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Australia is currently facing a skill crisis. The Department of Employment and Workplace Relations (DEWR) Skilled Vacancy Index 2003-2004 has recorded the following increases in vacancies over the last 12 months: 21% increase in metals trades; 38% increase in electrical and electronic trades; 45% increase in printing trades; and 17.9% increase in construction trades. This Australian Industry Group (Ai Group) policy document proposes a set of strategies and recommendations for the development of a world-class training system. They are: a review of existing apprenticeship arrangements; a focus on skills formation; the payment of incentives; vocational education and training (VET) priorities and funding decisions to be driven by labour market trends and projections; stronger emphasis on generic skills and capabilities; integrating training systems with innovation and technology diffusion; stronger industry commitment to training and skills development; an expansion of the role of Group Training; improved relationships between school and industry; and a deeper and richer relationship between industry, VET and higher education sectors.