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Tuesday, 22 May 2012
Page: 5048

Mrs PRENTICE (Ryan) (17:37): I rise today to speak on the Skills Australia Amendment (Australian Workforce and Productivity Agency) Bill 2012. The coalition will support this bill and I understand that the general premise of the bill is supported very broadly across the training and skills sector. However, this piece of legislation is not perfect, and I would like to take this opportunity to discuss some of the problems with that is particular bill.

Firstly, I note that this bill will create the new Australian Workforce and Productivity Agency, which will replace and take over the previous work of an organisation set up by the Rudd government in 2008, Skills Australia. Based on the fact that they are replacing Skills Australia so soon after its implementation, clearly there were issues from the outset with that organisation and they have been recognised by the Gillard government. However, this government is notorious for coming up with short-term, bandaid solutions that do not address the substance of issues affecting this country. If this legislation is passed, the government will be successful in 'vanishing' the name Skills Australia, but not in dealing with the problems and inefficiencies that surrounded that organisation.

The agency was budgeted for $25 million in the 2011-12 budget, which will enable them to oversee the administration of the $558 million Workforce Development Fund. This is to pay for up to half of training costs in the form of a co-contribution for the upskilling of existing workers. The other half is to be paid for by businesses themselves. In order to facilitate this process, enterprises will identify areas where there are specific workplace redevelopment needs and apply for funding to train new workers and retrain existing workers. The role of the new agency is to identify areas of importance and, as such, areas worthy of funding under a competitive application process.

The current round of funding, which will be worth $50 million dollars, involves three key priorities: (1) $15 million for the resources sector and other areas where the effects of the current resources boom are impacting training and skilling; (2) $15 million in support for regions where there are significant structural reform challenges, with two priorities being the manufacturing and tourism sectors; and (3) an additional $20 million for upskilling and skills augmentation across the general economy where the agency sees fit.

Anyone who has been studying the Australian economy over the last decade knows that there have been significant issues in training and the procurement of skilled Australian workers, such that companies have often looked to bring overseas workers into the country on temporary business 457 visas. This is particularly true for the mining and resources sector. Many constituents in Ryan have raised with me their concerns that it is unfair to Australian workers, that this sector—which does employ so many Australians—with the ongoing resources boom, is not investing enough in upskilling Australian workers first. I understand their concerns and the concerns of many thousands of workers across Australia.

I appreciate that by bringing in workers on 457 visas we are adding to the skill base of Australians. These foreign workers are bringing in their skills and, indeed, are adding quite significantly to the future of the Australian economy. However, they are only doing so in a bandaid capacity, and many will depart this country, never to return. I lament this situation because things could have been done better, both by the Australian government and by the mining industry.

The $30 million dollars provided could go a long way in ensuring that funds are directed to those areas where a monetary incentive is required to encourage a business to invest. There is expected to be a training shortfall of more than 250,000 skilled employees during the next five years, so it will be a very large challenge for the board and the agency to match skills expansion with work opportunities appropriately. For example, just under 130,000 manufacturing jobs have been lost since mid-2008, and many workers will require retraining. This will be a huge task for industry and the agency.

However, there are two elements of this bill that make me worry about the board's representation and consequent effectiveness. Firstly, in addition to the $558 million funding figure, there is also $20 million which can be allocated to unions and employer groups. Again, this current, union-controlled, Labor government cannot devise legislation without including a significant carrot to its union mates.

The agency also sees an expansion in the number of people on its board from seven members to 10 members, but still does not ensure appropriate representation on that board. I ask the government: why have they still not created a specific position for a representative of training organisations? These groups will no doubt be working very closely with the agency's board—yet, according to this Labor government, those people out on the ground actually doing the training do not merit representation.

In their submission to the Senate committee, the Australian Council for Private Education and Training queried the government and noted that they would be:

… pleased to work with Government to nominate a representative that has an in-depth knowledge and understanding of the training sector.

Given that ACPET is an organisation with over 1,100 members—a national organisation delivering many programs in vocational and educational training—I look forward to the government working with ACPET to resolve their concerns.

