What the Productivity Commission’s Report on Government Services 2026 Tells Us About the State of VET

A comprehensive analysis of the RoGS 2026 VET data: $8.9 billion in government expenditure, rising completions, improving employment outcomes, declining employer satisfaction, and what the numbers mean for RTOs, policymakers, and the sector’s future

The Annual Health Check

The Productivity Commission’s Report on Government Services is the most comprehensive annual assessment of how Australia’s public services are performing. Released on 10 February 2026, the VET chapter of the 2026 edition draws on NCVER data, unpublished government figures, and regulatory reporting to provide a detailed picture of a sector that is training millions of Australians, absorbing billions in public investment, and producing outcomes that are, in most dimensions, measurably improving.

For practitioners and policymakers in the VET sector, the RoGS data provides an evidence base that goes beyond the headline figures most commonly cited in sector discussions. It tracks trends over time. It disaggregates outcomes by equity group, jurisdiction, and qualification level. It reports on regulatory activity and compliance. And, critically, it reports on areas where performance is not improving, providing the uncomfortable data that a healthy sector must confront.

This article provides a comprehensive analysis of the RoGS 2026 VET data, examining what the numbers reveal about the system’s scale, its outcomes, its equity performance, its regulatory landscape, and the persistent challenges that the data, read carefully, make impossible to ignore.

 

1. The System at a Glance: Scale, Investment, and Structure

The scale of Australia’s VET system, as reported in the RoGS 2026, is substantial. Total government real recurrent expenditure on VET services in 2024 was approximately $8.9 billion, representing a 5.4 per cent real increase from $8.4 billion in 2023. This translates to $430 per person aged 15 to 64 in government recurrent expenditure. Total government appropriations and real recurrent program funding, inclusive of Australian Government transfers to the states and territories, reached $9.5 billion in 2024, though this represented an 11.2 per cent decrease from $10.7 billion in 2023, reflecting the wind-down of some pandemic-era and temporary program funding.

Over 5.1 million students were enrolled in VET nationally in 2024, with over 1.2 million in government-funded programmes. The concentration of enrolments at the Certificate III and IV level, where nearly 74 per cent of government-funded students are studying, reflects the system’s alignment with mid-level skills demand across trades, health and care, and business services. Student motivations confirm the employment orientation of the system: 72.8 per cent of total VET completers and 73.5 per cent of government-funded completers reported participating for employment-related reasons, with 12.4 per cent aiming for further study pathways and 14.7 per cent for personal development.

The provider landscape comprises 3,805 registered training organisations delivering nationally recognised training, of which 1,245, approximately one-third, delivered government-funded nationally recognised training through state and territory training departments. The Australian Government provided around $2.4 billion to states and territories in 2024, with $4.1 billion of VET funding allocated on a competitive basis. Non-TAFE providers received over $1.6 billion in government VET delivery funding, approximately 24 per cent of the total, reflecting the mixed-market structure that has characterised the Australian VET system for decades.

The following table consolidates the key system measures from the RoGS 2026.

 

 

2. Outcome Trends: What Is Improving and What Is Not

2.1 Rising Completions and Employment Outcomes

The headline outcome data in the RoGS 2026 is genuinely positive. Government-funded VET qualification completions among people aged 15 to 64 reached approximately 354,700 in 2024, a 16.4 per cent increase from 2020. This is a significant recovery and growth trajectory that reflects both the rebound from pandemic-era disruption and the impact of policy initiatives such as the Fee-Free TAFE Skills Agreement.

Employment and study outcomes show consistent improvement across the 2020 to 2024 period. In 2024, 86.4 per cent of government-funded VET qualification completers achieved their main reason for training, up from 82.2 per cent in 2020, a 4.2 percentage point improvement. The proportion who improved their employment status rose from 54.4 per cent in 2020 to 63.3 per cent in 2024, an 8.9 percentage point gain, though the 2020 baseline should be interpreted with caution given the COVID-19 pandemic’s impact on the labour market. The proportion employed and/or in further study after training increased from 78.8 per cent to 84.8 per cent over the same period.

These are substantial improvements. They demonstrate that government-funded VET is delivering on its core objective: helping people develop skills that translate into employment and further education. For RTOs, these figures provide a strong evidence base for communicating the value of VET to prospective learners, employers, and the broader community.

2.2 Student Satisfaction: Stable but Not Growing

Student satisfaction with the overall quality of training was 89.5 per cent in 2024, unchanged from 2020. Satisfaction with assessments was 89.3 per cent, and satisfaction with instructors was 87.7 per cent. These are high figures by any measure, and the stability over the four-year period suggests consistent quality rather than deterioration. However, the absence of improvement in a period of significant sector investment and regulatory reform is worth noting. It may indicate that the factors driving student satisfaction have plateaued and that further gains will require targeted intervention in specific areas rather than system-wide initiatives.

