He said the initiative would make it free for 200,000 disadvantaged young people to go to TAFE and other vocational education and training providers.

The initiative included an agreement between the government a peak employer and industry groups to encourage local businesses to employ more apprentices, while contractors would be required to employ a minimum number of apprentices on every NSW government project worth more than $100 million, Mr Grant said.

Public school students studying a vocational education and training course for their HSC would also benefit from a $27 million program to provide on-the-job training, Mr Grant said.

He said the package built on a record investment in vocational education and training that included $2.3 billion in spending on vocational education and training in 2014/15, an 11 per cent increase compared with the last Labor government, more than 60,000 additional training places in 2015 as a result of the NSW government's Smart and Skilled reforms and $1.86 billion for TAFE NSW to deliver training across the state.

But if Labor won government in March it would abolish the Smart and Skilled "privatisation" program, reverse TAFE fee hikes, guarantee funding to TAFE by capping the amount of public funds that could be contestable by private operators at 30 per cent and commission "a landmark review of education and training in NSW after year 10", according to Labor candidate for Dubbo Stephen Lawrence.

He said thousands of students had headed back to TAFE this week to "a nasty surprise" in the form of massive increases to course fees.

Government reforms had seen courses cut and staff sacked, with local people forced to take "hefty loans" to complete courses or not go back to TAFE at all, he said.

Meanwhile Reskilling NSW did not make up for damage that had already been done to TAFE and to educational opportunities for disadvantaged groups and second-chance learners, according to the Greens.

Greens NSW MP John Kaye feared the package did little for TAFE but gave dodgy private operators opportunities to "harvest public funds for almost no training outcomes".

"While concession-eligible students should be exempt from TAFE fees, allowing scholarships to be redeemed at private providers will inevitably open the system up to the same sort of abuse that is bringing down the federal government's income contingent loan scheme," Mr Kaye said.

"Private providers will be able to recruit eligible students from social housing, collect their fee waivers and the government subsidy and provide no training.

NSW Teachers Federation President, Maurie Mulheron said the Reskilling NSW announcement was an attempt to divert attention from the government's Smart and Skilled policy to privatise TAFE, which he believed would take public money out of the TAFE system and hand it over to private, for-profit companies.

"This is occurring at a time when the Baird government has already cut TAFE funding, slashed courses, sacked teaching and support staff, and increased student fees," he said.

"While removing the barrier of the concession fee of $240 for disadvantaged students is a positive move for some young people, the government's Smart and Skilled policy places significant financial barriers in front of the majority who need to access TAFE to retrain or upgrade their skills."