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Labor's blueprint: skills and schools: address to the Australia and New Zealand School of Government, Sydney: 29 September 2005.



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LEADER OF THE OPPOSITION THE HON KIM C BEAZLEY MP

CHECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY

ADDRESS TO THE AUSTRALIA and NEW ZEALAND SCHOOL OF GOVERNMENT SYDNEY

29 SEPTEMBER 2005

LABOR’S BLUEPRINT SKILLS AND SCHOOLS

Good afternoon,

I’m delighted to be here because education, learning and training are the issues that drive my commitment to public life. In wanting to lead this country my goal is to be Australia’s education and training Prime Minister.

As both a historian and a Labor Member of Parliament, I can tell you Labor’s core value underpinning our party is this: Prosperity as individuals and prosperity as a society requires that governments help their people to learn.

I believe investing in our people is a moral responsibility of government.

And I believe investing in our people is an economic necessity.

The current skills crisis, huge HECS disincentives and chronic underinvestment in education and training reflect a Government with the wrong priorities driven by the wrong values. For every figure the OECD produces showing how far behind the rest of the world we now are….

…. and for every trade on the national skills shortage list…

..…there is an Australian denied the chance to reach their potential.

How many ground breaking scientists and discoveries never were?

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How many tradespeople and their production have we lost?

How many great engineers have we never trained and what has been the cost to our economy and their families?

As the alternative Prime Minister I make a value judgement about where the Howard Government has taken us and I draw this conclusion: The Howard Government’s neglect of education and training is both morally wrong and economically irresponsible.

They have a profound belief that post secondary education in particular is a private opportunity more than a national investment - an individual privilege rather than a national need. Our values dictate that a Government cannot claim economic responsibility whilst it fails to invest in its people.

My passion to correct this is what drives me to do all I can to lead a Labor Government. The Howard Government is incapable of helping our people reach their potential and drive our economy’s prosperity.

Our country needs highly skilled people earning good wages. Highly skilled people producing highly valued goods and services the rest of the world wants and is willing to pay for.

Australia’s trade performance and our spiralling foreign debt make Labor’s commitment to create a highly skilled, highly competitive Australian workforce even more important.

On the surface, of course, we have seen a long period of prosperity and growth in Australia. Consequently we have a complacent Government - in short we have a Government that reads its own press releases.

The record prices we’re receiving for our resources mask the very poor performance of almost every other export sector for the past five years.

We must prepare for when the resources boom ends - as all such booms do. The massive growth in foreign debt has fuelled domestic consumption rather than productive investment. The economic certainty - the economic truth - is this:

If the Liberal and National Parties do not confront this problem - Australia’s foreign debt will ultimately cast a shadow the length and breadth of our country affecting us all.

In the past two years Australia’s foreign debt has increased at a faster rate than ever before in our nation’s history. At 430 billion dollars higher than any other nation in the world except for the United States. Solving this problem at its heart, at its core, demands investing in our people.

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We need an education system that teaches young Australians how to work - not just how to study.

At a time when when China and India are producing 4 million graduates a year, John Howard has cut a staggering $5 billion from our universities since 1997.

Public investment in our universities and TAFEs has fallen 8 per cent since 1995. The OECD average is a 38 per cent increase. Australia was the only developed country to reduce its investment. The next worst performing country actually increased it’s investment by 6 per cent.

Australia is now one of only three countries in the OECD where public expenditure accounts for less than half of all spending on universities and TAFEs. We are below the average among developed countries for public expenditure on education per student.

Australian students receive $4,000 less public support than students in the United States. A lack of funding means 20,000 eligible applicants are turned away from our universities every year and 34,000 from TAFE.

And in this year’s Budget the Government’s only answer was to increase skilled migration yet again, this time by another 20,000 every year. To announce this fix for their training failure so blatantly and with such pride was breathtaking.

The Howard Government simply cannot be trusted with this critical component of our economic management. Since 1997 the proportion of young Australians who complete Year 12 and go on to university has dropped by 20

per cent and 14 per cent for TAFE.

The Howard Government's New Apprenticeships Scheme is failing. Yes it boosts numbers but at the expense of quality. One in four trainees and apprentices do not get any formal training at TAFE or a similar institution.

A staggering 40 per cent of people who start a New Apprenticeship do not complete their training. Completion rates for traditional apprentices have declined from 71 per cent to 60 per cent.

