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The History Of VET: Funding in Vocational Education and Training

01 - August - 2019

Vocational Education and Training allows students to gain skills that will be transferable to the world of work. In essence, VET is essential for the current and future workforce of Australia. Funding for the VET sector and the alignment to the industry is what keeps the system ticking. An increase in productivity levels, economic value and development of community is directly influenced by the funding. The history of VET officially started in 1991 with the Australian National Training Authority (ANTA) Agreement which provided funding for vocational education and training. The VET system unofficially made its first steps in the form of TAFE already in the earlier years. 

Read this 5-minute blog to get some information about the history of Vocational Education and Training, the humble beginnings on funding within this sector, which RTOs can receive funding and a quick conclusion of the past years.


The beginnings of VET unofficially started in the early 1970s with the Kangan report. This report was created with the visions of the modern TAFE system, which recognised the importance of work for the development of individuals and society at large. With TAFE, young workers could act powerfully as citizens in a community, as it has always been about working-class education. In the 1980s the very high unemployment rates started to show the need for higher quality of training for tradespeople and expand the conversion rate throughout whole Australia. These hard times brought the decision to implement competency-based training. After this, all curriculum documents and training had to align with clearly stated competencies as outcomes for students.

In the late 1980's more and more private educational providers were beginning to appear to take advantage of chances presented by the rise in the training sector. There was quite a lot of evidence, that training was a lucrative business which serves the needs of industry and the individual. Very soon an expansion of apprenticeship training and the development of traineeships followed. During this time there were a record number of apprenticeships and traineeships. 


A clear beginning of VET came with the Australian National Training Authority (ANTA) in 1991 formulating, evolving and implementing vocational education and training policy. From that point on there were funding initiatives that were solely just for the new VET system. This new authority had the main focus of developing, promoting and managing the Vocational Education and Training sector.

In 1991, a landmark decision was made by all 9 Australian governments to unite and create a National Training System. The goal of the national VET system has been to align with the industry, individual and community needs. All of this within a nationally agreed system that achieves portability of VET skills across the nation and therefore labour mobility. The end goals are to realise measurable improvements in the national work skills pool and employment for individual VET graduates.

To incentivise training providers and to ensure standards of quality, the government created avenues of funding. The funding was placed where there were needs of industry, individuals and community. These two main factors are what drives funding for VET today.

The first big funding of the VET sector by the government was placed from 1992 - 1996 and had the name ANTAHistory of VET Agreement. Under the ANTA Agreement, the states received responsibilities for managing and funding VET provision in each state. To secure ongoing growth, the Commonwealth agreed to fund VET with $70 million per annum for 3 years, on top of the $100 million that was provided in 1992. 


The ANTA Agreement was renewed in 1997 for another seven years until 2004. Annually funding was reduced to $50 million to save budget as the government changed the length of the renewal. The target was an increase by 500,000 enrolments. Additional funding was provided with $50 million in 2001, $76 million in 2002 and $104 million in 2003. 

The Skilling Australia's Workforce Act took effect in 2005. The act required the states to report financial expenditure on VET and to maintain outputs, but without strict financial input requirements. The funding this time had more of an industry focus than before. The government directly funded two new investments in the form of Work Skills Vouchers (these can be used to assist people aged 25 or over to gain year 12 or equivalent qualifications) and vouchers for apprentices to obtain business-related skills. This initiative ended in 2007.


In the following years, there were National Agreements, and National Partnership Agreements made. The funding was focused on industry-based training on a co-contribution basis between the Commonwealth making up 50%, the states with 40% and employers with 10%. Altogether $1.7 billion of additional funding was scheduled to flow to the states and territories during 2012 - 2017. One of the biggest programs was the VET FEE-HELP, which provided equal treatment for students in a full-fee VET Diploma and Advanced Diploma programs with students in a full-fee higher education program. The following graphic shows the VET funding and enrolment trends from 1991 - 2014:

History of VET

It is clear that there were four different stages since VET received continues funding:

  1. Beginning of VET and its funding under ANTA Agreement (1991-97)

  2. The phase of static funding (1997-2006)

  3. continuous growth in funding (2007 -2012)

  4. A further period of stagnant funding where increases in Commonwealth outlays offset declines in state outlays (2012-2014)

2015 onwards

In 2015 the funding saw some slight decreases in VET models like the Industry Skills Fund and the Skills for Education and Employment plan. The total funding for 2015 still included a huge amount of $754.6 million and concentrated on programs like User Choice, Certificate 3 Guarantee and Higher Level Skills. Especially User Choice is an important program. It is managed by only focusing on demand-driven funding arrangements. The User Choice program is supposed to offer public funding for the cost of training and assessment. Currently, only eligible Queensland apprentices and trainees can receive funding via this program. Trough this initiative apprentices, trainees and employers receive better flexibility to select a suitable RTO for what they require. The investments cover the following fields:

  • Apprenticeship and Traineeship training
  • Foundation skills training
  • Industry pre-apprenticeship programs
  • Registered trade skills pathway
  • Trade skills assessment and gap training

In the next years, User Choice will still play a role as it is planned to be providing funds until 2020.

Which VET sectors and this means which RTOs will receive most funding, is still influenced by professional, regulatory or industrial requirements of the workforce market. The alignment between VET investment and the demand for labour in certain sectors is as big as in the previous years. If you would like to find out more about the current funding in VET and how it will look like in the future, check out our blog: "What Will VET Funding Look Like in 2019?" by clicking the button below:

VET Funding 2019 & Future

In conclusion there is a steady process of the VET sector evolving with constant funding over the years. Australia's workforce benefited from Vocational Education and Training more and more as it grew. In the near future funding will be essential to secure training for Australia.