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Monday, 6 December 2004
Page: 12

Senator ALLISON (1:20 PM) —The Vocational Education and Training Funding Amendment Bill 2004 is now the second bill to roll over VET funding because the federal government has failed to negotiate a new ANTA agreement with the states and territories for the second year in a row. ANTA agreements, as we all know, have been running since 1993, but since at least 1996 they have been the subject of significant funding cuts. The coalition cut TAFE funding in 1996 and 1997 and then froze it from 1998 to 2000. In the five years to 2002 student numbers increased by over 16 per cent, and there has been an annual growth in the delivery of courses of around six per cent per annum for the past 10 years. The funding per training hour fell in real terms by 19 per cent between 1997 and 2002.

By 2002, students were paying $194.6 million in fees and charges, and if New South Wales is indicative of other states their governments are requiring students to make up for the funding freeze. The Democrats do not want to see the TAFE system go down the same road as higher education in terms of massive fees being charged. The government was antagonistic to the TAFE sector from day one. Prior to the election Minister Nelson said that he would resume negotiations for a new ANTA agreement later in the year and that he would be willing to amend the legislation to incorporate any changes from the new agreement. However, the government has slowly but surely moved away from funding the states to funding its own programs, such as the direct purchase of 7,500 training places through private providers worth $20.5 million.

During the election we saw announcements of $1.06 billion of funding over four years for various training initiatives, on top of the ANTA funding. Very little of this funding is likely to go to the states or to supporting those institutions that currently provide almost 90 per cent of vocational education and training in Australia. It is fascinating that the ANTA negotiations stalled partly because of the unwillingness of the federal government to provide satisfactory funding, when they apparently have $1 billion up their sleeves. Within two weeks of the election the Prime Minister announced that ANTA would be abolished from July next year. I ask: how can a government that profess to be a supporter and promoter of vocational education and training abolish a body central to the delivery of vocational education and training?

ANTA agreements detailed the framework for a national VET system with agreed objectives, priorities, assured funding arrangements and consistent national strategies. State specific plans were also negotiated with ANTA within the agreed national frameworks. Only three months earlier, Minister Nelson announced the appointment of five new members to ANTA's board. The Australian Education Union's TAFE secretary, Pat Forward said:

It's perplexing that people who have been at the forefront of vocational education for 15 years—state education departments, TAFEs, unions, small business—weren't involved in these decisions.

ACTU President, Sharan Burrow, condemned the move, saying that the government was cutting its commitment to the skills and training agenda at the very time when skill shortages are becoming the biggest issue facing the Australian work force and economy. If the government is truly committed—which it says it is—to addressing the problem of skills shortages in our growing economy, why did it abolish ANTA without consultation? The Democrats would argue that this is not the sort of leadership that will deliver improved state-federal relations, nor will it improve training results in the states. It is appalling that the government are playing politics with the state governments and destabilising the structures that provided nationwide collaboration and coordination of the VET sector. The short-sightedness of the Howard government's education and training policies, I would argue, are close to unparalleled.

TAFE Directors Australia estimate the unmet demand for TAFE places at 42,800 in 2003, and they expect demand to grow significantly. This high level of unmet need is a direct result of the federal government's four-year-old funding freeze and failure to negotiate a new ANTA agreement. Apart from somewhat limited growth funds in 2001-03, there has been no additional funding, despite an annual growth rate in places of around six per cent per annum for 10 years. Our vocational education and training sector is driven by government to deliver short-term, competency based training packages and a shift to private providers.

In New South Wales alone, 15,400 TAFE teachers are on casual contracts and only 4,800 have ongoing employment. In fact, around 65 per cent of delivery hours in New South Wales TAFEs are from staff on casual contracts, and we do not think that helps deliver world-class training to students. The government needs to consider the type of staff that will be attracted to TAFEs on a casual contract and whether it is in the students' best interests. Without greater funding of the TAFE sector these problems will never be solved.

The result of underfunding TAFEs is that more students are missing out on a place, we have higher class sizes, increased casual teaching and wasted money on dodgy non-TAFE training providers. Given this history, it is extraordinary to think that Australia has a skills shortage. The Treasurer was quoted in the Financial Review as saying `if you want to ensure that there are no bottlenecks in an economy it is important that you continue to supply skilled labour', yet around 170,000 people will retire from the manufacturing sector in the next five years and as few as 40,000 people are being trained to replace them.

The Australian Industry Group released data showing that there are currently up to 21,000 unfilled apprentice positions in the manufacturing sector alone in Australia. For the first time ever, an Australian Chamber of Commerce and Industry survey found the biggest concern for their members was the increasing skills shortage. The government's own Intergenerational Report stated, and the message from industry is, that the crisis in skilled employment will worsen and this will impact on future industry investment, taxation revenue and funding for future services.

