CHAIR —As part of its inquiry into current and future skills needs, the Senate Employment, Workplace Relations and Education References Committee is conducting a series of roundtable meetings in different parts of the country with people involved in various ways with identifying and responding to the skills needs of industries, communities and individuals. The committee is also holding more formal public hearings with those that have made submissions to the inquiry. The committee wishes to have the opportunity to discuss or explore views on current skill formation policies and programs and suggestions for change with those representing the diversity of interests and viewpoints in the community. The purpose of these roundtable discussions is to allow the committee to consult with a broader range of people than is possible through the more formal hearing process, including those who do not wish to make formal submissions.

We are pleased to be in Launceston to learn from people in this region about their current and future skill needs and their suggestions for changes and improvements. Although these roundtable discussions are meant to be informal, we are bound to observe one important rule of the Senate in regard to privilege. This discussion is privileged and you are protected from legal proceedings in regard to what you may say. Hansard will produce a verbatim transcript of the evidence which will be provided to participants and will also be available on the committee's Internet site as official documentation of the committee's proceedings. This recording is not intended to inhibit informal discussion, and we can go in camera if you want to put something to the committee in confidence. I point out, however, that such evidence is often difficult to report in an inquiry of this nature and, in any event, the Senate may order the release of such evidence.

Many of you have provided the committee with some brief written information about yourselves or the organisation or interest that you represent and your key issues in relation to current and future skills needs, for which I thank you.

To begin proceedings, I will ask you a couple of questions. Please do not feel limited by the questions I pose to you. I am happy to discuss whatever issues you think are relevant to the committee's terms of reference and to this inquiry. To focus the discussion a little, can I ask you to address, if you can, the issue of whether you think the current training packages develop the employability skills that employers claim to need. We have heard a lot of criticism in this inquiry about the inadequacy of young people coming out of school, their lack of literacy and numeracy and related generic skills. We would like to get your views on whether the training packages are addressing those issues—if, indeed, they are addressing them at all. The committee would also like to know what you think about the relative importance of Commonwealth and state incentives in promoting training. In other words, do you think those incentives are important, are they adequate and are they properly focused in delivering the training outcomes that employers regard as necessary in the current environment? There are also the issues of the extent to which Job Network and the labour market programs can assist in meeting skills needs of employers in Tasmania, whether the current training programs and policies are adequate in meeting not just current skill needs but future skill needs as perceived by employers in Tasmania, whether you believe that the level of industry investment in training the work force is adequate and whether you believe that industry should invest in the training needs of the work force generally. Those four or five points should be enough to get things under way. Who would like to open the batting or make the opening statement?

Mr Benson —Maybe I could. The Manufacturing Industry Council have a number of issues in relation to skills shortages. If we look at the education system—your point No. 4 refers to whether the education system adds to or subtracts from our ability to gain skills in the manufacturing industry—we contend that keeping young people on to year 12 is sometimes an impediment to having a skilled work force. I have got some interesting figures on that. In a breakdown of people doing materials design and technology in Tasmania, 2,130 completed year 10, which transferred into year 12 completions of something like 1,800, but around 100 of those people were really articulating into manufacturing industry—that is, with metals, woodwork or furniture.

It seems that there is a notion of not encouraging people to exit year 10 to work in a trade when maybe they have become a little bit frustrated by the education system and its formality. They stay on, and maybe they are encouraged to stay on by the system and by their lecturers. Students might take a recreational subject for a couple years and stay on till year 12. If they had exited in year 10, they probably would have been living at home with their mum and dad, they probably would not have had a motor vehicle and their social activities might not have been all that energetic. Therefore, their exiting year 10 for a first year apprentice wage may have been workable. By the time they have moved on to year 12, taken some of recreational subjects and come out at the end of the system at year 12, they have probably got a more active social life and a motor vehicle, and they are probably living in a flat or somewhere else. Therefore, a first year apprenticeship does not look so colourful or economically viable for those people. I think we are losing a number of potentially really good tradesmen because they are moving out at year 12 and not at 10. I do not think the education system provides a lot of benefit to the manufacturing area in the traditional trades to build our skills over the forthcoming years.

CHAIR —How would you address that, given that there appears to be a bias amongst employers to take the year 12 people rather than the year 10 people? You are shaking your head, Ms Walduck, and I will be interested to hear your comments. That is certainly the impression we are getting around the country.

Mr Benson —It is an interesting case. We found with some year 10 people who came on board with us that they have got a thirst for addressing some manual needs of doing a whole range of things. That goes back a number of years to when we used to have trade schools and things like that. We have found in a lot of cases that it produces a well-balanced individual who is earning some money, who still is undertaking his or her training through a college and who is being productive in the environment in which they are working. When employers select a year 12 person, it is hard to see how long that year 12 person will stay in their training and whether it is appropriate for them. During a person's movement to year 12, they may have dabbled in IT or in a whole range of different areas. We have found that the sustainability is with younger people moving into those traditional trades areas.

Senator TIERNEY —We have heard from people in industry, particularly around places like Queensland, that for a lot of trades they need years 11 and 12 English and maths. Through a pathways program a lot of them are building a combination of traditional high school and trades training up to certain lower level certificates. Would introducing a student to those high-level and generic skills of trade training within the context of their final high school years be a better way to go?

Mr Benson —Some of the higher education areas or the higher pre-requisites that you are looking at relate to electricians and people in those sorts of areas. I am probably focusing more on boilermakers and fitters—those sorts of traditional trades.

Senator TIERNEY —You would need the maths with boilermaking, wouldn't you?

Mr Benson —That is right. But when you look at the transition of people through senior secondary colleges—the figures I quoted before of 2,130 people who started with some degree of interest in that area and 100 people coming out at the end—I wonder where the drop-off comes from in the period from year 10 to year 12 and what changes people's perception. It might be their perception of the manufacturing industry. In many ways the images we see of smoke-belching chimneys on television in a whole range of adverse advertising in relation to the manufacturing industry have not helped. When people are starting out in life and are looking at working for maybe 30 or 40 years, they do not want to go into an industry like that.

We have tried to change the perception of younger people by opening up a whole range of manufacturing environments and workshops where they are using IT and a whole range of new technologies. We want to try to broaden that perception of that young person by showing them that manufacturing has got IT, management and a whole range of different things in it. So my notion is that, with respect, Senator, a lot of people are dropping out. Something has changed in their minds between year 10 and year 12, and we need to address that in some way.

CHAIR —Ms Walduck, you were shaking your head vigorously, so do you want to make a comment? Then, Ms Bound, we will come to you.

Ms Walduck —JobNet Tasmania is also an employment agency. In a lower income level area, and in an industrial manufacturing area, we are finding the majority of employers want 16- and 17-year-olds for employment. Yes, they want them to have a high academic level at year 10, but they do not want year 12s. They are also looking for the impossible sometimes in wanting them to have initiative and a work ethic. However, the majority of our jobs that we are unable to fill are for 16- and 17-year-olds going into trades where they do not have preconceived ideas and where, as Mr Benson was saying, they do not have the perceptions of better jobs, fun jobs and are not looking at what they see as manual positions. We find them really difficult to place.

CHAIR —What are those trades, Ms Walduck?

Ms Walduck —They are trades on the engineering side: mechanical—most young ones go for automotive—and diesel mechanics. Agriculture is nearly impossible to fill anywhere.

Mr Zichy-Woinarski —I object to that.

CHAIR —I will give you every opportunity to object, Mr Zichy-Woinarski.

Ms Walduck —My other thought was that a partnership could be developed with TAFE at year 10 where prevocational courses could be offered, especially for the students who would not get the advantage of going to year 11 or 12 because they are more hands-on students. Where there is an interest you will find that their mathematical skills do increase once they have had a taste of what they want to do with a career.

CHAIR —I will go to Mr Zichy-Woinarski first and then come back to you, Ms Bound.

