David Fawcett (Wakefield, Liberal Party) Share this | Hansard source

I rise today to speak to the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007. This bill amends the Income Tax Assessment Act 1997, the Social Security Act 1991 and the Veterans’ Entitlements Act 1986 in order to provide an exemption for the apprenticeship wage top-up payments introduced in this budget so that the recipients obtain the full benefit and, in turn, the full incentive that is designed to come from these measures. In this year’s budget the government, in its Realising Our Potential measures, introduced this wage top-up for apprentices who are under 30 years of age and who are undertaking Australian Apprenticeships in areas of skills shortages as currently defined by the migration occupations in demand list. These payments will total $2,000—$1,000 for each of the first two years of trading. This recognises that the wages apprentices receive in the first couple of years of their apprenticeships are low by current standards and that there are many incentives for them to move beyond their apprenticeship into other work where even their partial skills are recognised and paid well. In the first couple of years of training the wages can be from as low as $15,000 up to close to $20,000 in the second year, which is not a lot in today’s terms, so you can understand why many of these young people choose to move into other areas that pay better.

These payments will be tax free and they will not count as income towards determining eligibility for income support, for things such as youth allowance or Austudy. This builds on some of the other incentives and initiatives that the government has taken to encourage people to take up careers in trades, such as the mid-career apprenticeships for those over 30 years of age where substantially more is provided—close to $8,000 in the first year and just over $5,000 in the second year—to mature age apprentices. This recognises that it is a huge ask for people to make that transition when they have responsibilities for their home and family, and also for an employer, who does not yet see the productivity coming out of them, to give a wage that can sustain them. So this is an iterative step, building on those earlier announcements, to try and encourage people to move into the area of trades. There have been a range of other measures that have targeted the apprentices themselves—things like the extension of youth allowance and Austudy for over-25-year-olds as well as the Commonwealth trade learning scholarships and the tool kits which have been provided under the Tools for Your Trade initiatives.

I think that it is important in the context of addressing this bill to look at the broader perspective on trade training in Australia. Over the last 11 years the Howard government has increased annual spending on vocational and further education by some 99 per cent, which is a significant investment. Despite this, there is still a really strong case for ongoing change. What we are seeing at the moment, portrayed often as a skills crisis, is really a workforce shortage. Whether you are talking about an unskilled workforce or semiskilled or graduates or technically qualified people or the ageing of the population, the growth in the economy is seeing a huge demand for workers. There is no one approach that is going to suddenly be a magic pill that will fix all of those problems. It takes steady iterative work to introduce a range of measures to bring this about.

In terms of addressing the workforce shortage, the Howard government are taking a number of measures including making sure that we can get everyone who can work into the workforce and encouraging those who are there to stay there. There are things like the pension bonus scheme and the Welfare to Work program. Last week in the electorate of Wakefield, which I have the privilege of representing in this place, we had a forum with the Minister for Workforce Participation and we issued some 1,700 invitations to people who had indicated a concern around welfare to come and discuss any concerns they had about this program. We found that most people who turned up were very favourable towards the support that was being given to make it possible for people to gain work. Whether in receipt of parenting payments or on a disability payment, when people recognise the significant investment that is being made to encourage them to make use of the abilities they have to move into the workforce they see there is a genuine attempt to give them a helping hand, and it was very positively received.

Secondly, we need to get back to the days of having trade training as a valued career path for young people rather than it being seen as a second option if you could not make it to university. The reality is that only some 30 per cent of our young people leave secondary education and go on to universities. It is to the shame, I think, of this nation that over the last couple of decades there has been a move away from valuing trade training and it is for that reason that I have strongly supported the creation of the Australian technical college in Wakefield as well as the others around Australia. We have seen very strong support from industry, small businesses and from parents and students and they participate in the technical college. The boards that run the college are actually controlled by industry so that they have a direct say in the make-up of the curriculum, the kinds of work placements and the outcomes that are achieved by the young people who are doing the apprenticeships through the school based new apprenticeship system.

