Chapter 2Key issues
2.1This chapter explores the extent of support for the Free TAFE Bill 2024 (bill) and examines some of the key issues raised by submitters during the inquiry.
General views on the bill
2.2There was broad support among submitters for the intent of the bill to deliver Free TAFE places to remove financial barriers for students and target priority skills shortages. For example, TAFE Directors Australia (TDA) highlighted the importance of ongoing free TAFE:
A legislated, ongoing commitment from the Commonwealth to free TAFE will deliver positive outcomes for students, industry and the community. Importantly, this bill will give TAFEs greater funding certainty to support medium to long term education planning. Embedding free TAFE as an enduring feature of the VET system will also support efforts by national, state and territory governments to support strong and sustainable TAFEs at the centre of the system.
2.3RMIT University (RMIT) submitted that 'legislating free TAFE at the Commonwealth level signals a national commitment to supporting accessible tertiary skills attainment, including for the increasing cohort of lifelong learners who will be required to up-skill and re-skill across their lives'. RMIT argued that Fee-Free TAFE 'should form part of a coherent tertiary system that offers opportunities for multiple pathways through work and learning'.
2.4Multiple participants, including Federation University Australia, Australian Council of Trade Unions and the Victorian TAFE Association (VTA) argued that the introduction of Fee-Free TAFE has been lifechanging for students by significantly reducing the financial barriers for students to pursue vocational education.
2.5The Department of Employment and Workplace Relations (DEWR) noted that the bill would provide an 'ongoing mechanism to deliver 100 000 Free TAFE places each year, providing opportunities to vulnerable cohorts and delivering a pipeline of skilled workers in key sectors of the economy'. DEWR argued that the bill would 'continue the important foundation that has been established by Fee-Free TAFE and provide certainty for the sector' as well as 'continue to build on the model of shared stewardship of the VET system'.
2.6Similarly, Jobs and Skills Australia (JSA), pointed out that around 43 per cent of new jobs expected to be created in the next 10 years will require a VET qualification, particularly in high-demand industries such as construction. JSAargued that this supports 'the argument that Australia's education and training system needs some rebalancing to give a greater prominence to the VET system to meet Australia's future workforce needs'.
2.7However, some stakeholders argued that Fee-Free TAFE should not be legislated without further evaluation and detailed costings, and that it would prioritise TAFE over other VET providers to the detriment of student choice and the private sector. For example, the Business Council of Australia, while supportive of reducing barriers to education and training, submitted:
… we oppose legislating Fee-Free TAFE as an enduring feature of the [VET] system. As a principle, programs such as this should not be set by legislation. Rather, they should be part of a normal budget and policy setting process which identifies the problems that need to be addressed and the most effective and sustainable solutions.
2.8This view was echoed by the Council of Small Business Organisations Australia, (COSBOA) which stated that the bill prioritised public TAFE colleges at the expense of independent Registered Training Organisations (RTOs) and argued that the 'narrow focus disregards the essential complementarity of TAFE and independent RTOs, which together form the backbone of a robust and inclusive vocational education and training system'.
2.9More specifically, some participants such as the Housing Industry Association (HIA) and Master Builders Australia (MBA) recommended evaluating the performance of the Fee-free TAFE scheme to date before enshrining the scheme into legislation. For example, HIA argued that 'understanding the program's successes and challenges will allow for evidence-based adjustments that enhance its effectiveness and efficiency'.
Comments on specific aspects of the bill
2.10While stakeholder feedback addressed various aspects of the bill, most of the commentary centred on the following:
support for the existing Free TAFE initiative;
evaluation of current arrangements;
funding and resourcing; and
the exclusion of private RTOs.
