Most people will be familiar with the law of unintended consequences. It occurs when a planned strategy or initiative fails to achieve the particular objectives for which it was implemented.
Sometimes an unintended consequence will result in an unexpected benefit, but these instances are mostly celebrated as being circumstantial ‘flukes.’ Sometimes it results in more than just failure. Australia has a few that are embedded in our history.
Introducing rabbits and foxes for a spot of game hunting reminiscent of the good old days in Britain and importing toads to take care of a pesky sugar cane beetle are amongst our most celebrated examples of the ‘law’ in action. The ultimate outcome is one where a ‘perverse’ result is delivered. This is defined as a resultant effect precisely contrary to what was originally intended. That is when the supposed solution to a problem actually makes the problem much, much worse.
Here’s a lovely example of it:
Prior to independence, India’s governing British Viceroy became concerned about the number of venomous snakes in and around Delhi. He offered a bounty for every dead cobra. This was a very successful strategy. Cobras were being killed in large quantities by motivated groups of snake hunters.
However, some business entrepreneurs started to worry when the wild stocks of cobras began to run low. They decided they could breed large numbers of cobras to keep their cash flow coming. When the government became aware of this ruse, they scrapped the reward program. This change of business model saw the cobra breeders let loose all the now-worthless, cranky and dangerous snakes. As a result, the Delhi cobra population greatly increased. The apparent ‘clever’ solution to an initial problem actually made the situation far worse. This event has entered the lexicon as ‘the cobra effect’ and is often used to illustrate the causes of any incorrect stimulation to the economy and politics with a book of the same title written by a German economist.
The amalgam of politics, economics, dangerous snakes and stupidity seems a perfect fit. Data from the government’s abysmal VET FEE-HELP student loan scheme revealed the scale of rorts being carried out. The government has introduced a bill to halt funding of specific vocational education and training courses in an attempt to overhaul the taxpayer-funded loan scheme, which has blown out from $325 million in 2012 to $2.9 billion in 2015 after private training provider businesses were given access to the scheme.
Data shows that since 2009, private training provider enrolments grew at nearly three times the rate of comparable TAFE student enrolments. Up to 320,000 courses were funded by the program in 2015, with an average course cost of $19,413 being charged by the private training sector. This was compared to an average course cost of $7,582 at Australia’s TAFE colleges.
Federal Education Minister Simon Birmingham will now seek to strip funding from many so-called lifestyle courses such as ‘Circus Art Performance’ and ‘Ayurvedic Lifestyle Consultation’ which previously attracted the student’s fees being paid up front to training providers. It’s hard to believe the levels of stupidity in ever having allowed that to occur.
In the 2015 VET FEE-HELP report, Birmingham said there was evidence of wide spread abuse of the scheme.
“While there are legitimate employment reasons for people sometimes studying more than one course at a time, the scale of multiple enrolments suggests it has often had little to do with boosting employment opportunities and more to do with boosting education provider revenues,” he noted.
The data also compared the high tuition fees being charged by private training businesses for popular courses with the lower TAFE fees being charged for the same courses. It suggested many private RTOs have made huge profits from the VET FEE-HELP scheme off the back of a total vacuum in governance. ASQA was and remains the government’s regulatory authority to prevent wide scale abuse and rorting. The report also listed the 20 most popular VET FEE-HELP funded courses at TAFE colleges last year and found, in every case, that private colleges had charged, on average, significantly more to deliver exactly the same course.
Much focus has been placed on the direct economic and reputational damages caused by the ‘cobra effect’ of a failed policy to entirely deregulate the vocational education and training sector. It was intended to increase the opportunity for more people to engage with a post-school education, obtain qualifications and re-train for new careers. Most sensible people support the idea that spending money on expanding education and training schemes is never a bad idea or a waste of money. But the spending and outcomes must be targeted, accountable, verifiable and reliable. The entire policy and this specific scheme were always fiascos from their outset and should never have been expected to be able to meet that criteria.
