The vocational education and training sector: a quick guide

UPDATED 12 SEPTEMBER 2023

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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
funding.

Links are also provided to further information.

What the sector covers

Students

In 2022, an estimated 4.5 million students were enrolled in VET with an Australian training provider, representing almost a quarter of the Australian population aged 15–64 years.

In the same year, 4.0 million students were enrolled in Australian schools, while 1.6 million students were enrolled at higher education institutions in 2021 (the latest data available).

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

51.8% were male
3.9% identified as Indigenous
4.5% reported having a disability
5.0% were international students.

For domestic students, where remoteness region was recorded, 67.6% came from major cities, 29.9% from regional areas, and 2.5% from remote areas. Australian Bureau of Statistics population figures for 2022 showed that 72.2% of the population lived in major cities, 25.9% in regional areas and 1.9% in remote locations (Parliamentary Library calculations based on Table 3 of Population estimates by LGA, Significant Urban Area, Remoteness Area and electoral division, 2001 to 2022 - Revised

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, multi-year 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 nationally recognised program enrolments at each level in 2022 is shown in Table 1 below.

Table 1 The proportion of program enrolments at each Australian Quality Framework level, 2022

Australian Quality Framework level	Proportion of program enrolments
Level 1—Certificate I	3.7%
Level 2—Certificate II	16.2%
Level 3—Certificate III	39.8%
Level 4—Certificate IV	19.1%
Level 5—Diploma	10.5%
Level 6—Advanced Diploma	0.8%
Level 8—Graduate Certificate/Graduate Diploma	0.3%
Other recognised and non-award courses	9.6%

Source: Parliamentary Library calculations from National Centre for Vocational Education Research (NCVER), ‘Databuilder’, Total VET students and courses: program enrolments, NCVER website. Filtered by level of education and nationally recognised enrolment type.

Of the 2.1 million students enrolled in nationally recognised programs in 2022, most (1.8 million) were in training package qualifications, while 157,400 were in accredited qualifications, 104,185 in training package skill sets, and 107,105 in accredited courses.

The three fields of study with the highest proportion of program enrolments were management and commerce (20.5%), society and culture (18.3%), and engineering and related technologies (17.5%).

In addition to program enrolments, there were some 3.0 million students studying subjects not delivered as part of a nationally recognised program. These included courses such as first aid training, responsible service of alcohol accreditation and licence to operate a forklift.

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 2022, of the students enrolled in nationally recognised training:

3.4 million (76.2%) were enrolled at private training providers
717,760 (15.9%) at Technical and Further Education (TAFE) institutes
493,480 (10.9%) at community education providers
106,380 (2.3%) at enterprise providers
103,475 (2.3%) at schools
67,695 (1.5%) at universities.

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

Policy and regulatory responsibilities

The VET sector is a joint responsibility of the Australian and state and territory governments, with Commonwealth funding provided under the Federation Funding Agreements Framework. This Framework replaced the former Council of Australian Government (COAG) arrangements in August 2020.

Payments to the states are facilitated through the Federation Funding Agreement—Education and Skills. The only program currently funded in the VET area under this Agreement is Fee-Free TAFE (officially the 12-Month Skills Agreement).

Under this Agreement, from January 2023, the Australian Government and state and territory governments are funding 180,000 Fee-Free TAFE and vocational education places. A further 300,000 places are to be made fee-free from January 2024 under the 5-year National Skills Agreement (NSA) being negotiated with the states and territories. The places are to address skills shortages in areas of national priority and will target priority groups.

The NSA, which is due to commence in January 2024, also provides additional Commonwealth funding to the states and territories to:

deliver high-quality, responsive and accessible education and training to boost productivity
support Australians to obtain the skills they need to participate in rewarding work
ensure Australia has the skilled workforce needed for critical industries and the delivery of high-quality services.

The NSA replaces the former National Agreement for Skills and Workforce Development agreement.

The Skills and Workforce Ministerial Council (SWMC) was launched in 2023 to support skills reform including:

delivering on the shared Vision of the VET sector through a long-term National Skills Agreement
positioning the VET sector to support a fair and productive economy
improving the quality and relevance of VET through delivery of reforms underway
enhancing VET delivery and outcomes for Australians by strengthening collaboration with other portfolios on key intersections.

Under the Federal Relations Architecture, the SWMC reports to National Cabinet regularly on its priorities, as well as annually on its workplan.

Federal government VET policy and programs are primarily the responsibility of the Department of Employment and Workplace Relations (DEWR). However, the Department of Industry, Science and Resources advises on industry policy, which can shape investment in VET.

State and territory policy responsibility rests either with the relevant Department of Education (such as in New South Wales) or with employment or economic-focused agencies (such as the Queensland Department of Youth Justice, 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).

Jobs and Skills Australia (JSA) was established in 2022, and replaced the National Skills Commission (website soon to be archived). JSA is a statutory body within DEWR. JSA’s role is to provide independent advice, data and analysis on the Australian skills and labour market, and the effectiveness of the skills system to meet national current and future skills needs.

There have been recent changes to industry engagement arrangements. Jobs and Skills Councils (JSCs) are being established to facilitate industry perspectives in the VET sector. Previously known as Industry Clusters, JSCs will have 4 broad functions and responsibilities:

workforce planning
training product development
implementation, promotion and monitoring
industry stewardship.

JSCs will work with JSA to identify skills gaps. JSCs replaced the previous industry engagement arrangements, which included 67 Industry Reference Committees and 6 Skills Service Organisations.

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 4.5 million students undertaking VET activity in 2022, only 1.3 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 Federation Funding Agreements, 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)
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 2021 (the latest data available) was $10.5 billion, of which the Australian Government contributed $6.3 billion (59.8%). The Australian Government also provided $257.4 million for VET Student Loans.

As can be seen in Figure 1 below, nearly 85% of Australian Government direct VET expenditure is on employer incentives, whereas state and territory government expenditure is primarily directed to VET delivery.

Figure 1 Government expenditure on VET by activity, 2021

Source: Parliamentary Library calculations derived from NCVER, Government funding of VET 2021: 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 2021, TAFE providers received 70.7% of total government VET delivery and capital funding, and 19.9% went to private providers. TAFE received 34.5% of VET Student Loan distributions, while private providers received 51.7%.

In addition, some federal government funding is provided directly to students, such as through Trade Support Loans (some $199.7 million in 2021) 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, $45 for a two-hour CPR - Provide Cardiopulmonary Resuscitation course conducted by the Australian Training Institute) up to thousands of dollars for multi-year technical training (for example, $102,500 for the Diploma of Aviation (Commercial Pilot Licence - Aeroplane) conducted by Western Australian Aviation College).

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 full fee for the Certificate IV in Engineering course at Wodonga TAFE is $16,320, with no additional cost for materials, while for the same qualification GOTAFE (based in north-east Victoria) charges $27,580 and $2,520 for course materials. In both cases, fees are significantly less for subsidised students.

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) provided 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).

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. Access to VOCSTATS is by application.
The ‘Vocational education and training’ chapter of the Productivity Commission’s Report on Government Services 2023 provides information on government-funded VET, including a range of performance information.
For a comprehensive history of the development of the VET sector, see Kaye Bowman and Suzy 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.

For copyright reasons some linked items are only available to members of Parliament.

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