Sep 8, 2003

Vocational Education and Training Funding Amendment Bill 2003: Second Reading


8 September 2003

Mr ALBANESE (Grayndler) (5.56 p.m.) —In rising to speak in the debate on the Australian National Training Authority Amendment Bill 2003 today at the outset I indicate that I will be moving an amendment to the Vocational Education and Training Funding Amendment Bill 2003 along the following lines:

That all words after “That” be omitted with a view to substituting the following words:

Whilst not declining to give the bill a second reading, the House:

(1)condemns the Government for:

(a)its neglect of vocational education and training since it came to office in 1996; and

(b)making misleading statements about the future funding levels for the new Australian National Training Authority (ANTA) agreement; and

(2)calls on the Government to amend the Bill to provide appropriate funding levels for the new ANTA agreement and to provide funds for 20,000 additional TAFE places.

On budget night of this year the Minister for Education, Science and Training, Brendan Nelson, released a fabulous looking budget kit that was far slicker than any other portfolio package. In fact, through Senate estimates, we have found that the kit alone cost some $76,416. The minister had spent up big on the packaging in the hope that he could distract attention from the actual content of the kit. Part of this slick kit was the minister’s media release stating that he had written to the states and territories offering them an additional $218.7 million for the new ANTA agreement for 2004-06. It created a buzz of excitement. Finally it seemed that after years of lobbying and difficult times the desperate pleas of the ALP, state and territory ministers, the education union and the students had been heard.

After all, the vocational education and training sector is in desperate trouble. Despite promising results in the early 1990s, the funding cuts by the Howard government have hit hard. The budgets of 1996 and 1997 not only reneged on the commitment to growth but also imposed a cumulative reduction of $240 million in Commonwealth funding for vocational education and training. These cuts came at a time when the number of students participating in vocational education and training courses across Australia had been growing by an average of 5.9 per cent per annum to more than 1.75 million students. Ten years ago there were fewer than one million students.

But it turns out that $76,416 can buy you a lot of smoke and mirrors, because that is about all that the new funding announced on budget night was about. Let us be absolutely clear: the government has not provided one cent of additional growth funding for 2004-06. The government is offering to maintain 2003 growth funds of $100 million over the next three years and to index that figure. Of course, indexation merely covers increased costs and does not deliver a single cent for a new place. The other $119 million in the so-called offer is a part of welfare reform already announced in past budgets. That is why when you go to the budget papers `future expenditure’ shows zero, zero, zero and zero.

On top of this, in the 1998-2000 ANTA agreement the Howard government did not give one extra cent. This means that the Howard government has not given one extra cent for TAFE in six out of the nine years it has been negotiating ANTA agreements, despite the record growth. This means there is no new funding offered to resource new enrolment growth that will occur during the life of the proposed agreement. Sadly, the fact that the government has tried to pretend that there was new money when there was not should come as no surprise, because this government has form when it comes to telling the truth about anything. The minister has many nicknames. Some call him Braveheart. Others on this side of the House call him Comrade, in affectionate memory of his days as a Labor activist not that long ago. But perhaps we should call him Big Brother. Like Big Brother in 1984, who tried to convince us that two plus two equals five, this minister has tried to convince us that zero, plus zero, plus zero, plus zero equals $218 million.

The other issue of major concern is that, in order to receive this stagnant funding, the Commonwealth is demanding an expansion of user choice. Make no mistake—this is just another part of the government’s agenda to privatise the education system. Without any real increase in funding, this will result in pulling dedicated funding out of TAFE. The Commonwealth proposes a series of targets, but it is not willing to ensure that the funding is available for the targets to be met. Australia’s training needs have changed. Gone are the days when we could afford to educate just some of our people once, at the start of their lives, and expect them to use the same knowledge and skill throughout their lives. Today we need to educate all of our people continuously if we are to maximise their potential and that of the nation. Australia needs nothing short of a revolution in our education and training system if we are to become all that we can be. We need to create a world leading system of lifelong learning, to create wealth and end the scourge of unemployment that blights so many of our nation’s suburbs. In particular, it is worth remembering that, while people who have nothing more than a basic education make up one-third of the work force, they comprise more than half of those who are unemployed. Vocational education and training is the key to changing that.

