The Victorian Government has announced funding reforms and recommendations to the state’s vocational education and training (VET) system.


The reforms form the State Government’s response to the Essential Services Commission’s (ESC) review of VET fees and funding, which aim to improve competitiveness and efficiency of the system.


The ESC's report was tabled in Parliament last week and makes more than 40 recommendations that would improve fee and funding arrangements.


The reforms introduced by the State Government are:

  • Reducing subsidies provided to TAFEs with annual turnover of more than $100 million (following the ESC's recommendation 6.9 that the gap in base rate funding rates between TAFE institutions and non-TAFE providers should be progressively closed over the next four-year funding agreement);
  • Bringing tuition fees for apprentices into line with the fees paid by their peers (consistent with the ESC's recommendation 4.5 that the state government should treat trainees and apprentices consistently with other students under the Victorian Training Guarantee);
  • Removing the minimum and maximum fee caps charged by training providers to students – while maintaining price protection for students (consistent with the ESC's recommendation 5.6 that maximum and minimum caps should be removed); and
  • Reducing the level of government subsidy provided for the delivery of a number of courses which have recently experienced high growth (business and clerical studies, finance, hospitality, property services, tourism, wholesale and retail and recreation).


The State Government has pledged to continue subsidising VET courses, with an average of 80 per cent or more of total VET course costs at and below Certificate IV level covered by the government funding.


The ESC’s funding review can be found here