2. Overview of VET sector
   1. Vocational Education and Training (VET) is a tertiary education pathway that enables people to gain tertiary qualifications, workplace-specific skills, and knowledge-based competencies in a wide range of occupations and industries.[1]
   2. This chapter provides an overview of the VET sector, including its governance structure and how courses are delivered. It also considers general perceptions of the sector among employers and target cohorts.

System governance

2.3Governance of the VET sector is the joint responsibility of the Commonwealth and the states and territories. At the national level, the Department of Employment and Workplace Relations (DEWR) is primarily responsible for governance, financing, and overarching policy development for the VET system. DEWR works cooperatively with state and territory skills departments.[2]

2.4State and territory training authorities are responsible for the operation of the VET sector within their jurisdictions. Training authorities participate in the formulation of national policy, planning, and objectives, and promote and implement agreed policy within their jurisdictions—supported by statutory advisory and regulatory bodies.[3]

2.5The Skills and Workforce Ministerial Council (SWMC)—established by the National Cabinet—provides a forum for national cooperation on the intersection of skills and training policy with workforce matters. The SWMC progresses items of national importance in the portfolio to achieve agreed objectives and priorities. It is made up of Commonwealth, state and territory ministers responsible for the skills portfolio in their respective jurisdictions.[4]

2.6An overview of roles and responsibilities in the VET sector is included in Figure 2.1.

Source: Productivity Commission, Report on Government Services 2024, https://www.pc.gov.au/ongoing/report-on-government-services/2024/child-care-education-and-training/vocational-education-and-training.

Funding

2.7Funding for the VET sector is the joint responsibility of the Commonwealth and the states and territories. Funding is allocated via government grants and appropriations, as well as via competitive tender and user choice mechanisms. Funding is provided to a mixture of registered training organisations (RTOs), including technical and further education (TAFE) institutes and other public providers, independent and industry-led RTOs, and community education providers.[5]

2.8An overview of funding arrangements for the VET sector is included in Figure 2.2.

Source: Productivity Commission, Report on Government Services 2024,

2.9In 2022, funding provided through VET appropriations and intergovernmental funding arrangements totalled $10.7 billion—an increase in nominal terms of $274.1 million (2.6 per cent) from 2021. This funding included $6.8 billion from the Commonwealth and $4.0 billion from the states and territories. Expenditure on VET activities in 2022 comprised:

• $5.5 billion for direct VET delivery.
• $4.0 billion for employer assistance to engage in VET.
• $145.1 million for student assistance for equipment, travel, and other costs.
• $448.3 million for capital investment.
• $743 million for system administration and governance.[6]
  10. A significant portion of VET is delivered by non-government providers on a fee-for-service basis with costs borne by students or employers. Of the 4.5 million students enrolled in VET in 2022, 1.96 million (43.5 per cent) were enrolled in government-funded courses.[7]

Regulation

2.11The Australian Skills Quality Authority (ASQA) is the national regulator for the VET sector. The organisation is responsible for regulating RTOs that deliver VET courses and qualifications to students in Australia or offer Australian qualifications overseas. ASQA is also responsible for regulating providers that deliver VET courses to people in Australia on student visas, as well as certain providers that deliver the English Language Intensive Courses for Overseas Students program.[8]

2.12ASQA’s functions are specified under the National Vocational Education and Training Regulator Act 20211 (NVR Act). These functions include but are not limited to:

• Registering providers as RTOs.
• Accrediting courses that may be offered or provided by RTOs.
• Carrying out compliance audit activities of RTOs against quality standards.
• Promoting and encouraging continuous improvement in RTOs’ capacity to provide a VET course or part of a VET course.
• Advising and making recommendations to Commonwealth, state and territory minsters and the SWMC on matters relating to VET.
• Collecting, analysing, interpreting, and disseminating information about VET.[9]
  13. ASQA takes a risk-based approach to regulation, and typically focuses on improving performance over applying sanctions. If a provider is identified as non-compliant—for example if ASQA receives a complaint or identifies an issue via routine monitoring—ASQA may undertake a performance audit. If the provider is then assessed as non-compliant, ASQA will raise the issue with the provider in the expectation that the issue will be addressed voluntarily. Serious or persistent noncompliance may attract sanctions under the NVR Act, including the cancellation of a provider’s registration.[10]
  14. ASQA also works to identify systemic risks to the integrity of the VET sector and to address them in accordance with its regulatory functions. Risk priorities in 2023–2024 include student work placements; academic integrity; online delivery; shortened course duration; recognition of prior learning; workforce capability; international delivery; and governance through change.[11]
  15. The Victorian Registration and Qualifications Authority and the Western Australian (WA) Training and Accreditation Council are responsible for regulating RTOs and for accrediting courses within Victoria and WA.[12]
  16. The Tertiary Education Quality and Standards Agency (TEQSA) is responsible for the regulation of providers and quality assurance of training and education in the higher education sector.[13] ASQA and TEQSA often work collaboratively, particularly in relation to the regulation and accreditation of dual-sector providers and courses.[14]

Provider self-assurance

2.17ASQA is transitioning to a regulatory approach focused on provider self-assurance, which will see providers having in place their own systems and practices to monitor, evaluate, and continually improve training outcomes and performance. This will also see ASQA taking on a more collaborative, capacity-building role as opposed to having a focus on monitoring and compliance.[15]

2.18Some issues raised with the self-assurance model include the potential for poor performance to go unnoticed, reductions in independent feedback to providers, and concerns that where a provider self-reports an issue this will be treated punitively. By contrast, potential benefits of the model include increased autonomy and flexibility, greater potential for innovation, and greater responsiveness to industry needs.[16]

2.19ASQA co-designed a model for self-assurance with the sector in 2021 and 2022 and is continuing to monitor the effectiveness of the new approach.[17]

Students

2.20In 2022, there were 4.5 million students enrolled in nationally recognised VET. This represented around 25 per cent of the population aged 15 to 64 years. Students enrolled in VET increased by 5.1 per cent from 2021 to 2022.[18] Of those students:

