A STATEWIDE review of TAFE has deemed three institutes too "subscale" to compete in the market, but North Coast TAFE has escaped immediate threat.
The Boston Consulting Group's report into the vocational education and training provider found TAFE repeatedly fell short of private competitors when it came to value for money.
Riverina, New England and Western NSW institutes all fell below the assessors' bare minimum enrolment-to-revenue ratio.
North Coast TAFE just made the cut, although the report warned: "Some will not be sustainable in their market segment even though they exceed these bare minimums."
There was a slight catch.
The only two private training providers the report listed for comparison were NAVITAS and the Australian Careers Network, the latter of which was subject to police raids just last week.
The Australian Competition and Consumer Commission has launched action against ACN, accusing it of taking advantage of intellectually disabled students and people in indigenous communities by signing them up to thousands of dollars of debt.
There are also accusations the provider knowingly enrolled students with no access to the internet to online courses.
About 15,000 ACN students were left in the lurch when ACN went into administration.
The report found ACN was 224% more efficient at using its physical assets than TAFE.
The figures showed North Coast TAFE was spread over 18 sites with 209 separate buildings.
There are almost 1900 TAFE buildings across 168 sites in NSW, with a total asset replacement cost of $4.7 billion.
The report also found NSW TAFE's operating costs were up to 60% higher than other areas of Australia.
"TAFE NSW has become an expensive, high cost system where 40-60 cents in each dollar spent on TAFE is going towards administration and backroom costs, not on frontline teaching," Skills Minister John Barilaro said.
"The current system is failing students, failing industry, and failing to meet the demands of employers to create the workforce for the jobs of tomorrow."
Mr Barilaro said TAFE needed a technological shake-up if it was to continue to compete.
"The TAFE of today was set up in 1993 when workplace and student expectations were very different," he said.
"Back then, TAFE NSW was very heavily focused on face-to-face, on-campus teaching; distance was an overriding factor affecting how and where students studied, and institutes tailored their courses to the economy of their local community.
"We are now facing a future where even the most traditional jobs - carpentry, joinery and plumbing - have undergone significant changes in technology, and we need a TAFE NSW which is set up for the jobs of the future - in science, technology and engineering."
NSW Teachers Federation president Maurie Mulheron said the government followed up the "flawed" report's release by cancelling enterprise bargaining negotiations with the group.
"Mr Barilaro's attempts to talk down the TAFE system in the media using a report by Boston Consulting has been revealed as a strategy to begin what we fear is yet another attack on the TAFE system as well as TAFE teachers' salaries and working conditions," he said.
"We are calling on teachers to vote 'No' and reject this attack on their salaries, their conditions and ultimately the TAFE system." -ARM NEWSDESK