Government funded vocational education and training (VET) in Australia is funded by the Commonwealth and state and territory governments. State and territory governments are responsible for the delivery of VET services and provide recurrent appropriations for VET through annual budget cycles.
NASWD and National Partnerships
The Commonwealth Government supports states and territories with VET services by providing ongoing specific purpose payments made through the Intergovernmental Agreement on Federal Financial Relations.
The National Agreement for Skills and Workforce Development (NASWD) identifies the long-term objectives of the Commonwealth and state and territory governments in the areas of skills and workforce development. Negotiations are underway for a new $1b National Skills Agreement to replace NASWD.
Commonwealth funding is also provided through time limited National Partnerships and Project Agreements such as the National Partnership on the Skilling Australians Fund. The Commonwealth also administer their own VET programs and VET loan support programs.
Report on government services 2022 provides an overview of the major funding flows within the VET system.
Skilling Australians Fund
The Skilling Australians Fund was announced in May 2017 as part of the Commonwealth 2017-18 budget and commenced on 1 July 2017. From 1 July 2018 to 30 June 2022, the Fund was managed through a four-year project-based National Partnership with six participating state and territory governments: New South Wales; Western Australia; South Australia; Tasmania; the Australian Capital Territory; and the Northern Territory. States and territories match the Commonwealth's financial contribution to agreed projects.
The Fund was partially financed by a levy paid by employers who sponsor foreign skilled workers under certain permanent and temporary visa classes. The purpose of the levy was to require employers seeking to access skilled overseas workers to contribute to the skills development of Australians.
The Heads of Agreement for Skills Reform, signed between the Commonwealth and the states and territories in 2020, established the Job Trainer Fund. The Fund is part of the JobTrainer package which has two components: (1) $1.5 billion to expand and extend the Supporting Apprentices and Trainees initiative; and (2) $500 million investment in the JobTrainer Fund, with matched contributions from state and territory governments.
VET Student Loans
VET Student Loans commenced on 1 January 2017, replacing the VET FEE-HELP scheme which ceased on 31 December 2016. The program offers income contingent loan support to eligible students studying certain diploma level and above VET qualifications. Eligible students are entitled for loans up to a capped amount.
Student Training Entitlement
A national entitlement to training was introduced under the 2012 National Partnership Agreement on Skills Reform whereby all jurisdictions agreed to implement a student training entitlement within the national training system by 30 March 2015. The initiative provided all working-age Australians with access to government-subsidised training places to their first Certificate III level, as a minimum, with their choice of training provider, and jurisdictions having the flexibility to go beyond the minimum. Entitlement models adopted by jurisdictions:
- New South Wales: Smart and Skilled
- Victoria: Skills First
- Queensland: Certificate 3 Guarantee
- South Australia: Subsidised Training List (formerly WorkReady)
- Western Australia: Jobs and Skill WA
- Tasmania: entitlement is embedded in all government-subsidised training programs
- Northern Territory: Northern Territory Training Entitlement (no longer available)
- Australian Capital Territory: Skilled Capital
Subsidies and incentives
A range of subsidies and incentives offered by the Commonwealth and state and territory governments, are available to employers and VET students, including: commencement and completions incentives, Rural and Regional Skills Shortage incentive, Mature Aged Workers Incentives, payroll tax rebates/exemptions, Workers Compensation premium reduction/exceptions/levies; and living away from home allowance.
Trade Support Loans
The Trade Support Loans program is part of the Australian Government’s Better Support of Australian Apprentices policy. It replaced the ‘Tools For Your Trade’ payments which ceased from 1 July 2014. Under the Trade Support Loans program, income-contingent loans of up to $20 420 over four years are provided to apprentices in priority trades where there are growing skill shortages.
User Choice, introduced in 1998, is a national funding policy for apprenticeships and traineeships whereby State and Territory governments fund registered training organisations (RTOs) to provide structured training to apprentices and trainees. These funds reduce the cost of the training that apprentices and trainees or their employers will have to pay, and give employers the choice to select any approved RTO to deliver the off-the-job training components of apprenticeships and traineeships. The amount of funding available under User Choice is different in each state and territory, as each state and territory has different priority areas to direct their User Choice funds.
Other sources of funding
While VET is largely publicly funded, companies and individuals also contribute to the cost of training, for example, companies purchase training for their employees and pay certain levies, while students contribute through the payment of courses, including student loan repayments, and administrative fees. Other non-government sources of revenue include contracted overseas training, overseas student fees and adult and community education.
VET funding data
NCVER's National VET Funding Collection provides information on the flow and distribution of government contributions that stimulate or support publicly-subsidised vocational education and training (VET) activity in Australia. VET funding data comprises the following three datasets:
- jurisdictions' contributions and allocations
- funding activity and distribution
- funding activities and distributions (excluding loan values)
- funding for VET Student Loans
- public VET asset base.
Where to go for more information
- New South Wales
- South Australia
- Western Australia
- Northern Territory
- Australian Capital Territory
Other useful information