A major weakness in the funding base for skill development in Australia arises from a declining investment in training by key stakeholders--employers. Australia is spending less on training and creating fewer high skill jobs than comparable countries and forcing individuals to take greater financial responsibility for their own development. Forces driving the trends are the changing structures of jobs and growth of so-called nonstandard forms of employment that are closely associated with declining levels of employer involvement in training. Public policy has addressed the problem in various ways. The last major initiative directed at increasing employer expenditure on skill formation was the Training Guarantee Levy in the early 1990s. It succeeded in stimulating employer expenditure, resulted in more genuine training, and encouraged managers to take training and skills development more seriously. Its major failings arose from a fixation with supply-side issues, preoccupation with training inputs, and enterprise orientation. To increase employer commitment and national productivity, Australia should institute a skills levy or similar mandatory system of employer contribution to training supplemented by individual learning accounts. Training should be coordinated by collaborative institutions comprising employers, training providers, brokers (public and private) and employee representatives. The institutions would be responsible for developing skills eco-systems on both a regional and industry basis. (Includes 49 references and a 5-page overview.) (YLB)