Executive Summary
Australia’s labour market is undergoing significant, rapid change. As outlined in the recent Employment White Paper, in the coming decades our economy and labour market will be shaped by an ageing population demanding quality care and support; digital and technological advancement; climate change and the ‘net zero’ transformation; and geopolitical risk and fragmentation.
The vocational education and training (VET) sector is and will continue to be a significant contributor to ensuring our workforce is sufficiently skilled and adaptable to respond to the challenges and opportunities of an increasingly dynamic labour market. Evidence indicates that approximately 51 per cent of all current jobs require a VET qualification. Over the next 10 years, around 44 per cent of all new jobs will require a VET qualification, and 48 per cent will require a bachelor’s degree or higher.
Despite the critical importance of VET to Australia’s economic security, many people hold negative perceptions of VET and the careers to which it leads. VET is often perceived as less intellectually demanding and inferior to university, and as leading to lower-paid, more physically demanding, and less stimulating employment. These negative perceptions are often driven by low levels of understanding of VET and VET-enabled careers, as well as by policy decisions and media representations which reinforce the belief that university education is necessary for personal and professional success.
This inquiry has examined the reasons for negative perceptions of the VET sector, as well as measures to ensure current and prospective VET students—as well as other stakeholders—have sufficient information about the sector and are actively encouraged to consider a VET pathway. The Committee recognises that information and marketing measures are not sufficient. Real changes must be made to ensure that the sector delivers the high-quality education and training needed to respond to current and emerging skills needs.
The Committee’s report makes 34 recommendations, informed by 100 submissions, over 30 hours of public hearings, and engagement with students and educators. The Committee recognises that significant work is ongoing to reform the VET sector, including the Employment White Paper and the National Skills Agreement. The Committee’s recommendations are designed to complement and build upon this work.
Information and promotion
Current and prospective VET students (and other key stakeholders) require clear, accurate, reliable information on the VET sector to inform decision-making. While information on the VET sector is available (for example via government websites and from individual providers), it is fragmented across jurisdictions, often inconsistent, and sometimes neither current nor relevant. Evidence indicates that making additional information available on student and employer satisfaction, completion rates, and salary outcomes—would be of significant value.
There is also compelling evidence that additional granular data should be collected to enable government and other stakeholders to identify, understand and respond appropriately to key issues facing the sector. This should include addressing key gaps in existing data collection mechanisms.
The National Careers Institute (NCI) was created with the intent of ensuring that current and prospective VET students can access reliable information on career pathways and training options. The NCI should be operating as a ‘one stop shop’ for information on VET courses, qualifications, and career pathways. However, it appears the NCI is not functioning optimally. Evidence suggests that information on NCI websites is insufficient, out of date or irrelevant, websites are not accessible or user-friendly, and information and guidance have a strong bias in favour of higher education.
The Committee has recommended significant enhancements to the NCI, including a complete overhaul of the Your Career website. An enhanced NCI should also have a key role in boosting the capacity of VET alumni programs, noting that these programs have often proven effective in helping secondary students and members of the public to imagine a VET-enabled future.
Marketing the VET sector to current and prospective students will also be critical to dispelling negative perceptions about the sector and responding to current and future workforce and skills needs. The Commonwealth, States, and Territories should collaborate on large-scale promotional campaigns, diffused through multiple channels at national, state, and local levels. These should highlight the value of VET careers and the different pathways into the sector and target various cohorts.
VET and secondary schools
There is compelling evidence that schools must do more to promote VET to students. This includes providing relevant, accessible, consistent information on VET and associated careers and promoting VET and university as equally valid post-school options. Ensuring that VET and university are perceived as equally valid will require reducing the reliance on the Australian Tertiary Admissions Ranking as a primary measure of success in secondary education, for example by fostering alternative measures of success in schools, celebrating success by students who pursued VET-enabled career pathways, and examining different pathways into VET and university as part of broader efforts to integrate and streamline tertiary education.
There is broad recognition that quality, structured careers education is crucial to informed decision-making about post-school pathways. However, the extent and quality of careers education appears to vary considerably between schools, with some students receiving just 45 minutes of career education each year. There is a clear need for a careers education strategy to lift the quality and consistency of careers education. Key elements of a strategy would include a minimum number of career education contact hours, support for career practitioners in schools, professional development opportunities for practitioners and other educators, and supported engagement with VET providers and industry.
The quality of VET delivered to secondary school students (VETDSSS) is critical to perceptions of VET in the school system and to shaping students’ decisions about post-school pathways. It is very concerning that the nature and quality of VETDSSS varies between schools, as does the extent to which VETDSSS is valued. Going forward, VETDSSS should be underpinned by cooperative arrangements between schools, VET providers, and industry. At least in the short to medium term, TAFEs must be prioritised as VET providers of choice, consistent with efforts to rebuild a public core to the VET sector.
VETDSSS is also undermined by a shortage of qualified VET educators stemming from a shortage of educators in the VET sector, limited school resources, and failures to adapt teaching qualifications to vocational education. A greater range of initial teacher education (ITE) programs with a VET speciality should be offered, with ‘general’ ITE courses enhanced to include units on VET to ensure classroom teachers can provide reliable information on VET pathways to their students.
