Findings

Findings Angela Ball Wed, 08/26/2020 - 06:50

Some points of consistency and of difference between jurisdictions were noted over the course of the project. These are outlined in Table 1.

Table 1: Observations of similarities and differences in VET pricing approaches

Similarities Differences
  • The general intent of government subsidisation of training is consistent across the nation.
  • All jurisdictions base their subsidies mainly on the cost of delivery.
  • The cost of delivery is generally attached to the field of study, and the relative cost of delivering training in that field.
  • All jurisdictions take hours of delivery (whether nominal or actual) into account when setting prices and subsidies.
  • While jurisdictions have a similar intent and basis of price and subsidy calculations, the detail underlying these calculations differs and hence results in different prices and subsidy levels.
  • Jurisdiction-level approaches tend to capture the differing economic and demographic factors that affect skill attainment and prioritisation, and the location of training delivery.
  • The extent to which data can be observed for qualifications varies across jurisdictions and qualifications.
  • The price paid for a qualification may be fixed for a given enrolment, or determined by the combination of units of competency actually taken and/or the number of hours actually delivered.

Source: Deloitte Access Economics.

In conducting the website-based fee data collection, it was found that about 56% of providers sampled clearly published subsidised fee information. Of the remainder, either the provider website could not be located, the course could not be located for that provider, or the fee either was not stated, was stated as a full fee, or was not clearly specified.

Variation by AQF level and field of education

Variation by AQF level and field of education Angela Ball Wed, 08/26/2020 - 06:16

Substantial price variation occurs within the same level of education and within the same field of education, as shown in Table 2. This table shows the average price for all qualifications within a field of education/level of education combination, weighted by the number of enrolments for that qualification (and for that price observation). For example, the fifth cell in the first row ($6,600) shows the average price of all Certificate III level qualifications in the natural and physical sciences field. In some instances, there are only a low number of qualifications represented within a cell. For that reason, relatively high or low weighted average prices should be used with caution as they may be based on a small number of non-representative qualifications. We have indicated cells with low number of qualifications (<5) through shading.

Within a level of education, the greatest variation occurs at the Advanced Diploma level, where the difference between the fields with the lowest and highest averages is about $20,000. Within a field of education, the largest difference between the lowest and highest average is in architecture and building. However, a number of fields of education and levels have ranges exceeding $10,000, suggesting the wide dispersion is not driven by only a few outliers.

Table 2: Weighted average prices, by field of education and qualification level

A/T status Field of education Cert I Cert II Cert III Cert IV Diploma Adv Diploma Grad Cert/ Diploma
Non A/T Natural and physical sciences   $2,500 $6,600 $14,200 $13,000    
Information technology $2,400 $4,300 $8,300 $8,800 $14,000 $9,000  
Engineering and related technologies $3,300 $3,800 $7,000 $8,600 $13,300 $15,700  
Architecture and building $3,000 $5,200 $10,100 $9,400 $15,500 $20,100  
Agriculture, environmental and related studies $1,900 $4,400 $7,800 $10,400 $12,100 $14,200  
Health   $3,300 $6,400 $8,100 $18,400 $9,600  
Education $4,900   $4,700 $4,800 $11,400    
Management and commerce $1,400 $2,700 $4,500 $5,100 $6,600 $7,100  
Society and culture $2,500 $2,400 $5,700 $7,200 $9,100 $10,600 $11,400
Creative arts $3,100 $3,100 $6,300 $8,700 $12,500 $14,500  
Food, hospitality and personal services $800 $2,700 $6,500 $7,500 $14,900    
Mixed field programmes $3,600 $3,800 $4,100 $4,500 $9,600    
A/T Natural and physical sciences   $9,100 $8,500 $11,200 $12,200 $4,100  
Information technology $800 $3,100 $7,200 $10,300 $11,000 $7,300  
Engineering and related technologies $2,000 $4,500 $13,800 $12,100 $27,700 $16,200  
Architecture and building $2,600 $4,500 $16,400 $9,400 $15,300 $24,800  
Agriculture, environmental and related studies $1,400 $5,000 $10,900 $10,300 $13,500    
Health   $3,700 $6,500 $8,600 $18,800    
Education     $5,100 $6,300 $12,800    
Management and commerce $1,500 $3,100 $4,800 $5,400 $6,200 $9,200  
Society and culture   $2,500 $6,100 $8,300 $10,700    
Creative arts   $4,400 $10,500 $10,200 $19,100    
Food, hospitality and personal services $1,300 $3,800 $9,800 $9,600 $13,500    
Mixed field programmes   $2,600          

