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Building Australia’s skills and prosperity

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National Cabinet has agreed to unlock billions of dollars to build Australian skills and prosperity.

The landmark five-year National Skills Agreement (NSA), which will take effect from January next year, was developed under principles agreed by National Cabinet and will embed national cooperation and strategic investment in our vocational education and training sector.

The Federal Government is prepared to invest $12.6 billion to expand and transform access to the VET sector, support quality training and implement reforms to address critical skills needs. If States and Territories access all the Commonwealth funding available under the NSA, the combined investment by governments would exceed $30 billion.

Prime Minister Anthony Albanese spoke about the announcement.

“The National Skills Agreement is consistent with so much of what my Government does – bringing people together from all over the country to address the common challenges faced by all of us,” he said.

“We need to train Australians for the jobs of today as well as the jobs of tomorrow.

“This important National Skills Agreement, alongside our very successful Fee-Free TAFE places, will mean more boilermakers, more chefs, more aged care workers, more child care workers, and more Australians with the skills that they need, but also the skills that our economy needs,” Albanese said.

In an historic first, a new National Stewardship model will coordinate strategic investment in skills across the economy, and support delivery of skills needed in national priority areas, as well as providing States and Territories with flexibility to meet local industry skills needs.

The agreement places TAFE at the heart of the VET sector, with TAFEs to be supported by baseline funding commitments.

Minister for Skills and Training, Brendan O’Connor elaborated on what the NSA.

“This landmark agreement will kickstart real change. I’d like to thank my counterpart Skills Ministers for their genuine cooperation in looking to rebuild national vocational education and training, with TAFE at its heart,” he said.

“The ineffectual Coalition Government failed to land a national skills agreement with any State or Territory.

“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.

“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 high performing and world-class VET sector is crucial for achieving a fairer society and a stronger economy,” O’Connor said.

Major reforms will include the establishment of nationally networked TAFE Centres of Excellence involving partnerships between TAFEs, universities, Jobs and Skills Councils and industry.

The $12.6 billion investment by the Commonwealth includes an extra $2.4 billion in flexible funding to support State and Territory skills sectors with capacity to deliver skills for critical and emerging industries. Priorities include:

  • Clean energy and Net Zero transformation of the economy.
  • Australia’s sovereign capability, including advanced manufacturing skills, national security, food security and construction.
  • Care and support services.
  • Ensuring Australia’s digital and technology capability.

There is up to an additional $1.3 billion of Commonwealth funding to implement agreed reforms including:

  • $325 million to establish nationally networked TAFE Centres of Excellence and strengthen collaboration between TAFEs, universities and industry.
  • $100 million to support, grow and retain a quality VET workforce.
  • $155 million to establish a National TAFE leadership Network to promote cutting edge curriculum.
  • $214 million for Closing the Gap initiatives to be designed in partnership with First Nations peoples and led by them.
  • $250 million to improve VET completions including women and others who face completion challenges.
  • $142 million to improve foundation skills training capacity, quality and accessibility.
  • $116 million to improve VET evidence and data.

This new investment is on top of $414 million already committed for the delivery of 300,000 Fee-Free TAFE places from 2024.

The Albanese Government values and supports TAFE and Australians getting the skills the country needs. The previous Government was defined by nearly a decade of dysfunction and mismanagement, and nowhere was this more evident than in the VET sector.

In a significant shift away from the short-term, transactional working relationships of the past decade, a new National Stewardship approach on skills will provide a framework for cooperation across state borders and across national and State and Territory priorities.

Shared National Stewardship of VET will ensure funding under the National Skills Agreement is used more effectively to achieve opportunities for all Australians, and ensure social and economic inclusion, especially for those historically locked out of the labour market.

The Agreement delivers on the Vision and Principles endorsed by National Cabinet which requires Skills Ministers to focus on gender equality and women’s economic participation, Closing the Gap for First Nations people, and ensuring more opportunities for young people, mature age Australians, people from culturally and linguistically diverse communities, people with disability, and regional and remote learners.

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