This paper traces the emergence of ‘life skills’ from being rather general and global prescriptions for educational change to specific lists of ‘skills’ that schooling, vocational and higher education should address. We focus specifically on the ‘key skills’ of the Employability Skills Framework (ESF) developed jointly by the Australian Chamber of Commerce and Industry (ACCI) and the Business Council of Australia (BCA) (ACCI & BCA, 2002). We propose a strategy for extending the definitions of the key skills to include personal, social and civic objectives. We also identify a sequence of challenges that schools and school systems must address in order to meet the requirements to develop these key skills in students, to assess achievement of them and to report achievement against them. We identify assessment as the core challenge and the further definition of these constructs as a related challenge. The credible assessment of key skills will be a driver for teaching and learning them, and will provide a sound basis for reporting achievement.