Metal fitters and boilermakers have been on the National Skill Shortage list for 8 of the last 10 years. Machinists, refrigeration mechanics and welders for 9 of the last 10. Mechanics, auto electricians, panel beaters, chefs, sheet-metal workers, nurses and medical technicians every single year for the past decade.

Since September 1996, skilled vacancies in the construction trades have increased by 77%.

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The reality is these short sighted decisions have consequences and in 2004 and 2005 the chickens well and truly came home to roost: We had the most significant decline in the number of Australians in training in more than a decade - down 7%, or 122,000 people.

The Australian Industry Group estimates our economy will soon be short at least 100,000 skilled tradespeople. Couple this with the Government’s extreme industrial relation’s agenda and two conclusions are clear:

We are falling behind the rest of the world. And John Howard and Peter Costello want us to compete, not by being up skilled - but by being underpaid.

This is John Howard and Peter Costello’s low skills, low wage road - two men who do not understand the difference between a low paid, part time or casual job and a career.

They want lower Australian wages to compete with low wage economies. So our nation now approaches this crossroads. Howard and Costello’s low wage, low skill road.

Or Labor’s decent pay and high skills road.

And so we say to the Australian people: Australia must re-invest in our skills base. We must have a strong education and training system. We must change our training structures and incentives to deliver the skills our country needs. We need a Government that understands the one thing John Howard and Peter Costello do not:

That we reach our national goals by helping every Australian reach their own personal goals. Since becoming Opposition Leader I’ve made it clear: I would give Australians plenty of time to make an informed decision at the next election.

Over the next two years I will steadily explain Labor’s way forward. We’ll start with our principles and priorities. We will progressively move to more detailed policies and plans as we move forward. I will have a lot more to say about schools, universities and TAFE.

In particular I want to address further the giant burden HECS has become, the lack of growth in university places and the distortion of priorities in order to attract fee paying students from overseas.

As they say - watch this space.

But for today I want to concentrate on three critical policy components for Skills and Schools. One, helping young Australians learn how to work - not just learn how to study.

Two, overhauling the failed New Apprenticeships Scheme; and

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Three, getting the skilled migration/training Australians balance right.

Allow me to address each of these principles in turn:

I believe Australia and all political parties made a big mistake in turning our attention away from trades education in schools. We need fundamental change to our secondary schooling. We need to keep young people in

schools by offering better choices.

There is much that can be done within our school system to fix this problem: we need first class facilities for trades, science and technology training; more school-based apprenticeships and a Trade Taster program to provide relevant work experience.

I believe students in every school district should be able to attend a senior trades or science and technology high school. The dusty and Dickensian workshops in many of our schools are turning our young students away from the trades.

There must be first-rate facilities available in every school district and students must be given the chance to use them. That means new facilities must be built - a capital injection will be required.

The capital funding we’d provide would require reform so school systems build a training culture. Sensibly we must use the facilities of the 25 new technical colleges in a more coherent way than the Commonwealth Government proposes.

And we’ll make sure new facilities support training in the trades we need most and in the regions and suburbs where training is most required. I want schools to be building more metal workshops and science laboratories. We need more schools-based apprenticeships.

That’s why Labor has proposed a Trades in Schools scheme to double the number of school-based apprenticeships in areas of skill shortage and provide extra funding per place - an additional 4,000 training places in our schools for Year 11 and 12 students to put a real dent in the skills shortage.

Labor’s plan delivers additional funding of $1,750 per student apprentice to help schools build their capacity to offer school based apprenticeships. Students need work experience in traditional trades and in trade training, not just in cafes and office jobs.

In addition we need a Trades Taster Program so year 9 and 10 students can experience a wide variety of trade options - giving them a hands-on feel for what their future options are. A Trades Taster program would lead to more specialised pre-apprenticeship programs and then to full and real apprenticeships.

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Experience in the Trades Taster program would be credited to a chosen apprenticeship. These could be on-site at school, or at the local TAFE or training provider. All these measures however can only be really effective if we fundamentally re-examine the purpose of schooling in Australia and the way we arrange our school systems.

In many parts of Australia high schools are “zoned” so that local children are really only able to attend local schools and all high schools have to function as comprehensive high schools. This thinly spreads capital funding for trades, science and technology among schools.

It takes away from parents and students the right to choose the best type of schooling for their own future. To fix all these problems, and to take advantage of new skills initiatives I have outlined, Australia needs a nationally co-ordinated system of senior secondary schools allowing schools to specialise - in particular in trades training and in science and technology.

