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Competency-based training (CBT) was introduced in Australia in the early 1990s to increase productivity and skill levels of the Australian workforce. This article highlights two recent reports, 'Bridging the skills divide' (indexed at TD/LMR 85.667) and 'The vocational education and training system: key issues for large enterprises' (indexed at TD/TNC 77.61), and says that current vocational education and training (VET) policies, underpinned by CBT, have failed to meet Australia's skill needs. In spite of this, Australia has persisted with CBT and with training packages, which also has major problems. The article concludes that CBT and training packages are just one part of a series of VET policies that has been proven to be ineffective and that these failures in VET point to major failures in policy formation and implementation.