People powering productivity

Putting the workplace at the heart of Australia’s skills and training system

A skilled, agile and productive workforce aligned to employer needs is critical for Australia’s productivity uplift. Workforce skills and capabilities enable the innovation, competitiveness and business investment that will underpin our quality of life for decades to come.

The identification of skills as an area of focus for the upcoming Economic Reform Roundtable is important. However, skills development in and of itself is not a magic solution for lifting productivity. Over recent decades, levels of formal post-school education have increased notably, at a time when productivity could best be described as anaemic.

Australian Industry Group, through its dedicated Centre for Education and Training, has a longstanding focus on driving productivity through skills and workforce development. The Centre’s evidence-based and industry-informed research and advice has focussed heavily on topics such as creating a connected and coherent tertiary system, strengthening work-integrated learning, building foundation skills and developing degree apprenticeships.

Important progress has been made. Significant reform has been progressed across Australia’s post-school education and training system in recent years, underpinned by substantial investment. We must continue on this path, with a sharp focus on aligning policy and investment settings with the importance of productivity as a national priority.

The connection between education and training and the workplace is essential to drive productivity. Governments, industry and individuals themselves all have a role to play in sharing in the costs and the benefits of this skills development and lifelong learning.

This paper calls for skills and workforce policy in Australia to shift towards a more economic focus that drives productivity by more closely connecting education and training with the workplace. Six key actions can drive this agenda forward, in consultation with industry:

1. Maintain progress towards the bold ambition of a connected and coherent tertiary system by converting the principle of tertiary harmonisation into widespread practice through system governance that embeds a clear role for industry, funding, regulation and compatibility between skills and knowledge frameworks.
2. Design and implement a new Australian Government initiative focused on driving productivity uplift at the firm level through skills and capability development.
3. Review specific federal and state policy settings and overall system complexity that may be constraining employer investment in productivity-enhancing skills development.
4. Encourage a culture of lifelong learning through the National Skills Passport and National Skills Taxonomy, tax deductibility of self-education expenses, a comprehensive national policy framework for lifelong learning and reforming Recognition of Prior Learning (RPL).
5. Proactively encourage and enable strengthened connections between the tertiary education system and industry and employers through policy, system and investment settings, with a focus on facilitating enhanced work-integrated learning and ensuring funding settings enable flexibility in training delivery within workplace contexts.
6. Strengthen the role of the apprenticeships system in delivering upon current and future skills needs, including through employer incentives to support commencements and increasing the availability and uptake of degree apprenticeships.