C. Reviews and policy context
1.1As set out in chapter 1, several reviews and inquiry processes relating to the VET sector are either ongoing or have been recently completed. The outcomes of these reviews—and particularly the new National Skills Agreement (NSA), Employment White Paper, and Australian Universities Accord (AUA)—are directly relevant to the views and recommendations outlined in this report.
1.2Key reviews and reform processes are outlined below. Stakeholders emphasised that reviews of the sector should not be considered in isolation. There must be holistic consideration of stakeholder input, as well as efforts to ensure that implementing recommendations of one review do not adversely impact on implementation of the recommendations set out in another.
1.3Stakeholders also noted that there have been many reforms to the VET system, and raised concern that students, providers, employers, and other stakeholders have little time to adjust to reforms and implement meaningful, lasting change.
National Skills Agreement
1.4A National Agreement for Skills and Workforce Development (NASWD) was agreed by Commonwealth, state, and territory governments in 2009, under the auspices of the Intergovernmental Agreement of Federal Financial Relations. The NASWD was updated in 2012.
1.5The NASWD was a high-level agreement that identified long-term policy objectives in areas of skills and workforce development, recognising the importance of ensuring the skills of the Australian people are developed and utilised in the economy. Its objectives were to ensure the VET system delivers a productive and highly skilled workforce; enables all working age Australians to develop the skills and qualifications needed to participate effectively in the labour market and contribute to Australia’s economic future; and supports increased rates of workforce participation.
1.6Progress towards targets in the NASWD were reported through a public dashboard maintained by the Productivity Commission.
Productivity Commission review of the NASWD
1.7On 15 November 2019, the Australian Government requested that the Productivity Commission review the NASWD. Government requested that the Commission have regard to current and potential funding arrangements, existing skills programs and contemporary policy settings and labour market needs.
1.8The Commission provided a final report to government in January 2021. Key matters outlined in the report included:
- A lack of evidence for a VET system in crisis. The measures recommended were to address some acknowledged weaknesses of the system and to continue building on its strengths.
- Recognition that the NASWD was overdue for replacement.
- Support for making the intergovernmental agreement to replace the NASWD principles-based and modular, with review of the agreement every five years.
- Support for the continuing development of a more efficient and competitive VET market through informed user choice and a focus on quality.
- Recognition that there was capacity for governments to achieve better returns on the $6.4 billion spent via changes to subsidies and fees; greater contestability and transparency in public funding for TAFEs and enhancements to the autonomy of private providers; and by enabling state and territory funding to follow students enrolled with an interstate provider.
- Support for expanding VET Student Loans (VSL) to more Diploma and above courses and to most Certificate IV courses.
- Recognition that reforms to the trade apprenticeship system are best focused on improving completion rates through better screening and matching of prospective apprentices, making pathways more flexible, and adjusting employer incentives.
- Support for a coordinated national strategy to improve school education, ‘second-chance’ learning in the VET sector, and other adult education services to reduce the number of Australians with low language, literacy, and numeracy skills.
- The report made 32 recommendations focused on enhancing the VET system and setting the groundwork for a new national agreement.
Development of a new National Skills Agreement
1.10Following the Commission’s report, governments agreed a Heads of Agreement for Skills Reform in July 2020. This outlined a series of priorities for a new National Skills Agreement (NSA) to replace the NASWD. These included:
- Adopting a new funding model
- Developing and funding nationally accredited micro-credentials and individual skill sets, in addition to full qualifications,
- Providing stronger support for foundation skills and ensuring access for all Australians with low levels of language, literacy, numeracy. and digital literacy
- Promoting apprenticeships and other employment-based training,
- Strengthening VET pathways for secondary school students and improving the quality and vocational relevance of VET in schools.
- Working with the National Careers Institute (NCI) to reduce the proliferation of careers information available and supporting the NCI to provide access to career information that enables people to make decisions about their learning, training and employment pathways.
- Enhancing transparency and accountability.
- Supporting a viable and robust system of public, private, and non-profit providers.
- Increasing real investment in VET, while undertaking agreed reforms needed to ensure this investment will improve outcomes for Australians and the economy.
