Hitting vocational training targets to reap $57bn bonanza

AUSTRALIAN governments will boost gross domestic product by 2 per cent and deliver society a $57 billion bonanza.

AUSTRALIAN governments will boost gross domestic product by 2 per cent and deliver society a $57 billion bonanza if they achieve the vocational training target they have agreed to, according to a Productivity Commission report to be released today.

On current trends, they are more than 80 per cent short of the target, set in 2009, which calls for the proportion of people without certificate III qualifications -- the typical level of apprenticeships -- to be halved by 2020.

The report, which analyses Council of Australian Governments reforms, estimates achieving the target would increase course completions by 1.29 million and lift GDP by 1.95 per cent.

Employment would be boosted by 1.04 per cent and labour productivity by 0.35 per cent, it says. By 2062, when 2020 graduates should have retired, income would have been boosted by $108bn, with a net social benefit of $57bn in current dollars.

But three years into the 12-year timetable, the reforms have realised just 12 per cent of the benefits, the study estimates. Most of this comes from the federal Productivity Places Program, which ends next month, with Victoria's open training system also contributing.

Policies still in train in Victoria and South Australia could deliver another 4 per cent of the expected benefits, the report says. The remaining 84 per cent will have to come from policies yet to be implemented.

COAG last month reaffirmed the 2020 targets while acknowledging them as "ambitious". All states and territories agreed to fund guaranteed training places up to certificate III level, with places available through public or private training organisations.

At present, only Victoria has such a system, but South Australia has committed to a market-based system from July and the other states have discussed similar reforms.

The report highlights woeful completion rates as a key shortcoming. It estimates that while the Victorian reforms and the PPP have meant an extra 560,000 students trained, this has resulted in only 140,000 extra qualifications. The report cites concerns about the quality of training, and urges governments to strengthen quality control through cost-effective independent validation.

Tertiary Education Minister Chris Evans highlighted the benefits of the COAG reforms, saying the report "overwhelmingly endorsed" the government's vocational training agenda.

He said beneficiaries of the reforms could expect to earn an extra $325,000 over their working lives. "Getting a certificate III or IV can change people's lives," he said. "A qualification can be the difference that enables a person to afford to buy their own home."