RESEARCH PAPER SERIES, 2020–21   Updated 24 June 2021

The vocational education and training sector: a quick guide (updated)

Carol Ey

Social Policy

This quick guide provides an overview of the vocational education and training (VET) sector including:

• what the sector covers

• policy and regulatory responsibilities and

• funding.

Links are also provided to further information.

1 What the sector covers

Students

In 2019, an estimated 4.2 million students were enrolled in VET with an Australian training provider, representing almost a quarter of the Australian population aged 15–64 years.

In comparison, in the same year, 3.9 million students were enrolled in Australian schools and 1.6 million students were enrolled at higher education institutions.

Of those VET students for whom the relevant information is recorded:

• 52.5% were male

• 3.9% identified as Indigenous

• 4.7% reported having a disability and

• 5.3% were international students.

For domestic students, where remoteness region was recorded, 66.8% came from major cities, 30.5% from regional areas and 2.7% from remote areas. Australian Bureau of Statistics population figures for 2019 showed that 72.2% of the population lived in major cities, 25.8% in regional areas and 1.9% in remote locations.

Qualification levels and courses

Accredited VET programs cover a wide range of activities, including part-day employer-specific training, general use courses such as first aid training, year-long employment-related certificates, apprenticeships and postgraduate diplomas. Courses include those provided at Australian Qualifications Framework (AQF) levels 1 to 6, and level 8, as well as non-award courses. The proportion of program enrolments at each level in 2019 is shown in Table 1 below.

Table 1: the proportion of program enrolments at each Australian Quality Framework level, 2019

Australian Quality Framework level

Proportion of program enrolments

Level 1—Certificate I

5.2%

Level 2—Certificate II

18.9%

Level 3—Certificate III

35.3%

Level 4—Certificate IV

17.4%

Level 5—Diploma

12.9%

Level 6—Advanced Diploma

2.3%

Level 8—Graduate Certificate/Graduate Diploma

0.2%

Other recognised and non-award courses

7.7%.

Source: Parliamentary Library calculations from National Centre for Vocational Education Research (NCVER), ‘Databuilder’, Total VET students and courses: program enrolments, NCVER website.

Of these program enrolments, most (85.5%) were in training package qualifications, while 6.9% were in accredited qualifications, 3.6% in training package skill sets, and 4.1% in accredited courses.

The three fields of study with the largest number of program enrolments were management and commerce (20.9%), society and culture (17.2%), and engineering and related technologies (15.1%).

In addition to program enrolments, there were some 2.6 million students studying subjects not delivered as part of a nationally recognised program. These are subjects which were not delivered as part of a nationally recognised program, for example, first aid courses or responsible service of alcohol accreditation.

Providers

There are some 4,000 registered training organisations (RTOs) in Australia. Providers must be registered in order to deliver nationally recognised courses and AQF-accredited VET qualifications, or to receive government funding for the provision of VET courses. Those providers who are not RTOs would typically be delivering non-award courses.

In 2019, of the students enrolled in nationally recognised training:

• 3.0 million (72.1%) were enrolled at private training providers

• 779,200 (18.6%) at Technical and Further Education (TAFE) institutes

• 489,100 (11.6%) at community education providers

• 124,400 (3.0%) at enterprise providers

• 108,000 (2.6%) at schools and

• 77,600 (1.8%) at universities.

Note that these percentages add up to more than 100% as students may have enrolled in training with multiple provider types.

2 Policy and regulatory responsibilities

The VET sector is a joint responsibility of the Australian and state and territory governments. The National Agreement for Skills and Workforce Development (NASWD), formulated as part of the Intergovernmental Agreement on Federal Financial Relations (IGA FFR), defines the objectives, outcomes and performance measures, and the roles and responsibilities of governments in the delivery of services across the skills and workforce development sector.

