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Regional skills relocation

CHAIR —Welcome, Mr Hartman. Thank you for attending and for your submission. Although the committee does not require you to give evidence under oath, I advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. We have your submission, and we are very grateful for it. Would you like to make an opening statement before we begin asking a few questions?

Mr Hartman —I would love to, thank you.

CHAIR —Please proceed.

Mr Hartman —Thanks very much for allowing me to give some information and for accepting our submission. Thank you also for the work you will be doing, which I think is very important. ForestWorks is one of the industry skills councils that looks after the forest and the forest products industry, but we have a much broader role than just being a national skills council, which is a DEEWR-anointed function that we have had for about three years. In the past one of our functions was being a service provider for the forest and forest products industry. In one of those areas we have provided services to people who have lost their jobs through redundancies in the industry. Our latest tally, which we did yesterday, shows that was close to 1,800 workers in all different states.


Mr Hartman —We have managed to take them from a situation of redundancy to employment or training and a new job. We have a lot of experience hands-on in getting people from a rural setting. Just about all the closures in our industry have been in rural settings or regional Australia. One was in the Shoalhaven, and it was probably the closest one to the city.

Recently we have been involved in retraining and trying to find work for 350 workers who have lost their jobs in the two paper mills in north-eastern Tasmania. That will represent a particular challenge for us. Most of the work we have done over the past nine years has been in a skill shortage environment. We have had great success—figures of over 90 per cent—in getting people into jobs within three to eight months of their becoming unemployed.

The most recent example was in Dartmoor in Victoria, and in Nangwarry in South Australia. If you have ever visited Dartmoor, you would know it is virtually a one-timber-mill town. Overnight 121 workers lost their jobs. We got 80 of those back into employment within six months. We understand their experiences, what they go through, and how they are sitting in a town in their house that virtually has become worthless overnight. They say to us, ‘I have to start again. What do I do?’

We put people on the ground to manage that process and take them through it. To a certain degree we are providing a function that is a Job Services Australia type of function, but in a very different model and one that produces significantly better results for the workers concerned. That work that gives us a fair bit of knowledge has been focused on getting jobs for those people—ongoing permanent employment. Specifically it has not been a research activity into labour force mobility, but through that process, under a Victorian program that was funded by the Victorian government, we serviced 800 workers who lost their jobs. The government had reduced the log supply to the industry, so a lot of mills were shut down.

We were given a Victorian government contract to look after the workers. About 10 or 12 per cent of the workers needed relocation, as distinct from finding jobs, so we learnt a few lessons about relocation from that process. One of the lessons is that, for most workers, relocation was the option of last choice. In fact, most people would prefer to retrain and get a start in a new industry in a brand new job rather than leave.

We found that a key driver for people to leave was that they wanted to carry on their profession in the forest and forest products industry. Therefore they would chase a job that was familiar to them. We found that those who did not want to shift felt that way largely because of family, schooling and connection to community. That is a good story for regional Australia. Our experience was very different to the drift and everyone saying, ‘This is a great opportunity, let’s go to the city.’ It was not like that. It was, ‘How do we stay here? What do we have to do to stay here?’

We are now running programs that are funded by employers, by companies that want to shut down a mill—the Dartmoor one was completely funded by Carter Holt Harvey. And the work we are doing in Tasmania is now funded through a federal government program. But you should be aware that the Victorian government had available for each individual worker up to $30,000 of relocation assistance. That is hugely different from the pilot program you discussed in your first hearing—$5,000 on average per head—and much different from the Job Services Australia amount of approximately $1,000 per person.

In our submission we recorded in our work on Dartmoor and South Australia that most of those workers were not accessing the Job Services Australia relocation amount. They were not offered it. It was not seen to be part of the upfront, ‘Come in the door, we’ve a relocation package for you.’ So with $30,000 to relocate workers, you actually learn a little bit about what motivates them, considering that only 10 per cent of the workers took advantage of it, and $20,000 of it was basically to cover the cost of shifting house. That was all right when they were going from one region to another—quite often there was a match—but if they were to shift houses from regional Australia to a capital city, they said that the amount did not even touch the sides of the bucket cost-wise.