Mr Zichy-Woinarski —I do object to people quoting the agricultural industry as an industry where we have great difficulty finding employment. If one were to look at the figures that Mr Stevens could have produced this morning, or that the industry itself could produce, we are in the situation in TAFE Tasmania—the only provider of agricultural and horticultural education in Tasmania—where we have an oversupply of students for the amount of money that is being made available for delivery. Let us put the facts on the table: we can quite comfortably put 60 to 80 students into the industry every year at level II and/or level III. We currently have 143 people training in agriculture at both levels. All of those people have employment. The agricultural industry per se realises that if it is to succeed in maintaining its skill advantage in this state it needs qualified and well-trained people. That is what we are trying to do. We hope to have them at year 11 or year 12 because it is important, where we have quality assurance programs, that people do understand their requirements in respect of quality assurance.

I would like to suggest to the Senate through this inquiry that the second reiteration of the agricultural and horticultural training package, where it has now forced at assessment the student to indicate that they understand the underpinning knowledge and to demonstrate that skill on the job, has moved in the right direction and will end up with skills formation and better people in the industry.

Ms Bound —To respond to Mr Benson's comments, as you indicated, there are multiple reasons for what is happening. I find that a very interesting set of figures and perhaps ones worth further exploration. The perceived culture of the industry is obviously part of that. The work that the centre has done on training brokerage—and Gayle Walduck picked this up to some degree—indicates that there is quite a mismatch between what is out there and students' and employers' knowledge of what is available. There is very much a need for appropriate training brokers at a local level to develop that knowledge and for them to be funded appropriately. Our research indicates that publicly funded or professionally funded organisations—the not-for-profit organisations—that are training brokers provide a much better service, because their ethic is to follow through rather than based on full profit. That is not to negate the work for-profit organisations do; it just means they are driven by different sets of values.

The other thing that might be relevant is the whole business of structured systems to support kids, especially youth. In Norway, for example, there are legislative requirements for local governments and for a whole range of relevant agencies such as labour market programs and educational institutions that are the equivalent of our Centrelink and so on to work together to collaboratively produce and deliver particular outcomes so that quite early on they pick up at-risk students, follow their pathways and do a whole lot of career planning. Because that system is legislatively based, it is adequately resourced. That is an important factor. I think that a whole range of the skill difficulties that may be identified can, to some extent, be addressed through adequate infrastructure.

Mr Coad —In relation to building and construction, we see the VET program as being central to attracting young people into the industry. In our industry, 97 per cent of all those who have entered that program have ended up in employment in the industry. It is a very high success rate. Something like 100 apprentices now coming through that program have secured employment in the industry. It is a matter of taking those year 10s and offering a vocational pathway into industries. It may not be necessarily an academic pathway; it may be a combination of academic and practical skills training. We want young people to be given an opportunity through those programs. From our point of view, the VET program is central to a strategy for giving people from schools links to industry, to employment and to job training, which is central to the building and construction industry. So we would encourage an expansion of the VET program—VET in Schools—to link it to grade 10 as a career path and its promotion at that level to ensure that people have access to years 11 and 12 as part of the VET program rather than it being a purely academic situation.

CHAIR —In Western Australia, the director of the TAFE College at Kwinana said to us that virtually 100 per cent of the apprentices who come through VET complete their apprenticeships. The drop-out rate is very minimal for those who come through VET as opposed to those who come through some other form. I do not know what the experience has been down here, but if anyone is still here from the department of education and training they might like to give it a little bit of thought and come back to us.

Mr Baker —As Mr Coad indicated, we also see the national training packages as instrumental in providing a pathway for young people into the industry. One of the difficulties that we have had—and it was articulated by Mr Benson—is that, for whatever reason, those traditional physical trades areas do not present themselves as being attractive to young people. One way that we have sought to address that issue is through recent discussions with an organisation called Work and Training Tasmania—a labour hire company that also provides training for young people—and they intend to foster a program whereby students will be able to complete their year 12 qualification and, at the same time, complete a certificate II in light vehicle. They will undergo that training as part of their years 11 and 12 learning outcome. That will provide to them an employment opportunity at year 10. At year 12, completion of their higher school academic qualification and a certificate II in light vehicle will provide a 12-months credit towards their certificate III apprenticeship. That way we hope to do something about the issue that Andrew raised of getting people back into the trade group. Whether or not that will work, we do not know, but we will attempt to get it up and running for the school year next year. That is something towards addressing the problem that Andrew raised. Hopefully, if we can get some success as far as the automotive industry is concerned, we will then move it on to the other traditional metal/engineering trades where there is, as Andrew has quite rightly pointed out, a shortfall.

Mr Mulcahy —Perhaps I should have mentioned earlier—the pause threw me off a little bit—that I am the CEO of TRANZNET and also the company secretary of TDT Tasmania. I did not say that at the beginning. The next clarification I need to make is that Mr Baker is referring to light vehicles as in vehicle manufacturing, not light vehicle as in road transport, which is significant to me as a representative of the transport and distribution industries. I hope that it is appropriate for me to comment now, because the discussion has been trade based up until now and I come from an industry where there are technically no apprenticeships.

Looking at the points that you have asked us to address, there are some reasonably critical things that occur. The answer to the question regarding training packages and employers' needs and particularly employees' needs is, yes, we do believe that they do meet the needs. They meet the needs for a couple of reasons. I do not want to be critical of anybody else who might be represented here or who were represented previously, but I will try to give you some facts that are both historic and ongoing. Commonwealth incentives have probably provided the only significant public funding to road transport, stevedoring, maritime, warehousing, rail and now to transport administration areas of my work force. Tasmania is a key example in the sense that, if you took away the Commonwealth incentives that have been applied to traineeships both for existing workers and for entry level people, there would be less than $10,000 from the public purse spent on the entire industry in any annual period. It does not go very far.

I now go to your last point: does industry investment in work force training apply? Yes, it does because all of the training that has been provided in those industries in the past, other than the incentive payments, has come from the user. It has come from the user in one of two ways: it has come from the employer who has developed his staff or, more particularly, it has come from the potential employee who must undergo mandatory training, usually linked to licences and so on that have to be achieved or obtained before they can walk in the door with their job application. Capital equipment, particularly in road transport, constitutes a significant investment. For example, simply getting a licence for a heavy vehicle, if you have had no exposure at all and do not have any access to personal equipment—and it is not just a matter of using your father's truck—you are looking at between $800 and $1,000.

Having said that, looking at the issues of education policy and so on, it is significant that we have had a lot of difficulty in getting young people at years 11 and 12 to participate in what are commonly called the VET in Schools program. A couple of key issues affect us in that way. One of them is again licensing. We have a gap between 16- and 17yearolds and insurance and licensing issues. Licensing cuts in at 19 and insurance cuts in at 25. Employers are not particularly able or willing to employ young people under those circumstances.

A critical issue for this inquiry is that we have a major skill shortage that is two-pronged. It is twopronged in the sense that the average age of operators, and in fact management, in the entire industry in Australia exceeds 50 years of age. That was the case 10 years ago, with the same sort of pattern developing. The second issue is that a huge increase is imminent in the total transport task that affects this nation. By 2015 the road transport task will in fact have doubled. Depending on the other industries, if you talk about distribution and logistics in general, it may in fact have doubled for all of them by then, but it is anticipated that it will at least have doubled by 2020. Therefore, with the aged work force and the increase in our tasking to satisfy community needs, we need to make up a huge skill shortage or skill deficit.

There are a number of initiatives that the industry is trying to address at this stage which look at trying to overcome one of the biggest hurdles, which is the way the industry is perceived, particularly by young people; we are not seen too favourably. In doing that, there are issues to be addressed, like redefining core skills that can overcome the insurance problems that we are facing. I suppose they are just two of the things we are trying to do, but I do not know how successful they are going to be. We could well be faced in 2010 with the situation where we have gone practically nowhere in advancing the industry and cutting the skill shortage.

Mr Milne —The seafood industry is suffering major skill shortages in the catchingprocessing area. Part of the reason is that a lot of the people who work in our sector are casuals and part-timers or they work on a share of the catch. Therefore, training or traineeships in a lot of cases are unavailable to these people because they just do not qualify.

We have an industry which is not seen in a particularly favourable light as far as career choice goes. Again we see industry companies saying, `Why should I invest in training? These people, because of their working part time, their mobility, will take any training and walk out the door.' We are seeing a major crisis developing with trained skippers, senior processing type people, people who are leading at the front end of the business, and also in attracting suitably qualified young people into the business. The seafood industry traditionally has been seen as a place of last resort: if you cannot work anywhere else, you tend to come to the seafood sector. Traditionally we have seen very high levels of poor numeracy and literacy, and on and on it goes. At the moment we are finding it difficult even getting those individuals in there, let alone keeping them. We really need to establish that skills pathway in order to keep and retain people.