Payments to the states are facilitated through the Federation Funding Agreement—Education and Skills, which is part of the new Federation Funding Agreements (FFA) framework established in August 2020. This Framework replaces the former Council of Australian Government (COAG) arrangements. The FFA—Education and Skills consolidates a range of existing funding agreements including the National Partnership on the Skilling Australians Fund and Project Agreements for:

• Energising Tasmania

• the National Infection Control Training Fund

• the north-west Tasmania job ready generation package

• the New South Wales Infrastructure Skills Centre and

• Revitalising TAFE Campuses across Australia.

In addition, the JobTrainer Fund has been established under the National Partnership for Streamlined Agreements.

In June 2020, the Council of Australian Governments (COAG) Skills Council was replaced by the Skills National Cabinet Reform Committee (Skills Committee), as part of the cessation of COAG, and its replacement with a new National Cabinet and the National Federation Reform Council.

The Skills Committee was established to support ongoing reform to VET including:

• simplifying, rationalising and streamlining national VET qualifications

• strengthening quality standards and

• developing a new National Skills Agreement to replace the NASWD from 1 January 2022.

The Skills Minister’s Meeting (SMM) was also created at that time, with responsibility for the ongoing management of VET system. Both the Skills Committee and the SMM consist of ministers from each state and territory with portfolio responsibility for skills issues.

The Australian Industry and Skills Committee (AISC) was established by the former COAG Industry and Skills Council (the precursor to the COAG Skills Council) to give industry a formal, expanded role in policy direction and decision-making for the VET sector. One of the main functions of the AISC is to provide advice to SMM on new or amended training products, which must be endorsed by SMM before they can be listed on the National Register for implementation by RTOs.

The AISC receives advice from industry-specific Industry Reference Committees (IRCs), which have representation from large and small businesses, and peak bodies and unions, to ensure that industry skill requirements are reflected in the national training system.

Federal government VET policy and programs are primarily the responsibility of the Department of Education, Skills and Employment. However, the Department of Industry, Innovation and Science advises on industry policy, which can shape investment in VET.

State and territory policy responsibility generally rests with the relevant Department of Education, but in some cases it rests with employment or economic-focused agencies such as the Queensland Department of Employment, Small Business and Training and the Tasmanian Department of State Growth. The Parliamentary Library publication Tertiary education: a quick guide to key internet links lists the relevant agency for each state and territory.

The Australian Skills Quality Authority (ASQA) is the national regulator for Australia’s VET sector, with responsibility for the registration of training providers and accreditation of courses. It also manages the registration of VET and English language course providers who wish to offer courses to overseas students studying in Australia (CRICOS). Providers who only offer courses in Victoria or Western Australia, and who do not intend to enrol overseas students, can register with their relevant state regulator instead (the Victorian Registration and Qualifications Authority and the Western Australian Training Accreditation Council).

The National Skills Commission was established in July 2020 to provide advice and national leadership on the Australian labour market and current, emerging and future workforce skills needs. It has three long-term outcomes:

• to make an enduring and relevant contribution to labour market information

• to improve the quality, accessibility and relevance of VET, and

• to contribute to a labour market that effectively aligns skills needs with education and training.

3 Funding

Government funding

Unlike the school and higher education sectors, a significant proportion of VET activity is undertaken by non-government providers on a fee-for-service basis without any government funding. The cost for this activity is borne by the student or their employer. Of the 4.2 million students undertaking VET activity in 2019, only 1.2 million were enrolled in courses outside the school system that were directly government funded (that is, were ‘government-funded students’).

Federal and state/territory government funding is provided through multiple channels, including:

• Commonwealth funding to the states and territories targeted to particular outcomes, such as through the NASWD and National Partnerships, often spent on training subsidies

• general funding of government-supported providers such as TAFE institutes, schools and universities, including capital funding

• fee-for-service arrangements for the provision of designated programs (such as the Adult Migrant English Program) and

• VET Student Loans, which are paid by the Australian Government to providers on behalf of students in designated courses.

