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The importance of TAFE to Victoria's prosperity

The importance of TAFE to Victoria's prosperity

Victorian TAFEs are uniquely placed to position their students to take advantage of substantial disruption being caused by technological and structural changes in the economy. KPMG’s analysis found Victorian TAFEs confer a range of significant and positive social impacts, including a vital $2.9 billion contribution to the Victorian economy.


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More than ever before, Victoria’s current and future workforce need to prepare for the changing requirements of jobs. These changes will occur to both the jobs themselves, and the skill profiles within jobs. A healthy and vibrant TAFE system will be a non-negotiable, and vital, part of ensuring that Victoria has an education system that can meet the skills needs of the future.

Earlier this year, it was revealed that in 2012 TAFE had 1.2 million students enrolled nationally. By 2015 that figure had dropped to 870,000. Over the past 5 years, apprenticeships, the backbone of any functioning skilled economy, have almost halved.

As the Productivity Commission noted in 2017, the vocational education and training system has three broad aims:

  1. To deliver a productive and highly skilled workforce; to enable everyone, regardless of their background.
  2. To participate in the labour market, and contribute to Australia’s economic future.
  3. To contribute to the increasing skill levels of working Australians. 

The Productivity Commission further stated that the system must achieve these basic aims in ways that are affordable, timely, appropriate, relevant and accessible with a quality teaching and learning framework.

What is the value of TAFE?

So it is timely that the value of TAFE to Australia’s prosperity is quantified. In KPMG’s report for the Victorian TAFE Association our analysis has found Victorian TAFEs confer a range of significant and positive social impacts, and a vital contribution to the Victorian economy. The report represents the first time TAFE’s contribution to Victoria’s economic wellbeing and social fabric has been measured.

Economic contribution

Victorian TAFEs contributed $2.9 billion to Gross State Product (GSP). This means that, for every $1.00 spent by Victorian TAFEs and dual sector universities, there was a flow-through impact of $2.19 of value-added in the Victorian economy.

Equity and access

TAFEs champion and deliver equity and access to education and training. Forty per cent of students enrolled in Victoria’s TAFEs come from a low socio economic background, compared to 33 percent in private RTOs and 14 percent in Victoria’s universities. While there is an over-representation of students from low socio-economic backgrounds in TAFEs, these students complete their qualifications at a higher than average rate.

TAFEs deliver training through world-class facilities, and target their training through long-standing relationships with local employers with a focus on innovation in local communities. TAFEs also have a state-wide presence, which allows them to deliver genuine access to regional areas.

Employment and skills

Every year, TAFEs provide training that results in another 8,700 people being employed – increasing the employment rate in their student cohort from 62.2 percent prior to training to 72.5 percent after training.

In addition to new jobs, TAFEs also support both upskilling and reskilling to improve the lot of those who have been disrupted by shifting industrial demand, and provide second chances to those who failed to successfully negotiate the school system.

Industry partnerships both help companies transform and grow, and provide students with opportunities to upskill and transition into higher paying positions contributing to a lift in the overall productivity of the workforce.

Victoria’s future prosperity

The State of Victoria faces ongoing challenges to its prosperity, including rapid industry transformation, ongoing skills shortages in key growth sectors and the growing need for workforce upskilling, and broader questions about inequality and the associated implications for social cohesion.

Through their support of key student cohorts, close community engagement, industry partnerships, and industry-leading training, Victorian TAFEs have a vital role in sustaining and growing Victoria’s prosperity into the future.

©2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.

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