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Wednesday, 18 October 2006
Page: 206


Ms MACKLIN (5:16 PM) —The Prime Minister has finally been forced to act on Australia’s raging skills crisis. There is no question that the skills crisis is hurting Australian families and hurting businesses, and at last we have the Prime Minister acting on this crisis. Unfortunately it seems that previous government speakers, like the Prime Minister, do not recognise that this crisis exists, but Australian businesses and Australian families certainly know that it does. We only have to go back over the last 10 years to figure out why it is that we have such a serious skills crisis. We have had a government that has seen 300,000 Australians turned away from TAFE. Unfortunately it seems to be the case that only now that this skills crisis is hurting the Prime Minister politically are we getting some action.

It is also the case that the Prime Minister is acting to desperately catch up with the range of Labor policies which have been announced over the last 18 months—policies that Labor has put forward to make sure that we do get more carpenters, plumbers, electricians, mechanics and so the list goes on—into jobs and working. As many—most importantly, the Governor of the Reserve Bank—have said, this is the No. 1 economic issue facing Australia. Yet in the Prime Minister’s ministerial statement he said that we needed to put ‘the more breathless commentary about a skills crisis into proper perspective’.

Australian families certainly have the skills crisis in proper perspective. They have the perspective of four consecutive interest rate rises at the same time that the Reserve Bank has been issuing warning after warning. We have a government member over there laughing. He is laughing at the fact that Australian families have faced four consecutive interest rate rises since the election and, of course, this government has continued to ignore the warnings it got from the Reserve Bank as far back as 1999. From as far back as 1999, the Reserve Bank has been telling the government that skill shortages are putting upward pressure on interest rates.

Australian businesses, along with Australian families, have also got this skills crisis in perspective. The Prime Minister might not have it in perspective, but business certainly does, because business has been delaying billions of dollars of resource projects because of the lack of skilled workers. Business, like the Reserve Bank, has been telling the government for years that this is a very serious problem holding business back. We need to go back and have a look at why that it is: because of the huge cuts this government imposed a number of years ago on the funding of our TAFEs and our universities.

It seems like it is only the Prime Minister who lacks the perspective to see the impact that the skills crisis is having on Australia. As I said before, the lack of skilled workers is the No. 1 economic issue facing this country. It is dragging down investment, slowing economic growth and holding back productivity. I refer government members to the statement on productivity just last week from the new Governor of the Reserve Bank—it is pushing up inflation and putting upward pressure on interest rates. These are all the serious economic impacts of the skills crisis. This Prime Minister created the skills crisis; it is his responsibility to fix it.

As I said before, the skills crisis started when the government back in 1997 implemented massive budget cuts in our TAFE system and in our universities. In fact, not only did they first cut the funding to our TAFEs and our training system but they then abolished growth funding altogether. So for years our TAFEs were just treading water. Instead of training young apprentices, funding cuts actually sent our TAFEs into a survival scramble.

In 1998, the government actually abolished the National Skills Shortages Strategy. They also slashed university funding—the place where all these very important professionals get trained—for example, engineers. Of course, the result of slashing the funding to universities not only has seen a decline in the number of Australians going to university but also has seen the government foist the funding burden onto Australian students, and now the debt carried by Australian students and graduates is soon to reach $20 billion. That is being carried by our students and graduates because of the extraordinarily short-sighted decisions made by this government.

This appalling track record has most recently been highlighted by the OECD. What they show is that Australia’s public investment in tertiary education, that is, in our TAFEs and universities—the very foundation of our skilled technical and professional workforce—has gone backwards by seven per cent since this government was elected. We have gone backwards. We are the only developed country in the world to have gone backwards; the average across the rest of the developed world is an increase of 48 per cent. So everywhere else in the developed world they are investing in the future of their people, investing in training and investing in higher education. Everyone else is moving forward. Only Australia is going backwards. This year, the Howard government is spending proportionally less of the federal budget on vocational education than last year—less on this most critical area at a time when our national vocational and technical training effort needs a significant boost.

The Australian Industry Group have been out there really pressing the point on the government. They released figures last month showing the extent of the skills crisis. They said two-thirds of our jobs need a vocational education, but only one-third of the working population has a trade or vocational qualification. The Australian Industry Group said that within a decade we will need an extra 270,000 technical workers. The mature age wage subsidy that was announced by the Prime Minister will support 10,000. The measures that are in this statement go nowhere near meeting the demands of industry for skilled workers.

