Technical and further education in Australia faces widespread staff job cuts and possible mergers between many colleges as a result of sweeping changes imposed by federal and state governments.

In its first annual budget last month, the federal government of conservative prime minister John Howard savagely cut spending on labour market programmes. This will reduce the fee-for-service income that colleges earn by more than Aus$200 million (Pounds 100 million) over the next 12 months.

Almost 900,000 Australians, about 9 per cent of the workforce, are unemployed, but funding for the labour market programmes was slashed from Aus$2.16 billion, allocated in the Labor government's budget last year, to Aus$1.58 billion this year. That means 200,000 fewer training places in colleges.

The government also reduced its allocation to the Australian National Training Authority, which administers federal vocational training funds, by 25 per cent (to save almost Aus$13 million) and cut its grants to the states for vocational education and training by Aus$63.4 million.

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Labor had promised to continue increasing Commonwealth spending on technical and further education beyond 1997 so that an additional Aus$1.35 billion would have been allocated in the three years to 2000, generating an extra 681,000 student places. This would have taken Labor's growth funding commitment since it reached agreement with the states to set up the authority in 1992 to Aus$3 billion.

As part of its goal to shift responsibility for such matters as education and health to the states, the Howard government appears to have scrapped the plan. It has also imposed an immediate cut of more than Aus$30 million in federal spending on capital works in technical and further education, a decision that will affect college plans for refurbishment and expansion.

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More than 1.5 million Australians do technical and further education courses each year, with one million of them involved in vocational courses that in many cases lead to degrees. The system includes 220 colleges, plus numerous other bodies such as adult education and an increasing number of private providers, as well as secondary schools that also offer technical and further education programmes.

Under Labor, technical and further education enjoyed more than ten years of increasing federal funding. Labor's aim was to make technical and further education a genuine alternative to universities for the nation's school-leavers by raising its status and creating stronger links between the two sectors.

Today, backed by the new federal administration, conservative governments in most states and territories are playing down colleges' role by introducing more competition from private training providers. Under the economic rationalist agenda, technical and further education colleges are supposed to become "performance oriented" and more efficient in the delivery of programmes to their "clients".

As is happening in universities, the colleges have been told that to survive they will have to be far more entrepreneurial and commercial - as well as more competitive with each other. And, like the universities, the colleges are increasingly looking offshore to market their education programmes.

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In Victoria, Phil Honeywood, the tertiary education minister, says the net effect of state and federal policy is likely to cause the biggest transformation in vocational education and training since the technical and further education system was first developed in 1974.

"Governments' role will focus on supporting and responding to user choice in a commercial, rather than educational, environment," he says.

The new competitive pressures created by the Victorian and federal changes will add to the other performance pressures already being experienced in technical and further education, he says.

As a result, technical and further education institutes will have to become vigilant in assessing where their future best interests lay, and "government will become more concerned about significant variance in performance standards between technical and further education institutes".

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