CHAIR —That issue has been raised in a number of areas with us about the whole of the maritime industry, including the fishing side of it. Has your organisation sought to have discussions or talks with the Maritime College about what can be done in that area to look at training, particularly at the higher level of skippers and so forth?

Mr Milne —I am from the Maritime College and I am the national training coordinator, so I do a lot of the VET type stuff. We work very closely with Rory Byrne from his side of the business. The bigger companies in Tasmania are starting to cover that quite well. They are starting to put career pathways in and are going through traineeships. I guess the big issue is that at the higher end, after you go through certificates II and III, there is some money at certificate IV but it is very limited and there is nothing above that. So we just get to the end of the career pathway as such or the cash sort of side of it, and that again is an issue. We need to continue to bring those people through and encourage them to stay in the industry.

Senator BARNETT —Just following up on that, it applies in the forest industry and in agriculture and fishing. In terms of accessing skilled labour in regional areas like the east and west coasts, how important or serious is the impact of distance and the fact that we are a regionalised state? I know that Don Howe is from Mole Creek. How big an issue is it in Tasmania? Can you respond to that?

Mr Milne —I think it is that there is just not the skilled labour available. That is the issue. Tasmania is very good as far as travel and access go. The majority of fishing boats leave from either Devonport or, on the east coast, Hobart. There are a very limited number of places you can go from. It is not as though you are leaving from Cairns and fishing in the Torres Strait where you have a 600 to 800 kilometres distance and things like that in accessing the area. As for the training package, there is a lot of flexibility in the provision of training now. It is on the job and, as a general rule, we travel to where the individuals are, if we can.

Mr Byrne —Perhaps I could just bring some salient points to David's last remarks. The seafood industry in Australia is worth about $2[half ] billion, the catching sector is worth in excess of 50 per cent of that and the uptake of the seafood training package in that sector is less than one per cent. Therefore, for the whole country there are less than a handful of individuals—deckhands and skippers—undertaking formal new apprenticeships from the seafood training package. So you have a sector worth probably close to $1[half ] billion and hardly a new apprentice to be seen.

The uptake in the aquaculture and processing sectors is a lot more healthy because of the opportunity to use state funding, user choice type funding, and because they have formal employment enterprise agreement type of arrangements. But in the catching sector there is a crying need. Tasmania's occupational health and safety record, to sum it up, is such that your chance of being killed in the catching sector of the fishing industry is 400 times the national average. So, when a parent seeks advice on an occupation for their darling child, you would not recommend they go to sea in Tasmania with there being a 400 times the national industry average chance of their being killed at work.

The very restrictive funding criteria, user choice criteria, are working to industry's disadvantage enormously. Our industry for a long time has said that any training is better than nothing at all, and so why deny to this huge and valuable sector any opportunity for formal training because they are employed by share of catch or other casual type arrangements? It is a significant impost and it really should be addressed.

Senator BARNETT —Why is it that bad?

Mr Byrne —Because most deckhands and skippers are employed for a percentage of their catch, and that does not meet state requirements for funding new apprenticeships. Therefore, it does not meet the state requirements for a formal training agreement, and so you cannot even use the Commonwealth incentives. They are not considered employees. To you and me, they are employees. They work under the direction of a skipper and in all other senses they are employees—but not in the sense of meeting the requirements of a state training agreement.

Senator BARNETT —So they need to be more flexible?

Mr Byrne —Absolutely.

Senator BARNETT —Is that the nub of it?

Mr Byrne —It is really. Other than for direct employees, they need to consider the importance for the whole industry—it is a lot more than just a fishing industry—of having these flexible engagement or employment arrangements.

CHAIR —Obviously we are pretty keen to start asking questions. Would anyone else like to make some introductory remarks?

Mr Bendall —I will just expand a little further on what Rory Byrne has said. In the forest industry we have a similar problem of very small levels of access to the formal traineeship and new apprenticeship qualifications. That is primarily because of the inability of those enterprises to provide the broad range of competencies that are necessary to complete the qualifications in the way they have been put together. What we do have in the state, though, is a licensing system which is run by our industry training board. That has about 8,400 people holding licences which are, in effect, parts of qualifications and they each have probably, on average, perhaps three or four of those competencies. If the ability were there to fund parts of qualifications rather than entire qualifications, people in our industry and the seafood industry who are completing particular tasks that do not in themselves build up a whole qualification would have the opportunity to access formalised training, which currently does not occur.

Mr Dobbie —Following on from David Milne's brief comment about casualisation in the seafood industry, the food processing industry in Tasmania is affected by casualisation of employment that is directly linked to the seasonal availability of produce to process. As such, at this stage the statistics would suggest that about one-third or better of the industry is currently employed under a casual or seasonal employment contract or similar arrangement. The result of that is that, whilst the training package as developed has the capacity to deliver the skills and knowledge required by the industry, the funded pathways linked to traineeships and new apprenticeships cannot take into consideration adequately the nature of the casualisation of the employment contracts. So generally we find that within the policy arrangements there is a need to address either a part-time or a full-time employment contract, whereas the capacity of the industry on occasions does not have the ability to actually meet that level of employment.

Some attempts have been made—and Mr Zichy-Woinarski from rural training could perhaps give us an outline of what they are—to address those issues within the agricultural and horticultural industries. But generally there have been constraints in the effectiveness of those trials because the group employment companies generally have been unable to manage the reemployment of seasonal people across a full-time or part time employment arrangement. So, statistically, the takeup of new apprenticeship or traineeship opportunities in the food processing industry in Tasmania is abysmal; the numbers are extremely low and do not reflect the nature of the industry. The industry employs about 10,000 people directly.

Senator BARNETT —Which industry?

Mr Dobbie —Food processing. The only areas within that industry group that seem to support new apprenticeship initiatives are those in the traditional trades areas of meat retailing and baking—and that is as an entry level option—whereas those who are seasonally fluid, such as dairy and vegetable processing et cetera who rely on casual or seasonal work forces, generally do not access new apprenticeship incentives or opportunities because those arrangements do not suit the recruiting or employment arrangements that are entrenched within their industry group. On the one hand we have a viable industry, but on the other hand we have a traineeship system that currently has some constraints in meeting the skill needs as an entry level option for that industry.

Capt. Milward —I would like to explain the other end of the scale and ring some alarm bells with the Senate, if I may. We at the Maritime College, probably more than any other training institution in Australia, train Master Class 1s and Engineer Class 1s in the industry. We all know that there is a downturn in the Australian shipping industry, but I do not know whether anyone is aware of this problem: we now have a complete lack of Master Class 1s and Engineer Class 1s in the other related maritime industries like pilotage, surveying, stevedoring and that type of thing that we need in this country. To give you some very quick figures, we need to train at least 200 to 300 seafarers for ocean-going ships a year, but we are training less than 40. At the moment we are poaching people from overseas as much as we can. But perhaps we should look at what has happened in the United Kingdom recently. They are preceding us by about 10 or 15 years and they have had the same problem. In fact, they are now financing up to the order of 90 per cent seagoing staff to the senior ranks to get some training and to get their pilots, surveyors et cetera into the industry. We are doing nothing like that in Australia; we are doing no financing for the shipowners themselves. In fact, shipowners are restricting the amount of training staff on their ships now. Although we do not have a very big industry, they are restricting the number because of the cost of training. They are getting absolutely no help from the government to train seafarers at all.

Mr Howe —My views are fairly narrow and limited; I am not as broad as—

CHAIR —That does not mean that are you not relevant.

Mr Howe —My comments are probably relevant, but they are not as broadly based as those of the learned people around me. I run a small manufacturing business and we manufacture earthmoving and forestry equipment. I totally agree with Andrew Benson's comments. To put it crudely, we are raising a mentality of button pushers and not labourers. All the boys I have brought through their trade usually come to me at around 16 or 17. They have mainly come off farms in the area; that is where they came from when there were a lot of farms in the area. There are not many farms in the area now, and that is why we are suffering in our ability to source young people.