The data is more nuanced when disaggregated by equity group. Completers in remote and very remote areas recorded satisfaction of 94.3 per cent, the highest of any group and an increase of 3.0 percentage points since 2020. This is a significant finding. It suggests that providers operating in remote areas, often under the most challenging delivery conditions, are producing learner experiences that exceed metropolitan standards.

2.3 Employer Satisfaction: The Persistent Decline

The most concerning data point in the RoGS 2026 is employer satisfaction. In 2023, the most recent year for which employer survey data is available, 66.4 per cent of employers who engaged with VET were satisfied with all forms of VET engagement. This represents a decline from 69.2 per cent in 2019 and from 72.9 per cent in 2015. The drop in satisfaction with apprenticeships and traineeships is particularly pronounced: from 81.7 per cent in 2015 to 73.2 per cent in 2023, an 8.5 percentage point decrease.

This is a trend that the sector cannot afford to dismiss. Students are increasingly satisfied and achieving their goals. But employers, the end users of the competencies that the VET system certifies, are becoming less satisfied with what VET delivers. The gap between student satisfaction and employer satisfaction is now over 23 percentage points. If this gap continues to widen, it risks undermining the labour market value of VET qualifications, the credibility of competency-based assessment, and the willingness of employers to engage with the system through apprenticeships, traineeships, and partnerships with RTOs.

The following table tracks the key outcome measures from the RoGS 2026 against their 2020 baselines.

 

 

3. Equity: Who Is Being Reached and What They Are Achieving

Equity is a core reporting theme in the RoGS, and the 2026 data shows improvements across groups that have traditionally faced barriers to participation and completion. The most significant equity finding is the growth in First Nations VET completions: government-funded VET qualification completions among Aboriginal and Torres Strait Islander people aged 15 to 64 rose by 28 per cent to 22,400 between 2020 and 2024. This is a substantial increase that reflects both targeted support initiatives, including Fee-Free TAFE places in priority areas, and broader participation growth across the system.

The RoGS 2026 also presents an access finding that challenges conventional assumptions about where barriers to VET participation are concentrated. Data from the Survey of Work-Related Training and Adult Learning shows that the proportion of people who wanted to participate in formal study below bachelor degree level in the previous 12 months but could not was highest in major cities, at 2.7 per cent, and lowest in outer regional and remote areas, at 0.4 per cent. While this data is from 2020 to 2021 and should be interpreted with caution regarding currency, it complicates the narrative that access barriers are primarily a regional and remote issue. Unmet demand for VET appears to be concentrated in metropolitan areas, potentially reflecting cost pressures, availability of places in specific qualifications, employer release barriers, or information and awareness gaps.

The following table summarises the key equity findings from the RoGS 2026.

 

For RTOs and policymakers, the equity data present a nuanced picture. First Nations completions are growing strongly. Remote learners are reporting the highest satisfaction. Barriers appear to be more distributed across the socio-economic spectrum than often assumed. And gender disparities, while present at the access stage, appear to moderate in terms of outcomes. The system is reaching a broad cross-section of Australians, which is precisely what $8.9 billion in annual investment should be delivering.

 

4. The Regulatory Landscape: Audit Activity and Adverse Decisions

The RoGS 2026 reports regulatory activity across all three VET regulators: ASQA, VRQA, and TAC. As at 30 June 2025, ASQA regulated 3,837 RTOs nationally, VRQA regulated 116 RTOs delivering to domestic students in Victoria, and TAC regulated 162 RTOs in Western Australia and Victoria.

The most significant regulatory data point is ASQA’s adverse decision rate. In 2024 to 2025, 9.2 per cent of ASQA-regulated providers were subject to a compliance audit, and 2.3 per cent of all providers received an adverse decision as a result, up from 1.5 per cent in 2023 to 2024. This increase should be read in the context of the transition to the Standards for RTOs 2025, which became mandatory during this period. The uplift in adverse decisions is consistent with what would be expected during a transition to new regulatory expectations, particularly given the 2025 Standards’ emphasis on outcomes, self-assurance, and the separation of assessment design from assessment conduct.

By contrast, VRQA and TAC recorded no adverse decisions from compliance audits in 2024 to 2025. VRQA’s audit rate was significantly lower than ASQA’s, at 0.9 per cent, while TAC’s was comparable at 8.6 per cent. Caution is required in comparing across regulators due to different regulatory frameworks, audit types, and legislative responsibilities.

 

For RTOs, the increase in ASQA adverse decisions is a practical signal. The transition to the 2025 Standards is not a theoretical shift. It is producing real compliance consequences for providers that have not adapted their practices, particularly in assessment system operation, pre-validation, and the evidence of active quality management that the new Standards require. The RoGS data confirms what CAQA has consistently advised: the 2025 Standards demand a level of demonstrated practice, not just documented policy, that many providers have not yet achieved.

