Review Slams Government Funding

Date —

5 Jun 2020

Industry Sector/s —
Vocational Education & Training

Summary —

The Productivity Commission review of the National Agreement for Skills and Workforce Development has established that the Australian Government has received poor value for the money given to states / territories for vocational education and training (VET).  The report determined that governments should look at reforms to make the VET system a more efficient, competitive market, driven by the informed choices of students and employers, with the flexibility to deliver a broad suite of training options.

Key Issues —

In November 2019, the Treasurer instructed the Productivity Commission to review the National Agreement for Skills and Workforce Development.  This is the primary agreement under which the Australian Government provides around $1.5 billion annually to state and territory governments to fund VET programs.  The interim report of the review has been released.

The interim report is a damning criticism of how state and territory governments have applied the funds, determining that targets have not been met and the performance indicators have proved to be deficient.  

In setting out a forward path, the Productivity Commission has made interim reform recommendations that governments should look at to make the VET system a more efficient, competitive market, driven by the informed choices of students and employers, with the flexibility to deliver a broad suite of training options.  They include:

Productivity Commission Suggestions For Review  —

  • Using student vouchers instead of subsidy payments to RTOs to facilitate students studying with the provider of their choice, whether an independent RTO or public TAFE college.
  • Expanding access to VET Student Loans by relaxing loan caps and course and qualification restrictions, underpinned by strong risk management. 

There are also some pointed comments on the possibilities that some subsidy arrangements directed at public TAFE colleges may violate principles of competitive neutrality. This is a view that the Independent Tertiary Education Council Australia (ITECA) has raised with both the Productivity Commission and government more broadly.

Overall, the Productivity Commission has determined that there are benefits in empowering student choice, allowing them to study with the provider of their choice – whether this be a quality independent provider or public TAFE College.

ITECA continues to engage with the Productivity Commission to ensure that its findings and recommendations fully recognise the quality outcomes that independent RTOs offer.

The report is particularly important to independent providers that support more than 80% of the 4.1 million students in vocational education and training.


Member Engagement —

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 Reference Committee.

Further Information —

For more information on this issue please send an email to or telephone 1300 421 017.  Stay up to date via Twitter @ITECAust or via Facebook at

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