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Tuesday, 14 June 2005
Page: 45

Mr CREAN (5:15 PM) —Australia faces a skills crisis because of a failure of government policy. The problem is that the Skilling Australia’s Workforce Bill 2005 takes away the life support system that underpinned the development of effective vocational education and training policies in this country and in its place applies a couple of bandaids. This is not a crisis that has come upon us recently. It is one that the government has been long warned of and their failure to act means we have failed our youth in this country, we have failed our businesses in this country and most of all we have seen this failure lead to an underperformance by us as a nation.

This, of course, is just one more example of policy failure by this government, which has even acknowledged on certain occasions that it inherited a robust, dynamic and sustainable growth economy. It has allowed itself through complacency to see us underperforming as a nation. It is complacency that has seen a record current account deficit, record foreign debt and the combination of things putting upward pressure on interest rates. What we have is not just the trade crisis that I referred to but now this skills crisis and an infrastructure crisis—all because of the failure of government policy.

I speak in support of the amendments moved by the shadow minister. There are a number of points I want to make in relation to this area. Firstly, skilling a nation does not just empower individuals; it is an essential driver of economic growth. Secondly, equipping a nation with the necessary skills to meet the demands of a modern dynamic economy does require a comprehensive integrated approach throughout the education and training sectors and it needs that across all levels of government, working together but connected to the needs of industry. Thirdly, Australia’s skills crisis has not come out of the blue. The government has known for a number of years that skills shortages were emerging but it has failed to respond and we are now paying the price: lost opportunity for the individual and lost opportunity for the nation.

The fourth point I want to go to is that the government’s response to this crisis is short sighted. In my view it is doomed to fail. It refuses to recognise the extent of the problem, which was only responded to in a half-baked way because of panic in the lead-up to the last election that they needed to look as though they were doing something in the policy response area.

As for the comprehensive policy approach that is needed, we all know that we are confronted with a rapidly changing global environment. If Australia is to continue to grow and prosper and to be able to sustain that ability we must change as well. The empowerment of individuals must be developed through a policy framework of lifelong education and training initiatives. The driver of sustained economic growth is how well we manage that dimension of the strategy.

Labor have always understood this and when last in government we did make a significant contribution to developing the skills of the country. Under us, we saw school funding increase by 55 per cent in real terms. It was a huge commitment by the then Labor government. We also saw TAFE and other vocational sector funding increase by 56 per cent in real terms, as well as the huge expansion in universities. There was an increase in funding of 60 per cent and an almost 80 per cent increase in the number of university places. None of this came about overnight. We had to plan for it, we had to prepare for it and we had to budget for it.

In contrast—and it is a pity that the member for O’Connor has left; he was telling us how much the government had done—in its first two budgets, and off the back of the trajectory that Labor had put in place, this government slashed $240 million from the vocational education and training sector. That is what the Howard government did in the first two budgets, 1996 and 1997. Following that, we had the 1998 to 2000 ANTA agreement which abolished growth funding altogether and froze the funding to the vocational education and training sector for the following three years. How can you expand as a nation, how can you increase the opportunities, if you are not only cutting real growth but also freezing the funding?

When Labor were in office we established ANTA, the Australian National Training Authority. We did that in 1992 to coordinate and drive a national agenda with the states. We did that through cooperation but with an agenda for vocational education. We had a commitment to provide growth funding to the sector on the basis that the states agreed to maintain their funding commitment. We had the leverage to ensure that that funding occurred.

In addition to the establishment of ANTA, in 1994, through the Working Nation program, we focused particularly on re-engaging the long-term unemployed and on lifting the skills level of the nation—particularly the skills of our young people. We used that program as a means to empower not just individuals but regions. Through the structure of area consultative committees, regions were given the opportunity to identify the skill needs of their areas and have the Working Nation programs and the ANTA funding respond positively to those needs.

The Labor government established Netforce, an expert committee comprising eminent business, union and community leaders who understood what industry wanted and needed to address their skill requirements. This was an enabling, empowering, grassroots up or community based approach. If I can put it this way: the national programs were actually responding to what regions, local communities and businesses were asking for. The task of Netforce was to expand on accredited training in the non-traditional trade areas. It did not replace the apprenticeship system; it complemented it. The reason was simple: the non-trades area was the fastest growing area of job demand. Labor also introduced the training wage and we developed labour market policies which targeted subsidies, core management and skills accreditation to what individuals, industry and the nation needed.

These initiatives were hugely successful. To give some indication, when Labor gained office in 1983 there were fewer than 35,000 structured training places. By 1996 Labor had almost trebled them: 60,000 apprenticeships and 36,500 traineeships. What did this government do as soon as it got into office? It abolished Netforce immediately, and now it is abolishing ANTA. This is not a government that builds skills; it is a government that deskills. That is why the skills crisis that we are facing is of the government’s making.

It could have been avoided. Again, I go back to the success of the programs that we put in place. In 1995, as Minister for Employment, Education and Training, I released Australia’s Workforce 2005: Jobs for the Future. That report identified the skill needs of our nation 10 years out. It was a road map for our skills needs. It identified the changing nature of our labour force, demographic changes, immigration factors, and industry and occupational needs. That is what Labor did in office. When we were in opposition we actually called upon the government to join us in a bipartisan approach and repeat the exercise—to update it and take it another five years out. In 1999 we called on the government to produce the updated report.