The failure still remaining largely unidentified is the perverse element of the unintended consequence. This is most prevalent where the training that was and is being delivered and the course qualifications being issued have direct links to occupational licensing requirements.
Many media publications reported on certain courses to help highlight the gross inequity in the fees being charged by private training providers compared to those charged by TAFE. One such course that was focused upon is the CPC50210 Diploma of Building and Construction (Building).
In the National Training Package, this qualification is described as follows:
"This qualification is designed to meet the needs of builders, including selecting contractors, overseeing the work and its quality, and liaising with clients. The builder may also be the appropriately licensed person with responsibility under the relevant building licensing authority in the State or Territory. Builder licensing varies across States and Territories and additional requirements to attainment of this qualification may be required.
Occupational titles may include: Builder.
Under the AFR’s headline Students enrolled multiple times in shonky colleges, the article’s author, Tim Dodd, reported that “In one case, for the Diploma of Building and Construction (Building), TAFEs charged an average fee of $3,914 compared with $20,071 at private colleges, more than five times more.”
The ‘Diploma of Building and Construction’ (Building) course qualification is necessary for many applicants in order to obtain their ‘builder’ class licence across most states in Australia. So what precisely would compel anyone to voluntarily agree to pay five times more to a private training organisation to complete exactly the same qualification that they could have done at a TAFE but at a fraction of the cost?
Surely a rational person would never choose this as a realistic option? A simple ‘back of an envelope’ economic business analysis should also have prevented any prospective private training college from ever having sought to introduce a training program that would require them to offer their course fees based on such highly uncompetitive pricing arrangements. But they most certainly did.
There was and continues to be many private training organisations that describe themselves as ‘colleges’ or ‘institutes’ promoting this course, and several other building qualifications at the Certificate 3 trades, Certificate 4 and even Advanced Diploma levels. All of these courses have direct links to occupational licensing. Many have done a roaring trade, particularly with heavy print and radio advertising promoting a ‘Recognition of Prior Learning’ (RPL) for prospective clients.
Basically, RPL means a qualification may be issued based on the applicant providing some ‘evidence’ of their inherent and pre-existent skill and knowledge of the course content. It doesn’t mean they have to sit for examinations or anything onerous to prove their competence.
RPL assessment is allowable and legitimate under the highly flaky ‘rules’ governing assessment of course competencies. And remember who is in charge of policing the quality standards of the massive VET environment: ASQA. The same bureaucracy that entirely failed to prevent the massive rorts from occurring within the now discarded and discredited student loan scheme. It is utterly implausible that they would have ever possessed the necessary resources or capabilities to adequately scrutinise the integrity of each and every private provider.
The success of this business model ultimately relies on the qualification’s link to securing an occupational building license. This should have rung alarm bells and raised serious investigations within every state and territory agency that has jurisdictional responsibility for the issuance of building or trade related licences.
If the politicians and bureaucrats had simply joined the dots, they would realise that they are the ones directly responsible for protecting building consumers from the risks of repeated contractual rip-offs, continued poor quality outcomes, and incomplete and defect-ridden construction work and building projects. They can only avert these risks by ensuring that fit and proper persons – and that specifically means persons who have been appropriately trained and qualified – will only ever be issued with a licence to practice building construction work and offer their services to the public as ‘licensed’ builders.
Tens of thousands of home building consumers now and into the future will be at an extreme risk of becoming victims of the law of unintended consequences, which has effectively provided a conduit for untrained persons to obtain a building licence from the issuance of a non-credible qualification and then enter the industry and market without having ever undertaken a rigorous assessment and valid examination of required skill and knowledge.
It’s time for government to develop a whole of business approach to rethink the establishment of a uniform set of requirements that cover builder training and qualification requirements, licensing quality standards, and appropriate licenced work classifications right across the Australian building regulatory environment. Under the present circumstances, it makes an infestation of poisonous cobras look like a minor concern.