Brendan O'Connor (Gorton, Australian Labor Party, Minister for Employment Participation) Share this | Hansard source

I rise to support the Skills Australia Bill 2008. The bill will provide for the establishment of a statutory authority, Skills Australia, which will enable the government to properly establish what skills are needed and where they need to be located. Skills Australia is a key plank in the Australian government’s five-point plan to fight inflation. The Prime Minister and other ministers, and indeed other members of government, have made the point very clear that we have a 16-year-high inflation rate. It is a legacy that was left by the Howard government and something that we have to attend to. It occurred as a result of a number of factors, not least of all the failure of the previous government to anticipate the skill deficiency. I will accept some of the assertions made by the opposition—indeed, by the shadow minister—that you cannot anticipate precisely all of the skill deficiencies that will beset the country. But to think that after almost 12 years in government the Howard government could not have anticipated the lack of skills that were causing concern to employers and industry across the country is a hard thing to accept. The fact is that the previous government stopped thinking about public policy and stopped considering the importance of this particular area. This bill will start to get the country back on track to have a policy in the area of skills that will be demand driven.

Debate interrupted; adjournment proposed and negatived.

That is one of the problems that we confront. We have had a government that ignored this area of public policy. It did not acknowledge that the problem was as big as it was, and as a result we now have hundreds of occupational groups which need people with expertise and qualifications to fill positions. Skills Australia, as a statutory authority, will provide expertise to the government in order to attend to this particular shortage. As I was saying before being interrupted procedurally, we are going to ensure that this is a demand-driven approach, to the extent that we will ensure that employers will be given an opportunity to identify the skills they need to ensure a successful business.

Over the last decade employers have been disengaged from this area, to a point where people are acquiring skills that are not necessary. Indeed, in the case of the shortages, there has not been sufficient involvement of employers and industry in the area of skills. We believe Skills Australia will provide leadership and will advise the government appropriately in order to ensure that we focus on those needs. We know that there are major problems. We have got capacity constraints in the economy. We are attending to our fiscal responsibilities by ensuring that the budget surplus this year will be 1.5 per cent or more of GDP. We are encouraging private savings. We are going to ensure that there is a proper focus on removing bottlenecks in the economy. And we are focusing—and this bill exemplifies that particular focus—on the skills requirements of this nation. Fifthly, we are going to increase employment participation because it is critical that we do so in order to fight inflation and to prevent, wherever possible, increases in interest rates. This bill is part of the approach that the government is taking. We are filling the void that was left by the Howard government.

With respect to my own portfolio, it has been announced by the government that there will be 450,000 VET places over the course of the next four years, 175,000 of which will target people who are not in work, who are looking to enter the workforce or who are marginally attached to the workforce. I am very happy to be working in that area. It is a critical area because it provides the wherewithal for jobseekers to have the requisite skills to be in demand by employers who are crying out for labour.

A series of reports outlined in recent times have gone to the problems that have beset the country as a result of the previous government’s inaction. Firstly, VECCI made the point that the Work for the Dole scheme was deficient in many respects. Indeed, VECCI indicated as recently as last week that the Work for the Dole scheme should be overhauled or even scrapped because it does not give the unemployed useful skills. That is certainly one of the contentions in the submission they provided to the government as a result of the review that we are undertaking to look at the effectiveness of employment programs and employment services generally. VECCI were clear that that scheme is deficient in providing activities that would lead to employment. In fact, I am aware of occasions on which job seekers are having greater difficulty finding work because they are undertaking nonsensical activities in some of the Work for the Dole programs. I have been to a number of Work for the Dole programs and I have seen some elements which I am happy with. I am not particularly keen on other elements, because there seems to be a lot of contrivance when it comes to the activities for job seekers, but I am certainly keen to maintain any elements that will provide the participants with work skills or work experience that provide them with a greater capacity to find work. But VECCI do have a point when they suggest that there are areas which are seriously deficient and where some of the activities would not lead in any way to improving the likelihood of a job seeker finding work.