Rather than being zoned to a single school, students would be allowed to choose between a number of schools in a larger zone. Schools themselves could specialise within a zone, depending on local needs and demand from parents and students.

There should be trades schools, science and technology schools, academic schools, and a range of other possibilities, such as high schools which focus on drama and the arts. All schools would continue to offer full courses in core subjects such as English and maths.

So students receive a strong general education, and are encouraged to keep their options open, schools would only begin to specialise from the senior secondary years.

This would lead to the development of senior secondary schools, bringing together students from a number of feeder schools to a single campus for the final two to three school years.

This works very well in a number of states, for instance in the ACT and Tasmanian system of secondary colleges for Year 11 and 12. A single approach does not work - but we would demand a commitment that all students have real options, provided by their education community.

While the basic model would be Year 10-12 or Year 11-12 schools specialising in areas like trade training or science and technology, there are a number of other ways our commitment to senior schooling could be delivered.

A Year 11 or 12 student could do the final years of their senior school certificate along with a vocational course at TAFE. Schools could provide new vocational education and training in schools and school based apprenticeship programs.

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Maths and science schools could be established alongside campuses of major universities, such as the Australian Science and Mathematics School at Flinders University or the proposed new ANU College in Canberra.

Some of these changes are already happening around Australia. In my own electorate the Peel education campus co-locates a senior secondary school with the local TAFE and Murdoch University.

In Blacktown local students can attend the Western Sydney Institute of TAFE, a senior secondary school or a co-located Catholic school, alongside students from the University of Western Sydney.

Coorparoo Secondary College in Queensland offers school-based traineeships and apprenticeships.

Northland Secondary College in East Preston has recently pioneered NTEC, a new $3.5 million manufacturing and technology centre - 12 secondary schools use this facility.

In south eastern Melbourne Holmesglen TAFE is establishing Holmesglen Senior Secondary Vocational College at its Moorabbin campus in 2007.

The Oatley campus of the Georges River College in Sydney, the Salisbury High School in Adelaide, and others across Australia have all been innovators in new vocational opportunities.

These are just a few examples of what can be achieved by schools, community and industry working together in local partnerships. Yet none are receiving support from the Government’s Technical College initiative and its $350 million in funding.

I would work with States and Territories to implement these changes in secondary schooling. We would use the significant funding the Commonwealth provides as a major lever to drive change.

Second, I am advocating a total overhaul of the failed New Apprenticeships Scheme. We must restructure the way we train Australian apprentices.

John Howard believes apprentices are a cheap labour source - I believe they are an investment. That’s why we must totally overhaul the Howard Government’s so-called New Apprenticeships Scheme.

We need a real apprenticeship scheme. I’ve detailed the facts of the Howard Government’s apprenticeship failure.

Now I ask you to listen to these real examples:

This is what Wendy, a New Apprentice Scheme participant had to say: quote

“..there was no training whatsoever, the whole time that I was there”.

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This is what Dean said: quote

“I`d just had enough. I realised that the pay wasn`t enough, and I knew that I wasn`t really learning anything, and it just wasn`t working.”

Tony, a parent of a new apprentice said this about the experience:

“I thought it was a bloody rort, you know, I just couldn`t understand why companies were getting this money basically to subsidise a 15-year-old boy doing a part-time job just for pocket money …. That`s not what I`d call a traineeship or training …”

In summarising the problems the Financial Review said:

“The rate of labour churning in the system also says a lot about the extent to which New Apprenticeships can be used by business as a source of cheap labour.”

The Australian newspaper editorialised last week:

“the $600 million the Government spends each year on incentive payments to employers to hire trainees and apprentices does plenty to boost the number of trainees in hospitality and retail -- where they are cheap to train -

- but not enough in the hardcore industrial areas.”

So whilst Australia needs real apprenticeships - John Howard and Peter Costello are serving up a cheap labour scheme. A real Australian apprenticeships system would target traditional apprenticeships.

We would target employer incentives where they’re needed most. We need the highest incentives to go to employers who are training apprentices in areas of skill shortage.

We would increase incentive payments for skills on Australia’s National Skills Shortage List. Much of the jobs growth in our economy is now in high skill areas - supported by diplomas, advanced technical and semi-professional qualifications - yet training in these areas is not supported by New Apprenticeships incentives.

Currently incentives are paid up to certificate level 4, but are not paid at certificate levels 5 and 6. To develop higher skills Labor would introduce incentive payments for these higher level qualifications.

And we would make sure incentive payments encourage and reward employers providing traditional apprenticeships taking up to 4 years to complete, in preference to shorter traineeships that can be completed in one year.

