Nov 30, 2004

Vocational Education and Traning Funding Amendment Bill 2004: Second Reading


30 November 2004

Mr ALBANESE (Grayndler) (7.05 p.m.) —I am pleased to speak to the Vocational Education and Training Funding Amendment Bill 2004 and want to acknowledge at the outset the great privilege that I had in the previous term thanks to the decision of the then Leader of the Opposition, the member for Hotham, in appointing me shadow minister for employment services and training. The opportunity to be involved in vocational education and training took me to every state and territory, where I was able to discuss the challenges facing Australia in providing a skilled work force and also to talk first-hand to a great many Australians who were providing that vocational training in schools, in TAFEs, in private training organisations and in group training organisations.

This issue is also one that I raised continually in the last parliament. Only when the federal election was upon us were skills shortages—which had been created as a direct result of government policy—acknowledged by the government. Before then it was clear that everyone, from peak business organisations to financial journalists and the Governor of the Reserve Bank, had been talking about Australia’s emerging skills crisis and its potential to threaten future economic growth. According to Group Training Australia, there are currently national skills shortages in all key trades, including the engineering trades, all the vehicle trades, all the construction trades, all the food trades, as well as the electrical trades, electronics, printing, the wood trades, hairdressing and furniture upholstery. Service industries such as nursing, child care and teaching are also desperate for new entrants, to keep up with demand. The Australian Chamber of Commerce and Industry in its July 2004 survey of investor confidence found that for the first time in 14 years the availability of suitably qualified employees was the No. 1 constraint on future investment decisions. Specifically, 79 per cent of firms surveyed said recruiting employees with appropriate skills was a major or moderate concern.

In September the Australian Industry Group released its survey, which found that more than one in two manufacturing firms were experiencing difficulties finding the skilled workers they needed. According to the Australian Industry Group, the skills crisis was here and now. The government’s own department, in the DEWR skilled vacancy index for August, found that vacancies for tradespersons had reached the highest level since such data was collected. Unfortunately it is likely to get worse. Over the next five years 175,000 workers are expected to leave the traditional trades, with only 70,000 expected to enter.

Due to this, the Labor Party established a Senate Employment, Workplace Relations and Education Committee inquiry into skills shortages—something that was opposed by the government because they said it was not an issue. Yet the committee found that a failure to have enough skilled metal, engineering and manufacturing workers to carry out the $20 billion worth of major infrastructure and resource projects expected in the next 10 years would threaten the very viability of those projects. Indeed, it has been estimated that current skills shortages could cost Australia $9 billion in lost output over the coming decade.

The absurdity of this is that, at the same time that you have this shortage of skilled workers, you also have a significant reservoir of untapped labour. In particular, Labor identified and came up with a strategy to address the fact that 45,000 young people leave school early to go nowhere—not to go into further education, training or into a job. The Leader of the Opposition, Mark Latham, deserves a great deal of credit for being ahead of the game. As the centrepiece of his first budget reply, he announced the youth guarantee, a comprehensive approach to tackling skills shortages, addressing the needs of young people and providing them with those opportunities.

That policy is not surprising, because that is part of a proud tradition of the Labor Party. It was the Whitlam Labor government in 1973 that first provided Commonwealth financial support for apprenticeships through the establishment of the National Apprenticeship Assistance Scheme. This scheme was a landmark for apprenticeships in Australia. It marked the beginning of what has been continuous Commonwealth funding for apprenticeships and ensured that they became a national priority. It was the Hawke Labor government in the 1980s that took on the states and territories and put in place new industrial arrangements that enabled the traineeship system to be created in the first place.

It was the Keating Labor government that in 1992 got the agreement of all the states and territories to the establishment of the Australian National Training Authority. This was a statutory body which sought to overcome the inconsistencies of our federal structure and bring a national focus to the delivery of VET. But what we have seen over the last 8½ years of the Howard government is an undermining of this system, culminating in the announcement in a press release—not during the election campaign—that ANTA would be abolished from July next year. It is absolutely outrageous that nothing about this issue was mentioned or put to the Australian people prior to the election on 9 October.

But it is not surprising, because the whole structure of vocational training has been under attack. Indeed, since 1997, real funding per teaching hour has dropped by 19 per cent and the proportion of VET funding coming from the Commonwealth has fallen from 25 per cent to 22.2 per cent. So none of these arguments about the responsibility of the states stand; the Commonwealth has not been keeping up its share of the bargain. Inevitably, these cuts have undermined the quality of training that 1.72 million Australians are currently receiving from the VET sector. At a time when we most needed our federal structure to be working cooperatively, Minister Nelson went along to the ANTA negotiations last year. The states would not sign up because the offer had no growth funding in it and it had the government’s ideological industrial relations agenda attached to it, so the minister simply said, `I’ll get back to you next October after the election.’ He broke off negotiations. That is not surprising, given the decision after the election.