If we are to give service facilities to outlying areas, we have to do something to make the early training more viable for young people. To try and find board or alternate travel when they leave home is not easy on their early wage. I recognise that we probably have not been doing enough in commitment to our young people, and that is why we are running short of boys and girls now who want to do something that is manual labour—and I refer to boilermaking, welding and fitting and turning. Everything is getting more centralised. Country areas are losing their ability to source young people. I think we need to make it more attractive in those early years for somebody to start into an apprenticeship.

Mr Coad —One of those points you mentioned was industry investment in training. Particularly here in Tasmania, our building and construction industry is predominantly small business. Something like 95 per cent of those businesses employ fewer than five people. The introduction of training funds or industry funds in our industry has been enormously successful and we have demonstrated that not only here in Tasmania but in other states and territories. I believe that that is an opportunity where, in other industries where small business exists, governments can actually assist and encourage those industries to set up some form of industry funding arrangement to support their industries, which government can then support as well. I think that is an opportunity that should be looked at, particularly in those industries where small businesses are involved. The larger organisations tend to have their own human resource management systems in place and their own capability, but it is this area of small business and how you actually get small business to engage in training that is a key strategy, if you like, and it is important to have that. We see industry training funds, and having industry ownership of that, as a key way forward. As a matter of fact, I would welcome your comment on that.

CHAIR —What is the rate here? I understand that in Queensland it is 0.25 per cent and in Western Australia it is 0.2 per cent. What is it in Tasmania?

Mr Coad —It is 0.2.

Mr Benson —We are talking about the entry level training end. Research shows that greater than 1.5 million tradespeople are not currently working in their existing trade, and that is for a whole range of different reasons. In many ways I think it behoves employers to try to become employers of choice. It costs the Commonwealth, the state and each individual organisation a lot of money to train people up front and then, through a whole range of different issues, they drift out of that trade. Some of the issues might be that they move up in their career path, which is really great, but some people move on because they are disenchanted for a whole range of different reasons. So I think we have to look at providing opportunities for people to come back. A quick example involves our organisation. You may know that there is a shortage of nurses around the country. Our organisation advertised for nurses to work on the TT Line. We had 45 applicants. Maybe some people were getting disenchanted in their existing environment for a whole range of different reasons. I think it behoves employers to do things that are really meaningful, to help retain and bring back those people who have made that choice to move on so that we can capitalise on all that training and investment that we have put in at the front end.

CHAIR —I think there is some evidence around the country that that is happening, particularly in Western Australia where they are anticipating skill shortages as a result of major project work there. They are looking at fast tracking people—either cross-skilling them or upskilling people who have been in the industry or left the industry. But there are a couple of issues there which employers need to address if they want to attract a lot of those people back. One is income and the level of remuneration and the other one is continuity of employment. A lot of those people have left because of lack of continuity of employment in the industry. They have given up on the industry and gone into other employment because it is more steady and longer term.

Senator STEPHENS —We are very fortunate to have so many representatives of the industry training boards here, particularly given the circumstances of cuts to funding. First of all, I am interested in hearing how you are surviving and how you are responding to your industry as a result of the funding cuts. But, more importantly, regarding the issues that we have been hearing this afternoon about casualisation and the seasonal nature of the industries that are represented here, I would be very interested to hear how you as industry training boards are trying to respond to those particular issues of your own industries.

Mr Dobbie —To address your first point about how we are surviving: only just. As to your second point about what we are able to do, or are capable of doing, with regard to the casual and seasonal employment training issue, I attended recently a meeting of the Food Industry Council here in Tasmania, as a subcommittee member, and reported that we did not have the resources left in the Food Industry Training Board to pursue the matter of dealing with the problems in casual and seasonal employment because of the absence of funding. So the ability of the organisation to actually deal with it has been constrained by the removal of funding to ITABs. It is pretty cut and dried.

Perhaps one of the most deeply entrenched issues in dealing with an issue is industrial relations. There are entrenched conditions of employment in awards that affect these industries, and generally the policy associated with traineeships reflects those agreements. As such, it is not possible to change the policy without changing the award provisions in most cases. So the pursuit of full-time employment is generally the ideal in most circumstances, but the nature of the industry is such that full-time employment is not generally available. The end result of that is that most people who enter the food processing industry in Tasmania enter through a casual or seasonal loop in the first instance, and they are then selected at some later date for full-time employment. At that stage, though, the opportunity to take up traineeships is generally not available to them.

Mr Zichy-Woinarski could probably speak more to the rural operations traineeship model. There has been an attempt to create a full-time employment issue amongst the seasonal group, managed through a group training or group employment arrangement, but there have been some difficulties in that area. I am not totally familiar with what those difficulties are, but I understand that they have been substantial—to the extent that the initial pilot has not been successful in dealing with those problems. So it is a combination of issues. Industrial award policy and employment issues are affecting the ability of the industry to access funded training as an entry point arrangement for a seasonally employed employee.

Senator STEPHENS —Perhaps we could hear from the rural sector.

Mr Zichy-Woinarski —We are surviving on reserves. Probably, depending on what happens with the state government issue that has recently been advertised and some submissions that have gone currently to the Minister for Education, we will be able to survive until 30 June on reserves. I agree with my friend Ken Dobbie about casual labour. It is a major issue that we have all tried to address. It has three parts to it. The first part is the inflexibility of Centrelink to develop what I would call employment credits. I will give you a classic example. Today it has been raining and, if we were shearing down in the Midlands, it would be most likely that the shearers would have called `wet weather' and shearing would have ceased for the day. People employed as shed hands on casual labour would cease work; they would not get any work and they would not get paid.

The former minister for education, Dr Kemp, created, as Mr Dobbie has pointed out, a certificate of rural operations which had built into it some quite brilliant ideas. One of those ideas was that 50 per cent of the training had to be related to agriculture and/or horticulture but the balance could come from any other training package. So you could be, for instance, in Smithton on our north-west coast, where you could be a relief milker involved in making hay and silage, and in the summer months you could be involved in some form of tourism activity and also could assist the fishing industry in providing deckhands or splitters or something like that. The idea is quite brilliant; the execution of it has not been so good. We did an industry survey and we actually know who the employers are and who the potential employees are. But because that survey was done with Commonwealth money we are not able to release those findings to the right people to employ those people, because of the privileges. It is private, confidential and privileged. I have all that information, which we could have handed to other people to go about getting this particular traineeship into place.

The previous minister also decreed that it had to be done by a group training company. That brings incentives and God knows what else into play, so it has not got off the ground. You have to say that the people who get involved in casual and seasonal employment do know their Centrelink requirements, they do know the rules of the game and we have to make an incentive. If you go to Ireland and have a look at the Irish labour pool, like I did in 1996, you will see that you have to build up credits so that, when they are not working, they are able to pull down those credits in unemployment benefits, but within 15 months they are in the full-time employment work force. Ireland is a classic example of that.

CHAIR —Can I follow that up with you. That is an important point you make, and it has been made to us elsewhere—in fact, in Mareeba, outside Cairns, where there are a lot of seasonal workers in the industry and they go from picking mangoes to picking various other crops. In any agricultural package, I do not know why there cannot be a mix of different skills in those areas to accommodate that seasonal nature. Obviously it will be different from area to area because of the crops grown. But one of the issues that was raised with us was the issue you raised about Centrelink—about people who have been able to get other employment during the gaps in the seasonal work and whose income is calculated on what they have earned for that couple of days or couple of weeks multiplied by 365 days a year. They are deemed to be earning a salary of $100,000 a year when actually they are nowhere near it. In fact, it is becoming a disincentive for them to go and look for work in between their gaps while they are on benefits from the Commonwealth through Centrelink. Have any of your organisations made any submissions to the government about addressing that type of issue?

