6. Operation and funding of VET
   1. This chapter discusses the structure and governance of the vocational education and training (VET) sector, including the mix of providers, regulation, student experience, access to VET, and sector funding. It also considers measures to better align the VET and higher education sectors.

Purpose and functions

6.2The VET sector lacks a clearly defined purpose or structure. This was highlighted as a potential reason for negative perceptions of VET and deficiencies in the operation of the sector.

6.3Professor Erica Smith emphasised the need to consider the true purpose of VET, noting that VET in Australia is understood as the ‘handmaiden of industry’. According to Professor Smith, this is a relatively recent idea, with VET historically understood as having a social purpose. VET is understood as having both a social and economic purpose in other countries. Professor Smith also observed that universities are often perceived as equipping graduates with workplace skills and delivering a more generalised, person-centred education.[1]

6.4Women in Adult and Vocational Education (WAVE) noted that the contemporary VET sector is highly complex and widely dispersed. WAVE recommended that the Australian Government clearly define the VET sector, including its purpose and social and economic benefits. WAVE also recommended that government highlight key access points and learning pathways across all education sectors.[2]

6.5Dr Phillip Rutherford stated that there is no clearly defined VET system. While there are many individual parts and links, few are connected, and none are joined in a common purpose with clear objectives. Dr Rutherford indicated that a functioning VET sector should include:

• A clearly defined vision for VET from which the development of policies and key products (for example, Training Packages) proceed.
• A single authority responsible for the development of a vision and purpose for the VET sector, and for the development of overarching policy.[3]
  6. A core element of the new National Skills Agreement (NSA) is embedding shared stewardship in the VET sector. This effort is to be led by the Skills and Workforce Ministerial Council. The Department of Employment and Workplace Relations (DEWR) stated that the new stewardship model will:

… replace a more transactional, and too often adversarial, approach to funding and delivery that has existed in the skills sector … [and] ensure the funding available under the [NSA] is used to achieve the best possible outcomes based on collaboration, agreed targets and priorities and an evidence-based approach to drive continuous improvement.[4]

Provider market

6.7VET is currently delivered by more than 3,500 providers, comprising a mix of public, private, and community-led organisations.

6.8The sheer number of providers means that regulation and audit can be challenging, and poor behaviour may not be effectively addressed. Finding reliable information on individual providers and course offerings is also challenging for prospective students, employers, and other stakeholders.[5]

6.9The National Youth Commission Australia (NYCA) indicated that marketisation of the VET sector and contestable funding arrangements have led to a decline in the quality of training and poor perceptions of VET.[6] The Motor Trades Association of Australia (MTAA) similarly noted that contestable, demand-driven markets reward large-scale, low-cost training delivery which is not conducive to a high-quality workforce or the provision of modern facilities or training materials.[7]

6.10Monash University highlighted an influx of providers and an erosion of skills training, stating that this has led to a perception of lowered standards.[8] NYCA expressed similar views, stating:

The poorly regulated market allowed the participation of private and non-profit VET providers with little to no experience in education and training. Researchers have described the actions of some VET providers as malfeasance—using incentives for enrolment provided to people with little likelihood of benefiting from the program … With enhanced funding and better regulation, it will take a long time to repair the reputational damage that I think has been done through this period of full competition.[9]

6.11By contrast, the Independent Tertiary Education Council (ITECA) asserted that the idea of an ‘explosion’ in the number of registered training organisations (RTOs) is untrue, noting that the overall number of RTOs has declined in recent years.[10]

6.12ITECA also stated that independent providers support the majority of students in the VET sector (87.1 per cent of students in 2021) and deliver the majority of longer-term and advanced qualifications (70.9 per cent of Diplomas and 69.4 per cent of Certificate IV qualifications in 2021). According to ITECA, employers are more satisfied with private sector providers than with technical and further education (TAFE institutes), including in terms of flexibility, relevance of training, and price. However, private providers still receive a small proportion of government funding (22.9 per cent of funding in 2021).[11]

6.13Notwithstanding this focus on the benefits delivered by private sector and industry RTOs, ITECA called for ‘agnostic’ funding arrangements for the sector which give priority to student choice over whether a provider is public or private.[12]

6.14DEWR stated that independent RTOs predominantly deliver short, high-volume training such as first aid or responsible service of alcohol (RSA), undertaken on an exclusively fee-for-service basis. DEWR noted that 90 per cent of TAFE students undertake a program of study rather than subject-only training.[13]

6.15TAFE Directors Australia called for a move from an open market approach to focus on a small number of high-quality RTOs working alongside public training providers. It stated that funding for VET must recognise but clearly differentiate between smaller, specialised providers who deliver shorter, competency-based courses and larger public institutions which deliver full qualifications.[14]

6.16Jobs and Skills Australia (JSA) indicated that it may be possible to begin categorising providers, courses, and qualifications into ‘education’ (longer-term qualifications) and ‘training’ (shorter, more targeted courses focused on industry need), stating:

[G]eneralists … might be providing accredited training at the full qualification. We put public providers in that category … There are also some mixed private training providers that have private and public sources of funding. So that's one bucket. There's a second bucket that we call 'program specialists', which are businesses that provide RSA and that kind of highly targeted training. And then there are industry specialists, where providers provide training just for an industry grouping. There's a third category, which we're calling 'cohort specific', which targets a particular group, including enterprise providers, so a business can be a registered training provider and provide training to their own staff, and industry associations that might be training staff on behalf of the whole sector; schools, VET and school students; Indigenous specialists; and international specialists that are just focused on international students.[15]

6.17Independent Higher Education Australia (IHEA) called for partnerships between high-quality TAFEs and quality independent VET providers to scale benefits associated with the burgeoning opportunities across the sector.[16]

6.18Newbery Consulting (Newbery) noted that there are a variety of different employers across a range of industries, and that meeting the needs of these employers requires a diverse VET ecosystem—with every VET provider having a role to play:

• TAFE is strong at servicing the traineeship and apprenticeship market.
• Community colleges provide training in support of community needs and interests.
• Private RTOs deliver traineeships and apprenticeships, and short courses in support of industry and most often in the workplace.
• Enterprise providers deliver training directly to their own workforce.[17]
  19. Newbery asserted there is little difference in terms of service quality and levels of non-compliance between public and private providers, and suggested that universal terminology be adopted (for example, ‘VET providers’ or ‘RTOs’) to avoid perceptions that TAFE is inherently superior.[18] By contrast, the Australian Education Union (AEU) stated that when universal terminology is adopted, TAFEs are implicated in reputational damage caused by less reputable for-profit entities.[19]

TAFEs and public sector providers

6.20Several stakeholders highlighted the benefits of TAFE and indicated that addressing negative perceptions of VET will require greater investment in public provision. The Committee heard that the TAFE brand is trusted, and greater investment in the TAFE system will ensure a strong public core to the VET sector.[20]

6.21The Government of South Australia (SA Government) stated that TAFEs can play a leadership role in enhancing perceptions of the sector, arguing that lifting the status and capability of TAFE is central to lifting the status of the VET sector as a whole. According to the SA Government, there is an opportunity to consider the central role of TAFE through a new long-term NSA.[21]

6.22DEWR stated that TAFEs support more students from disadvantaged cohorts than private sector providers, highlighting data from the National Centre for Vocational Education Research (NCVER). The data shows that, in 2021:

• 6.0 per cent of students at TAFE identified as First Nations, compared with 3.0 per cent of students at private providers.
• 8.0 per cent of students at TAFE identified as people with disability, compared with 3.0 per cent of students at private providers.
• 20 per cent of students at TAFE belonged to the most disadvantaged socio-economic quintile, compared with 16 per cent of students at private providers.
• 1.0 per cent of students at TAFE were from very remote areas, compared with 0.7 per cent of students at private providers.[22]
  23. The Queensland Nurses and Midwives’ Union (QNMU) observed that TAFE plays a significant role in providing and coordinating training. This coordinating role provides short- and long-term contributions to society and to the economy in the delivery of services. Moreover, TAFE plays a key role in providing training in regional, rural, and remote areas where it is less viable to deliver services.[23]
  24. Public provision of VET can also be critical to certain industries. The Australian Nursing and Midwifery Federation (ANMF) noted that TAFEs are central to nursing, midwifery, and aged care. The ANMF raised concern that private providers do not offer courses that are relevant to this sector or are of a sufficiently high standard.[24]
  25. The NYCA observed that underinvestment in TAFE has reduced the capacity of the public system to keep up with technological development, maintain teachers’ skills and knowledge, and ensure that VET delivers for industry. The NYCA recommended that all levels of government significantly increase funding for TAFE, stating that an adequately funded public system will enhance the overall quality of VET by forcing private providers to improve the training they offer.[25]
  26. The Australian Council of Trade Unions (ACTU) asserted that while TAFE was once the ‘jewel in the crown’ of VET, after decades of funding cuts and deregulation this is no longer the case. TAFE has lost thousands of teaching jobs over the past 10 years, and funding cuts have left the workforce under increased pressure. Many TAFEs have been forced to reduce their course offerings if they have not closed altogether, and there has not been sufficient investment in facilities and equipment. The ACTU called for greater, guaranteed funding for TAFEs—with TAFEs receiving 70 per cent of all public expenditure—and for a $3 billion fund to support capital improvements.[26]
  27. Master Electricians Australia (MEA) stated that while TAFE has good branding and is geographically dispersed, it must move away from a ‘bricks and mortar’ approach to training to deliver more flexible options to employers.[27]
  28. Stakeholders indicated that rebuilding the TAFE system is a priority for at least some jurisdictions. The SA Government observed that work is ongoing to rebuild TAFE SA. This includes restoring courses in areas such as disability and early childhood education and care, building new infrastructure, introducing fee-free TAFE in partnership with the Commonwealth Government, and supporting regular positive media attention on and promoting the TAFE system.[28]

Private sector providers

6.29In contrast, some stakeholders indicated that private RTOs offer a higher quality of education, a greater diversity of courses than TAFEs, and deliver the ‘niche’ courses which respond to industry need.[29]

6.30ITECA stated that private RTOs have higher levels of student satisfaction, higher completion rates, and higher rates of post-study employment than public institutions. Furthermore, enterprise RTOs (RTOs within businesses which deliver training solely to the business’ staff) specialise in specific areas and will accordingly have links with local employers and staff that specialise in specific disciplines.[30]

6.31Katrina’s School of Hair and Beauty noted that those who have been trained by a private RTO tend to display the greatest level of skills and competence.[31]

6.32The MTAA stated that industry RTOs and group training organisations (GTOs) are instrumental in securing employment opportunities for students and helping establish a skilled labour pool for employers. Moreover, industry RTOs and GTOs offer the flexible, tailored training programs that are increasingly preferred by SMEs and have higher student retention rates than TAFEs. The MTAA recommended an increase in funding for industry-based, non-profit RTOs and GTOs that demonstrate high rates of student placement and retention.[32]

6.33The Community Media Training Organisation (CMTO) called for greater recognition of specialised enterprise RTOs set up by industry for industry. It noted that its own model ensures industry has a deep interest in and ownership of the way training is developed and delivered to meet the needs of a rapidly evolving industry.[33] This view was echoed by the National Fire Industry Association, who stated:

Aside from the 90 per cent completion rate, the key benefit [of industry RTOs] is the connection between the employer end of the industry and the training side. Employer and employee representatives are equal partners in the delivery of training, ensuring that training is directly relevant to industry needs.[34]

6.34However, other stakeholders expressed negative views about private VET providers. For example, the ACTU stated that private sector providers:

• Are largely if not solely concerned with maximising profits and are not concerned with delivering high quality training.
• Often rely on casual workers and fail to provide adequate pay and conditions.
• Operate proprietary training models, under which they receive public funding for training which is not available to the public but is delivered to a single employer. The employer may see the private RTO as a conduit to public money.[35]
  35. The Australasian Vocational Education and Training Research Association stated that a proliferation of for-profit providers in the marketised VET system contributes to lower perceptions of VET. It argued that one way to raise the status of VET is to change current funding models and ensure VET is funded as an educational sector—using similar approaches to those in schools and universities.[36]
  36. The National Union of students (NUS) similarly asserted that for-profit motives in tertiary education led to poor student outcomes as RTOs offer low-cost training to compete with the public sector. It expressed concern with the corporatisation of VET and increased reliance on private RTOs.[37]

Sector regulation

6.37Regulation in the VET sector is led by the Australian Skills Quality Authority (ASQA). Responsibility is shared with the Victorian Registration and Qualification Authority and with Western Australian (WA) Training and Accreditation Council in Victoria and WA jurisdictions, and the Tertiary Education Quality and Standards Agency (TEQSA) in relation to dual sector providers.ASQA is responsible for—among other matters—the registration of providers, the conduct of compliance and audit activities, and the accreditation of VET courses.

