This opinion article, by Business Council of Australia Chief Executive Jennifer Westacott, was published in The Australian on 13 December 2014 under the title ‘Tertiary Revamp Must Include State Support’.

Given the failure of the Senate to pass the government’s higher education reform package and the current federation white paper process, there is an opportunity for all governments to work together to create a tertiary education system that meets the needs of 21st-century Australians.

Tertiary education is a continuum that starts with vocational education in the senior years of secondary school and extends into the VET and higher education sectors.

Access to tertiary education is the ultimate tool to enable people to become independent and prosperous. It affords them better living standards and equips them with skills to contribute to the economy and the community.

Tertiary educated people have the skills and knowledge businesses need to be competitive in an increasingly dynamic and competitive global economy. Having a tertiary qualified workforce is fast becoming a prerequisite for business success.

While a generation ago most young Australians didn’t complete secondary school, today, more than 80 per cent complete Year 12. In 1975, there were about 280,000 students at university. In 2013 there were close to a million.

We have more people enrolled in VET and higher education than ever before in our nation’s history and all governments have agreed to purse the objective of increasing the skill levels of our population. This is a significant and important policy change. We have shifted from having a tertiary education servicing 30 per cent of the population to wanting and needing one to service the majority of the population.

Over the last 40 years governments have expanded access and increased their investment. But this has not been accompanied by a systematic rethink of how we should design our tertiary system to best deliver to the majority.

This is partly because VET and higher education operate as silos. There are exceptions, and institutions that work across both sectors are growing. But they are still the minority.

Each sector has its own funding, regulatory and governance arrangements with a mixture of commonwealth and state government responsibilities. These are usually based on history rather than a coherent policy vision.

Governments have introduced reform in their own domains. The first notable reform was the introduction of the Higher Education Contributions Scheme by the Hawke government in 1989.

The Brumby government’s introduction of the Victorian Training Guarantee in 2009 was the first step in saying everyone is entitled to government support to upskill and gain a VET qualification.

South Australia followed with similar reforms and other states and territories are on their own pathways to offering an entitlement to training.

In 2012, the previous federal government brought the entitlement approach into higher education by allowing public universities to enrol as many government-funded students in bachelor degrees as they wanted.

The current government’s Higher Education Research Amendment Bill 2014 proposed opening up higher education even further by extending the entitlement to diplomas and advanced diplomas and private higher education providers.

The policy intent in all these reforms is the right one. But it is now time to undertake a comprehensive review of VET and higher education, and design a broad tertiary system with an entitlement to government support to upskilling as its centrepiece.

A broad tertiary system should be a quality and fit-for-purpose model that delivers skills development to people across all stages of their lives — ranging from literacy and numeracy through to higher-level research qualifications.

The model should also include government subsidised access for students across both VET and higher education, with a single entitlement model.

Students should make a personal contribution to their education that can be deferred. This personal contribution should reflect a person’s ability to pay in the future based on their earning capacity.

Government assistance, in the form of an income contingent loan, should be available to students to help them make their personal contribution. This would ensure people are able to participate in education regardless of their background.

Students should have choice about what they study and where they study. Extensive market information should be available about the quality and cost of delivering their training and potential labour market outcomes.

These features would deliver a tertiary sector that is dynamic and diverse, where providers focus on their strengths to differentiate and specialise. It would value research and teaching equally and deliver both vocational and academic learning in a way that is relevant to students and the jobs of the future. It would also deliver products and services that are needed on a globally competitive basis and set people up to be successful in a global marketplace.

Successive state and commonwealth governments in Australia have had the right policy intent — making tertiary education available to all Australians at whatever point in their life they need it.

It’s now time to build the system that delivers on this policy intent. The commonwealth government should bring together all governments, the Opposition and industry to work together to achieve this shared objective.

We cannot afford to squander any more opportunities for reform.