Investment in vocational training can help attract teachers to the sector, key to addressing skills shortages, Federal Skills and Training Minister Brendan O'Connor has said.
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But the union representing teachers in the sector has warned it is hard to attract staff who can use their skills in higher-paying jobs in the industries.
Students can now enrol in more than 2500 free places at the Canberra Institute of Technology, the ACT government-run vocational education provider.
The jointly funded program is worth $16.5 million and will provide free places across 46 courses under the deal that was announced in December.
There would be about 840 fee-free places available in the care sector, about 600 in hospitality and tourism and 400 in technology and digital. About 50 construction training places will also be available.
Mr O'Connor said abolishing fees for some TAFE courses in areas of high-skill demand would attract people who might otherwise not seek out further education.
"It also is of concern to me that people might choose to take an unskilled job indefinitely rather than look to go to a course," Mr O'Connor said.
"We need to find as many ways as possible to encourage people to undertake courses that will give them the skills that will set them up throughout their working life."
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However, Australian Education Union ACT vice president Karen Noble said the sector could not currently afford to pay industry experts - particularly in the trades sector - to become teachers.
"[The pay] is not sufficient to get the expertise we need from industry to come here and make CIT the best it can be," Ms Noble, who also teaches at the Canberra Institute of Technology, said.
Ms Noble also warned fee-free TAFE places bring in a more diverse student cohort, increasing the need for support staff to work alongside teachers.
"WIth fee-free places, we will be recruiting students increasingly who are people with issues of disadvantage in life and as learners," she said.
"Certainly the AEU and I have said in a number of forums with government, both ACT and Australian, that fee-free TAFE is great, but fee-free TAFE alone is not the answer.
"We need additional support for the people who will come to us as entry-level students. ... We need additional support so that they are successful."
Mr O'Connor said the federal government understood the need to ensure there was a sufficient number of teachers to train future workers.
"I think it's more likely if you invest in the sector properly - not just wages and conditions - but if you invest in capital equipment, you are saying to teachers and trainers that they matter, their profession matters when you invest in education and training generally," he said.
Mr O'Connor said the federal government wanted to retain teachers in the sector and bring teachers back who may have left, and considering teachers' pay was part of this.
"Teachers have generic skills, that's why they can go into other parts of the labour market and no one begrudges people doing that if they're tired and they want a change," he said.
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