- The Heads of Agreement also outlined measures that governments could implement in the shorter term, including simplifying, rationalising, and streamlining qualifications and strengthening quality standards. Parties also committed to the establishment of a $1 billion JobTrainer Fund, to enable a rapid increase in low- or no-fee training places for young people in areas of genuine and identified skills needs.
- Following the Heads of Agreement for the new NSA, a vision and principles for the NSA were agreed by the Skills Ministers and endorsed by the National Cabinet on 31August 2023. Key principles included providing a supply of skilled labour to key industries; rebuilding TAFEs; supporting historically disadvantaged cohorts to access education, training, and support to obtain secure and well-paid jobs; supporting economic transitions; and pursuing greater national consistency while respecting the autonomy of the states and territories.
- The new NSA was endorsed by the National Cabinet on 16 October 2023. It provides states and territories with access to Commonwealth funds of up to $3 billion over five years, taking total Commonwealth investment in state and territory training systems to $12 billion over five years. According to the Department of Employment and Workplace Relations (DEWR), the new NSW also represents a ‘fundamental shift’ in the way that governments work together to address shared challenges and capitalise on shared opportunities in the VET system. This is underpinned by a greater focus on stewardship and national collaboration. It is also proposed to develop an outcomes framework for the sector and a National Skills Plan. It is anticipated that the National Skills Plan would be published in June 2024.
- An additional $1.3 billion in Commonwealth funding is also committed for priority reforms, including:
- $325 million to establish nationally networked TAFE Centres of Excellence and strengthen collaboration between TAFEs, universities, and industry $32 million has also been committed in the Employment White Paper. Among other matters, the Centres will provide national leadership in the delivery of skills, education, and training; bring together employers, unions, universities, and other stakeholders to develop and implement solutions to meet skills needs; develop innovative and more advanced training offers such as higher apprenticeships; and disseminate best practice across the TAFE network. According to DEWR, up to six Centres will be ‘turbocharged’ for rapid establishment in the areas of net zero, the care and support sector, and digital skills. The first Centres of Excellence are expected to commence operation in 2024.
- $100 million to support, grow and retain a quality VET workforce—supported by a new VET Workforce Blueprint. The development of the Blueprint is being guided by a tripartite expert steering group, with the Blueprint expected to be finalised in early 2024 following consultation with sector and industry representatives.
- $155 million to establish a National TAFE leadership Network to promote cutting edge curriculum. It is envisaged that the Network will foster collaboration between the teachers and administrators of TAFEs and public training providers to develop curriculum resources, improve the quality of teaching and learning practice, and enhance the status of TAFE. The Network will share innovation and best practice from TAFE Centres of Excellence with the broader TAFE network.
- $214 million for Closing the Gap initiatives to be designed in partnership with and led by First Nations peoples. Initiatives will include partnering with First Nations organisations to provide genuine engagement and agency in policymaking; expanding investment in the capability, sustainability, and growth of the Aboriginal Community-Controlled and First Nations Owned training sector; growing the Frist Nations VET workforce and boosting the cultural capability of mainstream RTOs; and boosting data and evaluation capacity in the First Nations VET sector.
- $250 million to improve VET completions for people who face completion challenges. Among other measures, this initiative will include supporting employer and apprentice relations to improve retention rates and refreshing the National Code of Good Practice for Australian Apprenticeships. Projects which aim to support specific cohorts including women, First Nations peoples, and people with disability will be prioritised in funding arrangements.
- $142 million to improve the quality and accessibility of foundation skills training. This will include supporting states and territories to enable no- or low-fee access to foundation skills training through VET and/or Adult and Community Education (ACE) providers. A 10-year national foundation skills strategy will also be developed to strengthen the quality and sustainability of the sector.
- $116 million to improve VET evidence and data. This will support measures to simplify reporting pathways, improve data quality, and increase reporting timeliness throughout the VET system. Key reforms include improving cyber security, supporting collaboration with States and Territories and the NCVER in the new VET Information Standard, and the National ICT capability for sharing VET data and information.
Australian Universities Accord
1.15On 16 November 2022, the Minister for Education announced a comprehensive review of the Australian higher education system, and the appointment of an Expert Panel to conduct the review.
1.16The Panel was tasked with reviewing the higher education system against seven priority areas: current and future skills needs; access and opportunity; investment and affordability; governance and accountability; links between university and VET; quality and sustainability; and innovation and capability. The Panel was also tasked with engaging across all sectors and groups affected by higher education policy in the conduct of the review.
