Skills Funding Agreement Principles

Date —

8 June 2021

Education Sector/s —
Vocational Education & Training

Summary —

As the Australian Government and the state / territory governments negotiate a new skills funding agreement, the membership of the members of the Independent Tertiary Education Council Australia (ITECA) have set out the principles that should guide negotiations.

Key Issues —

Each year the nation spends around $4.6 billion on vocational education and training, with some $1.6 billion contributed by the Australian Government and the remainder by the states and territories. Time-limited initiatives, such as the $2 billion JobTrainer program, are in addition to this.

The current funding framework, the National Agreement for Skills and Workforce Development is coming to an end. Through the Heads Of Agreement For Skills Reform, signed in mid-2020, both the Australian Government and the state / territory governments have committed to adopting a new funding model that improves national consistency for students, integrates subsidies and loans and is linked with efficient pricing and the skills needed by employers.

The ITECA membership of the ITECA have set out three principles, approved by the ITECA Board in April 2021, that should underpin the new skills funding agreement. These are as follows:


ITECA Advocacy ― 
Principles For A New National Skills Funding Agreement


Principle 1 —
Skills Needs Assessment

That the lead role in determining which skills disciplines should be funded be undertaken by the National Skills Commission (NSC), working with state / territory governments to identify skills needs at a local level.

Principle 2 —
Student Funding Support Quantum

That a consistent approach to course funding be developed by the NSC, having regard for the ability for state / territory governments to properly meet the cost of delivering each qualification to different student cohorts in different geographic areas.

Principle 3 —
State / Territory Government Funding

For a state / territory government to receive government funding it must accept that funding be made available on the basis of student choice, with funding provided through Registered Training Organisations (RTOs) on a fully contestable basis having regard for their registered scope and demonstrated capacity to provide quality outcomes for both students and taxpayers.

This framework would see the NSC take the lead role in determining skills needs and the funding provided whilst providing state / territory governments with the flexibility needed to meet local needs.  Importantly, independent RTOs and public TAFE colleges would be assessed on the same basis on their ability to access funds to support students, having regard for their past performance. ITECA has communicated these to the Australian Government and the state / territory governments at both a Ministerial and Departmental level.

A short briefing on the negotiations for the new National Skills Agreement will be included on the agenda for the next series of ITECA Funded Provider Interest Group meetings. If you’re an ITECA member, be sure to register for these.


Get Involved ― 
ITECA Funded Provider Interest Groups


◾ ITECA Capital Funded Provider Interest Group
ITECA New South Wales Funded Provider Interest Group
◾ ITECA Northern Territory Funded Provider Interest Group
◾ ITECA South Australian Funded Provider Interest Group
◾ ITECA Queensland Funded Provider Interest Group

◾ ITECA Tasmanian Funded Provider Interest Group
◾ ITECA Victoria Funded Provider Interest Group
◾ ITECA Western Australia Funded Provider Interest Group

The new National Skills Agreement is critical to independent RTOs that support around 85% of the 4.2 million students in vocational education and training; however, these providers receive less than 30% of government skills funding.

Meaningful reform to skills funding that supports students and their employers is a key advocacy priority set out in the reform blueprint for the next Australian Parliament, the Seven Priorities For A Skilled And Educated Workforce.

Getting Involved —

ITECA’s ability to play a lead role in matters associated with this issue rests on the advice and guidance of individuals serving on the ITECA Vocational Education and Training Reference Group.  ITECA Membership – It's a great time to get involved.

Further Information —

If you're an ITECA member and would like more information on this matter, the ITECA team would value the opportunity to talk to you.  Simply send an email to [email protected] or telephone 1300 421 017.  Stay up to date via Twitter, Facebook and LinkedIn.


Disclaimer & Copyright —

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