6.38The Committee received limited evidence on the regulation of the sector. However, a common theme was that ASQA’s approach to regulation is prescriptive, and RTOs are subject to duplicative and burdensome audits. This was a particular concern for RTOs regulated at both the federal and state levels and for dual-sector providers.[38]

6.39The Australian Digital and Telecommunications Industry Association (ADTIA) noted that RTOs are often driven by compliance with ASQA standards and stated that this comes at the expense of service quality and student outcomes. ADTIA called for ASQA to work with industries to ensure audits are undertaken under a system that helps RTOs achieve continuous improvement.[39] These views were broadly echoed by RMIT University (RMIT), who stated:

Regulatory arrangements need to have more of a holistic approach and auditing needs to allow for more interpretation of requirements in a process-driven fashion more in line with the way ISO auditing works. Contract compliance auditing also doesn’t necessarily focus on quality outcomes and can become an exercise in ensuring that documents are written in are particular fashion and ticking boxes (particularly in relation to assessments) rather than focusing on the student experience and educational outcomes.[40]

6.40RMIT advised that a ‘one-size-fits-all’ approach to compliance with obligations is not fit for purpose and is a legacy of a system which enabled the misuse of public funds at the expense of students. RMIT stated that there is an opportunity to consider separate public providers (TAFEs and large dual-sector providers) for which administrative and compliance obligations could be reduced—with a view to building confidence in public provision.[41]

6.41IHEA noted that dual sector providers are regulated by both ASQA and TEQSA and stated that this contributes to confusion and regulatory duplication—exacerbated by the fact that regulators operate in unnecessary silos. IHEA called for service-level agreements to be established around ASQA’s key functions and for consideration of streamlining registration for dual-sector providers. According to IHEA, the greatest benefit would be realised via merging ASQA and TESQA.[42]

6.42Mr Brett Hilder—a private business owner—expressed strong concern about ASQA’s activity in the sector, stating that the regulator:

… has a deserved reputation as a bullying, bureaucratic institution which invariably imposes the most damaging sanctions at its disposal on … private RTOs [which are small and medium enterprises (SMEs)]. It does not understand what compliance looks like, and never has.[43]

6.43Mr Hilder asserted that ASQA is to blame for the ‘woeful delays’ in even modest updates to units and qualifications on which RTOs rely and is ultimately ‘the single biggest driver of mediocrity and delays in responding to changing industry needs’.[44]

6.44The Australian Industry Group Centre for Education and Training (AiGroup) observed that while ASQA’s strong focus on compliance is necessary, over time the regulator should re-prioritise its regulatory agenda to focus on lifting the actual and perceived quality outcomes of the VET system. This should provide an impetus for RTOs to change their priorities and focus less on compliance and more on quality. The AiGroup indicated that TESQA’s approach to regulation could be used as a model, noting that TESQA has always had a strong focus on the quality of programs in the university sector.[45]

6.45The ACTU asserted that ASQA’s recent move toward self-assurance for RTOs has made noncompliance easier for bad actors. It argued that existing regulatory settings may make it easier for RTOs to issue certificates that leave trainees ill-prepared for industry work. The ACTU claimed:

[L]ittle is being done to ensure that certificates match industry experience or that assessment requirements (which RTOs draft themselves) correspond to clear industry pathways and career development. A hands-off approach to ensuring quality certificates is hardly consistent with a public perception of a world-class TAFE system.[46]

6.46The ACTU stated that the solution to this issue is for ASQA to move away from the risk management and self-assurance model that it has adopted, and towards more active regulation of the sector.[47]

6.47Concerns about ASQA’s regulatory performance were raised in the 2019 expert review of the VET system (Joyce Review). The review recommended measures to strengthen ASQA’s capacity to provide education and guidance to the sector, to expand ASQA’s auditing role to include ranking providers on their training offerings and governance arrangements, and to reduce duplication and minimise reporting burdens for RTOs.[48]

Enhancing the VET experience

Student support and representation

6.48Several stakeholders noted a lack of effective, consistent support and pastoral care for students on VET campuses for both public and private providers, stating that this can negatively impact experiences and perceptions of the sector.[49]

6.49The NUS noted that prospective VET students—particularly those exiting secondary education—consider the services and lifestyle offerings of institutions when making pathway choices. It asserted that one way of enhancing perceptions of VET would be to increase student representation:

Students need to have a say on—to be able to directly influence—the way their courses are run and the way TAFE and institutions are structured, and also on how their apprenticeships and practicals are run … As we know, there are hundreds of thousands of new TAFE students, but they do not have the same representation as university students do.[50]

6.50The NUS called on government to prioritise funding for student representation on VET campuses and to establish the same facilities and programs found on university campuses—for example clubs, societies, and student collectives, food banks, legal services, counselling, health services, and childcare. The NUS also asserted that there would be merit in establishing a national complaints body for VET, empowered to act against RTOs where complaints are made.[51]

6.51TAFE Directors Australia observed that wrap-around services are particularly valued in the context of Fee-Free TAFE offered by the Victorian Government. These services—which include literacy and numeracy skills—allow TAFE educators to engage more effectively with students with higher needs who may have been unable to access VET under standard funding arrangements.[52]

6.52Professor Robin Shreeve expressed concern that VET institutions have inadequate social, recreational, and sport facilities compared with universities, and few provide access to counselling, information, guidance, and formal mentoring.[53]

6.53The Committee heard there would be value in implementing greater support for students completing certain qualifications. The Queensland Alliance for Mental Health (QAMH) stated that extra support is needed for the emerging mental health peer workforce, which will be an increasingly large part of the mental health system. One means of supporting this future workforce is to invest in peer mentoring programs. The QAMH identified the Peer Workforce Student Mentoring Program delivered on two campuses in Queensland as ‘overwhelmingly successful’ in terms of encouraging students supported by peer mentors to continue their studies.[54]

6.54Stakeholders indicated that careers guidance should not end at the end of secondary schooling and called for quality careers and training support on VET and university campuses, as well as access to more careers support for the public.[55] The Australian Centre for Career Education (ACCE) asserted that VET courses should have a career education component, and that there should be career guidance available for all people across university and TAFE settings. The ACCE stated:

[S]tudents need to have access [to careers information] to know that they're making the right choices and those courses are right for them, and that the courses will actually deliver work. I think a lot of students are promised, 'You'll get a job once you've got this course,' and that's not necessarily the case. In some of the VET sporting courses, students seem to think they're going to get a job there, and that's not the case. In that instance, a student's made an incorrect assumption about following that path.[56]

6.55The University of Technology Sydney (UTS) advised that the New South Wales (NSW) Government has established Careers NSW to provide lifelong information, advice, and professional guidance for all NSW residents at any stage of their career. UTS indicated that the Commonwealth may wish to consider a similar approach at the national level.[57]

6.56Skills Impact noted that the VET ecosystem is necessarily complex and cautioned against implementing solutions to reduce complexity without considering local need:

While departments, agencies and careers advisors continue to look for simplified solutions, stakeholders including employers, learners, and parents, are looking for much greater detail that specifically relates to jobs and future potential. This includes the nature of skills required because while some occupations may look attractive to a wide range of learners, learners may have specific weaknesses that don’t allow them to develop the full range of required skills and become non completers by necessity. They are not suited physically, temperamentally, culturally, or intellectually for the job role they started learning.[58]

6.57SkillsIQ observed that there is little assessment conducted by training providers as to whether a person is suitable for a course, with the focus being on delivering training which will lead directly to employment. SkillsIQ indicated that while a focus on career pathways should remain, the lack of engagement with students around their needs and expectations leads to students leaving courses part way through.[59]

6.58TAFE NSW asserted that a key determinant of whether a student will complete their qualification is whether they understand and are prepared to undertake the training at their point of entry. In relation to Fee-Free TAFE, TAFE NSW stated:

Nursing is free, but it's a big deal to go and study a Diploma in nursing and to understand what it means to be in that clinical environment and to deal with people, so we're doing much more work at the front end to understand what learners want to get out of learning, their career aspirations and the preparatory work for the learning experience so that the pain points of the first assessment, the first practical and studying for a couple of years are managed upfront. That starts to impact completions.[60]

6.59The Committee heard that there would be merit in ensuring that prospective VET students are aware of core skills required for work in specific sectors and can self-assess whether that work would align with their skills, aptitude, and aspirations. The QAMH highlighted the benefit of:

• Identifying and clearly communicating the core skills and attitudinal factors for ‘best fit’ workers in the Community Mental Health and Wellbeing sector.
• Developing an online tool for potential workers to self-assess their suitability to work in the sector as a key first step in a person’s career pathway.

On-campus facilities

6.60Stakeholders emphasised that a functioning VET system requires up-to-date facilities to support students and enable quality outcomes and raised concern that many VET campuses—particularly TAFEs—lack modern amenities. The Committee heard that this may be driven by historic and ongoing funding issues.

6.61Two third-year apprentices representing the Electrical Trades Union of Australia (ETUA) told the Committee that there is a lack of infrastructure and up-to-date equipment on VET campuses.[61] One stated:

Even on my campus at CIT in Canberra, we've literally got not enough equipment and the equipment that we have is old and broken ... [W]e're looking to electrify Canberra completely by renewables in a very short amount of time, and realistically there's no opportunity for the apprentices who are going to be the tradies doing this work to actually learn it.[62]

6.62The NSW Department of Education, TAFE NSW, and the NSW Education Standards Authority (NSW Department of Education et al) stated that the VET sector is constrained by a lack of resources, trainers and assessors with sector-relevant skills, training facilities, and modern equipment. Commonwealth investment in facilities and modern equipment for all providers will enable RTOs and other providers in local communities to provide quality training that supports local jobs and economic development.[63]

Access to VET

6.63Several stakeholders indicated that steps should be taken to increase access to VET for all Australians. A particular focus was supporting learners from regional, rural, and remote areas.[64]

6.64The Victorian Chamber of Commerce and Industry (VCCI) noted that students in regional and remote areas are more likely to undertake lower-level qualifications than their metropolitan counterparts. This is despite regional industries relying heavily on VET-trained workers. Barriers to access to VET include funding, class sizes, access to teaching and learning resources, and overall difficulties in achieving economies of scale.[65] Concerns relating to economies of scale were echoed by the NUS:

[T]he demand-driven structure just doesn't work effectively for TAFE, especially in regional campuses … [W]hen I was initially studying my Certificate IV at Bathurst TAFE, it was a bit of a struggle to get people into the role. I didn't know until a week before the course started that there were enough students in there, so I didn't have much time to prepare and effectively move around work to study. Demand-driven structures should be changed, especially for regional and rural students who don't have access to those large TAFE institutions that inner-city campuses do.[66]

6.65The National Australian Apprenticeships Association (NAAA) noted that according to AASN providers, the greatest predictor of success of a training contract is how far training is conducted from where the apprentice lives. This is a key challenge for apprentices in rural, regional, and remote areas.[67]

6.66The NAAA indicated that the consolidation that occurred as a factor of changing funding environments and opening of the contestable training market has led to apprentices in rural, regional, and remote areas being required to travel significant distances. The NAAA stated:

[W]e will be developing … recommendations about how the Commonwealth could better support apprentices who do need to travel long distances. There's moderate complexity in that. Sometimes they're catching public transport across a city, but in the bush people are travelling long distances in their own car. And there's the whole block release thing. There could be a suite of supports for apprentices that cover their actual costs, as long as we can do it in a way that's administratively easy enough for everybody to deal with.[68]

6.67Catholic Education Western Australia Limited (CEWA) highlighted the ‘vastness’ of WA and associated challenges for access to VET. It noted that the availability of training is typically driven by local industry rather than student choice. CEWA advised that access can be constrained by lecturer availability and few opportunities for work placements within regional and remote areas. Teachers with the qualifications to deliver VET in Trade Training Centres in remote areas are also difficult to source.[69]

