The release of the Productivity Commission's final report into the National Agreement on Skills and Workforce Development (NASWD) confirms that it is no longer fit for purpose and a new national skills agreement is needed.
Minister for Employment, Skills, Small and Family Business, Senator the Hon Michaelia Cash, said the Morrison Government has commenced negotiations with states and territories.
"This report shows that our world-class VET system can be improved with a more transparent and consistent funding model," Minister Cash said.
"It's clear the NASWD is overdue for a replacement, but with a major overhaul we could achieve a better return on public investment.
"That's why we are negotiating with state and territory governments on a new National Skills Agreement, following the signing of a heads of agreement for Skills reform by the National Cabinet last year.
"This agreement has to ensure investment is targeted at areas of skill needs for our economic recovery and into the future."
Treasurer Josh Frydenberg said the VET system will help the Australian Government's Economic Recovery Plan to build back from the COVID-19 crisis.
"Our Government is investing a record $7 billion in the VET sector in 2020-21, which will play a critical role in supporting Australia's growth and prosperity," Treasurer Frydenberg said.
"The investment in VET reform is an important component of the Government's JobMaker Plan, which will secure Australian jobs and keep businesses open."
Minister Cash said the Federal Government's boost to skills is already taking place with the JobTrainer fund being rolled out across the nation.
"We have already joined forces with state and territory governments to roll out the $1 billion JobTrainer Fund, supporting around 320,000 additional free or low-fee training places for job seekers and young people.
"In addition, we're providing $4 billion in wage subsidies and incentives for apprentices and trainees, and have established the National Career Institute and the National Skills Commission to ensure we are meeting Australia's current and future workforce skills needs.
