Australia’s National Skills Agreement (NSA) is set to reshape vocational education and training (VET), focusing on workforce development, accessibility, and industry alignment. For Registered Training Organisations (RTOs), understanding the NSA is crucial to staying compliant, taking advantage of funding opportunities, and ensuring high-quality education outcomes.
What is the National Skills Agreement (NSA)?
The National Skills Agreement (NSA) is a landmark funding and policy framework to enhance Australia’s skills and workforce development. This agreement establishes a long-term commitment between the Commonwealth, state, and territory governments to reform and strengthen the Vocational Education and Training (VET) sector. The NSA is crucial in ensuring Australia’s workforce has the skills to meet current and future economic demands.
The landmark Agreement grants states and territories access to up to $3.7 billion in additional Commonwealth funding over five years, bringing the total Commonwealth investment in state and territory training systems to $12.6 billion over the same period.
When Was the National Skills Agreement Enacted?
The National Skills Agreement was enacted on 1 January 2024, following its announcement in 2023. It replaces previous national skills and workforce development funding arrangements, introducing a more structured, outcomes-focused approach to VET investment. The agreement was developed in collaboration with all states and territories to ensure alignment with national economic priorities while addressing local skills needs.
The National Skills Agreement’s Outcomes Framework
The Outcomes Framework is critical in linking government actions to measurable outcomes over the five-year life of the National Skills Agreement. It enables governments to monitor, track, and respond to changes in the VET sector, ensuring that the system remains adaptable and aligned with national priorities. Furthermore, it facilitates strategic discussions between governments, providing a mechanism to assess the health of the VET system and progress towards shared objectives.
By fostering collaboration, the Outcomes Framework ensures governments can address common challenges while leveraging opportunities to enhance VET delivery. Ultimately, this supports better student outcomes by providing pathways to secure and well-paid employment and addressing Australia’s current and future skills needs.
Components of the Outcomes Framework
The Outcomes Framework incorporates several key elements to guide assessment and policy direction under the National Skills Agreement:
- An overview of how the framework interacts with Jurisdictional Action Plans, National Priorities, and Stewardship responsibilities.
- A summary of the theory of change and the conditions that enable successful VET outcomes.
- Indicators for Population Outcomes measure the impact of the VET system on individuals, society, and the broader economy.
- Measures for System Outcomes, focusing on areas in which the VET system must perform to achieve the desired population outcomes.
- Initial targets for 10 key measures covering various aspects of the VET system’s performance.
- A process to ensure the framework remains current, reflecting diverse perspectives and ongoing developments in skills policy.
Objectives of the National Skills Agreement
The National Skills Agreement aims for a more effective and responsive vocational education and training system that benefits individuals, industries, and the broader economy. Key objectives include:
- Ensures that critical and emerging national, state, and local industries have access to a skilled workforce, securing a strong domestic labour force to meet current and future priorities under the National Skills Plan.
- Strengthens the capacity of training providers to deliver high-quality education and training with a modern and responsive TAFE system at the core of the VET sector. This includes upgrading TAFE facilities, enhancing wrap-around support for priority groups, investing in a high-quality teaching workforce, and fostering stronger collaboration with industry and unions.
- Guarantees that all Australians—particularly women, First Nations Australians, young people, mature-age workers, those facing long-term unemployment, people from culturally and linguistically diverse backgrounds, people with disability, and regional and remote learners—have access to the education, training, and support required to secure well-paid, stable employment.
- Ensures that no Australian is left behind as the economy evolves and adapts to structural changes by expanding opportunities for lifelong learning and foundational skills development, aligned with the Outcomes Framework.
- Enhances informed decision-making for students, workers, employers, and governments by leveraging Jobs and Skills Australia’s skills and labour market insights, improving access to career information, and promoting transparency across the system.
- Promotes national consistency, which enhances access, equity, and transparency while maintaining state and territory flexibility to address local priorities. The National Skills Agreement is designed to be clear, simple, and built on genuine tripartite engagement with the sector to drive meaningful reform.
