Report on Government Services 2022

The VET system provides training for entry level jobs through to highly technical occupations, but also provides training for non-employment related reasons. Nationally in 2021, the main reason graduates participated in VET was for:

• employment related reasons (71.6 per cent in total VET and 73.1 per cent in government-funded VET)¹
• personal development (15.0 per cent in total VET and 14.1 per cent in government-funded VET)
• pathways to further study (13.4 per cent in total VET and 12.8 per cent in government-funded VET) (NCVER 2022).

To achieve these aims, a student may choose to complete a single subject/unit of competency, module, skill set or VET qualification. VET qualifications range from Certificate level I to Graduate Diploma level, as determined by the Australian Qualifications Framework (AQF).

1. Total VET refers to nationally recognised vocational education and training activity delivered by Australian registered training organisations (RTOs) to students who undertook nationally recognised VET on a government funded or fee-for-service basis. All data for non-nationally recognised training and delivery from non-registered training providers have been excluded from reporting of total VET activity in this Report. Locate Footnote 1 above

VET is an area of shared responsibility between interlinked government, industry and individual stakeholders (figure 5.1).

Figure 5.1 VET roles and responsibilities, as at 31 December 2020

Federal governance arrangements

Government roles and responsibilities are outlined in the National Agreement for Skills and Workforce Development , and are summarised below:

• The Australian Government provides financial support to State and Territory governments to sustain national training systems and provides specific incentives, interventions and assistance for national priority areas.
• State and Territory governments manage VET delivery within their jurisdiction (including the effective operation of the training market).
• The Australian Government and State and Territory governments work together to progress and implement national policy priorities. Up to May 2020, the COAG Industry and Skills Council had responsibility for skills development and national training arrangements. In May 2020, the Council of Australian Governments (COAG) was replaced by a new architecture for federal relations. The National Cabinet announced the formation of six National Cabinet Reform Committees, including the Skills National Cabinet Reform Committee (Skills Committee).

The Skills Committee was established to support the ongoing reforms to vocational education and training outlined in the Heads of Agreement on Skills Reform, including:

• Simplifying, rationalising and streamlining national VET qualifications across industry occupation clusters and the Australian Qualifications Framework (AQF), and introducing improved industry engagement arrangements.
• Strengthening quality standards, building Registered Training Organisation (RTO) capacity and capability for continuous improvement and developing a VET workforce quality strategy.

Industry liaison

The Australian Industry and Skills Committee (AISC) provides industry advice on the implementation of national VET policies, and approves nationally recognised training packages for implementation in the VET system.

The AISC draws on advice from its network of Industry Reference Committees (IRCs). IRCs are made up of people with experience, skills and knowledge of their particular industry sector and are responsible for developing training packages that meet the needs of Australian industry. IRCs are voluntary bodies that are supported by professional Skills Service Organisations in training package development work.

Regulation of VET

The Australian Skills Quality Authority (ASQA) accredits courses and regulates registered training organisations (RTOs) to ensure nationally approved quality standards are met. ASQA has jurisdiction over all RTOs, except for those that are state accredited and operate solely in Victoria or WA (and do not offer courses to interstate and overseas students).

Registered Training Organisations

Registered training organisations (RTOs) are those training providers registered by ASQA (or, in some cases, a state regulator) to deliver VET services, including:

• government VET providers — such as technical and further education (TAFE) institutes, agricultural colleges and multi-sector education institutions
• community education providers — such as adult and community education providers
• other registered providers — such as: private training businesses; industry and community bodies with an RTO arm; employers that have RTO status to train their own staff; Group Training Organisations or Apprenticeship Network Providers that also deliver VET services.

Nationally recognised training

Nationally recognised training leads to vocational qualifications and credentials that are recognised across Australia. It consists of the following components:

• Training packages specify the knowledge and skills (known as competencies) required by individuals to perform effectively in the workplace. Training packages detail how units of competency can be packaged into nationally recognised qualifications that align to the Australian Qualifications Framework (AQF). Training packages are approved for implementation by the AISC
• Accredited qualifications refer to nationally recognised courses that lead to a qualification outcome not specified in a national training package
• Accredited courses have been assessed by a VET regulator as compliant with the Standards for VET accredited courses 2012
• Training package skill sets are defined as single units of competency, or combinations of units of competency from an endorsed training package, which link to a licensing or regulatory requirement, or a defined industry need
• Units of competency and accredited modules define the skills and knowledge to operate effectively in a workplace context. They are the smallest study components that can be assessed and recognised. Where a student enrols in a unit/module not part of one of the categories above, they are reported as ‘subjects not delivered as part of a nationally recognised program’.

