Launceston's Alanvale TasTAFE campus will transform into a health Centre for Excellence under a plan announced by the Liberals.
Under a re-elected Gutwein government, the party has pledged $10 million to revitalise and refurbish the Alanvale campus.
The funds are in addition to a $4 million campus upgrade already underway at the school, which was announced in 2019.
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Incumbent Member for Bass Sarah Courtney said the Centre for Excellence model would be the same as the Water and Trades Centre for Excellence already built at TasTAFE's Clarence campus.
"We want to deliver services ASAP ... and we know that organisations like City Mission are already delivering them," she said.
"So we want to support that industry with modern infrastructure."
The Centre for Excellence at Alanvale will include $5 million to expand the health hub at the campus to train students on mental health, youth and alcohol, and other drugs training.
It will complement the existing nursing, and aged care wing recently redeveloped and opened for students.
Ms Courtney said it would deliver modern facilities that are up to industry standard. Still, the government would develop the hub's courses through consultation with the allied health sector and other community stakeholders if the Liberals are re-elected.
The investment in Alanvale is part of a broader $45 million investment into TasTAFE infrastructure statewide.
City Mission chief executive Stephen Brown said there was consistent demand for allied health workers who specialise in mental health and alcohol and other drugs.
"As the provider that operates the majority of the residential beds in Tasmania, we are finding that we need a steady stream of staff, but they are hard to find," he said.
Demand for beds at Missiondale, City Mission's Northern-based centre for drug and alcohol recovery, was at capacity, he said.
"About 90 per cent of the beds at Missiondale are filled and there is significant demand," he said.
Carers for these programs require a specific type of person, and Mr Brown said if TasTAFE could offer a course for Tasmania's young people, it would provide a skilled local workforce.
Due to the demand, we are filling the gap with people from interstate, who are moving to Tasmania because of the state's popularity. Still, we would love to attract Tasmanians."
The Liberals announced its $98.5 million policy to transform TasTAFE on Monday, following the Premier's Economic and Social Recovery Council's report.
PESRAC recommended TasTAFE be transformed into a government business enterprise to help it become more responsive to Tasmania's skills needs than it currently is.
The Labor party has not released its entire plan for TasTAFE but has previously announced a free TAFE policy that would cost $10 million.
It has also pledged $22.5 million to grow the TAFE teaching workforce by 20 per cent and a further $40 million to help provide free training in areas of critical skills shortages.
Eighty scholarships will also be available for people from the industry to become qualified TAFE teachers.