6.68The Isolated Children’s Parents Association of Western Australia (ICPAWA) similarly noted that distance is a particular challenge for students in WA and suggested the Commonwealth could provide additional funding or coordinating support to assist these cohorts.[70]

6.69The ANMF observed that in the midwifery sector there is little alignment between workforce and skills needs and locations of courses and providers, and that there is currently no midwifery program in Tasmania. The ANMH stated that this leads to people moving to the mainland to study—often not returning, asserting that work must be done to assess skills shortages and enable better distribution of providers across the country.[71]

6.70Stakeholders highlighted challenges faced by current and prospective students with disability.[72] Jigsaw stated that it has not been easy to identify VET partners who can provide tailored support for people with disability. According to Jigsaw, traditional classroom learning and examination models, ratios of support, employer supports, and timeframes to outcomes in VET can be barriers to engaging with VET pathways for students with disability. Jigsaw recommended consideration be given to including flexible and person-centred approaches in the VET system, including by providers working with people with disability and disability specialists to develop and implement tailored VET pathways.[73]

6.71The Australian Disability Clearinghouse on Education and Training (ADCET) stated that there are several perceived and real assumptions as to the ability of VET providers to support students with disability, including:

• Lack of disability awareness and responsiveness within the VET workforce.
• Lack of attention to structural barriers such as physical and digital environments.
• Lack of inclusive learning and teaching strategies that embrace inclusive practice.
• Over-reliance on reasonable adjustments as a means of addressing the needs of individuals rather than a systemic approach.
• Limited understanding of legislative obligations under the Disability Discrimination Act 1992 (DDA) and the Disability Standards for Education 2005 (DSE), with no mechanisms to address compliance.
• Poor cultures of inclusion which attract people with disability and foster success across the learning lifecycle.[74]
  72. According to the ADCET, at least some of these issues might be addressed through the following measures:
• Requiring organisations with more than 100 employees to report on strategies to improve access and outcomes for people with disability, using a similar model to the gender equity reporting managed by the Workplace Gender Equity Agency. Organisations could also be mandated to have a current Disability Inclusion Action Plan (DIAP) registered with the Australian Human Rights Commission’s DIAP register and report regularly on outcomes.
• More explicit compliance on disability could be managed through ASQA, noting that at present there is little or no focus on strategies to support people with disability in VET and no reference to prioritising disability in ASQA’s priorities.
• A review of funding arrangements in the VET sector to ensure that providers are receiving sufficient funding to support students with disability.
• A grants scheme to assist with key accessibility and inclusion issues such as ICT procurement and the transformation of learning.[75]
  73. The VCCI asserted that funding for students with disability in VET does not align with the apparent desire to increase this cohort’s participation. In Victoria, VET students with disability cannot access the Program for Students with Disability (PSD) which provides funding for government schools to support students with disability and high needs. This is notwithstanding that most VET providers can accommodate the learning needs of students with disability.[76]
  74. Access to VET for migrants and people from culturally and linguistically diverse (CALD) backgrounds was also highlighted. The Equal Opportunity Commission of Western Australia (EOC-WA) raised concern at the lack of comprehensive support for refugee and migrant communities in the areas of mental health, disability, and domestic violence. This lack of support can exacerbate barriers to successful social and economic participation. According to the EOC-WA, while all jurisdictions provide some support to refugee and migrant communities to pursue VET pathways, support is inconsistent. The EOC-WA recommended affirmative support to enable equality of access to fee-free VET for refugee, migrant, and asylum seeker communities.[77]
  75. The EOC-WA asserted that recognition of prior learning (RPL) is critical for members of refugee and migrant communities to make sound choices about appropriate VET and higher education courses to meet industry needs. RPL is also needed to ensure migrants are employed in roles that make use of their skills and qualifications.[78]

Funding

6.76A key issue for several stakeholders was that the VET sector is systemically under-funded and not funded to the same level as university. This has impacted negatively on the sector’s ability to deliver quality education and training that aligns with industry needs and on perceptions of VET among prospective students and the wider public. Stakeholders called for VET funding to be increased and better allocated, noting that the new NSA is an opportunity to establish a long-term funding solution for VET that delivers growth and certainty.[79]

6.77The ACTU stated that VET has not only dealt with ‘regular and dramatic’ funding cuts but has been funded as if it were a second-class system. It highlighted that VET receives $10.5 billion per year compared with $30 billion per year for universities. This is despite the fact that in 2021 the VET sector serviced 4.3 million students while universities serviced 1.3 million students. The ACTU called for a national inquiry into funding for TAFE and VET to establish an adequate funding rate, with the aim of making funding for VET commensurate with funding for other education sectors.[80]

6.78The Australian Government has announced that it has committed to at least 70 per cent of Commonwealth VET funding going to the TAFE sector and has sought agreement from State and Territory Governments on this commitment.[81] This is reflected in the new NSA, which provides that the states will determine resource allocation within their respective training systems while ensuring that at least 70 per cent of Commonwealth funding is directed to TAFE and public training providers.[82]

6.79Dr Rutherford advised that under the current system, funding is only allocated to achievement of the most ‘obvious’ objectives, including ongoing revision and release of Training Packages, the development of assessment tools, and the delivery of courses. However, there is no funding for management and leadership of the VET system as a whole or for research and development which supports the VET sector (other than funding for organisations whose role is to provide data on metrics such as skills shortages and completion rates).[83]

Inconsistency in fees and subsidies

6.80Providers typically set their own fees for courses and units they offer. Subsidies are available for many courses, with both course fees and government subsidies varying across jurisdictions.

6.81Several stakeholders expressed concern at the high level of variation between fees and subsidies, calling for greater consistency in funding.[84] The Australian Chamber of Commerce and Industry (ACCI) stated that funding differences in VET are difficult for students and parents to understand. This is compared to higher education, where costs are arranged in bands but are the same across universities for domestic students—particularly where domestic students are eligible for income-contingent loans.[85] Ms Amanda Ellwood raised similar concerns, stating:

Even experienced Careers Practitioners struggle to work out what a course might cost. Fees are different your school leavers compared to adults. Not all Diplomas cost the same. One might be $3000, another $10,000. Based on what? … Some courses are depicted as more worthy of government subsidy than others.[86]

6.82ADTIA observed that employers have queried variations in fees and subsidies and have indicated that it appears inequitable when attempting to adopt a national approach to training workers. ADTIA called for a nationally consistent approach to funding allocations, in line with a national focus on the Skills for Australia policy.[87]

6.83The CMTO stated that state-based funding for VET creates barriers to access, and confusion and complexity for students and employers. This has discouraged some students from pursuing VET pathways. Moreover, in some cases employers in the communication and media sector were completely excluded from accessing state-based subsidies for their employees, despite colleagues in other states having no barriers. The CMTO called for national VET coordination to create equitable funding of qualifications across states, as well as a priority skills list which recognises industries with social and cultural value.[88]

VET Student Loans

6.84The VET Student Loans (VSL) program assists eligible students to pay tuition fees for approved Diploma and Advanced Diploma courses with approved providers. The scheme is designed to provide financial support to students undertaking higher level training in courses that address workplace and industry needs.[89]

6.85Some stakeholders indicated that the VSL scheme is unduly restrictive and asserted there would be value in expanding the scheme to enable greater consistency with the university sector. For example, the ACCI stated that:

• The VSL scheme is limited in the qualifications it covers. As of June 2021, only 194 of 4,000 RTOs were delivering qualifications that were eligible for funding under the scheme;
• Loan caps apply to approved courses in a three-band structure, with some limited exceptions made in the case of aviation.
• Non-subsidised places attract an additional 20 per cent tax. According to the ACCI, this policy ‘has not been designed with students in mind’.[90]
  86. The ACCI recommended that the VSL scheme be reviewed, with a view to expanding the range of qualifications to which it applies to at least all Diplomas and Advanced Diplomas which are part of industry training packages and considering the value of funding caps.[91] The VCCI echoed these views, highlighting the importance of bringing the VSL scheme in line with HECS-HELP in the university sector.[92]
  87. The Business Council of Australia (BCA) called for the creation of a more level funding system across higher education and VET. It stated that one way to do this would be to expand the VSL scheme to all courses at the Certificate IV level and above, where approved providers deliver them. This would boost take-up of higher-level VET and support greater interoperability between VET and higher education while maintaining controls to ensure the integrity of government-financed courses.[93]
  88. The NSW Department of Education et al argued that the VSL scheme could be extended to Certificate IV and some Certificate III courses.[94] UTS indicated that advocacy efforts are already underway to expand the VSL scheme in this manner.[95]

Fee-Free TAFE

6.89The Federal Government partnered with all states and territories to deliver 180,000 Fee-Free TAFE and VET places from 1 January to 31 December 2023, and has announced funding for an additional 300,000 places from January 2024.[96]

6.90Fee-Free-TAFE places are generally in areas of national skills priority, including care sectors, technology and digital, hospitality and tourism, construction, agriculture, and sovereign capability. Diploma and Certificate-level qualifications may be undertaken with support from the scheme. Fee-Free-TAFE is also prioritised for certain cohorts, including First Nations peoples, young people, unpaid carers, women in economic insecurity, women undertaking study in non-traditional fields, people with disability, and certain categories of visa holders.[97]

6.91Several stakeholders indicated that Fee-Free-TAFE has been successful in terms of increasing engagement with TAFE and the VET sector generally, including helping to repair the reputational damage caused by the marketisation of the sector and the expansion of FEE-HELP. The Committee heard that government should continue the Fee-Free-TAFE program and prioritise the delivery of training by public providers.[98]

6.92Other stakeholders highlighted potential issues with the initiative that should be addressed to enhance its impact. TAFE Directors Australia observed that perceptions of Fee-Free TAFE may be influenced by the fact that wrap-around servicing was not part of the funding package when originally rolled out. This created difficulties for educators and others in supporting learners with higher needs. Teachers also saw quite rapid increases in their class sizes which created some additional challenges. TAFE Directors Australia noted that these issues are likely to be addressed under the new funding round.[99]

6.93The Career Industry Council of Australia (CICA) stated that although the provision of free TAFE opens opportunities for more students to consider a VET pathway, it has the potential to imply that because TAFE is free it is of lesser value or importance. CICA asserted that if the Government is confident in the quality of the VET sector, subsidised TAFE courses would be more appropriate.[100] Newbery expressed a similar view, noting that this issue might be addressed by requiring a very modest student contribution to course fees.[101]

6.94The ANMF observed that it is difficult to assess the true impact of initiatives such as Fee-Free TAFE due to a time lag in the available data.[102]

Aligning VET and higher education

6.95Meeting future skills needs will require a whole-of-tertiary system approach, with greater integration and interoperability between the VET and higher education sectors. Stakeholders noted that the sectors have historically been hierarchically distinct, and that students experience challenges in moving between the sectors due to differences in funding, lack of credit transfer, and the perceived status of the different pathways.[103]

6.96TAFE Directors Australia called for the development of a holistic tertiary education sector which does not distinguish between university and VET, stating:

[W]e need to distinguish for school students what it means to study in school—the subject choices you make and what those subject choices mean in terms of pathways—from what it means to equip adults for the life of learning they’re going to continue to skill up for the 50 years they’ll probably be in the workforce.