1.17An interim report for the review was provided to government in June 2023. It set out the following priority actions to reform the higher education sector:
- Extending visible, local access to tertiary education by creating further Regional University Centres and establishing similar concepts for metropolitan areas
- Ceasing the 50 per cent pass rule and requiring increased reporting on student progress.
- Ensuring all First Nations students are eligible for a funded place at university, by extending demand driven funding to metropolitan First Nations students.
- Provide funding certainty through the extension of the Higher Education Continuity Guarantee into 2024 and 2025.
- Immediately engaging with state and territory governments and universities to improve university governance.
- The Interim Report also sets out the Panel’s initial views about larger issues to be covered in a final report, and which will be tested through further consultation and engagement with stakeholders.
- The Final Report for the AUA was presented to government on 28 December 2023, and released to the public on 25 February 2024.
- According to the report, significant changes are needed in higher education to produce the skills, knowledge and intellectual ambition needed to meet current and emerging social, economic, and environmental challenges and to respond to skill shortages and areas of critical demand.
- The Final Report makes 47 recommendations, including a national tertiary education system with the objective of underpinning a strong, equitable and resilient democracy and driving national economic and social development and environmental sustainability. Recommendations with relevance to the current inquiry include:
- A more flexible and responsive skills system, achieved through initiatives including a National Skills Passport to give all Australians a record of their formal qualifications, skills, prior learning, and work experience.
- A comprehensive system of modular, stackable, and transferable qualifications
- New accreditation arrangementsfor micro-credentials in the higher education sector, setting conditions so these credentials are funded as Commonwealth supported places.
- Supporting methods of ramping up skills delivery, including through collaborative infrastructure such as TAFE Centres of Excellence
- Outreach programs to build the aspiration andcapacity of students from underrepresented groups to participate intertiary education, including a consistent national framework for career advice across all life stages and a national communications campaign to build aspiration for tertiary education.
- Developing a national student charter setting out a shared, national commitment to the welfare, safety and wellbeing of all students and establishing a National Student Ombudsman to respond to student complaints.
- An Australian Tertiary Education Commission asa statutory, national body to plan and oversee the creation of a high quality and cohesive tertiary education system to meet Australia’s future needs.
- Develop a fit for purpose, integrated and timely tertiary education data capability, withthe Australian Tertiary Education Commission to produce an annual State of the Tertiary Education System Report
- A pathway for TAFEs to become self-accrediting in VET at the Australian Qualification Framework (AQF) Level 5 and above in areas of national priority.
Employment White Paper
1.22As an outcome of the 2022 Jobs and Skills Summit, the Australian Government announced the development of an Employment White Paper. The Development of the White Paper sought to provide a comprehensive blueprint for Australia’s future labour market, including a bigger, better‑trained and more productive workforce to boost incomes and living standards and create opportunities for Australians.
1.23The White Paper was released in September 2023.
1.24The White Paper explains that building a competitive economy relies on investments in the skills and capabilities of the current and future labour force. This is increasingly the case as the Australian economy shifts from hydrocarbons to renewables; with the development of artificial intelligence (AI); with an increasingly older workforce; with increasing growth in the care and support economy; and as global fragmentation puts pressure on supply chains.
1.25The White Paper sets out a roadmap to achieve the Australian Government’s vision for the future labour market, focused on 10 key policy areas. Of direct relevance to the current inquiry is a focus on investing in skills, tertiary education, and lifelong learning by increasing the share of Australians studying in areas of high skills need. This includes measures to:
- Broaden opportunities for people to study in areas of skills shortage.
- Enhance the tertiary education sector in priority areas.
- Support partnerships with industry.
- Grow and strengthen the VET sector.
- Broaden access to university.
- Promote study in areas of high skills need.
- Boost collaboration in the tertiary sector.
- Remove barries to lifelong learning.
Review of the Australian Qualifications Framework
1.26In June 2018, the Minister for Education and Training and the Assistant Minister for Vocational Education and Skills announced the appointment of an Expert Panel to undertake a review of the Australian Qualifications Framework (AQF). The review was announced in the 2017-18 Budget.