Mr Zichy-Woinarski —That type of issue has been raised through a number of forums here. The Tasmanian Employment Advisory Council has raised that issue on a number of occasions. We have raised that issue recently with the manager of Centrelink in Launceston. We were led to believe that considerations were being developed to allow people to create employment credits. As you point out, and as Mr Dobbie points out and Mr Byrne would point out, seasonality is the nature of our beast. At the present moment we have a large number of people out there on the back of potato pickers, because it is potato harvesting time. In my office we get phone calls asking, `Where do I get potato harvesters?' What you need to make this seasonal labour program work is a seasonal labour manager whose role is to match employers and employees and find them jobs. That is what the Irish labour ring model has. We have tried, but we come back to the profit motive. If you are trying to be a manager of a labour ring, unless you are getting funded, you are also trying to make profits yourself. The advantage of a labour ring is that it can handle all the workers compensation; it can mix and match people, do all the wages and get people to the places. I have to say that I have seen, from my years in the industry, so much need for this that we have to make it work somehow.

CHAIR —Why do you think the government is not responding to your representations?

Mr Zichy-Woinarski —I would think that they see this as a private enterprise opportunity.

CHAIR —But they are the impediment in part, aren't they?

Mr Zichy-Woinarski —They are part of the impediment. As far as the training is concerned, there is a package available which all of us around this room could use. The training, as you quite rightly pointed out, can be mixed and matched to suit the needs. It does not matter: it could be in Hobart, where it could be some light manufacturing and it could have some transport. To give you an example, we have just run a program which is about careers in dairying. When we went to Bonlac, not only did they point out that they could be involved in milking and in making cheese or butter but also it came to light that one of the biggest problems, as Mr Mulcahy has pointed out, is that Bonlac do not have enough drivers to collect the milk, to do the distribution et cetera. So there is this whole pool of needs which we have to try and mix and match, and we are not doing it very well.

CHAIR —Perhaps I can put a general question to all of you. Is there a problem here with expectations? Is this an expectations issue in the sense that employers have an expectation of somehow being able to get young people as potential employees out of the pool who will have skills beyond what is reasonable to expect at that level and without necessarily putting any effort into training them themselves? On the other side of the equation, is there an expectation by young people that somehow or other there is a range of employment opportunities out there beyond what, in reality, exists at the trade level? A lot of the jobs that we are talking about are at the non-higher-education end of the spectrum. We know that only about 30 per cent of students actually go on to higher education. So 70 per cent of young people coming out of schools are potential matches for the jobs that are available in industry, whether they be in the trades, in mechanical engineering or whatever. I just wonder if on both sides of the equation there is an expectation problem here—that people are expecting too much to be available to them in both the potential labour force and the potential jobs that might be available.

Mr Dobbie —In measuring the demand or the need or where the target group is, one of the issues has been identifying statistically who this group is, where they are located and where they can be potentially employed. As often as not, we put them into tidy categories of rural or fishing or food or whatever. But, to highlight the disparity in the levels of need just within the food processing industry, 60 per cent of the wine industry is employed under a casual or seasonal contract in Tasmania. Surprisingly enough, in manufacturing food, in confectionary, Cadbury, which is one of the largest employers in the state, employs 30 per cent of its work force under a seasonal contract. They are making chocolate under a seasonal contract. It has no relationship to a whole range of other issues that might be affecting seasonality of employment. The figure for dairy processing is 30 per cent, and for vegetable picking it is about 35.

In some cases, entire plants employ seasonal workers. At the Simplot plant, which processes mixed vegetables, 80 per cent of the work force is on a seasonal contract. So in measuring the target group and dealing with it in terms of the demographics—its location, skills need and things of that nature—how do you take 400 partially trained vegetable processors in Devonport and give that group a job somewhere else in that region at a time when generally the industry in that region is in a downturn because of the seasonal influences that are occurring? As often as not, people are attracted to seasonal employment on the basis that they become returning seasonals. In effect, they create a permanent employment opportunity out of the seasonality of the industry. They treat it as a full-time job as much as anything else. Statistically it is important that we identify or separate those who are itinerant and move from mango picking to carrot pulling and so on from what we would categorise as the permanent seasonals—those who return to the same manufacturing plant every year and sometimes pick up nine to 10 months worth of employment.

The Commonwealth incentives in some cases therefore act to disadvantage employers in that regard. In the wine industry, vineyard managers or vineyard supervisors are generally employed for about a ninemonth period. The Commonwealth policy on Commonwealth incentives requires 12 months employment. But that person who is employed for nine to 10 months every year, and who returns every year and is a longterm employee, does not get access to those incentives; nor does the employer, simply because of the nature of the employment. So there is a demographic issue there and there is also the issue of how those demographics actually impact on both the application of training packages and the incentives. On the issue of whether employers contribute to the training of their employees, I would think that that could be measured as a significant level of investment, given that they have not been provided with support at the entry level point.

Mr Withers —Really to answer partially your question and also to follow on what Mr Zichy-Woinarski was saying, the Chamber of Commerce has about 2,000 members in this state but probably represents, through all its other associations, about 40 per cent of the work force. We do a quarterly survey and I suppose it really follows a lot of the surveys that the Department of Employment and Workplace Relations does regarding, as Ken said, some of the regional issues and within industry some of the variations. But in the quarterly skills survey, which roughly takes about 250 responses, if you like, we ask employers to rate against roughly 20 criteria, which include things like employee costs, taxes, cost of energy, productivity and insurance. Over the last few surveys, consistently rating at No. 4 has been the availability of suitably qualified employees. That is the question. I suppose it really means the ability to find or source employees for a job. It is not talking about upskilling current employees. So it consistently rates very highly, and it follows really behind insurance, which, as you can imagine, is quite topical.

Senator BARNETT —When you say that it is fourth on the list, is that in order of priority, that it is hard to get skilled labour? Is that what are you saying?

Mr Withers —That is right. So insurance is 1, labour wage costs are 2 and cost of wages is 3. Statistical weighting, from talking to my economist the other day about that, is quite high above most of the others. Following on from what Mr Zichy-Woinarski was saying, certainly from the employer perspective, it is an issue of trying to source suitably qualified people to fill labour shortages or employee shortages within a business.

CHAIR —Just to follow on with that—and other people around the table may be more capable of answering the question than you are—given that historically in this country the skilled labour force was trained in public institutions, the utilities, railways, shipyards and so forth, who do the employers think will train the skilled labour force for them? This is an issue we raised in our last inquiry with small business, and we had the same response from them. It was a major issue. They could not get skilled labour. When I consistently raised the issue, `You don't train anyone so how do you expect to get the labour? Where are you going to get it from if you don't train it? Are you prepared to pay for it?' and also raised the issue about the training levy and so forth, there was a pretty resounding no. There seems to be an expectation out there—I do not know whether this is just small business; it probably goes wider than small business—that somehow or other someone else will train the labour force for them and they are out there, ready to walk in the door and pick up the tools and get on with the job. Again this is an expectation issue, and I do not know whether or not you are able to test, beyond just the pure statistical evidence, the actual thinking of some companies about where the labour force will come from if they do not put an effort into training them themselves.

Mr Withers —I suppose to partially answer your question—and I am sure Ken and others who really have a much greater grip of their own industry could answer with respect to their industries—my role as the education training adviser with the chamber is that I actually go out and promote New Apprenticeships and I am sponsored, if you like, through the Australian Chamber of Commerce and Industry and through the department of employment and science and training. Essentially, I am going out to advertise the New Apprenticeships scheme. In my discussions with businesses in the last six months since I have been with the chamber, most of the businesses are more than happy to take the training burden. Admittedly, of course, many of them are small businesses and there is an issue of release and when these people get their training. The biggest issue I find is that they are still largely unaware of the New Apprenticeships scheme and its benefits. I believe that was also raised this morning in discussion. It is not an issue that they think that someone else should be training them, from my perspective.

Senator STEPHENS —Mr Withers, to what extent do incentives play a part in whether people will take on the training responsibility?

Mr Withers —Again from my perspective, talking to businesses, it does play a large role in I suppose getting them interested. But, if they are going to access something like the New Apprenticeships scheme, where they do get some incentives because they will not always qualify and may not always be interested in it, they have to be satisfied that their training outcome will bring a benefit to the business in the first instance. Certainly, if there is New Apprenticeships funding or state funding through user choice, which has been already mentioned, that certainly can make it more attractive.

Senator STEPHENS —Is that a specific question in your survey?

Mr Withers —No, it is not.

