Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 27 June 2001
Page: 25191


Senator CARR (11:56 AM) —I move the second reading amendment on sheet 2249, standing in my name:

At the end of the motion, add “but the Senate:

(a) notes with concern that the Government has failed to provide appropriate support for vocational education and training by cutting $240 million from TAFE, and contributing no growth funding for 5 years, thereby restricting training opportunities and damaging the quality of training; and

(b) condemns the Government for allowing the Australian National Training Authority Agreement to lapse by:

(i) failing to make a realistic offer of funding; and

(ii) finally offering an amount of funding which is even lower than the amount of previous funding cuts and which fails to adequately address the needs of Australian vocational education and training”.

Today, we are discussing a bill for the funding of vocational education that sees the Commonwealth back down from its previous intransigent position, which was based on the claim that it had no responsibility for funding growth in Australia's vocational education system. It is unfortunate, however, that this bill fails to address this government's past neglect and that it does not address the future needs of the Australian people's demand for vocational education.

In February this year, the government introduced its innovation statement. This was a statement that highlighted the government's ongoing failure to recognise the importance of vocational education insofar as it once again ignored the needs of vocational education and did not mention it. I say `again' because this is the third innovation statement released by the Howard government that ignored the contribution of vocational education to the Australian society and economy.

The former head of DEET, Dr Vince FitzGerald, who is now the executive director of the Allen Consulting Group, recently completed a report entitled Skills in the knowledge economy: Australia's national investment in vocational education and training. This report followed heavy criticisms of this government's performance by ACCI, and both the Allen Consulting Group and ACCI have in the past been known to be sympathetic to this government's policies.

Dr FitzGerald observes that it is the VET sector within education that is most effectively responding to enterprise requirements for skills development, which is so necessary for the knowledge economy. Arguably, the VET sector is therefore a more important economic contributor than higher education. Despite this, under this government the national investment in vocational education and training has fallen dramatically since 1996. The situation is expected to worsen because of the significantly greater projected future growth in demand for vocational education relative to higher education.

Dr FitzGerald shows conclusively using the NCVER data that the drop in investment in vocational education is the direct result of the Commonwealth government's funding policies. He makes the point:

Commonwealth funding has been cut back while the states have maintained steady growth in their resourcing.

Dr FitzGerald also refers to international comparisons of overall economic performance, which demonstrate that the most competitive countries maintain a balance across all the sectors of education in terms of their public investment. I agree with his assessment that what is required is a balanced national effort to lift investment in skills formation and innovation activity across all education sectors.

This bill, which reflects the recent funding agreement, falls miserably short of achieving this goal. One can only presume that the states have signed up to this grossly inadequate arrangement with the expectation that there will be a change of government after the next election and with the expectation that there will be an opportunity to renegotiate the funding models with a new national Labor government.

Over the past 10 years the average growth rate for vocational education has been at 6.5 per cent per annum. Over the last three years it has been 6.9 per cent per annum. If we examine the figures, in 1996 there were 1.347 million Australians in vocational education. In 1997 there were 1.459 million. In 1998 there were 1.535 million and, in 1999, 1.647 million. Assuming a growth rate of seven per cent per annum, this forward projection on growth will see in 2000 a figure of 1.762 million, in 2001 a figure of 1.885 million and in 2000 a figure of 2.017 million students. These figures do not include enrolments in the adult and community education sector. Given government spending of $15 million on advertising for New Apprenticeships this year, one could presumably expect that the demand will increase. Quite clearly, the growth funding provided in this agreement is grossly inadequate.

Put simply, we have a protracted period in which there have been very significant increases in the number of people participating, but this growth in participation has not been matched by the growth in resources. In simple terms, the argument essentially is that, if there has been an expansion in the capacity for the system to meet new programs and demands have been placed on the system to meet new programs, in that context we see a reduction in resources leading to a reduction in quality. Simple efficiencies themselves are not enough to cope with this situation. The impact on the system has been invariably and undeniably a decline in quality to the point where now profound questions need to be pursued with regard to the capacity of Australia's vocational education system to meet the necessary quality assurance, to be relevant, and to be able to adjust to meet the skills and social needs of our society and economy. The proposed training plans that underpin the current agreement are not able to address these concerns.

If we look at the recent reports of the vocational education ministerial council, we find that the growth in the system according to the ANTA board and the states and even DETYA has been of the order of 1.6 per cent to 3.3 per cent. On the assumptions outlined in the recent ministerial papers, for each one per cent growth we see in 1998 figures $26.64 million is required. On these assumptions, and DETYA's own figures anticipating a growth rate of 2.8 per cent, $75 million per annum is required and, given the growth rate in actual enrolments—as distinct from what has been projected—clearly the figure that the ANTA board leans towards, of 3.3 per cent in 2001 prices, would be in excess of $100 million per annum. This figure in itself may well be an underestimate of the level of growth within the system.

