New research has found that the TAFE system supports $92.5 billion in annual economic benefits.

The boost comes from a combination of effects - the direct operation of TAFE institutes, higher incomes and productivity generated by the TAFE-credentialed workforce, and reduced social benefits costs.

Over $6 billion in economic activity and 48,000 jobs are supported by the direct operation of TAFE institutes and the TAFE supply-chain.

Through its accumulated contribution to the employability and skills of Australians, the TAFE system generates another flow of benefits worth $84.9 billion per year in higher incomes and productivity.

Those benefits are shared by workers in higher incomes, firms in higher profits, and federal and state governments – which receive $25 billion per year in extra tax revenues.

Finally, another $1.5 billion in fiscal savings are enjoyed by governments through reduced costs for health and welfare benefits for TAFE graduates.

The TAFE system promotes wider social benefits critical to addressing inequality.

TAFE helps ‘bridge’ access to further education and jobs pathways in regional areas and for special and at-risk youth groups.

TAFE students are more likely to come from low-income households and identify as Aboriginal compared with private VET providers.   

Altogether, the TAFE system drives $92.5 billion in benefits per year – equal to almost 5 per cent of Australia’s GDP.

Researchers at The Australia Institute who undertook the study also found that despite chronic underfunding, Australia’s historic investment in the TAFE system continues to generate an enormous and ongoing dividend to the Australian economy.

Increased public investment in the skills and earning capabilities of Australians will be critical to our post-pandemic recovery.

The full report is accessible here.