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The Independent Pricing and Regulatory Tribunal (IPART) was asked by the New South Wales (NSW) government to review the state's skill base and identify the future challenges for the vocational education and training (VET) system over the next 20 years. The aims of the review were to: determine the future demand for skills in NSW for it to achieve high levels of labour force participation and productivity; and identify the action needed to ensure the VET system is best placed to support these long-term skill requirements. The focus of the review was on publicly funded VET programs provided by registered training organisations (RTOs). This report presents the review findings and recommendations for the NSW government. It contains an executive summary and 10 chapters. Chapter one, 'Introduction' outlines the review process. Chapter two, 'Understanding the structural mismatch in today's labour market', looks at the structural mismatch in the current labour market and identifies issues related to the supply of and demand for labour that need to be addressed. Chapter three, 'Increasing labour force and employment participation', explains the need for greater emphasis on VET to increase the labour force and employment participation rates and also outlines the broad actions that need to be taken. Chapter four, 'Forecasting the future demand for VET', considers how much and what type of training will be needed if NSW is to succeed in increasing the labour force participation rate to offset the ageing population. Chapter five, 'Setting a new vision for the VET system and TAFE NSW', sets out a new mission for TAFE NSW and outlines new approaches to skills policy based on the concept of workforce development. Chapter six, 'Taking stock of the public VET system today', examines the size and structure of the VET system, recent reforms in VET and performance measures in efficiency, effectiveness and employment related outcomes. Chapter seven, 'Achieving the mission for TAFE NSW', considers actions that will be needed to enable and encourage TAFE NSW to achieve the new vision and mission. Chapter eight, 'Improving outcomes for users of the system', discusses the complementary actions needed to improve outcomes for users of the VET system. The focus of chapter nine, 'Removing barriers to participation in VET', is on ways of increasing the participation rate in VET. The final chapter, 'Understanding the benefits and financing the costs of the proposed reforms', provides a cost-benefit analysis of the proposed reforms. Included as appendices are: Terms of reference; Access Economics forecasting; Performance of the publicly funded VET sector; Recent reforms and trends in TAFE NSW; Employers' expenditure on training, returns to training and incentive arrangements for employers; Individuals' returns on training and financial assistance available to them; Impact of training on employment; List of submissions to the review; Reference list.