Industry Engagement Reforms

On this page:

What is Industry Engagement in the VET system?

Industry, including employers and peak bodies, interacts with the Vocational Education and Training (VET) system in diverse and complex ways. These include:

  • hiring VET graduates,
  • engaging and supporting structured training for apprentices and trainees
  • training their own employees
  • in some cases, working with Registered Training Organisations (RTOs) to develop organisation-specific training, including tailored training to meet workforce development needs.

Industry also provides input to the development of qualifications through the following channels:

  • The Australian Industry and Skills Committee (AISC) was established by Skills Ministers in May 2015 to give industry a formal role in commissioning training package development work and approving training packages for implementation.
  • Industry Reference Committees (IRCs) are the key industry advisory bodies to the AISC. They are the formal channel for considering industry skills requirements in the development and review of training packages. IRCs are made up of experts in relevant industry sectors and play a critical role in identifying and responding to emerging skills and training needs.

For more information, see the Overview of Current Industry Engagement Arrangements in Vocational Education and Training factsheet.

Why is Industry Engagement in the VET system important?

Australia's VET sector has long been internationally recognised for its industry leadership, quality, and capacity to deliver qualifications aligned to jobs.

Industry plays a critical role in identifying the skills needed today and into the future.

Why is reform needed?

The impacts of COVID-19 and a rapidly changing economy are affecting the way we work. While the strength of Australia’s VET system is internationally recognised, we need to ensure it continues to respond to the needs of employers, now and into the future.

However, employers have indicated that the VET system is not currently working for them, with recent consultation showing:

  • employer satisfaction with VET has fallen from 86.3 per cent in 2009 to 78.8 per cent in 2019
  • 42 per cent of employers report recruitment difficulty, primarily because of applicants’ lack of skills, qualifications or experience
  • only 41 per cent of employers said that the VET system is currently meeting the needs of their business.

What is being done?

The Australian, state and territory governments have agreed to reform the way industry engages with the VET system to ensure it is delivering for both learners and employers.

This will equip Australians with the skills they need to upskill in current roles or apply to new and emerging jobs, and be part of the responsive and resilient workforce that delivers for businesses and employers.

In October 2020, Skills Ministers agreed to progress reforms to enhance industry leadership in the VET system to deliver training that meets the needs of employers for a skilled and productive workforce.

To support these reforms, comprehensive consultations were undertaken with stakeholders between November 2020 and April 2021.

Stakeholders were asked about:

  • the role of industry in the VET system and how it could be enhanced.
  • improving collaboration across industry groups.
  • the effectiveness of the current arrangements and opportunities for improvement.

As part of the 2021-22 Budget, the Australian Government will provide an additional $149.2 million over four years, bringing the total investment to $292.5 million, to enhance the role of industry in the VET system and embed improved governance. To achieve this, industry clusters will be established and supported to:

  • identify current and emerging skills needs for their industry sectors to support strategic workforce planning.
  • develop and update national qualifications and micro-credentials.
  • collaborate to improve training delivery and assessment by working with training providers and employers to monitor training outcomes, improve resource development, promoting careers and encouraging work placements.
  • provide strategic advice on skills and workforce needs and the effectiveness of VET system policies and standards.

Additionally, Skills Ministers agreed that an independent national body would replace the Australian Industry and Skills Committee (AISC) in approving training packages. Details are still being worked through by governments.

To keep up to date of the progress, visit

Submissions - Skills Reform: Improving industry engagement and reforming qualifications in Vocational Education and Training discussion paper

As part of public consultations on industry engagement reforms, VET stakeholders were invited via to provide submissions in response to the Improving industry engagement and reforming qualifications in Vocational Education and Training discussion paper. The submissions are now available to be viewed.