The Department of Employment and Workplace Relations' skilled vacancy report for November showed an annual increase of 6.9 per cent in all trades. I ask the minister: is your government ever going to look objectively at the mountain of evidence of skills shortages and respond accordingly? The skills crisis is the result of eight years of coalition government policy failures. There is nothing else that the government can sheet home the blame to. The crisis is indeed in their court and entirely their responsibility.

Australia's proportion of youth at risk is high compared to other OECD countries, with unemployment levels 2.7 times higher for 15- to 24-year-olds than for adults aged 25 to 54. Ten per cent of school leavers are not making a successful transition to work and, over the past decade, 15 per cent of teenagers have not been in full-time learning or work. The government's election announcement of an $800 tool voucher was laughable in the face of these enormous problems. The Prime Minister thinks that young people are now going to sign up to apprenticeships to get $800 worth of tools, while they still struggle every week to make ends meet.

The Democrats have been appalled by the low apprenticeship wage rates which currently apply, especially for first and second year apprentices. We know that they act as a disincentive for young people to take up these positions. First year apprentices receive just $235, and second year apprentices receive $308 in wages—lower than both the living away from home allowance at $318.50 and the newstart allowance at $394.60. A wage of $235 a week would barely cover rent, food and transport and would leave nothing to pay for other bills, clothes, social expenses and the like. That amount might be all right if you are a 16-year-old still living at home with mum and dad and they are paying for all of your costs, but apprentices now need to have good maths and English and they need to stay at school for the time necessary to acquire those skills. They cannot now leave school at year 9 or even year 8 as might once have been the case. There is an urgent need to engage young people in training to obtain work skills that will allow them to enter the work force. The cost of doing otherwise, in terms of welfare payments, lower tax revenue, higher health costs and higher crime rates will be much greater well into the future.

The opportunities and challenges of a global knowledge economy mean that our future depends no longer on minerals, sheep or wheat but on the creativity, ingenuity, initiative, ideas and skills in particular of all Australians. At the very least we should be aiming for two years of post-school training for all our citizens—adults as well as school leavers. Strong TAFE institutions with highly developed local community, business and student linkages are best placed for rapid and responsive technology and knowledge transfer. One of the main problems with this government's policies is that they weaken TAFE institutions. The result of reduced funding is always a narrowing of the courses delivered, and moves to establish federally funded technical colleges will further undermine an already injured TAFE system.

The Chair of TAFE Directors Australia, Gillian Shadwick, believes there has been far too much emphasis on short-term traineeships which have come at the expense of higher level skills training. In response to the coalition's pre-election training policy announcements, Ms Shadwick stated:

... the policies announced fall well short of what is required to address Australia's future skills needs.

The Democrats argue that there are many policy areas that need to be addressed in the VET sector. As a minimum, all Australians should have, as I said, two years post-school training. TAFEs are the backbone of the VET sector and cannot be replaced by an assortment of industry training schemes. We should reinvest in our TAFE system by renegotiating the ANTA agreement with an additional five to 10 per cent in annual growth funding in real terms; a requirement that at least 70 per cent of the content is delivered by permanent professional, accredited teachers by 2007; professional development for TAFE teachers so they have up-to-date industry experience and teaching competencies and qualifications; improved data gathering on skill needs; better sharing of infrastructure, especially in the regions, by public institutions and businesses; improved training and retraining strategies for older workers, people with disabilities and those who are welfare dependent; and a commitment from state and territory governments to nationally consistent and significantly reduced fees and charges for TAFE courses.

We should put on hold `user choice' in the delivery of VET courses until there has been a proper review and evaluation of this private provider model. The current drop-out rate of new apprentices in VET needs to be addressed. Quality and successful completion need to be rewarded and student support must be improved. Different learning rates and student needs should also be recognised if we are to make significant progress in this sector. Fees and charges, we think, should not be allowed in VET programs in schools as they are a barrier to student participation. The Democrats support government links with industry to assist the transition between school and employment and further education but argue that this should be done in a balanced way rather than giving industry complete ownership of the process.

With the abolition of ANTA from July next year, around the time the government will gain control of the Senate, an independent review of Australia's current and future vocational education and training needs is needed to guide what appears at present to be a rather ad hoc and short-sighted approach to VET.

The Democrats will not oppose this bill because we do not want to stop the money flowing, as disappointing as the level of funding is in the bill. For any government to be reducing funding for VET in the middle of a national skills crisis is ridiculous and appalling and is obviously not going to solve the skills shortage. The government has led us down the path to a skills crisis through funding cuts and funding freezes to TAFEs and discouragingly low apprenticeship wages. Now its refusal to index inadequate growth funds has again delayed adequate funding flowing to the sector.

Failure to gain agreement from the states and territories for a new ANTA agreement for two years reduces stability in the sector and is placing further financial pressure on TAFE, businesses and other VET providers. The Democrats urge the government to introduce appropriate policies that will move Australia out of the skills crisis and provide the necessary training for our young people.