Scott Morrison is willing to stump up more money to give Australians the skills they’ll need as the economy recovers – but only if the flawed training system is overhauled.

The prime minister says the partnership between the states and the Commonwealth isn’t working effectively at the moment and ultimately Australians looking for jobs are the losers.

Overhauling the skills system is a key plank of his government’s plan for the coronavirus economic recovery.

“We need Australians better trained for the jobs businesses are looking to create,” he told the National Press Club on Tuesday.

Under Mr Morrison’s plan, funding would be more closely linked to skill gaps based on what businesses need.

Industry will be given greater power to shape training needs, with pilot schemes across human services, digital technologies and mining used as examples for other sectors.

The human services trial was used to rapidly develop extra training for aged care and disability support workers to respond to the COVID-19 pandemic.

Mr Morrison made the case to ditch a “clunky and unresponsive” system in favour of more consistency across states and greater transparency around spending.

“There is a partnership between the Commonwealth and the states in supporting and delivering these services … but I wouldn’t say it’s a very effective partnership at the moment,” he said.

“I don’t think money’s the only problem here, but you’re not going to invest money in a dud system.”

He was critical of $1.5 billion in untied funding handed to the states each year “with no end date and no questions asked”.

And while the federal contribution was mandated, there was nothing to stop the states cutting their portion.

The JobMaker plan for skills builds on work in train since November.

Subsidies, loans and other funding would be based on the scope for return on investment.

There would also be greater consistency between the vocational education and training, and higher education sectors.

The National Skills Commission will provide detailed labour market analysis and other up-to-date data in a bid to identify emerging skills shortages.

Labor has accused the coalition government of talking big on skills while taking vocational education funding backwards since it took office.

But those within the training sector said a move to simplify a frustrating system was welcome.

The National Apprentice Employment Network says inconsistencies in funding and the level of qualifications means employers cannot develop truly national plans to develop their workforce.

Mr Morrison also rejected calls for government to play a major role in recovery over a longer period of time

“At some point, you’ve got to get your economy out of ICU,” he said.

“You’ve got to get it off the medication before it becomes too accustomed to it.”

Deputy opposition leader Richard Marles said the economy had been unhealthy well before the pandemic.

“The truth is that the Australian economy barely had a heartbeat before we got into the COVID crisis,” he told reporters in Canberra.

“Scott Morrison was presiding over an economy in which he had doubled the debt. He was presiding over an economy which had anaemic growth, where underemployment was rife, where we were seeing record-low wage growth.”