Sharon Claydon (Newcastle, Australian Labor Party) Share this | Hansard source

I rise to speak on the Trade Support Loans Bill 2014 and to support the amendment moved by the member for Cunningham. Very briefly, this bill establishes the Trade Support Loans Scheme for Australian apprentices. These loans will be concessional and income contingent, with a lifetime limit of $20,000 indexed from 2017. The loans will be repayable when the individual's income reaches the Higher Education Loan Program, or HELP, repayment thresholds. The bill also provides for a 20 per cent discount to be applied to the loan, incurred when an Australian apprentice has successfully completed their apprenticeship.

To be fair, prior to the 2013 election the Prime Minister did announce his proposal for a Trade Support Loans program, and those of us on this side of the House are indeed amazed that the Prime Minister finally appears to be keeping one of his election promises. But what he did not tell apprentices was that he was going to scrap a key assistance measure—Labor's $1 billion Tools For Your Trade program—that provided $5,500 to each apprentice who took part. Replacing Labor's $1 billion Tools For Your Trade program with the Abbott Liberal government's $439 million loans scheme means that this government has just lifted $561 million out of the pockets of Australian apprentices, who, in my electorate of Newcastle, are the future hope of us retaining a skilled manufacturing industry.

With the passage of this bill, struggling apprentices on pay well below the minimum wage will be forced to swap their tool allowance, which was a grant, for a $20,000 bank loan instead. This now means that what was an optional loan available to apprentices—the new Trade Support Loan—is now the only financial support offered to apprentices. It is borrow or bust. The loans were also tagged as being interest-free when announced, yet in real terms, following the announced changes to HELP loan indexing arrangements, these loans will actually accrue up to six per cent interest over their lifetime from 2017. For the first time, apprentices will be loaded with spiralling debt before starting their careers.

The lack of clarity around how the loans will work is another concern, particularly as they will be available to school-based apprentices.

Teenagers at school need to be offered adequate protections and advice regarding the loan agreement that they will be entering into. The provision of the optional trade support loan is not opposed by Labor, but it should not have come at the expense of the Tools for Your Trade scheme and should have appropriate advice requirements in place to ensure informed and voluntary decisions by apprentices, some of whom are school based.

The industry minister flagged that a key reason for ceasing the Tools for Your Trade program was because there was evidence that apprentices were spending their money on tattoos and mag wheels for their cars or on birthday parties. I just heard the member for Hindmarsh suggesting similarly. This cheap shot at apprentices is offensive and demonstrates the minister's lack of understanding about the costs apprentices incur while training. Many apprentices have huge costs for tools and equipment, and the minister's accusation that they are misusing these funds is offensive to the majority of apprentices, who have used these much-needed funds to do the right thing and buy the equipment that they need to help them on their career path. Apprentices are on pay well below the minimum wage. They need support to purchase the tools essential to their trade. This is a minister and a government that is clearly out of touch.

While it is true that the government did flag its intention to introduce these trade support loans, they absolutely did not tell the industry or apprentices that other successful programs that support our apprentices will be axed at its cost. Group trainers and employers were delivered a severe blow when the announcement was made that the very successful Australian Apprentices Access Program, the Australian Apprenticeships Mentoring Program and the Apprentice To Business Owner Program were being axed. They are successful programs that help apprentices find employment and finish their apprenticeships. They now sit on this government scrap heap, which is getting higher and higher every day.

I would like to draw particular attention to the difference the Australian Apprenticeships Mentoring Program and apprenticeship access programs have been making for apprentice and employers in my electorate of Newcastle. Of the current 31 programs that are being delivered under the Commonwealth mentoring program, three deliver specific services in Newcastle. The Australian Rugby League Commission's Trade Up with the NRL program focuses on increasing the retention and completion rates of Australian apprentices who are also involved in rugby league. Mentors work with the clubs and regions to assist identified apprentices within the rugby league community with successfully completing their apprenticeships. Former Newcastle Knight and qualified electrician Anthony Quinn is a mentor in the program. Earlier this year Anthony retired from the NRL having experienced significant injuries during his rugby league career. Thankfully, he has a trade to fall back on. Mind you, it took him 13 years to complete his apprenticeship while he juggled football and family commitments.

In his role as a mentor in the NRL's program, Anthony helps young footballers ensure they have options when their playing careers end. Anthony is only 31 and he has already had to embark on a new career. Other players are not as lucky and through injury, misadventure or a drop in form may be faced with the ending of their sporting career in their twenties or even teens.

Another program delivering services in Newcastle is BUSY At Work's Apprentices on Track Industry Mentoring Program. Their project provides mentoring support to Australian apprentices across the transport, postal and warehousing industries as well as rail related industries including electrical, carpentry, welding, metals trades and fitters and turners. The rail industry is at a crossroads in Australia and in my home town of Newcastle in particular as state Liberal governments offshore their purchasing of new carriages rather than building them in Australia. The Apprentices on Track Industry Mentoring Program helps give some sort of assurance to apprentices at a time when their industry and other, similar industries like shipbuilding are at pains to survive under Liberal governments.

