Jennie George (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Environment and Heritage) Share this | Hansard source

I have made several contributions in the House on the government’s Australian technical colleges program. I have consistently questioned whether the expenditure on these 25 colleges is in fact good public policy and to what extent the program would play any meaningful role in addressing the skills crisis which is now facing our nation. As we know, it is a skills crisis that is a severe obstacle to Australia’s economic fortunes.

It is very easy for the member for Canning to again play the blame game and try to transfer the responsibility to state governments. But, under the watch of the Howard government, for years a range of credible organisations, including their friends in the business community, have been alerting the government to our growing skills crisis. Rather belatedly, the government had to confront this reality and admit that such a shortage actually existed. However, rather than accepting their failure to deal with the crisis after 10 long years in government, they came up with the rather spurious rationalisation that Australia’s skill shortages were a manifestation of a buoyant economy.

I have to challenge that assertion and I do so on the basis of the region that I represent. One would have to ask how it is that, in a region like the Illawarra—where we have unemployment rates at around 10 per cent, together with record levels of unemployment among teenagers looking for full-time work, at around 40 per cent—side by side with these horrendous indicators of unemployment we have skills shortages. So this rationalisation that somehow you have to expect skills shortages because we are travelling so well economically certainly does not hold up in the area that I represent. In fact, it is a very potent mix to have high unemployment rates, especially among young people desperately wanting to get into an apprenticeship, coupled with business crying out for labour to fill their shortages now, not in 2010 to 2012 when we would expect the first graduates to be emerging from these colleges.

The government has only itself to blame for allowing the skills crisis to develop on its watch. It has been asleep at the wheel while this crisis grew around it. A small indication that it has been asleep on its watch is the response to some questions on notice to the former minister about what was happening to apprenticeship training in the Illawarra from 1996 onwards. By the government’s own admission, the number of apprentices in training in the traditional trades in fact fell from 880 young people in training in 1996, which was the first year of this government, to 870 in 2004. So the number of young people in training for an apprenticeship was in fact declining at a time when the alarm bells should have been ringing for this government.

Despite all of the knowledge and warnings about the skills crisis, fewer people in my region were training in the traditional trades in 2004 than in the first year of this government. When you look at the early 2000s, you see that the number of apprentices in training in the Illawarra had fallen to 630. So you cannot say that this is a problem that developed overnight. The warning bells were ringing loudly for a considerable period of time. As we know from all of the reports that we had from the TAFE directors, this was at a time when cuts were being made, there was a lack of investment in vocational education and there was huge unmet demand in the system. Young people who would have made excellent apprentices and trainees were in fact being turned away from the gates of our local TAFE colleges.

When we first heard the proposal about these Australian technical colleges as an election promise, the Prime Minister said at the time, ‘The technical colleges are the centrepiece of our drive to tackle skills shortages and to revolutionise vocational education and training throughout Australia.’ In my view, it was the case then as it is today that that statement was one of extreme hyperbole. The 25 colleges, as we know, will at best train a maximum of 7½ thousand tradespeople who will graduate between the years 2010-12. How on earth is that a solution to tackling the skills crisis that is here with us today and that is growing every day? I cannot say to the businesses in the Illawarra, ‘Wait for the 315 young people who will graduate between 2010-12 to fill the skills shortages that we know exist today.’ So the solution was a mere drop in the ocean when the estimated skilled labour shortage today is in the order of 100,000 people. The government’s announcement was, in my view, a political fix to the policy problem of Australia’s crisis in skilled labour—a problem that continues to grow and that still needs to be urgently addressed by the new minister.

On behalf of the people I represent, I think it is quite reasonable to query whether the expenditure on these colleges is good public policy and to ask the question: would not the same outcomes be achieved without duplicating the existing provisions for school based apprenticeships, the provisions that are available for apprenticeship training in the TAFE sector and, indeed, the increasing interface between the VET stream in schools and local TAFE institutes? We are asked in the bill before us today to increase the funding allocation for these 25 colleges by another $112.6 million. The total allocation would grow from $343.6 million to $456.2 million over the period 2005-09. You have to ask: why is this increase in funding needed? We were told by the minister—who obviously did not satisfy the Prime Minister about his capacity to implement an urgent response to Australia’s skills crisis and who now finds himself on the back bench—in his second reading speech that the additional funds are needed because:

... the continued success of the Australian technical colleges ... program reflects the better than expected progress that has been achieved to date in implementing this Howard government initiative.

Nothing could be further from the truth.

By the end of last year, just five of these colleges had commenced operation. Some two years after the grand announcement was made, the minister at the time was claiming satisfaction with the hundreds of enrolments. There were five colleges up and running last year—on the Gold Coast and at Gladstone, Port Macquarie, Eastern Melbourne and Northern Tasmania. Between these five colleges, there were 340 enrolments. Even that minimal figure was skewed by the fact that, at Port Macquarie, the newly labelled Australian technical college with 205 enrolments previously operated as the long-established St Joseph’s vocational college. So there were 205 students at a college that already existed. It was relabelled and rebadged as Port Macquarie Australian Technical College. If you subtract the 205 enrolments from the 340 total enrolments, it is a pretty pathetic performance. I recall at one stage that the Australian Technical College Gladstone had only one student enrolled.

So some two years after the announcement, after we spent about $50 million of taxpayer funds, we had 350 students, minus the enrolments that were already there in Port Macquarie, in only five colleges. You have to ask: is this what the minister claimed to be a great success? I do not think so. Now we are being asked to approve an additional $112.6 million. We were told—and I quote again from the former minister, the no longer minister for vocational education and training—that ‘the operational cost necessary to get each college up and running is far higher than originally expected’.