Thirdly, we need to ensure that those who start an apprenticeship actually finish it. That is part of the measures that this bill today addresses to make it easier for people to do that. Finally, we need to encourage a culture both in the workforce itself and particularly among the employers that says that it is worth investing in the ongoing upskilling of our workforce so that people, whether at a point where they never finish school or whether at a point where they can further their qualifications, either tertiary or trade, can continue and employers can see that the community sees a benefit in that investment.

One of the programs that this government has put in place which I strongly support is skilling Australia’s defence industry. In representing an area where there is a growing defence presence in uniform people, defence science and technology, and defence industry, I welcome the fact that we are now seeing a partnership between the Australian government and industry to invest money into training opportunities, whether that be at the first-tier provider level—and they are particularly looking there at graduates and project managers, systems integrators et cetera—or whether it is flowing some of those funds down to the second- and third-tier small to medium enterprises. Many of these small to medium enterprises employ the apprentices that undertake the trade training. I welcome these sorts of initiatives from the government which see partnerships develop that create that culture of investment in our young people and in our more mature workforce so that we have the skills we need to move forward and to be competitive into the future.

The drop-out rate is an issue. Forty-two per cent of those who start apprenticeships drop out, some 38 per cent of those in the first couple of years. It is a huge attrition rate. This is part of the reason that the government has taken the step to provide additional incentives for young people in their first couple of years. Not only are we providing the wage top-up; there is also the $500 fee voucher to help offset the cost of fees so that the young people receive a total of $3,000. On top of that we provide a $4,000 employer incentive, the $13,000 wage subsidy for mature age apprentices, a $1,000 trade scholarship, the $800 tool kit, and the $1,000 regional incentives to support those who are aiming to undertake trade training and live in a regional area.

There are other programs that the government has put in place to help people reach the threshold where they can even start to look at taking on formal trade training. A large number of Australians have not actually finished secondary school and last year the government committed $837 million to a program to provide vouchers that allow individuals to access up to $3,000 of training to bring them to the point where they can take on additional training. In less than five months there have been some 14,000 vouchers with some 640 training providers providing over 6,200 courses. These have been uncapped so that more people can take advantage of this. This demonstrates that there is an unmet need here which the government has recognised and it is helping people to move to that point where they can take up further trade training.

Some of the other choke points in the trade training system do not just relate to the salaries received by apprentices and their ability to stay in the system to complete their training; we also need to look at who can provide the trade training. We have talked about the Australian technical colleges, and I welcome the support of the state governments around Australia that are now looking to replicate the model—I particularly notice that South Australia are looking to replicate the model—that has been put forward by the Australian government of trade training at schools coming back to the dedicated trade schools that were got rid of, particularly in the 1970s in South Australia.

The TAFE colleges around Australia—there are 74 of them—have nearly three-quarters of all of the vocational and technical students in Australia. But, just as the technical colleges have been well received because they are very responsive to the needs of local employers and industry, we need to see an increase in the ability of TAFE colleges to respond to the needs of the employers and the communities they are located in. This is not just us saying this; there have been reports completed on it. The NSW Independent Pricing and Regulatory Tribunal’s report to their state government said that VET is a key part of the whole-of-government strategy to improve their supply of skilled labour. But it said that they needed to remove the constraints on TAFEs regarding commercial revenue retention, they needed to negotiate future industrial agreements so that any change in pay and conditions is linked to productivity agreements and they needed to provide the directors of the TAFE institutes with far more discretion and flexibility to attract and retain staff. They also needed to have a more commercial focus and to be able to engage with third parties so that they can have partnerships that benefit the students and the industry.