I can also point to comments made with respect to this particular area by the BCA. The BCA has made it very clear that the previous government neglected the skills crisis. They had been warned time and time again by all sorts of bodies, not least of all by the Reserve Bank of Australia. Indeed, employer bodies for the last decade had been warning the previous government about the growing skills shortages in this country, effectively saying they must attend to them. That particular plea by that employer body and other employer bodies fell on deaf ears because the government, of course, did not seek to attend to that particular problem. Mr Greig Gailey, the President of the Business Council of Australia, is the author of a recent article in a daily newspaper. He said:

More than ever, governments need to focus on fiscal policies and broader reform agendas in areas such as infrastructure, education, skills and workforce participation that collectively enhance the nation’s capacity to grow.

But recent federal budgets have not kept pace with the economy’s structural needs.

Instead of focusing on policy settings that invest in those areas of the economy that drive long-term growth, recent budget spending has remained fixed on driving even greater demand and consumption in the short term.

The BCA president is quite right in identifying the failure by the previous government to attend to those matters. This bill is about rectifying that problem. This bill is part of the solution that will be undertaken by this government in attending to this very important area of public policy, so I am very happy to be speaking today on this matter. It is very important that we get this right. Establishing Skills Australia will be one of the first of many steps that this government will take as part of a comprehensive approach to confronting and dealing with the skill challenges of our nation. When we establish Skills Australia we will be helping to ensure that this nation can maintain its prosperity and improve its productivity, which, in recent times at least, has been in decline. We need to do that as a matter of urgency.

I acknowledge the comments made by the shadow minister who, whilst criticising some areas of the bill, welcomed the fact that there would be some attention given to the skills area. He has asked some questions about the composition of Skills Australia, which are legitimate questions to raise, and I think those answers will be forthcoming. It is reasonable to put to the government the question of whether the seven personnel on the board of this statutory authority are in keeping with the criteria set down in the bill, and I am confident that that will be the case.

The main area of disagreement is that we on this side say that the previous government did not focus on this area. As the economics editor of the Age said in February, only a few weeks ago, the Howard government dropped the ball on the skills agenda. It turned to other matters, one of which was its own survival. But it would have had a better chance of survival if it had attended to the things that ordinary Australians need. What ordinary Australians need is a job or the skills that are attractive to a prospective employer. As the Minister for Employment Participation, I want to ensure that the programs we have out there for job seekers to participate in are effective, that the training is meaningful and that the employers are engaged with the government and other bodies to make sure that we match the skills needs to the skills. I understand the argument put by the shadow minister that, if somebody does not want to acquire a particular skill or attain a form of education, it cannot be forced upon them. I understand that, if someone is averse to acquiring a particular skill, it is not easy to suggest that they do so. But, equally, it is critical for us to ensure that job seekers are focused on skills that are in demand. It is going to be futile, in terms of the vocational prospects of job seekers, if we do not ensure that the skills they are acquiring have something to do with the real world and something to do with the demands of employers in this country.

This is a very important debate that we are having in this chamber. The bill itself is critical because it is going to set the path for the way in which the government will be advised as to the skills that are needed in this country. It is seeking—in a better way, I would argue—to anticipate the skills required. Again, I accept that you cannot precisely anticipate all skills that are needed, but I think the previous government could have done more in this area to ensure that there were not so many employers crying out for people with the requisite skills.

There are, of course, other ways in which employers can seek the right labour with the right skills. They have the capacity to attract labour from overseas. That mechanism was used by the previous government and a similar mechanism will be used by this government. There are other areas of policy to attract people back into the workforce. You can have incentives that will see second income earners coming back into the workforce or working longer—for example, the tax cuts that have been announced and that will take effect. Those tax cuts, by increasing the incentive, will increase the likelihood of, for example, second income earners coming back into the workforce or working for longer hours. There are other areas of public policy that you can change to encourage people to stay longer in the workforce. But my primary focus is to ensure that those people who are unemployed or underemployed and who can work and want to work—indeed, in many cases they are compelled to look for work—are provided with proper targeted training in order to fill the skills need. On that basis, I commend the bill to the House and hope that the opposition accede to the bill and to the reasoning behind it.

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