Support for the existing Free TAFE initiative
2.11DEWR noted that Free TAFE enrolments have been significantly higher than targets, demonstrating strong demand for the program, with around 570 000 enrolments under the program. This included strong enrolments across priority sectors—with almost 151 000 care sector course enrolments and over 39000 construction sector enrolments. DEWR pointed out:
Fee-free TAFE has had a much higher participation rate by priority cohorts than the broader VET system. In 2023, First Nations students were 6.7percent of fee-free TAFE compared to 3.5 per cent for VET more generally; students with disability, 7.6 per cent, compared to 3.8 per cent generally; women, 61.8 per cent, compared to 46.2 per cent generally; and regional and remote students, 35.9 per cent, compared to 26.8 per cent generally. The inclusion of these cohorts in the labour market is important given the current low rate of unemployment at four per cent.
2.12RMIT submitted that through the Victorian and Commonwealth Fee-Free TAFE initiatives there have been 'over 9000 enrolments at RMIT from 2023–24 in priority areas such as care (including nursing, disability and aged care), digital and tech, construction, and education and training'.
2.13TAFE SA also highlighted that since its commencement 'nearly 15 000 students have accessed training through this program at TAFE SA, with enrolments predominantly in areas experiencing chronic workforce challenges and of strategic importance to the nation'. The South Australian Government noted that Fee-Free TAFE had also 'reinvigorated TAFE SA campuses and returned courses to regional campuses previously removed'.
2.14Other submitters argued that current Free TAFE programs have increased equity and opportunity and helped to address critical workforce challenges. Forexample, the Victorian Government indicated that its Free TAFE initiative had enrolled 'more than 54 800 culturally and linguistically diverse learners and more than 45 200 Victorians experiencing unemployment have participated in Free TAFE'. It noted that the initiative 'has already saved these students more than $550 million in fees'.
2.15Similarly, the Health Services Union argued that Fee-Free TAFE has been critical to a meeting health, care and support demand:
Because of fee-free TAFE, more Australians of all ages are considering a career in health, care and support than ever before. Students who might have never considered a career in care are joining this sector. Fee-free TAFE is raising the profile of care and support, professionalising and uplifting the value of its women-dominated workforce.
2.16The Multicultural Youth Advocacy Network Australia argued that the program 'offers numerous benefits, particularly for young people from multicultural backgrounds' by fostering 'social inclusion and economic participation for young people from refugee and migrant backgrounds, providing a pathway to meaningful employment and integration into the broader community'.
2.17In addition, the Australian Research Alliance for Children and Youth (ARACY) submitted that under the Fee-Free TAFE program over 170000 young people and priority cohorts had participated—including more than 166 000 enrolments in regional and remote areas and 30 000 enrolments from First Nations Australians. ARACY noted that 91.8 per cent of apprentices and trainees were employed within six months of graduation, while 78 per cent of graduates are employed six months following graduation.
2.18Submitters also pointed to the importance of returning TAFE to the heart of the VET sector, and of state governments working collaboratively with the Commonwealth to deliver overall improvements to the national VET system. For example, VTA submitted that 'legislating was crucial for establishing greater policy certainty, which benefits students, industries, and educational institutions alike'. The VTA argued that:
… members strongly support the central role of TAFE at the core of the VET system, and how this is reflected in the bill. This recognises the importance of the public TAFE system in advancing Australia's priorities, addressing skills gaps, and providing equitable opportunities for all Australians to reach their goals in the VET systems.
2.19In addition, the Australian Education Union (AEU) argued that the introduction of Fee-Free TAFE has been lifechanging for students, significantly reducing the financial barriers for students to pursue vocational education:
This legislation recognises TAFE as the anchor of the vocational education sector and as a social good for all Australians, not just those who attend TAFE. We know that, as the public provider of education and training, TAFE offers the best educational outcome for students and is the best value-for-money investment that governments could make into the sector. Research has shown that TAFE has increased Australia's productivity and tax revenue, lowered unemployment, supported a healthier workforce and society and contributed billions to the economy.
2.20Indeed, some submitters called for the expansion of Fee-Free TAFE to other cohorts to ensure that it addresses other systemic inequities. For example, the National Network of Incarcerated and Formerly Incarcerated Women and Girls called for the inclusion of Fee-Free TAFE education for people in prison:
By prioritising education as a pathway to liberation, we can build a society that values human potential over punishment. This initiative challenges the carceral state, aligns with our international commitments, and, most importantly, affirms the dignity and rights of every person in our community.