1.27Terms of Reference for the AQF Review tasked the Expert Panel with reviewing the AQF structure and components to ensure the AQF was: flexible and responsible; reflected the knowledge, skills and capabilities required for economic and social participation; facilitated access to learning pathways and mobility within and between education sectors, AQF levels and AQF qualifications; and reflected international good practice.
1.28The review recognised that formal qualifications would continue to be important in the labour market. It aimed to ensure the AQF was adapted to support widening access to education and employment. The AQF review was closely linked to other review and policy reform processes, including the 2018 Council of Australian Government (COAG) review of senior secondary pathways, and the Strengthening Skills review of the VET system (Joyce Review—discussed below).
1.29The review was presented to government in September 2019. While finding that the (then) current AQF was more comprehensive and complete than earlier versions of the framework, the Panel nevertheless argued that the AQF should be significantly reformed. Among other matters, the panel found that too much weight was placed on levels within the AQF relative to the qualifications with which the qualifications align, and that the 10-level structure of the AQF was too rigid and overly hierarchical. The Panel also found that the outcome statements in the AQF were not meaningful, and that the AQF Qualifications Pathway Policy provides only limited guidance on credit recognition between some qualifications and was not designed to recognise shorter form qualifications such as micro-credentials.
1.30The Expert Panel made 21 recommendations to underpin a comprehensive set of reforms to the AQF. These included:
- A less complex AQF structure with a primary focus on qualification types.
- A single and clearer taxonomy comprising eight bands of knowledge and six bands of skills more flexibly applied.
- The use of contemporary definitions of knowledge and skills
- Refocusing the AQF on the design of qualifications linked to learning outcomes.
- Providing additional information to help define qualification types—particularly for qualifications linked to nationally recognised training, apprenticeships, and research-oriented qualifications.
- The identification of general capabilities such as digital literacy and ethical decision making in individual qualifications.
- Revision of the AQF Pathways Policy to broaden guidelines for credit recognition and to provide for recognition of shorter form credentials.
- Development of a prototype national credit points system for voluntary adoption by institutions and sectors.
- Realignment of qualification types against a revised taxonomy, including the addition of a higher diploma qualification.
- Clearer definitions around the Senior Secondary Certificate of Education (SSCE)
- Volume of learning is expressed in terms of hours, not years, and applied as a benchmark for compliance and quality assurance.
- Establishment of a governance body for the AQF
- Update of AQF policies and assignment of policies to the governance body.
- On 9 December 2019, the Australian Government accepted recommendations of the AQF Review related to higher education, and accepted the aims of recommendations relating to VET, subject to further discussion with state and territory governments.
Expert Review of Australia’s Vocational Education and Training System
1.32On 28 November 2018, the Prime Minister announced an independent review of the VET sector to examine ways to deliver skilled workers for a stronger economy. The review was led by the Hon Steven Joyce, a former New Zealand Minister for Tertiary Education, Skills, and Employment. Mr Joyce delivered a final report to Government in March 2019.
1.33The Joyce Review found that some good work had been done, particularly in setting up the key elements of an integrated framework for VET, establishing a national regulator, and providing for nationally portable qualifications. Creation of a universal student identifier and the new VET Information Strategy were identified as ‘further steps in the right direction’, as were the reforms to address VET FEE-HELP issues.
1.34However, it was unclear to many stakeholders that (then) current VET systems and processes could deliver flexible work-based learning models to ensure Australians could obtain the necessary skills for the future of work. Key concerns identified in the review were slow qualification development, complex and confusing funding models, and ongoing quality issues with certain. Careers education, VET in schools, and access for disadvantaged learners were also raised as areas for improvement.
1.35Ultimately, the review found that significant upgrades to the architecture of the sector were needed to ensure that VET could deliver the skills needed for Australia’s future. The review proposed a roadmap for reform, underpinned by 71 recommendations across the following six key areas:
- Strengthening quality assurance.
- Speeding up qualification development.
- Simpler funding and skills matching.
- Better careers information.
- Clearer secondary school pathways.
- Greater access for disadvantaged Australians.
- The review emphasised that implementing the roadmap would require strong and sustained inter-governmental cooperation. It also proposed several actions that the Australian Government could pursue in the shorter term, including reforms to ASQA, piloting a new business-led model of training development, establishing the National Skills Commission (NSC—now Jobs and Skills Australia (JSA)) and the NCI; creating VET pathways for secondary schools, and enhancing foundational skills training.