We found family was an issue and their connection to the community as well as the costs of shifting and the time and effort involved in relocation. A key factor was the destination to which they were heading. They were all factors affecting workers’ mobility, but ultimately we were quite surprised at how this particular group of workers—most of them were very stable in regional Australia for 40 or 50 years—were so immobile. They were prepared to change jobs and do a whole range of things, such as go down to one income—most of the time we talking about two incomes, one of which was lost—but they were not prepared to shift.

Our viewpoints in this matter are quite different from others, probably a little unique. We are not looking at those who fly in, fly out to Karratha and those being driven out to go to capital cities. We are looking at people  losing their jobs in a high unemployment region and saying, ‘What do we do next?’ That is where most of our lessons have come from.

CHAIR —I have to say that what is most interesting about your submission is precisely that. It seems to us that even under the government’s previous relocation program, one of the reasons why it succeeded where it succeeded was the preparedness or the role of a kind of mentor for an individual. That sounds like it is your experience as well.

Mr Hartman —Exactly. One of our models is worked on by a core group of people. The key part of the model in the Dartmoor mill, for example, was that we would find a community leader, usually an employee who had been made redundant and we basically employ them. Their mission in life for the next 12 months or two years, depending on how long we run the program for, is to look after all of the 120 people. They have a genuine interest and passion in coming up with a solution for each one of those people. That is a very different model than turning up at Centrelink and going through a registration process, and then being put onto a job service provider and going through another registration process, and then going on to a retraining program through an RTO and registration process. Each one of those people is a stranger and they are not necessarily committed to your long-term interests but rather are committed to getting their program through.

Our model requires a different funding stream, but we are highly successful because each person is individually mentored. A lot of that was counselling over the dinner table at night, and for the family as a group as well as helping them to make a career change, quite often, or a relocation change. A part of that program also involved a subsidy to the new employer. They got a 20 or 25 per cent subsidy for wages for three to six months. An interesting part of the mobility was that out of the $30,000, $10,000 of that was about helping them to shift. That might cover school uniforms, for example, and there was also a travel allowance that ran for three to six months. We found that a lot of workers tried the long-distance commute, even five days a week somewhere else and coming back. Once the subsidies stopped, they basically returned home and said that they then had to find some other work.

CHAIR —So each worker had an allocation of $30,000?

Mr Hartman —Yes.

CHAIR —Was there a time criterion on how that was to be spent?

Mr Hartman —Under the Victorian program we were contracted by the Victorian government to provide services for three years. There was an extensive policy document so each worker was entitled to a range of things. Our job was to ensure that workers got their entitlements when they needed it. Obviously a lot of workers did not use everything that was available. Some workers found jobs almost straightaway themselves because they had connections, but a lot of workers took a lot of effort. Averaging out was really important.

CHAIR —Of the 10 per cent who chose to relocate, I think you said in your example it was because of their experience and history in the industry that they wanted to stay. Generally speaking, was it about their skill level? For example, if I am a doctor, I can happily move and be a doctor in a community 30 or 100 kilometres away or in the city, but if I am a factory hand, then my prospects may be less glowing.

Mr Hartman —One of the features of the model we were running, and still run, is that we sit down with individual workers. Most workers think that they have not got skills, that their skills are absolutely specific. They say, ‘I am a timber worker. I can handle timber.’

CHAIR —‘I have lost my fingers. I know how to do the work.’

Mr Hartman —That is right. When you sit down with them you find that they have warehousing and logistics skills, transport skills, mobile equipment handling and load-shifting skills, and they have quality control skills. So we take them through an assessment process, usually with a registered training organisation.

CHAIR —Including an RPL, so that they would get credit for that.

