Julie Owens (Parramatta, Australian Labor Party) Share this | Hansard source

I rise to speak on the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2007. This bill provides the funding for three more Australian technical colleges, in Perth, Brisbane and Western Sydney, bringing the total cost of establishing 28 colleges to $548 million. Unfortunately, the bill reflects the usual approach that this government has to serious issues in the Australian community and economy. It does nothing for so long, and then, when it finally does respond to a problem largely of its own making, what we get is not a real solution for the future but a political fix. This is a political fix to a problem that desperately needs a very real solution, and that problem is the skills crisis.

The Reserve Bank has warned over and over again of the growing skills crisis and the impact that it has on inflation and interest rates. Just last Monday, the Reserve Bank of Australia issued a warning again about capacity constraints in the economy and the implications for interest rates. That warning, of course, came on the tail of the most recent, the ninth, interest rate rise in a row. The Reserve Bank statement reinforced the need for positive action from the Howard government to address capacity constraints, particularly the skills shortage. And it was not the first warning. There have been 20 warnings from the Reserve Bank about the implications of capacity constraints and skills shortages in the Australian economy. The response from the Howard government was to deny it for many years and finally to come up with a highly cynical political fix.

Capacity constraints, including the skills crisis, are not things that rise up out of the ground. It is not as if the economy is moving along and then suddenly, overnight, out of the ground, rises the capacity constraint of a skills shortage. You can see it coming. We on this side of the House have seen it coming, and we have been asking for action for a number of years. Business, both big and small, has seen it coming, and it has asked for action. The Reserve Bank has seen it coming and has given at least 20 warnings. But the government denied the existence of the skills crisis even as recently as last year, just as they denied climate change and housing affordability. And, when they finally acted, they did not govern for the future of the country. They campaigned for their own futures. This is a political fix which was announced in the lead-up to the 2004 election and will be delivered to a marginal electorate near you in the lead-up to the 2007 election.

We on this side of the House are not opposing this scheme. It did go to the electorate in the 2004 election and, quite frankly, some action—any action—is better than no action on something that has such a negative impact on ordinary families dealing with interest rate rises. We do, however, have grave reservations about the effectiveness of the Australian technical colleges in fixing a problem that the government itself has created over 11 years of neglect. When the government was elected in 1996, there was already in place a non-tertiary education sector, known in the broader community as TAFE. In that first year, 1996, the government cut the Commonwealth Dental Scheme. It waited until the second year, 1997, to begin slashing investment in vocational education and training.

Between 1997 and 2000, Commonwealth revenue in vocational education decreased by 13 per cent. Between 2000 and 2004, it increased again by the extraordinary figure of one per cent. That is a 13 per cent decrease between 1997 and 2000 and a one per cent increase since then. Since 1997, on John Howard’s watch, with increasingly strong indicators that a skills crisis was approaching and would put upward pressure on inflation and interest rates, real expenditure per hour of TAFE curriculum fell by nearly 24 per cent. That figure comes from data from the National Centre for Vocational Education Research. TAFE is the major provider of vocational education and training in Australia, with more than 1.2 million students. TAFE accounts for 75 per cent of all students and 85 per cent of all training hours, yet we saw it slashed by 13 per cent in the first four years of the Howard government.

Year after year, the Howard government has ignored this most vital part of our community and education infrastructure. The sector is crying out for additional recurrent funding and much needed investment in infrastructure, despite it being the area that will bear the greatest responsibility for the skills, vocational education and training development of our workforce. So what did we get with the Australian technical colleges announcement before the election in 2004? We have seen it delivered, in the main, over the last three years. Ninety per cent of the Australian technical colleges are in marginal or coalition held seats. How cynical is that? It is a political fix for the Liberal Party, not for the future for the Australian people.

More than $500 million in expenditure and so far there is not one graduate to show for it—not one. There will be graduates; the first one will be known as the ‘half billion dollar graduate’. We will see that one soon, I am sure. The Australian technical colleges will graduate fewer than 10,000 students by 2010. The government’s own figures show a shortfall of 200,000 skilled workers by then, and the centrepiece of the government’s skills program will deliver, maybe, 10,000 students by 2010. The locations for these centres were chosen not based on the need for skills but based on John Howard’s need for votes. So far, we have no graduates. Only five per cent of the government’s own estimation of need by 2010 will be met by this, the centrepiece of their skills policy. Meanwhile, the skills crisis grows week by week and continues to put upward pressure on inflation, which, as we know from the Treasurers’ comments, is exactly where he thinks we need it.

