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Tuesday, 10 August 2004
Page: 32632

Mr MOSSFIELD (7:55 PM) —In speaking on the Vocational Education and Training Funding Amendment Bill 2004, I support the amendment moved by the member for Capricornia, which I will come to later in my speech. I will comment on some of the remarks by the member for Macquarie. He did acknowledge that there is a skills shortage and that there is some unemployment of mature age workers and young people. I think that the federal Liberal government have to accept some responsibility for that, because they have been in office for eight years now. I do not think it is good enough to simply go back all the time and try to blame the previous Labor government for the problems that they have now. I think that most of those problems have come about because of the current government.

The member for Macquarie also mentioned that the careers adviser structure in New South Wales was good. I was pleased to hear him say that. He is very light on praise for the New South Wales government, so the fact that that system is working well, in his words, is very good. I agree with him that the need for careers advisers at the school level is extremely important, and I am very pleased to see that it is acknowledged that that system is working well in New South Wales. I will take the bait and comment on TAFE fees and simply say that I agree that it is just not acceptable if fees are being increased beyond the reach of the average working person or young person. There is no disagreement there. If there is criticism to be directed at the state government for increases in TAFE fees, then I am one of those who will do that. I think we have to keep TAFE courses within the reach of ordinary people.

On the legislation itself, last year the states and territories unanimously rejected a Commonwealth proposal for a new ANTA agreement for the years 2004-06. The parties agreed to roll over the current agreement for 12 months while negotiations continued. While the Commonwealth agreed to the rollover, it also decided to impose what I would say are penalties, withholding some $29 million from the states for 2004. That is what this bill is: it is really a penalty for not agreeing with the Howard government, and the states and territories are the ones that are being penalised, along with the people who train in the VET system in those states. The Bills Digest states that the purpose of this bill is to:

... reduce—

I think `reduce' is an extraordinary word to have in a piece of education legislation; it is not a good look—

the appropriated limit of total funds for vocational education and training (VET) to be provided to the Australian National Training Authority (ANTA) for distribution to the States and Territories for 2004, from $1,136,822,000 to $1,129,418,000 ...

It further states:

appropriate funds for VET to be provided to ANTA for distribution to the States and Territories for the year 2005 up to a limit of $1,148,059,000.

Let me say again that the purpose of this bill is to cut funding to vocational education and training and that is simply not good enough, particularly taking into account what the member for Macquarie has said—that we do have a skills shortage. I will be expanding on that a bit later on. That sums up the past eight years of the Howard government. After eight years in office they are still cutting education funding. I can only say that this is a disgrace. The failure of the of the Howard government to reach agreement with the states has meant some delay in providing funding to training programs for the more needy groups such as mature age workers and people with disabilities.

The states' rejection of the Howard government's funding offer of $3.6 billion over three years was outlined in a campus review in January this year. To paraphrase, the review said that negotiations had broken down over a funding shortfall of about $230 million. The states are asking for the Commonwealth package to be increased by at least $348 million to meet the challenges facing the VET sector and to fund the growth that will be required to position our economy into the future.

Over the last weeks we have been speaking a lot about the free trade agreement with the United States. It is going to require a lot of skill by the Australian work force to benefit from that agreement. At this stage, if we are going to cut funding, I think we are going to find ourselves in a lot of difficulty and unable to maximise the advantages that might flow from that agreement. The states and territories have put the figure for unmet demand at about 57,000 places per year and claim that the government's offer will create only 18,000 places over the three-year life of the agreement. The states are also unhappy, according to the campus review article, because:

The Commonwealth managed to find some $200 million to help secure passage of its contentious legislation to bring in its Backing Australia's Ability package for universities but could not find extra funds for VET.

That is the important point: the Commonwealth could not find extra funds for VET. This debate allows the parliament to look at a number of issues relating to VET in Australia and to ask ourselves the question that I will continue to ask during my contribution: why cut funding to this vital sector? Areas that need close examination include the unmet demand, skills shortages and mature age training. The Australian Labor Party intends to address the issue of unmet demand in the area of youth employment and training.

The Leader of the Opposition, the member for Werriwa, stated in his budget reply speech that Labor would abolish fees for secondary school students doing TAFE courses, which would benefit some 7,500 extra students taking up TAFE places. In that speech, the Leader of the Opposition said that every year the skills of more than 45,000 young people who leave school early and do not go into full-time work or study are wasted. That is an important point to remember: 45,000 young people who could be making a contribution to the economy of this country are unable to do so because they have not got the appropriate training. That is one side of it—the economy is suffering—but what about the young people themselves? In many cases they could end up unemployed or in dead-end jobs. This is one of the most important reasons why we need extra funding for vocational education and training. We need it to take up the slack as far as these young people are concerned. Under Labor's plan, an estimated 15,000 extra students will stay at school or take up TAFE courses, thereby placing extra demand on TAFE.

On the issue of skills shortages, the ACTU advises that the shortage of apprentices in industry is becoming critical and could cost Australia up to $9 billion in lost output over the next decade. I should say at this point that it is not only the ACTU, representing the Australian trade union movement, that is saying this; industry is also saying it. So we have the two major groups in industry—the unions and the employers—both saying the same thing as far as the lack of skills is concerned. The ACTU predicts that 170,000 skilled tradespeople will leave industry over the next decade and that only 40,000 will enter the work force.