• 50.1 per cent were male, and 46.7 per cent were female.
• 3.9 per cent identified as people with disability.
• 3.6 per cent identified as First Nations peoples.
• 59 per cent lived in a major city, 26.1 per cent lived in a regional area, and 2.1 per cent lived in a remote or very remote area.[19]
  21. By comparison, in 2022 there were approximately 1.55 million students enrolled in university[20] and around 1.79 million students enrolled in secondary schools.[21]
  22. The National Union of Students (NUS) observed that over the five years between 2016 and 2021, VET enrolments increased by 177,000 while university enrolments increased by 25,000. The NUS stated that this demonstrates that VET remains ‘extremely relevant’ to people wanting to increase their skills to enter the workforce.[22]
  23. Professor Robin Shreeve noted that a typical university student is undertaking a three-year bachelor’s degree, while a typical VET student is an apprentice, a trainee, or a student undertaking a short course such as a First Aid Certificate.[23]

Participation and enrolments by gender

2.24Women and men are relatively evenly represented in the VET sector. However, there is a clear gender-based distinction in the choice of training among VET students.

2.25For example, women are more likely than men to undertake qualifications directed to caring roles. In 2022, women accounted for more than 90 per cent of enrolments in Early Childhood Education and Care qualifications, over 80 per cent of enrolments in the Diploma of Nursing, and over 70 per cent of enrolments in the Certificate III in Individual Support.[24] In 2022, men made up 88 per cent of enrolments in engineering and related technologies, 90 per cent of enrolments in architecture and building, and 77 per cent of enrolments in information technology (IT).[25]

2.26Gender differences by occupation are stark across apprenticeships and traineeships. Women make up 30.9 per cent of all apprentices and trainees, and a very small percentage of apprentices in plumbing (1.6 per cent); bricklaying, carpentry, and joining (2.5 per cent); and electrical (5.2 per cent). By contrast, women are over-represented in hairdressing (85.2 per cent), food trades (32.9 per cent), and in the sectors classes as miscellaneous technicians and trades workers (39.9 per cent).[26]

2.27The Committee heard that perceptions of VET and associated biases drive women away from higher-paid trades towards lower-paid VET pathways.[27] The National Apprenticeships Association Australia (NAAA) noted that men often do not choose female-dominated occupations due to lower pay, while women do not choose male-dominated occupations precisely because the culture is male dominated.[28]

Qualifications and courses

2.28VET covers a wide range of activities, including part-day, employer-specific training, general use short courses such as first aid training, employment-related certificates, apprenticeships and traineeships, and longer-term qualifications.

2.29VET qualifications often relate directly to specific industries or occupations, which means that students can gain the skills and knowledge needed to start working in their desired field right away. VET qualifications are also shorter than traditional degree programs, enabling students to begin working and earning within a shorter period of time. In addition, VET provides access to hands-on learning and real-world experience that enable tactile and applied skills to be developed.[29]

2.30In 2022, there were 2.1 million students enrolled in nationally recognised training (NRT).[30] Of these, 91.3 per cent were in full qualifications, including 84.9 per cent in training package-based qualifications and 6.4 per cent in accredited qualifications. The remainder of the enrolments were in training package and accredited skillsets.[31]

2.31VET qualifications are typically offered at the Certificate I to Advanced Diploma levels. In 2022, the majority of students (41.5 per cent) enrolled in qualifications were undertaking courses at the Certificate III level. This was followed by Certificate IV courses (20.2 per cent) and Certificate II courses (17.9 per cent).[32] By contrast, universities typically offer Bachelor- to Doctoral-level degrees. Some dual-sector institutions offer both VET and university qualifications.[33]

2.32In 2022, the fields of VET study with the highest enrolments were management and commerce (20.5 per cent), society and culture (18.3 per cent), and engineering and related technologies (17.5 per cent).[34]

2.33In 2022, there were 3 million students enrolled in courses not delivered as part of a nationally recognised program. These included product- or industry-specific training and short courses such as first aid. The majority of enrolments (67.6 per cent) were in health, followed by engineering and related technologies (11.9 per cent) and management and commerce (67.6 per cent).[35]

Nationally recognised training

2.34Nationally recognised training covers qualifications and units of competency based on Training Packages, and individual qualifications and units endorsed by ASQA.

2.35Training Packages are the basis for most programs delivered in the VET system.[36] Packages specify the knowledge and skills required by individuals to perform effectively in the workplace and set out how units of competency are packaged into skillsets and qualifications. Training Packages are mostly used by RTOs to design curricula and by employers to assist with workforce planning and development.[37]

2.36Training Packages contain the following products:

• Units of competency, which specify workplace performance standards.
• Assessment requirements for each unit of competency.
• Qualifications aligned to the Australian Qualifications Framework (AQF).
• Credit arrangements specifying arrangements between Training package qualifications and higher education qualifications in accordance with the AQF.[38]
  37. Packages are developed and implemented in accordance with the Training Package Organising Framework (TPOF), which came into effect in January 2023. The TPOF was designed to place industry and learners at the centre of the VET system, and ensure that training product development is faster, less bureaucratic, and more responsive to national and local skills need.[39] New arrangements for the development of Training Packages followed a review conducted in 2018. This found that the process was overly complex and bureaucratic, lacked transparency, and limited engagement.[40] The development of Training Packages is discussed in Chapter 5.
  38. Accredited courses are typically developed by RTOs and other organisations when a training need is not covered by a Training Package and a course needs to be nationally recognised. A course cannot be accredited to address an outcome that can be achieved via a Training Package. ASQA accredits courses against Standards for VET Accredited Courses and the AQF. Only RTOs may deliver accredited training.[41]

Apprenticeships and traineeships

2.39Some VET students complete their qualification as an apprenticeship or traineeship. This is a learning pathway which combines paid in-work training with formal study.[42] Apprenticeships and traineeships (covered by the term ‘Australian apprenticeships’) are available in a variety of VET qualification levels and can be full-time, part-time, or school-based.[43]

2.40Typically, an apprenticeship is a structured arrangement of 3.5 to four years. It is often undertaken in trade sectors such as plumbing or electrical. A traineeship is of shorter duration and is undertaken in a wider variety of areas including health, IT, and hospitality. A comparison of the two pathways is set out in Table 2.1.