Note: (a) All prices are rounded to the nearest $100; (b) Shading indicates that less than five observations.

Further details at the hourly level are included in Appendix B.

Variation across jurisdictions for the same qualification

Variation across jurisdictions for the same qualification Rebeca Papillaud Fri, 10/30/2020 - 14:36

Differences in approaches (and the availability of data) result in substantial variation in subsidy and fee levels across jurisdictions, and the number of jurisdictions offering funding, for a single qualification. The extent to which the subsidy drives the price, or the fee is the key driver, is explored below. Chart 1 shows the range in prices and subsidies, observed at the provider level, across the top 10 qualifications by national enrolment level in 2018.

Note: (a) Provider-level (or state level in regulated fee markets) observations are only included where both a subsidy and fee is observed; (b) Qualifications marked (*) are excluded due to small sample size.

The composition of the top 10 qualifications, and how this differs by delivery (i.e. apprenticeship/traineeship or not) is shown in further detail in Table 3. In general, the subsidy plays a larger role in the price of a qualification when delivered under an apprenticeship or traineeship than when not delivered under these delivery modes. This does, however, vary across qualifications and is influenced by policy settings in some jurisdictions to set low (or zero) fees for apprentices and trainees.

Table 3: Subsidy and fee composition of national average price, top 10 qualifications

Qualification   Subsidy
(%)
Fee  (%) Average qualification price(a)
Certificate III in Individual Support Non A/T 86% 14% $5,700
A/T 89% 11% $5,800
Diploma of Early Childhood Education and Care Non A/T 86% 14% $11,500
A/T 91% 9% $12,800
Certificate III in Early Childhood Education and Care Non A/T 83% 17% $6,600
A/T 92% 8% $6,700
Certificate III in Electrotechnology Electrician Non A/T 75% 25% $13,400
A/T 93% 7% $16,000
Certificate III in Carpentry Non A/T 77% 23% $12,900
A/T 95% 5% $15,100
Certificate III in Hospitality Non A/T 84% 16% $4,200
A/T 88% 12% $4,500
Certificate II in Skills for Work and Vocational Pathways (b) Non A/T      
A/T      
Certificate III in Plumbing Non A/T 77% 23% $13,200
A/T 95% 5% $21,700
Certificate II in Kitchen Operations Non A/T 79% 21% $2,700
A/T 80% 20% $3,700
Certificate III in Business Administration Non A/T 75% 25% $4,100
A/T 88% 12% $4,100
Top 10 average Non A/T 82% 18%  
A/T 90% 10%  

Note: (a) All prices are rounded to the nearest $100; (b) Observations with small sample sizes are excluded from the table; (c) This table comprises national weighted averages of subsidies, fees and prices. Observations are only included in the final calculation if both a subsidy and fee is observed.

Chart 2 shows the weighted average price by jurisdiction for high-volume Certificate I and Certificate II qualifications. This shows:

  • differing levels of price variation across qualifications
  • a general range of $2,000 to $5,000 in total price across these qualifications, with some jurisdiction averages outside these bounds.

Note: Qualifications masked with an asterisk (*) have small sample sizes and are not included in this analysis.

