VOCATIONAL education has been so starved of funding by the NSW Government that our international reputation is at risk and the economy will miss out on $20 billion in revenue, new analysis shows.

The Government has cut funding in relative terms to TAFE more than any other state or territory, despite having the largest population and more than 500,000 students and 5000 full-time teachers.

Recurrent funding for vocational education and training, unadjusted for inflation, increased by 13.6 per cent in NSW compared to 80.7 per cent in Victoria, 43.7 per cent in Queensland and 60.4 per cent in Western Australia between 1997 to 2007.

Peter Kell, the academic who led the TAFE Futures inquiry in 2006, has warned Australia's that underinvestment in vocational education has undermined its international reputation and taken its toll on an ageing workforce and infrastructure, forcing student fee increases.

He said students in Hong Kong were being told to go to the US instead of Australia.

''China is making a massive public investment in the vocational education and training sector and the Obama Government is doing the same in the community college sector.''

Figure from The National Centre for Vocational Education Research from 1997 to 2007, show NSW has slashed more than $550 million from its annual spending on vocational education and training, about 90 per cent of which goes to TAFE.

The figures show the Commonwealth has also cut its funding by about $155 million, a 27.2 per cent reduction since 1997.

The analysis by the NSW Teachers Federation takes into account the increase in student tuition hours and the impact of inflation.

Carmel Tebbutt, when she was NSW minister for education, commissioned a report from the Allen Consulting Group which found every dollar invested in TAFE returned $6.40.

The assistant general secretary for the NSW Teachers Federation, Phil Bradley, said the analysis showed the cumulative reduction in state government funding had amounted to $3 billion in real terms over 12 years.

Based on the Allen Consulting predictions, this would mean a $20 billion loss to the NSW economy in real terms.

''There is a clear impact in terms of the detriment to the economy because of the lack of investment in TAFE at a time when we have skills shortages,'' Mr Bradley said.

The NSW Greens MP John Kaye said cutting TAFE expenditure was ''false savings''.

''While it might have helped balance the budget in the short term, it is stealing billions of dollars from the state's economy over the next 20 years,'' he said.

Mr Bradley said Department of Education and Training was seeking a 10.4 per cent increase in the TAFE teaching load to save more than $50 million a year, for an average 1.5 per cent per annual salary increase over three years, costing $15 million a year.

A spokesman for the NSW Department of Education and Training said that over the last 10 years, ''TAFE NSW has been streamlining its operations to provide a more efficient service''.

''For much of the period … the Commonwealth Government required states and territories to achieve growth through efficiencies, which TAFE NSW achieved,'' he said.

A spokeswoman for the Minister for Education, Verity Firth, said the TAFE budget had increased by $584.2 million since 1996-97.

''TAFE NSW will contribute $196 billion to the NSW economy over the next 20 years,'' she said.

（www.eduwo.com, Anna）