Key Priorities of the National Skills Agreement
National priorities are key areas where governments have collectively committed to focused action to tackle critical skills shortages and workforce demands. The agreed national priorities include:
- Advancing gender equality
- Supporting Closing the Gap initiatives
- Facilitating the Net Zero transformation
- Strengthening and sustaining essential care services
- Enhancing Australia’s sovereign capability and food security
- Building Australia’s digital and technology expertise
- Expanding housing supply
- Implementing reforms to improve the regulation, quality, and relevance of VET qualifications
Sectors That Will Be Affected by the National Skills Agreement
Key Industry Sectors
Several industries will benefit from the NSA, particularly those facing skill shortages or requiring workforce upskilling. These include:
- Health and Aged Care – Addressing workforce shortages in nursing, disability care, and aged care.
- Early Childhood Education – Increasing the supply of qualified educators.
- Clean Energy and Renewable Industries – Supporting Australia’s transition to net zero emissions through skills development in green energy sectors.
- Digital and Technology – Enhancing skills in cybersecurity, data analytics, and IT-related fields.
- Manufacturing and Construction – Upskilling workers for advanced manufacturing, defence industry projects, and significant infrastructure development.
- Agriculture and Food Production – Supporting the sustainability and innovation of Australia’s agricultural sector.
Vocational Education and Training (VET) Sector
The NSA has significant implications for the broader VET sector, particularly Registered Training Organisations (RTOs). These training providers must align their course offerings with the priorities outlined in the National Skills Plan. This includes:
- Adapting training delivery models to meet evolving workforce needs.
- Enhancing the quality and relevance of training programs.
- Expanding access to fee-free training opportunities for priority cohorts.
Students and Job Seekers
Individuals seeking vocational education and training will benefit from:
- Increased access to free or low-cost courses in priority industries.
- Higher quality training through improved partnerships with industry.
- Better employment prospects due to training programs aligned with workforce demands.
Employers and Industry Groups
Businesses will experience direct benefits through a more skilled workforce, reducing skills shortages and improving productivity. The agreement supports stronger engagement between employers and Registered Training Organisations (RTOs) to ensure that training aligns with real-world job requirements.
Key Ways RTOs Can Be Affected by the National Skills Agreement
The National Skills Agreement will significantly influence how Australian RTOs operate, aligning their role with national workforce priorities and strengthening their capacity to deliver high-quality vocational education and training. The agreement is designed to create a more cohesive and responsive skills system that supports industry and learners while ensuring training providers meet the evolving needs of the Australian economy.
Alignment with the National Skills Plan
Under the National Skills Plan, RTOs will deliver training addressing workforce shortages in critical and emerging industries. This means more significant emphasis on developing training programs that align with national, state, and local priorities. The National Skills Agreement aims to ensure RTOs have the resources and support necessary to adapt to economic and industry shifts while maintaining training quality and relevance.
Quality and Modernisation of Training
The National Skills Agreement strongly focuses on enhancing the quality of education and training delivered by RTOs. This includes:
- Strengthening the TAFE sector, with RTOs expected to collaborate closely with TAFE institutions to ensure a modern and responsive VET system.
- Encouraging investment in training infrastructure, mainly through upgrades to TAFE and private RTO facilities, ensuring students receive hands-on experience using modern technologies.
- Supporting a high-quality teaching workforce, ensuring RTO trainers are well-equipped with the latest industry knowledge and pedagogical skills.
Increased Access and Equity in Education
The National Skills Agreement also prioritises ensuring all Australians, particularly underrepresented groups, have access to quality education and training. RTOs will play a crucial role in the following:
- Expanding wrap-around supports for priority cohorts, including women, First Nations Australians, young people, mature-age workers, long-term unemployed individuals, people with disability, and those in regional and remote areas.
- Providing training programs that lead to secure, well-paid jobs, reducing barriers to workforce participation.
- Supporting lifelong learning initiatives, ensuring Australians can upskill and reskill as the economy undergoes structural change.