Mr Byrne —Following on from Senator Stephens's point asking about the influence of employment incentives for new apprentices, we have already heard evidence from industry sectors here that this type of funding is often the sole source of funding new apprenticeships, but I wonder whether people are aware that once you have accessed them once they are not available again. If you have accessed them at cert II, that commencement is not available at certainly III. If you have accessed the full raft of incentives at certainly III, there is no funding available at certificate IV. Therefore, there is an inequity between the individual who is deemed to be a new entrant who gets state funding for in some cases certificates II, III and IV and the individual who is deemed to be an existing employee whose funding is paid for by one set of Commonwealth incentives. So, if you are unfortunate enough to be existing at cert III, it is very unlikely that your employer will put you through a cert IV qualification, and in some industries it is operators at that lower management level that are really required; so the system is working very much against funding higher qualifications.

Senator BARNETT —Just going back to Mr Dobbie and I think some others about the casualisation of the work force and its seasonal nature—this is really a question to Andrew Benson about contract labour and the labour hire firms—is that one way of tapping into the programs? Because you have them on your books and you go from A industry to B industry or you go from wine to forestry or whatever—you move them around—is that one way of tapping into the training programs? I am trying to work out how we solve this problem of moving from A industry to B industry and then having this three- or sixmonth gap or whatever in the middle. I am not looking for a response from anyone in particular, but perhaps we could hear first from you, Mr Benson, with your skilled engineering hat on.

Mr Benson —Skilled Engineering in Tasmania employs in the order of 1300 people every working day during the summer. A lot of that is poppy picking at Tasmanian Alkaloids, hop picking at Australian Hop Marketers and forestry at the nursery at Perth—a whole range of different areas. People by and large see those sorts of positions as an interim move until they can move up the chain or get a full-time job. People are not that used to working labour hire as a traditional sort of framework here. At a lot of places on the mainland they are, but people will come to us—maybe they have moved interstate—and they will say, `Let's go to Skilled Engineering because we worked for them in WA and we'll get a job.' That is normally an interim thing until they get a full-time job. The majority of people do not see it as a lifestyle choice. With some of the contracts down south, Tasmanian Alkaloids and Glaxo have had a very poor season with the quality of the poppies. Therefore, there are a lot of ebbs and flows with industry. We try to manage it as best we can, to rotate those people across a whole range of areas, and we do it successfully in a lot of rural areas, but it is a challenge.

Senator BARNETT —There has been some criticism of labour hire firms in terms of the lack of training. Do you have a response to that?

Mr Benson —Yes, I do. We established a group training company as part of our operation, because my notion is that we should be nurturing young Australians to look at a career path of choice. We will be planting shade trees, under which I may not sit but other people will, and we need to do that right across the country. In general terms, someone can start with us as an apprentice in Hobart and work right through and become a certified practising engineer at Karratha or wherever. So we as an employer of choice are taking that very seriously and trying to turn that whole notion around.

Senator BARNETT —That is happening in Tasmania.

Mr Benson —We are moving that forward. We have 70 apprentices at this point in time. We have picked up a number of apprentices from organisations that have gone into liquidation. We have taken them on board and placed them in organisations such as Caterpillar Elphiston, where there is longterm employment for them, still working for us but providing them with opportunities to achieve their trade and to continue to work in that area. So we see that as a real community value that Skilled Engineering aspires to. Also we run a childcare centre, so we are starting at the very bottom.

Mr Dobbie —Perhaps I might respond to that also. This has a loaded spring effect as far as the industry is concerned in the long term. Cullen, a researcher with ANTA, has published a number of papers in recent years regarding the level of productivity and its relationship to skills in manufacturing industries in particular. He wrote a number of papers as far as food was concerned. He identified in his research that up to 70 per cent of those who are employed in food manufacturing industries in Tasmania have no post-compulsory education qualifications whatsoever. If you then reflect that against the recruitment and employment practices of the industry, you can see that the inability to provide formal skills training at the beginning of the employment cycle emerges some years later as an identifiable level of unproductive work force because there is no post-compulsory qualification training delivered to the industry.

Anecdotally, I can give you an example of a guy who was employed at a vegetable processing plant in northern Tasmania; he had been employed processing frozen vegetables for a period of 15 years as a casual seasonal employee. The company had offered him a permanent job because he had been a very good employee: `You've come to work every day. You've done your work. We'll give you a permanent job.' They then looked at his skill profile and identified that he held no useable skills beyond his current level of employment. He was a materials handler and he had nothing. It is hitting not only at the entry point, at the longterm impact of productivity issues, but in that middle ground where there are developing arrangements within the manufacturing environment itself that some employees are not tapping into. So the target group can be just as valuable for those who are currently employed as for those who are entering the industry. The 70 per cent lack of productivity in Tasmanian industries is of concern, I would think, when linked to skills.

Mr Milne —I think that starts to come back to that numeracy and literacy thing we talked about to begin with. A lot of these individuals are those who have fallen through the educational hole, have got work part time and have developed skills bases over time, but when you actually come to see what they can do you find they run into a brick wall at that point. Another issue that I would like to add to that area—I do not know whether you call them life skills—is that one of the people in the fishing industry that I deal with said that one of his major problems is young people controlling their credit cards, their love life and their addictions. He said the skill he does not have a problem with; he can train people. What he has a problem with is retaining people because of those issues of leaving and constantly turning over because they just cannot exist in that day-to-day work environment. I think that ties in with this numeracy and literacy educational structure that we are seeing coming through.

Mr Mulcahy —There are a whole lot of little side issues that hang off what we have been talking about in the last 20 minutes or so. Just going on from what David was saying about numeracy and literacy, in some of the industries—and I would not say that in food processing that this was still the case; it certainly was the case some years ago when I did a little bit of work in that industry and it is certainly the case in certain areas of transport and distribution and obviously it is in some of the maritime or fishing side of things and perhaps in others—some of the literacy and numeracy problems exist below the level of entry into the VET scheme. So there is a problem which is not being addressed by people either coming out of school or already in the VET process because they have done certificate I or certificate II or parts thereof while they have been in school. We do not have the system to pick up that.

Conversely, for existing workers, because training packages are occupational documents as opposed to classroom curriculum type documents, there has been the ability to identify what employers need in looking at individuals and saying, `What skills do you have?' and looking then at growing a business or growing the task matrix that people perform and therefore defining exactly the areas of development that are required. Achieving that has been a terrific plus in a number of industries, not the least of which is mine. That is probably one of the critical factors in employer satisfaction with certain parts of the training package agenda that we have followed.

CHAIR —Can I pose a question to Ms Bound. Perhaps you are in the best position to answer this, seeing that you are an educationalist. Many years ago—in another life and wearing a different hat—some survey work was done which demonstrated that the average tradesperson in industry had a comprehension level of a 13yearold. So we restructured and rewrote all our material, in the same way as the Sydney Telegraph, the Hobart Mercury or whatever has done, for that level of comprehension. I wonder whether that has changed very much at all in the past 20odd years or whether it is still pretty much reflective of the work force generally.

But there was an issue raised with us by a principal of one of the high schools in South Australia. She said that one of the problems with literacy and numeracy—and this may only apply in South Australia; it may not apply across the board—was that year 10 was the last time students had a compulsory mathematics component in their curriculum at school and that they were only required to do, I think she said, one semester from the beginning of year 10 to year 12. She made the point—and I think there is some validity in it—that if they stay on to year 12, by the time they go to do a test for employment, it is probably two years since they have done any mathematics in their school work. Many of them may be in that situation and may have forgotten the basic principles of mathematics. Is that a common problem in all of the states? Does a similar situation exist in Tasmania?

Ms Bound —I cannot say, because my educational area is adult and vocational education and it is many years since I have taught in secondary schools, but what I can tell you is that certainly year 10 is the last year they do compulsory maths here; it is the same with English. I think most of the ITAB people here would tell you that most VET people are encouraged to do basic maths and basic English as a minimum as part of their VET courses. But I would agree with you that, if no practice has been experienced and there is a gap of several years, there is likely to be a considerable problem. One of the interesting things that is happening in Tasmania in educational curriculum—I am sorry, but the term has gone out of my head—is what we colloquially call the Ls, a new system where the disciplines and the generic skills are integrated right through the curriculum. There are seven or eight learning areas; hence it is called the Ls. This has just been piloted and is now in the process of being introduced across all schools. How it will impact in years 11 and 12 and in relation to VET and the training package areas I think will be really interesting. We are starting to look at some interesting curriculum development processes coming from the states which have all sorts of exciting possibilities.

