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Thursday, 15 February 2018
Page: 1196

Senator CAMERON (New South Wales) (11:00): I rise to speak on behalf of Labor on the Migration Amendment (Skilling Australians Fund) Bill 2018 and the Migration (Skilling Australians Fund) Charges Bill 2017. The bills amend the Migration Act 1958 and provide a framework to collect an additional levy from employers accessing workers under the temporary and permanent employer-sponsored migration programs. Labor referred these bills to the Senate education and employment committee for inquiry to allow for further scrutiny by stakeholders most impacted by this legislation. Stakeholders have been absolutely vocal in raising their concerns about the consequences of the bills.

The bills allow the Minister for Immigration and Border Protection to determine by legislative instrument the manner in which labour market testing must be undertaken for a nominated position and the kinds of evidence that must accompany a visa application. Labour market testing requires employers who want to bring in overseas workers to first test the local labour market. This is to make sure that there are no suitably qualified and experienced local workers readily available to fill those positions prior to bringing in overseas workers. This is about putting local workers first.

Labor has genuine concerns that the Migration Amendment (Skilling Australians Fund) Bill 2018 doesn't legislate strict labour market testing conditions. Labor's private member's bill, the Migration (Skilling Australians Fund) Charges Bill 2017, introduced a more rigorous requirement for labour market testing to be incorporated into legislation, such as a requirement that jobs be advertised for a minimum of four weeks and a ban on job advertisements that target only overseas workers and exclude Australians. In addition to our private members bill, Labor has announced a comprehensive plan to put local jobs first and to invest in employment and training.

The Migration (Skilling Australians Fund) Charges Bill 2017 imposes the nomination training contribution charge payable, sets a charge limit for the nomination training contribution charge and provides for the indexation of the charge limit. These charges will apply to the temporary skills shortage visa, which is to replace the temporary work skilled subclass 457 visa in March 2018 , the employer nomination scheme subclass 186 visa and the regional sponsored migration scheme subclass 187 visa. States and territories are not exempt from paying the nomination training contribution charge. The Commonwealth cannot be liable to pay Commonwealth taxes or fees, although the Migration Amendment (Skilling Australians Fund) Bill 2018 makes the Commonwealth notionally liable to pay the nomination training contribution charge, including possible pecuniary penalties such as fines, for not paying the nomination training contribution charge.

The bill asks Australians to trust that Minister Dutton will do the right thing in a legislative instrument. But Minister Dutton has proved time and time again that he can't be trusted to do the right thing and protect labour market testing. That's why Labor has moved substantive amendments to implement minimum standards for labour market testing. Labor fought and won for labour market testing to be included in amendments to the Building Code as part of the Building and Construction Industry (Improving Productivity) Bill 2013. I will be moving detailed amendments to attempt to fix the government's failures, because labour market testing means local workers get the first shot at local jobs. If the out-of-touch Turnbull government won't protect local workers, Labor will protect them.

The revenue from the levies introduced by this bill will become the sole source of funding for what the government has called the Skilling Australians Fund. The government is claiming that the fund will be $1.47 billion in total, with $1.2 billion raised from visa fees. From 2018-19, the government is saying, the fund will rely entirely on revenue from the visas. There is no guarantee that the revenue from the levies will reach that amount. I will be looking at further amendments, which I will distribute as soon as I possibly can, to actually guarantee the income.

An effective skill formation system is essential to national economic and social prosperity. There was a time not long ago that Australia's apprenticeship system was the envy of the world. In the latest IMD world talent ranking, Australia is towards the bottom of the leaderboard when it comes to apprenticeships and employer commitment. Australia has placed 51st out of 67 nations for the area of apprenticeships sufficiently implemented and 43rd for employee training as a high priority in companies. Under this government we are seeing our international position on training decline. As a consequence, Australia is falling down the world talent rankings when it comes to investment and development of homegrown talent. A recent OECD report shows that Australia has poor capacity to access global value chains as a result of our lack of skills and high-tech manufacturing and complex business services.