Integration of the Outcomes Framework
The Outcomes Framework embedded within the National Skills Agreement will introduce new benchmarks to measure the success of the training sector. RTOs will need to:
- Demonstrate how their training programs contribute to improved employment outcomes and workforce productivity.
- Align course offerings with the National Skills Plan, ensuring relevance to priority industries.
- Improve reporting and data collection to provide transparency on skills development and student outcomes.
Greater National Consistency and Flexibility
A key aspect of the National Skills Agreement is achieving greater national consistency while allowing states and territories flexibility in delivering local priorities. RTOs will benefit from:
- Streamlined funding arrangements, reducing administrative complexity and ensuring sustainable financial support for training providers.
- Improved collaboration between governments, industry, and training providers, fostering partnerships that enhance course offerings and employment pathways.
- Clearer regulatory frameworks, simplifying compliance requirements while maintaining high-quality standards.
How RTOs Can Adjust to the National Skills Agreement
To comply with, accommodate, and capitalise on the National Skills Agreement (NSA), Australian Registered Training Organisations (RTOs) must strategically adjust their operations, training delivery, resources, and marketing. Aligning with the National Skills Plan and the Outcomes Framework will ensure long-term sustainability and competitiveness in the evolving vocational education and training (VET) sector.
Operational Adjustments
Compliance with National and State Priorities
RTOs must ensure their training programs align with the priority industries identified in the National Skills Plan, supporting the NSA’s objective of a nationally consistent yet locally adaptable skills system. This means adjusting course offerings to meet the skills demand across critical and emerging industries while working closely with government bodies and industry stakeholders to ensure training meets current and future workforce needs.
Enhanced Data and Reporting Systems
To align with the Outcomes Framework, RTOs must improve data collection, tracking, and reporting on student progress, course completion rates, and employment outcomes. By leveraging Jobs and Skills Australia insights, RTOs can tailor their course offerings based on workforce trends and industry projections, ensuring their training remains relevant and effective in securing employment opportunities for graduates.
Funding and Revenue Diversification
With the NSA introducing new funding mechanisms, RTOs must explore multiple revenue streams beyond traditional course fees. This includes securing government grants, collaborating with TAFE institutions, and developing micro-credential programs that meet industry demand. Partnering with businesses to provide customised corporate training solutions will help RTOs tap into employer-funded training initiatives, making their programs more financially sustainable.
Training Delivery Adjustments
Modernising Course Content
To comply with the National Skills Agreement, RTOs must ensure their training content reflects the latest industry standards and workforce needs. This includes updating curricula to support skills development in emerging sectors, integrating real-world projects, apprenticeships, and industry placements to enhance employability, and ensuring course materials remain current and industry aligned.
Flexible and Innovative Delivery Modes
The NSA promotes accessibility and lifelong learning, requiring RTOs to embrace flexible delivery models. Expanding online learning, blended courses, and micro-credentials will help meet the needs of learners who require more adaptable study options, particularly those in regional and remote areas. Emerging technologies such as virtual reality (VR) and simulation-based learning can also be incorporated to provide hands-on experiences in a digital environment.
Focus on Priority Learner Groups
The NSA strongly emphasises equity and inclusion. RTOs must enhance support services for priority learner groups, including women, First Nations Australians, young people, mature-age workers, long-term unemployed individuals, people with disabilities, and culturally and linguistically diverse learners. This may involve offering wrap-around support services, culturally responsive course materials, and tailored career guidance to help these groups successfully transition into the workforce.
Resource Adjustments
Infrastructure and Digital Investment
RTOs must invest in facility upgrades and modern training equipment to meet the NSA’s training quality expectations, notably if partnering with TAFE institutions. Expanding digital infrastructure will also be crucial in supporting online education and hybrid learning environments, ensuring students have access to high-quality training regardless of location.
Trainer and Workforce Development
Ensuring the teaching workforce remains highly skilled is essential for maintaining training quality. RTOs should invest in ongoing professional development for trainers, including industry placements, upskilling programs, and leadership training. Collaboration with TAFEs, industry partners, and unions can enhance knowledge-sharing and keep trainers updated with industry trends.