In relation to one of the first questions you asked about whether training packages develop the skills that employers need, I think—and perhaps I will get lots of derision for this—it takes a fairly skilled educator, where you are not in a workplace environment, to bring those skills alive and make them generic and give deep understanding as opposed to teaching surface `how to' skills. From what I have seen of it, living in the retail sector, even where it is on the job, it is a lot of `how to' stuff and very little in-depth understanding, because employers are interested in employees doing as they are told, and that is inherent in `how to' skills and the way they are taught in those sorts of environments.

CHAIR —One of the criticisms I hear from some employer areas is that within the TAFE system there is too much focus on the technical skills and not enough focus on the generic skills. I presume that extends also into the RTOs—that the focus is essentially on technical skills. What is the reason for this? I find it hard to understand. I did my apprenticeship a long time ago—longer than I care to remember—but when I was doing my apprenticeship I had done generic skill training through the technical system. While I was doing my technical skills, there was also a component of mathematics and English bound up there—the theory and so forth. I am having some difficulty comprehending how it can be so narrow or how it has become so narrow that you can virtually eliminate those skills out of the process, even if you are dealing with the primary focus on technical type training.

Ms Bound —I think there has been a huge shift in the types of skills that are required. When we are talking about generic skills for today we are talking about a quite different set of skills. There has been a move away from tailorist modes of working where we narrow working tasks through to team working and problem identification, problem solving and all those sorts of things. While it may have been in some instances built into some of the trades long term, I think there are different sets of requirements now. The generic sets that are required now are not necessarily picked up—I can speak only anecdotally—in trainers, including those I lecture in the Bachelor of Adult and Vocational Education degree. If those educators undergo a course like BAVE, we encourage them to develop those sorts of skills and integrate them into the technical skills. So it is an integrated package. You can look at that in the entry type level stuff, but at AQF5 and 6 it becomes a problem, because when we did some research into contractual alliances—that is, contractors who tender, and they work together—we found huge skill gaps there. Things like tendering, negotiation skills, sharing finances, developing shared language and all those sorts of things are not part of the prevocational stuff or necessarily built adequately for today's world into the trades areas. It does not necessarily have to be trades—any sort of area, whether it is community and health or whatever, although those sorts of areas tend to be a little bit better at it because the generic soft skills have traditionally been there.

CHAIR —You have made an interesting point there because in the last inquiry this committee did into small business we found that there was a large deficiency in small business in the generic type skills—business planning and so forth. It is not just confined obviously to one level of the work force; it seems to be permeating right across. I do not know how big the challenge is to redress it, and redress it in the short term.

Ms Bound —There are obviously multiple prongs to such an issue, but certificate IV, workplace trainer and assessor, is good for assessing skills in the workplace but in terms of educating people in generic skills we need to develop people with many more skills. So they need to continue their training to become educators as opposed to assessors.

Senator BUCKLAND —Ms Walduck, how does that translate into trying to match people coming from school to jobs through the Job Network? What experience do you have with that, particularly with numeracy and literacy?

Ms Walduck —Within my area, not a great deal. I guess I can only recount what is being advised by my colleagues. With a lot of the trades here in Tassie, TAFE offer numeracy and literacy assistance to a person doing a trade certificate or any new apprenticeship, so that is available. Going back to a previous question, we are finding in our agency that the dollars, not the skills, are the major influence in terms of what employee they are going to put on. There may be somebody who has already done a certificate—for instance, a certificate II—and there will be another applicant who has not had any training whatsoever. The employer will put on the one that will attract the most dollars. I guess it depends on the business and whether they are after the skills or the dollars. It is too easy to just categorise them into one area. It depends upon which is the greater need. For a lot of the small businesses where there are only one or two employees or it is the first time they are putting on an employee, the bottom line is the dollars. They are not looking at the skills. They believe they can get that assistance through the training provider.

Senator BUCKLAND —Mr Benson, I was interested in some comments you made earlier regarding young people leaving school at year 10 because not everyone will get an advantage from going through to year 12. How many apprentices from year 10 do you directly employ—that is, not through job sharing or anything but directly through Skilled Engineering?

Mr Benson —As far as new apprentices are concerned?

Senator BUCKLAND —Yes, year 10 school leavers.

Mr Benson —I do not have that figure to hand, but I can take that on notice and arrange to get that to you.

CHAIR —Are they all new apprentices or do you have any traditional apprentices?

Mr Benson —If we look at the mix between traditional trades or apprenticeships and traineeships, probably I would say between 25 and 28 per cent are in a trades area and the others are in office admin, IT and those sorts of areas. That is the sort of mix that we have at this point.

CHAIR —Could you break them down when you give us those figures of the age groups?

Mr Benson —Certainly.

Senator BUCKLAND —I am quite happy for you to take the questions that I was going to put on notice. Your views are formed. Are they factual or anecdotal? Do you have statistics to back up your claim that it is advantageous for some people to leave school at year 10?

Mr Benson —I have anecdotal information, but I do have statistics in relation to that transfer from year 10 into materials design and technology. The figure is 2,130.

Senator BUCKLAND —What about the more traditional apprenticeships that you mentioned earlier?

Mr Benson —If we look at people coming out of year 10, I have 47 people over the course of the year in the furniture area, 48 in construction and 57 in metals and engineering and mining.

Senator BUCKLAND —Do you have statistics that show how many of those year 10 school leavers go on to complete their apprenticeship and remain in the trade, and can you compare that to those who leave school later, go into apprenticeships and continue in the trade?

Mr Benson —Unfortunately I do not have that information, but I am aware that there is a large attrition rate in new apprenticeships. I am not sure—someone else might be able to correct me on this—but there is an attrition rate in the order of 33 per cent, which seems pretty high from my perspective. I am not sure whether that is for people who have exited year 12 or people who have exited year 10.

Senator BUCKLAND —I have other questions that I will put on notice.

Mr Bendall —There is a very successful organisation in Launceston called Student Works that addresses the needs of those students who are unable to learn in a traditional environment. Whilst I cannot quote the statistics, I guess they would be available. Student Works have a great deal of success with students who have otherwise been written off by the traditional education system. They end up in that organisation through being disruptive in class and failing to learn in any way, and they are taken down trade directions. Student Works operate in very much the same way as the technical high schools did in the 1940s and 1950s, streaming off those who clearly had better skills with their hands than with calculations. I think it is regrettable that at the moment we are forcing all students down one pathway, which has the end destination of university, when many of them are not cut out for that right from the start. Student Works is an excellent example of picking them up, streaming them off into trades and giving them a self-confidence that they never had before because they were regarded as failures in the traditional education system.

Senator BUCKLAND —Is Student Works based in Launceston?

Mr Bendall —Yes.

CHAIR —Isn't that the very point with a lot of this? In the era we are living in, people who do not get through to the higher education system are seen to be failures in many respects.

Mr Bendall —That is true.

CHAIR —That pressure is not just coming from peer groups; it is coming from families and so forth. One of the issues that we have been looking at and talking about is articulation between the school system, the TAFE system and the higher education system. We have been looking at the capacity of people to come out of the school system at year 10—and I happen to agree with Mr Benson for different reasons; I think that is probably the best point of entry for a whole range of reasons—and to be able to enter a trade but with the capacity to go on to earn credits for their trade training, to take that back into the higher education system and to go on and do the training, whether it is in mechanical engineering or another field. There is currently a consultancy being led by the Western Australian government looking at exactly that. In fact, in Western Australia they have a campus with all three elements: TAFE, secondary schools and the higher education system. It is based in Rockingham, just outside of Fremantle. They are using that as a basis for some of this consultancy work. But it seems to be a very important element of the process of being able to overcome that pressure group which says that if you go into the trades you are a failure because you will not get into the higher education system. That capacity is still there.