Experts that submitted to a recent Senate inquiry into the VET system in SA spoke with one voice. They all said the national vocational education and training system needs fundamental reform. Professor John Buchanan identified compelling facts about the system, and he showed that the system is highly fragmented at the same time as being very rigid, and that there are poor connections between the labour market and qualifications. According to COAG data, the system is failing on its own measures. Large for-profit training providers have been making profits in the order of 35 per cent to 50 per cent—profits of up to 50 per cent for companies that are ripping off young Australians trying to access training. He concluded that there is no discipline on the system to preserve quality. Alan Finkel, the Chief Scientist, is concerned that the system is not equal to providing the skills that are needed for technical advances and rapidly changing labour markets that we are entering. Even the Productivity Commission—and I'm no great fan of the Productivity Commission—have called the VET system a mess. Last year, in their five-year productivity review, Shifting the dial, they said:

Despite its important but complex role, the VET sector has been beset with a raft of problems leading to a sector characterised by rapidly rising student debt, high student non-completion rates, poor labour market outcomes for some students, unscrupulous and fraudulent behaviour on the part of some training providers.

The BCA, the Business Council of Australia, is calling for systemic transformation and is of the view that it will take billions of dollars to put the VET system back together.

What has the government been doing in response to this? The government has done nothing to confront the underlying issues that plague the VET system; instead, they came up with the Skilling Australians Fund, which has been roundly criticised for its instability, its lack of sustainability and its failure to deal with the flaws in the VET system. The government has designed a system for funding skill formation, a matter of fundamental importance for ensuring the prosperity of our nation, that relies entirely on uncertain revenue. If the revenue from visas goes down, so will the funding for skills.

The funding mechanism has been condemned by experts and stakeholders. Back in May 2017, when the Skilling Australians Fund was first announced by the government, Professor Peter Noonan from the Mitchell Institute for health and education policy was already describing the flaws in the design of the fund:

Revenue for the fund will be highest when skilled migration is highest, and lowest when employment of locally skilled workers is highest. That means the revenue stream for the fund will be counter-cyclical to the purpose for which it was established: to increase the proportion of locally trained workers and to lessen reliance on temporary skilled migration visas.

Submitters to the Senate inquiry had the following to say about the government's approach. The Law Council of Australia said this:

… the Law Council is concerned that, should the number of skilled migrants decrease due to the Levy, so too would funding. If less funding for training and vocational education is provided to Australian and permanent residents, the demand for overseas labour may increase. Therefore, the Law Council suggests that the Levy should not provide the only source of revenue for the Fund.

It seems like common sense to me: if you want to have a decent training system, you put the funding in. The National Apprentice Employment Network, the organisation that represents group training companies, employing about 10 per cent of apprentices, said:

The VET sector should never be in a position where the best it can do to ensure sustainable funding for apprentices, going forward, is to encourage increased skilled migrant employment.

The Victorian TAFE Association said this:

… the levels of funding provided should first and foremost be driven not by the amount raised by migration charges but by the level required to train and educate Australians that maximises their contribution to Australia's economic success, future productivity and growth.

ACCI, a business group, said that the federal government has sent a strong negative signal about their commitment to vocational training. The Electrical Trades Union called it absurd and said:

The budget of the fund needs to be guaranteed, consistent and decoupled from how much money is actually brought in by the levy. There needs to be a guarantee of funding to ensure there is adequate training and, obviously, the levy can be used to defray. We should not have a system where there is funding for training of Australian workers contingent upon the importation of temporary workers.

The ACTU said:

It is our opinion that the VET funding model outlined in this proposal fundamentally fails to address the real weaknesses in our current VET system.

The government says that their Skilling Australians Fund will have matching funding from the states and territories, but it has been nearly 10 months and there is still no sign of any agreement. I note that the minister has been ringing around, pleading with state ministers to sign off. It was entirely predictable that the government would struggle to make an agreement with the state and territory governments on the Skilling Australians Fund. As ACCI pointed out in its submission to the inquiry:

Given there is no guarantee that the SAF will receive the amount of monies that are projected to be raised through the migration programme use, this has created uncertainty in the negotiations with the states/territories.

