This paper argues for specific, major, institutional reforms capable of building a high-skilled internationally competitive labour force in Australia. It argues for replacing the current policy of maintaining labour underutilisation as a productivity driver, with a national system of counter-cyclical public sector employment (Job Guarantee) and skills formation infrastructure, organised on a regional basis.

The first section introduces the issue of Australia's deficient skill formation capacity. Sections 2 & 3 summarise deficits in key labour market institutions, the Job Network and the tertiary education sector. Section 4 highlights the chronic failure of the private sector to provide supervised opportunities for novices to undertake skilled work. Section 5 argues that the state has a unique responsibility to act, while section 6 proposes necessary components of an institutional framework. The conclusion addresses the political question of opposition to full employment.