Government funding of VET 2025

Description

This publication provides information on the distribution of Australian and state and territory government funding for vocational education and training (VET) in the 2025 calendar year.

States and territories provide VET service delivery to ensure local and national skill needs. The Australian Government prioritises national skills development and supports states and territories with VET service delivery by providing funding under intergovernmental funding arrangements.

The funding provided by governments is reported across five broad VET activities: VET delivery funding, employer assistance, student assistance, capital expenditure, and system administration and governance.

Funding expenditure may be greater or less than the total contributions provided each year due to additional requirements in the year and timing around funding payments. Further information on the National VET Funding Collection, including how the data are collected and reported is available in the explanation of the collection.

Report

Contributions and allocation

Governments’ contributions of funding

In 2025, total government funding provided through VET appropriations and VET intergovernmental funding arrangements was $10.1 billion, up 1.4% from 2024, due to increased state and territory government contributions.

In 2025, compared to 2024:

• state and territory governments’ share of total government funding increased to 51.8%, up $152.0 million to a total of $5.2 billion
• total Australian Government funding declined 0.3% to $4.9 billion.

Allocation of funding

Government contributions are allocated by jurisdiction with funding provided on a recurrent basis to cover the cost of the training system or as capital funding. Australian Government contributions are also distributed to state and territory governments through national agreements to support VET service delivery and national priority initiatives.

In 2025, funding by:

• recurrent and capital flows totalled $7.5 billion, an increase of $31.8 million (0.4%), consisting of:
  • Australian government funding of $2.3 billion, a decrease of $120.2 million
  • State and territory government funding of $5.2 billion, an increase of $152.0 million
• intergovernmental agreement flows totalled $2.5 billion, an increase of $103.4 million (4.3%).

Expenditure

Overall government expenditure in VET was $10.1 billion in 2025, increasing by 0.7% ($70.3 million) in nominal terms and declining by 1.4% in real terms¹ from 2024.

VET delivery expenditure increased by 2.5% ($165.0 million) in 2025, following increases of 11.9% in 2023 and 9.2% in 2024. In real terms, VET delivery expenditure was similar to 2024 levels and remained above those recorded in 2019. This funding category includes training subsidies and expenditure on national priorities such as TAFE Centres of Excellence.

System administration and governance expenditure increased to $1.0 billion in 2025, up $108.6 million (11.9%) from 2024. Since 2019, the proportion of total VET expenditure allocated to administration and governance increased from 8.6% to 10.2%, although trends varied across jurisdictions.

Expenditure by student and training attributes

Expenditure by student and training attributes captures spending for key groups within the VET sector. Reporting is either based on actual payments and/or modelled and estimated data. The following section reports on a selection of attributes; all attributes can be seen within the Government funding of VET 2025: data tables.

Some VET programs have broader objectives, making the expenditure difficult to categorise by a specific student or training attribute. Where this occurs the expenditure is reported as ‘not attributable’. These totals are important to consider when analysing the student or training category data as they include direct and indirect costs for training.

VET expenditure is grouped across five broad VET activities of VET delivery, employer assistance, student assistance, capital expenditure, and system administration and governance. The figures presented in this section include a legend to indicate the VET activities included in student or training data breakdown.

For further details, refer to the Government funding of VET 2025: explanatory notes — Expenditure by student and training attributes and jurisdiction notes and caveats.

Expenditure by apprenticeships status

Total government apprenticeship spending decreased by $208.8 million (6.7%) from 2024 to $2.9 billion, largely reflecting the reduction of employer incentives provided by the Australian Government.

Australian Government expenditure peaked at $3.9 billion in 2022 before declining to $1.3 billion in 2025.

State and territory expenditure directly attributed to apprenticeships has been steadily increasing since 2020, growing from $921.9 million to $1.6 billion.

Expenditure by provider type

In 2025, from the $7.3 billion spent on VET delivery and capital expenditure, payments to:

• public providers increased by $319.0 million (6.0%), from 2024, to $5.6 billion
• private providers decreased by $124.1 million (9.2%), from 2024, to $1.2 billion.

Expenditure by student Indigenous status

In 2025, from the $6.9 billion spent on VET delivery, spending on:

• Indigenous students increased by $4.9 million (1.3%) to $380.4 million
• non-Indigenous students increased by $92.1 million (2.3%) to $4.1 billion.

A significant proportion of VET delivery expenditure cannot be attributed by Indigenous status, this funding is costs associated with support programs, administration, operational funding and training funds provided under block funding arrangements.

Expenditure by training package

In 2025, by qualification enrolments, the top five training packages were Community Services, Construction, Plumbing & Services Integrated Framework, Business Services, Electrotechnology, Health.

Relative to 2024, three of these training packages were also in the top five for the largest absolute change in qualification enrolments: Community Services (down 29,425 or 11.1%), Business Services (down 29,335 or 28.7%), and Electrotechnology (up 5,040 or 7.3%). Consistent with increased activity, spending for Electrotechnology increased by $28.5 million (or 10.1%) from 2024.

Attributable spending by training package continues to be highest for the Community Services training package at $815.3 million, a decrease of $3.1 million (0.4%).

Expenditure by student disability status

In 2025, from the $6.9 billion spent on VET delivery, expenditure for:

• students with a disability increased by $65.2 million (17.9%) to $430.2 million
• students without a disability decreased by $102.3 million (2.8%) to $3.5 billion.

In 2025, Government-funded students and courses reported 116,705 students with a disability, an increase of 6,930 (or 6.3%) from 2024, which is consistent with the change in expenditure.

VET Student Loans

The Australian Government administers the VET loan programs, including the VET Student Loan program and the Australian Apprenticeship Support Loans.

Payment provisions provided under the VET Student Loan program declined each year from 2017 to 2023, followed by two consecutive increases reaching $260.7 million in 2025.

Payments under the Australian Apprenticeship Support Loans program remained relatively stable from 2020, before declining by $17.7 million (8.7%) from 2024 to $185.3 million in 2025.