- As an initial response to the Joyce Review, the Australian Government committed $585.3 million to enhance the sector through the Delivering Skills for Today and Tomorrow package. Since then, government has made further investments and is working with state and territory governments to further strengthen the VET sector.
Parliamentary inquiries
1.38The Commonwealth Parliament has conducted and continues to conduct inquiries into the VET sector and related matters. Some of the relevant inquiries are outlined below. State and territory governments have also conducted their own inquiries into VET within their jurisdictions. These include:
- The Queensland Parliament’s inquiry into the delivery of VET in regional, rural, and remote Queensland.
- The NSW Parliament’s inquiry into VET in NSW.
- The ACT Legislative Assembly inquiry into VET in the ACT.
Inquiry into Australia’s tourism and international education sectors
1.39On 11 October 2022, the Minister for Trade and Tourism, requested the Joint Standing Committee on Foreign Affairs, Defence and Trade, through its Trade Subcommittee, to inquire into Australia’s tourism and international education sectors.
1.40The Committee presented an interim report on 19 October 2023. The report focused on Australia’s international education sector post COVID-19.
1.41Of direct relevance to the current inquiry, the Committee highlighted ‘overwhelming’ evidence of persistent and deep-seated issues in the private VET sector. It stated that at least some providers had systematically exploited Australia’s education system and broken migration law to funnel vulnerable international students who are unwilling participants into sophisticated operations that in almost all cases lead to exploitation, and in some cases to slave labour and sex trafficking.
1.42The Committee made 29 recommendations aimed at strengthening and enhancing the competitiveness of Australia’s international sector, with a lead recommendation focused on the development of a ‘Team Australia’ program to build a stronger international education brand and support market diversification. The Committee also made a specific recommendation focused on addressing unscrupulous practices by VET providers:
The Committee recommends the Government take firm action to address persistent and deep-seated integrity issues in the private Vocational Education and Training (VET) sector, understanding this will be a difficult and long-term reform program. Actions may require legislative changes to strengthen regulatory oversight and tough decisions and could include: •
- structural reforms to improve the monitoring and assessment of current providers and increase vetting of new providers including a fit and proper person test to operate a VET provider.
- a pause for at least 12 months by Australian Skills Quality Authority (ASQA) in processing new provider applications for Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) registered VET providers, with limited exceptions for legitimate applications such as industry linked entities, high economic value proposals or those endorsed by state and territory governments.
- requiring new providers seeking CRICOS registration to have operated and delivered to domestic students for at least 12 months.
- suspension of recruitment of international students to CRICOS VET courses identified with persistent quality and integrity issues and/or of limited value to Australia’s critical skills needs, such as management and leadership courses.
- automatic suspension of new international student intake for providers under serious regulatory investigation.
- cancellation of a provider’s CRICOS registration if no training is delivered for a period of 12 months or more.
- an ongoing boost to the resources available to ASQA for compliance and enforcement of VET regulatory and quality requirements over time.
Select Committee on Workforce Australia Employment Services
1.43The Select Committee on Workforce Australia Employment Services (WAES Committee) was established by a resolution that passed the House on 2August2022. The WAES Committee was tasked with a first principles review of the Workforce Australia employment services system.
1.44The Committee presented an interim report in February 2023, and its final report on 30 November 2023.
1.45The Committee was clear in its assessment that the employment services system and broader human services ecosystem was fragmented and difficult to navigate, and that the employment services system had little connection with education and training. This was notwithstanding that quality training is widely recognised as one of the most effective ways of improving employability and of gaining and keeping a job.
1.46The Committee made 75 recommendations to underpin an ambitious blueprint for a rebuilt Commonwealth Employment Services System. Recommendations with particular relevance to the current inquiry include:
- Establishing formal intergovernmental agreement(s) setting out key roles and responsibilities for coordination with skills, training, and related human services.
- Establishing a network of regional hubs and service gateways responsible for local service system coordination and mapping, jobseeker assessment and referrals to services, and industry and employer engagement and support. This is likely to include direct engagement with the training sector.