As I’ve said a staggering 40 per cent of people who start a New Apprenticeship do not complete their training.

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Labor has proposed a $2,000 Trade Completion Bonus, paid directly to traditional apprentices.

This proposal immediately encourages more apprentices to complete their training in the traditional trades by paying $1,000 half way through their training and a further $1,000 at the completion of their apprenticeship.

Halving the current drop out rate would put an extra 10,000 qualified tradespeople into our workforce each and every year. Contrast this with the Government’s new technical colleges which will graduate one thousand new tradespeople in 2010 - maybe.

We also must clean up the rorts in the New Apprenticeships Scheme.

Too many New Apprenticeships are being conducted without proper checks on training or quality assurance. Training practices must be genuine - real training is not guaranteed by just ‘ticking and flicking’ government forms.

We must put in place strict new funding conditions, rigorously enforced, to ensure quality training for our apprentices.

And nationally consistent standards to ensure qualifications are nationally recognised, providing flexibility to participants’ training, depending on the qualification they seek and their past experience.

A real Australian apprenticeship would keep its integrity and quality, making sure our apprentices become tradespeople with broad based, enduring skills, so that they always have the skills to get work.

And a Labor Government would provide decent pay and working conditions as a safeguard against people being used as cheap labour. Low wages contribute to the high dropout rate for apprentices.

A recently commissioned Howard Government report recommended apprentices be made easier to sack.

Australian Workplace Agreements currently being offered to first year apprentices can pay as little as $6.90 an hour, all up, for a 40 hour week, including sick pay, penalty rates, and other allowances.

The situation will only get worse under the Howard Government’s extreme attack on working conditions. Vulnerable, young apprentices will have to go it alone and negotiate their own pay and conditions, turning many young people off becoming an apprentice.

That’s why a Labor Government would protect apprentices’ wages from the Howard Government’s extreme industrial relations changes. When so many young apprentices cite better wages for unskilled workers as a reason to drop out, the Howard Government’s industrial relations plans start to look both extreme and bizarre.

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And we would protect adult wages for mature age workers who want to return to an apprenticeship later on in life.

Thirdly we must get the balance right between skilled migration and training Australians.

I am a supporter of skilled migration. But I believe the current balance is wrong. Let me explain why. Many skilled migrants are from poor communities in poor countries that need them.

The Howard Government has increased the skilled migration program by an extra 270,000 skilled migrants since 1997.

Yet since 1998 the Howard Government has turned 270,000 Australians away from TAFE. That’s just not right. Ask the apprentices from Ballarat - eight young Australians lost their chance at an apprenticeship when transport company Maxi-Trans imported welders from China instead.

We need to get the skilled migration balance right. To achieve this a Labor Government would put in place a Training Australia Partnership.

We would review the skilled migration program to assess companies who are over-reliant on importing skilled labour, without doing their part to secure the long term skills base in their field.

We want to make sure companies fulfil their obligations to train Australians first. Businesses must not over rely on skilled migration. The Government should work with business to help train young people.

Labor is developing detailed plans for working with business to achieve this. Putting in place the right incentives so all parties benefit. But also putting in place the mutual obligation - I want to be clear about this - there is a mutual obligation here.

Our position is clear - we support skilled migration - but we say - let’s get the balance right. My fear is that an important program designed to complement Australia’s skills base has become a quick fix for Government incompetence.

That has to change.

Conclusion

I believe the Prime Minister of Australia has a moral obligation to train and educate our people - to see this task as a critical national investment. Mutual obligation for Prime Ministers with the honour of national leadership requires them to respond by ensuring our nation’s future.

To help Australians learn so Australia can advance.

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I believe in this obligation - I fear John Howard does not. I am advocating an overhaul of how we train our people to achieve our national goals. Australia’s skills shortages make it clear:

We need to train fewer lawyers but more tradespeople. We need to train fewer merchant bankers but more engineers. We need to train fewer financial advisers but more apprentices. We need to train fewer advertising executives but more nurses.

We need to give young people a real chance to consider a career in the trades. We need schools that help young people learn how to live, not just learn how to study. We need to train young people not serve them up as cheap labour.

And above all else we need a Government that has faith in the Australian people to achieve their own dreams and our national goals.

When I spoke before about the moral obligation of an Australian Prime Minister to help our people learn, I meant precisely this:

As the alternative Prime Minister, my promise to our people is to help every Australian reach their potential.

I make that promise because I believe in us.