Mr Hartman —Yes. Then they find, ‘Wow, we’ve actually got a whole range of skills, and that will allow us to get employment in other areas.’ It changes their thinking. A worker left by themselves or turning up to Centrelink basically would turn up and say, ‘I’ve got no skills. I have to start from scratch.’ They go to a TAFE and they are sat down in a classroom, and that is a big problem for them. They are at risk of going into long-term unemployment.

If they receive intervention, usually we did it in a group setting before the mill shut. We would go in there and say, ‘We’re here to look after you, and here’s the way we’re going to do it.’ We get a mindset that they have a range of skills. We also come into it with the philosophy that there are not many people who are completely unskilled. They have a whole range of health and safety and workplace orientations, and all those other skills.

CHAIR —What did you find, though, when they had a significant deficit in, say, literacy or numeracy?

Mr Hartman —We found them jobs that did not require—

CHAIR —So there was no additional training?

Mr Hartman —A lot of people who were changing careers were put through training programs. One of the lessons we learnt in trying to get RTOs to deliver in regional Australia, and this would be a strong recommendation for a fix, is that most registered training organisations get paid for funded delivery hours for a person, regardless of where they are and what skills they have been trained in. So it is not related to the cost of training or the difficulty in delivery. We think that it is no small accident that most of the skill shortage areas, if you look at skills, are in skills that are expensive to deliver.

One of our providers, for example, Box Hill TAFE that delivers in the pulp and paper sector of our industry, has 35,000 students. Their economics, if each student gets 1,000 funded hours at $10 an hour, enables you to look at the cash flow of that scenario. But our RTOs that we get to deliver in regional Australia might get three, eight or 10 students and they have to drive to towns in between, and they are in really difficult-to-deliver fields. It is not like you get 15 people learning hairdressing in one room. They have to be out in a factory environment, driving a forklift. In most states there is no differential cost in that at all. People in regional Australia find it harder to get their skills delivered. The more expensive the skills are, the less inclined RTOs are to deliver. That has been a key factor in skill delivery, what skills are in shortage and what skills are in oversupply.

CHAIR —Barry, do you have any questions?

Mr HAASE —I really do not. I think your exercise has been commendable and it is a great example of that experience and its effectiveness. This committee’s challenge is to see how we can attract in the first instance, as opposed to deploying—your experience is significant, although not exactly in line with my personal ambitions as part of this committee.

Mr Hartman —Yes.

Mr HAASE —But a valid question I have is: do you have any knowledge or are you aware of any similar or reverse procedures that have been applied in Australia or overseas?

Mr Hartman —Not directly on that issue, but the flipside of what our industry goes through is pretty similar to the National Farmers Federation. For example, in regional Queensland recently a timber mill shut down because they could not get the labour to run the mill on a reliable basis.

Mr HAASE —Which mill was that?

Mr Hartman —Up Caboolture way.

Mr HAASE —Right.

Mr Hartman —So on the flipside of our industry, one of our activities relates to the fact  that our industry struggles to attract labour. Part of our submission is about any policies or processes the committee might consider should take into account the skills drain that industries, such as the forest and forest products industries, experience when people get pulled out to live in other regional areas where there are higher paying jobs. Our industry suffers from critical skill shortages and labour attraction issues, which are pretty similar to what the farmers have been talking to you about.

CHAIR —Are they any good at workforce development planning?

Mr Hartman —No. The issue is that most of the businesses struggle with profitability. We did a four-year program in Tasmania that we are evaluating at the moment. One of the key factors we found was that profitability of enterprises affected their capacity to develop their workers and to provide training. We have noticed that in our industry. I noticed in one of your previous hearings the commentary that one of the problems in the mining industry was that they do not train enough and that a lot of poaching was going on. Our industry suffers a little bit from that same scenario. But I think that part of the solution is that regional Australia has to be made more attractive to live in.

