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Transcript of interview with Leon Byner: 5AA, Adelaide: 29 August 2013: Skills and training; Liberal's Job Network versus Labor's Job Services Australian (JSA); manufacturing; 457 visas; apprentices

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E & O E - PROOF ONLY _____________________________________________________________

Subjects: Skills and training; Liberal’s Job Network versus Labor’s Job Services Australian (JSA); Manufacturing; 457 visas; Apprentices. _____________________________________________________________

LEON BYNER: Well, let's welcome one of the senior ministers of the current government in election mode, who is here in South Australia to gee up the troops, I suspect. But his responsibility is employment, training, and skills. I'm talking about Brendan O'Connor. Brendan, nice to have you in the studio.

BRENDAN O'CONNOR: It's good to be here, Leon.

BYNER: Look, I don't know whether you know this, your confederates might have told you, but we've taken quite a bit of interest in the business of training. We've also taken quite a bit of interest in the business of job networks and our program had a lot to do with exposing some of the rorts that the networks were perpetrating on people. The most nasty that I can think of, and I'm not sure that the problem is solved yet, where a person would go to a job network, because that's what they had to do -


BYNER: - They would find that they were given little or no help, very poor attitude. They would then, through their own networking skills, get a job.


BYNER: Good on them. And then they would be hounded by the Job Network, as would their new employer, to fill out forms so that they can claim a commission for something they had absolutely nothing to do with. And to me, you know, if anyone tried that in any other business, you know what would happen.

They'd probably be looking at the view with a whole lot of bars in front. Have we sorted that out?

O'CONNOR: There is no perfect system and I - but I think you bring to attention a real issue about taxpayers' dollars. Let's just go back very quickly to 1996. There was a complete privatisation of the system. Now, Job Network was introduced by the Howard Government. When I was minister, actually in Kate Ellis's portfolio today, five years ago, we reformed Job Network, Job Services Australia, where we rededicated most of the resources to the most disadvantaged. Why? Because of the point you just raised. There's a deadweight loss, economists call it. That is, people getting money for something that would have happened anyway.That can happen where providers are getting some sort of incentive to help job ready people into jobs.

BYNER: Yeah.

O'CONNOR: You just said people can get jobs themselves on occasion. So what we did was we shifted a large part of the resources for the job ready down to the most disadvantaged. People that have been - who might be going through intergenerational unemployment backgrounds, they have not even seen a job, they've got no role models. And we build up their skills to get them into work. What we've done is shift those resources. Does that mean that we're not going to have problems on occasion? It doesn't mean that. We will have problems. If you bring to attention fraudulent behaviour, though, by a provider, I'd like to know about that because they should be -

BYNER: Oh, this was quite a hullabaloo at the time.


BYNER: I'll tell you, Brendan, I had Chris Hamilton, who's an employment psychologist, Gary Collis, who's an industrial advocate, he used to be the employment ombudsman. We've got a lot of evidence of some of the shonky practices of some of these job networks. That's not to say that many of them don't do a good job, you know?

O'CONNOR: Can I just say on behalf of them - I mean, there's some private, for-profit providers, and there's a lot of not-for-profit providers who basically, in many cases, subsidise from other areas of their organisation, because they're church groups and others, and many of them work tirelessly for job seekers. It's just in their nature. They're -

BYNER: Okay.

O'CONNOR: But then there are others, of course, who may not always do the right thing.

BYNER: Alright.

O'CONNOR: We should identify that.

BYNER: Alright. Now, look, you - Kevin Rudd in this campaign says he wants to reinvigorate manufacturing.


BYNER: And, you know, we've had a very big focus on this program over our rural sector because our food sector is very responsible for hundreds - well over $100 billion of exports and not only exports, but economic benefit into Australia and, you know, we are set to subsidise the car industry and I don't see how we can't do that simply because everybody else is doing it and if we sit around and say well, let them survive on their own feet, they never will. I mean, you've got companies in America that are subsidised by the taxpayer for every dollar, nine or ten bucks. I mean, how the hell can you compete with that?

O'CONNOR: Well, Kevin Rudd is right when he says we need to have a country that builds things and I'm totally opposed to those who say we shouldn't provide any support to industries which ensure that we have skills in this country. Whether it's building some of our defence assets, as you do here in South Australia, whether it's actually a car, the automotive industry. We do need to provide support. And you're right. If you look at the amount of taxpayers' dollars spent per car in America, I mean, what we invest in is not too much money.