2.21Master Electricians Australia indicated concern about the limited access to some Fee‑Free TAFE training and cited the Cert III in Electrotechnology as an example of courses that could be incorporated in FT agreements.
2.22Notwithstanding this, some submitters argued that independent RTOs achieved superior outcomes and reflected higher levels of student and employer satisfaction compared to public TAFE colleges. For example, the Independent Tertiary Education Council Australia (ITECA) argued that:
… TAFE continues to underperform in many areas with official data showing that TAFE achieves lower completion rates, lower student satisfaction and lower employer satisfaction.
2.23The National Centre for Vocational Education Research (NCVER) noted that they would not draw the same conclusions as ITECA, and that while 'at a whole-of-system level, the data shows that as a group private providers have higher performance outcomes than TAFE on many metrics… it doesn't establish a causal relationship between provider type and that performance':
… the Productivity Commission looked at this question in 2021 and found no evidence that public RTOs deliver consistently better student outcomes than privates or vice versa. They found employer satisfaction is higher in private RTOs but students experiencing disadvantage report higher satisfaction at TAFEs or public RTOs, at high-level findings.
…
… NCVER published research in 2018 that looked at the factors that drive completion rates. We found that 70 per cent was driven by student attributes and course mix, and provider type was relatively small, at 10 per cent.
2.24VTA also pointed out that public TAFE offered specific 'wraparound support services for students – many of whom are returning to training for the first time since schooling or may not have had the opportunity to complete schooling':
These services form a core part of TAFE as a public provider, while other providers do not always provide the same level of support for students. TAFE Institutes, as large and mature government-owned providers, can provide the support required for students who may need additional support navigating various systems and processes or determining whether courses are right for them – all to support their success. With full course portfolios, TAFE are also appropriately placed to provide advice on different pathways for students, without motivations guided by a limited set of courses they may provide.
2.25Overall. JSA observed that employment rates for VET graduates were 84percent, and the year following completion, VET graduates had a median income uplift of $11 800 and earned a median employee income of $48500. JSApointed to analysis from the VET National Data Asset (VNDA) report:
For example, on average for those 400 000 people, median income went up about $12 000. Dependency on income support declined by 39 per cent for those who completed a VET qualification. There was a 15 per cent uplift in employability for those who completed, and 24 per cent went on to further study: about 16 per cent went on to further higher-level VET study and about eight per cent went on to higher education study.
Evaluation of current arrangements
2.26While supporting making VET more accessible, some participants argued that Free TAFE should not be legislated without evaluation of existing programs, particularly in relation to completion rates and employment outcomes. Forexample, Independent Schools Australia submitted:
The success of the Free TAFE initiative must be measured not just by enrolment numbers, but by other factors such as the impact of education provided, graduation rates, and the employability of graduates. A detailed assessment will provide data on whether the objectives of the program are being met and identify areas that require improvement.
2.27Ai Group submitted that a 'key reason for not supporting the current legislation is that the effectiveness of free TAFE programs that have already been commenced has not yet been properly evaluated'. It argued that '[w]hile there is evidence of strong commencements, particularly from equity groups, there are suggestions of high drop-off rates and poor completions in some areas'.
2.28Universities Australia argued that 'further consideration should be given to the proposed approach to data collection and reporting' and that the bill could 'be strengthened by including robust benchmarking and evaluation of the Free TAFE program and the introduction of a comprehensive data collection mechanism'.
2.29In a similar vein, The Group of Eight submitted that current publicly available data on free TAFE programs provided limited information on attainment rates. As such, it argued that:
The bill should therefore specify that ongoing funding from the Commonwealth to the States and Territories under 'FT agreements' be contingent on meeting specified attainment rates. By linking funding to tangible improvements in attainment rates, progress towards the national tertiary education attainment target will be more transparent.
