National Agreement for Skills and Workforce Development overdue for replacement

A new round of reform for the Vocational Education and Training (VET) system is needed to deliver a more productive workforce for Australia says the Productivity Commission.

The Productivity Commission today released its review of the National Agreement for Skills and Workforce Development (NASWD).

“Governments have stepped back from some of the NASWD’s policy aspirations. Targets have not been met and the performance framework has not held governments to account,” Commissioner Jonathan Coppel said.

“The guiding principle for the review is to strengthen the focus of the VET system on meeting the needs of its users — students and employers,” Commissioner Coppel added.

The Commission recommends changes to make the next intergovernmental agreement more effective and improve accountability for the $6.4 billion spent each year by governments.

“There are reforms which should improve the returns from the large public investment in VET,” Commissioner Malcolm Roberts said.

“Almost half of government funding is distributed as subsidies to training providers. These subsidies should be based on the efficient costs of delivering courses. Having hundreds of different subsidy rates is confusing and ineffective; subsidy rates should be simplified,” he added.

Income contingent loans make it possible for students to take university and higher VET courses. More courses, including Certificate IV courses, should be eligible for loans, with the emphasis on courses which deliver genuine results for students.

Too many VET students do not complete their courses. Governments can support students — especially apprentices — to complete their training through better matching of students and courses, more support during training and timely employer incentives.

VET helps many people who lack essential language, literacy, numeracy and digital skills. Two to three million Australians have one or more of these skills below the level usually achieved by Year 8. A broad strategy involving schools, VET and adult education providers is needed to tackle this significant problem.

Lifelong learning helps people upgrade their skills over their careers. Mid-career employees often do not need the formal qualifications funded by governments; they want short-term, focused training. The Commission recommends a trial to test whether a new financing instrument is needed to support people obtain training tailored to their needs.

The Commission’s final review of the National Agreement for Skills and Workforce Development can be found at www.pc.gov.au .

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