Prime Minister Kevin Rudd has demanded the states put more money into TAFE.

And if they don't, the federal government would quarantine some of the commonwealth funding to states and pay it directly to the TAFE system.

Mr Rudd told the Labor campaign launch on Sunday that TAFE was the backbone of the national training system and without the right skills, Australians would not be able to seize the job opportunities of the future.

"Which is why it is worrying to see state governments making TAFE cuts and jacking up fees," he said in Brisbane.

"We have seen this in Victoria, WA and Queensland where we see TAFEs starting to wither on the vine."

Mr Rudd said he would not stand by and continue to hand commonwealth funds to state governments to run TAFE colleges while those governments cut their own TAFE funding.

A re-elected Labor government would require state governments to maintain and increase TAFE funding.

If those conditions were not met by July 1 next year, the federal government would move to provide Commonwealth funding directly to individual TAFE colleges.

"If state governments frustrate this ambition, then from 2015 the Australian government will begin directing its own TAFE funding into a new TAFE Australia Network directly funded by the commonwealth," he said.

The commonwealth would develop individual funding relationships with each TAFE institution, which would reflect the training needs of communities and industries they served.

Crucially, that would bring commonwealth funding of universities and TAFEs into line, Mr Rudd said.

He said the commonwealth's annual funding to states and territories for skills and training amounted to $7 billion over the budget cycle.