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What is the National Skills Reform?

July 23, 2021

Australia’s economic recovery from the COVID-19 crisis will partially be powered by VET, supporting:

  • job seekers with upskilling and reskilling
  • school leavers with access to training
  • businesses to be able to get skilled workers where and when they need. 

VET has a very important role to play in providing high quality and relevant training for the emerging jobs of the future, which is why the Parties have agreed the VET system needs reform.  

The Heads of Agreement for Skills Reform has set out immediate reforms for the VET sector, and an approach and priorities for developing a new National Skills Agreement to replace the National Agreement on Skills and Workforce Development. 

The priorities in the Agreement are aimed at ensuring the VET system is delivering for students and employers and equipping Australians with the skills they need for emerging jobs. The agreement will be finalised in August 2021, aiming to commence January 2022, and will cover the five year period up to 2026/27. 

Immediate reforms

Building on the 2019 VET Roadmap, there are two immediate reforms that aim to strengthen the training system: 

  • 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 RTO capacity and capability for continuous improvement and developing a VET workforce quality strategy.

What have stakeholders said?

Earlier this year, consultations were held where VET stakeholders gave their insights on what they need and expect from the national training system, and how a future system should work. 

Three articles from these consultations have been published so far, and we’ve covered the main points from each.

Industry Engagement

Enhancing industry engagement is a key reform measure, and is one of the most critical aspects of VET that needs to be continually improved and nurtured. 

Employer satisfaction in VET has fallen over the past decade from 86.3% in 2009 to 78.8% in 2019[1]. To improve satisfaction, industry engagement needs to be strengthened across the national training system, there needs to be increased responsiveness to employer needs and skills change, and better qualifications should boost student outcomes. 

Currently, industry engagement arrangements for VET include the Australian Industry Skills Committee, Industry Reference Committees, and Skills Service Organisations. The main role these groups assist with is training package development. 

The Industry Engagement consultation found there’s strong support for industry to have a role in VET that goes beyond training package development. This broader role includes industry being involved in collecting data and evidence, strategic workplace planning and collaborating with training providers on delivery – alongside being a driver for recognising workplace needs, growth areas and pathways for students and graduates.

This broader role also includes better cross-sector collaboration, making use of the many links between skills requirements and training packages for different industries. With this improvement, VET graduates would have larger transferable skill sets and career pathways, in turn maximising the workforce available to employers. 

For the development and approval of training packages, stakeholders have called for broad, diverse, relevant and robust industry representation, including engagement with smaller and more niche businesses and industries. Training packages also need to be more responsive to industry needs, while training package approval could be streamlined and improved to ensure training products are fit-for-purpose. 


Simplifying and streamlining national VET qualifications is another immediate priority. 

Trials of new evidence-led approaches to designing qualifications are underway, run by three Skills Organisation Pilots in Mining, Digital and Human Services. 

The Mining Skills Organisation Trial is designed to address an immediate skills need that has been identified by the mining industry, and to help students progress their careers. 

The Digital Skills Organisation Trial is focusing on ensuring career pathways into digital jobs are simple and relevant to both employers and employees. The trial is testing new ways to train data analysts, as industry needs technologically capable Australians. 

The Human Services Organisation Trial will focus on career pathways for the Personal Care Worker job family within the aged care sector. The design objectives underpinning this trial are based on:

  • delivering broader vocational outcomes
  • simplifying and increasing flexibility and responsiveness of the training products (micro-credentials and skill sets)
  • enhancing the relationship between training products
  • improved articulation between education sectors.


The sector is aiming to move beyond compliance with the Standards to delivery of high-quality training by creating a shared understanding of excellence in training provision across the sector. 

Stakeholders in this consultation suggested there needs to be a clearer definition of quality. Many RTOs are confused about where they need to improve when it comes to quality. This includes:

  • Assessment: this is a common area of non-compliance and confusion for RTOs. Assessment validation and RPL processes are often inconsistently understood and practised.
  • Industry Engagement: high-quality RTOs have strong connections to industry and can produce outcomes for employers. Industry and employers need to be shown the value of engagement, and engagement requirements could be clarified. 
  • Professional networks and RTO collaboration
  • Learner support: wraparound support services and LLN support are valuable for learner wellbeing
  • Transition arrangements are administratively burdensome and disruptive for students
  • Amount of training: more clarification and guidance is needed
  • Workforce quality: capability standards and frameworks, industry currency initiatives and access to professional development can all influence workforce quality. There were also concerns that the Cert IV in Training and Assessment, or a ‘one size fits all’ approach, adequately prepares entry level trainers and assessors for their role. 
  • Training packages: frequently raised issues reflect the impact training packages have on training delivery.

To learn about the National Skills Reform in more detail, go to the Skills Reform website here

The Qualifications Reform Survey is now open. VET stakeholders involved in the design, development and delivery of national training products are encouraged to respond by 10 September. Find the survey here. Read more about the VET Qualifications Reform here.

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  1. Moving towards better industry engagement in VET
  2. Qualifications Reforms
  3. Achieving high quality in the VET sector
  4. Heads of Agreement Skills Reform

Want to learn more? Check out these articles:

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