- Introducing new objectives for the employment services system, including a specific focus on growing the skills and capabilities of the Australian workforce, advancing the productivity of the Australian economy, responding to the needs of business and industry, and providing adaptive and flexible responses to energy and industry transitions. Findings and recommendations of the WAES Committee were also consistent with the findings of the Employment White Paper (discussed above).
Inquiry into school to work transition
1.48On Wednesday 31 May 2017, the Minister for Employment, Education and Training, referred to the Standing Committee on Employment, Education and Training an inquiry into how students are supported from school to work. The Committee presented its final report in May 2018.
1.49The report found that while many students had been successful in their transition from school to further education and employment, more must be done to improve the transition process—especially for disadvantaged cohorts. Key concerns included poor perceptions of VET pathways, issues with the PaTH internships program, and insufficient support for students facing disadvantage, including First Nations students and students with disability.
1.50The report made 35 recommendations. Recommendations with specific relevance to the current inquiry include:
- Updates to initial teacher education (ITE programs).
- Significantly enhanced industry engagement with schools, and a review of the way that industry connections are organised in schools compared with connections in the VET and higher education sectors.
- Support for trades training in schools, including school-based apprenticeships.
- Increased marketing activity around apprenticeships and traineeships.
- Measures to ensure that VET and higher education policy take into account the distinct needs of students from CALD backgrounds.
- Greater support for VET providers to offer enhanced English language training.
- Investment in the development and implementation of a national career education framework or strategy, including measures to provide tailored career advice to students with disability.
Inquiry into the operation, regulation and funding of private VET providers
1.51On 24 November 2014, the Senate referred the inquiry into the operation, regulation, and funding of private VET providers in Australia to the Education and Employment References Committee. The Committee tabled two interim reports before presenting its final report in October 2015.
The final report raised several concerns regarding the behaviours of and funding for private VET providers, with a strong focus on the VET-FEE-HELP scheme. It made 16 recommendations, including:
- An immediate review into the operation and regulation of VET FEE-HELP, which should consider the most effective way to control course costs under the scheme and the most effective way to limit provider access to the scheme.
- The rejection of proposals to lower the payment threshold under the VET-FEE-HELP scheme to $30,000 or $40,000.
- Urgent and concerted efforts to further raise awareness of the rights of students and existing Standards relating to providers in the VET sector.
- A concerted and urgent ‘blitz’ of all providers by the Department of Education and ASQA, to ensure providers are consistently complying with the national standards.
- Government providing a brief to the Department of Public Prosecutions to launch prosecutions against providers engaged or benefiting from fraud and taking steps to recover monies lost.
- ASQA be given powers to directly regulate brokers or marketing agents in the VET sector, and to protect students.
- The government caps or otherwise regulates the level of brokerage fees paid for VET FEE-HELP students to a maximum of 15 percent of the loan amount.
- Government applies minimum hours standards to VET FEEHELP eligible courses.
- ASQA be given the powers to take swift and strong action against RTOs found to be providing inadequate training to their students.
- Government be required to approve any instances of RTOs subcontracting out components of their VET FEE-HELP eligible training.
- ASQA maintains its close scrutiny on and gives priority to the Early Childhood and Aged Care training sectors,
- Underpinning legislation for ASQA be revamped in order to give the regulator sufficient powers to adequately regulate the VET sector.
- ASQA improves its processes to enable it to swiftly share information with other levels of government, regulators, and law enforcement agencies.
- An Ombudsman focused on domestic students in the VET sector be created.
Inquiry into TAFE and its operation
1.52On 21 March 2014, the Senate Standing Committee on Education and Employment adopted an inquiry into the role of the TAFE system and its operation. The Committee presented its final report in October 2014.
1.53The report emphasised the value of TAFE in the Australian community, as well as its critical role in developing skills that are essential to the economy. However, the report also identified issues associated with the quality of training, as well as the need to provide sustainable funding for TAFE which takes into account the contributions of governments at all levels. In addition, the report identified some instances of poor practice by private providers which were jeopardising the reputation of the VET sector as a whole, and which it was critical to address.
1.54The report made six recommendations. These focused on defining the role of TAFE, lifting the quality of training, defining pathways from TAFE to higher education and employment; addressing regulatory loopholes and unscrupulous practices; gathering additional data on funding arrangements; and ensuring funding for TAFE captures capital requirements and support for disadvantaged learners.