Tim Watts (Gellibrand, Australian Labor Party) Share this | Hansard source

I am pleased to have the opportunity to speak on the Trade Support Loans Bill 2014. Since the federal budget there has been a lot of attention given to the plight of university students under this government—and deservedly so, given the Prime Minister's insistence on breaking yet another election promise in order to massively increase both university fees and the cost of student debt. But it is not only university students who are suffering under the Abbott government.

Australians undertaking apprenticeships and vocational education will also suffer from cost-shifting and buck-passing under this government. This bill establishes the Trade Support Loans program for Australian apprentices. The Trade Support Loans program was announced by the then opposition prior to the 2013 election. But what then then opposition leader, now Prime Minister, did not tell apprentices before the last election was that he also intended to scrap the $1 billion Tools For Your Trade program, established by the previous Labor government.

On this point, I note that the member for Paterson indicated, during his contribution to this debate, that the opposition had been upfront with the Australian people about their intent to axe the Tools For Your Trade program before the last election. But when challenged on this point by the member for Hunter, the member for Paterson declined to provide evidence for this claim. Given the recent penchant of those opposite to tell fibs about the fictions they told voters at the last election, to offer furphies about the fabrications they offered to voters, and to provide falsehoods today to justify the fraud they perpetuated at the last election, it would assist the House greatly if Minister Macfarlane could table evidence for the Member for Paterson's claim during his summing up of this debate. I call on him to do so.

The Tools For Your Trade program provided up to $5,500 per apprentice in tax-exempt cash payments to support apprentices with the costs of their training, buying tools needed for their apprenticeship, and other costs associated with their apprenticeship. In its place, the optional loan scheme that was originally intended to be made available in addition to the Tools For Your Trade payment, as a supplement for these cash payments, now remains as the only specific financial support offered by the government to apprentices.

Anyone who has had an apprentice in the family knows that many apprenticeships carry very high costs for the tools and equipment needed on the job. The financial reality for these apprentices is that as a result of the policies of the Abbott government, instead of being able to utilise government support to meet these costs, these costs will now be covered by a loan that must be repaid to the Commonwealth.

For many apprentices who have already commenced their trades under the previous government, this could mean up to $3,700 lost in future payments for a first-year apprentice. Providing loan based support for apprentices is not opposed by those on this side of the chamber. It is a useful method for providing additional support for people taking the initiative to improve their skills. But it should not have come at the expense of the Tools For Your Trade scheme that provides an appropriate level of support for people making the decision to make a long-term commitment to improving their skills and education.

Unfortunately, the Tools For Your Trade program is just one area where the Abbott government is cutting support for apprentices and shifting the costs of these apprentices to state and family budgets. Also suffering the effects of Tony Abbott's apprenticeships axe are the Australian Apprenticeships Access Program, the Australian Apprenticeships Mentoring Program and the Apprentice to Business Owner program. These programs have all been axed by a government that is telling young Australians they ought to be learning or earning, while at the same time attacking the very programs that assist them to do so.

This bill provides for the introduction of Trade Support Loans of up to $20,000 to be repaid on an income-contingent basis. Loans of this kind may well be a worthy supplement to other forms of government support for apprentices. But given that these loans will be available to school based apprentices aged 16 to 18, measures need to be put in place to protect children from the consequences of what are major financial decisions. This need is further heightened by the fact that the government intends to outsource debt management for Trade Support Loans to the private sector, potentially leaving $20,000 debts incurred by 16-year-olds in the hands of private debt collectors. It is a worrying prospect, and these bills should include provisions to ensure that apprentices—particularly school based apprentices—receive appropriate advice to ensure that they make informed decisions about loans incurred under this program.

Issues like this have driven Labor to seek an inquiry into the bill through the Senate Economics Committee. This inquiry will examine the payment, by monthly instalments, of the loan amount; loan terms and conditions into the future; future outsourcing of debt management by the government; the protection of 16- to 18-year-old apprentices; and general loan advice to all apprentices.

However, as Tools For Your Trade participants have already been notified of the program closure, Labor is minded to support this bill. Of course, all the financial support in the world for apprentices will be for naught if the learning institutions that support apprentices are not themselves funded. In this respect, the record of the Liberal Party, particularly at the state level, is extremely poor.

As I have previously informed the House, the impact of the State Victorian Liberal government's swingeing cuts to TAFE and VET funding in Melbourne's west have been particularly severe. In Melbourne's west, less than 50 per cent of the population have completed high school, and less than 10 per cent have completed a bachelor degree. We also have a very large migrant and culturally and linguistically diverse community, with over half of the resident population in Melbourne's west speaking a language other than English at home. I am talking of families like my own.

In this context, TAFEs are particularly important to Melbourne's west as providers of tailored employment training—often addressing skills gaps or deficits in basic education. The Victorian Liberal government's cut of $170 million in funding allocated to TAFEs to meet their community obligations, promote social inclusion and provide support to students from disadvantaged backgrounds, has particularly hurt Melbourne's west. One result of these cuts has been the retrenchment of more than 13 full-time youth and education support workers at Victoria University. These student support roles are particularly important for institutions like Victoria University, which support large numbers of students who are either the first members of their immediate families to engage in tertiary education or who come from disadvantaged backgrounds. These students often require a little more holistic support early on in their studies to ensure that they are able to make the challenging transition to tertiary study. These students often do not have the experienced support networks enjoyed by more privileged students and, as such, are at risk of dropping out of tertiary education early in their degrees.

More broadly, Victoria University, the primary provider of higher education in Melbourne's west, has been substantially impacted by the cuts in VET program subsidies by the Victorian Liberal government. Cuts to VU's program-subsidy funding constitute over 25 per cent of the total revenue of VU's TAFE. As a result, VU has been forced to undertake major retrenchments of its TAFE teachers and support staff. As VU is a major employer in Melbourne's west, this has also had obvious flow-on effects for the broader economy of the region. Cuts in VET fees in Melbourne's west have also had an impact on the fees faced by prospective students. When coupled with the Liberal government's decision to remove caps on VET student fees, the cuts in VET funding have had the inevitable consequence of pushing student fees higher.

TAFE providers are forced to increase fees to compensate for lost government funding in order to remain viable, with consequences for the accessibility of education for students from disadvantaged backgrounds.

A further consequence of the Victorian Liberal government's cuts to VET funding is the knock-on effect that these cuts have on the accessibility of university study in Melbourne's West. As students from Melbourne's West are statistically more likely to come from lower socio-economic status backgrounds, they rely heavily on alternative pathways to university study—including VET programs, in particular.

Of particular concern is the state Liberal government's decision to dramatically reduce funding for VET Certificate I and II courses. These courses are generally not vocational in nature, but instead are used by disadvantaged students as bridging courses to further study. Limiting access to VET programs in Melbourne's West therefore has a pipeline effect of limiting access to university study for students in the region. The cumulative effect of these changes is to further entrench educational disadvantage in Melbourne's West.

The Abbott government tells us that the age of entitlement is over and that our young people must earn, learn or starve.

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