The bill follows the first VET funding bill in 1992 which was underpinned by the Keating government's commitment to inject $100 million of Commonwealth resources into recurrent funding as part of the One Nation economic statement. An additional $70 million of growth funds for each year of the triennium was also included. This arrangement was extended through to 1997.

The Howard government in 1996 introduced its so-called `efficiency dividend' which saw a five per cent reduction in funding provided to ANTA. In addition, the growth funding which had been in the previous funding bill was discontinued. That amounted to a five per cent cut from the base of recurrent funding. Effectively, that meant a cut of $240 million. That money has not been restored by this bill. The Commonwealth proposition that we are debating today sees funding grow by $50 million in 2001, $75 million in 2002 and $100 million in 2003. These figures take no account of the lost years under the Howard government from 1996 to 2001. In return the states are required to match growth funding on a dollar for dollar basis. The Commonwealth will exercise a veto over the states' compulsory VET plans and its so-called `innovation strategies'.

I use the word `veto' deliberately because the Senate should be under no illusions about this. The effect of items 2 and 3 of schedule 2 of this bill is to provide the minister with the capacity to withhold funds from individual states if he so chooses. As an aside, I note that, whereas in February the Commonwealth chose to ignore vocational education as part of its own innovation strategies, it demands that the states now include it in their vocational education plans, and perhaps one has to see this as their means of compensation. Furthermore, states are required to increase on a per capita basis the number of apprenticeships and traineeships on the June 2000 base by some 20,000. With respect to my state of Victoria, for instance, that will mean an increase of some 5,000 places.

At this point I would like to incorporate into Hansard—and I have already sought leave of the Government Whip on this matter—some tables prepared by the Parliamentary Library outlining the funding figures for the next four years. This is a table that you will not find in the budget. However, it does indicate the true nature of the expenditure arrangements under these bills, and I seek leave to have the tables incorporated.


Senator Calvert —I would like to see them first.


Senator CARR —I have already checked with the whip who was on duty at the time.

Leave granted.

The document read as follows

Vocational Education and Training Funding Act estimates: Calendar year (as at 2001-02 Budget)

2001

2002

2003

2004

$m

$m

$m

$m

Base

931.415

952.745

972.230

993.087

Supplementation

21.330

19.485

20.856

21.304

Australians Working Together Measures

NA

3.412

11.672

23.779

ANTA Growth

50.00

76.50

104.142

106.329*

TOTAL

1,002.745

1,052.142

1,108.900

1,144.499

*The proposed new ANTA Agreement, which includes growth funding, is for the period 2001 to 2003. The forward estimates include continuation of the funding for growth for 2003 in real terms in subsequent years.

Vocational Education and Training Act Funds: Financial year (as at 2001-02 Budget)

2001-02

2002-03

2003-04

2004-05

$m

$m

$m

$m

Base

952.745

972.230

993.087

1,014.392

Supplementation

21.330

19.485

20.856

21.304

Australians Working Together Measures

1.412

12.298

27.413

31.214

ANTA Growth

50.00

76.50

104.142

106.329*

TOTAL

1,025.487

1,080.513

1,145.498

1,173.239

*The proposed new ANTA Agreement, which includes growth funding, is for the period 2001 to 2003. The forward estimates include continuation of the funding for growth for 2003 in real terms in subsequent years.

ANTA and New Apprenticeship funding

The following table shows appropriations for ANTA's operating activities and for New Apprenticeships. Employer subsidies are a significant part of the Support for New Apprenticeships component.

Appropriations for Australian National training Authority operating activities and for New Apprenticeships - Commonwealth Budget 2001-02

2000-01

2001-02

2002-03

2003-04

2004-05

$'000

$'000

$'000

$'000

$'000

Australian National Training Authority (for operating activities)

10,793

10,932

-

-

-

New Apprenticeship Centres

70,292

74,218

79,233

81,966

82,156

Support for New Apprenticeships (includes employer subsidies)

313,010

345,708

372,506

374,779

390,024

New Apprenticeship Implementation

15,788

2,000

-

-

-

New Apprenticeship Workforce Development

7,300

14,425

15,411

14,060

14,355

New Apprenticeship Access Programme

18,678

19,729

20,259

20,768

21,185


Senator CARR —It has to be remembered that the New Apprenticeships constitute about 18 per cent of the total student enrolments but they consume 25 per cent of resources. If we look at the NCVER figures for the duration of apprenticeships we see that 20 per cent are now of one year or less, 18 per cent are for two years or less, and 18 per cent are for three years or less. Forty-four per cent are for three years. In approximate terms this means that, of an increase of 100 commencing apprenticeships today, 80 will still be in training the following year, 62 will be there a year later and 44 will continue for a further year after that. It is the so-called `pipeline' effect.