South Australia have undergone a number of reforms in their TAFE systems and have reduced their TAFE institutes to three broader structures. Whilst there have been efficiencies in doing this—which I welcome—they have been at the expense of training delivery, with no commensurate reductions in the level of administrative costs. There is still a large amount of authority going back into the department rather than being delegated down to the TAFE directors. I would certainly encourage the South Australian government to move down this path so that the TAFEs can play a more active role—because they are fine institutions with many good teachers—and respond to industry needs and we can see more young people moving into that area.

There has been an amount of misinformation peddled around as to whether there are enough places at TAFEs. In particular, the opposition have talked at times, and the Education Union have talked at times, about unmet demand. They talk about the fact that unmet demand is high and therefore it are this government that is preventing people going through TAFE. It is important to note that the figures for unmet demand include not only traditional trades, which are the focus of today’s discussion, but also non-qualification and leisure courses. They also include people who are unsuccessful in their application to enter a course because their scores were too low, they applied too late or TAFE cancelled courses because of insufficient numbers. So the statistics that have been brought forward do not bear any direct correlation to the areas of skills shortage Australia so desperately needs to address.

Even taking these figures into account, though, compared with 1995, using the same analysis, the unmet demand has decreased by half, which is a significant achievement. That is because of the 99 per cent increase by this government that we talked about at the start of this address. The number of publicly funded vocational and technical education students has increased by 26 per cent and, over the period 2005-08, the Australian government has provided 167,000 additional places. These have taken place through the Commonwealth-State Agreement for Skilling Australia’s Workforce, the Australian technical colleges, the Australian New Apprenticeships Access Program, which alone has provided 20,000 places, and the Group Training in the Trades program, which delivered 11½ thousand places. So there has been a significant investment by this government in trade training, and I welcome any future cooperation on behalf of the states to see that uptake continue.

There is one last area that I would like to touch on briefly, and that is the potential for industry to be involved in encouraging young people to consider trades as well as the technical and engineering and maths and science fields. I spoke yesterday in the House to a bill about higher education and the fact that the government is increasing incentives for universities to offer places in disciplines such as engineering, and maths and science, as well as this investment in trade training, but unless we have the young people who want to move into those places then those places will remain unfilled.

One of the things the government funded through the Sustainable Regions Program in South Australia was the Northern Adelaide Advanced Manufacturing Industry Group, which encourages companies such as BAE Systems, Tenix, General Motors Holden and a number of other component suppliers to become involved in a partnership with high schools in the area so that they can go into the high schools and work with the science teachers to help them see how the subjects they are teaching in either trade or technology areas are used in the workplace. They can help the teachers in practical experiments and projects that are run in the school, and they can bring the children and the teachers into the workplace to see how those skills can translate to a career in a wide range of industries, whether it be in auto, in defence, in the aerospace sector or in advanced manufacturing. This means that young people at that critical year 9 or 10 point, where they are making decisions about where their future will lie, have the knowledge and information to make decisions to go down the path that will see them take up trade training, engineering or maths or go in any of the directions this country needs to continue to move forward.

The last point I would like to make is that the reason we have been able to make this investment, and the reason this investment is required, is because of the good economic management of the government. Vision without dollars is hallucination. This government has had the vision for the education sector and the wherewithal to make the investment in it so that we are seeing a future for education in Australia. It is a future not only for education but also for demand for jobs. The fact that there is a workforce shortage and a skills shortage is because the jobs are out there waiting for people to take them. That is because the government has set in place a framework whereby industry and individuals have the encouragement and the incentive to invest in this country in creating jobs. That means that, when young people finish their training, whether it be through school, through a trade or through university, they have a job they can go to.

I welcome that economic management. I encourage the Australian community, as we approach the election at the end of this year, to consider their options and the fact that on one side you have a government that has the vision and economic credibility to bring that about and on the other side you have an opposition that, through the Education Union and through some of the statements it has made in this place, has opposed many of the measures that have brought about that economic framework and the initiatives and developments in education. In this particular case I welcome their support for this bill. I commend this bill to the House.

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