Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Hansard source

I note by the contributions from the opposition that it is not just the Deputy Leader of the Opposition who has forgotten 2007 and the election result.

Thirdly, we will be unfolding our plan for tackling chronic skills shortages in the economy.  I will talk more about this shortly.

Fourthly, we will provide national leadership to tackle infrastructure bottlenecks through the development of Infrastructure Australia.

And, fifthly, we will provide practical ways of helping people re-enter the workforce including removing disincentives to work and helping increase workforce participation.

By exercising fiscal restraint our plan aims to do everything we can to ease the pressure on inflation.  Our plan deals with the chronic investment deficits in the capacity side of the economy, particularly investment in skills and infrastructure.  This skills agenda is clearly a vital part of this broad whole of government plan.

Skills Australia

Establishing Skills Australia is the first step of many this government will take as part of a comprehensive approach to overcoming the challenges our nation faces in securing a prosperous, productive future.

Skills Australia will be comprised of seven experts drawn from a range of backgrounds including economics, industry, academia and training providers.  It represents an intellectual as well as a financial investment in the skills agenda.

Skills Australia will:

• analyse current and emerging skills needs in the Australian economy—both in the broader economy and across industry sectors;
• assess evidence from commissioned research and industry stakeholders to inform Australia’s workforce development needs;
• widely distribute information from research and consultations with stakeholders to enable entrepreneurs, businesses and workers to have the necessary information to inform their training and employment decisions;
• provide the government with recommendations on current and future skills needs to help inform decisions to encourage skills formation and drive ongoing reforms to the education and training sector, including on priorities for the investment of public funds; and
• establish and maintain relationships with relevant state bodies and authorities to inform its advice on current and future demand for skills and facilitate alignment of priorities for responses to skills needs.

The Skills Australia legislation establishes the operational arrangements to support the independent body, including provisions relating to conflict of interest issues, arrangements for the appointment and service of members, remuneration of its members, procedures about its conduct and arrangements for working groups to provide it with the capacity to investigate issues deeply, drawing on a wider range of stakeholders.

Skills Australia will provide the government with advice about areas of acute skills shortage.

Without wishing to pre-empt their advice, there are some clearly identified areas of skills shortages we can anticipate. For example, the mining and construction sectors are likely to be prime candidates.

The mining industry is currently experiencing the highest vacancy to employment ratio, with around 3.7 vacancies for every 100 people employed in the industry. Wages growth is strongest in the mining industry, at 5.4 per cent through the year to the September quarter 2007, compared to 4.2 per cent across all industries.

The construction industry is also experiencing labour constraints. Wages growth in construction is at 4.8 per cent through the year to September 2007. The industry also has the highest proportion of employees with a certificate as their highest qualification, at 45.7 per cent. This means that it will benefit greatly from additional training places at diploma and above levels.

Skills Australia will play a pivotal role in boosting productivity and participation in the Australian economy by providing high-quality advice to the government. This will ensure that policies can be directed towards closing the skills gap—the gap between the demand for and supply of skilled workers.

New Training Places

Our Skilling Australia for the Future policy will increase and deepen the skills capacity of the Australian workforce and ensure demand for skills and training is matched. The Rudd Labor government’s plan for our future skilled workforce will close the skills gap in the Australian economy in three key ways:

Firstly, by funding an additional 450,000 training places over the next four years.

The government will take the advice of the Reserve Bank of Australia seriously by acting with urgency to make 20,000 of these new training places available from April 2008. These initial places will be directed to those outside the workforce and will help many Australians gain employment and stimulate workforce participation rates.

Higher Level Skills

Secondly, we will ensure that most of the 450,000 places lead to a higher-level qualification, such as at the Certificate III level or above.

The new places will offer high-quality training opportunities which better suit the needs of our economy in the future. In an increasingly globalised world, we need to increase not only the number of Australians with skills and qualifications but also the depth of skills in our workforce if we are to drive up productivity and compete internationally.

The Business Council of Australia estimates that nearly half of the qualifications needed to meet the predicted demand for skilled workers over the next decade will need to be at Certificate III level or above.

The Role of Industry

Thirdly, and most importantly, we are placing industry demand at the heart of the skills training system.

Part of the problem in increasing our national skill levels has been that training has not sufficiently matched industry’s needs. Businesses have not been provided with enough assistance to enable them to diagnose, predict and tailor training to their future workforce needs.

The government will align skills development policies and training delivery with industry priorities, and position the training system to better meet the needs of individuals and industry.

New training places under the Skilling Australia for the Future policy will be allocated according to industry demand.

Training organisations must be encouraged to play their part and respond flexibly to increasingly diverse industry and individual needs. Training providers must deliver customised, relevant training that is integrated with, and supported by, workplace learning opportunities, at a time and place that suit business needs.

The Australian government’s major reforms will help with better diagnosis of Australia’s skills needs and ensure new training places are delivered in a way that meets the needs of industry—helping more people secure meaningful jobs, and helping drive up productivity.

Drawing on the advice of Skills Australia, strengthened industry skills councils will connect employers to the new training places. Industry skills councils will work with employers to identify their skills needs and match those needs with nationally accredited training.

Industry skills councils will also work with employment service providers to give people outside the workforce access to training which matches industry and employers’ needs. Australia’s training system must shift to a system that is driven by, and which responds to, the needs of business, industry and the economy.

More than one-third of the additional 450,000 training places will be allocated to people currently outside or marginally attached to the workforce to equip them with the skills they need to gain employment. The remaining places will be targeted at training people who are currently employed but who need to upgrade their skills.

Skilling Australia for the Future will also support up to 65,000 apprenticeships over the next four years.

A Cooperative Approach

The Rudd Labor government is also committed to progressing the national skills agenda through the Council of Australian Governments.

Through COAG all governments in Australia agreed to work together to increase the productive capacity of the economy, address inflationary pressures and deliver higher quality services to the community.

Building on the work of COAG, my department has begun discussions with state and territory systems to ensure close coordination between governments in planning for and funding growth in training and skills development. It is only with a long-term productivity agenda that we can hope to achieve simultaneously high economic growth, low unemployment and low inflation.

There are many shared and real benefits to be achieved by working together. We can expect a better return on publicly funded training investment. We can also increase the capacity of enterprises to adopt high-performance work practices that increase productivity through supporting their employees to realise their potential.

The Skills Australia Bill is the first element of the Australian government’s policy framework to fight inflation by addressing skill shortages. We are ‘Skilling Australia for the Future’. It is a challenging plan that requires all parties to make an active contribution. It is only with all stakeholders actively engaged in the skills agenda that we can focus on our outcomes—to increase the productive capacity of the economy through a more highly-skilled workforce. The result will be an Australia where the career aspirations of individuals are recognised, nurtured and rewarded.

I commend the bill to the House.

Debate (on motion by Mr Hunt) adjourned.

See this speech in context