I will just tell you a little story. In Brisbane we had a group of apprentices in front of us, one of whom told us that after a period of time he had actually qualified to go to university to become a mechanical engineer but had decided instead to go and serve an apprenticeship as a diesel mechanic. I asked him why he had made that career decision when the other opportunity was there. He answered that it was quite simple. He said, `In four to five years time I'll probably have $50,000 in the bank, I'll own my own car and I'll still be able to go on to university and get the degree. My mates will have gone to university. They'll probably have a $50,000 debt, no car and not be able to afford to buy one.' He said, `I think I've made the right career choice.' I thought that was a new spin being put on it. Maybe that is a good argument and we ought to put it up in lights and say to young people, `Look, there's a smart way to do this and benefit from it.' But it was an interesting turn on what we had been hearing previously.

Ms Bound —The Centre for Research and Learning in Regional Australia undertook research into VET in regional Australia. Consistently throughout regional areas around Australia we found that it was students who intended to go to university who were undertaking VET subjects and in fact taking many of the jobs that students who we would traditionally think of as doing VET would otherwise have. That were doing so not for quite the same rationale but for similar sorts of reasons in the sense that it would give them access to work to support them while they were going through university and so on. But, of course, that is squeezing out other people. I think what is valued in our system is structured into the school system, into TAFE and universities. It is a value laden process.

Mr Benson —When we started our group training company, we found that we wanted to try and address the drifting offshore to the northern island of the whole range of skills of people coming out of university, so we approached the government to see whether university graduates in IT and botany could undertake a certificate IV or something like that under the VET system to make them more employable. In actual fact, there were no government incentives for those people, but they picked up practical knowledge and some of that addressed the drifting offshore of a lot of them. So a combination of this and what Helen was talking about would be quite meaningful at the end of the day. Also, not everyone presses their buttons at a particular time. Like a number of colleagues around the table, I started my time as a tradesman, as a carpenter. Senator, you were talking about applied information. I did not take much of an interest in geometry until I had to pitch a roof. Once it starts to be applied, you start to relate to it.

CHAIR —There do not seem to be many carpenters today who can pitch a roof.

Mr Benson —Yes. When I was 40, I went to university and did a Graduate Diploma in Urban and Regional Planning. This is a great country, and you can do things like that because the system allows you to. I just think there are a whole range of non-traditional ways that people learn and gain skills in this country.

Senator BARNETT —We had a criticism this morning of the state government policy of quarantining the training TAFE provides to traditional labour. I am seeking your views around the table with regard to that. You mentioned Rural Industry Training, for example. The RTO this morning said that they thought it was unfair and that it was disadvantageous to them and to other RTOs who might want to put up their own proposals. They said that, so long as they have the skills and the infrastructure, competition is good and it provides greater efficiencies and so forth. Would anyone like to respond to that criticism?

Mr Zichy-Woinarski —I would like to respond to that. The infrastructure that was developed by industry in conjunction with TAFE Tasmania and the university is such that it would be very hard to replicate it from any other RTO. It should be laid before this inquiry that the criticism is that industry, with the university and TAFE Tasmania, developed a training farm which is run as a commercial farm as well, so the students, when they are at Burnie, will actually work on real-life, serious farming and not mickey mouse stuff. They have an 80-acre farm which has a management committee at Burnie and has to run at a commercial profit like any other farm. They get contracts from Simplot, Tasmania Alkaloids and Glaxo. They grow carrots. They even have a grazing herd which they fatten up and sell. Those students also work on university research and help with the manual labour which is associated with some of the rather interesting university research projects that go on up at the Burnie farm. The whole thing was seen by industry, the university and TAFE as a joint venture. There have been huge amounts of public money for it, both state and federal. The university, TAFE and industry saw that, if you opened up training in agriculture to all and sundry registered training organisations, there would be a diminution of training and the standards that we were seeking would disappear.

Mr Byrne —My industry has a different opinion and has had a different experience. My industry thinks that its members are mature enough to negotiate the best training. It might take some time and there might be a few mistakes along the way, but why there is a differentiation between TAFE type training and private RTOs is a mystery to us. It goes beyond the fact that the training dollar is quarantined; it goes to the fact that TAFE institutions have a whole range of funding available, including funding to provide capital and funding to provide maintenance. So, in effect, you have two levels. You have a superior level of funding for TAFE and an inferior level for private RTOs. The fact that a lot of those RTOs are the preferred provider speaks huge amounts for the excesses of some of the TAFEs.

In the seafood industry in Tasmania, TAFE are a very minimal provider. We work very heavily with people like the Australian Maritime College and private providers such as the one I am involved with, Seafood Training Tasmania. As an example, with the uptake of the Seafood Training package, at one stage we had 50 per cent of the total number of new apprentices in the country in Tasmania. It is a bit less than that now, but overall I think we have had 30 per cent of the total number in an industry that employs 2,500 people. That gives you an example of what can be done if you have active partnerships with private providers. I am not saying that the same could not be done with a TAFE institution. But, as for the concept that you can have simulated work environments, even though you might have wonderful farms et cetera, in our experience the workplace is the best environment because the skills are there. They are some of the soft skills that were mentioned earlier, like turning up for work on time—a fair and accurate measure of enthusiasm demanded by employers. These are difficult to instil in a simulated work environment, no matter how good the equipment and no matter how closely it matches the work environment.

Mr Milne —Leading on from that, I think the maritime model as such is very interesting with that combination of handson VET type stuff and higher education. As a necessity, anyone who gains a qualification to go to sea has to have hands-on experience and gain sea time, so you have that VET handson component leading in as you go up into higher education and degree type situations. Currently our placement into the work force is something like 85 per cent. These are the people we put through that industry type pathway to higher education. We have found it very, very successful.

Mr Baker —Overall TAFE deliver literally 90 per cent of our qualifications in both automotive and engineering. We have had a range of experiences with them. I should say that, as far as capital infrastructure is concerned, it would be very difficult for another organisation to replicate what TAFE have, although we express concerns at the way in which TAFE perhaps generally look towards centralising the delivery of those functions. One of the difficulties that we confront on a regular basis with TAFE is their reluctance to recognise an assessment that is done by another RTO. TAFE hold themselves up to be the giver of all knowledge and skill. For us that becomes a bit of an issue, particularly with the development of the training packages and the delivery of those packages with other RTOs. Because of the cost infrastructure, it would be very difficult to replicate it—although, as I indicated, we do have a serious problem as far as the state government's desire to centralise training is concerned. That in turn impacts the higher end of the qualification area—in particular, the certificate IV. We have currently got a submission with the Department of State Development in relation to expanding that program to provide recognition of the current competencies for people who have achieved those outcomes.

Mr Lijauco —There are two levels. One is the qualification level, the certificate III or apprenticeship trade level, where funding is mostly tied up with TAFE because of the infrastructure, the cost and so on, which is fine. I guess there is just a need for a better acknowledgment of the on-the-job component of the training that links into the assessment and the other requirements. The other level is the statements of attainment, which is part of the qualifications. At the moment funding is available for those but under competitive bids, which makes it very difficult to access the funds. If more funding were available for those types of statements of attainment, that would ease the problems of, say, casualisation of the work force, seasonality and so on. Workers would be able to build up their qualifications by attaining several statements to make up the qualification.

CHAIR —Can I ask you all generally whether you support the concept of the skills passport—or are you not aware of it?

Mr Mulcahy —There are skills passports and there are skills passports.

CHAIR —I am talking about the one that ANTA talk about.

Mr Mulcahy —I do not know that the ANTA version, in relation to some of the industries, has been developed sufficiently to address all the issues.

Mr Coad —I think the qualification is a passport within itself. It tells you the level of competence that someone has got. Coming up with a qualification is within itself a passport; it is a list of competencies that an individual holds. There is another complex issue here in terms of licensing arrangements which overlays all that. It involves how you integrate the training with those licensing arrangements and the duplication that exists. In the building and construction industry I am pleased that this state government is setting up a new building act which requires accreditation of all builders within the state. They have linked that back to the Australian Qualifications Framework as a criterion for accreditation. It is important that those sorts of things happen because, if you do not do that, you are going to have problems.

CHAIR —You have got a Premier who knows something about the industry—I do not know if that is good or bad! I think we have just about reached the end of the session. On behalf of the committee, thank you all very much for coming along this afternoon and for your contributions. They have been particularly valuable to the work of the committee. Hopefully, at end of the day, we will be able to come up with some recommendations in this area to address at least some of the problems, if not all of the problems.