Eric Hutchinson (Lyons, Liberal Party) Share this | Hansard source

The were many failures of the previous government—Pink Batts, school halls, the Australia Network, the NBN, but Tools for Your Trade should not have been one of them, frankly. This would not have been on the list if the planning and the compliance and the tools had been the thing that were actually purchased. But everyone knows—everyone has a story—about poorly spent grants under the Tools for Your Trade scheme. Ultimately it is the responsibility not just of the employer but also of the apprentice to contribute to their education and their training.

It is through education and training that opportunities open. I have a technical background. I studied a trade many years ago and other doors opened. I completed that and I went on to further study. On Friday I was at home in my electorate and I visited Mark Turner, at Turners Blackwood Furniture in Western Junction. I walked in and, having introduced myself, I met Daniel, who is the fourth year apprentice at that business. I asked him straight out. I asked him the question in front of his employer, Mark, and by the end of it we were having a bit of a chuckle, because, as I said, everybody knows a story, everybody has seen the examples of how a notionally good idea with poor planning did not deliver on expectations that I think many would have had—no doubt with good intent—when it was devised. Indeed, in my home state of Tasmania, we are experiencing a skills shortage in more than 60 trade areas, including carpentry, bricklaying and electrical work. My state's economic downturn has dramatically affected our industry and manufacturing base. Tasmania has suffered a serious cycle of business shutdowns. Young Tasmanians bear the brunt of that flow-on effect more than just about any other sector of the community. The number of apprenticeships offered has dropped and less apprenticeship positions are being filled. As one industry leader told me this week: 'This part of the business and industry sector is always the first to be affected when times get tough. Apprentices are often the first to go.' It is last on, first to leave when a business or industry closes and the boss can't afford to keep them. This does not bode well for an already challenged younger generation for our country's tradesmen and tradeswomen.

The latest national figures reveal that in my electorate of Lyons we have only 1,037 apprentices in training, including 430 identified as from the skills shortage areas. This is not a large number when you consider that my electorate makes up nearly half of the area of Tasmania. That is why this Trade Support Loans Bill 2014 is important for the young people in my electorate of Lyons.

We welcome whatever can be done to support more young Tasmanians into and through training to increase their skills level and, therefore, their chances of long-term employment. That message has already trickled through to business and industry in my state since the scheme was announced as part of our government's first federal budget last month.

Austral Bricks, at Longford in my electorate of Lyons, is a subsidiary of the national brickworks business. Austral has been making bricks in Tasmania for more than 35 years. It employs 25 staff and has invested $3 million in the plant in the past three years. Only last month, federal Minister for the Environment Greg Hunt flew to northern Tasmania for the official launch of Australia's first carbon-neutral brick produced at that factory. Austral general manager David Robertson told me this week that his company welcomes the Trade Support Loans scheme as extra support for apprentices through to the end of their training. He said that Tasmania needed as many apprentices as it could muster to help fill skills shortages. This new scheme will provide financial support similar to the HELP scheme for university students, which has been extended to sub-bachelor degrees and diploma courses, which, as David suggests from personal experience, is a good way to assist cash-strapped students towards the end of their training. It is a similar thing with apprentices starting on a very low wage base. This scheme will help them in those first vital few years, when their take-home pay is minimal but they face the same costs for tools and other equipment or accommodation as their qualified counterparts.

The Tasmanian Building & Construction Industry Training Board chief executive Simon Cocker said this week that he too thought that the new scheme would work well to help cut the dropout rate among young apprentices. He tells me that there is a more positive feeling for growth in Tasmania's building and construction industry than there has been for a number of years, with several big projects on the way, like the rebuilding of the Myer store in Hobart, the Royal Hobart Hospital—if we can get it back on track—and the Parliament Square development. Let us all hope that this scheme may also help to attract some young people back to the state to train and work in the industry locally.

These Trade Support Loans deliver on an election commitment by this government to provide income contingent loans for living costs for apprentices. Up to $20,000 will be available over four years to apprentices undertaking certificate III or IV qualifications. They will be similar to the Higher Education Loan Program, as I mentioned, with the repayment done via the tax system once the threshold income level is reached. Students who successfully complete their training—and that is something we want to see—will receive a 20 per cent discount on their loan. What a deal! It is the best loan I will ever get in my life. According to the latest data, about 20 per cent of trade apprentices drop out by the end of their first year and about 30 per cent by the end of their second year. So 50 per cent do not complete the course. The retention rate is unacceptable. One of the reasons for apprentices not completing qualifications is the minimal associated wages in an apprentice's early years. This bill goes a long way to address such deficiencies. The scheme targets the aspect of noncompletion and provides support where it is needed most with loan payments heavily weighted in the first two years of the apprentice's training when the risk of withdrawal is highest and wages are at their lowest. It is a must if we are serious about increasing the number of apprentices to tackle our skills shortages, as we are in Tasmania.

In summary, there is a mutual obligation between the apprentice and the employer. The scheme offers front-ended payments of $8,000 or 12 payments of $666.67 in year 1, $6,000 or 12 payments of $500 in year 2, $4,000 or 12 payments of $333.33 in year 3 and $2,000 or 12 payments of $166.67 in year 4. The important thing to recognise is that the apprentice can borrow as much or as little as they require. For example, somebody may, over six months, using $4,000 of their loan, buy tools and then opt out. They complete their apprenticeship and after four years they get a 20 per cent discount on that $4,000. What a wonderful deal!

Another example might be when they save over the first year to buy a second-hand ute for $8,000. On completion—this is depreciation on steroids—they get a 20 per cent discount on that rate. What a deal! It is the best deal they will ever get in their lives. There is an extensive list of apprenticeships on the National Skills Needs List. I am very pleased to note that the minister has included—this is true particularly for my electorate and in Tasmania more broadly—agriculture and horticulture qualifications, which are not on the National Skills Needs List, as additional skills priority areas that are eligible for the Trade Support Loans, although they are not on that list. That is particularly important in respect of skills within the dairy industry, in my state of Tasmania, and also within the horticultural sector as well. They are growing areas. I am really pleased to see the addition of those two apprentice courses within this loan scheme. It is a very positive initiative. It has broad support from apprentices and employers, and elevates apprenticeships and the trades to sit alongside diploma courses, sub-bachelor degrees and the higher education and university degrees. I commend the bill wholeheartedly to the House.

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