All nationally recognised training is listed on the National Training Register and only RTOs can deliver nationally recognised training and issue nationally recognised qualifications or statements of attainment on the full or partial completion of training. Apprenticeships/traineeships combine employment and competency-based training, including both formal nationally recognised training and on-the-job training.

Figure 5.2 outlines the major funding flows within the VET system.

Figure 5.2 Major funding flows within the VET system

a The Australian Government provides VET in Schools funding to the State and Territory governments as a part of the National Specific Purpose Payment for Skills and Workforce Development. State and Territory governments provide funding to government and non-government schools for VET in Schools programs.
b School education institutions may operate with an RTO arm, providing courses that may combine traditional studies with VET.
c Except in WA where overseas student fees are received by the State Training Authority.

Government grants and competitive tendering

The main source of government recurrent funding of VET is via government grants and appropriations and/or competitive tendering/user choice mechanisms. Nationally in 2020, Australian, State and Territory government appropriations and program funding for VET was $5.6 billion (table 5A.5).

• State and Territory governments provided $3.6 billion (64.6 per cent of total funding).
• The Australian Government provided around $2.0 billion to State and Territory governments, with the majority provided through specific purpose payments.

Government funding of VET is provided to a mixture of government RTOs (including TAFEs), and community education providers and other registered RTOs. Nationally, government payments to non-TAFE providers amounted to $1.1 billion in 2020, similar to 2019 (table 5A.4).

Nationally in 2020, $2.6 billion (47.7 per cent) of government appropriations and program funding was allocated on a competitive basis — a 7.6 per cent decrease in real terms from 2019. The majority of funding allocated on a competitive basis was provided through entitlement funding programs (see 'Key terms and references' tab for a definition) (66.6 per cent of all contestable funding allocated to VET in 2020) (table 5A.5).

Other funding

Financial support to students, employers and industry from the Australian, State and Territory governments includes the following:

• Incentives and loans to individuals — such as incentive payments (for example, to support with the cost of learning during training) and program subsidies and government loans (for example, VET Student Loans — see 'Key terms and references' tab for a definition)
• Skills development and incentives to employers — including support with the cost of employing and training staff in the form of subsidies and incentive payments (such as for Australian Apprenticeships)
• Support for the National Training System — including funding to industry bodies to support the training system, and assist in the identification of skills needs and the development of skills programs (for example, Skills Service Organisations and the Australian Apprenticeship Support Network).

Governments provide for a number of specifically funded VET programs to provide support for target individuals or communities. For example, support for people with special needs to engage with training, or support for VET delivered in secondary schools.

Students

Nationally in 2020, around 3.9 million students participated in nationally recognised VET (total VET students) (table 5A.8). Around 1.9 million students were enrolled in qualifications, with the largest number of these students enrolled in Certificate level III or IV qualifications (1.3 million), followed by Certificate level I or II (0.4 million), and Diploma or above (0.4 million) qualifications. Other students were enrolled in subjects not delivered as part of a nationally recognised program (2.4 million) and in training package skill sets and accredited courses (0.2 million).

In 2020, around 1.2 million students participated in government-funded VET (table 5A.9). Around 1.0 million students were enrolled in government-funded qualifications, with the largest number of these students enrolled in Certificate level III or IV qualifications (0.7 million), followed by Certificate level I or II (0.2 million) and Diploma or above (135 600) qualifications. Other students were enrolled in other forms of government-funded nationally recognised and non-nationally recognised training.

Data on student participation in government-funded VET by target group (by Indigenous status, remoteness area and disability status) are available in tables 5A.10–12.

Training providers

In 2020, there were 3519 registered VET training organisations delivering nationally recognised training in Australia (table 5A.6), of which 1312 delivered nationally recognised government-funded VET through state and territory training departments (NCVER, unpublished). Around 1527 VET providers delivered government-funded nationally recognised, locally developed and non-nationally recognised training, at 29 817 locations in Australia (table 5A.7).