O'CONNOR: But we have to do it smart and we've got to do it - we've got to say - we've got to do it in a way that's going to make sure that we leverage the capacity -

BYNER: Brendan, I need to ask you about tradies because, you know, we don't have enough of them and we've been training hundreds of thousands of people, but it appears we haven't been training the mechanics, the air conditioning experts, and many of those people who you need to have working with you for a skilled economy. We seem to be training people to go into hairdressing salons and sweeping floors.

O'CONNOR: Well, that's a genuine and legitimate job as well.

BYNER: Yes, it is, but you see, we don't have a shortage of people in the hairdressing business, making sandwiches in cafés, we have a shortage of skilled tradespeople.

O'CONNOR: And look, can I say, Leon, one of the reasons why we've re-diverted money away - and, in fact, I've had to take some criticism. I was just at a conference because we've taken some money away from the areas that are not priority areas where there is no shortage, to areas that are in shortage. One of the best ways I think a government can assist in providing skills in this country is listen to industry. You've got to make decisions based - that is, skill acquisition -

BYNER: Okay.

O'CONNOR: - Based on what employers and businesses need. We do that more effectively now than we did five years ago, much better than the previous government.

BYNER: Alright. We're talking to Brendan O'Connor, Minister for Skills, Employment, Training. If you've got a question or comment, 8223 0000. Give me the four most sought after skills that we are in massive shortage of right now, Brendan. What are they?

O'CONNOR: Well, look, they - it can vary from region to region.

BYNER: But in general, what are they?

O'CONNOR: Because Australians don't tend to mobilise or move around the country in the same way that -

BYNER: They do in the mining sector.

O'CONNOR: They do, but if you ask certain employers, you'll find there are occasions where -

BYNER: Okay.

O'CONNOR: You and I have discussed this on the 457s.

BYNER: Yeah.

O'CONNOR: About - there's no problem with the 457 for a legitimate shortage. But what is going on when people are not looking locally when there are skills available locally. Instead -

BYNER: Okay.

O'CONNOR: - Looking overseas.

BYNER: Is Gina Rinehart going to get her 1700 workers in case - because -

O'CONNOR: Look, I think there's a simple test for employers. If they genuinely have a shortage in their region -

BYNER: Well -

O'CONNOR: - Then they've got a right to look overseas. If they do not then they should be getting local workers first.

BYNER: Okay. So are we going to change the visa system or not? I'm just wanting to be clear on this.

O'CONNOR: Well, I think this is a really important question you ask because the last day of the parliament, we complete - we enacted legislation that tightened up 457s, that requires employers to look locally, whether it's Adelaide, whether it's Brisbane.

BYNER: But it required them to do that before.

O'CONNOR: No, it - well, the problem before was there were things that you had to attest to, but there was nothing enforceable. You had - if you did not comply with what were the supposed requirements, there were no breaches and there were no penalties. Today, employers must look local before they access 457 visas. That's the right balance.

BYNER: But, as you know, there are people, for example, I can tell you about the Tintinara meatworks and, you know, and many other businesses like that, who cannot get…

O'CONNOR: I agree with -

BYNER: - Local labour. Now, what are they supposed to do?

O'CONNOR: I agree - well, they've got to get - they might have to get overseas workers.


O'CONNOR: [inaudible] No, no, no. Don't get me wrong here, Leon. There are situations where employers are looking and cannot find workers. If there's a legitimate demand, they have to be supplied with workers.

BYNER: Yeah.

O'CONNOR: If locals are not available, then of course we must - we - immigration built this country. But what we can't have happen is unemployed tradespeople not getting work because employers have chosen to look overseas

first. What we're saying, look local first, demonstrate that, you know, if you can't find locals, sure.

BYNER: What are you going to do for the rural sector? Because right now they've got to manage almost on their own, you've got farmers who are pulling up crops and orange trees in [inaudible]. I mean, that's crazy.

O'CONNOR: No, we have - look, we have deliberately had backpackers and - we've got 500,000 overseas, sort of semi-skilled workers in this country allowed to work in a limited way. And what we've done is prevented them to work in certain sectors of the economy, so they will work in horticulture and agriculture.

BYNER: Yeah.

O'CONNOR: That's been really important. If you ask farmers today, they'll access the sort of backpackers, and they need them in regions in South Australia, New South Wales, Queensland, everywhere. And we do have half a million of overseas workers that do that. And we understand that.

And I was asked, when I was Immigration Minister, would I extend it to tourism, I said no, because the problem will be all the young people will end up in the pubs pulling beers - instead of picking fruit. And the farmers need them on the land. And so, I think we've got the balance. But if there's ever a legitimate shortage Leon, we must be responsive to that genuine demand. What we can't have happen though is allow people to bring people from overseas without just looking locally.

