Report underlines bleak outlook for TAFEs

FORMER Gippsland educational institutions GippsTAFE and Advance TAFE were in “dire financial trouble” before deciding to merge, a Victorian auditor-general report has revealed.

The two entities merged in May 2014 to become Federation Training and received $40 million in State Government funding in support.

In the Technical and Further Education Institutes Results of the 2013 Audits report, released on Wednesday, both TAFEs were among the six out of 14 Victorian institutions considered a high financial sustainability risk in 2013.

AdvanceTAFE was assessed as a high risk with an underlying result of negative 50.9 per cent and was the worst underlying result of any institution in Victoria.

“This means that the operating deficit was half of the total revenue in 2013, indicating, that this TAFE is in dire financial trouble,” the report said.

GippsTAFE recorded a deficit of more than $4.5 million in 2013, down from a surplus of about $5 million in 2012.

It also recorded an underlying negative result of 15.0 per cent.

The report said the 14 Victorian TAFEs had total liabilities of $238.9 million at December 2013.

Debt also increased by $16.4 million in 2013 to seven per cent of total TAFE liabilities (less than one per cent in 2012).

“The increase was due to loans made to Central Gippsland, Gordon, Kangan, South West and William Angliss Institute,” it stated.

National Tertiary Education Union spokesmen Dr Colin Long said the report showed how the policy of opening government Vocational Education and Training funding to private training providers, combined with the Liberal Government’s “massive cuts” in funding to public TAFE institutions had devastated their financial viability.

“The State Government’s cuts have destroyed generations of tax payer investment in the Victorian public education system, rendering the financial sustainability of most TAFEs as high or medium risk,” Dr Long said.

“TAFEs made over 2000 staff redundant as a result of the State Government’s cuts, with the likelihood of this number being much higher when we take into account those casual and fixed term contracts that weren’t renewed.”

The Express made several attempts to speak to Federation Training, but calls were not returned.