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PM rejects claims of skills training neglect -

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PM rejects claims of skills training neglect

Reporter: Michael Brissenden

KERRY O'BRIEN: Is it simply the by-product of a booming economy or a result of years of government
complacency? Today in Canberra, business leaders and the Opposition pressed the Government for
action over what seems to have become an alarming skills shortage. After 14 years of growth, you'd
think business would be happy, but a damaging skills shortage is now being identified as a serious
impediment to current and future growth. The Reserve Bank even cited the shortage as one key reason
for its decision to increase interest rates last week. But in Parliament today, the Prime Minister
rejected Opposition claims that his Government had neglected skills training, and he described talk
of a skills crisis as "dishonest and misleading". In a moment we'll hear from the group that
represent 10,000 manufacturers. But first, we'll hear from political correspondent Michael

MICHAEL BRISSENDEN: In the shipyards and the factory floors, from the boardrooms to ministerial
offices, the whole nation, it seems, is talking about one thing. As Costello told the Coalition
Party room today, all the parrots in the pet shops are talking about the skills shortage. You bet
they are!

ALAN EVANS, FORGACS ENGINEERING: It's not far away from being a catastrophe, I think. We need to
have the State Government and the Federal Government engaged in programs that get companies in a
position where they can get these training programs under way.

MICHAEL BRISSENDEN: Allan Evans runs Australia's biggest ship repair yard in Newcastle. The skills
shortage here has got so bad, he has even been forced to import 20 specialists welders from Hungary
to fill the gap. New apprentices are desperately needed but they're impossible to find.

ALAN EVANS: It's almost a start from scratch situation. There is a complete generation of people
disappeared from the trades environment in Australia.

DENNIS WILSON, MASTER BUILDERS AUSTRALIA: There's certainly a skills shortage in the building and
construction industry. There is a national skills shortage in all trades, not just the trades but
also the professions, estimators, project managers, supervisors, foremen, the whole raft of
projects that are being held up are because of the skills shortages that exist at the present time.
It's not just our industry, it's every industry that's suffering those skills shortages.

MICHAEL BRISSENDEN: Dennis Wilson is parts of a delegation of business leaders who is meet fairly
regularly in Canberra with government representatives. The topics are discussion are usually
wide-ranging. Today, though, there was only one issue that dominated the talks.

DENNIS WILSON: Five years ago the word skills shortage or skills crisis was not thought about.
People have suddenly woken up that there is a skills shortage, that they need to do something about

MICHAEL BRISSENDEN: But what? The government says it's already spending $2.1 billion on training.
The Opposition says it's too little and definitely too late.

JENNY MACKLIN, SHADOW EDUCATION MINISTER: When it comes to skills investment, we know that this
Government cut spending, it didn't increase it, it cut spending on training in 1997, and it took
years before they made up that cut. We really have got a Government that's dropped the ball on
training, that really is trying to deny the existence of a skills crisis in the face of very
serious evidence. There's only one organisation responsible for this skills crisis, and that's this
Government. They've known it's been coming, and yet they haven't put the additional investment into
training, especially in the traditional trades, where they should have.

MICHAEL BRISSENDEN: It may well have been building for years, but in the space of just a couple of
days, this skills shortage has become a real point of political debate. The Opposition can clearly
see a political opportunity, but the Prime Minister says the attack is misguided and any talk of a
crisis is wrong.

JOHN HOWARD, PM: And figures released last week by the national centre for vocational education and
training show commencements in traditional trades increased by 19 per cent, Mr Speaker, and the
deputy Leader of the Opposition was surely talking about a traditional trade if she's talking about
the building industry, has increased 19 per cent, Mr Speaker, in the 12 months to September 2004,
Mr Speaker, so the question of whether, over a particular period of time, there is a rise or fall
in renovations, Mr Speaker, is influenced by a variety of factors, but it does not merit the wholly
misleading and dishonest description of a skills crisis.

MICHAEL BRISSENDEN: The crisis or serious shortage, call it what you want, but the anecdotal
evidence now flooding in from desperate businesses is hard to ignore and the Reserve Bank cited the
skills shortage as one of the key reasons it decided to increase interest rates last week. The
Government's own skills at work evaluation paper, released yesterday, shows that overall trade
apprenticeships increased by 32 per cent in the years between 1996 and 2003. But significantly, it
also shows the number actually fell in the years between 2000 and 2003. And that a large number of
those apprenticeships were taken in areas that are not now in such high demand.

JENNY MACKLIN: We've seen a very significant increase in traineeships going into the clerical area,
into retail. It certainly hasn't been the case that we've seen that huge increase going into the
traditional trades, so the Government likes to claim that they've had an increase in
apprenticeships, but when you look at the detail, the big increase has really gone into those areas
where we don't have a skills shortage, in retail, for example.

MICHAEL BRISSENDEN: There is, as you'd expect, a lot of hot air now flowing through this debate.
But the one thing everyone does agree on is that apprenticeship seem to have an image problem in
today's Internet age.

DR BRENDAN NELSON, EDUCATION MINISTER: We've achieved many things as a country, of which we can be
very proud, but one of our failings we've created a culture in which young people feel their lives
are valued by the educational choices they make. They've been told in all kinds of ways that if
they don't get an outstanding result year 12 result and a university education and BMW and mobile
phone in fashionable clothes, in some way they're not as good as someone who does.

MICHAEL BRISSENDEN: Well, maybe, but if that's all kids wanted, there would be no shortage of
sparkies and plumbers. A good tradesman can earn a six-figure salary these days without too much
trouble. But back in Newcastle, Allan Evans can certainly attest that spanners and oxywelders are
far from attractive career tools. He had 24 apprenticeship positions to fill this year, but could
only find eight willing takers.

ALAN EVANS: When we talk to the colleges around about the September-October mark, about prospective
school leavers that might be wanting to join the apprenticeship scheme, there's relatively few
people who want to get involved. It's not as socially acceptable as it used to be, it would appear,
the advice we're getting from the head teachers is that it's not cool to be an apprentice, the
trades are not as sort of well accepted as they used to be amongst the young people. They want to
get into computers or clerical work or retail.

MICHAEL BRISSENDEN: In the Parliament, this has predictably enough become an argument of smoke and
mirrors with different facts and figures flying about to prop up the rhetoric. The evidence seems
clear enough and the fall in apprenticeships has been happening under governments of both political
persuasions. There was a big fall, for instance, under the Keating government in 1992 and an even
more dramatic slide under the Howard government in 1997. Something clearly needs to be done. Today,
the Treasurer remained coy about reports that this year's budget surplus could be as much as $10
billion. Australian industry might have a few recommendations about how to spend at least some of