Training and qualifications
There is a prevailing view that the VET sector often fails to equip graduates with relevant skills and does not keep pace with rapid developments in technology. This is a particular concern for the development of Training Packages, which typically require multiple approvals by separate government entities. While it appears that the ongoing process of skills reform is likely to address at least some of the concerns in this area, additional measures should be implemented to enhance the speed at which training can be delivered to market and improve its relevance. These should include enabling Jobs and Skills Councils (JSCs) to make minor amendments to packages, as well as setting a path to self-accreditation for TAFEs. Efforts should also be made to ensure a collaborative process in the development and implementation of VET training offers, involving industry, employers, workers, and unions.
There is compelling evidence that measures must be implemented as a matter of urgency to address gender discrimination in VET pathways and significantly lift women’s participation in the sector—including in specific pathways such as apprenticeships and in traditionally male-dominated industries. The Committee considers that government should also give special consideration to supporting and increasing participation in overlooked and often heavily feminised sectors.
Apprenticeships are a cornerstone of the VET sector, and a high-quality apprenticeship pathway will continue to be critical to ensuring that Australia is able to respond to emerging skills needs and increasingly dynamic labour markets. It is very concerning that just over half of all apprentices complete their qualifications, with lower completion rates variously driven by low wages, negative workplace experiences, and a ‘fundamentally broken’ Australian Apprenticeship Support Network (AASN). It is proposed that a pilot program be created involving specialised, industry-led support providers, with lessons from the pilot used to inform the development of a more permanent solution. Measures to enhance wages and conditions for apprentices should also be considered, as should measures to increase access to apprenticeships for historically (and currently) under-represented cohorts.
Micro-credentials play a valuable role in the skills ecosystem—particularly as a means of responding to rapid changes in technology and of upskilling and re-skilling workers for industry transitions. It is therefore concerning that there appears to be disagreement and confusion as to the definition of a micro-credential and the circumstances in which micro-credentials should attract public funding. As such, there would be value in developing a national policy framework for micro-credentials. This could build on the existing micro-credentials framework published by the Department of Education and leverage other work to recognise a broader suite of skills and qualifications.
Another critical concern is that the VET sector—particularly TAFE—is experiencing challenges attracting and retaining sufficient qualified staff. Measures to improve attraction and retention of VET educators and to lift the overall quality of education should be implemented as a matter of urgency. These should include improving pay and conditions, exploring alternative entry pathways into teaching, and reducing financial and administrative burdens associated with ‘default’ entry pathways.
Operation, governance, and funding
The significant number of providers in the VET sector and the adoption of a contestable market have created challenges for many stakeholders. Many prospective students struggle to make informed choices about their 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.
While it is acknowledged that private and industry-led RTOs all have a role to play in the VET sector, it is critical that there be a focus on ensuing the sector has a strong public core. The focus in the new NSA on putting TAFE at the heart of VET and on building the quality and flexibility of TAFEs is welcomed. However, while the new NSA refers directly to partnerships between TAFEs, employers, universities, and other stakeholders, it is unclear if this includes partnerships between TAFEs and other RTOs in the design and delivery of training. There would be value in ensuring that partnerships—at least between TAFEs and non-profit and industry-led providers—are supported.
The Committee supports exploring measures to separate the VET sector into ‘education’ and ‘training’, with funding for smaller and private sector RTOs to deliver short-form, industry-specific training and for TAFEs to deliver longer qualifications with a focus on holistic student development. This should form part of broader efforts to integrate VET with higher education.
The process of skill reform must involve enhancing and streamlining regulatory arrangements, as well as refocusing regulation on lifting the quality of training. This should include giving the national regulator greater flexibility in terms of how it prioritises and makes both enforcement decisions and decisions in relation to provider registration.
The focus on the ongoing process of skills reform on lifting investment in the public VET sector and improving the coordination of investment in skills is a welcome addition to the education and training policy environment. However, it is unclear whether this process has focussed sufficiently on improving the consistency of fees and subsidies for VET courses across jurisdictions. There would be merit in exploring options to align subsidies and fees insofar as possible. There would also be value in reviewing the VET Student Loans (VSL) scheme and investigating its relationship with Fee-Free TAFE.
Enhancing the experience of VET students should be a key element of the skills reform agenda. Measures should be committed to improve student support on campuses, including by supporting representative bodies and complaints mechanisms and providing access to programs and facilities typically found on university campuses such as counselling, health, and legal services. 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.
As outlined in the Employment White Paper, meeting future skills needs will require a whole-of-tertiary-system approach, with greater integration between VET and higher education. Measures to integrate the tertiary sectors are being explored through the government’s ongoing process of skills reform. However, these processes do not appear to have resulted in a comprehensive roadmap to a genuinely integrated tertiary sector. A roadmap should be developed, including integrated funding arrangements, a clear framework for qualifications and training pathways, and streamlined regulatory and governance arrangements.
Government also has a key role in enabling provider-employer partnerships, including by providing sustainable funding and appropriate policy settings. Initiatives supported by the new NSA should enable meaningful partnerships between providers and employers, and these should be monitored to ensure their ongoing efficacy. To further promote VET to employers and to improve outcomes for graduates, there would be value in government working with key stakeholders to define skills requirements for individual roles, and to focus recruitment on specific skills and work requirements.