As well as containing real growth money, the Vocational Education and Training Funding Amendment Bill 2003 and the Australian National Training Authority Amendment Bill 2003 should have taken action in a number of areas. Firstly, they should have rebalanced the incentive scheme to ensure that real training effort was rewarded. At the moment, there is a bias against apprenticeship training. The AQF and AQTF systems need to be reviewed. We need, and these bills should have provided for, a pathway to a truly national training system with agreed standards across all jurisdictions. We need to give the AQF rigour and integrity. Why not, for example, give consideration to completion bonuses for apprentices? Why not give consideration to ensuring that there are caps, as a percentage, on the number of employees who can be classified as trainees in any particular company? Why not acknowledge that some companies—private providers—are essentially effectively becoming second tier public providers? They get no money from the private sector and rely completely upon public funds. Why not restructure the system to ensure that there is increased incentive for longer term traineeships and apprenticeships?

These issues are not academic. In my speech today I want to give a number of real examples of where mistakes are occurring. The first example that I have been approached about comes from an apprentice plasterer. This apprentice plasterer worked for a company called T&A Ceilings. He was retrenched on 8 July, after the company went into liquidation. It has been revealed that this plasterer was not actually attending a traditional TAFE college. His training was being delivered by a private provider, Murray Mallee Training Company. The first concern is that, unlike other apprentices who were working for the company and attending a TAFE college for five days every five weeks, he was receiving only two hours of direct student-teacher contact every six weeks. A representative of the Murray Mallee Training Company would visit the work site and discuss the last module that had been issued. He would then be issued with between one and four modules according to their thickness, to be completed during the next six weeks. This particular apprentice found that the theory content to most modules was pretty easy to complete, because the answers were at the back of the modules that he was given by this company. All the rest of this apprentice’s theory was completed at home during his own time.

There was no on-site practical component to each module. To verify the apprentice’s practical component, the instructor from this company would come and take photos of the apprentice working during the six-weekly visits. The Murray Mallee Training Company was also the New Apprenticeships centre that signed up this apprentice and his employer to the training contract. It was at the signing of the training contract that the employer was introduced to this new style of apprenticeship training. This is not a one-off. This is occurring right around Australia. The real problem as well is that pressure is now placed upon TAFE to actually compete with this. So we are seeing more and more practical examples on the ground of individuals essentially being ripped off and, indeed, taxpayer funds being ripped off. In the longer term, the Australian economy is being ripped off because proper training is not occurring.

But there are other issues as well. We need to make sure that there are targeted training initiatives for the existing work force, and we need to draw a distinction between new training for new entrants into the work force and training of existing workers. That is a critical distinction that needs to be made in policy terms. I want to give a second example, this time of an existing worker. It refers to a company called DEC Painting—once again the company is in Victoria. The CFMEU received a telephone call requesting that they come and talk to one of their members, and it turned out that one of the painters was concerned about a training contract that he was requested to sign. The training in question was to qualify for certificate III in general construction: apprenticeship painting and decorating, which is a four-year apprenticeship. During the conversation, it was revealed that up to 20 workers from the company had signed these training contracts and that a majority of these workers had been working in the industry as painters for 20 years or more. Among the tasks being offered were teaching modules on `applying paint to walls using rollers.’ These were people who had worked in the industry for many years!

But many of them were happy enough to sign up. It did not result in decreased wages to them. But what did matter is that it then attracted a Commonwealth subsidy. That is what is occurring and that is one of the things that is allowing Braveheart over here, the minister, to come in and beat up his comments and talk up the figures all the time, telling us about how many people are in new apprenticeships. These are the sorts of rorts that are beefing those figures up. For people who are existing workers what should be given is a recognition of prior learning towards the trade papers, but this process is undermined because there is a government subsidy of around $4,000 for each person involved.

So we have new entrants being exploited within the system and we have problems with existing workers and training. We also need to consider the VET in schools program. Currently the House of Representatives Standing Committee on Education and Training is undertaking an inquiry into the effectiveness of VET in schools. There are many good programs and many good people out there providing quality VET in schools programs, but there needs to be, surely, a national approach towards VET in schools. This must link it to future skills needs and job opportunities and consider matters such as teacher training issues and people teaching VET courses in schools without any industry experience. Indeed, there is a need for a national approach on all these issues, in cooperation with the states. Instead all we have is more buck-passing—just like in health—despite the states indicating their willingness to form a productive partnership.

It is yet another lost opportunity. How long can we afford to keep missing these opportunities, especially when our competitors—like Singapore, Hong Kong and the European Community—are taking education so seriously? The failure of this bill to come up with a real agenda to improve access to VET is symptomatic of the minister’s whole approach to education. We know the minister’s sole source of inspiration is the United States. All the minister is interested in is creating a handful of Harvards, Yales and Princetons, to give advantage to the graduates of our category 1 private schools. He thinks that pipedreams will solve all of our nation’s educational needs. He is wrong. We all admire the quality of America’s elite universities, but we have to get over this fixation with copying the US system. We need a system that suits our needs and is based on our values—values like equal opportunity and a fair go.