If you can get training in regional Australia, it becomes a starting place for your career and that makes it more attractive. But our experience is that, if most people shift to regional Australia, they cannot get training. Most of the training happens in capital cities and then people have to migrate. If we could provide really good training solutions that would make a difference. For example, Tumut is part of our industry and there is a Tumut TAFE where people can get really good training. They are able to stay in that town rather than go to Sydney.

Another point that is not in our submission but is one of the things that we think you should have a look at is about shifting jobs rather than people—there are  issues about labour force mobility but job mobility is a significant issue. It is about attracting industry to regional Australia. A good example of that would be frames and trusses for the building industry, which is a big sector for our industry. If you look at the Sydney market, most frames and trusses were built within the Sydney metropolitan area until the cost of doing that became too expensive. Now they are all delivered in regional Australia based around Sydney and they are trucked into Sydney. That means there are a lot of job opportunities in that sector within a band that is 300 kilometres outside of Sydney. They have done that through natural competition and cost advantages. But if anything, you could have a look at that. It makes it more attractive for business to be operating in regional Australia and you create a critical mass of people living there.

Housing is a big issue. Our industry has had growth as well as contraction. There are two brand new mills in Tasmania. The biggest issue for attracting labour was that they could not get housing. There were no houses to purchase. The only option for workers who wanted a job there was to commute. They said that they came from another town and they would have happily lived in that town, but there was nowhere to live, there was no land, and there were no options. It is not as though the cost was too high: there absolutely were no houses to move into or to purchase, and there was no land on which to build a house because of land release issues.

What would help our industry and other industries as well as new industries, and what we would encourage, are policy settings that would be attractive for businesses to start up. A company in Tasmania, Ta Ann, which is a Malaysian plywood company with two new sites, said that they would happily do anything they could to provide housing for workers, but there was virtually nothing they could do. We find that employers are quite receptive to employer incentives that would help regional areas of Australia to develop. Employers say that they want to provide a community experience for their workers to attract them, but the way it is currently  it is almost impossible to do that in regional Australia.

CHAIR —In terms of identifying the barriers to that, though, are you saying the barriers are the slowness of local government’s decision making and its lack of planning for the future, or is it more complex than that?

Mr Hartman —In our experience, a company will put in place a business structure first and then worry about the people last. They do that because there are trees or there are resources and they find a site that they build on. The council does not have much time to plan, but then it comes to building houses people just come into the town and say, ‘Yeah, I’ll have a job. Where’s a house?’ There is not a house, so they leave and the company is not able to attract people.

I do not know exactly what the barriers are, except that they do not get a lot of lead time. A company that decides to expand a timber mill to three times its capacity, like Hyne Timber did in Tumbarumba in New South Wales, cannot get people when they put a call out for workers, and then they say there are housing, schooling and child-care issues and medical or doctor access issues. It is a critical mass thing. If we can get more business and more industry in regional Australia, we need to put regional Australia in a growth and development pathway. I am talking about traditional regional Australia rather than Western Australia, which is now turning to traditional because some of the mining towns have been there for many years.

CHAIR —Or worse—they get terribly big, like they did in my town, where the state and local government put in all the infrastructure and then the company packed up and left.

Mr Hartman —Yes.

CHAIR —The committee and I really appreciate your attendance and your submission. I am glad you had the opportunity to listen to some of the discussion with the National Farmers Federation. It would not surprise me if we come back to you with more questions or requests for information, particularly on the model you were talking about for relocation, the costs and so on. I cannot recall off the top of my head if you have offered, or we have asked for, additional information. If we have, we will be chasing you up for that.

Mr Hartman —Okay.

CHAIR —Thank you very much for appearing before the committee today.

Mr HAASE —It was very good.

Mr Hartman —Thank you.

Resolved (on motion by Mr Haase):

That this committee authorises publication, including publication on the parliamentary database, of the transcript of the evidence given before it at public hearing this day.

Committee adjourned at 12.39 pm