[This requires] … a removal of VET as a concept and more a creation of a tertiary education sector where we are able to mix and match vocational education, applied learning, with higher education degrees in a seamless, more dual certification … The problem isn’t one around perception; it’s around innovation and how we move to a [new] … adult tertiary education sector.[104]

6.97ITECA similarly called for the government to ‘radically re-think’ its approach to post-secondary education, asserting that siloed approaches to tertiary study must end. According to ITECA, an integrated tertiary education system would encompass:

• Changes to funding models, integrating funding for VET and for university into a ‘lifelong learning account’ that supports study in both systems without the need to access different funding and loans programs.
• A coherent approach to tertiary education regulation through a process of TEQSA and ASQA regulatory convergence.
• A further review of the Australian Qualifications Framework (AQF) that supports a student accessing both skills training and higher education during their working lives, including a cohesive approach to micro-credential recognition.[105]
  98. UTS advised that a key barrier to integration are the different funding models which apply to the two sectors. These issues are being considered as part of the Australian Universities Accord (AUA) and were examined in the 2021 Review of University-Industry Collaboration in Teaching and Learning. UTS recommended that a TAFE-university coordinating council be established, comprising representatives from government and tertiary sectors, to address issues such as reciprocal recognition of prior learning, a way forward on collaboration courses, and funding.[106]
  99. The NSW Department of Education et al emphasised that integration between the VET and university sectors requires changes to funding and regulation. Current issues in this space include:
• Non-university providers of higher education such as TAFE NSW are ineligible for Commonwealth Supported Place funding. This exclusion means they pay full fees even if they come from a low socio-economic or other disadvantaged background.
• Students with VET providers that offer higher education are charged additional fees under the FEE-HELP scheme. These fees are not applicable to students who study with universities, leading to an incentive to enrol in higher education.[107]
  100. RMIT highlighted that a key component of an integrated tertiary education system is a streamlined, adaptive approach to RPL and recognition of current competency (RCC), stating:

[Assessment of] prior learning is a bespoke process where an assessor needs to deeply assess competence against training standards. The current funding arrangement varies across jurisdictions and can lead to a ‘tick and flick’ approach that diminishes the confidence in those with mapped experiences. There is an opportunity to enable trusted providers to be more robustly and consistently funded to enable a clearer system of RPL and RCC.[108]

6.101The DaV’ange Group similarly asserted that a nationally consistent approach to RPL is urgently required. This requires acknowledging that RPL is a part of the Standards for RTOs and educating industry on the benefits of RPL in terms of workforce development and mobility.[109]

6.102ITECA shared that students who complete skills training qualifications often feel that their prior learning is not recognised by higher education institutions. This creates a perception of limited integration between the systems, as students may feel they need to start from scratch if they wish to pursue a higher education qualification.[110]

6.103Stakeholders asserted that an integrated tertiary education system should be underpinned by strategic planning at national, state, and local levels. For example, the BCA called for government to develop:

• A comprehensive lifelong learning strategy.
• A Lifetime Skills Account, modelled on Singapore’s SkillsFuture Credit system.[111]
  104. The QNMU advised that the Commonwealth has the potential to make a significant contribution to reinitiating broad strategic planning processes that inform coordinated cross-sectoral decision making. This could include consideration of incentives such as cadetships, internships, and scholarships; measures to encourage individuals to initiate or extend their training; and transitions between VET to tertiary sectors. The QNMU stated that these strategies will be critical in regional and remote areas.[112]
  105. The Department of Education noted that improving the capacity for learners to move back and forth between the VET and higher education sectors is an active discussion among stakeholders. The Department noted that there are examples of higher education providers working with VET providers—as well as innovations within dual sector providers—that the committee may wish to explore in more depth. These partnerships will be particularly relevant in sectors with people qualified in both systems, such as information technology, engineering, education, and care.[113]
  106. The Department of Education highlighted the following programs aimed at testing collaboration between industry, government, and universities. While cross-sector collaboration is not a design requirement of the programs, there is evidence of collaboration between VET and higher education sectors.
• Advanced Apprenticeships (Industry 4.0) pilot: a $7.2 million pilot delivered in collaboration with seven Australian universities which targets small and medium-sized enterprises in key manufacturing industries.
• National Priorities and Industry Linkage Fund (NPILF): an ongoing $1.7 billion funding program which allocates block grants to Table A universities under the Higher Education Support Act 2003 to support their engagement with industry.
• Women in STEM Cadetships and Advanced Apprenticeships (Women in STEM): A $25.1 million program that aims to promote equality of opportunity in higher education by supporting women currently in paid work to pursue an industry-relevant pre-bachelor higher education qualification in a STEM field.[114]
  107. The Employment White Paper found that enhanced collaboration between the VET and higher education sectors and with industry are critical to delivering high-quality, industry-responsive qualifications and to building interoperability between sectors. Collaborative approaches could be trialled in areas of national priority, including clean energy, the carer economy, and defence.[115]
  108. The interim report for the AUA similarly noted that there is an opportunity to bring together the tertiary education system as a coherent whole, rather than thinking of higher education and VET as two separate and siloed areas. The interim report indicated that achieving this goal will require:
• Collaborative reform across governments, regulators, employer groups, unions, student groups and education institutions.
• Reform to the AQF to ensure that university and VET are equally recognised, and that providers are supported in creating innovative and integrated qualifications.
• Aligning funding settings across the tertiary system to enable fair and consistent pricing and to reduce financial incentives to choosing one pathway over another.
• Greater alignment between ASQA and TEQSA, including removal of duplicative requirements and reassessing the value of two regulators operating in parallel.[116]
  109. The AUA interim report observed that new leadership is needed if tertiary education is to operate as an interconnected whole. The AUA is considering the benefit of establishing a Tertiary Education Commission with responsibility for overseeing the development of a fit-for-purpose tertiary education system and operating with some independence from government. The report noted that in the 1970s and 1980s a Commonwealth Tertiary Education Commission (CTEC) was charged with promoting balanced, coordinated development of tertiary education, diversifying opportunities for tertiary education, and closer cooperation between the various kinds of tertiary education.[117]

Pathways between tertiary sectors

6.110Stakeholders indicated that VET and higher education are increasingly linked either by formal agreements or transition pathways, and there is increasing recognition that people will move between sectors during their lives.[118]

6.111In 2021, 11.6 per cent of commencing domestic undergraduate students used a VET qualification or enabling course as the basis for entry to higher education.[119] Numbers of students using a VET qualification to enter university are gradually increasing, as shown in Figure 6.1.

Source: Department of the Treasury, Working Future: The Australian Government’s White Paper on Jobs and Opportunities, p. 128

6.112The proportion of students using a VET qualification to enter higher education is higher for certain cohorts. For example, 18.3 per cent of First Nations students and 17.3 per cent of students from remote areas used a VET qualification as their basis for entry into higher education in 2021.[120]

6.113TAFE Directors Australia noted that approximately 20 per cent of people who enter VET already have a university qualification. However, obtaining a complete picture of the intersection between TAFE and university qualifications can be challenging, as data often fails to distinguish between shorter courses such as First Aid Certificates and complete qualifications.[121]

6.114Stakeholders indicated that interoperability between VET and higher education will require pathways between sectors to be better articulated, including by clearly defining the roles of the sectors in a student’s career journey and enabling mutual recognition of qualifications. Pathways must recognise that movement between the sectors are not necessarily linear or hierarchical, and students must be informed that choosing one path over another will not limit their career progression.[122]

6.115Clear pathways between sectors are particularly important for certain professions such as nursing. For example, the QNMU stated:

[A] nurse might begin their training doing a Diploma of Nursing, becoming an enrolled nurse. Later in their career they might complete a Bachelor of Nursing through a university, becoming an RN. More efficient articulation between the sectors is critical to support greater flexibility in career pathways – including costs and recognition of prior learning the student has developed.[123]

6.116The QAMH similarly noted that there is not a single or primary entry pathway into the mental health sector. Entry pathways are split between VET and university, and the sector lacks a ‘flagship’ qualification. This can create challenges in promoting careers in the sector to those considering a VET qualification.[124]

6.117The ACCE observed that many higher education providers are offering VET courses that support a pathway across their institution to higher education courses. However, not all providers or courses offer a pathway or credit transfer. For disadvantaged or struggling cohorts, this can be a barrier to lifelong learning. The ACCE recommended that government communicate pathways between VET and higher education courses and address inequity in costs and funding so that students can move between VET and higher education as needed.[125]

6.118Clear pathways between the sectors may enable students to explore more advanced qualifications in sectors not traditionally represented in universities. Dr Rutherford noted that in the early 2000s he proposed a pathway model which would allow a person to commence an apprenticeship and then transfer into a more advanced VET program and thereafter to university—ultimately leading to a doctoral degree in the relevant field.[126]

6.119The Employment White Paper found that credit transfer and RPL are important ways of improving connections between higher education and VET, and that limited credit transfer creates unnecessary barriers to further skills development and inefficiencies when students must duplicate their learning experience. The paper found that as universities are self-accrediting institutions, admission practices and RPL can differ significantly across providers. The AQF makes qualification levels—and the skills and knowledge developed under them—difficult to understand and does not sufficiently support transitions between sectors.[127]

Dual providers and combined qualifications

6.120Some stakeholders indicated that building interoperability between VET and higher education may require supporting dual providers and qualifications which combine certificate-, diploma-, and degree-level programs, with micro-credentials integrated into programs as appropriate.[128]

6.121The Australian Academy of Technical Sciences and Engineering (AATSE) recommended greater collaboration between the VET and university sectors via jointly managed and branded qualifications, noting that these could cover short courses and micro-credentials that help meet industry demand for skills. The AATSE stated that developing these qualifications may help to break down some of the hierarchical perceptions between the tertiary education sectors.[129]

6.122There was support for an advanced apprenticeship or degree apprenticeship model that enables participants to obtain a Bachelor degree (or higher) via apprenticeship pathways. This model exists in international jurisdictions such as the United Kingdom (UK), and work has been done at the state level (for example through the NSW Tertiary Pathways Project) to adapt the traditional apprenticeship model to higher level qualifications.[130]

6.123The AiGroup noted that there is support among employers for engaging university and VET students as higher-level cadets in degree apprenticeship or similar models. However, most employers would only implement this option with additional support.[131]

6.124ITECA indicated that while VET and higher education should be better integrated, each sector must retain core offerings.[132] Professor Shreeve similarly argued that VET should not offer courses at the Diploma or Degree levels but should instead draw on its strengths as a provider of Certificate-level courses and micro-credentials in areas of skills shortage.[133]

6.125Newbery stated that confusion is created when universities offer traditionally VET qualifications—particularly Diplomas and Advanced Diplomas. Newbery noted that VET qualifications offered and marketed as university qualifications are perceived as being of higher quality than those offered through VET providers. This is despite the courses being essentially proprietary qualifications that are exclusive to the university and have limited recognition or portability. Newbery called for measures to restrict universities to delivering Bachelor- to doctoral-level qualifications.[134]

6.126Newbery also called for a review of the impacts on consumers of allowing universities to offer traditionally ‘VET-level’ qualifications. This should consider the value of qualifications to the student and the taxpayer, whether marketing practices are ethical and consistent with relevant regulations and consumer protection laws, and whether legislative changes should be made to segregate the authority to issue qualifications between the university and VET sectors.[135]

Institute of Applied Technology model

6.127Some stakeholders drew attention to the Institute of Applied Technology (IAT) model pioneered in NSW. IATs are a distinct form of provider that blend VET and university without being dual-sector providers. They typically focus on offering stackable micro-credentials.[136] TAFE NSW explained that these micro-credentials:

• Align with the AQF and to the volume of learning, such that students can guide their study to allow ‘stackability’ into other qualification pathways either at TAFE NSW or in the university space.
• Have significant academic rigour provided through co-design of micro-credentials with industry, universities, and TAFE NSW subject-matter experts.
• Are not aligned to a training package like the traditional VET pathway, nor to a higher education product. IAT micro-credentials sit ‘between that space’.
• Are supported by an investment of $108 million from the NSW Government. This subsidises up to 26,000 micro-credentials over a four-year period. The costs for individual credentials range from $1,500 to $3,000, with out-of-pocket expenses for the student ranging from $180 to $360.[137]
  128. TAFE NSW emphasised that the IAT model moves beyond the rigid curriculum rules which typically apply to VET and university providers and allows for rapid responses to evolving industry need. The model is key to breaking down misconceptions about the inferiority of VET and building genuine integration between the sectors. However, existing funding models for the VET and university sectors create challenges for scaling the IAT model, particularly as they do not support the ‘stackability’ of micro-skills and micro-credentials.[138]
  129. UTS told the Committee that two TAFE-led IAT pilots are in development, with a third planned in a regional area. Both are delivered by TAFE NSW. The IATs include:
• IAT Digital in Meadowbank, which focuses on big data and cybersecurity and is delivered in partnership with Microsoft, UTS, and Macquarie University
• IAT Construction in Kingswood, which focuses on project management, leadership, and digital construction, and is delivered in partnership with Western Sydney University and CPB Contractors.[139]
  130. UTS stated that should pilots be successful, they may be supported and expanded by the Commonwealth. Immediate priorities include:
• A Commonwealth co-contribution including grant funding for the development and delivery of innovative course offerings—focused on micro-credentials—to meet industry needs. These credentials would be high quality, flexible, transferable, and would address gaps in educational offerings to meet industry needs.
• Dedicated Commonwealth supported places under the Commonwealth Grant Scheme to incentivise participation of university providers and make support via the Higher Education Contribution Scheme (HECS) available to IAT students.[140]
  131. The NSW Department of Education et al explained that it is undertaking an evaluation of the design, implementation and impacts of the IAT pilots. Lessons and opportunities will be shared with the Commonwealth Government, including where Commonwealth support in areas of regulatory flexibility or policy harmonisation, may be needed to fully realise the benefits of the innovative IAT model.[141]

Reforming the Australian Qualifications Framework

6.132Several stakeholders suggested the AQF contributes to the perception that VET qualifications are of lesser value than their university counterparts, as well as to an artificial separation between the sectors. The Committee heard that the AQF should be amended to remove the hierarchy between qualification types.[142]

6.133The IHEA noted that one way of increasing interoperability between the VET and higher education sectors would be for government to remove the distinction between Diplomas and Graduate Certificates in the AQF. According to the IHEA, this proposal has significant stakeholder support.[143]

6.134The Department of Education acknowledged that the AQF is sometimes viewed as contributing to a perception that there is a hierarchy in terms of value across VET and higher education, due to its 10-level structure which places VET qualifications at lower AQF levels than higher education qualifications. In addition, the government’s pathways policy may be seen as reinforcing a perception that education pathways should ascend the AQF levels rather than moving flexibility between sectors.[144]

6.135The Department of Education stated that recommendations of the AQF Review present opportunities to influence the perception and status of VET by better recognising the strengths of VET qualifications; emphasising the various pathways students take in and between VET and higher education; and providing a common language across sectors to describe transferrable skills.[145]

Supporting industry and employer partnerships

6.136Successful partnerships between employers, broader industry, and VET providers are critical to a functioning VET market. These partnerships enable VET providers to align training with industry needs, provide the pipeline of graduates that is crucial to addressing workforce shortages, and ensure students have a clear pathway from education into employment.