Source: Apprenticeship Careers Australia, Difference between an apprenticeship and a traineeship, https://www.apprenticeshipcareers.com.au/job-seekers/fact-finding/difference-between-apprenticeship-and-traineeships

2.41As of December 2022, there were 377,655 individuals completing an apprenticeship or traineeship, representing around 14 per cent of all VET program enrolments. The majority of apprenticeship enrolments (60.3 per cent) were in trade occupations. The most common areas of study by enrolment were engineering and related technologies (37.2 per cent), management and commerce (19.3 per cent), and architecture and building (18.7 per cent).[44]

The Australian Qualifications Framework

2.42The AQF is the national policy for regulated qualifications in Australian education and training. It comprises:

• Learning outcomes for each level and qualification type.
• Specifications for the application of the AQF in the accreditation and development of qualifications.
• Policy requirements for:
  • issuing AQF qualifications;
  • qualification linkages and student pathways; and
  • registers of organisations authorised to accredit and issue AQF qualifications, and of AQF qualifications and related pathways.
• Definitions of the terminology used in the policy.[45]
  43. There are 10 levels in the AQF. Level 1 has the lowest complexity, and Level 10 the highest. Learning outcomes are constructed around what graduates are expected to know, understand and be able to do as a result of their learning, expressed in terms of knowledge, skills, and application. The VET sector typically offers qualifications at AQF Levels 1 to 6: Certificate I to Advanced Diploma. Universities offer qualifications at the AQF Levels 7 to Level 10: Bachelor to Doctoral Degree.[46]

Completion rates and student outcomes

2.44For nationally recognised qualifications commencing in 2018 (the latest year actual completion rates are available), the completion rate was 47.6 per cent. Training Package qualifications saw a higher completion rate (48.7 per cent), while completion rates for accredited qualifications were lower (36.4 per cent). Completion rates were higher for women (50.1 per cent) than for men (44.9 per cent).[47]

2.45Completion rates rose by AQF level, from 36 per cent at the Certificate I level to 56.7 per cent for qualifications at the Diploma level or higher. Completion rates were highest among enterprise providers (58 per cent) and schools (50.4 per cent), and lowest among TAFEs (44.1 per cent) and community providers (44.4 per cent).[48]

2.46Completion rates for apprentices and trainees were higher than average for the VET cohort. In 2022, the completion rate for apprentices across all occupations was 55.8 per cent, falling to 53.4 per cent for trade occupations. Contract completion rates—that is, the proportion of contracts for training which commenced and were completed with the same employer—were 48.7 per cent for all occupations, falling to 42.2 per cent for trades. Contract recommencements and movements between employers is higher for trades than for non-trade apprenticeships and traineeships.[49]

2.47Analysis of ABS population statistics and VET completions indicates that completions as a share of the working age population have increased between 2016 to 2021. This indicates that holding at least one VET qualification is becoming more common in the labour force. Moreover, more VET completions are in occupations with higher VET shares of employment (where there is demand for a VET-qualified workforce), and in occupations with strong employment growth.[50]

2.48In 2023, the key reason cited for not completing training among students undertaking VET qualifications were change in employment, followed by ‘personal reasons’ and finding training to be ‘not as expected’. Both students who completed a qualification and those who did not complete reported high levels of satisfaction with the training (88.1 per cent and 76.6 per cent of the cohorts, respectively), including the quality of teaching and assessment processes. 67.6 per cent of students who completed a qualification, and 58.9 per cent of those did not, also reported improved employment outcomes—including employment at a higher skill level or in a better job.[51]

2.49Apprentices and trainees reported relatively high levels of satisfaction with training and skills development—particularly in trade areas. For example, 89.4 per cent of those who had completed a trade apprenticeship and 89.5 per cent of those who had completed a qualification in a non-trade field were satisfied with learning outcomes. This fell to 78.9 and 69.1 per cent (for trade and non-trade fields, respectively) for those who did not complete. Rates of employment after training were high for all cohorts (both ‘completers’ and ‘non-completers’, in both trade and non-trade areas).[52]

2.50The main reasons for non-completion for apprentices and trainees were employment-related (65.4 per cent), followed by personal reasons (13.9 per cent), and reasons relating to the training (12.5 per cent).[53] This reflects evidence from stakeholders that apprentices are typically happy with the training offer, with non-completion often due to issues with workplace culture, low wages, delays commencing training with their VET provider, inability to secure a female trainer or mentor (for female apprentices); and language, literacy, and numeracy barriers.[54]

2.51Evidence indicated that additional data should be collected to enable a true picture of commencement and completion rates across VET offerings including apprenticeships and traineeships.[55] Stakeholders noted the following issues:

• Completion of individual or grouped units of competency may not be counted as ‘success’ in training statistics, despite learners deliberately enrolling in individual units to meet their training needs.[56]
• Some apprentices leave their apprenticeship after identifying that it is not suited to their needs or aspirations. This should not be considered a system failure.[57]
  52. The Australian Industry Trade College (AITC) recommended a longitudinal study on completion of apprenticeships be conducted, stating that it is crucial to examine long-term outcomes of young people after completing school while identifying gaps in career decision-making processes.[58]

Providers

2.53To deliver nationally recognised courses and accredited qualifications, a provider must be registered with ASQA. Non-registered providers are not permitted to deliver accredited training but may deliver non-award courses. In 2022, there were 3,589 RTOs in Australia. Of these, the vast majority (2,884) were private training providers. Other provider types included enterprise providers (125), community education providers (192), schools (349), and TAFEs (24).[59]

2.54By comparison, there are 170 higher education institutions, including 42 universities. The majority of these institutions are accredited providers which deliver accredited courses and qualifications for specific sectors—typically at the AQF levels 7 to 10.[60]

