Landmark National Skills Agreement to unlock billions

Anthony Albanese MP
Prime Minister of Australia

Brendan O'Connor MP
Minister for Skills and Training

Last night's National Cabinet agreed to unlock billions of dollars to build Australian skills and prosperity.

The landmark five-year National Skills Agreement (NSA), which will take effect from January next year, was developed under principles agreed by National Cabinet and will embed national cooperation and strategic investment in our vocational education and training sector.

The Albanese Government is prepared to invest $12.6 billion to expand and transform access to the VET sector, support quality training and implement reforms to address critical skills needs. If States and Territories access all the Commonwealth funding available under the NSA, the combined investment by governments would exceed $30 billion.

In an historic first, a new National Stewardship model will coordinate strategic investment in skills across the economy, and support delivery of skills needed in national priority areas, as well as providing States and Territories with flexibility to meet local industry skills needs.

The agreement places TAFE at the heart of the VET sector, with TAFEs to be supported by baseline funding commitments.

Major reforms will include the establishment of nationally networked TAFE Centres of Excellence involving partnerships between TAFEs, universities, Jobs and Skills Councils and industry.

The $12.6 billion investment by the Commonwealth includes an extra $2.4 billion in flexible funding to support State and Territory skills sectors with capacity to deliver skills for critical and emerging industries. Priorities include:

  • Clean energy and Net Zero transformation of the economy.
  • Australia’s sovereign capability, including advanced manufacturing skills, national security, food security and construction.
  • Care and support services.
  • Ensuring Australia’s digital and technology capability.

There is up to an additional $1.3 billion of Commonwealth funding to implement agreed reforms including:

  • $325 million to establish nationally networked TAFE Centres of Excellence and strengthen collaboration between TAFEs, universities and industry.
  • $100 million to support, grow and retain a quality VET workforce.
  • $155 million to establish a National TAFE leadership Network to promote cutting edge curriculum.
  • $214 million for Closing the Gap initiatives to be designed in partnership with First Nations peoples and led by them.
  • $250 million to improve VET completions including women and others who face completion challenges.
  • $142 million to improve foundation skills training capacity, quality and accessibility.
  • $116 million to improve VET evidence and data.

This new investment is on top of $414 million already committed for the delivery of 300,000 Fee-Free TAFE places from 2024.

The Albanese Government values and supports TAFE and Australians getting the skills the country needs. The previous Government was defined by nearly a decade of dysfunction and mismanagement, and nowhere was this more evident than in the VET sector.

In a significant shift away from the short-term, transactional working relationships of the past decade, a new National Stewardship approach on skills will provide a framework for cooperation across state borders and across national and State and Territory priorities. 

Shared National Stewardship of VET will ensure funding under the National Skills Agreement is used more effectively to achieve opportunities for all Australians, and ensure social and economic inclusion, especially for those historically locked out of the labour market.

The Agreement delivers on the Vision and Principles endorsed by National Cabinet which requires Skills Ministers to focus on gender equality and women’s economic participation, Closing the Gap for First Nations people, and ensuring more opportunities for young people, mature age Australians, people from culturally and linguistically diverse communities, people with disability, and regional and remote learners.

As at 17 October 2023.