IPART has released a draft report on price and fee setting for government-funded VET under Smart and Skilled. Our recommended approach to base prices takes account of the specific costs of a qualification by including a variable cost component ($/nominal hour) that reflects the cost differences due to the units of competency (UoCs) that make up the qualification, and a fixed cost component ($/enrolment) that reflects cost differences due to the level of qualification. The base price is derived by applying the relevant variable cost(s) to the relevant UoCs and hours, and then adding the relevant fixed price.
As there are more than 40,000 UoCs, it was not practical to calculate a variable cost ($/nominal hour) for each UoC. Instead we combined the UoCs into 25 industry groups based on their cost drivers. We then estimated 25 variable costs ($/nominal hour) that apply to the ‘standard’ UoCs in each of these groups. We also estimated 10 variable costs that apply to ‘high cost’ UoCs within the same industry groups.
This file contains a mapping of UoCs to the 25 industry groups identified in our draft report, as well as the cost per hour and the nationally agreed nominal hours associated with them. The list is not comprehensive and may include UoCs that have been superseded. It is not a list of UoCs that will receive government funding under Smart and Skilled.
As noted in our draft report, we recommend that base prices be built based on a typical combination of UoCs per qualification. DEC would develop the typical combination of UoCs for all qualifications. In our draft report, we have published base prices for a sample of qualifications where we have information on TAFE’s average combination of UoCs across all TAFE institutes (see Appendix I).