A greater focus will be placed on keeping apprentices in work as poor pay exacerbates already tight budgets and triggers dropouts.
Concerns over worker shortages and training gaps have led to a push from Skills Minister Brendan O'Connor to reform the system.
The centrepiece of the new tranche of reforms ahead of a landmark migration report being unveiled is a crackdown on dodgy providers who exploit international students.
A new integrity unit will be established and unscrupulous providers could face suspension, expulsion or criminal prosecution as part of a crackdown on unethical and illegal behaviour.
The unit will work with law enforcement agencies to conduct intense compliance checks on high-risk providers in a bid to improve protections for all students.
A confidential vocational education and training tip-off line will allow current and former students, staff, homestay hosts and employers of international students to report fraud.
The nation's VET regulator will also get a $37.8 million boost.
But skilled migration will continue to play a key part in plugging skills shortages with low unemployment resulting in a lack of workers to fill key positions.
The focus will need to shift from temporary to permanent migration "so they feel genuinely welcomed by the country," Mr O'Connor told the National Press Club on Monday.
"Particularly when some of the people with those skills have options to go to comparable countries."
Increasing skilled migration wasn't a binary choice between overseas and Australian workers, he added.
"I never see it as one option or the other, we need to have a very knowledgeable, skilled workforce of our own and we need to rely on skilled migration where we need to do so."
Ensuring apprenticeship completions go up is also a priority with about half dropping out of their trade.
But this needs to be balanced with fiscal responsibility instead of just throwing money at businesses, the skills minister added.
"It's not up to taxpayers to fund every form of training where the employer is benefiting from the apprentice.
"But we need to target the support so it increases the likelihood of completion."
The Australian Chamber of Commerce and Industry has called for a new subsidy scheme to strengthen the case for businesses to hire apprentices and young Australians breaking into the workforce.
"We must get the incentives right," CEO Andrew McKellar said.
Boosting apprenticeships to address shortages also needed to start at school by changing the perception VET and TAFE were somehow inferior to university.
Nine of out 10 future jobs will require tertiary education and half of that will come from the VET sector, Mr O'Connor said.
"The perception of it being a secondary option, a lesser option, is something we need to attend to.
"You're making a very good choice if you enrol in a VET sector provider where you acquire skills that are in demand ... and it's something you want to do."
The minister also pledged to work with the disability sector to increase accessibility and opportunities.
Cost barriers facing people with a disability already struggling with support payments or lower incomes needed to be addressed, he said.