Professor Peter Noonan made the same observation nearly a year ago:

Unless the Commonwealth guarantees funding levels and continues to make up any shortfall in the revenue, it will be difficult, if not impossible, for the Commonwealth to enter meaningful, bilateral agreements with the states through the fund.

While the government is failing to settle agreements with the states because their funding mechanism is so absurd, the Senate inquiry was being told about apprentice vacancies—1,000 in New South Wales alone—that can't be filled. And we know there is a potential skills crisis looming in the disability and aged care sectors.

In their original announcement, the government claimed that the Skilling Australians Fund would lead to an additional 300,000 apprentices and trainees over the forward estimates. The Department of Education and Training is saying it will develop up to 300,000 apprentices, trainees, pre-apprentices, pre-trainees and higher apprentices. If the government pursues that target within that time frame with this farcical funding regime, Labor is very concerned that the quality of apprenticeships and traineeships will suffer. The last thing we need is a return to poor quality traineeships that are simply wage subsidies for already low-paid jobs.

Like Labor, stakeholders are understandably concerned that the Skilling Australians Fund might be used to undermine the quality of apprentice training. Witnesses referred to discussions between the state and federal governments about projects to fund what was described variously as a 'new style of apprenticeships,' 'an apprentice-like experience,' and, 'training that shares similar characteristics to an apprenticeship'. I know Mr Banerjee, from the department, is quite oblique at times, but this takes obliqueness to a new level.

The National Apprentice Employment Network had this to say about what the government is talking to the states about:

There have also been some discussions around the weakening of those guidelines to include things such as apprentice-like employment, and we have seen programs such as the builders program in South Australia and other institutional based trade training programs that fundamentally, through our experience with employers, do not necessarily result in employment capabilities of the individuals participating in them.

Ms Tiltman referred to the Bob Day student builder pilot. The government paid $2 million—to the registered training organisation that then Senator Bob Day founded and chaired for 10 years—to fund 20 students to undertake a carpentry course in a classroom. Minister Birmingham has assured us in this place that these 20 students would end up with building licences. I've got to tell anyone in South Australia listening in: if someone says they've got a building licence, they might never have been on a building site for paid work in their life. It is an absolute nonsense. But it was done by this government to placate Senator Bob Day at the time, to guarantee his vote on bills in this place. It is just outrageous that the training system would be used to bribe a senator in this place.

Ms Tiltman went on to explain the damage that can be done to unsuspecting students enrolling in courses that they think will lead them into work, when, in fact, the industry won't take them on. She described taking calls from people that have completed an institutionally based course and can't get a job because they don't have the experience and they're competing in the labour market with fully qualified tradespeople who have completed an apprenticeship. Not surprisingly, there has been strong opposition to the use of institutionally based training as a replacement for apprenticeships and traineeships. The government needs to ensure that the fund provides quality skills development that the community and employers can trust. What we've heard so far doesn't instil confidence.

The government has done nothing to ensure the sustainability of TAFE. Nationally, there has been a 20 per cent drop in government-funded training at TAFE between 2013 and 2016. We're in serious danger of losing the institutional capacity to deliver skills if we don't sustain our TAFE network. That should be of major concern to the government, and yet there is no reference to TAFE in any of the government's announcements about the Skilling Australians Fund. They sit back and watch as TAFE doors close and skills shortage courses are struck off the list of offerings. We have a situation in South Australia where the Liberal opposition are promising to move to a fully contestable training system if they win government. That would mean a $70-million cut to TAFE per year in South Australia. They are happy to decimate TAFE and throw the students of South Australia onto the mercy of a flawed training market, where private for-profit providers have made profits of between 35 and 50 per cent.

A government without a plan for education and training has no plan for Australia's future. The Turnbull government has no answer on jobs. This is a government that can't deliver on the fundamentals. During the course of this debate, we will raise issues that need to be addressed. (Time expired)