I want to draw members’ attention to an important article by UK economist Will Hutton in the 1 September edition of the US magazine The Nation. Hutton argues persuasively that the recent explosion in fees in the US university sector and the comparative decline of its vocational education system is destroying the American dream of social mobility and undermining the principle of success based on talent. At private universities fees alone cost around $A30,000 per year and at state universities they are about $A12,000. Scholarships are not keeping pace. The very poor are not getting in and their lifelines, the community colleges—which are the equivalent of our TAFEs—are being run down. Higher education is again becoming increasingly class based and stratified. It benefits the sons and daughters of the lucky few but not the nation as a whole.

As Hutton says, a new aristocracy, armed with passports from the elite universities, is emerging, and it is closing off opportunities for everyone else. This appears to be the type of education that this minister cares about and wants for Australia. Well, it is not the sort of education or country that I want. Instead, I want a system where the education you get is based upon your ability and not your ability to pay. A nation with as large a population as the US can perhaps get away for a short time with educating the lucky few; Australia certainly cannot. We need a different model—one that not only improves the skills base of the whole community rather than just benefiting those from privileged families but also ensures that there are genuine entry level training opportunities for young people, disadvantaged groups and people seeking to re-enter the work force. We need a model that takes the Western Sydney Institute as seriously as the University of Sydney and a trainee car mechanic as seriously as a medical student. We need to focus not only on young people but also on older Australians who are currently in or out of work. We need to, as the ACTU has suggested, target training initiatives for the existing work force through the introduction of a new workplace development training fund focused on developing skills information about targeted industries, industry sectors and enterprises.

Australia and Australians have had seven years of rhetoric from this government on the importance of education and training, but absolutely nothing else. This total lack of care and vision has led to many businesses and organisations speaking out against the government’s current approach. In its submission to the Senate’s skills inquiry, the Australian Industry Group reported that over half the businesses surveyed face skills shortages. To try to jolt the government into action the ACCI publicly revealed the results of their members survey, which indicated the availability of qualified labour is rated as the second most serious constraint on investment—after taxes.

In Australia we are currently experiencing a crisis in skills. We have industries, services, businesses and communities crying out for skilled staff, including nurses, aged care workers, childcare workers, hairdressers, plumbers, builders and mechanics—to name just a few. This is just crazy for a country like Australia, particularly as we have such a high youth unemployment rate. The skills crisis is a direct result of the Howard government’s policies. It is living proof of the government’s lack of vision and shows just what a negative impact their policies are having on all of us.

The driver of this policy is the government’s desire to go for short-term, cheap options rather than take a strategic approach that would deliver long-term economic and social benefits. Under this government, the nation’s training dollar is not being targeted towards addressing acute skills shortages in the economy or towards providing young Australians with the skills that will improve their long-term career prospects. A startling indication of the scheme’s inadequacy is the consistently high non-completion rate among trainees. For every two people who commence a traineeship or apprenticeship, someone drops out. This means that the government is paying double.

On top of this drop-out figure, between 20 and 30 per cent of those undertaking traineeships are receiving inadequate training. I have a document, which I will seek leave to table, which is an example of one of the reasons why this is the case. It is an advertisement which says:

How many of your staff attract a $4,400 government grant? Train your staff and make money at the same time. The government is currently giving grants of up to $4,400 to $5,400 per employee to employers and providing national accredited qualifications—

and then it goes into big letters—

ON THE JOB. This is available for all staff, regardless of how long they have worked for your company.

Here we have companies advertising that they can rort the government and pick up a fee of $4,400 for doing nothing. If the government spends money on that, it is $4,400 that cannot go into proper training. I seek leave to table this document.

Leave granted.

Mr ALBANESE —In a study undertaken by Mark Cully from the National Institute of Labour Studies and Richard Curtin from Curtin Consulting, it is revealed that 47 per cent—almost half—of those who did not complete their apprenticeship or traineeship did not complete it because they felt that they were `being used as cheap labour’. A further indication that the government is simply not interested in quality training is the fact that the minister rarely mentions a word about the critical need to improve the checks and balances on the use of the apprenticeship and traineeship systems. This is despite the problems that have been publicly documented in the media. The minister believes he can just blame the states and territories.

A great example of this was the company Broadscope in Victoria. This company picked up some $18 million in federal government funds. Under the scheme, $6,700 is available. The training company got $4,510 per worker, and the client company got $2,200 for female employees and $1,100 for male employees. What did the company have to do? What training did they have to provide for this? They had to do 2½ days of training a year. One IT firm—set up by a couple of spivs who probably went to the same schools as the front bench members over there—picked up $18 million in federal government funding.