6.137The Tasmanian Government noted that employers in Tasmania have a varied understanding of VET. For those engaged with VET, there is an understanding of how training, through on-the-job experience, can grow and upskill their workforce. Employers not engaged with VET have lower awareness of how VET can support their business and opportunities enabled by the VET system.[146] The SA Government similarly stated there is a need to educate and work with industry and businesses on the positive relationship between an employee’s VET qualifications and the transfer of skills to businesses.[147]

6.138Professor Shreeve noted there is a significant difference between the views of individual businesses and those of industry associations. Associations may be motivated by funding the association rather than listening to specific employers on the ground. Professor Shreeve called for closer relationships between individual providers and enterprises.[148]

6.139The ANMF asserted that ensuring training providers have meaningful relationships with employers should be a mandatory component of their registration and accreditation requirements.[149]

6.140Stakeholders highlighted elements of an effective partnership between industry, employers, and training providers. The NCVER asserted that:

• While RTOs are a major source of knowledge on nationally recognised training, the role of an RTO must evolve to that of a ‘navigator’. This requires RTOs to build skills in working collaboratively with employers to identify their needs and to put forward ways of meeting them—including through proactive outreach to local employers and industry experts.
• Financial incentives for employers and RTOs can facilitate partnerships to support workforce planning and the development of tailored nationally recognised training.
• There is a need for more special industry-RTO partnerships, with employers seeking personal contact with RTOs and to work more intensively with business-oriented training providers.
• Small businesses may benefit from the engagement of local brokers—including employer associations or regional development organisations—to work between business and RTOs to facilitate connections in more meaningful ways.[150]
  141. The MTAA observed that partnerships between industry and VET providers often involve large businesses. SMEs often lack the resources and expertise to engage with training providers to develop a training offer. The MTAA recommended that dedicated resources and support be made available to small businesses to assist engagement and foster partnerships with VET providers.[151]
  142. The Council of Small Business Organisations Australia (COSBOA) stated that the most successful partnerships are flexible, built on trust, and have clearly defined outcomes and roles for all participants. Partnerships must also ensure that all participants have something to gain.[152]
  143. Effective support for industry may involve RTOs adapting training offers to industry needs. The NSW Department of Education et al highlighted the following examples of where TAFE NSW has taken this step:
• New Education and Training Model micro-credentials. These credentials support industry skills development in smaller, more concentrated programs. The model was granted $37.4 million to develop 100 non-accredited micro-credentials to attract employers to Western Sydney and create new jobs.
• A defence industries traineeship pilot in Newcastle, which involves a collaboration between Training Services NSW, Hunter Net, and RDA Hunter. The pilot included a group training employment model where recruits were placed in manufacturing SMEs under a traineeship in para-professional job roles.[153]
  144. The AiGroup explained that what employers are looking for from their VET providers is a flexible approach that considers local industry need and is delivered in a way that is suitable for their business. The AiGroup stated that partnerships can be derailed by an unwillingness from providers to explore innovative solutions, poor understanding of how training packages allow qualifications to be packaged, and the refusal to offer RPL for experienced workers. This latter issue may be driven by a lack of state funding. The AiGroup suggested:
• Professional development for educators about the flexibility offered by Training Package qualifications.
• Information for employers about available service offerings, delivered through peak and representative bodies.
• A review of funding rates for RTOs to ensure that they are sufficient to enable a valuable service. This should include consideration of funding for RPL.[154]
  145. ADTIA indicated that partnerships between RTOs, employers, and industry function most effectively when there is a clear understanding of the employers’ skills needs. It noted that several TAFEs and advanced colleges have industry committees which meet to seek industry input on qualifications structures, validation of training, and assessment methodology. ADTIA also indicated that individual employers and peak bodies could support partnerships by defining clear pathways from training to employment and providing entry-level training for new recruits to assist in adapting to new work environments.[155]
  146. The elements of successful partnerships are broadly captured in NCVER research, summarised in Box 6.1.

Source: NCVER, Development and Sustaining Successful Partnerships Between Employers and Training Providers, p. 5, https://www.ncver.edu.au/research-and-statistics/publications/all-publications/developing-and-sustaining-successful-partnerships-between-employers-and-training-providers.

6.147Professor Smith noted that while significant research has been undertaken on the elements of successful partnerships focused on upskilling or reskilling a company’s workforce, there is little research on partnerships between employers and RTOs for students learning off-the-job at a training provider. However, Professor Smith also indicted that—in general—ensuring employers are utilised more systematically through work placements would be likely to raise the status of the VET sector.[156]

Role of government

6.148Stakeholders highlighted the role of government in providing sustainable funding for partnerships between providers and employers, enabling the sharing and scaling of skills generated via partnerships—including via nationally recognised training—and providing an enabling environment via policy and program settings.

6.149The Minerals Council of Australia (MCA) stated in relation to industry-led initiatives in the mining industry:

[Industry should be] identifying where the need is and driving the effort, but [there must also be] buy-in and support [from] the training providers and … government to make sure that these things are able to be carried up and into the system. Investment in piloting and supporting those programs is critical, but the long-term sustainability and delivery needs to have that broader support, not just of those delivering it but of the government frameworks as well.[157]

6.150The MCA drew attention to the following examples of industry-led initiatives delivered in partnerships with training providers, recommending that government provide pilot funding for employer-provider partnerships to test innovative programs linked to career pathways:

• BHP’s FutureFit Academy: two dedicated learning centres in Perth and Mackay which offer a maintenance traineeship and a trade apprenticeship. Students can earn while studying. The program enables a pipeline of qualified graduates for the mining sector.
• Rio Tinto’s automation qualifications: the first accredited automation qualification, launched in partnership with South Metropolitan TAFE and the WA Government. Rio Tinto worked with the Mining and Automotive Jobs and Skills Council to develop nationally accredited courses in autonomous workplaces.
• Queensland Future Skills Partnership: partnership between Advance Queensland BHP Mitsubishi Alliance, TAFE Queensland, and Central Queensland University to support existing workers to acquire skills in cyber security, data management, and Supervisory Control and Data Acquisition. Training includes 12 accredited skill sets or a non-accredited program covering 10 micro-credentials.[158]
  151. Newbery observed there will be a variety of partnership types in the VET sector, each involving different providers and arrangements for delivery of training. Partnerships could be supported across a variety of delivery models by:
• Reviewing Standards for RTOs to better recognise the contribution to training and assessment by supervisors, including to provide more certainty about compliance to VET providers who are partnering with enterprises to deliver VET qualifications.
• Providing incentives to employers to recognise their contribution to the delivery of training and assessment under a partnership.
• considering the introduction of employer skills vouchers, where eligible employers are allocated vouchers with an allocated amount of funding to be used with a VET provider of their choice. This would need to be supported by robust safeguards including strict eligibility criteria and reporting requirements and independent post-training evaluation.[159]
  152. The Committee heard that government has a key role to play in supporting the evolution of public VET delivery. The Tasmanian Government stated that it is actively working to make TasTAFE a more future-focused, market-aligned training provider.[160]
  153. Stakeholders observed that government can leverage partnerships to address unmet skill need and support priority cohorts. The SA Government highlighted Skills SA’s Training Priority Projects (TPPs), noting that the TPPs enable education providers and community-based organisations to work with regional, sector or industry level partners to address unmet or regionally specific and emerging skilling needs. The SA Government indicated that these TPPs should continue to be supported and may be leveraged, recommending that:
• Case studies of large-scale partnerships with successful outcomes in uptake of participants, completed training and employment security be used to inform principles of best practice with regards to partnership success.
• Partnerships between governments, VET providers and employers that lead to career pathways and employment be incentivised—especially for target cohorts.[161]
  154. The WA Government drew attention to the role of government in supporting target cohorts, highlighting the following initiatives:
• WA Police Force Aboriginal Cadet Program: North Metropolitan TAFE and the WA Police partnered to develop a customised training and support program to assist with recruitment and preparation of First Nations entrants to the Police Academy.
• Job Ready pathways: Programs coordinated by the WA Department of Training and Workforce Development (DTWD) which include a short course of free training from a registered training provider, work placement with an industry employer and either offers of employment or support to connect with further opportunities at the end of the program.[162]
  155. The Committee heard that government may have a key role in disseminating best practice in provider-employer engagement. WorldSkills Australia recommended the Commonwealth engage with major education providers and industry organisations that have strong partnerships with each other to develop best practice guidelines.[163]

Supporting changes to work practices

6.156Some stakeholders indicated there would be value in government—and potentially training providers—working with employers to help them understand the value of VET qualifications, and in enabling changes to work practices to support VET pathways. SkillsIQ observed that employers increasingly demand university- or even postgraduate-level qualifications in job descriptions without considering the demands of the role. This leads to individuals avoiding VET as an entry pathway and disruption to work arrangements if a person is obliged to retrain when it is discovered that they lack key practical skills. Skills IQ noted:

• Many applicants for hotel training programs hold a Bachelor of Tourism when a Certificate III would be more appropriate. Often, the candidate will be required to obtain the Certificate-level qualification to gain practical skills.
• New entrants to the childcare sector often have early childhood education and related degrees but lack practical skills in working with young children. These individuals are often required to return to the VET sector to upskill.[164]
  157. SkillsIQ observed that where an organisation specifies a Bachelor degree as a job requirement, the applicant will assume that they will be performing graduate-level work. This is often not the case and leads to dissatisfaction. Moreover, specifying a university-level degree as an entry requirement can limit the ability of an organisation to establish clear career paths. This is because employees will increasingly enter the organisation at a higher level with theoretical rather than practical skills and will not have the experience of leveraging practical skills to progress to senior positions.[165]
  158. The Victorian Student Representative Council (Vic SRC) similarly stated that more must be done to educate employers on the value of VET qualifications and to engage with employers on their skills needs.[166]
  159. Newbery suggested that government consider a program to promote VET pathways to ‘underutilised work capacity’ within society, including people who are employed part-time, full-time parents, older people who may be looking for part-time work in retirement, people with disability, and people living in rural and remote Australia. According to Newbery, the program would work directly with employers to identify flexible and working from home opportunities and to link these with a suitable VET pathway into employment.[167]

Committee comment

6.160The VET sector is complex and fragmented, and work is needed to clearly define the sector and its social and economic roles. The Committee is optimistic that greater national stewardship as contemplated by the new NSA should go some way towards addressing this issue. There would also be real value in establishing a Tertiary Education Commission or a similar entity with national oversight of the sector and a focus on better integrating VET and higher education as contemplated by the AUA. The Committee encourages government to pay close attention to these matters as part of the ongoing process of skills reform.

