The federal government will pump $500 million into Australia’s vocational training sector to tackle unemployment and boost the economic recovery.

But the sector’s history of rorts has many researchers worried about how the money will be spent. 

Unveiled by Scott Morrison on Thursday, the JobTrainer program will see $1 billion injected into the ailing vocational education and training (VET) sector over an undisclosed timeframe.

Half of that money will come from the federal government, with the states and territories chipping in the remainder.

The money will undoubtedly be welcomed by the sector, but Mitchell Institute policy fellow Peter Hurley said it’s relatively little for such a significant sector.

“If you look at government funding at the state and federal level going into training, in 2018 it was about $5 billion, and in 2012 it was about $6.3 billion,” he said.

Go back even further, to 2006, and the sector received $5.3 billion in state and federal government support.

We’re spending less now than we did over a decade ago,” Mr Hurley said.

The latest round of funding could bring VET spending back in line with levels seen at the start of the decade, if it is spent quickly.

University of Queensland economics professor John Quiggin said the money will make a big difference if it is “injected into the TAFE system over a short number of years”.

But if it is drip-fed into the system it will have a limited impact.

The miseducation of Australian workers

Regardless of how quickly the funds find their way to VET providers, Mr Hurley said there will inevitably be a number of dodgy operators looking to rort the system. 

“Whenever there is a bucket of money put in, often there are problems,” he said.

Most recently that has included the VET FEE-HELP loan scandal in 2016.

That involved private educators soliciting potential students with a range of enrolment incentives, in order to take advantage of federal government loan schemes.

Mr Hurley said the case was far from unique.

It also happened at a state-based level when they introduced subsidies, and also happened with international students about a decade ago,” he said.

“The VET sector does have a history of this, so it’s really important that how we spend this public money is done in a way that assures it’s spent well.”

Professor Quiggin agreed.

He said government should rebuild the TAFE sector while trying “to keep for-profit firms out of this space as much as possible”.

“The obvious thing to do is to direct the money to TAFE and then let them contract with private for-profit providers, if there are courses they can provide that meet needs, rather than allowing for-profits to recruit students with all kinds of means,” he said.

“But it’s always been the case with this kind of service that the way to make a profit is to cut corners and deliver something that meets the formal description but doesn’t actually do the job.”

The government has yet to explain how it will vet private providers.

The New Daily put a series of questions to the Department of Education, which did not reply before deadline.