During the speech the Prime Minister boasted of his apprenticeship statistics. One thing he did not mention—not surprisingly, from this Prime Minister—is that today only one-third of the apprentices in training that he boasts about are actually in the traditional trades. You have to discount his figures as only one-third of them are in the traditional trades, compared to two-thirds who were in the trades 10 years ago.

But the most extraordinary omission from the Prime Minister’s statement last week is that there is nothing to help our young people—nothing. There is not one initiative to ensure we get more young people into training, into the trades. It seems as though the Prime Minister either did not know or just completely ignored the fact that two-thirds of Australian apprentices are under the age of 25. There was absolutely nothing in this package to ensure that we encourage more young people into the trades and that we do more at school to encourage them into the trades. And, most importantly, there was absolutely nothing to help them complete their training. Forty per cent of our apprentices drop out of their training before they finish. One of the critical reasons we have such a serious skills crisis is that so many young people—40 per cent of them—are dropping out of their training before they finish their trade. Was there anything in this skills package to address that massive dropout rate? Not one thing. There was no trade completion bonus, which Labor has proposed. There was nothing to address this serious dropout rate.

As the previous Labor spokesperson—the member for Cunningham—indicated, there is nothing to address the very significant levels of teenage unemployment, particularly in some parts of Australia. Her area of Wollongong has one of the most serious levels of teenage unemployment, where it is over 40 per cent, and there is absolutely nothing in this package to help those young people. There is nothing in the package to help lift training standards. One of the big criticisms of current training arrangements is the enormous number of what, in the vernacular, are called ‘tick and flick’ training practices, where we do not ensure that the training our young people are getting is really up to the mark. Once again, there was nothing in this package.

Labor welcome any efforts to help those who do not finish year 12. We certainly believe that education and training should not be a once in a lifetime opportunity, so anything that helps people who have not had the opportunity to finish school is a good thing. We also welcome this change as, hopefully, a recognition by the Prime Minister that you cannot just leave school at 15 and stop learning. You do need literacy and numeracy skills to compete in our modern economy. Year 12, or the equivalent vocational qualification, is fast becoming the new labour market minimum requirement—and I hope this skills package is a recognition from the Prime Minister that he should not be encouraging our young people to leave school at year 10.

We do have some concerns about the workability and scope of the voucher programs that have been put forward because some international evidence certainly shows that existing workers with low-level skills are not likely to have full knowledge of what it is that they need to learn. They are often very reluctant to participate in learning and also have a lot of difficulty finding the time for training outside working hours. So these are some of the practical issues that these mature age workers will face in accessing this voucher.

Another problem with what has been announced is that the training provided by the voucher is available only up to certificate II level. One thing that of course needs to be pointed out is that this level is nowhere near what is sufficient for a trade qualification and therefore will not do anything to address the skills shortage. Nevertheless, it is certainly better than nothing. We are finally getting the government to do something to help these people who have difficulty with their very basic skills, but we will be concerned if we do not see more action from the government to get more people into the trades.

We do welcome the support for apprentices to undertake business training. We actually proposed a similar initiative as part of our skills account policy. We also, not surprisingly, welcome the extension of employer incentives at diploma and advanced diploma level. This was actually contained in the Leader of the Opposition’s skills blueprint announced a whole year ago. Obviously we are glad to see the government pick up these initiatives. It is also a good thing to see the wage subsidy for mature age apprentices. In fact it is interesting to note that this policy designed to help mature age workers is very similar to one that we had as part of Labor’s Working Nation program more than 10 years ago—a program that was, of course, trashed by the government. If they had not trashed all of those initiatives more than 10 years ago, in fact, the skills crisis would not be as bad as it is today.

It is also very important to get these extra places into engineering. I would have to say that one of the problems with engineering is that we have actually had a decline in the number of Australian students commencing an undergraduate engineering degree. I think the government needs to look far more deeply at the problem of the shortage of engineers. Providing additional places is one thing; getting young people in a position to want to do engineering and encouraging them to do engineering is a big issue that the government has yet to address. (Time expired)