As I was preparing for this speech I was reminded of Greg Wilton. Today is the anniversary of his death five years ago. He was one of those people who understood the significance of this issue and identified with it, and he pushed us to update the program. We called on the government to do it but they refused. In my view, this reflected their short-sighted and narrow nature. They refused to recognise the nature of the problem then—and so what did the Labor Party do? We produced it from opposition. We produced the next stage report, Workforce 2010. It again correctly identified what is apparent now: that the strongest areas of new jobs growth over the next decade will be in a number of key growth areas, particularly in retail trade but also in human services, health, education, welfare, property and business services.

Since 1998 the Howard government has turned away 270,000 people from TAFE and created an $833 million skills deficit by lagging behind the states and territories in investment in vocational education and training. The 2004 skills shortage list includes 42 professions and trades—including those identified by Labor in Workforce 2010—such as nurses, and child- and aged-care workers. The Australian Industry Group has estimated that 175,000 people will leave trades over the next five years, with only 70,000 entering trades. Skills growth, as a driver of productivity, has dropped 75 per cent over 10 years and vacancies for skilled tradespeople have increased by a massive 68 per cent since June 1997—that is according to the skilled vacancies index. All of these shortages were, therefore, foreseeable. A government that was planning for the future of the nation should have been better able to anticipate them, prepare for them and put in place the policies that would have avoided the problem that we are now facing.

The Howard government promised, on its election in 1996, to boost the numbers of apprenticeships. That is what it promised because it was arguing then that we had a problem. Of course, it was ignoring the initiatives that Labor had put in place. What was its solution at the time? Its solution was to roll traineeships and apprenticeships together and call them ‘new apprenticeships’—essentially, to argue that they were getting the numbers up. But despite that fudge it has still fallen well short of the nation’s needs. In doing that the government has failed young people, business and the service providers. It has failed the nation.

Most of the growth in apprenticeships under this government has been in the areas where there are no skill shortages, and the number of people commencing a traditional trade apprenticeship between 2000 and 2003 has actually dropped. During a period of sustained economic growth we saw a drop of that dimension. A staggering 40 per cent of people who start ‘new apprenticeships’—their term—do not complete them. They do not complete their training, at a time when we have severe skills shortages and a desperate need for more skilled workers. You have to do more than simply change the name; you have to have a strategy and you have to put in place the structures that will deliver on that strategy.

When confronted with this skills crisis before the last election, the government announced a couple of initiatives. The big ticket items to tackle the skills crisis emerged essentially in panic from the government. At no stage in the lead-up to the last election did the government say it intended to abolish ANTA, which I have talked of earlier. Its policy announcement was that it would establish 26 technical colleges and, in the process, cut across Australia’s already well-established TAFE and vocational education and training schemes. The problem with the initiative is that it will not be fully in place until 2008 and the first apprentices will not be fully trained until 2010. We are supposed to be dealing with a skills crisis now, but the government’s policy initiatives do not even begin to deliver until five years down the track. And even when they are finally in place the technical colleges will graduate only around 3,600 students each year when the AiG, amongst others, is estimating a skills shortage of 100,000 workers over the next five years. It is a totally inadequate response. Tacked onto the technical colleges announcement in the election campaign was an announcement to give new apprentices a tool kit. At a time when the country is calling out for real solutions, the government scraps one of the success models of the country, sets up a duplicate system and offers a tool kit.

This country needs a far better set of solutions than that, and so we went to the last election promising to build upon the Labor legacy that I have talked of before. We had an approach in the lead-up to the last election that would have seen a billion dollar strategy to boost Australian skill levels and address the skills shortage: 36½ thousand new vocational education and training places each year, a commitment to pay TAFE fees for secondary students to encourage more young people to get a VET qualification while at school, 6½ thousand skill-up apprenticeships through group training organisations in regions of skills shortage, more funding for group training organisations, more opportunities for mature age Australians and an extended youth allowance to new apprenticeships. This approach built on Labor’s $27 million Bright Futures program to help schools raise awareness of post-secondary study options, including the benefits of a career in the traditional trades. So we had a real response to the skills crisis. We have since that time also announced the $2,000 trade completion bonus to encourage Australians to complete training in skills which are in demand. We have also proposed the creation of 4,000 extra trade training places in our schools each year.

What we are really saying here is that instead of the Howard government importing an extra 178,000 skilled migrants, which has been its effective training policy since 1997—but turning away 270,000 Australians from TAFEs since 1998—it must begin to embrace the sorts of comprehensive policies that Labor announced and went to the last election on and implement them in a way that will see a massive expansion in VET effectiveness and skill formation in this country. Despite all the evidence—despite the acute skill shortages, despite the negative impact that it is having on our export performance and despite the increased costs it is imposing on all Australians—the government pays little more than lip service to responding to the country’s needs. Instead of building skills through a comprehensive package involving all levels of government, industry and education sectors, it is tearing down the very structures that worked so well.

Despite promising prior consultation before determining the new national funding arrangements, the Commonwealth did not consult with state governments over the content of these bills. This is not the way to run skills development, a set of training and education policies for a nation which has continued to grow off the back of the policies put in place by us and will sustain us into the future but which will not sustain us if we are running down the very mechanisms by which we can drive productivity, get skills formation and enhance our productive capacity. You cannot do it on your own. You have to do it in cooperation with the states. This bill does not do it, and it is the failure of policy that will continue to undersell us as a nation. (Time expired)