The minister did not do anything about it. The Victorian government intervened and is taking action, but these are federal government funds and this is the direct result of an abuse of federal government policy. It is a rort—just like the many other rorts that exist in this system. But the minister never talks about them; he just mentions these figures as if proper training were being provided throughout. The fact is that more scrutiny is required by governments of how and where employer incentives are being paid. Incentives should be designed to encourage greater levels of training effort and should increase more sharply with the levels of qualifications undertaken, as well as for longer term traineeships and apprenticeships.

Under the Howard government, training effort is now largely being driven by access to training dollars instead of by skills development needs. This is absurd. It is not good for the workers, it is not good for the companies and it is not good for our nation. The problem is that the future under the Howard-Costello government is very bleak. In the weeks leading up to the last budget, the minister was going around telling people that this year’s budget was going to be focused on universities but next year the focus was going to be on TAFE and VET. We all know what his focus on universities means: fewer places for people who study hard and earn the marks and more places for people who can afford to buy their way in. I do not know where his focus on TAFE and VET will lead, but I know it will not lead to greater public investment, it will not recognise the current skills crisis and it will not improve access. Only a few weeks ago, the minister stood in this very House and said:

Vocational education and training underpins the competitiveness of our industries and supports Australia’s economic and social development.

That is a grand and true statement but, in the end, it is just an empty line, because the 2001 ANTA funding agreement provided about one-third of what the state and territory ministers said they needed in 2001 and this year’s budget papers show no real increase.

In their letter of response to the minister’s offer, the state and territory training ministers wrote back and said:

We note your offer of $220 million for the period of the next Agreement and the objectives you wish to see included. While agreeing with you on some of the objectives which should be contained in the next Agreement, the fact that your proposal contains no new funding is a matter of considerable concern.

Once again we have a stand-off. The annual agreement has not been signed—just like the other Commonwealth-state agreements—and the government is placing pressure on the states and territories rather than sitting down and working out what would be good, decent policy.

Currently ANTA is working on a national strategy for 2004 to 2010, entitled Shaping our Future, which has been endorsed in principle by the relevant state and federal ministers. I believe Shaping our Future is off to a good start and provides the right sort of framework for actually being able to ensure Australians have access to world-class skills and knowledge. But I am concerned that the words on the page will not actually turn into an action plan that is implemented. This is a government that is notorious for commissioning reports, setting up task forces and establishing expert groups, but nothing actually happens. The ANTA board needs to be the primary driver in this regard and that is why it is in everyone’s interests to get the right people on the board. We need to make sure that the ANTA board has a good mix of skills, background and experience. I welcome the expansion of the board from seven to nine members and I look forward with great interest to seeing what impact it actually has on achieving outcomes.

The amendment that I have foreshadowed also refers to the need to provide funds for 20,000 additional TAFE places. Last year some 15,000 school leavers who were eligible missed out on TAFE simply because the funding was not there. When we move this amendment we will be giving the government the opportunity to adopt good Labor policy and to adopt the 20,000 places. I am sure that, if they are fair dinkum about the minister’s rhetoric, they will do that, because these 20,000 places would mean more Australians, particularly young people, would get the skills and training they need for a decent job and a bright future.

At a time when Australia’s youth unemployment is stuck at over 20 per cent, we need a plan to break that cycle of unemployment and poverty. We also need a plan to address the skills shortages which are there. Skills growth as a driver of productivity has dropped 75 per cent in the last decade. The Productivity Commission has found that to maintain and raise current living standards more Australians must attain higher skill levels. That is what this debate is about today and that is why Labor announced, as the first segment of our Aim Higher policy, 20,000 new TAFE places. We recognise that it is good for the individuals who go through TAFE to get those skills but that it is also necessary for the economic future of this nation. We can either be a high-skill, high-wage growth economy or we can go down the competition road to the bottom—that is, we can go for trying to compete with our neighbours in terms of low wages and low skills, and we all know what that would mean.

Our policy will cost $88.5 million if they agree to this amendment. That is a minor cost compared with the cost to this nation of not doing it. We need to invest in skills and jobs for young Australians. We can even tell the government how to fund it: just take away the tax break that foreign executives were given in the budget. It is a matter of priorities, and the government should prioritise TAFE.

I believe that in the next period we need to really go after these issues. The Dusseldorp Skills Forum have estimated that 80,000 young people will leave school and risk long-term unemployment. They estimate that if you spent $2.3 billion over five years you would have an economic benefit of $8.2 billion by 2050. Surely investing in the potential of our individuals and investing in our nation is something that should be supported. We have a minister who is good on rhetoric but bad on action. Voting for this amendment gives him a chance to show that he is fair dinkum. (Time expired)