Chapter 1Introduction
1.1The Free TAFE Bill 2024 (bill) would establish ongoing financial support to the states and territories (states) to deliver Fee-Free TAFE and vocational education and training (VET) places in areas of local and national priority. The grant of financial assistance to the states would be conditional upon the terms and conditions agreed to between the Commonwealth and the states.
1.2In his second reading speech for the bill, the Minister for Skills and Training, the Hon Andrew Giles MP, outlined the importance of a strong VET system to boost productivity and ensure that Australia has the skilled workforce it needs:
Free TAFE will support a prosperous and equitable Australia. It removes financial barriers to education and training. It delivers a coordinated national response to workforce shortages in industries and occupations of local and national priority.
Reforming the national VET system
1.3The bill forms part of a broader suite of government reforms to put TAFE at the heart of the VET system. According to Jobs and Skills Australia (JSA), around 43per cent of new jobs expected to be created in the next 10 years will require a VET qualification, particularly in high-demand industries such as construction, manufacturing and the care sector. JSA predicted a 'growing need for post‑secondary qualifications for almost all jobs in the future, upwards of 90percent within a decade, and of those a significant proportion need to be vocational education and training qualified'.
1.4The five-year National Skills Agreement (agreement) between the Commonwealth and states aims to deliver a national VET system that provides high-quality, responsive and accessible education and training to boost productivity, support Australians to obtain the skills and capabilities they need to obtain well-paid secure jobs, and ensure Australia has the skilled workforce it needs now and into the future.
1.5The agreement provides states with access to up to $12.6 billion of Commonwealth funds including new funding of up to $3.7 billion over five years. The agreement also embeds a model of shared stewardship to support governments to work collaboratively and purposefully towards national priorities, while preserving flexibility for the states to align local skills supply with demand.
Fee-Free TAFE
1.6The Commonwealth and the states are investing over $1.5 billion to deliver 500000 Fee-Free TAFE and VET places over 2023–2026. As part of the Fee-Free TAFE Skills Agreement, the Commonwealth partnered with the states to deliver an initial 180 000 Fee-Free TAFE and VET places from January 2023. TheCommonwealth's contribution of $493 million to support the delivery of training places was matched by the states.
1.7In August 2023, the Commonwealth committed an extra $414.4 million for a further 300 000 TAFE and VET places to be made fee-free from January 2024, with these places currently being rolled out nationally. An additional $86.4million was subsequently announced in the 2024–25 Budget for states to deliver a further 20 000 Fee-Free TAFE and VET places, including approximately 5 000 pre-apprenticeship places, over two years from January 2025 to boost the supply to the construction industry.
1.8The Commonwealth has indicated that Fee-Free TAFE will fund areas of local and national priority, with priority given to specific groups, including First Nations Australians; young people (17–24 years); people who are out of work or receiving income support payments; unpaid carers; women facing economic insecurity; women undertaking study in non-traditional fields; and people with disability and certain categories of visa holders.
1.9According to the latest enrolment data, from 1 January 2023 to 30 September 2024 there have been over 568 400 enrolments in Fee-Free TAFE nationally, including over 30 000 First Nations Australians. In addition, more than 60percent of enrolments have been women and more than 30 per cent of enrolments have been in regional areas.
1.10The bill would legislate the Fee-Free TAFE program by enabling the Minister to provide grants under section 16 of the Federal Financial Relations Act 2009 on behalf of the Commonwealth to states to secure Free TAFE (FT) places for prospective students in TAFE or the VET sector.
Overview of the bill
1.11The bill comprises one schedule with a preamble and four parts. The preamble outlines the importance of TAFE and the embedding of Fee-Free TAFE as an enduring feature of the VET system. The objective of the bill would be to:
establish the delivery of at least 100 000 FT places each year, removing financial barriers to education and training, particularly for people experiencing economic disadvantage;
support education and training in areas of high workforce demand, with emerging skills needs or otherwise a national or state priority; and
acknowledge the importance of TAFE and other public training institutions to the VET sector, and the shared stewardship model of the national TAFE system.
