Having spent over two decades immersed in the tertiary and vocational education system, I’ve seen its many strengths and its limitations. While Australia’s competency-based training system has been instrumental in producing job-ready graduates, it has increasingly struggled to meet the demands of a rapidly changing workforce. The proposed reforms, highlighted in the Qualification Reform Design Group Final Report (QRDG – December 2024), aim to address these challenges, bringing the system into closer alignment with the needs of learners, industries, and workplaces.
These changes reflect a shift toward a capability-oriented approach, designed to overcome critical issues such as skills mismatches, the lagging responsiveness of education to industry needs, and the complexity of managing fragmented training packages and overlapping units of competency.
Challenges the Reforms Aim to Address Skills Mismatch and Industry Disconnect
One of the most pressing issues facing the Australian VET system is the persistent mismatch between the skills graduates acquire and the demands of the labour market. The Jobs and Skills Report 2024 highlights that industries like construction, healthcare, and clean energy are experiencing chronic skills shortages, while many graduates enter the workforce without the capabilities required to succeed in these high-demand areas.
The current system struggles to keep pace with technological advancements and shifting industry practices. By the time training packages are updated to reflect emerging trends, they are often already outdated. This lag not only frustrates employers but also places learners at a disadvantage, as they enter the workforce with qualifications that don’t align with real-world needs. Employers, in many cases, are left to fill these gaps through in-house training, further underscoring the disconnect between education and employment.
Complexity of Training Packages
Training packages, while foundational to the competency-based framework, have become increasingly complex and fragmented. With over 15,000 units of competency, RTOs face significant challenges in designing cohesive curricula that serve the needs of learners and industries alike.
This fragmented approach often results in disjointed learning experiences, narrowly focused on specific tasks and failing to equip learners with the critical thinking and adaptability required for long-term career success. RTOs also bear a significant administrative burden, constantly updating their programs in line with evolving training packages. This process diverts resources from innovation and quality teaching. Over the past decade, the need for streamlining qualifications and aligning them more effectively with workforce demands has become increasingly evident.
A Shift Toward Capabilities
The proposed reforms represent a significant departure from the existing competency-based model. By transitioning to a capability-oriented framework, the system aims to equip learners with broader, more adaptable skills better suited to the demands of a dynamic workforce.
Capabilities for a Changing Economy
Capabilities emphasize holistic learning, integrating technical skills with interpersonal and cognitive abilities. This approach prepares learners not just for their first job but for lifelong adaptability in a constantly evolving labour market. Capabilities also foster critical thinking, creativity, and problem-solving—skills that industries increasingly demand.
Streamlined and Purpose-Driven Qualifications
The reforms embrace what the QRDG describes as a “qualification-first design,” reducing the fragmentation that has hindered the current system. By designing qualifications as cohesive learning experiences in collaboration with industry, the new framework ensures relevance and applicability while simplifying curriculum development for RTOs.
The Role of Industry
One of the most inspiring lessons from international systems, such as Switzerland’s, is the critical role of industry and private investment in vocational education. In Australia, the dialogue between government, industry, and education providers has yet to yield the transformative changes needed to address skills mismatches and workforce shortages.
Industry involvement can enhance the VET system by improving its responsiveness, fostering innovation, and providing practical learning opportunities. Employers can play a pivotal role by co-designing qualifications, investing in training facilities, and offering apprenticeships and workplace-based training. These measures not only bridge the gap between education and employment but also ensure the system remains sustainable and adaptable to economic trends.
Competencies Still Have Their Place
While the shift toward capabilities marks a significant change for VET, competencies remain indispensable in certain industries, particularly trades and high-risk fields such as mining, construction, and healthcare. These sectors rely on competency-based systems to maintain safety, compliance, and consistency. Employers trust competency frameworks to provide clear, measurable standards for task performance. It’s critical that these frameworks remain intact where they are most needed.
The reforms wisely balance the precision of competencies with the adaptability of capabilities, ensuring that the system serves the unique needs of these critical sectors while broadening its scope to meet the challenges of a changing economy.
A Future-Ready VET System
The proposed VET reforms aim to tackle Australia’s most pressing workforce challenges, addressing skills mismatches, lagging responsiveness, and the administrative burden of fragmented training packages. By shifting toward a capability-oriented framework, the system will better prepare learners for sustainable careers in a rapidly changing world.
The Jobs and Skills Report 2024 and studies from organisations like the World Bank and International Labour Organisation highlight the increasing wage inequities between graduates with capability-based qualifications and those with task-based qualifications. This inequity further underscores the need for a balanced approach that equips all learners with adaptable and future-ready skills.
To achieve long-term success, the VET system must embrace a harmonised tertiary education framework where vocational and higher education are more closely aligned. Such a system would enable smoother transitions between VET and higher education, foster collaboration, and reduce duplication. By working towards shared workforce goals, the tertiary education sector can become a more efficient and integrated platform for lifelong learning.
In my view, the sustainability of these reforms depends on a balanced partnership between public and private investment, active collaboration between industry and education providers, and a shared commitment to ensuring vocational education remains a cornerstone of Australia’s economic and social prosperity. This isn’t just another reform—it’s a pivotal step toward equipping individuals with the skills and capabilities to thrive in an uncertain and dynamic future.