BYNER: Okay, now apprenticeships are an important issue. Now, the Coalition are going to allow apprentices to get a kind of HECS scheme for about - up to $20,000. Because one of the problems for the tradies is this; they go into an apprenticeship, and they get very low wages for a period of time. And ultimately that time in the wilderness, in say two, three, four years, will be rewarded with a skill and then they can earn a lot more money. But whilst they're doing it, realistically, all their friends are pulling beers, and doing stuff, earning a lot more than them. And they're thinking hang on a minute. And so what you get is a lot of people going into trades, and they don't stay.

O'CONNOR: That's true.

BYNER: So, okay, we know that the Coalition's policy is here. So what is your policy-


BYNER: - To actually get the tradies into these jobs, and not having a situation where - I mean I understand businesses can't pay for something for which they're

not getting a value. You see? So what I want to know is what does the Government propose to do about this one?

O'CONNOR: Well look, firstly the independent umpire only recently handed down an increase for apprenticeships because the apprentice today is not the apprentice of a generation ago.


O'CONNOR: They're 20, 22, 23. Some of them have got kids, and they've been dropping out. And so Fair Work Australia says well, what can employers cope with, how do we keep people in apprenticeships so they don't drop out - wasting all of that effort.

And they've - now, the Coalition are talking about interfering with that decision, but I think that was an understandable decision. Insofar as the loan's concerned, it's an imitation of our policy. We already have HECS-like loans for apprentices, we introduced that some time ago.

But as important as that is, in combination with that, we provide currently $5,500 payment, not loan, to apprentices for tools and equipment over the course of their apprenticeship.

BYNER: Okay.

O'CONNOR: That's been really important, because sometimes they just can't afford the equipment.

BYNER: Alright.

O'CONNOR: Now that payment is, I guess in that sense, better than a loan.

BYNER: Brendan, you know as well as I do that businesses are reluctant to take on apprentices.

O'CONNOR: They have been, yeah.

BYNER: Yeah, so what are you going to do about that?

O'CONNOR: It's in some cases.

BYNER: What are you going to do about that?

O'CONNOR: Well, look I think that - look, can I just say to you watch this space.

BYNER: Alright.

O’CONNOR: No no, well I'd love to give you a scoop right here and now. But I think there are some real issues about particularly Commonwealth procurements, like large government investments in infrastructure.

BYNER: Yeah.

O'CONNOR: Now, the question asked of me if what conditions are we applying to some of those massive contracts in terms of training young Australians? And I think that's a good question. And can I say to you, just watch this space on that issue.

BYNER: Okay, now one other thing: subbies.


BYNER: There is a massive problem where you've got couriers who are controlled by one party, if they pull a sicky, and it's a genuine one, they've got to pay two or three hundred dollars to their sub-contractor for inconvenience. We had a meeting recently, Gary Collis chaired it at the Oakton Central. I spoke to Professor Andrew Stewart, whom you know well.

O'CONNOR: I know Andrew, yeah.

BYNER: And there is a massive problem here. Are we going to do something about this?

O'CONNOR: Oh look, I'd be happy to talk to a number of people - yourself off air, Andrew, about that. I haven't heard about the difficulty, but -

BYNER: You don't know about this?

O'CONNOR: Look, I didn't know it was as wide as you're suggesting on this issue -

BYNER: Oh yes.

O'CONNOR: Well look, you know, it's like anything. Responsive governments will sit down with parties. Whether it's the BCA, whether it's the ACTU -

BYNER: Alright.

O'CONNOR: I'm happy to talk to you about that off air, and come back to you. I mean you seem to know a lot of stuff. Where do you get all this stuff from?

BYNER: Okay. Quickly. It's my job, it's my job Brendan. Listen, before I let you go, why are you here?


BYNER: Apart from talking to me of course, but why are you here?

O'CONNOR: Why am I here? Well I just presented a speech on training and apprenticeships to the providers at ACPET - the conference.

BYNER: Yeah.

O'CONNOR: I was here for that. I'm heading to Rockhampton today, which is quite far from here. I'm also here of course to talk to my friend, and I think a great advocate for this area, Steve Georganas.

BYNER: Yeah.

O'CONNOR: Who's, I know, a regular visitor on your show.

BYNER: Yeah, yeah.

O'CONNOR: And he's a great advocate. But look he's like a lot of us, in a battle. And the people of Australia will decide.

BYNER: Alright. Well I look forward to the scoop that you couldn't give this morning, and also more on the sub-contractor issue, and thanks for joining us.

O'CONNOR: Yeah, thanks very much Leon.

BYNER: Brendan O'Connor, the Federal Minister for Skills, Employment and Training on 5AA.



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