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The Council of Australian Governments (COAG) has developed a human capital and skills agenda for Australia (see report indexed at TD/TNC 87.80). This position paper aims to: outline why TAFE institutions can make an important contribution to this agenda, especially to leverage their existing skills platforms, their rural and regional networks, and small and medium enterprise (SME) client base; identify future resource needs and initiatives to support that contribution; and propose constructive ideas on new initiatives available to create an 'innovation platform' for TAFE and contribute to more effective skilling strategies. It then presents a 10 point reform agenda that provides immediate measures for COAG to reform the vocational education and training system. The reforms cover: (1) a new trade diploma qualification; (2) Generation X - towards a youth engagement strategy; (3) youth employment - transition from school to work technical colleges at TAFE skilled institutes; (4) a national youth guarantee; (5) Indigenous support and TAFE engagement with community; (6) in-bound training capability for 'skilled' migrants; (7) upskilling Australia - an innovation platform; (8) quality reform - delivering an industry-led training system; (9) governance of TAFE; and (10) resource and people development. These proposals will be 'workshopped' across Australia as part of a national consultation with key stakeholders by TAFE Directors Australia (TDA). This national consultation will support a White Paper on Innovation to COAG, to be presented at the TDA National Conference to be held in Adelaide on November 13-15 2006.