Marketing Adjustments
Targeted Messaging
To capitalise on the NSA’s objectives, RTOs must refine their messaging to emphasise government-supported training, industry-aligned courses, and job-ready qualifications. Marketing efforts should highlight how their programs align with the National Skills Plan, Outcomes Framework, and priority industry pathways, reinforcing the employment benefits and funding support available to students.
Employer and Industry Engagement
Building strong employer and industry partnerships will be key to positioning RTOs as preferred training providers. By working closely with businesses, RTOs can co-design courses, offer industry-recognised certifications, and deliver workplace training programs that meet evolving labour market needs. These partnerships can also help establish clear pathways from education to employment, boosting graduate outcomes.
Enhanced Online Presence and Career Information
RTOs should optimise their websites and digital platforms to provide detailed information about career pathways, funding options, and industry-aligned courses. Social media, digital advertising, and AI-powered career guidance tools can be leveraged to help prospective students understand how their chosen training aligns with the National Skills Plan and leads to sustainable employment opportunities.
How Precision RTO Resources Supports RTOs in Adjusting to the National Skills Agreement
The National Skills Agreement (NSA) introduces a renewed focus on delivering quality training, aligning with the National Skills Plan, and achieving the objectives outlined in the Outcomes Framework. As Registered Training Organisations (RTOs) navigate these changes, Precision RTO Resources provides essential tools and support to ensure compliance and success in the evolving vocational education landscape.
Quality Training Resources
Our quality training resources are developed to meet the highest standards, ensuring RTOs can effectively align their training delivery with the priorities set under the National Skills Agreement. These resources support competency-based learning, industry relevance, and compliance with regulatory frameworks, helping RTOs deliver training that meets the needs of learners, employers, and the broader workforce.
Matching e-Learning Resources
To complement our training resources, we provide matching e-Learning resources, enhancing flexibility and accessibility for learners. With digital learning becoming a key component of modern vocational education, our e-Learning solutions help RTOs integrate engaging and interactive content while aligning with the Outcomes Framework and the National Skills Plan.
LLN Assessment Tools
Ensuring learners have the necessary foundation skills is crucial for successful training outcomes. Our LLN (Language, Literacy, and Numeracy) assessment tools help RTOs evaluate learners’ capabilities and provide appropriate support, ensuring inclusive training meets the skill development goals outlined in the National Skills Agreement.
VPL Kit
Work-based learning plays a crucial role in preparing students for real-world employment. Our Vocational Placement (VPL) Kit supports RTOs in managing and tracking vocational placements, ensuring students gain industry-relevant experience that aligns with the National Skills Plan and the objectives of the Outcomes Framework.
RPL Kit
Our RPL (Recognition of Prior Learning) Kit supports RTOs in assessing and recognising learners’ prior experience and qualifications. This ensures efficient training delivery, reduces duplication of learning, and aligns with the skills recognition objectives within the Outcomes Framework.
Consulting Services for RTO Compliance and Growth
Beyond providing training resources, Precision RTO Resources offers expert consulting services to help RTOs navigate regulatory changes, implement compliance strategies, and align their training delivery with the National Skills Agreement.
Our team supports RTOs in adapting to new training requirements, optimising processes, and achieving long-term goals within the National Skills Plan. With Precision RTO Resources, RTOs can confidently adjust to the National Skills Agreement, ensuring compliance while delivering high-quality training that meets industry and learner needs.
Maximising Opportunities Under the National Skills Agreementv7: Key Takeaways for RTOs
The National Skills Agreement presents a significant opportunity for RTOs to expand their reach and enhance training quality. By staying ahead of regulatory changes, adapting to industry needs, and leveraging government funding, RTOs can play a vital role in building Australia’s future workforce.
To thrive in this evolving landscape, RTOs must embrace innovation, strengthen partnerships, and uphold quality training standards. Now is the time to align your training strategy with the NSA’s priorities and position your RTO for long-term success.
