenges that VET systems experience and these are usually the catalysis factors to change management.  The challenges include globalization, increased in service industry practices as opposed to production, increased competition at national and international levels, changes in market preferences and other demographic related challenges.  The responses to these challenges include the creation of modernized occupation and shifts of educational curricular to fit the current market structure.  VET systems therefore prepare the students for their future careers although substantial studies show that other important educational aspects are neglected with the industrial VET systems.

Consequences of the CBT-based VET system to governance practices

The adoption of an industrial-based VET system in Australia has led to considerable transformations in VET organizations as well as considerable challenges for the VET management (Mulcahy, 2007).  Strategic management therefore plays a critical role in the leading and directing of the VET organizations.  Strategy is an accomplishment of a network of relations rather than an individualized management or organizations.  Strategic management involves the strategy that is applied in the governance of public funds to finance the VET system.  According to Mulcahy (2007) the management responsible for governing the funds should take it as a responsibility of using the funds wisely for the benefit of those underneath them. First the managements will seek ways of attracting more funds for the training purpose.  Second, the management will be accountable for the planning and allocation of the funds.  Accountability of train funds should be considered by all management in the VET organizations.

Planning skills are essential to the process of strategic management and requires a strategic thinker, focus and planning skills. Planning should be undertaken by a particular management group that has operational responsibilities which are separated.  Consequently, there should be splitting of strategy from operations (Mulcahy, 2007).

Bagnall (2000) asserts that increased global involvement aspects are some of the most difficult challenges that face governments today.  Most nations experience a chronically high numbers of unemployed youths.  The labour markets tighten as the jobs seem to disappear and industries seem reluctant to employ youths at unskilled entry levels.  This has led to most governments including the Australian government to direct funding into VET systems that seek to balance general educational needs and vocational qualification. Australia before the 1970s and as a developing nation had to seek funding for the vocational education from the World Bank. At the moment, funding is achieved through a collaborative effort of commonwealth programs and public funds.  Governance of these funds should be done with the knowledge of the surrounding economic circumstances and the VET outcome at both the present and the future.


The Australian VET system is one of the most established and recognized at international level.  The VET system is managed at state and territorial levels and of late there is increased activity at national level.  The government through the Department of Education, Science and Training determines the kind of trainman packages that is offered to the VET organizations.  The VET system has taken an orientation towards the industrial requirements as opposed to the educational requirements.  The business sector has the top voice in deciding the kind of curricular and assessment that is offered at the VET organizations as the sector requires competence-based training for the learners who will later join the industry after they are through with their education. In line with this, various corporate agencies are involved in the pubic funding of the VET system.  The commonwealth is also a major Funder for the programs and the funds are also directed as per the industrial requirements through the Commonwealth-State Agreement for Skilling Australia’s Workforce.  This has been cited as the best approach in which Australia will meet the challenging economic and market needs of the country in this century. Australia would be placed at a competitive advantage in the global scale.  However, concerns from some scholars is that the CBT model used in the VET systems has ignored most of the general education requirements that should give the learners debating skills in social and political matters.

The review has revealed that the governance of funding is complex process and the involvement of many players with varying perspectives makes the matter more difficult.  Strategic planning in the allocation and use of funds is necessary and this can be done through separation of planning and operational roles so that the appropriation of funds does not undertake a biased view.  There is need to offer skills that render the candidates competitive at national level rather than just firm level.

Further research needs to consider how fund appropriation in the training packages can be done in order to meet both educational and industrial requirements of the learners.












List of References

Bagnall, N. 2000. “The balance between vocational secondary and general secondary schooling in France and Australia,” Comparative Education, vol. 36(4)

Billet, S. 2004. “From your business to our business: Industry and vocational education in Australia,” Oxford Review of Education, vol. 30 (1): 13-35.

Foster, S. 2001. “Pragmatic, problem-solving approaches to curriculum and assessment policy,” Journal of Educational Policy, vol. 1691): 53-66

Idriss, C.M. 2002. “Challenge and change in the German vocational system since 1990,” Oxford Review of Education, vol. 28(4): 473-490.

Karlsen, G. 2000. “Decentralized centralism: Framework for a better understanding of governance in the field of education,” Journal of Educational Policy, vol. 15(5): 525-538

Karmel, T. 2007. “Vocational education and training in Australian schools,” The Australian Educational Researcher, vol. 34(3): 101-118.

Lasky, B., & Tempone, I. 2004. “Practising what we teach: Vocational teachers learn to research through applying action learning techniques,” Journal of Further & Higher Education, vol. 28(1): 79-94

McFarland, L. 1994. Vocational education and training for youth: Towards coherent policy and practice, vol. 68.  UK: OECD Publishing

Mulcahy, D. 2007. “Managing spaces: (re)working relations of strategy and spatiality in vocational education and training,” Studies in Continuing Education, vol. 29(2): 143-162

OECD. 2008. OECD economic surveys: Australia 2008. Publishing OECD Publishing, Is. 18

Polesel, J. 2008. “Democratising the curriculum or training the children of the poor: school-based vocational training in Australia,” Journal of Educational Policy, vol. 23(6); 615-632

Rauner, F. & Maclean, R. 2008. Handbook of teaching and vocational education and training research. UK:

Reich, A. 2008. “Intersecting work and learning: assembling advanced liberal regimes of governing workers in Australia,” Studies in Continuing Education, vol. 30(3): 199-213.

Santoro, N., & Reid, J. 2006. “All things to all people: Indigenous teachers in the Australian teaching profession,” European Journal of Teacher Education, vol. 29(3): 287-303.

Smith, E., & Bush, T. 2006. “The delicate dance: The assessment implications of awarding students vocational qualifications within university degrees,” Higher Education Research & Development, vol. 25(4): 387-402.

Star, C., & Hammer, S. 2008. “Teaching generic skills: eroding the higher purpose of universities, or an opportunity for renewal,” Oxford Review of Education, vol. 34(2): 237-251.

Werquin, P. 2007. “Moving mountains: Will qualifications systems promote lifelong learning,” European Journal of Education, vol. 42(4): 459-484

Wheelahan, L. 2009. “The problem with CBT( and why constructivism makes things worse),” Journal of Education and Work, vol. 22(3): 227-242.

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