Chart 3 displays the same information for Certificate III qualifications. This shows:

  • relatively high variation across states and territories within a qualification (e.g. Certificate III in Plumbing and Certificate III in Light Vehicle Mechanical Technology);
  • low variation for some courses, including the Certificate III in Surface Extraction Operations and Certificate III in Customer Engagement, indicating similarity in costing and pricing methodologies across jurisdictions, and in provider fee rates; and
  • a ‘centre-point’ around which majority of prices are focused, with variation for some jurisdictions outside these bounds.

Analysis of high-volume Certificate IV and Diploma qualifications (Chart 4) shows:

  • no clear relationship between field of education and price variation for Certificate IV qualifications (e.g. price variation appears broadly equal for Certificate IV in Education Support, Certificate IV in Disability and Certificate IV in Training and Assessment);
  • increased variation for some higher level qualifications, including the Diploma of Early Childhood Education and Care and Diploma of Nursing; and
  • low price variation in courses in leadership and management.

Exploring jurisdictional drivers of price variation

Exploring jurisdictional drivers of price variation Angela Ball Wed, 10/14/2020 - 09:40

Clearly there is substantial variation in pricing across Australia, even for the same qualification. To investigate whether the variation is influenced by underlying differences in cost structures between jurisdictions, we compare the cost of a basket of high volume qualifications (using the distribution of 2019 government funded enrolments as weights) using average prices for each jurisdiction. Because jurisdictions currently determine which qualifications they will subsidise, we are restricted in how many qualifications we can include in the basket.

The variation in a cost of a basket of 15 high volume qualifications in each jurisdiction is shown in Chart 5. Each bar represents the same distribution of enrolments in each qualification (weighted using the 2019 national enrolments) but uses the jurisdictional average price, fee and subsidy information. We have removed the jurisdiction labels to focus on common patterns. These 15 high volume qualifications comprised 20 per cent of total government funded enrolments in 2019.

Actual subsidies and fees paid by governments and students will be influenced by qualification selection, completion rates, concession fee arrangements and student and regional based loadings. This chart does not take into account other payments jurisdictions may make that sit outside the qualification pricing framework (e.g. community service obligations, thin market funding and public provider supplements).

Chart 5 still shows noticeable variation in average price, subsidy and fee per enrolment. Six jurisdictions have an average price between $7,000 and $10,000, whereas two jurisdictions have much higher averages (above $14,000). This substantial difference may reflect differences in underlying cost structures or it may reflect different price and subsidy setting principles. For example, the two more expensive jurisdictions may incorporate into their pricing elements such as higher prices for delivery to regional and remote areas, thin markets, or for qualifications delivered by the public provider which elsewhere are addressed through loadings or programmatic funding.

Note: The average subsidy and average price shown in the above chart represent the average subsidy and average price where qualifications are weighted by national enrolment.

To remove these influences, we filtered the prices to include only prices paid for metropolitan delivery and removed any prices that applied only to public providers. Doing so reduced the number of jurisdictions with a usable number of qualification observations. However, it also increased the number of qualifications that we could observe, to 40.

Chart 6 shows the cost of a basket of 40 high volume qualifications selected and weighted by national enrolment, on a per enrolment basis across four jurisdictions. Qualifications included in this basket accounted for 40 per cent of total government funded enrolments in 2019.

Note: The average subsidy and average price shown in the above chart represent the average subsidy and average price where qualifications are weighted by national enrolment.

The average price for the top 40 qualifications falls within a smaller band (approximately $7,000 to $9,000), with three of the four jurisdictions much closer to $9,000. What Chart 6 shows more clearly is that differences in the standard fee-subsidy split may account for more of the difference in subsidies paid between jurisdictions than underlying differences in the cost of delivery. It should be noted that the chart does not necessarily indicate that total fees actually paid by students are substantially different between jurisdictions. The fee data captured in the database typically reflect standard fees. Jurisdictional arrangements regarding fee concessions and fee waivers may reduce the total amount paid by students in fees. This should not change the ability to make comparisons on total price, however, as jurisdictions typically have arrangements to reimburse or top up providers for fee income lost through concessions or waivers.