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This paper discusses the factors driving the increased need for education and training and the challenges of financing this increased provision. Major factors influencing the need for education and training in Australia are changes in employment and in the nature of work as a result of technological change and globalisation. The ageing of the population is also an important influencing factor. A review of the provision of education and training in Australia, both institutional education and employer-based training, suggests that it is not meeting emerging needs. The author briefly addresses issues of participation in education and training, expenditure per student or trainee, quality of education and training, and inequality, and what this might mean for increasing funding needs. A number of ways in which individual and employer funding could be increased and the impact on efficiency and equity are discussed.