Policy making in the English-speaking world has been increasingly bedevilled by the unrealistic expansion of the meaning of "skill". In this process generic skills have emerged as of considerable importance, while the concept of lifelong learning has become a policy mantra. The current focus upon generic skills by policy makers is important and worthwhile, but serious weaknesses in understanding their nature and how to attain them is evident. Three central issues of transfer of learning, framing and classification appear not to be well understood by policy makers, with transfer of learning essential for the development of generic skills. Recent changes in thinking about transfer of learning that have occurred over approximately the last 15 years are reviewed. Australia, which has pursued issues of generic skills with some vigour, is used as an example of the inconsistencies and problems that can develop because of the failure of policy makers to understand the complexity of the issues, and the importance of transfer and effective teaching. Recommendations are made on the need for policy makers to understand learning and transfer, and reconfigure a central place for these in policy focused upon implementation and realistic outcomes.