‘Barriers to participation in VET by selected equity group’ is an indicator of governments’ objective that the national training system is provided in an equitable manner.

‘Barriers to participation in VET by selected equity group’ is defined as the proportion of the population aged 15–64 years from selected equity groups who reported facing barriers to accessing or completing VET courses. For this Report, the selected equity groups are:

• Aboriginal and Torres Strait Islander people
• people from remote and very remote areas
• people with disability
• SEIFA groups (low socioeconomic status).

The proportion of people not from these selected equity groups facing barriers to accessing or completing VET courses is used as a comparator to the target groups.

A similar or lower proportion of persons in selected equity groups reporting that they encounter barriers to accessing or completing VET courses relative to people not from these selected equity groups is desirable.

Data are not yet available for reporting against this measure.

‘Barriers to participation in VET’ is an indicator of governments’ objective to create a national training system that is accessible to all working age Australians.

Barriers to participation in VET’ is defined as the proportion of the population aged 15–64 years who reported facing barriers to accessing or completing VET courses.

A lower proportion of persons reporting that they encounter barriers to accessing or completing VET courses is desirable.

Data are not yet available for reporting against this measure.

The ABS Survey of Work‑Related Training and Learning (WRTAL) has been identified as a possible source of data for a future performance measure. The latest WRTAL was conducted in 2020-21, however data are not yet available for reporting. Currently, only data on barriers to non‑formal learning are available from the WRTAL 2016-17 (see table 5A.32). The 'Key terms and references' tab provides definitions of formal and non‑formal learning.

‘Students who achieve main reason for training’ is an indicator of governments’ objective to create a national training system that meets the needs of students, employers and industries.

‘Students who achieve main reason for training’ is defined as the proportion of government‑funded VET graduates who reported that the training helped or partly helped them achieve their main reason for training.

This measure relates to the activities of government‑funded VET activity only.

Data are collected from the annual national Student Outcomes Survey for graduates aged 18 years and over. Survey data for a year (for example, 2021) refer to the cohort of students that graduated the year before (for example, 2020).

A high or increasing proportion of students whose training helped them achieve their main reason for training is desirable.

Nationally in 2021, 84.5 per cent of government‑funded 2020 VET graduates reported that training helped to fully or partly achieve their main reason for training (figure 5.3). The proportion was higher for Aboriginal and Torres Strait Islander government‑funded graduates (86.8 per cent) in 2021 (table 5A.13).

‘Employer satisfaction with VET’ is an indicator of governments’ objective to create a national training system that meets the needs of students, employers and industries.

‘Employer satisfaction with VET’ is defined as the proportion of employers who engaged in an aspect of VET, and who were satisfied with all forms of VET engagement.

‘Engagement with VET’ includes if the employer had employees undertaking an apprenticeship or traineeship, or had arranged or provided their employees with nationally recognised training, or had employees with formal vocational qualifications as a requirement of their job.

This measure relates to total VET activity².

Data are collected from the biennial Survey of Employers’ Use and Views of the VET system and represent the responses of employers with at least one employee and their training experiences in the 12 months prior to the survey.

A high or increasing proportion of employers who are satisfied with VET in meeting the skill needs of their workforce is desirable.

Nationally in 2021, 56.6 per cent of Australian employers were engaged with VET (table 5A.15), of which 67.7 per cent were satisfied with all forms of VET engagement (down from 73 .1 per cent in 2013) (figure 5.4). By type of training engaged in, satisfaction with apprenticeships and traineeships has shown the largest percentage point decrease (7.5 percentage points; from a peak of 81.7 per cent in 2015 to 74.2 per cent in 2021) (figure 5.4 and table 5A.16).

2. As government-funded VET engagement of employers cannot be determined from the survey. Locate Footnote 2 above

‘Student satisfaction with quality of training’ is an indicator of governments’ objective to create a national training system that is high quality.

‘Student satisfaction with quality of training’ is defined as the proportion of government‑funded VET graduates who were satisfied with the overall quality of training.

This measure relates to government‑funded VET activity only.