This issue was highlighted in an editorial in the Canberra Times on 29 July this year. The editorial drew attention to the difficulties of persuading young people to take up apprenticeships—in part because of the initial low wages and also because of the short supply of employers to train them. The editorial was also critical of the Howard government for debasing traditional apprenticeships against modern and, in some cases, low calibre traineeships. I would have to challenge the member for Macquarie on this point, if he suggests that the government is doing well in this area of providing extra apprenticeships. The minister has continually claimed that one of the achievements of the Howard government is that they have concentrated on encouraging young people to take on apprenticeships. He says that the status of apprenticeships must be increased and we should not have to rely totally on people going to universities, because there are good careers for people who serve apprenticeships, become tradespeople and then go on to higher positions in industry.

I do not think that the government have done enough in this area. I will be referring to what the ACTU has said in its research, and I think that will prove the point that I am making. The ACTU has said that the industry work force is not only ageing—as we all know—but there are also too few traditional apprenticeships coming through in the training system, with the training rate of traditional apprentices declining by 15 per cent since 1987. The ACTU, in documents that I have before me, makes the further point that the federal government are spending a huge amount of money in saying what a good job they are doing, when in fact that does not appear to be the case. I quote from the document, where it states:

The Federal Government spent $2.3 million in the first 6 months of this year claiming success with its New Apprenticeships program. But traditional trades apprenticeships account for just under one third of New Apprenticeships places and numbers are failing to keep pace with a looming skills shortage in the traditional trades.

As at 31 March 2004 there were 416,800 apprentices and trainees in training but only 32% of these are traditional trades apprentices. The number of traditional trades apprentices was 133,376.

This is a major problem: we appear to be pushing traineeships through, almost like a sausage machine, and ignoring real training, which, I would say, is a four- to five-year apprenticeship and the appropriate on-the-job training and vocational education and training to go with it. That is what produces proper tradesmen and skilled people for this country. I would like to quote again from the ACTU document:

A major problem with the New Apprenticeships program is that the financial incentives paid to employers by the Federal Government are biased against traditional trades apprentices.

Under the New Apprentices program the same payments are paid to both apprentices and trainees—$1375 for a commencement and $2750 for a completion, or a total of $4125.

But some traineeships can be completed in one year, compared to a four year term of a metal, electrical, or construction apprenticeship.

The suggestion there is that employers are going for short-term traineeships because of the extra money involved and ignoring traditional four- to five-year apprenticeships. Dr Phillip Toner, who I believe is from the University of Western Sydney, is quoted in this ACTU document. He said:

The payments do not recognise the much greater investment of time and effort on the part of an apprentice employer. In theory, an employer could get four cycles of commencement and completion payments for trainees in the same time it takes an employer of an apprentice to get one cycle.

That is the point I am making. The ACTU document continues:

Dr Toner also points out that the additional $1100 incentives for employers in areas where there are skill shortages are limited to only those employers in non-metropolitan regions. But in NSW, for example, around 75% of all apprentices are located in metropolitan areas.

While it is good to give employers in regional areas an incentive to take on apprentices, to some extent it is rather a waste because the demand is not there—the industry is not there in the regional areas and, in many cases, the young people are not there. The young people are in the cities, and industry is in the cities. So for that incentive to be of any value it should also apply to industries in the metropolitan areas. The ACTU document continues:

On a broader level, Dr Toner argues that industrial relations changes that have reduced the scope of awards and promoted individual agreements have also contributed to the decline in the training of apprentices.

I believe that is another indication of where the government's industrial relations policies are retarding the number of people being trained in industry. The ACTU calls on the federal government to:

Commit to directly employing more apprentices and ensuring Government tenders require contractors to also create additional structured training places;

Provide mentoring support for young apprentices;

Establish partnership initiatives within enterprises to encourage and support the uptake of structured industry training including additional apprentice pathways for young people and mature aged workers in skill shortage areas and to supplement and increase apprentice wages for both young people and assured workers; and

Supplement and increase apprentice wages or both young people and mature aged workers.

I would like to return to the Age editorial I was referring to prior to quoting from the ACTU document. It calls for a 50 per cent increase in funding for all forms of training, and it concludes by saying—and this is rather a powerful statement:

A government able to offer cash bribes to voters for having children will be swindling just those children if it is not putting down money now to see that they get the education they will need as young adults.

I think that is a very true statement. The need for a highly skilled work force is further emphasised in an article in the Melbourne Age of 13 July entitled `Australia in the technology vanguard', which refers to the enthusiastic use of technology by Australian businesses. But the article makes the point that there is an urgent need for highly skilled workers to drive this technology: it is no good having technology if you do not have the skilled workers to drive it.

The other area I want to refer to is the increased demand on TAFE to retrain mature-age workers who seek to re-enter the work force or move to new positions with their existing employer. Labor has committed $212 million to help older Australians in the work force. Part of Labor's plan is to set up career centres and deploy workplace trainers in key industries. It is reported that a third of Australians aged between 50 and 64 are on income support, and nearly half are not in the work force at all. So this is another area of demand for vocational education and training. This is clearly an economic loss to the Australian economy and will require a greater vocational education role to rectify the problem. Instead, what do we get from this government? This bill, which actually cuts funding in the next year. As I have said, this is a disgrace. In urging an agreement on ANTA funding, the predictions are for continued job growth and greater diversity in the use of technology by Australian industry, resulting in the need for increased VET resources to meet this demand. I think the amendment moved by the member for Capricornia should be supported, because the five points there really cover the arguments that I have put to the House tonight.