Australia’s tertiary education system should place greater emphasis on recognising the skills and capabilities people possess, rather than relying solely on qualifications as signals of workforce readiness. This paper argues that a stronger focus on skills is essential as the labour market adapts to major changes including artificial intelligence, digital transformation, population ageing and the transition to a net-zero economy.

The paper examines how stronger connections between skills and qualifications can improve learner mobility, workforce participation and productivity. It makes the case for a tertiary education system that recognises and values both, while creating clearer pathways for individuals to develop, demonstrate and use capability throughout their lives.

The paper outlines a set of system-level reforms to improve how skills are described, recognised and transferred. These include:

• developing a shared skills language through the National Skills Taxonomy
• improving the visibility of skills alongside qualifications
• strengthening recognition of prior learning and experience
• expanding multidirectional credit transfer across the tertiary system.