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Tuesday, 19 June 2012
Page: 3687

Senator BERNARDI (South Australia) (18:05): From 1 July 2012 the Skills Australia Amendment (Australian Workforce and Productivity Agency) Bill 2012 will create the Australian Workforce and Productivity Agency—which I will refer to as 'the agency'—which will replace Skills Australia. The bill gives the agency additional responsibilities other than those which Skills Australia had: providing advice to the minister on improving the productivity of the Australian workforce, providing advice to the minister on the allocation of Commonwealth funding including the National Workforce Development Fund and assessing research relating to improving the productivity of the Australian workforce. The bill also adds three additional board members to the existing arrangements and adds a new category to board membership.

Australia does indeed face skills shortages in a number of important industries. Businesses continue to have problems procuring the right people for the right job. Recently even the ACTU has been critical of the government's approach to addressing the skills shortage with a proposed offshore recruitment drive to fill vacancies in the mining and construction industries. It goes without saying that it is vital for our training systems to work efficiently in order to provide real job prospects are Australians. The Australian Workforce and Productivity Agency is responsible for the $558 million Workforce Development Fund, a fund made available to pay up to half the costs of training for the upskilling of existing workers. The government's contribution equates to $4,292 per training place, based on predictions of training 130,000 workers.

We on the coalition side, like all Australians, need to be convinced that the agenda being pursued by the government is producing value for money. There are some concerns that this policy and indeed this bill appear to have been cobbled together in the ad hoc way that we have seen many times before from this Labor government.

It is worth remembering that the agency established in this bill will replace Skills Australia, which was set up by the Labor government in 2008, just four years ago. Labor has decided to bring forward the work of the agency and have appointed an interim board. So it would now appear that this government has declared Skills Australia to have passed its use-by date. I ask: is Labor saying that Skills Australia did not achieve what it was meant to? Very few other conclusions can be drawn. As my colleague Ms Ley said in the other place:

The failure does not really lie with Skills Australia; it rests with the government …

Skills Australia provided advice and offered ways to improve skills and boost employment. It provided that advice, and the methods, to government, but ultimately it is up to government to act. It seems to me that the government is more interested in trying to spin another story, if you will, for the media's benefit or to convince some people that the government is actually doing something rather than digging deeper past the veneer and actually dealing with the development of skills and our economy. It begs the question: is the government really interested in fundamentally changing Australia's workforce for the better, or is it content to continue to make grandstanding statements and announcements that ultimately make little if any difference to those on the ground?

It would be remiss of me not to comment on the fact that this bill includes what is effectively a $20 million slush fund for the unions, because in addition to the $558 million in the National Workforce Development Fund, the government can allocate $20 million to unions and employer groups. There are, according to my research, no criteria for the allocation of these funds and there is no defined purpose. This leads me to conclude, quite reasonably, that this looks to be just another Labor slush fund for their union mates. It goes almost without saying that with a Labor government there always seem to be some perks for the union movement.

Moving on from the unions, the coalition is concerned that this bill panders to what I would describe as Labor's love of bureaucracy. Here we have this new agency replacing an old agency—it is not old, since it began just four years ago—but it is still doing the same thing, albeit with a few additional responsibilities. The government is spending $25 million over three years to set up this new agency, whereas the old agency only cost $5 million a year to run. It strikes me that this balance is wrong.

A vigilant eye must be kept on these processes to avoid taxpayers' precious money falling through the cracks and to avoid the creation of more red tape that stifles economic opportunity. As every Australian knows, Labor likes to spend. This is evidenced by the last four years of this government. Unfortunately, Labor likes to spend but is not that concerned with what it has to show for it at the end of the day.

During the Senate Education, Employment and Workplaces Relations Legislation Committee's inquiry into this bill, some stakeholders raised concerns about the overlapping of responsibilities between the agency and other bodies. For example, the education departments of both Queensland and New South Wales raised the issue of the agency potentially undertaking duties of the Productivity Commission and/or state and territory bodies. Also, with this government we have seen a major redirection of funding from various training initiatives and programs into what they call new initiatives. For example, the $200 million from the Critical Skills Investment Fund was redirected into the National Workforce Development Fund. Senator Evans, in his capacity as the minster, announced the merging of the funds, in 2011. Far be it for me to simply conclude that this is more money shuffling. But it is apparent that this can confuse stakeholders, who query which fund they now have to apply to in order to gain the appropriate benefits.

For those who do not want to look deeper it gives the appearance of increased funding from the government. These changes made by the government—like moving money around and rebranding agencies—can not only be confusing for industry but can lead to what the Queensland department called 'fragmenting skills investment', where there is a misdirection or waste in how funds are spent. So, it is important that the agency use its resources to support the work already being done by other agencies, rather than adding another level of bureaucracy.

The bill also proposes an initial three board members, and it adds an additional category for membership, that being the representation of employees. I should note here that some stakeholders have proposed that, if employees have their own membership category, employers should too. I will acknowledge that an industry category already exists, but it is not clearly defined. In fact, unions could describe themselves as industry representatives. I hope that in future the government will partake in some common sense and ensure that employers are adequately represented on the agency board.

Another point of concern is the fact that there seems to be no person from the training sector represented on the board. I believe that training should be afforded the same significance as unions and industry. After all, that is a core part of this whole issue: the training of workers. The Australian Council for Private Education and Training has said:

… it is appropriate that the training sector also be represented as part of the Australian Workforce and Productivity Agency membership … such an appointment would add valuable expertise to the AWPA as it develops advice for government.

In the next five years there is expected to be a shortfall of about 250,000 skilled workers in this country. This poses a challenge for all those involved in upskilling our workforce. Training needs to produce the skills that industry requires and is prepared to pay for. This will not happen if the agency's agenda is warped by the government trying to keep its most valued stakeholders happy—and by that, I mean the union movement. Excluding this important level of expertise can only hinder the work of the agency going forward. That is something the coalition does not want to see happen.

There are also a few inconsistencies between this bill and the budget papers that the government should take note of. The first is the task given to the agency regarding funding. The bill states that the agency will provide 'advice' on matters relating to the allocation of Commonwealth funding, including the Workforce Development Fund—and yet the budget papers state that the agency will 'administer' the Workforce Development Fund. Also, the bill says that the agency will assess research relating to improving workforce productivity; whereas the budget papers state that the agency would 'undertake' research. Further clarification to clear up these inconsistencies would be welcome.

The coalition will pay close attention to this new agency, in the hope that this is not just another quick fix or a temporary solution to a problem that the government has. We want it to be an enduring fix for the skills shortages that are apparent in Australia. We want there to be an effective collaboration between industry and government so that the skills requirements of industry can be met and sustained for decades to come. We do not want this agency to become another level of bureaucracy that splashes out, or indulges or provides for its preferred stakeholders, to the long-term detriment of improving Australia's workforce.

In conclusion, the coalition will not be opposing the passage of this bill. We are simply seeking to highlight our concerns. We would like the government to consider them, not only in the initiation of this agency but also in its ongoing operations, whilst it holds the Treasury bench.