Senator STOTT DESPOJA (Deputy Leader of the Australian Democrats) (5:15 PM) —I rise to speak on the Vocational Education and Training Funding Amendment Bill 2000. Before I begin my remarks, as a fellow Australian and on behalf of the Australian Democrats I want to commend Senator Buckland on his contribution in his first speech. I acknowledge how apt it is that he has given the speech that he has given in the context of this debate, particularly given his work and experiences at Spencer TAFE in the vocational education and training arena. I wish him well in this place.

I commence my remarks this afternoon by noting the disingenuous claim that has been made by the government that this bill actually maintains funding for the VET sector. The level at which it is maintained is the `post-growth through efficiencies' cuts level, which has left the VET sector with woefully inadequate funding to serve the needs of the Australian community and industry. Again, I indulge myself by reflecting on the comments made by Senator Buckland in his first speech. He talked about the need for training to be resourced, and also said that that education and training should be accessible to all. I doubt that it is accessible when there are such inadequate levels of funding. It is the view of the Australian Democrats that the current government's regime of growth through efficiencies has delivered the opposite when it comes to serving the needs of Australians. The VET sector is now being asked to do more with less, leading to a contraction in services it can offer and inefficiencies in delivery of training and vocational education. Of particular concern to my party is the effect this contraction, and the introduction of barriers to VET such as fees and charges, has had on young Australians. Young people today are more exposed than ever before to job insecurity, casual and part-time work and low wage levels than are older workers. They spend more time in education and training than any previous generation, they enter a labour market of declining entry level opportunities and they face a lifetime of job change and reskilling.

The capacity of young Australians to take advantage of the flexibility these changes in Australian labour markets may offer is largely dependent on their access to quality education and training. McClelland and MacDonald have identified up to 350,000 young Australian adults as being at risk of continuing labour market disadvantage as a consequence of their non-participation in education, training, work or full-time work. That McClelland-MacDonald study, `Young adults and labour market disadvantage', is from the Dusseldorp Skills Forum. It is entitled: Australia's young adults: the deepening divide, and was made available in April 1999. Institutional training, such as that provided by TAFE, is still a key means by which young people may enhance their labour market competitiveness. Workplace training may also be a valuable source of VET. However, the retention of junior rates of pay without accompanying training provisions in many awards has meant many young people are trading off wage levels for little return. The Democrats believe the three constraints on young people's access to VET must be addressed: firstly, inadequate resourcing of the VET sector to meet demand; secondly, barriers to participation in the form of fees and charges; and, thirdly, poor quality and inappropriateness of training.

Australia has relatively low expenditure on education and training compared with other OECD members, particularly European countries, which tend to have higher levels of public expenditure. Modelling conducted by Gerald Burke of the Monash University ACER Centre for the Economics of Education and Training has shown that an increase in the proportion of 20- to 24-year-olds in education or training from 61 per cent to 70 per cent would involve additional public expenditure of approximately $1 billion. This figure does not include additional income support costs from the transfer of young people from Newstart to the youth allowance. It is the view of the Australian Democrats that increasing access to VET is crucial in assisting young people when managing the transition from education to work. While the costs of increasing access for young people to VET may be high, the alternative is continuing high costs of providing income support to young people who are unable to manage that transition in an increasingly competitive labour market. The Democrats also believe that the imposition of fees and charges on the provision of training has compromised equity of access to training, particularly for many of those who are most in need. We are concerned by anecdotal evidence from employment service providers in Job Network that these fees and charges have greatly compromised their capacity to facilitate the participation of Intensive Assistance Job Search candidates in VET.

The Democrats have long opposed the imposition of fees and charges for the provision of education and training generally. We believe very strongly in a publicly funded, accessible education and training system at every level. As the experience of Intensive Assistance clearly demonstrates, the costs associated with providing accessible education and training to those needing to improve their employment prospects are far less than the costs of providing long-term income support. Where barriers to accessing TAFE training exist, many young people, and others of course, are forced to seek alternatives or face continuing disadvantage in the labour market. However, the training opportunities for those most in need of training and upskilling—long-term unemployed people—are particularly scant. The federal government, as we all know, continues to redirect funding away from the targeted assistance and training provided through Intensive Assistance to schemes such as Work for the Dole. Although never intended to be a labour market program or a training program, Work for the Dole received almost $360 million funding in the 2000-01 federal budget. At most, this scheme provides limited work experience to participants. But also Work for the Dole does not provide the structured and accredited training offered by other VET providers.

