Australia's vocational education and training system has copped a fresh round of criticism with more calls to overhaul its most confusing and underperforming aspects.
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The Productivity Commission's final report into the VET sector released on Thursday found government funding should remain untied but become more accountable and transparent.
Commissioner Malcolm Roberts said reforms would improve returns on the $6.4 billion government spend each year on the sector.
"Almost half of government funding is distributed as subsidies to training providers," he said.
"These subsidies should be based on the efficient costs of delivering courses. Having hundreds of different subsidy rates is confusing and ineffective; subsidy rates should be simplified."
The commission is calling for more courses, including certificate IV qualifications, to be eligible for loans with an emphasis on courses that deliver genuine results for students.
Student fees for certificate III and above should be set a modest minimum rates with exemptions for disadvantaged people.
Prime Minister Scott Morrison flagged VET reforms last year, labelling the existing system as fundamentally flawed.
The agenda includes a better response to skill demand, streamlining course pricing and consistency between states, and better co-ordination of subsidies and loans.
The federal government has also called for more funding transparency.
The Productivity Commission report also found governments could do more to match apprentices and courses and provide support including employer incentives to boost completion rates.
A broad strategy is needed to address the two to three million Australians who lack one or more of essential language, literacy, numeracy and digital skills below year eight level.
The commission also recommended trialling new loans targeting people aged between 30 and 45 who aren't eligible for assistance across a wide range of training courses.
Commissioner Jonathan Coppel said the review's guiding principle was to strengthen the VET system's focus on meeting the needs of students and employers.
He said governments had stepped back from the National Agreement for Skills and Workforce Development's policy aspirations.
"Targets have not been met and the performance framework has not held governments to account," Mr Coppel said.
Australian Associated Press