In order to meet this Commonwealth target it is likely that the $50 million provided under this agreement for the next calendar year will have to be devoted entirely to the New Apprenticeships commencements. Based on this pipeline breakdown of 80 to 62 to 44, the $50 million devoted to additional commencements in 2001 would create a requirement for an additional $93 million to support these people through to the completion of their qualifications. Quite clearly, that money is not in this agreement.

In reality, the so-called growth funds provided in this agreement will require an additional $40 million in 2002, an additional $31 million in 2003, and $22 million in 2004, just to meet the additional places. The big question—apart from the skills shortage—that still confronts vocational education is the question of quality assurance. The Senate committee report demonstrated that there were far too many rorters using the New Apprenticeships system. Too many workers have suffered at the hands of unscrupulous employers and training providers who simply have been taking government money and providing poor quality training or, worse still, no training at all.

The informed opinion within vocational education and training officials and circles would argue that the number of people who are not receiving proper training in accordance with training agreements is between five and 10 per cent. Taking the upper limit, that may well mean that some 33,000 people are currently registered in training but are not receiving appropriate training. In fact, many of those will not be receiving any training. If we use the figure of five per cent, currently 16,300 workers in the system are being abused. This simply is not good enough.

The government's response has been to insist that they have a new quality assurance regime established by way of asking the states to introduce so-called model training clauses into their various state based vocational education legislation. This has arisen because the government has received legal advice from Minter Ellison which highlights the fact that the current quality assurance regime in Australia has no legal foundation because it simply pays lip-service to the need for national consistency. When it comes to actually doing something about it, the states and the Commonwealth have been unable to reach agreement.

Australia needs a legally enforceable quality assurance regime which needs to be genuinely national in its approach. No amount of duck shoving will alter the inevitable logic of this proposition. The question will boil down to: who is going to pay for it? In recent times, we have seen the Commonwealth talk up its so-called new quality assurance reforms. In reality, the government's response has been simply to rename a number of committees and guidelines so that, instead of a National Training Framework, we now have the National Quality Framework; and instead of the National Training Framework Committee, we have the National Training Quality Council. The government tries to talk up this quality assurance by putting these terms into the titles of organisations. As Sir Humphrey Appleby was always quoted as saying, `If you have a dangerous concept, you always put it in the title because that's the safest place for it.' The government's actions in regard to this are clearly designed to compensate for not taking effective action. There are fundamental questions about auditing and sanctioning of registered training organisations, and about attempts to weed out those who are rorting the system. None of those issues have been agreed within the states. This highlights the fact that the so-called model clause approach is simply a second-best option. It will inevitably lead to a situation where the Commonwealth will be required to revisit the issue of Commonwealth legislation.

The NCVER recently published a report entitled Australian apprenticeships: fact, fiction and the future, which showcased the achievements of the New Apprenticeships system. The report explicitly stated that it did not provide an evaluation of the apprenticeship system, nor did it provide an exhaustive examination of the quality of teaching, supervision, learning, training and assessment in the system. Those are exactly the issues that Labor has identified as critical to the success of the skilling of Australia, and as the weakness in Dr Kemp's policies. It has to be remembered that nearly 50 per cent of Australian workers have no post-school qualifications. Australia ranks at only 18 of 26 OECD countries in this area. Clearly a great deal more work needs to be done.

What I welcome about the report is that it highlights the need for a new strategic direction for vocational education. It underlines the need for a strategic shift in the priorities for vocational education. Such a system should combine legally enforceable national standards for quality assurance with a focus on the creation of advanced skills training in areas of economic demand and employment growth. The challenge now facing the Commonwealth is not simply to multiply the number of lower-skilled traineeships but rather to provide leadership in the development of paraprofessional qualifications across the entire economy.

Vocational education must be able to provide a meaningful range of alternatives to universities. Australia needs a new stratum of qualifications between graduate degrees and trade qualifications, not only in the traditional skilled areas of manufacturing and transport but also in human services, including nursing, aged care and dental care, as well as the media, communications, culture and the arts, information technology, sports, leisure and recreation, and in management and business services.

Australia's vocational education system is fractured by state borders and the states have not been encouraged to think nationally, let alone globally. The vocational education system urgently requires revitalising and strengthening. It needs to refocus on national goals and objectives in which the problems of funding, quality assurance, national consistency and social justice are addressed. I ask the Senate to support our second reading amendment.