2.55RTOs vary in size from small organisations which may deliver bespoke courses and qualifications (often specific to an industry or sector) to larger—often public—entities which may deliver a significant proportion of VET within a jurisdiction.[61] In 2022, of the students enrolled in nationally recognised training:

• 76.2 per cent were enrolled with private training providers.
• 15.9 per cent were enrolled with TAFEs.
• 10.9 per cent were enrolled with community education providers.
• 2.3 per cent were enrolled with enterprise providers.
• 2.3 per cent were enrolled with schools.
• 1.5 per cent were enrolled with universities.[62]

Fees

2.56Typically, providers set their own fees for courses and units offered, with fees varying from less than $100 for a short, part-day course or unit, to many thousands of dollars for multi-year, specialised qualifications. Course costs may reflect a range of factors, including class sizes, contact hours, and teaching salaries, as well as policy settings across jurisdictions.[63]

2.57Government subsidies are available for many courses and qualifications. There is substantial variation in fees and government subsidies across Australia, including for the same qualification and in the same jurisdiction. While there is little systemic national data on the differences in prices across the VET sector, recent analysis by the National Skills Commission (NSC—now Jobs and Skills Australia (JSA)), indicates that in 2021–2022:

• The average VET student could expect to pay around $1,100. Fees varied by the level of qualification. Certificate I fees may be as low as $100, while the average fee for an Advanced Diploma is $3,400.
• For apprenticeships and traineeships, around 87 per cent of the course fee is covered by subsidies. This falls to 76 per cent for other training. Students are required to pay the difference between the course fee and the subsidy.
• The average price variation between jurisdictions for the same qualification was around $3,000, rising to more than $10,000 in some cases. There was especially large variation for some trade-related Certificate III qualifications.[64]
  58. Variations in prices for select qualifications are included in Table 2.2.[65]

Source: National Skills Commission, VET average price benchmarks, pages 18–22 https://www.nationalskillscommission.gov.au/publications/average-price-benchmarking-report.

VET delivered to secondary school students

2.59VET delivered to secondary school students (VETDSSS) is undertaken by senior secondary school students and can contribute to the Senior Secondary Certificate of Education (SSCE).[66] In 2022, there were 242,945 people participating in VETDSSS. This accounted for around 26.8 per cent of the Australian population who were at school and aged 15 to 19 years.[67]

2.60VETDSSS is typically delivered by a school that is registered as a provider or in partnership with an RTO. Some schools also deliver VET on behalf of an RTO under third-party arrangements. A common misconception is that VETDSSS is separate from other VET offerings. This is notwithstanding that VETDSSS uses the same set of competency standards and is delivered, assessed, and certified under the same conditions as VET undertaken by non-secondary students.[68]

2.61In 2022, most VETDSSS students were enrolled in Training Package courses, with a smaller proportion in accredited qualifications. Most enrolments were at the Certificate II and III levels (57.3 per cent and 32.6 per cent, respectively). The most common fields of study were tourism; hospitality; sport and recreation; business services; and construction, plumbing, and integrated services. VETDSSS was most commonly delivered by private providers (38.6 per cent), followed by onsite delivery at schools (28.8 per cent). Approximately 15 per cent of participants were enrolled with a TAFE institute, and a similar number attended more than one provider type.[69]

2.62In 2022, most students participating in VETDSSS were enrolled at public schools (60.5 per cent), followed by catholic schools (18.2 per cent). Approximately 15 per cent of VETDSSS students were enrolled with independent schools.[70]

2.63The majority of VETDSSS participants were in Queensland, followed by Victoria and NSW.[71] DEWR observed that the higher number of enrolments in Queensland may be driven by a delivery model that makes extensive use of on-site and external RTOs. Around 70 per cent of all school-based RTOs had their headquarters in Queensland in 2021. School-based RTOs in Queensland tend to focus on the delivery of non-trade Training Packages. Foundation skills also represent a much larger percentage of Training Package courses and qualifications delivered in Queensland than the national average (39.6 per cent of training in Queensland compared to a national average of six per cent).[72]

2.64A core component of VETDSSS are school-based apprenticeships and traineeships (SBATs). These allow secondary school students—typically in Years 10, 11 or 12—towork for an employer and obtain a recognised qualification while completing their SSCE.[73] In 2022, there were 20,765 students undertaking SBATs, representing 8.5 per cent of VETDSSS participants.[74]

2.65ASQA is responsible for ensuring that VETDSSS is consistent with the VET Quality Framework. This responsibility is shared with state-based regulators where training is delivered by providers operating solely in those states. Where VET is delivered by a secondary school, there is a division of oversight, responsibility and authority with state and territory governments as the regulators of secondary schooling throughout Australia. This can create challenges in ensuring that VETDSSS is delivered at a level consistent with the Quality Framework.[75]

VET and the labour market

2.66Several stakeholders emphasised that VET is and will be a significant contributor to meeting current and future skills needs, including in emerging industries[76]

2.67JSA observed that in the year to February 2023, 36 per cent of total employment growth has been in occupations where university qualifications are a primary pathway, while over 60 per cent of total employment growth has been in VET-related occupations. Growth has been highest in occupations requiring Certificate II- to Certificate IV-level qualifications.[77]

2.68Contrary to popular misconceptions that VET is largely for training trades workers, VET has a range of roles in the labour market. For example, 34.5 per cent of employed people across all occupations had a VET qualification as their highest education level in 2021. VET-qualified workers make up over 30 per cent of people employed in all broad occupational groups except sales workers and professionals.[78]

2.69The Australian Academy of Technological Sciences and Engineering (AATSE) noted that VET plays a critical role in responding to skills needs in STEM professions. Moreover, with the construction and manufacturing sectors being the largest employer of people who hold STEM VET qualifications, the VET sector will be essential to upcoming nation-building projects.[79]

2.70The Committee heard that VET will play a crucial role in ensuring the workforce is prepared for future opportunities, including in emerging sectors.[80] It will also have a key role in addressing skill gaps, notwithstanding mixed evidence as to whether the sector is currently responding to current workforce shortages:

The concentration of VET qualified persons in occupations listed as experiencing a shortage on the Skills Priority List is 39.8 per cent This is higher than the 34.5 per cent VET concentration when considering all occupations. By contrast, the average VET concentration across occupations not listed as experiencing a shortage on the Skills Priority List is 33.2 per cent, which is much lower than the VET concentration for occupations that are experiencing a shortage.[81]

2.71The Queensland Nurses and Midwives Union stated that VET has a key role in addressing skills and workforce gaps in health—particularly in regional and remote areas. This may include increasing the number of trained staff in rural areas and First Nations communities and providing a critical first step for skills development and further training.[82]

2.72JSA observed that total employment for occupations requiring a VET qualification is projected to grow by 7 per cent between 2021 and 2026 and is expected to account for just over 50 per cent of all jobs. Employment growth in occupations requiring a university qualification will be higher (around 13.5 per cent). However, the share of all occupations requiring a VET qualification is expected to remain higher than those requiring a university qualification for the immediate future.[83]

2.73The Shop Distributive and Allied Employees Association (SDA National) noted that most industries in which its members work do not require fully qualified staff at all levels but are nonetheless suffering from a lack of a critical mass of formally qualified staff—particularly at the mid-management levels. SDA National told the Committee that this manifests as dysfunctional workplaces, undervalued teams, significant levels of underemployment, and ineffective change management. SDA National indicated that VET has a growing role in addressing this concern, particularly noting the changing nature of work and emerging digital-focused roles.[84]

2.74DEWR told the Committee that economic forecasts show VET will continue to have a role in supporting workforce participation and productivity, noting that employment growth is anticipated in sectors which rely on VET graduates, including aged and disability support, childcare, and agriculture. DEWR emphasised that the sector must respond to widespread skills shortages across Australia, stating that this requires:

…cooperation between governments, employer bodies, unions, and training providers to ensure the VET sector is delivering the right training where people who need it can get access. It will also mean challenging some traditional stereotypes about who should do what training or participate in any particular occupation and ensuring that groups that lack the necessary foundation skills, or that experience other vulnerabilities are not left behind.[85]

2.75A VET Workforce Blueprint was announced as an outcome of the 2022 Jobs and Skills Summit in 2022. This will aim to address challenges currently facing the VET workforce and identify effective strategies for growing the VET workforce, attraction and retention, capability and career development and succession planning.[86]

2.76The Employment White Paper highlighted that the mix of skills required in the labour force is changing as Australia’s economy evolves. This indicates that an adaptable and highly skilled and educated workforce will be required to meet the challenges and opportunities of an uncertain future. The White Paper noted that in the next ten years, 90 per cent of new jobs will require post-secondary qualifications, with around 44 per cent of those jobs requiring a VET qualification and around 48 per cent requiring a bachelor’s degree or higher.[87]

The VET sector: perceptions and reality

2.77Stakeholders highlighted common views of the VET sector and careers to which a VET pathway leads. Many of these views were negative and reflected a low level of understanding of VET among members of the public. This is not to say that there are no positive views of the sector. For example, Monash University highlighted research showing that many people that VET prepares students well for further education and work, provides practical, hands-on learning, and supports achievement of specific career goals—including obtaining paid work.[88]

2.78A common theme in evidence was that VET does not enjoy the same status as university, with stakeholders noting that VET is often perceived as less intellectually demanding than higher education and less likely to lead to a fulfilling or lucrative career.[89] For example, the Australian Chamber of Commerce and Industry observed that there has been systematic encouragement of higher education as the preferred aspiration. This ignores the fact that higher education is not suited to all members of the Australian community.[90]

2.79SkillsIQ indicated that perceptions of VET as being inferior to university have been internalised by employers and contribute to an overqualified workforce, noting that:

• There is a general perception that a degree is the entry requirement into many jobs—including some entry-level positions.
• Employers frequently require—at least in their job advertisements—higher qualifications than needed for a role.
• Government policies have promoted higher education as a means of building the nation’s innovation and productivity.[91]
  80. Stakeholders observed that negative perceptions of the VET sector are driven by perceptions of the careers to which VET pathways lead, noting a pervasive view that VET pathways lead to a narrow range of careers, and that VET-related careers are low paid and involve manual labour.[92] For example, Professor Erica Smith stated:

[Occupations] that people understand as being respected, archetypal jobs like doctor, lawyer and so on, are not taught in the VET system … [These] occupations are understood and valued, whereas jobs in industries that don't have very clear occupational titles are not understood and valued. I think this is part of the reason why VET compared with university is undervalued.[93]

2.81The Integrated Information Service observed that perceptions of VET-related careers are particularly significant for apprenticeships and traineeships, as the apprenticeship pathway often leads directly to employment.[94]

2.82The National Careers Institute reported that in 2020 the median annual full-time salary was $60,000 for VET graduates and $64,700 for university graduates.[95]

2.83There can be large differences in income between university- and VET-related careers. For example, in 2020, the median starting salary for dentistry was $84,000. Starting salaries for university graduates also increased by qualification level, with the salary for holders of postgraduate research degrees specified as $93,000 for that year.[96] For VET, salaries in trades such as plumbing often match those for positions requiring university degrees, while salaries in (often female-dominated) fields such as beauty tend to be far lower.[97]

2.84Research comparing VET and higher education pathways for the same occupation indicates that starting salaries are often similar if not identical for the two pathways. However, over time higher education qualifications tend to lead to higher pay, more autonomy, and greater career progression. Moreover, when assessing candidates for positions—including promotions—employers often value experience, skills, and overall ‘fit’ with the organisation more than the qualification.[98]

2.85While employees in fields requiring degrees may earn more over their working life, VET students often enter the workforce financially better off than their university counterparts. Research by Empowered Women in Trades estimates that trades apprentices leave apprenticeships $197,000 to $247,000 ahead of university graduates.[99]