The third program operating out of Newcastle is NovaSkill's Australian Apprenticeship Mentoring and Support Service program—AAMPED—delivering mentoring to apprentices who are at high risk of drop-out and non-completion of their trade. NovaSkill is an organisation that has been operating ahead of its time for much of its 33 years of existence, and its mentoring program is no different. In the early 1980s, when a severe economic downturn was experienced in the Hunter, the Hunter Training Group, now NovaSkill, was formed to ensure young local apprentices could continue on with their trade training even if they did not have a day-to-day job to go to. The apprentices spent time being hosted by local employers and attended training with the training group so that when the economy improved they would be able to continue with their trade. This helped bridge a potential skills shortage that often occurs when economies recover. They were operating under an advanced model that we could well consider today as industry transitions.

NovaSkill's current mentoring program under the Australian Apprentices Mentoring Program is based on a model that was already operating successfully before the formal introduction of Labor's mentoring scheme in 2012. With a strong commitment to Indigenous employment and training, NovaSkill were delivering a specific program for Aboriginal and Torres Strait Islander that spawned their current AAMPED program. AAMPED has seen more than 1,600 Australian apprentices or trainees complete their apprenticeship, including more than 155 Indigenous apprentices and assisting more than 800 local employers in the process. While some other trainers direct the mentoring program at any apprentice who is employed, NovaSkill makes a point of only including in their program apprentices who are deemed most likely not to complete their apprenticeship.

To measure the risk of drop-out, apprentices complete a brief survey that measures various aspects of their life that may contribute to them leaving their apprenticeship like if the apprentice owns a car, if they live close to work, if the apprentice is from an Aboriginal and Torres Strait Islander background, if they live at home or in a share house or if they are facing financial pressures. The apprentices complete the survey at regular intervals to make sure their current risk is being assessed, as their circumstances may change, with the risk of drop-out reassessed. To ensure ease of delivery and high survey completion rates, NovaSkill developed an iPad app so apprentices could quickly complete the survey using a comfortable medium rather than a potentially uncomfortable interview or being grilled by their trainer. Despite only targeting high-risk-of-drop-out apprentices, the AAMPED program is delivering outstanding results. Their attrition rate for apprentices that go through the program is less than 10 per cent, whereas the national rate of attrition for apprentices is 48 per cent. According to NovaSkill, the program is also delivering real financial gains and skills results of national significance. For example, the cost to the Australian government of apprentices who start but do not finish their trade can be reduced by over 80 per cent per annum, and national skills shortages can certainly be addressed with over 40 per cent more apprentices completing their trade. By any measure, the mentoring programs delivered under the current Labor model are making a massive difference. But we see this government again making decisions based on ideology rather than evidence and instead of supporting or expanding this fantastic mentoring programs they are axing them and abandoning apprentices in the process.

While the ongoing funding for the mentoring program had its writing on the wall under this government, with failure to commit to its extension since elected, the scrapping of the Australian Apprentices Access Program came as a surprise to most. The access program provides vulnerable job seekers who experience barriers to entering skilled employment with nationally recognised prevocational training, support and assistance. Women who wish to return to the workforce by gaining new skills or updating existing skills will also be disadvantaged by the programs abolition. They may have been out of employment for a number of years and leant on programs like the access program to re-enter the workforce. Young culturally and linguistically diverse women, Indigenous women, women with disability and mothers will be left without this dedicated pathway to training and employment.

Again, while Labor does not object to the provision of the trade support loans, I do want to take this opportunity to flag a concern with how the Trade Support Loans program is being targeted, in particular the inequity it creates for women. While the inequity may not be intended through the program's delivery, the result is clear—loans will be available to more men than women. As with the Industry Skills Fund, very few women will be beneficiaries of Trade Support Loans as the funds are only available for apprentices undertaking a qualification in an occupation on the National Skills Needs List. Of the 65 or so occupations that are listed, only a handful have female apprentices.

The publicly funded TAFE system is slowly being displaced by the creation and expansion of a demand-driven competitive training system with a drive to privatise and commercialise the VET system. The VET system is promoted as industry driven and the sex segregation of occupations is entrenched in many industries. I urge the government to work with organisations like the National Foundation for Australian Women to ensure females who undertake a trade have the same financial support as males and are not further disadvantaged.

Having skilled and qualified workers is an important part of our overall economic sustainability. Apprentices, training organisations and employers are vital parts of the skill development and training ecosystem, so it is important that government supports them. Without them we will be faced with skills shortages for the jobs of the future and an ever-growing unemployment list that people will struggle to leave.

Under the Liberal state government in my home state of New South Wales we are seeing devastation in the TAFE and VET sectors. There have been massive drops in apprenticeship enrolment numbers—up to 50 per cent for some courses in my region in the Hunter; a lack of investment in capital works; more than $800 million in funding slashed; and over 700 teachers sacked. Industry figures are warning of future skills shortages. The Liberal state government is ignoring industry concerns and are pushing ahead with moves to a privatised vocational education sector and increasing course fees by up to 400 per cent from 1 January next year, pricing young apprentices out of training.

I congratulate the NSW Leader of the Opposition, John Robertson, for heeding advice and last week committing that a Labor government would abolish the Baird Liberal government's massive fee hikes and will commit to capping TAFE fees at current 2014 levels with increases no greater than CPI. They will also stop mass sackings and cuts to courses. That is what a strong government should be doing. They should be doing the right thing for apprentices and our nation's future. It is not good enough to swap a tool allowance for a $20,000 loan program. I urge the government to reconsider the abolition of these vital industry and apprentice support mechanisms. (Time expired)

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