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

I am pleased to be able to speak on the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007, which is before us this evening, and in general terms I support the measures that it contains. In terms of the budget announcement, we know that the government’s intention is to top up the wages paid to apprentices who are under 30 years of age and undertaking an apprenticeship in an area of skills shortage and that those payments will total $2,000—$1,000 for each of the first and second years of training. I think the payment also recognises the low level of apprenticeship wages in those first two years of training, estimated to average about $15,000 in the first year and $19,500 in the second year. Of course, these low wages may in fact be one of the factors that discourage potential apprentices from undertaking training. I also see the measure as responding in some way to the high drop-out rates that have been very prevalent for skilled trades training over the last decade. The top-up wage will also be paid to part-time and school based apprentices, who will receive $500 annually and attract the full $2,000 over a longer period of time.

As indicated in the contributions made by the shadow minister and other speakers in this debate, Labor supports the proposal contained in the bill. It strikes me as very reminiscent of Labor’s previously announced policy in relation to the trade completion bonus. However, I think this initiative on its own does not compensate for the government’s continued complacency and inadequate response to the issues confronting the nation in the huge skill shortage that we see. In looking at some of the contributions to this debate and hearing the member for Hasluck late last week, I think a number of government speakers have attempted to rewrite history and tried to sheet home some blame to previous Labor governments for a decline in the rate of apprenticeship completion and apprenticeship training. Nothing could be further from the truth.

Under the Howard government, the average number of traditional trade apprenticeships has been around 120,000 a year. Under the Hawke-Keating government, it was 13 per cent higher at 137,000 on average. In fact, completion rates under this government have been of concern, falling from 64 per cent in 1998 to only 57 per cent in 2005 compared to the rate under Labor, which was more than 70 per cent when they left government.

I think a lot of the argy-bargy that goes on in this debate is wrongly directed and I for one, having been elected in 2001 to represent the constituents of Throsby, have worked very assiduously and tirelessly to address the lack of apprenticeship opportunities in my own region, the Illawarra. I am pleased that the Minister for Vocational and Further Education is in the chamber this evening for the debate.

I do want to thank the Howard government for the contribution it has made to enable the continuing success of the Illawarra apprenticeship pilot program, which I have chaired since its inception. You may not be aware, Mr Deputy Speaker Hatton, that under this program, at a minimal cost to the federal government, we have actually seen 300 young unemployed people in the Illawarra placed in an apprenticeship. We have done that by recognising that many of our small business owners were saying the reason for not taking young people into an apprenticeship was the perceived lack of productivity in the initial years of training. This scheme is based on a quite substantial subsidy by the state government which pays for six months of prevocational training for the apprentice in training so that, when the young person graduates, they come out of college with the equivalent of the first year of an apprenticeship. We were able, thanks to the good sense of the then Minister for Employment Services, Mr Brough, to get some seed funding through the Job Network providers that provided an additional financial incentive of around $1,000 for our local employers to take on a young person.

I certainly reject any kind of allegation that people on this side of the chamber dropped the ball in terms of apprenticeship training and only focused on, as is alleged in the debate, getting young people into the university system—nothing could be further from the truth. I continue to work hard to ensure that a traditional trade option can be gained by young people, particularly young unemployed people, in the region of Illawarra.

Our latest statistics on unemployment indicate quite an appalling position for young people. Our unemployment rate for teenagers aged 15 to 19 looking for full-time employment—young kids who are disengaged but looking for full-time work—hovers at around 38 to 40 per cent. Our apprenticeship pilot is at very low cost to government. I will return to that later in terms of the huge amounts of money being expended on the Australian technical colleges in comparison to a modest commitment of around $130,000 a year, which has already placed more young people in the Illawarra into an apprenticeship than we will see graduating from the college when it is fully built at a cost of something like $19.6 million. You talk about public policy and good value for money; I hope the minister gives some further consideration to the efficacy of small-scale, local programs that come up with local answers to local problems in a way that does justice to the expenditure of taxpayers’ funds.

The government says that it is all Labor’s fault that there was a decline in apprenticeship training, but very early when I was elected I took this issue up with the then minister to get some hard data. What I found in response to my questions on notice was that the number of apprentices in training in the traditional trades in fact fell from 880 young people in the Illawarra undertaking apprenticeship training in 1996, the first year of this government, to 870 in 2004. So under this government the number of young people in traditional trade training was declining when the alarm bells were ringing about the impending crisis as far as the national skills shortage problem that we have debated on many occasions in the House is concerned. Despite all the knowledge and warnings about the skills crisis, fewer people in my region were training in the traditional trades in 2004 than they were in the first year of this government. When you look at the early years of this decade, you can see that the number of apprentices in training actually fell as low as 630 from a high of 880 in the first year of the Howard government.

You cannot say that the problem of skills shortages developed overnight. The warning bells had been ringing loudly for a considerable period of time. It was not just the Labor Party saying this; it was peak employer organisations like ACCI and the BCA, reports from Senate committees that investigated this issue and of course, very profoundly, TAFE directors who were complaining at the time of the government’s lack of investment in vocational and technical education.

The government has itself to blame for being asleep at the watch and for allowing the skills crisis to grow exponentially. The government has presided over 11 long years of neglect and underinvestment. In the early years after the government was elected what did we see? We saw actual funding cuts to TAFE and then a 13 per cent investment in the three years to 2000. Beyond 2000, investment only increased by one per cent, between 2000 and 2004. This was despite all the TAFE directors constantly drawing our attention to unmet demand in the system and lots of young people being turned away from vocational education and training.

The government’s failure to adequately invest is now seeing the nation pay a very high price in the form of acute skills shortages across this country. By the government’s own admission and estimates, a shortage of more than 200,000 skilled workers is projected over the next five years. Those skills shortages actually impede the possibilities for economic growth and development at the regional level. I do not think the Howard government has a clear picture of the impact of the skills shortage at the regional level, and I think more work needs to be done.

I am not suggesting that any magic bullet or one solution is going to solve the crisis, but it does seem to me that regional trends may be quite different from what is happening nationally or even at a state level. For example, the Illawarra’s close proximity to the booming Sydney labour market has had an impact on the ability of local firms to attract suitable candidates. In 2001, according to the census data, 17 per cent of employed people in my region commuted outside the region for work.

Regional skills shortages have a variety of underlying causes, and a multifaceted strategy is needed to address the specifics of each region and the problems they have to contend with. That is why we came up with the local apprenticeship pilot program. We saw that as a sensible way of addressing the high rates of youth unemployment while at the same time targeting those opportunities to areas of skills shortage that we knew existed in the Illawarra.

Our eminent local research body, IRIS, undertook a skills shortage study. It showed that most skilled labour in the Illawarra region is now in short supply relative to demand. And it is not just in the traditional trades. It is in areas like aged-care nurses and carers, at the top of the list, through to boilermakers, chefs, electricians, engineers, fitters and turners, nurses, truck drivers and kitchen hands. So it is not, as I say again, in the traditional trades that the skills shortages are apparent in my region but across a wide range of occupations that need to grow to service the needs of our community. In all the responses to the skills crisis I think the major investment in terms of recent initiatives has been in the Australian technical colleges program.

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