The agreement was supposed to commence on 1 January this year, and the government could not even get its act together to get that in place. It also could not get its act together to have an ANTA CEO, because she resigned some months ago and was replaced by a temporary appointee. We all know now why that occurred, as well. With respect to the government’s much-vaunted New Apprenticeships scheme, we know that it has become a numbers driven operation. When the government says there has been a massive growth in new apprenticeships, we know that most of that growth has been in the higher volume, higher turnover industries, as a means to subsidise wage bills, not to provide adequate training in what most Australians would see an apprenticeship as being—that is, a combination of on-the-job and off-the-job training in a profession, be it white collar or blue collar, over a number of years.

The government did announce at one stage during the election campaign—there was a leak in the Sydney Morning Herald—that skills shortages were going to spur a $725 million spree. What did we actually get? We got a tool box to fix the skills shortages. How out of touch! Obviously the government was not aware that construction, electrical, metal fabrication and other awards contain tool allowances of up to $22. If you add that up, you get an amount that is greater than $800. When I raised that with Steve Balzary, from the Australian Chamber of Commerce and Industry, he assured me that no employer out there would seek to have the tool allowance removed, even though they were having their tools provided for them. It was a very bold commitment indeed.

The government also announced an $18 million plan for an institute for trade skill excellence. This was to provide `industry endorsement of qualifications provided by private and public training providers, including TAFE, identifying excellence and the preferred providers of high-quality and industry relevant training’. That was ANTA’s job. So they announced a replacement for a national body that has been doing the job and that involves employers, unions, TAFE and the federal-state relationship. They announced its replacement in a five-page document that did not mention the name `ANTA’ once. The institute will have four shareholders: ACCI, AiG, the Business Council of Australia and the NFF. The government said: `No TAFE, no unions, no state government. We will just have a focus on one section.’ The truth is that employers and employees have an interest in a cooperative relationship when it comes to training, beyond any other policy area that you can think of.

The tragedy is that, certainly in the time that I was the shadow minister for training, I had excellent relationships not just with the trade union movement but with ACCI and the Australian Industry Group. The member for Cunningham is here. I went down to the Illawarra with her and the member for Throsby and sat down with the Illawarra business community, unions, TAFE, training providers and local schools, who all had a common interest. That is the only way that this system works. Yet it is being undermined. As part of this policy announcement the government announced an industry reference group for each key trades industry. What are skills councils for? They are only just in the process of establishing them and they announce a duplication.

As regards the proportion of the $18.3 million that is going to filter down—that is not going to ACCI and business organisations to create a bureaucracy—there are 20 awards for excellence valued at $10,000 each year, for three years. So $600,000 out of the $18.3 million is filtered down—to anybody. Awards are not a bad idea, but it is a pity that the government were not conscious of the way that the system was operating already. The government could not be bothered sending a representative to the world skills conference—a conference where 50,000 young people over three days in May this year went through the Brisbane Convention Centre. But, then again, during the campaign I spoke at the TAFE directors annual conference, a big national event. No government minister showed up; they sent along a parliamentary secretary. They could not be bothered during the election campaign to go along and talk to TAFE, the major provider of vocational education and training in this country. That is the heart of the system, and that is the reason why we were very committed to filling the gap, to providing extra TAFE places.

Then we come to the government’s plan for `technical colleges’, as they call them. They cannot say where they will be, when they will be up and running, and whether or not they will charge fees. Last year, according to the ACCER, there were 415,000 senior secondary high school students in this country; 202,000 of them were doing VET in Schools. It is happening. The member for Dobell, who refused to answer a question, outlined quite well in some of his comments what is going on, on the ground, on the Central Coast of New South Wales. What is going on with schools, be they in Gladstone, Marrickville, the Central Coast of New South Wales, Salisbury in Adelaide or Alice Springs, is that they are linking up with TAFE and local industry and providing an integrated vocational education and training system. It is occurring. Why you would come up with a gimmick, when we have a serious policy issue to confront, is beyond me.

The government senators’ report—the Liberal senators’ response, not the ALP’s response—from the Senate skills inquiry stated, on page 216:

… VET in Schools … is already active in promoting partnerships between the three education sectors, industry and the local community. There is, in any event, limitations on the Commonwealth in facilitating and promoting these partnerships which are best handled at state level.

No wonder the member for Page—who in a personal explanation today did not question the issue raised by the Deputy Leader of the Opposition—has called for the funding to go to Wollongbar TAFE, instead of having a college. I went to a TAFE college in his electorate during the election campaign, and they are providing a world-class system but they are starved of funds.

What does it say to the 202,000 young Australians who are currently engaged in VET in Schools? Indeed, as a result of a reference from the current minister, the member for Bradfield, to the House of Representatives Standing Committee on Education and Training, we had an inquiry into VET in Schools on this very issue. Did the government report say that we should do something about that? No. What it said was that we should do something about the costs, which is why Labor committed in its Youth Guarantee to paying all TAFE fees for VET in Schools students. This commitment looked after the 202,000 people rather than creating another bureaucracy that, sometime into the future at some unknown cost, might be able to have 7,000 students. It is an absurd duplication of resources. This government stands condemned for its lack of action in addressing skills shortages. Indeed, its policies have contributed to these skills shortages which seriously undermine Australia’s potential economic growth and rob Australians of the opportunity to participate in the work force.