February 2025 marks a pivotal moment for RTOs as the National Skills Plan continues its rollout after launching in September 2024. Developed as part of the National Skills Agreement, this forward-thinking strategy is designed to equip Australia’s workforce with the skills needed for the future.
With a focus on innovation, inclusivity, and industry collaboration, the plan addresses critical labour shortages and strengthens the vocational education and training (VET) system.
Here’s how the latest developments in the National Skills Plan are shaping the landscape for RTOs.
Understanding the National Skills Plan and Its 2025 Impact
The National Skills Plan is an integral part of the National Skills Agreement—a $30 billion, five-year initiative launched in January 2024. Its goal? To create a high-quality, responsive, and future-ready VET sector. By integrating government funding, industry insights, and education reform, the plan seeks to enhance cooperation between RTOs, TAFEs, businesses, and industry stakeholders.
For RTOs, the National Skills Plan isn’t just another policy update—it’s a framework for long-term success, providing additional RTO training resources, funding opportunities, and clearer compliance standards.
What This Means for Your RTO
RTOs play a crucial role in bridging skills gaps, and the National Skills Plan ensures better access to funding, regulatory updates, and industry partnerships. By aligning your training delivery with workforce demands, you can enhance student outcomes, improve compliance, and stay ahead of industry shifts.
Key Highlights of the National Skills Agreement in 2025
This year, the focus is on expanding accessibility, improving training quality, and addressing workforce priorities. Here are some of the major developments that RTOs should be aware of:
- National TAFE Network: A collaborative framework enabling TAFEs and RTOs to share resources, industry expertise, and best practices.
- First Nations Partnerships: Strengthening culturally relevant training programs to increase First Nations participation in VET.
- VET Data Transformation: Upgrading systems like the Unique Student Identifier (USI) Registry to enhance tracking of completion rates and employment outcomes.
Core Initiatives Impacting RTOs
1. Fee-Free TAFE Expands to Priority Sectors
The government has allocated $1.5 billion to continue supporting 500,000 fee-free TAFE places through 2026. While this primarily benefits TAFE students, RTOs delivering courses in high-demand fields (e.g., construction, aged care, and healthcare) will experience indirect advantages.
2. Strengthened RTO Standards (Effective July 2025)
New compliance benchmarks and training regulations will take effect in mid-2025. Staying up to date with these changes ensures that your RTO delivers high-quality, industry-aligned training.
3. Increased Funding for Underserved Communities
Diversity and accessibility remain a priority, with targeted funding for women, regional learners, and First Nations students in traditionally underrepresented fields such as tech, engineering, and construction.
How RTOs Can Align with Workforce Priorities?
The National Skills Plan has outlined eight key workforce priorities for 2025. Understanding these focus areas will help RTOs secure funding, align training packages, and enhance graduate employability.
1. Boosting Gender Equity in VET
Women remain underrepresented in key industries like STEM and construction. Programs such as Building Women’s Careers provide financial incentives to support female participation and completion rates.
2. Expanding First Nations Training Opportunities
RTOs that support First Nations learners can engage with the First Nations Partnership Committee to access targeted funding and develop culturally inclusive training.
3. Supporting the Clean Energy Transition
As Australia moves toward net-zero emissions, over 240,000 skilled workers will be needed by 2030. RTOs can position themselves as leaders in renewable energy training by expanding courses related to solar, wind, and sustainable infrastructure.
4. Strengthening Australia’s Digital Workforce
With 87% of jobs requiring digital skills, tech-focused courses remain critical. RTOs should align with industry-backed initiatives such as the Future Skills Organisation Workforce Plan to enhance digital literacy programs.
Looking Ahead: The Next Phase of the National Skills Agreement
The National Skills Agreement will continue to evolve through phased implementation and ongoing reviews of student outcomes, industry demand, and regulatory effectiveness.
For RTOs, actively engaging with industry updates, providing feedback on reforms, and leveraging data-driven insights will be key to long-term success.
How Your RTO Can Stay Competitive in 2025
With these changes in motion, now is the time to strategically align your training programs with the objectives of the National Skills Plan. Here’s how:
- Stay Ahead of Compliance Updates: Ensure your training meets the new RTO Standards coming in July 2025.
- Maximise Funding Opportunities: Identify grants and subsidies available for your organisation.
- Strengthen Industry Partnerships: Collaborate with TAFEs, businesses, and industry groups to develop more tailored and job-ready programs.
- Expand Your Reach: Focus on inclusive training models that attract women, regional learners, and First Nations students.
Conclusion
The National Skills Plan is a major investment in Australia’s workforce, with far-reaching benefits for RTOs, students, and employers alike. From fee-free training and compliance updates to workforce priorities and data reforms, the plan is setting the stage for a more agile, inclusive, and high-quality VET system. For RTOs, the key to long-term success lies in staying informed, adapting to reforms, and leveraging new opportunities.
Need help navigating these changes? Contact our team for expert advice on compliance, funding, and industry best practices.
Read the full National Skills Plan here.
