The Business Council of Australia (BCA) has released a 68 page proposal "Future-Proof: Protecting Australians Through Education and Skills" (October, 2017). This proposes putting the funding of Vocational Education and Training (VET) on an equal footing to university, to address the decline in the vocational sector. BCA point out that university programs attract more government funding and subsidized student loans than for VET. BCA suggest a "Lifelong Skills Account" for each student which can be used for VET and HE programs, in place of existing loans and subsidies. Also information on jobs and salaries are suggested to help students select courses.
These proposals are worth consideration. However, untangling the current web of state and federal responsibilities for education is not going to be easy. Also the unintended consequences of policies that assume students act in their own long term interests and education providers act ethically, need to be considered. Richard Thaler recently won a Nobel Prize for work on behavioral economics. Perhaps some simple, quick, low risk, small scale "nudge" policies could help achieve reform.
Some simple reforms would be regulations and financial incentives for universities to provide credit to students for courses done at other universities and vocational institutions. At present university will offer such credit, but after the student enrolls, they find that the amount of credit they actually get is very implied. Another reform would be to encourage universities to offer nested qualifications, so a student who has to withdraw after years of study is left with nothing but a debt.