Financial assistance for FT places
1.12Part 2 of the bill describes the type of assistance the Commonwealth could make towards FT places. This would be subject to a state or territory entering an 'FTagreement' that sets out the terms and conditions on which a grant of financial assistance by the Commonwealth is to be provided. The agreement would need to relate to the delivery of FT places from 1 January 2027 and be 'expressed to be an FT agreement for the purposes of the Act'.
1.13The bill does not prescribe the details of the terms and conditions under which a grant of financial assistance is to be provided. Rather, this would be left to the Commonwealth and states to agree as part of any FT agreement. Thiswould provide flexibility to ensure 'that free TAFE can be responsive to new and emerging priorities and economy-wide trends'.
Matters to be dealt with under FT agreements
1.14The bill sets out a non-exhaustive list of matters that must be dealt with under an FTagreement. This would include the timing and funding for FT places, national and state priority areas for FT places, eligibility requirements for VET providers and reporting milestones.
Areas of study and priority cohorts
1.15The bill provides that the FT places would be prioritised to areas of study that respond to national and local skills needs. These would be informed by evidence, including from JSA and Jobs and Skills Councils. FT places provided would also be prioritised to those groups who would benefit the most from the removal of cost barriers to study.
Training institutions
1.16The bill requires that an FT agreement set out the VET providers, or classes of providers that are eligible for funding, to provide flexibility for FT places to be delivered by non-public providers in certain circumstances.
Review and reporting requirements
1.17The bill specifies that the FT agreement must outline the arrangements for reviewing and evaluating the agreement, ensuring that Free TAFE is meeting expectations, that the risks are being managed, and that learning will inform delivery as the program evolves.
1.18In addition, the bill stipulates that the terms and conditions of an FT agreement must deal with a requirement for the states to provide the Commonwealth with a range of information, including the total funding provided for FT places and enrolment and completion numbers.
Other matters
1.19The bill would require the Minister to consult with the Skills and Workforce Ministerial Council before introducing any legislation to amend the Act, and if any amendments were introduced, to table a report setting out what consultation had taken place.
Financial implications
1.20While the bill itself would not have a direct financial impact, the Commonwealth has committed $253.7 million over 2026–2028 in the 2024–25 Mid-Year Economic and Fiscal Outlook, and an additional $1.4 billion from 2028–29 to 2034–35, for Free TAFE.
Consideration by other parliamentary committees
1.21When examining a bill, the committee considers any relevant comments published by the Senate Standing Committee for the Scrutiny of Bills (ScrutinyCommittee) and the Parliamentary Joint Committee on Human Rights (Human Rights Committee).
1.22The Scrutiny Committee noted that it had concerns regarding the appropriateness of allowing an FT agreement—rather than Parliament—to determine the terms and conditions under which payments may be made to the states, and the appropriateness of exempting relevant determinations from the usual disallowance process.
1.23The Human Rights Committee did not make any comments on the bill. However, the statement of compatibility with human rights concluded that the bill is compatible with human rights because 'it promotes the protection of human rights and does not limit any human rights'.
Conduct of the committee's inquiry
1.24On 21 November 2024, the Senate referred the provisions of the bill to the committee for inquiry and report by 27 February 2025.
1.25The committee advertised the inquiry on its website and invited submissions by 15 January 2025. The committee received 66 submissions which are listed at Appendix 1 of this report. The public submissions are available on the committee's website.
1.26The committee held two public hearings in Adelaide on 31 January 2025 and Canberra on 7 February 2025. A list of the witnesses who gave evidence at the hearings is included at Appendix 2.
Acknowledgments
1.27The committee thanks those individuals and organisations who contributed to the inquiry by preparing written submissions and giving evidence at the public hearings.