Data are collected from the annual national Student Outcomes Survey for graduates aged 18 years and over. Survey data for a year (for example, 2021) refer to the cohort of students that graduated the year before (for example, 2020). Graduates satisfied with their training include those who ‘Strongly agree’ or ‘Agree’ with the relevant questionnaire item.

A high or increasing proportion of graduates satisfied with their training is desirable.

Nationally in 2021, 89.3 per cent of all government‑funded 2020 VET graduates indicated that they were satisfied with the overall quality of their training (figure 5.5). The proportion was higher for Aboriginal and Torres Strait Islander government‑funded graduates (91.8 per cent) in 2021 (table 5A.14).

Satisfaction with instructors (88.0 per cent) was lower than satisfaction with assessment (89.8 per cent) in 2021 (table 5A.14).

‘Service quality’ is an indicator of governments’ objective to create a national training system that is high quality.

Service quality’ focuses on whether services are meeting required standards.

This indicator has been identified for development and reporting in the future. Discussions are continuing with the Australian Skills Quality Authority (ASQA) on potential metrics and data. Table 5A.34 provides contextual information about providers regulated by ASQA subject to compliance audit with critical or serious non‑compliance findings (final audit outcomes).

‘Government recurrent expenditure per annual hour’ is an indicator of governments’ objective that the national training system is provided in an efficient manner.

'Government recurrent expenditure per annual hour’ is defined as government recurrent expenditure (including user cost of capital) divided by government‑funded annual hours (for further information on expenditure data see tab 7a. Comparability of cost estimates).

This measure relates to government‑funded VET plus fee‑for‑service activity of government providers.

Lower or decreasing unit costs can indicate efficient delivery of VET services.

'Government recurrent expenditure per annual hour' should be interpreted carefully because low or decreasing unit costs do not necessarily reflect improved efficiency. The factors that have the greatest impact on efficiency include:

• training related factors, such as class sizes, teaching salaries, teaching hours per full time equivalent staff member and differences in the length of training programs
• differences across jurisdictions, including sociodemographic composition, administrative scale, and dispersion and scale of service delivery
• VET policies and practices, including the level of fees and charges paid by students.

Nationally in 2020, government real recurrent expenditure increased 3.9 per cent from 2019 (table 5A.1), while the number of government funded annual hours (course mix adjusted) decreased 11.7 per cent (table 5A.2). These annual movements resulted in an increase in recurrent expenditure per annual hour from $18.03 in 2019 to $21.21 in 2020 (figure 5.6).

Comparability of cost estimates

Government recurrent expenditure for 2017 onwards is calculated using data prepared by Commonwealth, State and Territory governments under the Australian Vocational Education and Training Management Information Statistical Standard (AVETMISS) for VET funding data. Data are prepared annually on an accrual basis.

Government recurrent expenditure for 2017 onwards is deemed as being equivalent to the recurrent funds received by State and Territory government departments responsible for VET (net of payroll tax) provided by the Australian Government and by State and Territory governments, and includes:

• Commonwealth ongoing specific purpose payments, State Recurrent funding, Adult Migrant English Program (AMEP), Skills for Education and Employment (SEE) Commonwealth administered VET programs and National Partnership Agreement funding
• user cost of capital (estimated as 8 per cent of the value of total physical non‑current assets owned by government RTOs).

For the years prior to 2017, government recurrent expenditure is calculated using data prepared by State and Territory governments under the AVETMISS for VET financial data. Details for the calculation for years prior to 2017 are available in the footnotes for table 5A.1.

Payroll tax payments by government‑owned RTOs are deducted from the total to ensure a consistent treatment across jurisdictions.

Government recurrent expenditure for VET may be affected by the movement of TAFE institutes between government and non‑government sectors. User cost of capital should be interpreted carefully. Differences in some input costs (for example, land values) can affect reported costs across jurisdictions without necessarily reflecting the efficiency of service delivery. The value of land is presented separately from the value of other assets to allow users assessing the results to consider any differences in land values across jurisdictions. The basis for the 8 per cent capital charge is discussed in section 1.

To promote comparability of the data across states and territories, as well as comparability between the financial and activity data, annual hours are adjusted by the course mix weight when calculating the efficiency indicator.