6.161Also clear is that the current significant number of providers in the VET sector and the adoption of a contestable market have created challenges for many stakeholders. It appears that prospective students struggle to make informed choices about career pathways, employers have difficulty accessing relevant training, and government and regulators may not be able to address poor behaviour. Challenges associated with marketisation must be addressed in the process of skills reform if the sector is to be effective in delivering high-quality training and education that keeps pace with a dynamic and evolving labour market.

6.162The Committee acknowledges that public, private, and industry-led RTOs all have their role to play in the VET sector and appreciates that private sector RTOs may be able to deliver more flexible training and service offers than their public counterparts (TAFEs)—at least in some circumstances. However, the Committee considers it critical that TAFEs are prioritised in measures to ensure sustainable funding for VET, given the importance of having a robust public core to the sector. Accordingly, the Committee welcomes the focus in the new NSA on putting TAFE at the heart of VET, and on building the quality and flexibility of TAFEs via industry partnerships and measures to enable new and innovative approaches to teaching and learning.

6.163Enhancing the capacity of TAFEs should include TAFEs partnering with other RTOs and industry bodies. The Committee notes that it is envisaged that TAFE Centres of Excellence will bring together employers, unions, universities, and other education and training providers to develop and implement real work and practical solutions to meet skills needs. However, it is unclear if this includes direct partnerships between TAFEs and other RTOs in the design and delivery of training. There would be value in ensuring that such partnerships are supported. The Committee is of the view that, at least in the short term, partnerships should be restricted to high-performing not-for -profit and industry-led providers. However, over the longer term, it may be feasible for TAFEs to partner with for-profit RTOs, subject to appropriate safeguards.

6.164The Committee considers there would be value in exploring measures to separate the sector into ‘education’ and ‘training’, with funding for private RTOs to deliver shorter-form, industry-specific training (subject to the provider and training being of proven quality) and for TAFEs to deliver longer qualifications with a focus on developing a student through education. There is compelling evidence that private RTOs are often highly competent in delivering shorter, higher-volume training, while TAFEs focus on full qualifications and on the ‘education’ component of VET.

6.165In addition, the Committee is concerned that VET providers are subject to significant and duplicative regulatory and reporting requirements focused on strict compliance with standards rather than on continuous improvement. These may be impeding the sector’s capacity to deliver high-quality training.

6.166The process of skills reform should involve streamlining and reducing duplication in regulatory arrangements, as well as refocusing ASQA’s regulatory approach on lifting the quality of training and away from strict compliance with prescriptive standards. This should include giving AQA greater flexibility in terms of how it prioritises and makes both enforcement decisions and decisions in relation to provider registration.

6.167Strong regulatory sanctions should continue to be applied to providers that are persistently or deliberately non-compliant and fail to lift the quality of their training offers despite engagement by ASQA. There would also be value in implementing additional safeguards (primarily via changes to the provider registration framework) to ensure the sector is not harmed by the actions of noncompliant providers—especially new entrants which have not been fully vetted.

6.168The Committee recommends that the Australian Government ensure that the ongoing process of skills reform include measures to encourage and support partnerships between technical and further education (TAFE) institutes and high-performing not-for-profit and industry-led providers.

6.169The Committee recommends that the Australian Government work with State and Territory Governments to explore options to separate vocational education and training (VET) into ‘education’ and ‘training’, including funding and governance arrangements to support high-performing independent providers to deliver shorter and industry-specific courses and to prioritise the delivery of longer courses and qualifications through technical and further education (TAFE) institutes.

6.170The Committee recommends that the Australian Government work with State and Territory Governments and with the Australian Skills Quality Authority (ASQA) to rationalise and improve regulation in the vocational education and training (VET) sector, including by better targeting regulatory and compliance action to deliberately or persistently noncompliant providers. This should include the following key measures:

• The removal of duplicative administrative and reporting requirements.
• Giving ASQA greater flexibility in terms of how it prioritises, considers, and makes decisions in relation to applications for regulation.
• Strengthening registration requirements to prevent providers from changing the scope of their registration whether they have been operating for less than two years.
• Providing that a provider’s registration automatically lapses when that provider has not delivered training or assessment for a period of 12 months.
• Resourcing and supporting ASQA to focus its regulatory approach on lifting the quality of training in the sector, enhancing VET student outcomes, and building and maintaining a culture of continuous learning and improvement.
  171. The Committee welcomes measures to improve the coordination of strategic investment in skills across all jurisdictions, as well as funding commitments in the new NSA. In particular, the Committee welcomes the focus on building the capacity of TAFE to that the sector has a strong public core, including the commitment of at least 70 per cent of Commonwealth funding to TAFEs and other public institutions.
  172. The Committee is optimistic that such measures will underpin a long-term funding solution for the VET sector which will enable growth and certainty and emphasises that government must continue to monitor funding to ensure that it is allocated and used effectively—with additional funding committed as needed.
  173. However, the Committee is concerned that fees and subsidies for VET courses are inconsistent across jurisdictions, and that this inconsistency has led to confusion for students, their families, employers, and other stakeholders and to poor perceptions of the sector. Seemingly arbitrary variations in fees and subsidies do not appear consistent with a national approach to training which responds to current and emerging skills needs.
  174. The Committee appreciates it may not be possible to entirely harmonise subsidies or fees, noting that these respond to a variety of factors such as location, the cost of delivery, and economic and demographic indicators. Nevertheless, there would be merit in the Commonwealth working with the states and territories and with the VET sector to explore options to align subsidies and fees insofar as possible. This should include consideration of the methodology used to calculate prices and the extent to which this can be harmonised and streamlined.
  175. The Committee also acknowledges concerns that the VSL scheme is restrictive and may not be providing sufficient levels of financial support to encourage students to pursue VET qualifications. However, the Committee’s view is that loans under the VSL scheme should be limited, and employers should be encouraged to share more of the cost—including through direct financial contributions and in-kind arrangements such as study leave.
  176. Fee-Free TAFE extends to Certificate- and Diploma-level qualifications in priority skills areas, and the Committee considers it more appropriate that students pursue qualifications with support from that scheme than the VSL. This is notwithstanding concern that Fee-Free TAFE could be perceived as devaluing TAFE qualifications by offering them to students at no expense.
  177. The Committee acknowledges that the Fee-Free TAFE scheme has a limited (though substantial) number of places. Moreover, it is unclear whether the scheme extends to Advanced Diploma-level courses. Accordingly, the Committee recommends a review of the VSL scheme to examine its relationship with Fee-Free TAFE and identify key gaps in the intersection between the schemes.
  178. Should it be determined that there are substantial gaps in financial support available to VET students, additional measures should be considered. These might include providing additional Fee-Free TAFE places, expanding the reach of Fee-Free TAFE scheme to higher-level qualifications, and expanding the reach of the VSL scheme to a greater range of qualifications and disciplines.

6.179The Committee recommends that as part of the ongoing process of skills reform, the Australian Government work with State and Territory Governments and with the vocational education and training (VET) sector to:

• Explore aligning fees and subsidy amounts for VET qualifications insofar as this is possible.
• Review the VET Student Loans (VSL) scheme and investigate its relationship with Fee-Free TAFE.
  180. Many VET and TAFE campuses also lack modern facilities, and this is leading to poor perceptions of the sector and may be contributing to rates of attrition. The Committee notes that government invested $50 million in 2020-21 to 2022-23 to support infrastructure projects such as building and construction works to expand, upgrade, or refurbish TAFE facilities, purchase, and upgrade specialist equipment, and invest in technological infrastructure. While this investment is welcomed, evidence indicates that additional funding may be needed to continue upgrading facilities to a sufficiently high standard. Additional funding may be required to ensure that physical and digital spaces are accessible to students with disability.
  181. In addition, there is a lack of effective, consistent support for students on campuses, with stakeholders noting that this drives poor perceptions of the sector and is impacting rates of completion. It appears that a lack of support is creating challenges for VET educators, who are frequently obliged to offer pastoral care in addition to delivering training. The apparent lack of student representation on campuses, which limits the extent to which students can raise concerns and have input into the design and delivery of training is an issue.
  182. The Committee agrees that the Commonwealth should commit additional funding and work with states and territories to improve student support on campuses, including by enabling the creation of representative bodies and independent complaints mechanisms, and providing access to those programs and facilities which are typically found on university campuses such as counselling, health, and legal services. Additional supports should be provided to increase access for students with disability, as part of an overall effort to deliver a more person-centred training offer that responds to the needs of all students.
  183. This work should start with TAFE campuses, noting that these providers are publicly funded and are often significantly larger than private sector counterparts. However, there would also be value in private sector providers enhancing the pastoral care and other supports available on site.
  184. The Committee is of the view that career counselling should not end when a student finishes secondary school. Career counselling services should be made available on campuses so that students can continue to plan their career pathways while studying and/or completing work placements.
  185. It appears that a contributor to non-completion in VET is a lack of understanding of the demands of a qualification. The Committee considers that there would be merit in the government working with the VET sector to increase providers’ engagement with students early in their training pathways to ensure that students are prepared for what lies ahead. The Committee notes that certain providers—for example TAFE NSW—already offer supports of this kind.
  186. Measures to enhance the VET experience for students should form part of a broader effort to ensure that the lived experiences of all individuals involved in or affected by VET are at the centre of advisory and governance mechanisms. This will be critical to ensuring that the VET sector meets the needs of an increasingly diverse student cohort and teaching workforce (albeit with the need to lift participation by certain cohorts), and to ensuring that the sector is able to respond to current and emerging skills needs.

6.187The Committee recommends that the Australian Government work with State and Territory Governments to ensure that the lived experiences of individuals involved with or impacted by the vocational education and training (VET) sector are prioritised in advisory and governance mechanisms.

6.188The Committee recommends that the Australian Government work with State and Territory Governments to:

• Continue to upgrade and modernise facilities on technical and further education (TAFE) institute campuses, including to ensure that physical and digital spaces are accessible for students with disability.
• Improve key support services on TAFE campuses, and ensure that students have access to counselling, career advice, legal services, health services, and disability support.
• Establish robust mechanisms for student and staff representation.

6.189The Committee recommends that the Australian Government work with State and Territory Governments and the sector to increase engagement by technical and further education (TAFE) institutes with students early in their training pathway, to ensure students fully understand the demands of the qualification and can make informed decisions about their training and career pathway. This should involve the development of tools to assess students’ aptitude for the units and qualifications they are looking to pursue and supporting tailored advice.

6.190It appears to the Committee that additional work is needed to increase access to VET in rural, regional, and remote areas and to better align training offers with local skills needs. This recognises that completion rates are often closely linked to the geographic location of the student and the providers. The move to a demand-driven structure has also reduced access to quality training for many students who do not live in metropolitan areas.

6.191The Committee notes the vision and guiding principles for the NSA stated that the agreement would aim to ensure that Australians in regional and remote areas have access to the education, training, and support needed to obtain well-paid and secure jobs. The Committee considers it likely that investment and reforms contemplated by the NSA will support access to training for people in regional, rural and remote areas.

6.192The Committee recommends that the Australian Government ensure that the skills reform agenda includes specific measures to boost access to vocational education and training for people in regional, rural, and remote areas, informed by local skills need.

6.193The Committee strongly agrees with the views in the Employment White Paper that meeting future skills need will require a whole-of-tertiary-system approach, with much greater integration between VET and higher education. This will require addressing barriers relating to funding and regulation, and creating clear learning pathways that encompass the two sectors. Measures must be implemented to ensure that all prospective learners have clear information about the sectors, their providers and course offerings, and to ensure that the sectors are perceived as equally legitimate.

6.194Integrating the sectors will require changes to funding and regulatory arrangements, as well as reforms to the AQF to remove—to the extent possible—the hierarchy that exists between VET and university qualifications and to focus on skills development and knowledge acquisition. It is clear that greater international interoperability requires clear pathways between VET and university, including clear points of entry to each sector and enhanced mechanisms for recognising prior learning and existing skills and competencies. The Committee was concerned to hear that there is limited credit transfer between sectors, and that RPL varies significantly between providers, with stakeholders noting that these issues discourage students from exploring career pathways which involve moving between VET and university.

6.195The Committee agrees with the view that there would be value in each sector (VET and university) retaining its core offerings within an integrated tertiary education ecosystem. The Committee was concerned to hear that in some cases universities are offering traditional VET qualifications and marketing them to students as more prestigious or valuable than a qualification obtained through a VET provider, despite the qualification not being nationally recognised or portable. However, the Committee considers that dual-sector providers and qualifications should be supported, so long as there is a robust governance framework in place to ensure the quality of the training and education and the qualifications obtained are portable.

