There is an overall decrease in expenditure on the two skills and training sub-functions in the 2012–13 Budget, from $4.0 billion in 2011–12 to $3.6 billion in 2012–13. This expenditure comprises $1.9 billion in ‘vocational and other education’ and $1.7 billion in ‘vocational and industry training’. Expenditure is set to remain flat through to 2013–14, but then increase to $3.8 billion by 2014–15. [1]

Consistent with this decrease in overall expenditure, there are no significant new measures for skills and training this year. Instead, the Budget continues implementation of the Building Australia’s Future Workforce reforms and funding package announced in the 2011–12 Budget.

The Australian Government provides funding for skills and training in two ways—through intergovernmental payments to the states and territories for vocational education and training and directly through its own programs (chiefly Australian Apprenticeships). With the machinery of government changes that occurred in December 2011, this funding for skills and training is now split across two portfolios.[2]

Australian Government payments to the states to support vocational education are made via the National Skills and Workforce Development Specific Purpose Payment (SPP) and through various National Partnership Payments (NPPs). In 2012–13, total payments to the states decrease from $1.9 billion in 2011–12 to $1.7 billion, mainly due to a drop in the value of NPPs for vocational and other education. While the SPP remains constant at $1.4 billion, the NPPs total $316.8 million (down from $526.8 in 2011–12), largely due to the cessation of the Productivity Places Program.[3]

In April 2012, the Council of Australian Governments (COAG) agreed to a revised National Agreement for Skills and Workforce Development and a new National Partnership on Skills Reform (NP).[4] The NP was a 2011–12 budget measure worth $1.7 billion over five years (2012–13 to 2016–17). Its objectives include: a national entitlement to a Certificate Level 3 qualification; a student loan scheme for diploma and advanced diploma students; and a web portal (MySkills) for information on vocational education and training. The NP is worth $238.4 million in 2012–13, less than the previous National Partnership for the Productivity Places Program (worth $375.9 million in 2011–12).[5]

Australian Government funding for its own programs (vocational and industry training) in 2012–13 will total $1.7 billion, down from $2.0 billion in 2011–12. Much of this saving is achieved through two measures that adjust the Australian Apprenticeships Incentives Program in response to concerns over retention and completion rates.[6] The first measure discontinues the commencement payment for existing worker Australian Apprentices ($1500) and increases the completion payment (from $2500 to $3000). The second measure defers the standard apprenticeship commencement payment to six months (rather than three) after start of employment. Together these measures save $401.4 million over four years.[7] Initial reaction to these measures from the sector has been mostly positive despite this reduction in funding.[8]

As noted in Budget Review 2011–12, the tendency to refurbish vocational education and training by renaming programs and redirecting funding across skills initiatives continues.[9]

The $558 million National Workforce Development Fund, only one year old and incorporating the $200 million Critical Skills Investment Fund established in 2010–11, encounters both deposits and withdrawals in this year’s Budget. This includes the redirection of $18.1 million over four years for three new Australian Skills Centres of Excellence that will support innovative production processes and related skills development (it is not yet known which industries will benefit).[10] There is also an additional $35 million over four years to train mature age workers. For information on other mature age worker initiatives, see the Budget Review 2012–13 article, ‘Increasing Workforce Participation’.

The overall message for skills and training in the 2012–13 Budget is ‘business as usual’. The Budget continues to implement the major initiatives announced in 2011–12, but reflects some refinements and savings measures. Chief among these are the new (but less costly) National Partnership on Skills Reform and much tighter targeting of Australian Apprenticeships incentives.

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