The never-ending private VET swindle

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By Leith van Onselen

Reports about rorting of Australia’s private vocational educational training (VET) system seem to be never-ending.

Following scandal after scandal, and a $3 billion Budget blow-out over four years, the Turnbull Government finally passed a bill last month imposing stricter eligibility criteria for VET courses, as well as capping student loans.

Still, reports of rorting within the VET sector continue, the latest example being the proliferation of worthless taxpayer subsidised courses in hairdressing. From The Age:

Tens of thousands of young Australians with hairdressing qualifications are so badly trained they are unemployable, the industry says.

The job seekers say they have spent thousands on course fees – a basic qualification costs an average $11,650 – but have little hope of finding work in their dream industry.

Meanwhile, the state government continues to pay the training colleges thousands of dollars per student.

“The system has churned out probably thousands of unemployable but qualified, well, let’s call them hairdressers,” says Sandy Chong, chief executive of the Australian Hairdressing Council.

The industry says about two-thirds of the 131 hairdressing courses offered in Australia should be shut down…

“Who is causing the problem? The government, because they are giving funding to all these training organisations that do it.”

Students commenced more than 74,000 hairdressing qualifications between 2009 and 2013, in an industry that employs 55,000.

…because the industry is reluctant to employ Australian graduates, the federal government keeps hairdressing in a skills-shortage status, allowing almost 3000 migrants to get 457 visas to cut hair in Australia in the past decade. The situation has been described as perverse by industry leaders.

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Righto, so taxpayers have subsidised literally tens-of-thousands of hairdressing graduates – far more than the industry could ever absorb – at the same time as the Government has allowed the widespread importation of foreign workers?

The rorting continues…

unconventionaleconomist@hotmail.com

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.