NSW WILL face worsening skills shortages and productivity shortfalls if the government fails to act, says a report to be published today by the Australian Council for Private Education and Training.
The council is calling for an overhaul of vocational education to quicken the pace of growth in NSW.
"For too many years NSW and much of Australia has primarily funded vocational training through large public institutions like TAFE, limiting the diversity and competition between different types of institutions," the council's chief executive, Claire Field, said.
Funding should follow students, with vocational trainers forced to compete for their cash, the report says.
Such a model would create a system "nimble enough to immediately address urgent skills shortages".
Public funding has previously been wasted trying to address predicted shortages which never eventuated.
"This lack of clarity, combined with an ageing model for vocational education training in Australia, has handicapped the training sector and has had a direct impact on the skills and capacity of the workforce," it says.
The report also recommends staff be given regular training.
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