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Wednesday, 16 August 2000
Page: 19075

Mr RUDD (11:01 AM) —I rise in support of the opposition's amendment to the Vocational Education and Training Funding Amendment Bill 2000 because of the critical importance of voc ed and training for the nation and because vocational education and training represents one of the four interlocking pillars for our vision for the future of this nation. Those four pillars are school education, vocational education and training, higher education and research and development in the broad. These four pillars in fact form interlocking components of our vision for the knowledge nation. They are the four pillars that together make up what we believe will be the armoury for this nation's future economic development as well as the arsenal through which we deliver our vision for social justice.

We in the Labor Party are excited about the knowledge nation. As a concept, it now permeates everything we do at the coalface of public policy, while at the same time it provides us with a galvanising, overarching vision for what we are about. We do not apologise for having a vision for the nation. We do not apologise for having this work currently in progress. We do not apologise for the fact that the work on this is at this stage incomplete because we know that the direction in which we are heading is the right direction. We know it is right for the nation, we know it is right for our party, and those who are hardheads opposite also know that it is the right way to go.

When we look at what we in the Labor Party stand for on the knowledge nation, and we look more broadly at where this fits right across the developed economies of the world—right across the OECD—we on the Labor side of politics fall right within the OECD mainstream. It is what we see emerging as a priority in Blair's Britain, in Schroeder's Germany and in Jospin's France, and we also see it in part in Clinton's America. The common theme is simply this: you cannot build the new economy, the knowledge economy in the absence of a focused effort through the public institutions of the nation to create the skills mix necessary to fuel the new economy—the knowledge economy. You cannot get to that end point by simply abandoning the field and by simply saying that the public institutions of the nation, such as TAFE, have no role. You cannot simply arrive at a conclusion that, in fact, it is all up to the market—that basically it is a matter of once around the dance floor with Adam Smith and it will be all okay in the morning. Let us just watch the invisible hand at work, let us just see the market sort it out—education being no different to any other commodity, good or service, being publicly transacted in a free market. That is not my view and it is not the view of the Australian Labor Party. But it is the view of those who believe that by absenting the field and simply allowing education to be treated thus, the correct mix of skills development machinery will emerge across the nation and we will equip ourselves for the future. That is not my view at all. The basic philosophical and practical reason for that is this: education is not just another good or service. Education is a public good, and because it is a public good it has to be treated in a different way. If you get the concept wrong at the foundation level, everything else by way of policy built on that foundation falls apart at the seams.

There are others who have a different view of education markets, and there are others who have a more general view of the role of markets as well. I note with respect the view on the subject of, for example, the member for Werriwa who has a more undiluted confidence in the teachings of Adam Smith on questions like this. I think Adam Smith is a great moral philosopher, even a great moral theologian. He is however a flawed economist when it comes to the operation of markets. He has great teachings for modern Australia, but I have to say that he was not the end of the canon as far as a proper policy mix for such public goods as education is concerned.

When we look at where we should be going as a nation on this question, we in the Labor Party, in our call for the development of a knowledge nation, are not Robinson Crusoe. A very interesting document emerged from Europe last year. It is entitled `Aims and ambitions for lifelong learning'. It says:

The challenge every country faces is how to become a learning society and to ensure that its citizens are equipped with the knowledge, skills and qualifications they will need in the next century. Economies and societies are increasingly knowledge-based. Education and skills are indispensable to achieving economic success, civic responsibility and social cohesion.

The next century will be defined by flexibility and change; more than ever there will be a demand for mobility. Today, a passport and a ticket allow people to travel anywhere in the world. In the future, the passport to mobility will be education and lifelong learning. This passport to mobility must be offered to everyone.

Part 1: Basic Principles

Meeting our social and economic goals will require a renewed commitment to investment in lifelong learning.

—by Governments, investing to enhance education and training at all levels;

—by the private sector, training existing and future employees;

—by individuals, developing their own abilities and careers

The rewards for investing in people have never been greater and the need for it has never been more pressing. It is the key to employment, economic growth and the reduction of social and regional inequality. As we move into the next century, access to knowledge will be one of the most significant determinants in income and the quality of life.

The document from which I have just quoted is the summit resolution of the Cologne summit of the Group of Eight most industrialised nations in June 1999. We can see from that document that what we in the Labor Party are arguing today, which is dedicating the entire public policy effort of the Commonwealth towards the creation of a knowledge nation, falls right within the mainstream of what the G8 have enunciated in this document, which they passed in June last year. It falls right within the mainstream of what the OECD more broadly has endorsed as its general policy direction. Where did I come across this particular resolution of the G8? The document in which I actually located it was a very important and worthwhile submission to the current Senate inquiry into the quality of vocational education and training in Australia. I quoted from submission No. 140. In fact this resolution forms a core part of submission No. 140, which comes from the Australian Council of Trade Unions, the ACTU.