2.30The Queensland Government called for an 'examination of the broader aspects of Fee-Free TAFE to determine the overall success and outcomes of the program, and associated implications of enshrining the program in legislation':
This includes investigating completion rates, availability of educators and impacts on the broader training system. Queensland has a healthy proportion of high-quality private providers, and it is important to ensure that delivery of FFT should not distort training delivery or disadvantage private providers.
2.31However, the Western Australian Government noted that it tracked student TAFE journeys at the unit level from enrolment to completion of the course and indicated that:
… in the year to 30 September 2024, 76 per cent of the unit enrolments delivered as part of Fee Free TAFE were successfully completed. This is comparable with the 80 per cent completion figure for units delivered across all courses, particularly considering that disengaged and other under-represented cohorts are now able to undertake training.
2.32In relation to the number of Fee-Free TAFE completions, DEWR pointed to completion rates to the end of September 2024, representing 20 months of data:
The number of completions has been steadily increasing over time. Since the commencement of fee-free TAFE there have been 110 403 completions. For 2023 students there have been 92 934 completions to September 2024. It is important, however, to consider a range of other factors when looking at completion numbers. In 2023 around 80 per cent of government funded VET students were part time. Further, almost 90 per cent of fee-free TAFE courses are full qualifications at certificates III and above, which take longer to complete, with some courses taking multiple years.
2.33JSA also highlighted that it was 'currently enhancing its analytical capacity through VNDA to generate deeper insights into the effectiveness and performance of the VET system'. JSA stated that it:
… intends to evaluate the outcomes of the Fee-Free TAFE and Free TAFE initiatives as sufficient data become available in coming years. By leveraging VNDA and other integrated data assets, this evaluation will provide a comprehensive view of the programs' contribution to national priority areas and alignment with workforce needs. The findings will guide evidence-based policy improvements to maximise the program's effectiveness in addressing Australia's current and future skills shortages.
2.34In relation to completion rates, NCVER argued that while 'completion remains a key indicator, our research shows that non-completion does not always indicate a lack of success or satisfaction'. NCVER stated that 'survey data reveals that approximately 40 per cent of qualification part completers leave for positive reasons'. and that 'the new VET Information Standard, currently anticipated for initial release in 2026/27, will enable NCVER to begin identifying students who cancel or withdraw from their training'.
2.35While NCVER noted that 'data systems do not currently distinguish Free TAFE VET activity, with aggregate data on the initiative reported directly from states and territories to the Australian Government', it proposed that it 'could support this initiative by providing transparent, impartial, quality data and reports, leveraging its established systems and methodologies'.
2.36DEWR argued that the transition to a new VET Information Standard and implementation of the Vet Data Streamlining Program would improve the collection of VET data, including competitions and withdrawals. In relation to an evaluation of the program, DEWR noted:
There's an ongoing cycle of review, monitoring and evaluation for the existing fee-free TAFE, and that is proposed to continue for the free TAFE in the bill. We receive quarterly reports from states and territories that provide a range of information, including enrolments, completions, enrolments by priority cohort and the sectors of the economy where those enrolments are. We analyse and look at those quarterly reports.
…
Later this year we will be conducting a full evaluation of fee-free TAFE in collaboration with states and territories. That will look at a range of different factors.
Funding and resourcing
2.37While supporting the intent of the bill, some submitters argued that rising demand from Free TAFE will place significant pressure on existing resources, requiring increased investment in facilities, infrastructure, and teaching staff. For example, the AEU indicated the need for additional investment into public TAFE institutions:
Whilst this legislation is critical for allowing more students to access VET study, it must be matched with funding for TAFE infrastructure, teaching and learning programs that support the unique needs of VET students, supports the TAFE workforce and revives and rebuilds the critical infrastructure that TAFE needs in order to support the influx of new students into the system. Furthermore, recognition must be given to TAFE's social contract with the Australian community and the significant economic and societal benefits gained from investment in high quality vocational education.
2.38Similarly, Federation University Australia noted that 'rising enrolments may strain infrastructure and staff capacity, particularly in regional areas where resources are already limited'. It argued that:
Programs must be adequately resourced to meet both the volume and diverse needs of students. Additionally, supporting students to complete their studies and transition effectively into the workforce will require ongoing investment in student services, career guidance, and retention initiatives.
