“Skills and Training Ministers across Australia have received a clear message that more needs to be done to ensure vocational education and training (VET) is delivering the outcomes employers, learners and the economy need,” said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
“Jobs and Skills Australia’s baseline report against the National Skills Agreement Outcomes Framework shows employer satisfaction with training has fallen to its lowest level in more than a decade and remains well below target. At the same time, student satisfaction is declining and students are less likely to report improved employment circumstances or further study after training.
“The National Skills Agreement represents a significant commitment by the Australian Government and all States and Territories to strengthening the VET system, to the tune of $30 billion over its lifespan. Australian Industry Group has supported many of the reforms.
“Investment of this scale must deliver impact and this system-wide view of performance provides important evidence to measure this impact. Our understanding of VET performance will continue to build over time as more data becomes available.
“The report identifies encouraging signs in some areas, including graduate earnings and pathways to higher-level qualifications. It is reasonable to expect some reforms will take time to deliver measurable improvements.
“But this report sends a clear message: investment alone will not deliver the skilled workforce Australia needs. Outcomes must urgently improve.
“A sustained decline in employer satisfaction raises serious questions about whether the system is delivering the relevance, quality and workplace capability businesses require.
“Findings around productivity are equally concerning. Productivity growth in sectors where VET pathways are critical has been consistently low or negative since 2019, reaching -0.3% in 2025.
“More than a year after skills were identified as a key driver of productivity through the Treasurer’s Economic Reform Roundtable, progress remains too slow.
“Jobs and Skills Australia rightly identifies that improving productivity outcomes will depend less on overall training volume and more on whether training consistently builds skills that are current, valued and used in workplaces.
“We have said for some time that Australia needs a much stronger connection between education, training and the workplace.
“In the past decade, workplace learning has become less prominent in VET policy and funding settings. Recent reforms have largely focused on expanding institution-based delivery, with comparatively little focus on models that integrate learning and work. That imbalance must be addressed.
“The Productivity Commission has made recommendations on boosting work-related training and it is disappointing these have not been actioned.
“We are now at the half-way point of the National Skills Agreement and negotiations will soon commence on priorities for the next agreement. It is clear that Australia’s VET system needs a much sharper focus on skills development in the workplace and aligning skills policy and investment with productivity.
“With skills shortages widespread, there is no time to waste. Australia needs a skills system that works better for employers, delivers better outcomes for learners and contributes more directly to productivity growth,” Mr Willox said.
Previous material published by Australian Industry Group’s Centre for Education and Training on this topic includes:
- Learning that works: Skills for today and tomorrow
- People powering productivity: Putting the workplace at the heart of Australia’s skills and training system