At the forefront of the modernisation push in bringing this nation into the OECD-G8 mainstream is the ACTU. I know it is politically convenient for those opposite, particularly the Minister for Education, Training and Youth Affairs, Dr Kemp, to permanently demonise the ACTU and every element of organised labour. What I remind Dr Kemp of is that when you look at the quality of the submission which has been lodged by the ACTU in this Senate inquiry—which I note parenthetically that Dr Kemp opposed, believing that the Senate inquiry was simply going to be a waste of time—you will see that in the core of the ACTU's submission is a commitment to the paramount importance of directing the public resources of the nation to the development of the skills necessary for a knowledge economy, for a new economy.

It becomes very tedious for those of us on this side of politics, and I think those who listen to the debates of this House, to hear day in and day out, as part of some sort of ongoing morality play, the view by both the Minister for Education, Training and Youth Affairs and the Minister for Employment, Workplace Relations and Small Business that the epitome of all evil in terms of this nation's future economic development is organised labour and the trade union movement. I would have thought that from the document from which I have read, which is a most progressive document indeed, we see the ACTU strongly looking to the future, looking to a vision for where we need to go in terms of the creation of a new economy, not in the reverse direction. I think it would be very useful for this parliament if the minister for education and the minister for workplace relations finally concluded in the year 2000 that the Cold War is over, that organised labour and the forces of the Left are not out to destroy civilisation as we know it and that they in fact represent some of the most progressive bodies of thought in terms of how we modernise the skills base of the nation. If the government cannot appreciate that in modernising the skills base of the nation they must bring organised labour and the ACTU with them, then it is a very paltry and stunted vision they have for the nation indeed and, at level of practice, it simply will not work.

The knowledge nation and the skills of the new economy are critical for our future national economic performance. They are also critical in terms of the skills which individuals will require for their own future quality of life. Again, turning to what the ACTU has put in its submission to the Senate inquiry on the question of the impact of skills levels on the capacity for individuals to obtain secure long-term employment, it says in paragraph 1.10:

Studies undertaken in Australia and overseas have reached the clear conclusion that the level of job security and the incomes received by employees are directly linked to the vocational training received/competencies acquired through participation in skill development.

In a recent OECD report the correlation between education and training opportunity and employment security was clearly established. The report showed that in Australia for young people between the age of 20-24 the unemployment rate related to education qualifications was:

(i) Below upper secondary education 18.4%

(ii) Upper secondary 11.1%

(iii) University level 5.4%

But the submission also goes to the question of levels of income. Again, quoting from the ACTU submission, paragraph 1.12 states:

Along with improved job prospects improved education and training opportunities also offer higher levels of income which when translated into a working lifetime amounts on average to hundreds of thousands of dollars. The OECD report also shows the differences between remuneration of workers 25-64 years of age in Australia by level of educational attainment—the report shows that, when compared to the average annual earnings of a male who has completed upper secondary education:

(i) Lower secondary completion -10%—

that is, 10 per cent lower than the average national income—

(ii) Tertiary completion +40%—

that is, 40 per cent above the average national income—

(iii) Non university tertiary +18%—

that is, 18 per cent above the average national income.

I have quoted extensively from the ACTU submission to leave those opposite with one single impression: the ACTU, the peak body of organised labour in this country, actually has in the core of its vision for the future of the knowledge nation the need to bring the entire nation along with us, to create the skills base necessary for a new economy. It is not acting as some sort of antediluvian troglodyte out there campaigning against this. It wants to see the democratisation of these skills so that all Australians have access to them, not just a narrow minority.

We on the Labor side have a policy vision: it is called the knowledge nation. We are in the process now of turning that into a concrete policy program. By contrast, I ask those opposite to reflect on the direction in which they are taking us in this particular area of policy. I think it is probably best described as what others have called the rowing boat strategy. The rowing boat strategy was a term I think first coined in British politics in the 1960s. It referred to that most forgotten of all post war British governments, that of Sir Alexander Douglas-Home. Basically, the core elements of the rowing boat strategy are along these lines: you keep your eyes fixed firmly ahead while moving as briskly as possible in the reverse direction. That is called the rowing boat strategy.

