Lifting the skills of women, culturally diverse communities and Indigenous Australians will be key to a $12.6 billion training deal struck between the Commonwealth and states.

Prime Minister Anthony Albanese met with the premiers and chief ministers for a national cabinet meeting on Monday to approve the five-year agreement, which starts in January.

The funding comes on top of $414 million already committed for the delivery of 300,000 fee-free TAFE places from 2024.

“The national skills agreement is consistent with so much of what my government does – bringing people together from all over the country to address the common challenges faced by all of us,” Mr Albanese said.

“We need to train Australians for the jobs of today as well as the jobs of tomorrow.”

Skills and Training Minister Brendan O’Connor said for too long the TAFE sector had been underfunded.

“A high-performing and world-class VET sector is crucial for achieving a fairer society and a stronger economy,” he said.

Skills ministers have been asked to prioritise gender equality and women’s economic participation and closing the gap for First Nations people.

As well they will seek to ensure more opportunities for young people, mature age Australians, people from culturally and linguistically diverse communities, people with disability and regional and remote learners.

Mr O’Connor said one of the challenges in delivering the agreement would be ensuring people have the foundational skills – such as reading, numeracy and digital literacy – to take on training.

While one in five Australians had foundational skill issues, the figure was closer to two in five among regional Indigenous communities and three in five in remote areas, he said.

“What we found is … when the community is directly involved in delivering programs you see much better outcomes, so we’re going to make sure we listen to them,” he said.

The agreement includes $2.4 billion in flexible funding to support state and territory skills sectors in the booming areas of clean energy and net zero transformation of the economy, advanced manufacturing skills, digital technology, national security, food security, construction and care and support services.

Up to an extra $1.3 billion will be provided for TAFE centres of excellence, improving the TAFE workforce, closing the gap initiatives, foundational skills and women’s programs.

Mr O’Connor said improving the quality of public and private sector training programs would also be a focus for the government.

“We’re working on removing any low quality, sub-standard providers,” he said.

“There are a small number relative to the amount of very good providers.”

Business Council chief executive Bran Black said the additional $142 million for foundational skills was something long advocated by employers.

Mr Black also welcomed the Indigenous funding, which would sit alongside the $25 million in education support being spent by council members.

ACTU secretary Sally McManus said the agreement would be a “game changer for millions of working people and their kids”.

Tess Ikonomou and Paul Osborne
(Australian Associated Press)