2.86Stakeholders also indicated that perceptions of VET are linked to and influenced by perceptions of specific sectors, noting that this may lead to lower engagement with those sectors and exacerbate current skill shortages. Examples include:

• A mistaken belief that manufacturing is ‘dirty [and] Dickensian’, notwithstanding that manufacturing is increasingly a very scientific industry.[100]
• Stigma and discrimination surrounding the community mental health sector, with the sector often seen as less prestigious and poorly remunerated.[101]
  87. Professor Shreeve noted that negative perceptions of VET-related occupations may be driven less by views on earning potential than by community views on certain professions, stating that ‘even if plumbers earned more than medical practitioners, many in the general public would consider plumbers to be of lower status’.[102]
  88. A critical factor in negative perceptions of VET is lack of awareness. Research by the Career Industry Council of Australia (CICA) identified poor awareness of the role of VET and its contribution to skills and workforce development.[103] Monash University observed that VET is not as well understood as secondary school or university.[104]
  89. Perceptions of VET often vary according to geographic location and demographic characteristics.[105] AMES Australia noted that for many migrants there is a perception that VET offers lower value qualifications relative to university and is associated with trades. This can lead migrants to choose a university (graduate) qualification as a means of returning to employment, despite VET being the better pathway.[106]
  90. Work is ongoing to provide more reliable, consistent data on VET outcomes. JSA noted that it is in the process of developing a VET National Data Asset to help inform discussions on career pathways and training outcomes. This will bring together VET data with a range of outcomes data—including on employee income, employment status, progression to further study, and receipt of government assistance.[107]

Employer and industry views

2.91Employers and industry often hold positive views of the VET sector compared to the general public.[108] Newbery Consulting stated that employers recognise VET as a primary pathway to grow their workforce—particularly when there is a scarcity of people with relevant skills—and consider that the VET sector offers:

• The ability to adapt quickly to changes in the industry and to changing employer needs, and to provide customised learning packages.
• Local knowledge, with many VET providers embedded in their local communities and able to provide targeted training programs tailored to their needs.
• Specialisation in industry sectors, enabling more targeted training programs.
• Better customer service and ongoing consultation.[109]
  92. This notwithstanding, employer satisfaction with VET has fallen over time, from a high of 85 per cent in 2011 to 73 per cent in 2019. This is reflected in Figure 2.3.

Source: Business Council of Australia, Submission 93, p. 3

2.93Stakeholders attributed this decline to a perception that relevant skills are not taught, a lack of recruitment and HR support for employers looking to engage VET-qualified candidates, and structural issues in the sector, including funding inconsistencies between jurisdictions. The Committee heard that the sector must urgently prioritise industry partnerships as a means of ensuring industry can access a competent and efficient workforce that responds to skills needs—including at the local level.[110]

Committee comment

2.94Lifting perceptions of the VET sector will require implementing measures to improve sector governance and regulation, lift the quality and relevance of training, and enhance the student experience. This will necessarily require reliable, accurate data.

2.95There is compelling evidence that additional, more granular data should be collected to enable government and other stakeholders to identify, understand and respond appropriately to key issues facing the sector, including completion rates and key barriers faced by a diverse student cohort. This should include addressing key gaps in existing data collection mechanisms.

2.96The Committee recommends the Australian Government work with State and Territory Governments and key stakeholders such as the National Centre for Vocational Education Research to improve data collection and reporting mechanisms in the vocational education and training sector. This should include a focus on the diversity of pathways within the sector and on better understanding the complex barriers faced by students.

Footnotes

[1]National Centre for Vocational Education Research (NCVER), Submission 36, p. 1.

[2]NCVER, Governance and regulation, 2023, https://www.voced.edu.au/vet-knowledge-bank-governance, viewed 29January 2024.

[3]NCVER, Governance and regulation, 2023.

[4]NCVER, Governance and regulation, 2023.

[5]Productivity Commission, Report on Government Services 2024, 5 February 2024 https://www.pc.gov.au/ongoing/report-on-government-services/2024/child-care-education-and-training/vocational-education-and-training, viewed 15 February 2024.

[6]NCVER, Government funding of VET 2022, 26 October 2023,https://www.ncver.edu.au/research-and-statistics/publications/all-publications/government-funding-of-vet-2022, viewed 15 February 2024.

[7]Parliamentary Library, The Vocational Education and Training Sector: A Quick Guide, 24 June 2021, https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp2021/Quick_Guides/VocationalTraining, viewed 29 January 2024. See also NCVER, Government-funded students and courses 2022, 18 July 2023, https://www.ncver.edu.au/research-and-statistics/publications/all-publications/government-funded-students-and-courses-2022, viewed 29 January 2024.

[8]Australian Skills Quality Authority (ASQA), ASQA overview, https://www.asqa.gov.au/about-us/asqa-overview, viewed 29 January 2024.

[9]National Vocational Education and Training Regulator Act 2011 (NVR Act), s 157.

[10]ASQA, ‘Regulatory Risk Framework: Effective and integrated management of risk’, April 2021, https://www.asqa.gov.au/resources/publications/regulatory-risk-framework, pages 13–16.

[11]ASQA, Risk Priorities, https://www.asqa.gov.au/how-we-regulate/risk-priorities, viewed 29 January 2024.

[12]ASQA, VET sector overview,https://www.asqa.gov.au/about/vet-sector, viewed 29 January 2024.

[13]Tertiary Education Quality and Standards Agency (TEQSA), TEQSA overview, https://www.teqsa.gov.au/about-us/teqsa-overview, viewed 29 January 2024.

[14]AQSA, How are multi-sector providers regulated?,https://www.asqa.gov.au/faqs/how-are-multi-sector-providers-regulated, viewed 29 January 2024.

[15]ASQA, Self-assurance,https://www.asqa.gov.au/how-we-regulate/self-assurance, viewed 29January2024.

[16]ASQA, Self-assurance.

[17]ASQA, Self-assurance.

[18]NCVER, Total VET students and courses 2022, 17 August 2023, https://www.ncver.edu.au/research-and-statistics/publications/all-publications/total-vet-students-and-courses-2022, viewed 20 September 2023.