2.39In addition, ARACY argued that while Fee-Free TAFE provides significant macroeconomic benefits 'its potential as a measure to reduce broad inequities could be greatly enhanced if coupled with additional measures to support holistic factors influencing enrolment and course completion'.
2.40Other submitters argued that the Commonwealth and the states needed to work together to meet shared and coordinated commitments for skills in priority sectors across the tertiary system. For example, RMIT argued that:
Without a well-communicated and planned approach, TAFEs and universities will be prevented from supporting a sufficient pipeline of skilled workers required for our most in-demand workforce sectors and the targets outlined for sectors such as clean energy, social care, and digital innovation. Tertiary institutions—dual-sectors in particular—offer the opportunity for innovative and streamlined skills provision but cannot proceed to fast-track these opportunities without clear commitments for place allocation from the Commonwealth and state governments.
2.41DEWR observed that if the bill passed it would 'work with states and territories on the design and delivery of ongoing free TAFE'. DEWR argued that '[t]here exists currently under the fee-free TAFE program an ability to adjust and shift the course lists and also to change priority areas if required. That process will continue with the new free TAFE agreement'.
2.42In addition, DEWR noted that the Commonwealth has committed $253.7million over 2026–2028 in the 2024–25 Mid-Year Economic and Fiscal Outlook, and an additional $1.4 billion from 2028–29 to 2034–35, for Free TAFE. This included ongoing funding of $177 million each year from 2028–29.
Exclusion of private RTOs
2.43Some participants argued that the proposed changes would prioritise public TAFE colleges over other VET providers to the detriment of student choice and the private sector. For example, the National Electrical and Communications Association submitted that the bill:
… could inadvertently limit student choice by disproportionately favouring the public TAFE system. This would restrict access to specialised, high-quality training options offered by industry led RTOs, which are more responsive to industry needs and offer tailored training programs.
2.44Hanrob College argued that independent providers 'play an essential role in Australia's education and training landscape, offering flexibility, innovation, and industry-aligned outcomes. It argued that 'excluding these providers from the Free TAFE framework could inadvertently limit access to education and undermine efforts to address skill shortages'.
2.45Cato Human Resources also submitted that 'RTOs offer several key advantages over TAFE in terms of flexibility, industry alignment, and personalised training'. It argued that their 'ability to tailor programs to meet the specific needs of industries, provide smaller class sizes, and offer faster, more hands-on training makes them a highly effective alternative to the public system'.
2.46Given the role that independent RTOs play in delivering education, some submitters advocated for their continued inclusion within any framework aimed at enhancing access to skills and education. Forexample, Surveyors Australia argued that:
While we welcome the government's initiative to make vocational education more accessible through Free TAFE, the policy inadvertently creates inequities by excluding private RTOs like ours. Students in regions underserved by TAFE often perceive that our courses should also be free, given their importance to the workforce. To address this disparity, we strongly advocate for the funding model to extend to all RTOs and for the program to be rebranded as Free Vocational Training.
2.47Similarly, the ACCI suggested expanding the eligibility of the Free TAFE program to 'all qualified providers, ensuring equitable access for regional, rural and remote communities'. ACCI argued that these 'measures will support the bill's overarching goals of economic prosperity, social equity, and environmental sustainability'.
2.48The National Aboriginal Community Controlled Health Organisation (NACCHO) submitted that the Aboriginal community-controlled health sector is currently chronically underfunded compared to TAFE and for-profit training providers. Accordingly, it recommended that FT places should 'be allocated to all Aboriginal community controlled registered training organisations, and that this be a required element of jurisdictional Implementation Plans'.
