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Tuesday, 10 August 2004
Page: 32638

Ms GEORGE (8:25 PM) —The Vocational Education and Training Funding Amendment Bill 2004 amends the Vocational Education and Training Funding Amendment Act that we debated in this chamber last year. Under that amendment act, the minister made appropriations in anticipation of the states and territories agreeing to the new ANTA agreement. I was surprised by the minister's level of optimism, for when the details of the new ANTA agreement for 2004-06 were released the state ministers were highly critical, pledging that they would fight collectively for a much fairer deal for the vocational education and training system in this country. They argued, quite rightly, that the offer put on the table by the minister was inadequate, particularly in the context of a nation facing severe skill shortages and the legacy of unmet demand. Interestingly enough, the TAFE directors had estimated that they needed an additional $345 million a year to cope with unmet demand in the system, but at the time they were being offered a meagre $100 million a year. That came on top of years when the TAFE system and the VET system were trying to cope with the pressure of unmet demand and at a time when funds for enrolment growth were frozen. If not frozen, then for several years growth had to be met through what were termed `efficiency savings'.

It seemed to me at the time that there was little chance of the new agreement being accepted, precisely because the government had failed to deliver a proper level of funding to cope with enrolment growth in the system. Not surprisingly, the states and territories formally rejected the Commonwealth's offer in December last year, and we are now told that negotiations will resume in October this year in anticipation that they might reach agreement on the ANTA agreement for the next several years. I find it amazing that the government totally underestimated the strength of the view that was being expressed by the states and territories about this very important area of training and education. This is an important area to our economy. Also, as we know, the VET system is very important in terms of the opportunities it can deliver to young people, particularly those who are unemployed.

Tonight we are facing a situation where we now have a formal rejection by the states and territories. It is absolutely appalling that a government that professes commitment to this important sector could allow this to occur. It occurs at a time when we know that 15,000 young Australians miss out on a TAFE place each year even though they satisfy entry requirements. It occurs at a time when Australia is facing a severe skill shortage in key trades and industries—and that is comprehensively backed up by the data and research that are presented by the government's own department. And it occurs at a time when everybody in the community knows that unemployment among workers without a post secondary school qualification is three times higher than for those with such a qualification.

It just does not make sense. We have high unemployment, particularly in regional areas, among young people; we have a growing and acute skill shortage, which is going to get worse; and we have a situation where everybody knows that, the more post school qualifications one can get access to, the better one's life chances will be. The government's own national skill shortage list reports, year after year, that the economy is facing acute shortages across a range of traditional trade occupations. These occupations include metal fabricators, motor mechanics, auto-electricians, panel beaters, electricians, bricklayers, plumbers, chefs, cabinet-makers and hairdressers. This is not just advice that this side of the House gives to the government; the government's own department produces these skill shortage lists. But it seems the government takes no notice of them.

There has to be something seriously wrong for the government to be fiddling around while Rome burns. You need only look at the recommendations of a comprehensive inquiry conducted by the Senate and the report that it presented, entitled Bridging the skills divide, to understand the seriousness of the situation facing the nation. If not adequately addressed, the current and projected skill shortages threaten Australia's future economic development. Let me repeat that it is absurd that, at a time when more than one in five teenagers are looking for full-time work—and in my region that ratio is even higher, where we have unemployment rates for young people looking for full-time work at around the 30 per cent mark—and we have in this country almost 400,000 job seekers who have been on unemployment benefits for more than 12 months and we have businesses screaming out for skilled workers, the government is, as I said, fiddling while Rome burns.

The advice that has been given to the government by its own department is echoed in sentiments expressed by employer organisations. Employer organisations made submissions to the Senate inquiry, and I will quote a few of them. The Australian Industry Group, in its submission to the Senate inquiry, said that `over half of the businesses surveyed faced skills shortages'. Another employer organisation, ACCI, said:

Australian firms are greatly concerned at their incapacity to recruit employees with appropriate levels of skills and retaining skilled employees, with such pressures being particularly acute in regional and rural Australia.

Recent research by the Australian Council of Trade Unions estimates that the growing shortage of skilled workers in the traditional trades will cost the Australian economy up to $9 billion in lost output over the next 10 years. These sentiments highlight a very severe failure on the part of this government to address one of the great crises facing the economy and our nation. The amendment moved by the member for Capricornia rightly points to the failures of government policy on a number of fronts.

I want to make some comments about the way I see the government's failure manifesting itself. First, the minister comes into this place quite often and berates the Labor Party for allegedly professing no concern about the issue of apprenticeships. I heard tonight the member for Dobell reiterate the spurious claims that are made by the government. The government constantly argues that the number of people undertaking apprenticeships and traineeships has doubled. But what the minister does not say and what the member for Dobell did not say was that the growth has predominantly been in traineeships and in areas where there are no skills shortages, such as in the retail fast food sector and in private security.

It is a totally different picture when you look at the traditional trades. I know from data that I was able to access that, in New South Wales, between 2000 and 2002, 6,654 new traineeships were created. That was an increase of about 22 per cent. But in exactly the same period in New South Wales, traditional apprenticeships in the trades declined by eight per cent—down by some 1,187 traditional trade apprenticeships. These figures from New South Wales reflect the trend in the Illawarra and, I dare say, in many regional areas, where the problem is even more acute. In my area, traditional trade apprenticeships declined in that period by 10 per cent, while traineeships grew by 11 per cent. So all this hype about doubling the number of people in the new apprenticeship system really masks the reality that the growth has been in the traineeship area in those occupations where the country is facing no skill shortages while, at the same time, we are facing a very severe crisis due to the decline in the number of young people in the traditional trades.