[19]Data generated using NCVER’s ‘DataBuilder’ online tool. See https://www.ncver.edu.au/research-and-statistics/data/databuilder.

[20]Department of Education, Selected Higher Education Statistics – 2022 Student data Key Findings, p. 2, https://www.education.gov.au/higher-education-statistics/resources/selected-higher-education-statistics-2022-student-data-key-findings, viewed 15 February 2024.

[21]Australian Curriculum Assessment and Reporting Authority, Student numbers, https://www.acara.edu.au/reporting/national-report-on-schooling-in-australia/student-numbers, viewed 31January 2024.

[22]National Union of Students, Submission 91, p. [2].

[23]Adjunct Professor Robin Shreeve, Submission 1, p. [2].

[24]Department of Employment and Workplace Relations (DEWR), Submission 76, p. 9.

[25]Data generate using NCVER’s ‘DataBuilder’ online tool.

[26]DEWR, Submission 76, p. 10.

[27]DEWR, Submission 76, p. 9.

[28]Mr Ben Bardon, CEO, National Apprenticeships Association Australia (NAAA), Committee Hansard, 19April2023, p. 16.

[29]Australian Chamber of Commerce and Industry (ACCI), Submission 43, p. 4.

[30]NCVER, Total VET Students and Courses 2022, 17August 2023.

[31]NCVER, Total VET Students and Courses 2022, 17August 2023.

[32]NCVER, Total VET Students and Courses 2022, 17August 2023.

[33]Department of Education, Submission 89, pages 3–4.

[34]NCVER, Total VET Students and Courses 2022, 17August 2023..

[35]NCVER, Total VET Students and Courses 2022, 17August 2023.

[36]DEWR, Training packages, https://www.dewr.gov.au/nci/training-packages, viewed 31 January 2024.

[37]DEWR, Training Package Products Development and Endorsement Process Policy, November 2022, p. 5, https://www.dewr.gov.au/skills-support-individuals/resources/training-package-products-development-and-endorsement-process-policy, viewed 31 January 2024

[38]DEWR, Training Package Products Development and Endorsement Process Policy, November 2022, p. 6.

[39]DEWR, Training Package Products Development and Endorsement Process Policy, November 2022, p. 4.

[40]See Department of Prime Minister and Cabinet, Strengthening Skills: Expert Review of Australia’s Vocational Education and Training System, p. 53, https://www.pmc.gov.au/publications/strengthening-skills-expert-review-australias-vocational-education-and-training-system, viewed 31 January 2024.

[41]ASQA, Course accreditation, https://www.asqa.gov.au/course-accreditation, viewed 31 January 2024. See also Standards for VET Accredited Courses 2021 [F2021L00269].

[42]Australian Apprenticeship Support, What is an Apprenticeship, https://www.apprenticeshipsupport.com.au/Apprentices/What-is-an-apprenticeship, viewed 31 January 2024.

[43]DEWR, Submission 76, pages 5–6.

[44]Data generated using NCVER’s ‘DataBuilder’ online tool. See also NCVER, Apprentices and trainees: 2022 December quarter, 1 August 2023, https://www.ncver.edu.au/research-and-statistics/publications/all-publications/apprentices-and-trainees-2022-december-quarter, viewed 31January2024.

[45]Australian Qualifications Framework Council, Australian Qualifications Framework, January 2013, p. 9, https://www.aqf.edu.au/framework/australian-qualifications-framework, viewed 29 January 2024.

[46]Department of Education, Submission 89, pages 3–4.

[47]NCVER, VET qualification completion rates 2022, 30 August 2023, https://www.ncver.edu.au/research-and-statistics/publications/all-publications/vet-qualification-completion-rates-2022, viewed 29 January 2024.

[48]NCVER, VET qualification completion rates 2022, 30 August 2023.

[49]NCVER, Completion and attrition rates for apprentices and trainees 2022, 4 September 2023, https://www.ncver.edu.au/research-and-statistics/publications/all-publications/completion-and-attrition-rates-for-apprentices-and-trainees-2022, viewed 29 January 2024.

[50]JSA, Submission 81, pages 4–6.

[51]NCVER, VET student outcomes 2023, 14 December 2023, https://www.ncver.edu.au/research-and-statistics/publications/all-publications/vet-student-outcomes-2023, viewed 29 January 2024.

[52]NCVER, Apprentice and trainee outcomes 2022, 23 March 2023. https://www.ncver.edu.au/research-and-statistics/publications/all-publications/apprentice-and-trainee-outcomes-2022, viewed 29 January 2024. See also Master Builders Australia (MBA), Submission 71, p. 10.

[53]NCVER, Apprentice and trainee outcomes 2022, 23 March 2023.

[54]See, eg, NAAA, Submission 60, p. 4;Mr Bardon, NAAA, Committee Hansard, 19 April 2023, p. 14.

[55]See, eg, Ms Annie Butler, Federal Secretary, Australian Nursing and Midwifery Federation (ANMF), Committee Hansard, 26 April 2023, p. 9.

[56]NSW Department of Education, TAFE NSW, and NSW Education Standards Authority (NSW Department of Education et al), Submission 77, p. 8.

[57]MBA, Submission 71, pages 11–13.

[58]Australian Industry Trade College (AITC), Submission 31, p. [13].

[59]NCVER, Total VET students and courses 2022, 17 August 2023.

[60]See Universities Australia, Australian Higher Education, https://universitiesaustralia.edu.au/policy-submissions/teaching-learning-funding/australian-higher-education, viewed 31 January 2024. See also Department of Education, 2020 List of higher education institutions,14 February 2022, https://www.education.gov.au/higher-education-statistics/resources/2020-list-higher-education-institutions, viewed 31 January 2024.

[61]AQSA, What is an RTO, https://www.asqa.gov.au/rtos/what-is-an-rto, viewed 31 January 2024.See also Ms Sharp, DEWR, Committee Hansard, 22 March 2023, p. 1. NCVER, Submission 36, p. 1; Ms Jenny Dodd, CEO, TAFE Directors Australia, Committee Hansard, 29 March 2023, p. 1.