The costs also have blown out, but there have been other problems as well. The Australian technical colleges have been plagued by difficulties and low enrolments. After three years and $500 million there is not one graduate, but there are only 1,800 enrolments. Twenty-one of the 25 colleges are now open, but only two of those 21 met their 2007 targets for enrolment. The average cost per student at this point is $175,000 per student. Only one-third of the colleges are legally registered to provide training, and many outsource to TAFEs. In fact, only nine of the 21 Australian technical colleges do not outsource to TAFE, which, as I said, existed before. So they cannot fill their enrolments, they outsource to TAFE, which was already happening and where it does not cost anywhere near $175,000 per student, and they have been unable, to date, to provide apprenticeships for their students—which was, of course, the original idea.

Despite the government’s Australian technical colleges’ website noting that the colleges would be established in ‘areas where there are skills needs, high youth population and a strong industry base’, we have seen 90 per cent of the colleges instead located in coalition or marginal seats—in other words, not where the skills need is high but where the government’s vote need is high. The Australian technical colleges are the centrepiece of the Howard government’s training agenda. After years of denying there was even a skills crisis, this is it. This is their vision for the future: a political fix that will try to plug a 200,000 deficit in skilled people with 10,000 graduates, that puts marginal seats above all else, that puts politics above government, that fails to serve my community and that fails to govern for my community.

While we on this side of the House agree that any move to increase training opportunities in Western Sydney is important, we need to acknowledge that this latest technical college, the only one in Western Sydney, will provide 25 places in a city of two million people. One technical college in Western Sydney will provide 25 student apprenticeships in the third largest economy in Australia—a city of two million people and the fastest growing region, in terms of population, in the country. The Howard government has let us down badly. It has really let us down. I have spoken many times about education in my community. I have talked about the university participation rate in Western Sydney being just over half the rate of the rest of Sydney. I do not have the figures for technical college participation—they are not available—but I would expect that they reflect university participation rates, which, coincidentally, also matched the participation rates in leisure and cultural activities. In Western Sydney, we are an incredibly long way behind now. After 11 years of a Howard government that claims to govern for the battlers, it has delivered 25 places—for those people who can afford to pay—for a city of two million people that is already participating at only just over half the rate of the rest of Sydney. Well, that is going to solve the skills crisis in Western Sydney! That will do a great deal!

There are three reasons why the skills crisis in Western Sydney needs to be solved—three reasons which stand out like nothing else. The first reason is that it provides an escape from poverty and public housing. We in Western Sydney have large public housing estates—planning errors from the past, I think we would all agree. We have large areas of disadvantage. Skills, training and education are the way out for these people. But there are 25 places, if you can afford one. Too bad if your parents are unemployed; too bad if your parents have a drug problem; too bad if your parents are on a disability pension; too bad if you are on a disability pension. There are 25 places for a city of two million people, if you can afford to pay for one.

The second reason is that we are one of the largest economies in the country. We are the driver of this country. Our population is growing at a much more rapid rate than the rest of the country. If we cannot grow our business in Western Sydney to match our population growth, this whole country will wear the price of that. The skills shortage in my area is a major constraint to the development of business. It is a major constraint. Twenty-five places for 75,000 businesses in Western Sydney is not going to do the job. Twenty-five places for those who can afford it, and we have 75,000 businesses.

The third reason is one that the Reserve Bank has warned the government about 20 times: the skills crisis is putting upward pressure on inflation and upward pressure on interest rates. I do not know how many times this has been said. I do not know how many times it needs to be said in order for the government to respond to this. My area of Parramatta is one of the areas in the country where house prices are falling. It is one of the areas which has the highest insolvency rates in the country. Nobody in Australia can afford interest rate rises but, I tell you, my area is really struggling. My area is struggling like I just cannot believe. When I am doorknocking out of there, I can see the fear in people’s faces now because of this. We have to deal with the skills crisis—

See this speech in context