This report explains the planning processes and financial arrangements underpinning the vocational education and training (VET) sector. It looks at the structural capacity of the sector to respond rapidly and efficiently to a dynamic labour market and changes in pattern of skill demand. The report finds that the complexities of the labour market and the multiple demands on the VET system mean that the planning processes used by state and territory authorities are relatively different, dynamic and, in some instances, quite complex.
The aim of this research was to identify approaches used by a select number of overseas countries-the United Kingdom, China, Singapore, Norway and Germany-in their attempts to match the supply of skills with current and projected skill needs. The study focuses on the mechanisms used by, or on behalf of, governments to influence the formal and informal processes and outcomes of skills formation. This includes the management and direction of VET systems, financing and other levers that influence the type, amount and location of training and other skills-formation processes. The research found that countries use a mixture of three types of strategies to attempt to align the supply of skills with current and future needs: state regulated; regulated through agreements between the social partners, that is, industry, unions and government; and market regulation.
Financing vocational education and training, as part of Australia's commitment to lifelong learning, will become a greater challenge as increased spending on other public services, such as health and welfare caused by an ageing population, constrains government education expenditure. This report examines a range of mechanisms to encourage individual contributions to and participation in vocational education, drawing on international examples, and presents available findings about the effectiveness of these mechanisms in the Australian context. The research suggests learning accounts and paid educational leave offer the most potential. Mechanisms must offer incentives for individuals to invest, preferably in conjunction with incentives for employers, such as taxation breaks and superannuation.