The Democrats view the high level of funding of Work for the Dole as an unacceptable diversion of much needed resources away from appropriate training, such as that provided by the VET sector, and funding for schemes like Work for the Dole should be immediately reviewed in this context. Quality workplace training is also becoming increasingly difficult to access. Aside from criticisms levelled at current apprenticeship and traineeship arrangements, young people are especially disadvantaged by the retention of junior rates of pay in federal awards. This has actually undermined efforts to increase sustainable employment opportunities for young people, precluding more effective policies and programs from being implemented. Moreover, they have substantially increased the hardship many people face in their transition from school to work by reducing access to appropriate training and livable incomes. I am sure Senator Carr, who is shaking his head over in the corner, agrees with me. The causes of youth unemployment are varied and complex—I think most people in the chamber would acknowledge that—and there is little reliable evidence available to suggest that junior rates of pay address these. Based on available research into the causes of youth unemployment, the Demo-crats believe that an approach that empha-sises education and training rather than wage discounting would be more successful in delivering permanent, full-time work oppor-tunities to young people.

Much of the blame for the failure to expand wage based contractual training arrangements in Australia lies with inadequate wage structures. Current junior rate arrangements do not contain structured training or skill development components. There is certainly no provision in the Workplace Relations Act 1996 for training to be incorporated into junior rate arrangements in future awards. As you know, the Australian Democrats unsuccessfully sought to have such provisions inserted into the act. These amendments would have given the AIRC the power to insert training and skill development arrangements into awards, with or without accompanying junior rates of pay. The government has pointed to increased provision of apprenticeship and traineeship places as evidence that it is serving the needs of young people and others who are seeking vocational education and training. However, as noted to the committee that inquired into this bill, this expansion has diverted funding away from TAFE because states have needed to meet that increased demand.

The capacity of VET to serve Australia's future social and economic needs is largely reliant on its ability to meet demand for training across the country and to ensure equity of access. It is the ability of the VET sector to accommodate the needs of young people, who are at the coalface of many of the changes in the Australian labour market and who are most at risk of suffering continuing labour market disadvantage as a consequence of those changes, which the Democrats believe must be secured as a matter of priority. Insufficient access to VET for young people is the clearest threat to the development of an adequate future skills base. In the context of an international trend towards skilled and information based economic development, Australia runs a real risk of being left behind if the current regime of growth through efficiencies is maintained.

The federal government has achieved its budgetary surplus on the basis of deep cuts to social and education expenditure. This short-term strategy is already beginning to have negative effects—we have only to look at the perception of Australia by other countries around the world, whether it is in relation to education spending or investment or research and development. We can even see the impact on our exchange rates if we are looking for realistic, tangible or obvious demonstrations of what impact this is having in the short term. If this regime is allowed to continue, not only will the damage already caused not be repaired but the sector will face no prospect of being able to meet the growing demand for skill development in the Australian community in the future. The goal of a flexible, skilled work force serving value added industry is unlikely to be realised unless Australia's VET funding is increased to provide the skills development and training such visions require.

To that end I would like to foreshadow the second reading amendment that has been distributed and is standing in my name:

I would add that there are a number of key issues contained in the second reading amendment circulated by Senator Carr on behalf of the opposition with which the Democrats agree. Obviously we have a bit of concern about the inclusion of Labor Party policy in the form of the knowledge nation rhetoric. But whose rhetoric do you want to choose? Is it knowledge nation or, for the government, can-do country, or the previous government's clever country? Regardless of the rhetoric, people are trying to encapsulate the importance of innovation, human capital and investment in education, research and development. All of these things we acknowledge are fundamentally important if we are going to be a prosperous economy providing sustainable jobs not only for young people but for all people. In order to do that, as contained in my remarks today and in the speech on the second reading circulated in my name, we must have not simply an adequately resourced sector but a well resourced sector. Certainly the growth through efficiencies policy is something with which the Democrats have long had concerns, as do many other people in this place.