State of VET 2026: 7 Questions Every Employer and RTO Should Be Asking

Training access, government funding, workforce skills and the future of vocational education in Australia

Australia's vocational education and training (VET) system is facing an important test.

We are investing in training, reforming regulatory arrangements and responding to persistent workforce challenges. But a fundamental question remains:

Are our training arrangements delivering the right skills, in the right places, for the students, employers and industries that need them?

For registered training organisations (RTOs), the challenges include financial sustainability, regulatory obligations, funding accessibility and the practical realities of delivering quality training.

For employers, the questions are equally important. Can they find suitable training providers? Can employees attend training without disrupting operations? Do qualifications translate into workplace capability?

These issues are central to the Independent Review of Fee-Free TAFE in Australia, led by Angela Connell-Richards, and the 2026 RTO Sector Survey.

Here are seven questions every employer and RTO should be asking.

1. Is training genuinely accessible to the people who need it?

Removing course fees can reduce an important barrier to participation. However, affordability is only one aspect of accessibility.

Students and employers also need suitable providers, manageable travel distances, flexible delivery schedules, qualified trainers and appropriate learning support.

For regional employers and industries operating around shift work, access can be particularly complicated.

The question: Is a course genuinely accessible if it is free but unavailable locally, offered at unsuitable times or delivered in a format that does not meet workplace requirements?

Training accessibility needs to be measured by whether people can realistically participate, not simply whether a funded place exists.

2. Is government funding supporting the full diversity of training providers?

Australia's VET system depends on TAFE institutes, independent private RTOs, community providers, industry-owned training organisations and enterprise RTOs.

Each contributes different capabilities, delivery models and industry relationships.

According to NCVER's Employers' use and views of the VET system 2025, private training providers remained the most commonly used main provider of nationally recognised training among employers using that training, at 49.1%. TAFE institutes accounted for 26.2%.

The figures reinforce the importance of understanding how funding arrangements affect the availability of different provider types.

The question: Are government funding decisions maintaining sufficient training capacity, specialisation and choice across regions and industries?

An effective system should assess training need, delivery capability, student outcomes and taxpayer costs rather than assume one provider model is appropriate in every circumstance.

3. Does training investment reflect actual workforce demand?

Qualifications and enrolments are important indicators of activity, but they do not automatically demonstrate that training is addressing skill shortages.

Employers need people with current technical skills, practical competence, workplace readiness and the ability to adapt as industries change.

Funding decisions should consider local vacancies, occupational shortages, employer demand, apprenticeship opportunities and emerging industry requirements.

The question: Are we funding training that leads to genuine employment opportunities and addresses verified workforce needs?

This is particularly important in specialist industries, where a training provider may need to invest in expensive facilities, equipment or highly experienced trainers to serve a relatively small workforce.

4. Can RTOs remain financially sustainable while delivering quality training?

Quality training requires investment.

RTOs must maintain capable trainers and assessors, fit-for-purpose resources, assessment systems, learner support, industry engagement and effective governance.

The 2025 Standards for RTOs also require providers to demonstrate how they achieve quality outcomes, not merely maintain compliant documents.

Preliminary responses to Vivacity's 2026 RTO Sector Survey point to concerns about compliance costs, funding access, enrolment volatility and provider sustainability.

These are important signals for further investigation, although the survey is self-selected and cannot be treated as representative of all Australian RTOs.

The question: Do current funding and operating arrangements allow providers to invest consistently in training quality, workforce capability and long-term delivery?

Provider sustainability is not only a business issue. When specialist or regional delivery becomes unviable, students and employers may face fewer training options.

5. Are we measuring training outcomes or simply counting activity?

Fee-Free TAFE has produced substantial training activity. The Australian Government publishes enrolment and completion figures through its national program snapshots.

However, enrolments and cumulative completion counts do not, by themselves, establish a valid qualification completion rate, the additional training created by the policy or the employment outcomes attributable to it.

For a meaningful evaluation, we need to know who completed, who withdrew, what skills were gained and whether training improved employment or workplace capability.

The question: What measures would demonstrate that public investment is delivering genuine benefits?

Relevant measures include qualification completion rates for defined cohorts, employment in related occupations, further study, employer satisfaction, retention, productivity and the total taxpayer cost per successful outcome.

6. Are employers and RTOs working closely enough together?

Employers are not simply customers of the VET system. They are critical partners in identifying skill needs, creating learning opportunities and helping students develop workplace competence.

NCVER's 2025 employer survey found that 76.1% of employers using nationally recognised training were satisfied that it provided employees with the skills needed for the job.

That is a positive finding, but it also leaves room to examine the experiences of employers whose expectations were not met.

Stronger partnerships can help providers design suitable delivery schedules, access current equipment and workplace practices, and support apprentices and existing workers more effectively.

The question: How regularly are employers and RTOs discussing actual skills gaps, training performance and changing workforce needs?

Industry engagement should produce practical improvements, not simply satisfy a regulatory requirement.

7. What needs to change to strengthen the VET sector?

The future of VET should not be framed as a simple choice between TAFE and independent RTOs.

Australia needs a diverse, capable and accountable system that delivers quality training and meets the requirements of students, employers, communities and taxpayers.

Potential improvements worthy of further examination include more transparent funding decisions, better recognition of regional and specialist delivery costs, stronger employer participation, meaningful outcome measures and closer monitoring of provider-market changes.

The question: If you could change one aspect of Australia's training system, what would produce the greatest improvement in workforce capability?

The answer may differ by industry, region or training pathway. That is precisely why direct evidence from employers and RTOs matters.

Your Experience Matters

Through the Independent Review of Fee-Free TAFE in Australia and the 2026 RTO Sector Survey, we are gathering evidence about what is working, where barriers exist and how funding and training arrangements affect the sector.

The review is examining government investment, training activity, student and employment outcomes, provider sustainability and value for taxpayers.

We invite RTOs, employers and industry representatives to contribute their experiences.

Complete the sector survey: https://vivacity.au/rto-sector-survey-2026

Download the free industry briefing: State of VET 2026 – 7 Questions Every Employer and RTO Should Be Asking.

Use the briefing to review your own training arrangements, identify gaps and start a practical conversation with your training partners.

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Angela Connell-Richards is an independent VET researcher with more than 30 years' experience in Australian vocational education and training. She is the Founder of Vivacity Coaching & Consulting.

Further reading and sources

• NCVER, Employers' use and views of the VET system 2025: https://www.ncver.edu.au/node/4263
• Department of Employment and Workplace Relations, Fee-Free TAFE Program Snapshots: https://www.dewr.gov.au/collections/fee-free-tafe-program-snapshots
• Skills Insight, Workforce Plan 2026–2027: https://skillsinsight.com.au/workforce-planning/

Research findings remain subject to source verification and ongoing analysis. Preliminary sector survey responses should not be interpreted as national prevalence estimates.