Expenditure data for years prior to 2020 are adjusted to real dollars (2020 dollars) using the gross domestic product chain price index (table 5A.31).

‘Student employment and further study outcomes’ is an indicator of governments’ objective that the VET system deliver a productive and highly skilled workforce through enabling all working age Australians to develop and use the skills required to participate effectively in the labour market and contribute to Australia’s economic future.

‘Student employment and further study outcomes’ is defined by two measures. The proportion of total VET graduates aged 20–64 years:

• employed and/or in further study after training (total and by selected equity groups [Aboriginal and Torres Strait Islander people, people from remote and very remote areas, and people with disability])
• who improved their employment status after training (total and by selected equity groups [Aboriginal and Torres Strait Islander people, people from remote and very remote areas, and people with disability]).

  ‘Improved employment status’ is at least one of:

  • employment status changing from not employed before training to employed either full‑time or part‑time after training. ‘Not employed’ is defined as unemployed, not in the labour force, or not employed (no further information)
  • employed at a higher skill level after training
  • received a job‑related benefit after completing their training, including set up or expanded their own business, got a promotion, gained extra skills, increased earnings, or other job‑related benefits.

Survey data for a year (for example, 2021) refer to the cohort of students that graduated the year before (for example, 2020).

Holding other factors constant, higher or increasing proportions indicate positive employment or further study outcomes after training.

Comparison of labour market outcomes should also account for the general economic conditions in each jurisdiction.

Nationally in 2021, 86.6 per cent of 20–64 year old total VET graduates from 2020 were employed and/or continued on to further study after training (figure 5.7a) — up from 83.6 per cent in 2020. The proportion was higher for people from remote and very remote areas (90.2 per cent) and lower for Aboriginal and Torres Strait Islander people (84.6 per cent) and people with disability (73.4 per cent) (table 5A.17).

For government‑funded VET graduates, 85.4 per cent were employed and/or continued on to further study in 2021 (lower than the proportion for total VET graduates) — up from 80.9 per cent in 2020 (table 5A.18).

Nationally in 2021, 67.2 per cent of 20–64 year old total VET graduates from 2020 improved their employment status after training (figure 5.7b) — up from 61.8 per cent in 2020. The proportion was higher for people from remote and very remote areas (76.1 per cent), around the same for Aboriginal and Torres Strait Islander people (67.5 per cent) and lower for people with disability (46.1 per cent) than the national average (table 5A.19). For government‑funded graduates, 65.2 per cent had improved employment status in 2021 (lower than the proportion for total VET graduates) — up from 58.8 per cent in 2020 (table 5A.20).

By type of improved employment status for total VET graduates, the proportion was highest for graduates receiving a job‑related benefit (83.5 per cent), followed by graduates employed after training (who were not employed before training) (48.3 per cent) and employed at a higher skill level after training (16.5 per cent). In 2021, for both total VET and government‑funded graduates, the proportion who improved their employment status was lower for graduates completing a Certificate I/II qualification (53.3 and 46.8 per cent respectively), compared with graduates completing a Certificate III/IV qualification (68.8 and 67.6 per cent respectively) or a Diploma and above qualification (70.6 and 68.5 per cent respectively) (tables 5A.21–22).

‘Student completions and qualifications’ is an indicator of governments’ objective that the VET system deliver a productive and highly skilled workforce through enabling all working age Australians to develop and use the skills required to effectively participate in the labour market and contribute to Australia’s economic future.

‘Student completions and qualifications’ is defined as the number of total VET AQF qualifications completed each year by students aged 15–64 years, per 1000 people aged 15–64 years (total and by selected equity groups [Aboriginal and Torres Strait Islander people, people from remote and very remote areas, and people with disability]).

Qualification completions data are ‘preliminary’ for 2020 and ‘final’ for earlier years.

A higher or increasing rate of completed qualifications increases the national pool of skilled people in Australia. However, this measure needs to be interpreted with care as the rate of qualification completions:

• by selected equity group (other than for remoteness) depends on obtaining accurate responses to self‑identification questions at the time of enrolment, which may vary across jurisdictions. A large unknown (or not stated) response could mean that the completion rate for the selected equity group is understated
• uses a different data source for the numerator and denominator, which can affect comparability.

