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The what and why of Australia's new VET Industry Engagement Reforms

November 16, 2021

NCVER data has found that the VET system isn’t working for employers. Employer satisfaction with VET has fallen from 86.3% in 2009 to 78.8% in 2019, while only 41% of employers said that the VET system is currently meeting the needs of their business. Applicants’ lack of skills, qualifications and experience also contributed to 42% of employers reporting recruitment difficulty. 

What are the new VET industry reforms and why are they happening?

The new VET reforms are aiming to ensure Australia’s VET system continues to be internationally recognised, and responds to the needs of employers into the future. These changes aim to equip Australians with the skills they need to upskill in current, new and emerging jobs, and be part of a responsive and resilient workforce in the rapidly changing economy. 

Skills and training ministers have agreed the way industry engages with the VET system will be reviewed to ensure it’s delivering for both learners and employers. After consultations with the sector, the reform will mean new Industry Clusters will be established. The Industry Clusters will provide a stronger, more strategic voice to industry, and play a broader role in ensuring Australia’s VET system is responsive to rapid changes in the economy. 

What does the new Industry Clusters model look like?

The new Industry Clusters model will be arranged as groups of aligned industries. It’s expected to replace the current 67 Industry Reference Committees (IRCs) and six Skills Service Organisations (SSOs) by 1 January 2023. 

The Industry Clusters will: 

  • identify, forecast and respond to the current and emerging skills needs and workforce challenges of their industries
  • develop training products that improve the quality, speed to market and responsiveness of training products, including piloting emerging products and testing new approaches to meet industry needs
  • work with training providers to ensure training delivery meets employer needs, career pathways are mapped and promoted and the impact of delivery is monitored
  • provide strategic advice on skills and workforce needs and the effectiveness of VET system policies and standards.

Training package approval processes are also changing. An independent assurance function is replacing the Australian Industry and Skills Committee (AISC) by 1 January 2023. 

What is being invested in these reforms?

The Government has stated they’ll be investing an additional $149.2 over the next four years to support the reforms, bringing the total investment to $292.5 million. 

What is the aim of the reforms?

The reforms aim to: 

  • improve, efficiency, transparency and confidence in the VET sector
  • ensure Australians can access high quality and relevant training
  • ensure employers can access the skilled workers they need
  • ensure courses and qualifications in the sector are driven by and better meet the needs of industry and students
  • drive system improvements and ensure qualifications are updated faster. 

The new Industry Clusters aim to strengthen employer leadership and engagement so that industry has a more strategic role in ensuring Australia’s VET system addresses skills and workforce challenges across the economy. 

Minister Stuart Robert stated that these reforms are a significant milestone as states and territories work to ‘complete the transformation of the VET system and progress further reforms’.

How will the reforms be monitored and reviewed?

Skills and training ministers will review the new industry engagement arrangements 12 months after commencement to assess whether the system is working as intended, and to make improvements where needed. Progress can be viewed on the Skills Reform website.

What are some of the questions being raised about the changes by those in the VET sector?

Some in the sector have commented on the lack of detail about how the new Industry Clusters model is different to the current model and what the improvements will be, while others are saying there’s a lack of education experts giving input into the reforms.

We’re interested to learn more and see how these reforms improve the sector in the future. 


  1. Industry Engagement Reforms
  2. Landmark VET reforms to drive our skills-led economic future

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