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.

NSA 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 Skills Agreement (NSA) is a five‑year agreement between Commonwealth and state and territory governments to ensure that the national VET system provides high‑quality, responsive and accessible education and training to boost productivity, deliver national priorities and support Australians to obtain the skills and capabilities they need to obtain well-paid, secure jobs. The NSA replaced the National Agreement for Skills and Workforce Development (NASWD) from 1 January 2024.

Commonwealth funding is also provided through time limited National Partnerships and Project Agreements such as Fee Free TAFE. The Commonwealth also administer their own VET programs and VET loan support programs.

Report on government services 2023 provides an overview of the major funding flows within the VET system.

Fee Free TAFE

Formally known as the 12-month Skills Agreement, the Fee-Free TAFE Skills Agreement is an agreement between the Commonwealth and state and territory governments to delivery 500,000 Fee-Free TAFE and VET places across Australia from 2023 to 2026.

The agreement sets out training places across these areas of national priority:

• agriculture
• care (including aged care, health care and disability care)
• construction
• defence
• early childhood education and care
• hospitality and tourism
• manufacturing
• sovereign capability
• technology and digital
• VET workforce from 2024.

The agreement also prioritises the following groups of people:

• First Nations Australians
• young people (17-24)
• people who are out of work or receiving income support payments
• unpaid carers
• women facing economic insecurity
• women undertaking study in non-traditional fields
• people with disability
• certain categories of visa holders.

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. On 19 October 2023 amendments to the VET Student Loans Rules 2016 (VSL Rules) commenced. These amendments followed consultations with VSL providers and VET sector representative organisations about ways to improve the operation of the VSL Program.

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: Skills Ready
• 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, mature aged workers incentives, payroll tax rebates/exemptions, Workers Compensation premium reduction/exceptions/levies; and living away from home allowance.

Australian Apprentice Support Loans

Australian Apprentices Support Loans (AASL) scheme expands the former Trade Support Loans program available to eligible trade apprentices in areas that lead to an occupation specified on the Australian Apprenticeship Priority List. This includes non-trade occupations such as priority aged care, childcare and disability care occupations. The AASL is designed to increase the likelihood of completion by reducing possible cost barriers associated with purchasing trade tools, supplies or everyday living expenses while undertaking an apprenticeship or traineeship. From 1 January 2024 apprentices and trainees are eligible to apply for loans up to $25,643 (for 2024-25), an increase from the Trade Support Loans program to aid with cost-of-living.

User Choice

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

• Commonwealth
  • Employer incentives
  • Financial support for Australian Apprentices
• New South Wales
  • Funding for vocational education and training
  • Incentives and support for employers
• Victoria
  • Employer subsidies and incentives
  • Financial assistance for training and other expenses
• Queensland
  • Funded programs
  • Subsidised training and incentives
• South Australia
  • Support for employers
  • Support for students
• Western Australia
  • Employer incentives
  • Subsidised training
• Tasmania
  • Funding for endorsed registered training organisations
  • Funding for employers and industry
  • Funding for apprentices and trainees
• Northern Territory
  • Apprentice and trainee funding for registered training organisations
  • Funding for pre-employment training program
• Australian Capital Territory
  • Funding for RTOs
  • Grants programs

Other useful information

• Budget highlights
• Search VOCEDplus

How to cite this overview