6.196Measures to integrate the VET and university sectors are being explored through the process of skills reform supported by the new NSA, via the Employment White Paper, and through the Universities Accord. To date these processes do not appear to have resulted in a comprehensive roadmap to a genuinely integrated tertiary education sector. Accordingly, the Committee considers that such a roadmap should be developed, with measures aligned with ongoing work to enhance Australia’s education and skills sectors. Key elements of the roadmap should include:

• Integrated funding arrangements which support lifelong learning. The Committee is attracted to the proposition such as a lifelong learning or skills account which supports study in either sector without the need to access different loan programs. Such an account might support Australians who would not otherwise have participated in skills or training due to perceived financial barriers.
• A clear framework for the qualifications that may be offered by VET providers and by universities, with a focus on building on the identified strengths of each sector. For example, VET providers have a strong history of delivering shorter courses, supporting apprenticeships, and delivering Certificate-level qualifications, while universities are typically better equipped to deliver degree-level qualifications.
• Targeted funding and other support for dual sector qualifications which align with current and emerging skills needs, including advanced apprenticeships.
• Clear pathways between VET and university, with defined entry points to courses and qualifications, processes for credit transfer, and adaptive, user-friendly processes for RPL. The Committee supports proposals such as a portable skill sharing system or portfolio in this regard.
• Service-level agreements between the regulators responsible for the VET and university sectors to reduce duplication and streamline process. Over the long term, merging the two regulators into a single entity responsible for quality assurance in the tertiary education system should be explored.
  197. Development of a roadmap should be led by a coordinating council with members representing Commonwealth and State Government, the VET and university sectors, employers and industry bodies, unions, and students and their representatives. This council would focus on identifying and resolving key issues associated with funding and regulation, education, and career pathways—including RPL; dual qualifications; and collaboration between jurisdictions and stakeholders.
  198. To the extent possible, a roadmap to a genuinely integrated system should link with other measures to improve both interoperability and student outcomes, including the policy framework for micro-credentials recommended in Chapter 5, and a national career education strategy recommended in Chapter 4.
  199. In developing this roadmap, government should give consideration to whether there would be value in separating an integrated tertiary education sector from a training sector focused on shorter courses—for example, first aid, responsible service of alcohol (RSA), and industrial licensing. Noting that many of the measures that are contemplated by such a roadmap will take time to develop and scale to a national level, the Committee considers that there would be value in trialling certain measures to better understand their impact.

6.200The Committee recommends that the Australian Government implement the recommendations of the Australian Universities Accord Final Report, and work with State and Territory Governments and other key stakeholders to define a roadmap to a genuinely integrated tertiary education system. This roadmap should include the following key elements:

• Integrated funding arrangements which support lifelong learning.
• Clearly defined guidelines for the qualifications that can be offered by vocational education and training (VET) providers and by universities.
• Clearly defined guidelines and targeted funding for dual qualifications which align with current and emerging skills needs, including advanced apprenticeships.
• Clear pathways between VET and university courses and qualifications, with defined entry points and processes for credit transfer.
• An adaptive, user-friendly framework for the recognition of prior learning.
• Service-level agreements between the regulators responsible for the VET and university sectors to reduce duplication and streamline process.

The development of the roadmap should be led by a coordinating council, with representatives from Commonwealth and State Government, and from both the VET and university sectors.

6.201Partnerships with industry and individual employers will be critical to the quality and relevance of the training delivered by the VET sector and employment outcomes for graduates. Partnerships have a critical role to play in boosting awareness of the value that VET graduates can bring to an employer’s business and in helping to raise perceptions of the sector as a whole.

6.202There is compelling evidence that engagement between the VET sector and industry must go beyond the development of training. It should include direct partnerships with individual employers that enable the employer to provide input into the delivery of training and to build employers’ understanding of how VET graduates contribute value to a business. Measures to enable individual employers to navigate the VET system have merit.

6.203The Committee agrees that government has a key role to play in enabling provider-employer partnerships, including by providing sustainable funding and appropriate policy and program settings. This may include providing financial support to sustain place-based projects which respond to local need, to enable those projects to scale their offerings to the state or national level as appropriate, and to ensure learnings and examples of best practice from those projects can be shared.

6.204The Committee is optimistic that measures under the new NSA—particularly the establishment of TAFE Centres of Excellence—should help to enable meaningful partnerships between providers and employers and ensure that training is innovative and responds to employers’ needs. It also appears that the proposed National TAFE Network should also ensure examples of best practice can be easily shared. The Committee strongly encourages the government to closely monitor these and other measures in the new NSA to ensure that they encourage and support partnerships between VET (especially TAFE) and employers, with changes made or additional measures introduced as necessary.

6.205In addition, it appears that a challenge facing VET graduates is the gradual increase in the level of qualifications demanded by employers, who often demand university-level qualifications for entry-level roles. In many cases, the qualification demanded by the employer does not align with key job requirements, with evidence suggesting that at least some new employees have been obliged to retrain in the VET sector after it is discovered that they lack certain practical skills.

6.206The Committee also considers that as part of the skills reform agenda, governments at all levels should work with industry associations, employers, experts, and other key stakeholders to develop guidance material on the skills requirements for individual roles. This may involve developing guidance for individual sectors, to be distributed and promoted by peak bodies. The guidance should encourage employers to have greater regard to the specific skills requirements of a position when conducting recruitment activities.

6.207The Select Committee on Workforce Australia Employment Services recommended in its final report that an employer-focused service be implemented and delivered by regional hubs. A key function of this service would be working with employers to match jobseekers to vacancies and to help employers adapt their recruitment and work practices to a diverse range of candidates. The Committee suggests that this could include working with employers to carefully identify skills needed for a position, and promoting VET qualifications as a way of meeting those skills needs. The service might include working with employers to identify flexible opportunities for people who cannot commit to full-time or strenuous work (for example, full-time parents, older people, and people in remote areas) but wish to participate in the labour market.

6.208The Committee recommends that the Australian Government, through the Jobs and Skills Councils, work with State and Territory Governments, peak bodies, experts, employers, employment service providers, and other key stakeholders to develop sector-level guidance on the skills requirements of individual roles. This guidance should support better-targeted recruitment focused on skills requirements over qualifications.

Ms Lisa Chesters MPCommittee Chair29 February 2024

Footnotes

[1]Professor Erica Smith, private capacity, Committee Hansard, 3 May 2023, p. 11.

[2]Women in Adult and Vocational Education (WAVE), Submission 70, p. 22.

[3]Dr Phillip Rutherford, Submission 4, pages 5–7, 15.

[4]Department of Employment and Workplace Relations (DEWR), Stewardship in the National Skills Agreement, 17 October 2023.

[5]See, eg, Mr Simon Walker, Managing Director, National Centre for Vocational Education Research (NCVER), Committee Hansard, 16 May 2023, p. 4; Mr Chrisopher Watts, Senior Policy Advisor, Australian Council of Trade Unions (ACTU), Committee Hansard, 29 March 2023, p. 12; Ms Salwa Kilzi, Vocational Education Officer, National Union of Students (NUS), Committee Hansard, 26 April 2023, p. 14.

[6]National Youth Commission Australia (NYCA), Submission 19, p. [6].

[7]Motor Trades Association of Australia (MTAA), Submission 38, p. 13.

[8]Monash University, Submission 83, p. 6.

[9]Mr Keith Waters, CEO, NYCA, Committee Hansard, 14 August 2023, pages 1–2

[10]Mr Troy Williams, CEO, Policy and Research, Independent Tertiary Education Council Australia (ITECA), Committee Hansard, 24 May 2023, p. 11.

[11]ITECA, Submission 85, pages 12–13, 24.

[12]ITECA, Submission 85, pages 13, 15, 17, 19, 21, 23, 28, 34, 38.

[13]Ms Anna Faithful, Deputy Secretary, Skills and Training, DEWR, Committee Hansard, 21 June 2023, p. 2.

[14]Ms Jenny Dodd, CEO, TAFE Directors Australia, Committee Hansard, 29 March 2023, p. 5.

[15]Mr David Turvey, First Assistant Secretary, Jobs and Skills Australia (JSA), Committee Hansard, 21June2023, p. 3.

[16]Independent Higher Education Australia (IHEA), Submission 8, p. [7].

[17]Newbery Consulting (Newbery), Submission 16, p. 28.

[18]Newbery, Submission 16, pages 18–19.

[19]Ms Maxine Sharkey, Federal TAFE Secretary, Australian Education Union (AEU), Committee Hansard, 26April 2023, p. 23.

[20]See, eg, NSW Department of Education, TAFE NSW, and NSW Education Standards Authority (NSW Department of Education et al), Submission 77, p. 15; Ms Dodd, TAFE Directors Australia, Committee Hansard, 29 March 2023, p. 3.

[21]Government of South Australia (SA Government), Submission 12, p. 5.

[22]Ms Faithful, DEWR, Committee Hansard, 21 June 2023, p. 2.

[23]Queensland Nurses and Midwives’ Union (QNMU), Submission 26, p. 5.

[24]Ms Annie Butler, Federal Secretary, Australian Nursing and Midwifery Federation (ANMF), Committee Hansard, 26 April 2023, p. 8.

[25]NYCA, Submission 19, p. [7].

[26]ACTU, Submission 69, pages 3–4, 8–9.

[27]Master Electricians Australia (MEA), Submission 5, p. 9.

[28]SA Government, Submission 12, p. 4.

[29]See, eg, Training Tailor Made, Submission 14, p. [1]; National Electrician and Communications Association (NECA), Submission 17, p. 6; Mr Paul Pellier, Submission 3, p. [1]; Mr Chris Lehmann, National Advocacy Manager, MEA, Committee Hansard, 19 April 2023, p. 12.

[30]Mr Williams, ITECA, Committee Hansard, 24 May 2023, pages 11–12.

[31]Ms Kira McKenna, Principal, Katrina’s School of Hair and Beauty, Committee Hansard, 17July2023, pages2–3.

[32]MTAA, Submission 38, p. 11.

[33]Community Media Training Organisation (CMTO), Submission 45, p. [7].

[34]National Fire Industry Association, Submission 30, p. [6]

[35]ACTU, Submission 69, pages 4–5.

[36]Australasian Vocational Education and Training Research Association (AVETRA), Submission 52, p. 4.

[37]NUS, Submission 91, p. [2].

[38]See, eg, IHEA, Submission 8, p. [6]; CMTO, Submission 45, p. [7]; The DaV’ange Group, Submission 99, p.8.

[39]Australian Digital and Telecommunications Industry Association (ADTIA), Submission 88, p. [9].

[40]RMIT University (RMIT), Submission 67, p. [2].

[41]RMIT, Submission 67, pages [2–3].

[42]IHEA, Submission 8, pages [6–8].

[43]Mr Brett Hilder, Submission 65, p. 2.

[44]Mr Brett Hilder, Submission 65, p. 2.

[45]Australian Industry Group Centre for Education and Training (AiGroup), Submission 47, p. 10.

[46]ACTU, Submission 87, p. 5.

[47]ACTU, Submission 87, p. 9.

[48]The Honourable Stephen Joyce, Strengthening Skills: Expert Review of Australia’s Vocational Education and Training System, 2 April 2019, pages 38–43.

[49]See, eg, Mr Walker, NCVER, Committee Hansard, 16 May 2023, p. 4; MsYasmine King, CEO, SkillsIQ, Committee Hansard, 16 May 2023, p. 5, p. 7.

[50]Ms Kilzi, NUS, Committee Hansard, 26 April 2023, pages 11–12.

[51]NUS, Submission 90, pages [3–4]. See also Ms Kilzi, NUS, Committee Hansard, 26 April 2023, p. 14.

[52]Ms Jenny Dodd, CEO, TAFE Directors Australia, Committee Hansard, 29 March 2023, p. 3.

[53]Professor Robin Shreeve, Submission 1, p. [3].

[54]Queensland Alliance for Mental Health (QAMH), Submission 35, p. 12.

[55]See, eg, Master Builders Australia (MBA), Submission 71, p. 12; Ms Kilzi, NUS, Committee Hansard, 26April2023, p. 14.