2.49In addressing this issue, DEWR observed that all providers contribute to a vibrant, diverse and quality national training system that meets the needs of all Australians:
Under the bill, free TAFE places are prioritised for delivery by public providers. Places may be available to non-TAFE providers in certain circumstances, such as thin markets, local conditions or specific cohort needs. This includes Aboriginal community controlled and First Nations owned RTOs, industry led RTOs, adult and community education providers and private RTOs. In the existing fee-free TAFE program, to 30 September 2024, 85.8 per cent of provision was delivered by public providers, including TAFE and dual sector providers; 12.5 per cent by private providers; and 1.7per cent by community based adult education providers.
2.50Further, DEWR noted that 'NCVER data shows that private RTOs received 20per cent of all government funding in 2023 from Commonwealth and states'. DEWR also pointed out that 'government funding for VET delivery and capital to private RTOs continues to grow' and that 'from 2022 to 2023 government funding for private providers increased by 10.9 per cent and funding for TAFE increased by 8.1 per cent'.
2.51DEWR indicated that it has not seen Fee-Free TAFE have a negative impact on the private training market. DEWR argued that '[i]f we look at 2023, we've had a net growth in the number of private training providers of an additional 24operating in the market. In total VET activity, we've seen the level of training, at both TAFE and non-TAFE RTOs, grow and we've seen the overall level of government investment in TAFE and in private providers also grow'.
Committee view
2.52The bill would establish an ongoing commitment of financial assistance to states to deliver Free TAFE. It would deliver cost-of-living relief through the removal of tuition fees and by prioritising cohorts who typically face barriers to education and training. It would also help address skills shortages by offering places in areas of national and state priority.
2.53During the inquiry, the committee heard strong support for the program, with significant support for embedding Free TAFE as an enduring feature of the VET system. Indeed, many participants argued that the bill would ensure an integrated approach to the national VET system, including recognising the critical role of states and territories in addressing skills shortages. Submitters also highlighted that establishing ongoing free TAFE places would enhance access to education for priority cohorts and support economic and social inclusion. The committee notes that the former Liberal and National Government had a decade to land a National Skills Agreement with the states and territories—an essential part of ensuring that there is an integrated national approach towards the VET system—and failed to do so.
2.54DEWR noted that Fee-Free TAFE enrolments have been significantly higher than targets, demonstrating strong demand for the program. This included strong enrolments across priority sectors—with almost 151 000 care sector course enrolments and over 39 000 construction sector enrolments.
2.55While some participants expressed concern in relation to the exclusion of private RTOs, the committee notes that under the bill places may be available to non‑TAFE providers in certain circumstances—such as thin markets, local conditions or specific cohort needs. This also includes Aboriginal community controlled, and First Nations owned RTOs, industry led RTOs, adult and community education providers and private RTOs. The committee also notes that the overall funding envelope for private RTOs has increased since the commencement of Free TAFE.
2.56Some submitters also raised concerns that the effectiveness of existing free TAFE programs has not yet been properly evaluated, particularly in terms of completions. However, DEWR has pointed out that recent data shows that completions have been steadily increasing and that Fee-Free TAFE figures are generally in line with broader VET completion figures.
2.57Further, DEWR and JSA indicated that a process for updating the national data standard was currently underway which will enhance the evaluation of the Free TAFE initiatives as more data becomes available in coming years. The committee is confident that this will improve the timeliness of data and ensure visibility of Free TAFE outcomes.
2.58In addition, the committee understands that there is an ongoing cycle of review, monitoring and evaluation for the existing Fee-Free TAFE program, and that this will continue under the bill. DEWR has also flagged that it will conduct a full evaluation of Fee-Free TAFE in collaboration with states and territories.
2.59The committee notes that, while the bill does not prescribe funding, Fee-Free TAFE has been provisioned for in the 2024–25 Mid-Year Economic and Fiscal Outlook, with $253.7 million over the forward estimates and ongoing funding of around $177 million each year from 2028–29.
2.60Overall, the committee believes that by removing financial barriers, the bill will empower individuals from diverse backgrounds to pursue vocational pathways, contributing to Australia's economic resilience and social inclusion.
2.61The committee recommends that the Senate pass the bill.
Senator Tony Sheldon
Chair
Senator for New South Wales