[62]NCVER, Total VET students and courses 2022, 17 August 2023.

[63]Parliamentary Library, ‘The Vocational Education and Training Sector: A Quick Guide, 24 June 2021.

[64]National Skills Commission, VET average price benchmarks: findings from the national VET average price benchmark database, 26 March 2021, p. 2, https://www.voced.edu.au/content/ngv%3A90161, viewed 29January2024.

[65]The table includes a mix of accredited and non-accredited training, selected based on the significance of the price and subsidy variation across jurisdictions.

[66]ASQA, VET delivered to secondary school students scoping study, 1 July 2021, p. 1, https://www.asqa.gov.au/how-we-regulate/strategic-reviews/past/vet-schools, viewed 29 January 2024. See also National Catholic Education Commission (NCEC), Submission 33, p. 4; Catholic Education Commission of Victoria (CECV), Submission 48, p. 4. ‘VETDSSS’ is used in place of ‘VET in Schools (VETiS)’ to reinforce that VET delivered in schools is the same as VET delivered in the broader education and training ecosystem.

[67]NCVER, VET in Schools 2022, 27 July 2023, p. 1, https://www.ncver.edu.au/research-and-statistics/publications/all-publications/vet-in-schools-2022, viewed 29 January 2024.

[68]ASQA, VET delivered to secondary school students scoping study, 1 July 2021, pages 10–11.

[69]NCVER, VET in Schools 2022, 27 July 2023.

[70]NCVER, VET in Schools 2022, 27 July 2023.

[71]NCVER, VET in Schools 2022, 27 July 2023.

[72]DEWR, Submission 76.1, p. [5].

[73]ASQA, VET delivered to secondary school students scoping study, 1 July 2021, p 1.

[74]NCVER, VET in Schools 2022, 27 July 2023. See also Ms Laura Angus, First Assistant Secretary, Careers and International Division, DEWR, Committee Hansard, 22 March 2023, p. 4.

[75]ASQA, VET delivered to secondary school students scoping study, 1 July 2021, p. 1.

[76]See eg Ms Clare Sharp, Acting Deputy Secretary, Skills, and Training Group, DEWR, Committee Hansard, 22March 2023, p. 1, p. 9; NCVER, Submission 36, p. 1; AQSA, What is an RTO.

[77]See JSA, Submission 81, p. 2; Professor Dawkins AO, Director, JSA, Committee Hansard, 22March2023, p. 2.

[78]JSA, Submission 81, p. 2.

[79]Australian Academy of Technological Sciences and Engineering, Submission 49, p. 1.

[80]See, eg, Refraction Media, Submission 9, p. 4; ACCI, Submission 43, p. [4]; MBA, Submission 71, p. 2; Australian Flexible Pavement Association, Submission 74, p. [1].

[81]JSA, Submission 81, p. 7.

[82]Queensland Nurses and Midwives Union, Submission 26, p. 4

[83]JSA, Submission 81, p. 9. See also Professor Dawkins AO, JSA, Committee Hansard, 22 March 2023, p. 2.

[84]Shop Distributive and Allied Employees Association (SDA National) Submission 44, pages [1–2].

[85]DEWR, Submission 76, pages 4–5.

[86]DEWR, Submission 76, p. 6.

[87]Australian Government, Working Future: The Australian Government’s White Paper on Jobs and Opportunities, 25 September 2023, p. 98.

[88]Monash University, Submission 83, p. 5.

[89]See, eg, Professor Robin Shreeve, Submission 1, pages [2]-[3]; Dr Phillip Rutherford, Submission 4, p. 14; ACCI, Submission 43, p. 3; Professor Erica Smith, Submission 72, p. 1; Aphacrucis University College, Submission 82, p. [6]; Dr Mark Dean, Research and Planning Officer, Australian Manufacturing Workers Union (AMWU), Committee Hansard, 26 April 2023, p. 5.

[90]ACCI, Submission 43, pages 3–4.

[91]SkillsIQ, Submission 50, p. 6. See also AVETRA, Submission 52, p. 3.

[92]See, eg, Dynamic Learning Services (DLS), Submission 23, pages 4–5; SDA National, Submission44, p. 2.

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

[94]Integrated Integration Service (IIS), Submission 43, p. [2].

[95]National Careers Institute (NCI), Australian Jobs 2021: Education Employment Outcomes, p. 46,https://www.yourcareer.gov.au/resources/australian-jobs-2021-pathways-to-workviewed 17 August 2023.

[96]NCI, Australian Jobs 2021: Education Employment Outcomes, p. 46, viewed 17August2023.

[97]See, eg, Professor Shreeve, Submission 1, p. [1]; MBA, Submission 71, p. 10.

[98]NCVER, VET and higher education pathways – do outcomes differ for the same occupation, p. 3, https://www.ncver.edu.au/research-and-statistics/publications/all-publications/vet-and-higher-education-pathways-do-outcomes-differ-for-the-same-occupation, viewed 17 August 2023. See also Professor Shreeve, Submission 1, p. [1].

[99]See MBA, Submission 71, p. 9.

[100]Dr Dean, AMWU, Committee Hansard, 26 April 2023, pages 4–5.

[101]Queensland Alliance for Mental Health, Submission 35, p. 7.

[102]Professor Shreeve, Submission 1, p. [1].

[103]Pharmacy Guild of Australia, Submission 24, p. 4

[104]Monash University, Submission 83, p. 4.

[105]Tasmanian Government, Submission 11, p. [1].

[106]AMES Australia, Submission 25, p. 3.

[107]JSA, Submission 81, p. 12.

[108]See, eg, Australian Industry Group Centre for Education and Training, Submission 47, p.2; Monash University, Submission 83, pages 5–6.

[109]Newbery Consulting, Submission 16, p. 23.

[110]See, eg, Skills Impact, Submission 13, p. [5]; MCA, Submission 92, p. 8; Business Council of Australia, Submission 93, p. 3.