In my view, the second failure in government policy is that the national training dollar has not been targeted at addressing acute skill shortages. Despite what the minister says, the reality shows a totally different picture. In the first six months of this year, this government spent $2.3 million claiming success with its New Apprenticeships program. But traditional trade apprenticeships account for just under one-third of all new apprenticeship places and the numbers are failing to keep pace with existing—let alone looming—shortages. As at 31 March this year, there were 416,800 apprentices and trainees in training. That looks a good outcome but, when you look behind these figures, you see that only 32 per cent of these are in traditional trade apprenticeships. The number of traditional trade apprentices in training was 133,376 out of the 416,800 people in the new apprenticeship system.

So let us make it quite clear in this debate that all the self-congratulation about the wonders of the new apprenticeship system really masks the reality that the huge growth is in traineeships in areas where there are no skills shortages but we are going backwards at an almighty rate in areas where government intervention is sorely needed.

In October last year in a grievance debate on the issue of youth unemployment I made reference to research undertaken by Dr Toner from the University of Western Sydney. It is a very important study, but a study that it seems the minister has made no particular effort to get on top of. Its findings point to the seriousness of the skill shortage problem that this nation faces. I want to raise a couple of findings from that study. The Toner study shows that there was a decline of about 16 per cent in the apprentice training rate in the decade from 1993 onwards. By `training rate' he means the number of apprentices in training compared with employed tradespersons—that is, the ratio of those in training to the number of people out there working in the trades.

Dr Toner's analysis shows that the major declines were in metal trades and in electrical and electronic trades—a 19 per cent decline in metals and close to a 25 per cent decline in electrical and electronics. His study shows that the number of apprentices in training also declined from 1993 onwards by an average of 15 per cent. He argues—and this is self-evident—that these declining training rates have reduced a source of full-time job opportunities offering good career paths for young people. What was interesting about Dr Toner's analysis was his argument that, if the training rate for each of the trade occupations for the period up to 1992 had been maintained in 2001, there would have been an additional 21,700 apprentices in training in 2001. The decline in those opportunities has meant the loss of about 21,700 apprentices in training. And that was back in 2001, so no doubt the figure is now much higher.

Of those positions, the analysis goes on to argue, 80 per cent of those positions that have been lost would have been filled by young people under the age of 25. That means that nearly 19,000 additional apprenticeship opportunities would have been available for young people between 15 and 24 had the training rate been maintained at earlier levels. His paper goes on to rightly argue that a broad range of solutions are required to redress the problem, including lifting the level of employer investment in training, adjusting incentive and subsidy arrangements and ensuring better entry level steps on the supply side.

So it seems to me that this current minister is absolutely missing the point. There is no point arguing the wonders and the virtues of the new apprenticeship system at a time when we are facing an absolute national crisis in the numbers of apprentices in training in the traditional trade areas that are so important to Australia's future economic progress. With the loss of around 22,000 apprentices in training as far back as 2001, is it any wonder that the nation is in this terrible predicament?

In a recent article in the Sydney Morning Herald on 22 July this year, it was noted that in a recent skilled vacancy index prepared by the minister's own department the following outcomes were revealed: that job vacancies for tradespeople had reached a 15-year high and that trade vacancies had risen 20 per cent in the past year to their highest level since September 1989. Something is going drastically wrong, and no amount of money and no amount of glossy advertising on TV can mask the fundamental problem that this government has failed to grasp: that this nation is in the grip of a serious and severe skill shortage that is even worse in rural and regional Australia.

What we need to understand is that the age profile of workers with traditional trade skills is changing sharply, with a far higher proportion of older workers and without the pool of younger people coming in to replace them when they retire. You have to ask: where are the new apprentices to fill the gap? The Toner study shows that the numbers in training have severely eroded over the period covered by his study. What impact will all of this have on business investment? I know that in Western Australia, for example, there are a number of substantial construction projects that are due to occur. But even the government there is saying that they have severe reservations about the capacity to fulfil this investment because of the absence of skilled people to take on that work. According to a recent ACTU study that I looked at the other day, the skill shortage in traditional trades is set to cost our economy up to $735 million a year in lost output and almost $9 billion in estimates over the next 10 years.

In concluding, I want to make some comments about my own region. We have been battling in the Illawarra to try and address the crisis of a high rate of youth unemployment—which hovers around the 30 per cent mark—at a time when all our local businesses tell us that currently there are emerging skills shortages that are foreshadowed to be even worse. Yet this is a region that has relied historically on a strong and viable manufacturing base. In cooperation with the unions, the employer organisations, the group training companies and a whole raft of interested people who want to address this problem, we sought from the minister a commitment to some funding to provide incentives to businesses in our area to take on a young apprentice. The minister has no problem spending millions of dollars promoting the new apprenticeship system and masking the truth from people. But when it came to actually funding a real project in an area with real needs we got no response from the minister.

The only response we have had from this government to date has been a commitment from the then Minister for Employment Services to provide $100,000 from the government's innovation fund. I think we are doing wonderful things with $100,000, but imagine how much more we could do if the minister and the government stopped putting money into promoting their so-called doubling of new apprenticeship places and actually funded local regions that have their own solutions to their own problems. It is an indictment of this government that when constructive solutions have been put forward to them they have met with such a paltry response. In conclusion, I support the amendment moved by my colleague the member for Capricornia condemning the government. (Time expired)