State governments would be stripped of responsibility for funding TAFE colleges under a federal takeover of responsibilities for vocational education and training backed by the Abbott government.
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The change, unsuccessfully pushed by Paul Keating in the 1990s, would fundamentally reshape the vocational education sector and mirror the federal takeover of universities four decades ago.
Assistant Education and Training Minister Simon Birmingham, who is responsible for vocational education, signalled on Friday that the issue is at the top of the federal government's federation reform agenda.
"By placing control of all of the funding levers — the setting of fees, payment of subsidies, and lending of income-contingent loans — with one level of government, we would promote accountability in the system and could create a more effective market, driven by students rather than providers, than we've seen to date," he told a TAFE Directors Australia conference.
"A truly national system would reduce duplication of programs run by the Commonwealth and the states and ensure better targeting of emerging skills needs and specific national priorities."
Sixty per cent of businesses with more than 200 employees operate across state borders, showing the need for a federal approach, he said.
Federal and state leaders agreed at a leaders' retreat earlier this year to consider a proposal to shift responsibility for vocational education and training from the states to the Commonwealth. State governments would still have the option to run TAFE colleges.n
TAFE funding played a major role in last year's Victorian election campaign after the Baillieu government cut funding by $300 million, sending half of the state's TAFEs into the red. The NSW government has moved to make TAFEs compete with private providers for public funding.
TAFE Directors Australia has welcomed a federal takeover as a more "coherent, workable and simplified funding model".
But Australian Education Union TAFE secretary Pat Forward said a Commonwealth takeover would lead to "the destruction of the public TAFE system".
"A Commonwealth takeover of vocational education would see TAFE abandoned by a number of states and the collapse of public provision in this crucial sector of education," she said.
Labor vocational education spokeswoman Sharon Bird said she was "pretty sceptical" about the idea.
"I don't see how it resolves the sector's complexities," she said. "There is a risk of repeating many of the problems we are already dealing with — just at a federal level."
Under current arrangements, state governments have primary responsibilities for TAFEs but the Commonwealth provides some TAFE funding, offers apprenticeship incentives and operates a loans scheme for vocational students.
Funding for vocational education has risen by only 5 per cent over the past decade compared with 40 per cent for universities and 25 per cent for schools.
Kevin Rudd threatened to take control of TAFE colleges at the 2013 election if states did not fund them correctly.
