At a time when unemployment is rising in the Illawarra, TAFE fees are rising, enrolments are dropping and retrenched workers are finding it more to difficult to access courses to retrain.

Last week's state budget revealed 83,000 fewer students enrolled in TAFE in 2015 than 2012 and 2500 TAFE staff have lost their jobs in that period.

TAFE fee rises meant some courses were costing thousands more and were beyond the reach of many people, some of whom needed to learn new skills because of redundancies.

NSW Teachers Federation organiser for Illawarra TAFE Rob Long said the NSW government's Smart and Skilled reforms were by design "planned to increase student fees, increase student debt and reduce the provision of public education".

"They [the government] are not even pretending that's not the case," Mr Long said.

"Everything that's happening [with TAFE] shouldn't really be a surprise to the government."

Mr Long said the government's agenda was to privatise vocational education and training (VET), with more profitable courses prioritised, not community needs.

The federation believed the state government had stripped $700 million out of VET in the last four years, while the federal government did not want to fund TAFE.

Mr Long teaches students for the Diploma of Tourism and Hospitality. Full fees last year cost $1500 - this year they had risen to $8000.

"I just heard at work that there was a carpenter, who had an injury at work and wasn't able to be a carpenter any more," Mr Long said.

"He went to TAFE to try and get retrained and because he's already got a qualification higher than the one he's enrolled in, they wanted to charge an injured worker full fees.

"There could have been some negotiation but that's their first reaction that they've got to charge someone like that. That's the heartless, lacking in compassion policy the government's put into place," Mr Long said.

He said he was worried about the BlueScope Steel workers losing their jobs.

People without qualifications who wanted to do a Certificate III course would pay lower fees, but most steel workers already had Certificate III or higher and if they wanted to retrain, they would have to pay full commercial fees of up to $15,000, Mr Long said.

NSW Skills Minister John Barilaro told Fairfax Media that the efficiencies under the Smart and Skilled program were necessary.

"I have an obligation to make TAFE viable and sustainable in the long term."

Meantime, the Dapto TAFE campus has become a ghost town, with almost no students.

A Foundation Skills program for semester 1 was not running due to insufficient numbers, although a Certificate I Access to Skills for Work and Training (Basic Computers) was running.

Mr Long said the federation would campaign to stop Dapto campus's closure.

The Federal Opposition says it will back TAFE by guaranteeing a portion of government VET funding is dedicated to TAFE.

Mr Long said he wanted the ALP to go further and provide more funding details.