THE Gillard government has threatened to withhold vocational grants to Victoria because of Premier Ted Baillieu's TAFE cuts, putting in doubt almost $435 million of federal funding.
As tertiary bosses prepare to sell campuses, increase fees or cut courses and staff to cope with state government cuts, Canberra has warned ''national partnership'' payments to Victoria are at risk.
In a move that has outraged the state government, federal Tertiary Education Minister Chris Evans is considering withholding money that should flow to Victoria as part of an agreement signed off by the Council of Australian Governments in April.
Commonwealth figures suggest Victoria should gain $435 million over the life of the five-year agreement - including $60 million next financial year - if it can meet a range of targets designed to improve the quality of the vocational system and the number of students trained.
Senator Evans told The Sunday Age that Victoria's TAFE cuts were ''destroying'' the vocational sector and undermining the state's COAG obligations.
''We don't want to take money out of the Victorian TAFE system, but there's clearly no point in us pouring money in if they're taking money out on the other end,'' he said.
''The COAG agreements set targets for both the number of people being trained and the quality of people being trained, and both these things are fundamentally undermined by the fire sale of TAFE.''
Skills Minister Peter Hall hit back yesterday, calling the threat ''another example of the Gillard government failure to provide Victorians with their fair share of funding''. About $43.5 million was due to start flowing this financial year, but stalled as the two governments traded blows over how to implement key reforms.
It's a sensitive time for Victoria: only days after secret cabinet documents revealed the impact of its $300 million TAFE cuts would be much deeper than first thought.
The 86 pages of documents summarise the ''transition plans'' for every public TAFE institute. Among the proposed changes:
■ Swinburne university is withdrawing about a dozen courses, increasing fees by up to 26 per cent and is planning to sell its Prahran and Lilydale campuses.
■ Bendigo TAFE has closed its Kyneton campus, will divest its Castlemaine campus, and will cut about 100 staff this year.
■ Holmesglen will stop delivering some VCE programs, increase fees by 102 per cent next year, and wants to acquire Swinburne's Prahran site.
■ Victoria University will cut 99 teaching staff, increase fees for vocational training in schools, and scrap courses in tourism, animal studies and veterinary nursing.
■ GippsTAFE will push to merge with Chisholm and Advance TAFE by the end of next year and cut staff by 100.
Disclosure of the transition plans, only two days after they were lodged with the Education Department, has intensified anger over the TAFE cuts and forced the government to launch an investigation into the leak.
Outraged TAFE directors met Education Department officials on Friday, but the talks did little to ease concerns.
Mr Hall yesterday defended Victoria's TAFE efforts, and accused Canberra of trying to stall national reform.
''The Victorian government spends more than any other state or territory on training,'' he said. ''We have more students enrolled in publicly subsidised vocational education than any other state … Yet, the Gillard government refuses to discuss Victoria's plan to implement the national partnership.''