 

5. The Workforce Signal: An Ageing Sector with Growing Demand

The RoGS 2026 includes workforce data from Jobs and Skills Australia’s VET Workforce Study that warrants careful attention. The estimated VET workforce is approximately 111,000 people, a figure that has been broadly stable since 2017. Overall growth was just 0.7 per cent over the decade to 2020 to 2021. Between 2011 and 2012 and 2017 to 2018, the number of VET teachers decreased by 19.6 per cent, before recovering marginally with a 1.9 per cent increase through to 2020 to 2021.

The age profile of the workforce is a strategic concern. The average age is 47.3 years, up from 46.0 in 2011. Almost half the workforce, 46.5 per cent, is aged 50 and over. With 57.2 per cent female and 74.8 per cent located in major cities, the workforce profile raises questions about succession planning, geographic coverage, and the pipeline of new entrants into VET teaching and assessment roles.

The demand side tells a different story from the supply side. Over the ten years to January 2024, online job advertisements for VET teachers doubled, compared to a 79.3 per cent average growth rate across all occupations. This is a sector where demand for qualified trainers and assessors is growing significantly faster than the overall labour market, while the existing workforce is ageing and has shown minimal growth for a decade. The implications for RTO workforce planning, for compliance with trainer and assessor credential requirements, and for the long-term capacity of the system to deliver quality training are substantial.

 

6. What the Data Means for RTOs and the Sector

The RoGS 2026 describes a VET system that is, by most measures, performing well and improving. Government investment is substantial and increasing. Completions are rising. Employment outcomes are strengthening. Equity participation is broadening. Student satisfaction is high and stable. First Nations completions are growing by 28 per cent. Remote learners are reporting the highest satisfaction with the system.

But the data also reveals three structural concerns that responsible sector leadership cannot overlook. First, employer satisfaction is declining, and the decline in apprenticeship and traineeship satisfaction is particularly sharp. If the gap between what learners experience and what employers need continues to widen, it will erode the labour market value of VET qualifications and the sector’s social licence. Closing this gap requires stronger industry engagement, more rigorous assessments that reflect genuine workplace competency, and a willingness to hear what employers are saying about the quality of the graduates they receive.

Second, the regulatory data shows that the transition to the 2025 Standards is producing real compliance consequences. The increase in ASQA adverse decisions from 1.5 to 2.3 per cent is not a large number in absolute terms, but it represents a significant year-on-year change in direction. RTOs that have not yet aligned their assessment systems, pre-validation practices, and evidence of active quality management with the 2025 Standards are at materially higher risk than they were twelve months ago.

Third, the workforce data describes a sector approaching a demographic challenge. An ageing workforce, minimal growth in teacher numbers, and rapidly increasing demand for VET teachers is a combination that, if not addressed through deliberate workforce planning and investment, will constrain the system’s capacity to deliver quality outcomes at scale.

For individual RTOs, the practical implications are clear. Use the outcome data, particularly the employment and satisfaction figures, as a competitive asset in marketing and industry engagement. Take the employer satisfaction decline seriously by strengthening the quality and rigour of industry engagement, assessment, and graduate preparation. Prepare for the regulatory expectations of the 2025 Standards by building the active, documented assessment systems and quality processes that auditors are now evaluating. And invest in workforce planning, trainer recruitment, and professional development to ensure the people who deliver training are available, capable, and current.

 

Conclusion: A System Worth Strengthening

The Productivity Commission’s RoGS 2026 provides a rich, detailed, and largely encouraging picture of Australia’s VET system. It is a system that is delivering strong employment outcomes, high student satisfaction, improving equity participation, and measurable economic value through skills development. The $8.9 billion in annual government investment is producing results that, in most dimensions, are trending in the right direction.

But the data also makes clear that the system is not without vulnerabilities. Employer satisfaction is a warning signal that cannot be explained away. The regulatory transition is exposing compliance gaps that were previously invisible. And the workforce pipeline is a slow-moving challenge that will become acute if it is not addressed proactively.

For RTOs, policymakers, regulators, and everyone who works in vocational education and training, the message is consistent: this is a system worth strengthening. The foundations are sound. The outcomes are improving. The investment is substantial. But sustaining and extending these gains requires honest engagement with the data, including the data that is uncomfortable, and a commitment to addressing the structural challenges that the numbers, read carefully, make impossible to ignore.

 

References and Further Reading

Productivity Commission (2026). Report on Government Services 2026, Part B, Section 5: Vocational Education and Training. Released 10 February 2026. https://www.pc.gov.au/ongoing/report-on-government-services/child-care-education-and-training/vocational-education-and-training/

Productivity Commission (2026). Report on Government Services 2026, Part B: Child Care, Education and Training. https://www.pc.gov.au/ongoing/report-on-government-services/child-care-education-and-training/

Jobs and Skills Australia (2024). VET Workforce Study. https://www.jobsandskills.gov.au

NCVER (2024). VET Student Outcomes. National Centre for Vocational Education Research.

ASQA (2025). Annual Report 2024–25. Australian Skills Quality Authority.