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Wednesday, 22 June 1994
Page: 1829

Senator TIERNEY (10.41 a.m.) —The Training Guarantee (Suspension) Bill, including the amendment, has a very long history going back to the time when I first entered this parliament. It was one of the very first matters that I spoke on in the parliament. I well remember our considerable concerns about what the government was doing with the training guarantee at that time.

  I suppose that what the government was trying to do was sound enough in principle because the Prime Minister at that time was claiming that he wanted us to become a clever country. To become a clever country we obviously needed a lot more training. As we have developed over this century, our training levels have been well below those of countries with which we have been competing, particularly Japan, the United States and Germany. So there was a need to increase training. But the government went about this in an extremely insensitive and inappropriate way.

  The government decided, I suppose because of Mr Dawkins who was minister at the time—he seemed to have all these eastern European type solutions to everything—that in education things must be very centralised and be directed from the top. We certainly found that in higher education and, when it came to training, we discovered a similar sort of thing was happening. He was going to levy all businesses initially one per cent, and later 1 1/2 per cent, to make sure that they trained people. The problem is, of course, that that is totally insensitive to the situation of particular businesses.

  During the unfortunate history of this training guarantee legislation we have found companies for whom it is inappropriate to spend 1 1/2 per cent of their money on training, either because their staff are well trained or because they are in a sort of business where training levels naturally only need to be low. For example, why would a company laying carpet need to spend 1 1/2 per cent each year on the training of carpet layers? The levy was insensitive to that. On the other hand we had companies—for instance, the Tweed Valley Processing Company up in the northern rivers—spending 8 1/2 per cent on training because of the nature of the exercise. So setting a levy at a particular point is a nonsense, as the present outcome—the amending legislation—has proved.

  We also found that a number of companies, regardless of how much training they were doing, amended what they were doing to this level. We had the rather strange situation where people who were spending maybe three per cent on training realised that they were only going to get deductions for 1 1/2 per cent and so reduced training levels. So while some were increasing the amount of training as a result of the training guarantee, others were reducing it. The net effect of all this was very little increase in the overall levels of training in the country. What the training guarantee did do to business—and this is particularly sad as it was brought in during the great recession—was give it yet another onerous government burden to fulfil. Businesses had a lot more paperwork to do. In a lot of cases funds were distorted, as businesses tried to spend up to a particular artificial level. The training guarantee created great difficulties for business in a difficult time.

  So it was with some relief, when the government had finally seen the light, about six months ago, that it proposed some changes to the system. When those changes were first mooted we welcomed them as adjustments to the system, for example, the way amounts could be averaged out over time. We thought that sort of adjustment was a good idea, but we felt that the government should go a lot further. We said at the time that the government should abolish this legislation as a very unfair impost on business. But the government has not done that. It is proposing in this legislation—a proposal I find curious—to suspend the training guarantee for two years. Why? Either it is working, after the government's assessment from 1991 to now, or it is not working.

Senator Kernot —It is better than saying, `We were wrong.'

Senator TIERNEY —We could not have this government admitting it was wrong, could we? What happens after two years? Perhaps it will slowly disappear or there will be some amending legislation to get rid of it. One would suspect that. As Senator Kernot seems to be indicating, this legislation is just a face saver for the government. The government should admit that the legislation has been completely inappropriate. It is not the way to go in training. During the last election campaign we criticised it severely. We put up an alternative range of education measures that could achieve the same effects. In particular, getting government off the back of business and giving businesses more financial flexibility to carry out the training that is proper and desirable for each type of business would see a much better outcome.

  Therefore, we call on the government at this late stage to abandon completely the system that it is proposing now to amend. We think that the effects of Senator Gibson's amendment will lead to much more satisfactory training of people in this country.