Let us look at the situation in the Illawarra where we do have one of these colleges. Last Friday night, I attended a very pleasant function in Wollongong to meet the parents of students enrolled at our college. The comments I make in my contribution about the government’s program do not reflect at all on the parents, the students, the staff or the board members who have all worked enthusiastically and tirelessly to get the Illawarra college operational. My comments are directed at the failure of government policy and the continued tardy implementation of real programs to address real problems insofar as our skills crisis is concerned.

I talked to a number of parents at the function and they were, naturally enough, excited at the prospect of their child’s enrolment. Nearly all I spoke to referred to the load and the pressure for these students because, as we know, they are supposed to be studying for their HSC, undertaking apprenticeship training and working two days a week. For a 16- or 17-year-old, I think that is a sizeable load. I do not think any of the projections on the part of the government for the maximum output of the 7,500 students ever factored in the possibility of drop-out and attrition rates because of that quite sizeable burden on 16- and 17-year-olds. In fact, the TAFE directors of Australia also pointed to this problem. Their executive officer, Mr Riordan, said ‘The Australian technical college model asks a great deal of 16- and 17-year-olds’ and that ‘the prospect of drop-out rates is high’.

When I raised the specifics of the Illawarra college with the minister, I was told that enrolments at our local college were to be 50 students at the start of this year. This is some two years after the announcement. Our students are currently in leased facilities and, not surprisingly, are going to undertake their training at the local TAFE college just down the road. But instead of using the facilities that TAFE can provide, the government proposes to build a brand new building, which will be constructed and operational from 2008.

I think it is reasonable for me to ask the government: do these students really need a brand new building when the majority of their week will be spent in employment with their employer? When they are not with their employer, they will be at the local TAFE college doing their apprenticeship training. By 2009, it is anticipated that enrolments will reach 315 students, and that will be the maximum. During that period we will have spent $19.6 million of taxpayer funds. If you work that out on a per capita basis—divide $19.6 million by 315 students—you have got to ask whether that investment is really justified. That raises the question that numerous people have referred to: why have we gone to the extent of duplicating the existing TAFE system which has for decades provided outstanding vocational training, particularly for young apprentices?

I also ask: could the skills crisis in the Illawarra have been addressed in a more cost-effective manner? I believe it could have been. I chair a committee called the Illawarra and Shoalhaven Apprenticeship Program. Over the past several years we have managed to place 250 unemployed kids into apprenticeships. All we have ever asked of this government is an ongoing commitment of about $100,000 a year to make that project ongoing and viable. Just think about it. Over the last couple of years, at a cost of something less than a quarter of a million dollars from the federal government, 250 young unemployed people in the Illawarra have been placed in apprenticeships and yet, at best, we are going to have 315 students coming out of our local Australian technical college—with a brand new building—and we are going to spend $19.6 million on that program. Not one question has been asked about whether that is a wise investment of taxpayer funds. But every time we go to the government to get an ongoing commitment of $100,000 a year to employ a project coordinator to continue to place young people into apprenticeships, we cannot get any firm commitments from this government. I think that is unjust and inequitable. I ask again: is this expenditure a wise investment of the funds bequeathed from the taxpayers to government and is it good public policy?

There is no doubt in my mind—and it was pretty obvious when the former minister who had responsibility for this program ended up losing his portfolio in the last reshuffle—that the Prime Minister also came to the same judgement that many people in the community have, and that is that the program has been bungled. We are told now, according to a recent headline in one of the national newspapers, ‘Mr Fix-it has the tools to restore colleges.’ We now have a new minister, and he points out in this article that one of his first tasks will be ‘getting the technical colleges program back on track’. I wish him all the best, because the government has raised expectations and it is failing to deliver. My views about this issue are confirmed by people who know even better than I do what happens in TAFE and the vocational system. Martin Riordan, the Executive Director of TAFE Directors Australia, said recently, ‘We think it’s important to reassess the Australian technical colleges because, despite the best intentions in the world, they are a failed model.’ Mr Riordan wants the Commonwealth to review the progress of the technical colleges program at the COAG meeting in April.

I want to put a number of questions to the minister, and I do so in all sincerity, because I think the time has come for a serious re-examination of this program. I ask: is the expenditure of $456.2 million on 25 colleges that will train a maximum of 7,500 students, who will not graduate until at least 2010, good public policy and a sound investment? Could this investment have produced better outcomes in dealing with skills shortages, and in a shorter time frame, through the existing school and TAFE programs and interface? What programs does the government have in place to deal with the shortages that exist right now—estimated at around 100,000 in terms of the needs of skilled labour? Of course, I want to know when I am going to get an answer to a very modest request for an ongoing commitment of $100,000 a year to ensure that young unemployed people in the Illawarra region continue to have access to apprenticeships. I do not think that is too much to ask when we have in our region a youth unemployment rate of 40 per cent—among the highest in the nation.

We have had a successful program working on the ground. We are not asking for $19.6 million, much of which is going to creating a brand new building that is not really required; but we are asking for some contribution to an innovative local program. Investment in vocational education and apprenticeship training is an issue of serious national importance, as is the crisis in the availability of skilled labour. The electorate is tired of quick political fixes which are based on spin rather than on substance. I think there are serious deficiencies in the Australian technical college model. My views are confirmed by the directors of the TAFE institutes throughout Australia, and I think that the matters that I have raised today warrant serious consideration at the highest levels of government.

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