The State Government has announced a major reform to TAFE NSW, removing it from the contestable funding model and committing to a stable, long-term budget – a move it says will restore stability to the public training provider and save more than $80 million over four years.
Under the changes, TAFE NSW will no longer compete with private training providers for annual government funding, a practice introduced over the past decade that critics say created unnecessary bureaucracy and uncertainty. Instead, from next year, TAFE will receive direct, ongoing funding – similar to the way public schools are funded.
The government says this shift will allow TAFE to prioritise high-quality education and training delivery, while reducing administrative burdens on teachers and restoring internal capacity to develop course materials.
“TAFE NSW teachers are the best at what they do – they have the skills, professional industry experience, and knowledge to create effective learning environments that engage and support students to develop the skills needed to succeed in the workplace,” said Minister for Skills, TAFE and Tertiary Education, Steve Whan.
“It makes absolute sense that TAFE NSW draws on its incredible internal knowledge base for course development, along with the expertise of other TAFEs and industry partners, rather than rely on external companies.
“We made a commitment to remove TAFE NSW from competitive funding, and this is us delivering on that commitment. Not only will it provide a more reliable budget to support longer-term planning for educational delivery, but it will free up teachers from extra administrative tasks to focus more on what they do best.”
The reform follows a recommendation from the NSW Vocational Education and Training (VET) Review and aligns with the government’s broader $3.4 billion investment in skills and TAFE, outlined in the 2025–26 state budget.
NSW Teachers Federation Acting President Amber Flohm welcomed the move, saying it would return TAFE to its core public education role.
“The Federation welcomes the removal of TAFE NSW from contestable funding, receiving direct funding from government just as schools do,” Ms Flohm said.
“Freeing up our TAFE NSW teachers to do more of the job they love, teaching their students and preparing curriculum for them, rather than hours of administration which has no effect on their student’s skill development and education, is to be applauded.”
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