[56]Ms Penne Dawe, CEO, Australian Centre for Career Education (ACCE), Committee Hansard, 16 May 2023, p. 14.

[57]University of Technology Sydney (UTS), Submission 46, p. 2. See also AiGroup, Submission 47, p. 5. Improving advice and information around VET—including the role of the NCI—is discussed in Chapter 3.

[58]Skills Impact, Submission 13, p. [5].

[59]Ms King, SkillsIQ, Committee Hansard, 16 May 2023, p. 7.

[60]Mrs Janet Schorer, Chief Delivery Officer, TAFE NSW, Committee Hansard, 16 August 2023, p. 7. MrsSchorer also drew attention to the need for greater wrap-around support for students—particularly in relation to mental health.

[61]See Ms Jessie Caisley, National Policy Officer, Electrical Trades Union of Australia (ETUA), Committee Hansard, 31 May 2023, p. 8; Mr Regan Agar, National Policy Officer, ETUA, Committee Hansard, 31May2023, p. 9.

[62]Mr Agar, ETUA, Committee Hansard, 31 May 2023, p. 9.

[63]NSW Department of Education et al, Submission 77, p. 15.

[64]See, for example, Professor Smith, Submission 72, pages 2–3; Ms Kilzi, NUS, Committee Hansard, 26April2023, pages 11, 13.

[65]Victorian Chamber of Commerce and Industry (VCCI), Submission 80, p. [9].

[66]Ms Bailey Riley, President, NUS, Committee Hansard, 26 April 2023, p. 15.

[67]National Australian Apprenticeships Association (NAAA), Submission 60, pages 5–6.

[68]Mr Ben Bardon, CEO, NAAA, Committee Hansard, 19 April 2023, pages 17–18.

[69]Catholic Education Western Australia Limited (CEWA), Submission 27, p. [2].

[70]Mrs Kym Ross, State Councillor, Isolated Children’s Parents Association of Western Australia (ICPAWA), Committee Hansard, 14 August 2023, p. 5.

[71]Ms Butler, ANMF, Committee Hansard, 26 April 2023, pages 8–9.

[72]See, eg, Ms Kilzi, NUS, Committee Hansard, 26 April 2023, p. 11.

[73]Jigsaw Australia, Submission 78, pages [3–4].

[74]Australian Disability Clearinghouse on Education and Training (ADCET), Submission 64, p. 5.

[75]ADCET, Submission 64, p. 7, p. 15.

[76]VCCI, Submission 80, p. [9]. See also Victorian Government, Program for Students with Disabilities guidelines, https://www.education.vic.gov.au/school/teachers/learningneeds/Pages/psdhandbook.aspx, viewed 5 February 2024.

[77]Equal Opportunity Commission of Western Australia (EOC-WA), Submission 32, p. [1].

[78]EOC-WA, Submission 32, p. [2].

[79]See, eg, Skills Impact, Submission 13, p. [3]; MTAA, Submission 38, pages 11–12; Australian Chamber of Commerce and Industry (ACCI), Submission 43, pages 8–‍9; AVETRA, Submission 52, p. 4; Professor Smith, Submission 72, pages 1–2; VCCI, Submission 80, p. [7]; Professor Shreeve, Submission 1, p. [1]; Mr Bardon, NAAA, Committee Hansard, 19 April 2023, p. 17; MrTrevor Gauld, National Policy Officer, ETUA, Committee Hansard, 31 May 2023, p. 7.

[80]ACTU, Submission 69, p. 2, pages 8–9. See also Council of Small Business Organisations Australia (COSBOA), Submission 86, pages 10–11.

[81]See, for example, Hon Brendan O’Connor MP, ‘Statement to Parliament on Significant Matters–National TAFE Day’, Speech, 6 September 2023, https://ministers.dewr.gov.au/oconnor/statement-parliament-significant-matters-national-tafe-day, viewed 13 February 2024.

[82]Australian Government, National Skills Agreement, p. [9], https://federalfinancialrelations.gov.au/agreements/national-agreement-skills, viewed 13 February 2024.

[83]Dr Rutherford, Submission 4, p. 15.

[84]See, eg, CMTO, Submission 45, p. [7]; AiGroup, Submission 47, p. 6; Ms Amanda Ellwood, Submission 51, p. [2].

[85]ACCI, Submission 43, pages. 8–9.

[86]Ms Amenda Ellwood, Submission 51, p. [2].

[87]ADTIA, Submission 88, pages [8–9].

[88]CMTO, Submission 45, pages [7–8].

[89]DEWR, VET Student Loans, https://www.dewr.gov.au/vet-student-loans, viewed 5 February 2024.

[90]ACCI, Submission 43, p. 11.

[91]ACCI, Submission 43, p. 12.

[92]VCCI, Submission 80, p. [9].

[93]Business Council of Australia (BCA), Submission 93, p. 4.

[94]NSW Department of Education et al, Submission 77, p. 14.

[95]UTS, Submission 46, p. 2.

[96]See, eg, Hon Brendan O’Connor MP, Minister for Skills and Training, ‘300,000 additional Fee-Free TAFE places to help with cost of living pressures’, Media Release, 1 January 2024, https://ministers.dewr.gov.au/oconnor/300000-additional-fee-free-tafe-places-help-cost-living-pressures, viewed 19 February 2024.

[97]DEWR, Fee-Free TAFE, https://www.dewr.gov.au/skills-reform/fee-free-tafe, viewed 5 February 2024.

[98]See, eg, Tasmanian Government, Submission 11, p. [2]; NUS, Submission 91, p. [2]; Mr Waters, NYCA, Committee Hansard, 14 August 2023, p. 2.

[99]Ms Dodd, TAFE Directors Australia, Committee Hansard, 29 March 2023, p. 9.

[100]Career Industry Council of Australia (CICA), Submission 39, p. [4].

[101]Newbery, Submission 16, pages 29–33.

[102]ANMF, Committee Hansard, 26 April 2023, p. 9.

[103]See, eg, Dr Rutherfood, Submission 4, p. 14; AITC, Submission 31, p. [7]; AiGroup, Submission 47, p. 2; JSA, Submission 81, p. 12; BCA, Submission 93, p. 4; Ms King, SkillsIQ, Committee Hansard, 16 May 2023, p. 5; Mr Williams, ITECA, Committee Hansard, 24 May 2023, p. 11.

[104]Ms Dodd, TAFE Directors Australia, Committee Hansard, 29 March 2023, pages 1–2; See also AiGroup, Submission 47, p. 2; CICA, Submission 39, p. [4].

[105]ITECA, Submission 85, p. 37.

[106]UTS, Submission 46, p. 1, pages 3–4.

[107]NSW Department of Education et al, Submission 77, p. 16.

[108]RMIT, Submission 67, p. [4].

[109]The DaV’ange Group, Submission 99, pages 10–11.

[110]ITECA, Submission 85, p. 38.

[111]BCA, Submission 93, p. 5.

[112]QNMU, Submission 26, p. 11.

[113]Department of Education, Submission 89, pages. 4–5. See also Mr Williams, ITECA, Committee Hansard, 24May 2023, pages 10–11.

[114]Department of Education, Submission 89, pages 5–6.

[115]Department of the Treasury, Working Future: The Australian Government’s White Paper on Jobs and Opportunities, p. 129.

[116]Department of Education, Australian Universities Accord Interim Report, 19 July 2023, pages 121–124, https://www.education.gov.au/australian-universities-accord/resources/accord-interim-report, viewed 14February2024. As noted in Appendix C, the final report for the AUA has yet to be released.

[117]Department of Education, Australian Universities Accord Interim Report, 19 July 2023, pages 124–125.

[118]See, eg, ACCE, Submission 15, pages 3–4; QNMU, Submission 26, p. 11; AITC, Submission 31, p. [8].

[119]Department of Education, Submission 89, p. 4. See also See also Department of the Treasury, Working Future: The Australian Government’s White Paper on Jobs and Opportunities, p. 127.

[120]Department of Education, Submission 89, p. 4. See also See also Department of the Treasury, Working Future: The Australian Government’s White Paper on Jobs and Opportunities, p. 127.

[121]Ms Dodd, TAFE Directors Australia, Committee Hansard, 29 March 2023, p. 6. See also Department of Education, Submission 89, p. 4.

[122]See, eg, Professor Shreeve, Submission 1, pages [2, 5]; SA Government, Submission 12, p. 3; ACCE, Submission 15, p. 7; QNMU, Submission 26, p. 11; ACCI, Submission 43, p. 4; WA Government, Submission 93, p. 5; Ms Kilzi, NUS, Committee Hansard, 26 April 2023, p. 11.

[123]QNMU, Submission 26, p. 11.

[124]QAMH, Submission 35, pages 4–5.

[125]ACCE, Submission 15, pages 6–7.

[126]Dr Rutherford, Submission 4, p. 10.

[127]Department of the Treasury, Working Future: The Australian Government’s White Paper on Jobs and Opportunities, p. 128. See also MTAA, Submission 38, p. 7.

[128]See, eg, Alphacrucis University College, Submission 82, p. [13].

[129]Australian Academy of Technical Sciences and Engineering (AATSE), Submission 49, p. 2.

[130]See, eg, Professor Peter Dawkins, Director, JSA, Committee Hansard, 22 March 2023, p. 6; NSW Department of Education et al, Submission 77, p. 15. See also Universities and Colleges Admissions Service, Degree Apprenticeships,https://www.ucas.com/apprenticeships/degree-apprenticeships, viewed 5February2024.

[131]AiGroup, Submission 47, p. 3.

[132]Mr Williams, ITECA, Committee Hansard, 24 May 2023, p. 8.

[133]Professor Shreeve, Submission 1, p. [3]. See also Professor Shreeve, private capacity, Committee Hansard, 3 May 2023, p. 3.

[134]Newbery, Submission 16, pages 19–20.

[135]Newbery, Submission 16, p. 21.

[136]See, for example, UTS, Submission 46, p. 2.

[137]Mr Matt Bushby, Director, Commercial and University Partnerships, TAFE NSW, Committee Hansard, 16August 2023, pages 5–6.

[138]Mr Stephen Brady, Managing Director, TAFE NSW, Committee Hansard, 16 August 2023, pages 1–2.

[139]UTS, Submission 46, pages 2–3.

[140]UTS, Submission 46, p. 3.

[141]NSW Department of Education et al, Submission 77, p. 15.

[142]See, eg, AATSE, Submission 49, pages 2–3; Integrated Information Service, Submission 53, pages [2–3]; Professor Dawkins AO, JSA, Committee Hansard, 22 March 2023, p. 3.

[143]IHEA, Submission 8, p. [3].

[144]Department of Education, Submission 89, pages 4, 8.

[145]Department of Education, Submission 89, p. 10.

[146]Tasmanian Government, Submission 11, p. 2.

[147]SA Government, Submission 12, p. 5. See also Mr Sean Teer, Employment Facilitator, South-East Melbourne and Peninsula Region, Workforce Australia, Committee Hansard, 26 July 2023, p. 11.

[148]Professor Shreeve, private capacity, Committee Hansard, 3 May 2023, p. 3.

[149]ANMF, Submission 54, p. 12.

[150]NCVER, Submission 36, p. 4.

[151]Motor Trades Association of Australia, Submission 38, p. 11.

[152]COSBOA, Submission 86, p. 7.

[153]Department of Education et al, Submission 77, p. 12.

[154]AiGroup, Submission 47, pages 8–9.

[155]ADTIA, Submission 88, p. [8].

[156]Professor Erica Smith, Submission 72, p. 3.

[157]Ms Karolina Szukalska, General Manager, Workforce and Innovation, Minerals Council of Australia (MCA) Committee Hansard, 19 April 2023, pages 20–21.

[158]MCA, Submission 92,pages 10–11. See also AiGroup, Submission 47, p. 8.

[159]Newbery, Submission 16, pages 27–29.

[160]Tasmanian Government, Submission 11, p. 3.

[161]SA Government, Submission 12, p. 7.

[162]WA Government, Submission 97, pages 6–7.

[163]WorldSkills Australia, Submission 94, p. 20.

[164]Ms King, SkillsIQ, Committee Hansard, 16 May 2023, p. 6.

[165]Ms King, SkillsIQ, Committee Hansard, 16 May 2023, p. 6.

[166]Victorian Student Representative Council (Vic SRC), Submission 90, p. [6].

[167]Newbery, Submission 16, pages 34–35.