The Intergenerational Report says we need more vocational skills – but federal funding for them is set to drop

James Lauritz/Getty Images The federal government’s Intergenerational Report published this week shows Australia will need significantly more skilled workers if we want to flourish in a rapidly changing world.

The report outlines how over the next four decades we will need: more nurses and carers for our ageing population more electricians and builders for our energy transition more people with the knowledge and skills to enable Australia to benefit from artificial intelligence.

Many of these careers start through Australia’s vocational education and training system, which includes TAFEs, independent providers and community colleges.

But how we will find and fund those workers is less clear.

What the report found The Intergenerational Report is unambiguous about the need for the vocational education and training system to respond to skilled worker shortages: responding to these challenges will require education and training systems that better align with labour market demand.

The report forecasts growth in the number of vocationally-educated workers, growing from 28% of the working-age population (25–64 years old) today to 37% in 2066.

Enrolments are falling But this is unlikely to happen without a change in trajectory.

At the moment, Australia’s enrolments in vocational education and training are actually declining.

Between 2016 and 2018, the average number of new students starting a vocational education or training qualification fell from 2 million to closer to 1.6 million.

The figure has hovered around this point since.

There has also been a declining trend in the last two years of data.

This means hitting the report’s expectation of 37% of the working-age population having a vocational education qualification by 2066 would require an uplift of nearly 40% in the number of people taking these qualifications.

The funding puzzle But the funding projections in the Intergenerational Report go in a different direction.

Despite the need for more vocationally trained workers, federal vocational education and training payments are one of only two segments (the other being the Family Tax Benefit) which are forecast to decline.