Big business wants a serious overhaul of higher education to give all Australians a lifelong entitlement to study university and vocational courses.
The Business Council of Australia says university and vocational education should no longer be siloed.
It wants the government to set up universal lifelong skills accounts that would let every Australian dip in and out of education throughout their working lives with fair access to both subsidies and loans regardless of whether the course is through a university or vocational provider.
It sees this as one step to rebuilding the tertiary sector as a whole and restoring a neglected vocational system, council chief executive Jennifer Westacott will tell the National Press Club in a speech on Wednesday.
At the moment, "funding is distorted, it creates the wrong incentives, and it's basically unfair," she will say.
She cites the example of nursing, where a university course attracts a $40,000 subsidy and access to more than $90,000 in income-contingent loans but a student at a vocational institution will get different subsidies depending on which state they're in and can only borrow $15,000.
"It stands to reason that students weighing up those two options would pick the heavily subsidised higher education qualification - even if they were better suited to the VET course," Ms Westacott will say.
"How is that in their interest or the public interest?"
The council wants an overhaul of the system with the starting principle that funding belongs to the learner, who should decide which provider and what course they want.
It says the future workforce is likely to need people to keep upskilling as they go rather than dropping out of jobs to obtain entire new qualifications.
The lifelong skills accounts would replace all existing subsidies and loans schemes and pool the $20 billion now spent on higher education annually.
Once someone acquired their first qualification, they could pick further subjects across the university and vocational systems to effectively assemble their own credentials.
While the accounts would have a cap to limit the budgetary burden, they could be used over a whole working life.
But Ms Westacott says until governments work out what they're going to do with the sector, not a cent more should be cut from vocational education.
"My great fear is that by the time we work out that this sector was hugely important to the economy, it will have been run down so much we have to spend billions of dollars to put it back together."
She acknowledges how tough it is to reform education.
"If we don't do reform then we're saying we're happy with not knowing how money is being spent, presiding over the decline of the VET system and for there to be tremendous confusion and the wrong incentives for young people and workers," she says.
"And are we really happy for young people to go on making the wrong choices and find themselves unable to get a job they want? I'm not."