When you apply it to government policy on vocational education and training and, more broadly, to skills development in general, sure you can say their eyes are fixed firmly ahead—they say they want more skills for the economy—but, when you unpack the concrete reality of that which they are doing, they are moving as briskly as possible in the reverse direction. In fact, the rowing boat strategy applies more broadly to what the government are on about. They say, for example, that they, the government, are concerned about reconciliation. That is the language; the concrete actions in which they are engaged take them in precisely the reverse direction. They talk about engagement with Asia. That is the direction in which they say they are going. If you look at the concrete actions, they are in fact heading in precisely the reverse direction. The rowing boat strategy is, I think, an analogy that fits quite nicely with what actually is happening with this government's performance on key elements of knowledge nation policy, including vocational education and training.

What are the four pillars of this government's vision for the future as far as skills formation, skills development and skills for the new economy are concerned? I think they have got four pillars: the first pillar is tax, the second pillar is tax, the third pillar is tax and the fourth pillar is tax. We have got the consumption tax, we have got the changes to the income tax rate, we have got the PAYG tax coming in, we have got the capital gains tax changes which have occurred, and I gather that we are going to have, at some stage in the by and by, implementation, in part at least, of the turnover tax. That is fine. All I would say to you is that, as far as tax reform is concerned, it does not matter a B as far as developing the capacity within the nation to provide for the next generation of Australians the skills necessary to participate equitably in the new economy, in the knowledge economy. It again derives from the philosophical point that we were discussing earlier in this debate, that is, if at the end of the day your view is that education is nothing more than a market of goods and services, then the view of those opposite is essentially this: get the price signals right through changes to the taxation mix and everything will sort out in the washthat is, market forces will take over, Adam Smith will give it a rev-up with the invisible hand andbang!it will all be okay in the morning, you will have exactly the right mix of skills training and development institutions, organisations and mechanisms in the economy that you need. It is just not like that because education is, as I said at the outset, a public good.

If we look how all this is unpacked on the ground in the key elements of education policy across the country, what do we see? We see this government systematically strangling the resource base for government schools. When it comes to universities, what we see is death by 1,000 cuts; again, in terms of the bleeding of the funding base for this nation's tertiary institutions. We have seen the collapse of research and development, R&D, in the broad. What we have seen also as far as this bill is concerned is a complete hoeing into the resource base of vocational education and training. Let us look at the VET record. Between 1996 and 2000 we had a 22 per cent increase in enrolments in VET and, at the same time, zero growth in effective growth funding. Between 2000 and 2003 it is projected—not by us, but by the ANTA CEOs, and even by DETYA itself—that there will be an increase of between three and six per cent per annum in enrolments in VET across the nation. But, again, what we see in the bill before the House is a zero increase in real funding. I simply ask this question: how long can you squeeze the lemon dry? There is, at the end of the day, a limit to how much you can get out of a single lemon. You cannot just keep going. But, as far as this government is concerned, it sees that its ultimate solution to all these sorts of dilemmas lies in that great old hoary chestnut of the Department of Finance and Administration called the efficiency dividend: keep whacking on the efficiency dividend and something will pop out the end. Let me tell you that, as far as the TAFE institutions in this nation are concerned, it is not working.

VET is a critical element of the entire skills formation enterprise of this nation. In 1999, total VET expenditure across the nation, public and private, was $8.5 billion: public, $3.7 billion; private, $3.8 billion; and individual activity, $0.9 billion. This is a large bucket of public resources funding 1.6 million students across the nation. In the private area we had 2,500 registered training organisations. In the public area, of that $3.8 billion of expenditure one-third of it is Commonwealth, two-thirds of it is states. Eighty-two per cent of that goes to TAFE, the rest to non-TAFE. Of the TAFEs themselves, we have 80 across the country. We have 300 campuses and 1.35 million students with a total cumulative public infrastructure value between $6 and $7 billion.

The vehicle through which the Commonwealth delivers resources to the TAFEs of this country and to the state training institutions more broadly is ANTA, the Australian National Training Authority. When I first became involved in the ANTA debate in the early nineties, the Commonwealth's contribution to total ANTA outlays was roughly one-fifth. As a consequence of the funding initiatives of the Keating government, that rose to about a third. What we had with the ANTA agreement of 1992—and I was intimately involved in that as the then Director-General of the Cabinet Office in the Queensland government—was a unique instrument of modern federalism: a combined federal and state body with a pooled funding arrangement, but on the condition that shared sovereignty would be augmented by a pledge of continued growth funding from the Commonwealth. On this, Paul Keating delivered: a $100 million additional injection from 1992 on; from 1993 to 1995 an extra $70 million per annum; and, beyond that again, a further growth dividend promised in 1996 and 1997—$422 million in 1991, $846 million by 1995-96. The growth dividend was delivered on by Labor, but the message which has been delivered back to the states of this country is this: under the current government, ANTA may continue but the reality is that the growth funding has gone. It is a fundamental betrayal of the VET interests of the nation. (Time expired)