Nationally in 2020, around 691 400 qualifications were completed by total VET students aged 15–64 years (table 5A.23) — equivalent to 41.4 qualifications per 1000 people aged 15–64 years (figure 5.8a). The rate was higher for Aboriginal and Torres Strait Islander people (50.3), and higher for people from remote and very remote areas (42.8). The number of qualification completions by total VET students declined 15.0 per cent from 2016 to 2020 (table 5A.23).

Around 295 900 qualifications were completed by government‑funded VET students aged 15–64 years — equivalent to 17.7 qualifications per 1000 people aged 15–64 years (table 5A.24). The number of government‑funded VET qualification completions declined 20.8 per cent from 2016 to 2020 (table 5A.24).

By qualification level, the rate of total VET qualifications completed per 1000 people aged 15−64 years was highest for Certificate III/IV (22.3), followed by Certificate I/II (11.6) and Diploma and above (7.4) (figure 5.8b).

Of the 691 400 qualifications completed by total VET students, 54.0 per cent were for Certificate III/IV, 28.2 per cent for Certificate I/II and 17.8 per cent for Diploma and above (table 5A.25). For the 295 900 completed by government-funded VET students, there was a greater concentration in Certificate III/IV (63.3 per cent were for Certificate III/IV, 25.2 per cent for Certificate I/II and 11.5 per cent for Diploma and above) (table 5A.26).

‘Students who improved education status’ is an indicator of governments’ objective that the VET system deliver a productive and highly skilled workforce through enabling all working age Australians to develop and use the skills required to effectively participate in the labour market and contribute to Australia’s economic future.

'Students who improved education status’ is defined as the proportion of total VET AQF qualifications completed by 20–64 year olds which were at a higher education level than their previous highest education level (total and by selected equity groups [Aboriginal and Torres Strait Islander people, people from remote and very remote areas, and people with disability]).

Higher or increasing proportions of students with improved education status after training indicate that the skill levels of the working age population are increasing.

Of all total VET graduates aged 20–64 years that completed an AQF qualification nationally in 2020, 47.2 per cent did so with a higher qualification than their previous highest AQF qualification (figure 5.9). The proportion was higher for all three selected equity groups — Aboriginal and Torres Strait Islander people (55.6 per cent), people from remote and very remote areas (50.7 per cent) and for people with disability (51.0 per cent) (table 5A.27).

Nationally, for government-funded VET graduates aged 20–64 years that completed an AQF qualification in 2020, 55.5 per cent did so with a higher qualification than their previous highest AQF qualification (table 5A.28).

For total VET graduates that completed an AQF Certificate III or above in 2020, 51.2 per cent did so with a higher qualification than their previous AQF – lower than the proportion for government-funded Certificate III or above qualification completions (60.6 per cent) (tables 5A.29-30).

Additional information is provided on the number of qualifications completed as a proportion of the number of enrolments (rather than the proportion of the number of completions). In 2020, 13.2 per cent of total VET enrolments by 20–64 year olds were completed at a higher education level – lower than government‑funded VET enrolments (14.3 per cent) (tables 5A.27-28).

‘Skill utilisation’ is an indicator of governments’ objective that the VET system deliver a productive and highly skilled workforce through enabling all working age Australians to develop and use the skills required to effectively participate in the labour market and contribute to Australia’s economic future.

'Skill utilisation’ is defined as the proportion of persons aged 15–64 years who completed their highest VET qualification (AQF Certificate levels I to IV, Diploma and Advanced Diploma) in the last five years, that are working in the field of the highest VET qualification or not working in the same field and the qualification is relevant to their current job.

A high or increasing proportion of persons who were either working in the field of their highest VET qualification or the qualification was relevant to their current job is desirable.

Nationally in 2018-19, 79.8 per cent of persons aged 15–64 years that completed their highest VET qualification in the last five years, were either working in the field of that qualification or not working in same field and the qualification was relevant to their current job. This proportion is lower than 2015 (83.0 per cent), but similar to 2010-11 (79.9 per cent) (figure 5.10).

Nationally in 2018-19, 68.1 per cent were working in the field of the highest VET qualification and 11.6 per cent were not working in the same field but the qualification is relevant to their current job (table 5A.33).