Another very significant issue this legislation creates is the continued overlap of bureaucracy and funding levels among multiple and varied training organisations and skills councils at the state level. The coalition is very concerned that this government, rather than providing workable solutions to the skills shortage, is simply directing funds to initiatives which have seen poor results to date, and, at the same time, redirecting funds from one training initiative to another. At one point, this Labor government redirected funds from the Critical Skills Investment Fund to the Workforce Development Fund, after which Senator Evans announced the amalgamation of the funds in 2011. Ultimately, this government pretends that there are large increases in funding in the aggregate, when really all they have delivered is a redirection of the funds.

It is quite confusing for the industry. For this fund, there is $558 million in funding, $101 million for a national apprentice mentoring program and a further $223 million for other support programs and wage-subsidy policies. There are other federal government programs, like funding for 30,000 new places in the Language, Literacy and Numeracy Program. This not only creates many layers of bureaucracy to deal with; it also confuses those in the industry, who have to work out where to apply—and what to apply for—at the myriad government agencies and offices. As the Queensland government noted in its submission to the Senate committee, states and territories are the predominant drivers in skills and training investment. This is particularly through the technical and further education departments, a segment of the vocational, education and tertiary sector and which are run primarily by each state government. The Queensland government noted that there is evidence that the duplication of skills training funding is 'fragmenting skills investment' and such duplication results in 'misalignment of training with local skill needs and industry requirements'. While there is scope for a national agency to have a more economy-wide perspective on what skills may be required as the economy evolves, there is a concern that this agency will be too far removed from the coalface to provide an accurate assessment of the workforce needs. Practically speaking, we must ensure that the agency will be producing value for money with their investments in skills training. It is certainly true that states in Australia have a much greater capability to cooperate with their local communities to ensure that skills requirements are being met. I hope at the very least that this agency will collaborate with state skills councils to gain access to the most accurate, on-the-ground knowledge.

It would be remiss of me not to mention the two taxes proposed by this Labor government which go a long way to discounting any possible benefits of the Australian Workforce and Productivity Agency. Every member of this House knows what I am talking about—the Labor government's minerals resource rent tax and the carbon tax. The first priority of the Workforce and Productivity Agency will be workers in the mining industry. I mentioned that the mining and resources sector has had difficulty in up-skilling enough Australian workers for their industry due to the significant cost of retraining. Taxing the so-called super profits of the mining industry and imposing a devastating carbon tax serves as a double whammy to that industry—thousands of jobs and billions of dollars of investment in mines and related businesses are at risk. They combine to serve as massive disincentives to international investment in the industry in the first place, lowering the general demand in the employment market of Australian workers. And if that is not bad enough, taxing their profits means mining companies effectively have less available funds to retrain employees and other Australians. This is yet another negative unintended consequence of the mining and carbon taxes, a consequence this government still does not understand.

The second priority of the $50 million funding round is for industries with significant structural reform challenges, with the two priorities being manufacturing and tourism sectors. The two main industries that will be affected by the Gillard government's disastrous carbon tax will be those exact industries—manufacturing and tourism. I echo the words of the American President's top manufacturing adviser and Chief Executive Officer of Dow Chemical Company, Mr Andrew Liveris, who said in March:

Carbon pricing in isolation puts the country on its own rising prices on energy-intensive industries such that it creates a disincentive for investment.

Mr Liveris knows that the carbon tax will damage an energy-intensive industry like manufacturing and puts this industry on the back foot in terms of international competitiveness. The $30 million for the mining, manufacturing and tourism industries is merely a bandaid attempt to cover up the hardship that they will have to face in the future. If the government truly supports these industries, they will rescind the mining and carbon taxes. The coalition has made that promise to the Australian people, and the Prime Minister and her government must do the same.

To conclude, there are clear issues with this bill, issues which this government has pretended to fix by merely rebranding Skills Australia. The $558 million available is significant funding for the upskilling and retraining of Australian workers, but the creation of a new Workforce and Productivity Agency creates a new layer of bureaucracy for businesses and skills training organisations. I agree very broadly with supporting Australian workers, but, again and again, this Labor government devises legislation that could and should be better.