Commonwealth Budget delivers $493 million for Fee-Free TAFE and vocational education places

The new Labor Government’s first budget – announced by Treasurer Dr Jim Chalmers (pictured) – makes good on its pre-election commitment to provide 180,000 Fee-Free TAFE, to be jointly funded by the states and territories. The Budget also commits to “stable and long-term funding for VET through a five-year National Skills Agreement with the states and territories” and to undertake a national study on adult literacy, numeracy and digital literacy skills. (Read the full Skills Budget Papers here.)


While maintaining its commitment to fee-free TAFE places, the Budget includes some new language that broadens that funding promise slightly, adding the words “and vocational education” and allowing other providers – presumably including not-for-profit adult and community education (ACE) providers – to access the funds “in exceptional circumstances”.

The Budget papers read: “The Skills Agreement includes $493 million to deliver 180,000 Fee‑Free TAFE and vocational education places. The Agreement will target industries with severe skills shortages, including the care sector, technology and digital, hospitality and tourism, construction, agriculture, and industries important to sovereign capability. Fee-Free places will be made available through public TAFEs and public dual sector providers and other providers in exceptional circumstances, where TAFE does not have adequate existing capacity, including for example, by Aboriginal and Torres Strait Islander community-owned registered training organisations.” (Italics added by CCA.)

Community Colleges Australia Comment: “The new wording around ‘free TAFE’ starts to address CCA’s criticisms of what funding for TAFE might do if undertaken without guardrails, policy protocols and clear guidelines as to suitable VET students or marketing. While CCA strongly supports suitable TAFE funding, we must ensure that both VET students and the ACE sector are not inadvertently disadvantaged, to the long-term detriment of Australian skills. This must also include development of long-overdue formal pathways between Australian ACE providers and TAFEs. It is essential that ACE providers be included in the ‘exceptional circumstances’ funding policy,” said Dr Don Perlgut, CCA CEO.

Adult Literacy, Numeracy and Digital Literacy Skills

The Budget papers state: “Higher literacy and numeracy skills are associated with increased wellbeing, better employment outcomes and increased wages. To support this the Government will task Jobs and Skills Australia with undertaking a National Study on Adult Literacy, Numeracy and Digital Literacy Skills. The study will assess the current literacy and numeracy levels of adults across Australia as well as looking at ways to better support the participation of First Nations people.”

CCA Comment: “CCA is strongly supportive of Commonwealth efforts in developing a powerful strategy to improve literacy, numeracy and digital skills, including in First Nations peoples, who have been particularly impacted (see the Reading Writing Hotline recent report). CCA is already engaged with Skills Minister O’Connor’s office and the Department of Workplace Relations to provide advice and assistance on the best strategies to improve literacy. We look forward to working with the new Jobs and Skills Australia on their national study,” said Dr Don Perlgut.

Other Budget Skills Announcements

The Budget also confirmed funding of:

  • $24 million to support the success of students with complex needs;
  • $50 million (additional) for the TAFE Technology Fund to provide modern facilities including in regional Australia;
  • $7 million for essential VET data infrastructure reform;
  • $12.9 million (additional) to establish Jobs and Skills Australia;
  • $100 million over ten years to support 10,000 New Energy Apprenticeships, including $62 million over four years to deliver the Skilling the Clean Energy Workforce; and
  • $22.6 million for additional In Training Support places for apprentices in regional and remote areas, including important pastoral care, mentoring, counselling, career guidance, industry mentoring, conflict resolution and referral to other specialist services.

More Information

Budget Commentary

“The budget marks a clear change of emphasis from budgets over the previous decade: including explicit recognition of the need to strengthen wage growth, new funding for vital care sectors, and important investments in diversifying Australia’s industrial base.” – Centre for Future Work, The Australia Institute (PDF)

“We welcome the digital inclusion initiatives announced in the Federal Budget. These are important steps but there is still more to do. We know that 17% of the national population remains digitally excluded, with a vast number lacking the foundational digital skills necessary to fully participate in employment and society more broadly.” – Australian Digital Inclusion Alliance

“In many ways this budget was a full stop to the work of the previous Morrison government, a reorientation to the new federal government agenda and workplan.” The new government has focussed “more resources on critical areas like early education and parental childcare, family and domestic violence, affordable medicines, aged care staffing, renewable energy, affordable housing, TAFE and higher education, manufacturing, and disaster readiness.” – David Crosbie, Community Council for Australia

“Budget builds good foundations; more support needed for people facing multiple and unrelenting crises.” – Australian Council of Social Service (ACOSS)

“Vocational education emerged as the centrepiece of the government’s higher education budget last night, with nationwide skills shortages and high cost-of-living tabled as key areas of priority.” – Campus Review

(More commentary will be added as it becomes available.)

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