Australia relies on vocational education to build its future workforce, but declining enrolments in full qualifications risk deepening skills shortages in construction, care, clean energy and other critical industries.
New UK Prime Minister Andy Burnham is vowing to raise the profile of vocational education, saying Britain should “value the hard hat every bit as much as the graduation cap”.
Australia should take notice.
Many of the occupations Australia will need to grow over the coming decades depend on VET (vocational education and training) qualifications. Building more homes and infrastructure means expanding the construction workforce. As the population ages, we will need more healthcare and aged care workers. The energy transition depends heavily on electricians, technicians and other VET-trained workers.
At first glance, Australia’s VET system looks well placed to respond.
VET reaches almost every corner of our economy. It supports school leavers entering the workforce, experienced workers changing careers, employees updating their skills, and professionals maintaining occupational accreditation.
The educator providing care and supporting the early learning of our young children, the electrician restoring power after a storm, the milliner preparing hats for the Spring Racing Carnival, and the first aider at a community sporting event will all have engaged with Australia’s vocational education system.
More than a quarter of working-age Australians participate in vocational education and training each year, and in any given year more than four times as many working-age Australians use the VET system than are in higher education, reflecting its role in learning throughout people’s lives.
But those headline numbers include some quite different kinds of learning.
VET has two tracks, covering everything from substantial occupational qualifications to a few hours of mandatory training.
The first track is qualifications: the certificates and diplomas that give people the deeper occupational skills needed to enter many jobs or build a career.
The second is short-form training – often a single, nationally recognised requirement – that tends to help people meet the needs of a job they already have or keep their skills up to date.
Both tracks matter, but they serve different purposes. One is about building initial occupational capability and the other is about strengthening existing employability.
Recent growth in VET has been concentrated in the second track. Much of the growth in short-form training is connected with workplace safety and compliance. That training has real value. CPR, White Cards and other short courses help keep workplaces safe and allow Australians to maintain and extend their skills throughout their careers.
But Australia also needs the ‘thick’ qualifications that build a career.
And here, there are some concerning signs. In 2025, the number of students enrolled in qualifications fell by 6 per cent, and the number commencing a qualification was about 19 per cent lower than in 2016.
Commencements are the front end of the pipeline. This shift away from VET qualifications will deepen skills shortages and threaten sovereign capability just when we need more workers in areas such as construction, care and clean energy.
That brings us back to Andy Burnham. He puts a strong emphasis on place: colleges, employers, schools and local leaders working together around the industries and opportunities in their communities.
Australia already has some of the foundations Britain is trying to strengthen.
TAFEs are substantial public institutions embedded in communities and local labour markets across the country. They know their local industries and can respond to regional skills needs. Increasingly, they also work together nationally.
The National TAFE Network shares curriculum and teaching practice through applied research and innovation across state borders. TAFE Centres of Excellence have been established for priority sectors, bringing TAFEs together with industry to develop training and spread what works.
Recently established Jobs and Skills Councils have quickly become embedded in the system, shaping the VET qualification and course mix in line with their research into industry workforce needs. This puts industry and labour at the forefront of shaping the training they rely on – as in the successful German-speaking countries’ collective skill formation systems. Independent VET provision enables much of the thriving short-course training delivery and allows for niche and market-responsive training.
So why, with so much of this public infrastructure in place, are too few Australians enrolling in VET qualifications – especially when the occupations we most urgently need are the ones those qualifications lead to? This is the puzzle policymakers must solve.
Australia needs talent moving through the full length of that pipeline to build the workforce the country is counting on, because our future economy will need people with graduation caps and people with hard hats.
Elizabeth Knight
Dr Elizabeth (Lizzie) Knight is Program Director, on education policy research. She previously worked as a public sector consultant. Prior to that she held teaching roles at the University of Auckland’s Faculty of Law.Education and Skills at Grattan Institute. Lizzie has worked across education, skills, workforce, and labour market policy in senior leadership, research, and advisory roles. Most recently, she was Director, Workforce Futures at Jobs and Skills Australia, where she led work on VET and Early Childhood workforce capability, skills needs, and worked on education-to-employment pathways.
Reilly Polaschek
Reilly Polaschek is an Associate in Grattan Institute’s Disability Program. She previously worked at McKinsey & Company in its Australian public sector practice. Prior to that she held teaching roles at the University of Auckland’s Faculty of Law. Reilly holds a Bachelor of Commerce and Bachelor of Laws (Hons) from the University of Auckland.