Total government funding provided through VET appropriations and VET intergovernmental funding agreements in 2019 was $6.4 billion, of which the Australian Government contributed $2.6 billion (41.6%). In addition, the Australian Government provided $275.9 million for VET Student Loans (including grandfathered VET FEE-HELP loans).

As can be seen in Figure 1 below, about 50% of Australian Government direct VET expenditure is on employer incentives, whereas most state and territory expenditure is directed to VET delivery.

Figure 1: government expenditure on VET by activity, 2019

4 Source: NCVER, Government funding of VET 2019: data tables, Table 4.

State and Territory governments directly operate some VET providers, such as the TAFE institutes and government schools, while both levels of government subsidise certain courses or programs operated by private providers and directly contract fee-for-service provision of others.

In 2019, public providers received 72.3% of total government VET delivery and capital funding, and 61.8% of VET Student Loan distributions.

In addition, some federal government funding is provided directly to students, such as through Trade Support Loans (some $222.4 million in 2019) and Living Away From Home Allowance for apprentices, and student income support arrangements. There are also incentive payments available to employers of apprentices.

Fees

In general, providers set their own fees for each course or unit. This can vary from less than $100 for a part-day course or unit (for example, $65 for a three-hour First Aid Management of Anaphylaxis course conducted by the Red Cross) up to thousands of dollars for multi-year technical training (for example, over $84,000 for the Diploma of Aviation (Commercial Pilot Licence - Aeroplane)Diploma of Aviation (Commercial Pilot Licence - Aeroplane) Diploma of Aviation (Commercial Pilot Licence - Aeroplane)Diploma of Aeroskills (Mechanical)conducted by Australian Wings AcademyAustralian Wings Academy).

In most states, different providers may charge different fees for the same course, even within the same state TAFE system. For example, in Victoria, the fee for the Certificate III in Electrical Fitting Diploma of Aeroskills (Mechanical)Diploma of Aeroskills (Mechanical)course at Melbourne Polytechnic (also known as Northern Melbourne Institute of TAFE) is $21,850 ($5,900 for eligible Skills First students, that is, ‘government funded students’), while for the same course South Metropolitan TAFE charges $3,689.

Different course costs can reflect a range of factors. The Productivity Commission (p. 5.7) cites differences in training-related factors (such as class sizes, contact hours and teaching salaries), jurisdictional factors (such as the characteristics of students and scale of delivery) and policy factors (such as the level of fees allowed to be charged to students) as cost drivers, but these are not always easily compared between providers. The National Skills Commission’s Average Price Benchmarking Report (2021) provides an overview of the variability in VET qualification pricing nationally, with a view to developing more nationally consistent prices for VET.

For government-subsidised training, there are a range of approaches to subsidies. For example, a maximum student contribution may be set (such as in New South Wales), or an hourly rate of subsidy may be set (as in Victoria).

Fees for specific courses can be obtained through the My Skills website.

5 Further information

• The National Centre for Vocational Education Research (NCVER) provides a wide range of research and statistical publications relating to VET, as well as VOCSTATS, a product that allows more sophisticated data users to produce their own statistical tables.

• The ‘Vocational education and training’ chapter of the Productivity Commission’s Report on Government Services 2021 provides information on government-funded VET, including a range of performance information.

• For a comprehensive history of the development of the VET sector, see K Bowman and S McKenna, The Development of Australia’s National Training System: a Dynamic Tension between Consistency and Flexibility, a report prepared for the then Department of Education and Training in 2016.

• The My Skills website is designed for training consumers and provides a national directory of VET training courses and providers, as well as information on careers and industries.

• Training.gov.au is the national register for training in Australia and contains the authoritative information about RTOs and nationally recognised training.

• The Australian Apprenticeships website provides a range of information and support for apprentices and employers. It also includes the National Skills Needs List, which is a list of traditional trades that are identified as experiencing a national skills shortage.

• In addition to the links provided above, the Parliamentary Library publication, Tertiary education: a quick guide to key internet links includes links to TAFE providers and to state and territory government agencies with responsibility for VET.

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