Australian unions and state governments have given their blessing to a “gamechanger” National Skills Agreement (NSA) that will nationalise vocational education and training (VET) and help the sector access to up to $30 billion in Commonwealth government funding.

The new agreement, which will take effect from 1 January 2024 and initially run for five years, will unite Commonwealth and state governments to provide what the Department of Employment and Workplace Relations (DEWR) called “high quality, responsive and accessible education and training to boost productivity.”

As part of a package that includes $12.6 billion in investment to “expand and transform” access to the VET sector, a new ‘National Stewardship’ model will engage state training authorities to co-ordinate strategic skills investment, target delivery of skills in national priority areas, and provide flexibility to meet local industry skills needs.

Improving Australia’s digital and technology capability is one of four core priorities for the program, which includes $2.4 billion in flexible allocations that will help local sectors focus skills development in “critical and emerging industries” including clean energy and the net zero transformation; bolstering sovereign capabilities in areas such as advanced manufacturing, national security, food security, and construction; and care and support services.

With TAFE as the core element of the VET sector, TAFEs will be supported by baseline funding commitments and up to $1.3 billion of additional Commonwealth funding including $325 million to create nationally-networked TAFE Centres of Excellence that will unite TAFEs, universities, Jobs and Skills Councils, and industry.

A new $155 million National TAFE Leadership Network will be established to promote “cutting edge curriculum”, with $250 million allocated to improve VET completions for women and others facing “completing challenges”; $214 million for Closing the Gap initiatives to be designed and led by First Nations peoples; and $142 million to improve foundation skills training.

The NSA is a “landmark agreement [that] will kickstart real change,” Minister for Skills and Training Brendan O’Connor said as he was joined by Prime Minister Anthony Albanese to launch the new program.

“The TAFE sector has endured periods of underfunding, impacts of deregulation, loose rules of VET market entry, a lack of national cohesion and an obsession for competition at the expense of collaboration,” O’Connor continued.

“A high performing and world-class VET sector is crucial for achieving a fairer society and a stronger economy. By providing genuine national leadership in partnership with states and territories, we are building a system that is greater than the sum of its parts.”

A national approach built around state buy-in

The program will be a “gamechanger” that “will make an incredible difference to working people and the next generation,” ACTU secretary Sally McManus said as the NSA was announced.

“The country needs, and young people deserve, a world-class VET sector, with TAFE at its heard to provide job opportunities across our cities, suburbs, and regions…. It’s reassuring to see a federal government show leadership and invest in the skills and training of working people.”

State education ministers were equally welcoming of the NSA – which has been designed from the ground up as a Commonwealth-led, state-delivered way of ensuring consistency in skills delivery across a range of sectors.

The NSA will give the New South Wales state government “the tools to rebuild TAFE, proactively manage skills shortages and support some of our state’s most disadvantaged students,” NSW Minister for Skills, TAFE and Tertiary Education Steve Whan said in announcing that the state’s VET sector will receive over $3.81 billion under the program.

The NSA’s “shared national vision for TAFE and skills will build a stronger future for Victoria,” Victorian Minister for Skills and TAFE Gayle Tierney said, with “crucial measures” – and funding for Victoria that includes up to $3.15 billion to expand its VET sector and $105 million to create 62,800 more free TAFE places – helping target training “to tackle the skills needs of our fastest growing industries.”

States and territories will be able to access Commonwealth funds of up to $3.7 billion over the next five years, increasing total Commonwealth investment in local training systems to up to $12.6 billion during that time – although if states access all funding available over the five years, Albanese said, combined investment in the sector could reach $30 billion.

The NSA is “a game-changer for individual Queenslanders,” Queensland Minister for Training and Skills Di Farmer said, noting the state government’s commitment “to providing high quality training no matter who you are or where you are in Queensland” and noting that the NSA “will help us to achieve that in our diverse and decentralised state.”

“Training changes people’s lives and we know that for so many it has been the difference between not having a job and getting one.”