The Productivity Commission takes a look at VET
In its 2025 Report on Government Services (RoGS) the Productivity Commission does another deep dive into the VET sector – and examines both what has been happening in the sector over the last few years, as well as what has been happening across different jurisdictions.
As always there is plenty for policy makers and data nerds to get their teeth into (and only a small number of the tables in the report are reproduced here – it also includes a large number of tables with student data in them).
Starting with Table 5A, it shows the changes in recurrent government funding for VET – and what might surprise some readers is that Tasmania has seen the largest increase in recurrent VET funding since 2017:
(Note that the percentage figures in bold in this table and others were not included in the Commission’s data output. They have been calculated and included to aid readers in understanding the data and in making comparisons.)
When seeking to understand how much money states and territories invest in VET and how that changes each year – it is important to keep in mind that approximately one-quarter of all government funding for VET comes from the Commonwealth government.
The percentage figures in bold below show the contribution of each government in terms of their recurrent funding to VET. So for example, the NSW government increased its investment by 23% between 2018 and 2023 (up from $1.245B in 2018 to $1.530B in 2023), whereas in Victoria the state government’s contribution was static across the 6 years: $1.047B in 2018 and the same in 2023.
The table also shows there has been a decline in all jurisdictions in the level of the Australian Government’s ‘ongoing specific purpose payments’. And although there has been an increase in funding available through the National Partnership Agreement, in some jurisdictions this increase has not offset the decline in the ongoing specific purpose payments.
There has also been a huge increase in VET funding which is directly allocated by the Commonwealth – up 210% in 6 years.
The proportion of VET funding which is allocated in a contestable manner varies significantly across jurisdictions – from 88% of all recurrent VET funding in South Australia being allocated on a contestable basis, to only 15% in Tasmania (and a minuscule share of direct Commonwealth government funding is allocated on a contestable basis).
The different contestable funding mechanisms result in the following payments to non-TAFE providers in each jurisdiction (and because the Commission has included percentages in this table, no additional calculations have been added).
The Commission’s analysis of the numbers of different providers in the sector is also interesting. (Note though that the data on providers, as calculated by the Commission, is reproduced here as published. There do appear to be some discrepancies in the data presented in Tables 5A.11, 5A.12 and 5A.18. These have been raised with the Commission and when answers are received, any clarifications/amendments will be added here).
Turning to the number of providers in each jurisdiction and there has been growth in the number of providers in NSW over the last five years and a reduction in numbers in Victoria and Queensland, with relative stability in other jurisdictions:
Obviously only some VET providers receive government funding and it is therefore somewhat confusing to see, for example, that in Tasmania where the table above states that there are only 51 RTOs in the state, there are apparently 103 publicly-funded providers operating in the state (and similar patterns in the Northern Territory and the ACT). Either there is a huge amount of interstate delivery by government-funded providers in the smallest jurisdictions or there is an anomaly in the government-funded provider data?
The footnote for Table 5A.12 in the Productivity Commission’s report states that: “The number of government-funded training providers is a distinct count, for each jurisdiction, of the number of training providers that submitted data through state and territory training authorities. Some training providers deliver VET in more than one state or territory and are separately counted for each state and territory, however they are only counted once in the Australia total. Government-funded training providers are reported according to the state or territory that funds the training.”
Finally there is the Commission’s analysis of some of the activities/performance of the regulators. (The data in this table also seems to have anomalies in it – which may be due to the financial year and not calendar year focus, ie in Table 5A.11 there were a total of 3,607 RTOs nationally but in Table 5A.18 it is reported that ASQA is responsible for regulating 3,938 RTOs, plus there are the 127 and 167 RTOs respectively which the Victorian and Western Australia regulators have responsibility for).
Nevertheless – the more important message in the data in this table is a quality one.
Look at how few providers have been subject to a compliance audit, particularly by ASQA.
Just 427 of the 3,938 ASQA is reported to be regulating (ie just 10.8%).
Those 427 RTOs will have been selected based on their risk of non-compliance (using ASQA’s well-developed risk processes) – meaning that ASQA has identified those RTOs with the most obvious signs of non-compliance with the Standards.
And of those audited just 14% had an adverse decision recorded against them after the audit, which is the equivalent of just 1.5% of all of the RTOs ASQA has responsibility for.
In other words: 98.5% of providers are either compliant with the Standards or at such low risk of non-compliance their activities have not triggered a compliance audit.
