Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I rise to speak on the Trade Support Loans Bill 2014 and the Trade Support Loans (Consequential Amendments) Bill 2014. As elected members of parliament, we have the right to come into this place and argue for what we believe in. We have the right to stand up for our constituents and to rally for their cause. We have the right to use anecdotes and stories to build our case and argue our point as strongly as we possibly can. No-one should ever object to that. It is the contest of ideas that makes our parliament work. But what we should never be entitled to do is come into this place and engage in reckless scaremongering when that is likely to have adverse effects on innocent people. That is what we have seen in the debate on education, trades and learning.

We have had that much scaremongering from the opposition that I have received letters from constituents. They have listened to this scaremongering and have written to me. They think that their children's future has been ruined or their children's future has been taken away because the coalition has been cutting education, loading them up so children cannot afford to go to university anymore, doing terrible things to the trade courses and stopping them from learning a trade. We know that nothing could be further from the truth. This coalition government is increasing spending on education—eight per cent this year, eight per cent next year and eight per cent the year after.

The scaremongering we have heard that is deterring people from going to university is an absolute disgrace. All of those on that side of the House involved in that scaremongering for political purposes should hang their heads in shame. The message we should be sending to our young people is that today they can get into university without paying one cent upfront. They can take a loan to pay for their university course and the taxpayer will actually pay 50 per cent of the cost of that loan. Yes, they will have that loan to pay off in the future, but—and this is the most important 'but'—if they are able to get a university degree, they will earn over their lifetime, on average, 75 per cent higher wages than someone who leaves at year 12. Over their life that will add up to, on average, $1 million more in wages that they will earn. That is the advantage that we give to young school leavers who are thinking about going to university. That is the message that we should be giving them. We should be doing everything we can to encourage them, and that is what the coalition has done.

The policies we are introducing will create 80,000 extra places by 2018. We want to see extra people entering university and doing trade courses because that is what the future of our country needs. Every member of this parliament has an obligation to talk up the opportunities and encourage high school students to do a trade or get a higher education degree or diploma because, although there is a cost, they will be paid back many times over their career.

It is important when the government introduces legislation that it sets out what the problem is that we need to address. We do have a problem in this country with apprenticeships. We have a 50 per cent dropout rate, so 50 per cent of all the young kids who take up a trade and start an apprenticeship will not complete that apprenticeship. That is a significant problem that we need to address. One of the reasons the problem exists is that when someone works for a small business as an apprentice they get a very low wage. That is because when they start that apprenticeship they are not actually adding much value to that business. Of course, down the track they will; as their skills progress they will add more and more.

When they start they are on a training wage. In today's society it is very hard for them to live on such a wage. When apprentices see their mates earning more money than them and having money to go out to clubs and bars and to pay for a car, many people who have started an apprenticeship say: 'It's all too hard. I'm getting paid too low a wage. I'm going to throw the towel in'—and 50 per cent of them do. That is harming not only the country but them as well. The kids I went to school with who went on to do a trade—they became plumbers, carpenters and electricians—are the ones today with the biggest houses, the biggest boats and the best cars. They have all done very well.

We have to encourage them. We need to help those students get over that first hump when they start their apprenticeship and are on a low salary. Once they get set up they are going to have a very prosperous future. That is the message we should be spreading. We should be encouraging them. We should be supporting them in those first years, and that is exactly what these bills do. Previously we had the Tools For Your Trade program, under which we had a 50 per cent dropout rate, that provided apprentices with just $800 for the first three months and $1,000 at 12 months. In comparison, this program provides someone in their first year with an extra $8,000. It is frontloaded to encourage them to get into that course. That helps overcome that first year and gets them up and running, gets them started.

I want to go back to the scaremongering we have heard. Unfortunately, it has continued in this debate. There is concern about debt. I would like to quote a few comments firstly from the whingeing, whining and carping contributions of other members. The member for Parramatta complained that this will create 'debt as far as the eye can see'. She said:

… we see here a government that is prepared to see our young people start their lives with rising debt …

Hello? Where was the member for Parramatta over the last six years when the government she was a member of was running up record debt as far as the eye could see? That debt is actually owed by the people of Australia. We know that the previous government, which the member for Parramatta was a member of, delivered deficits. They went into debt and between 2008-09 and 2012-13 they had a combined deficit of $191 billion. That was all borrowed money. As far as creating debt as far as the eye can see is concerned, if nothing is done over the next 10 years, that debt will grow to $667 billion. So if there are no policy changes, that debt will be inherited by our children and our grandchildren.

Then there is the contribution from the member for Lalor. She is again complaining about debt. She says they will end up leaving school with debt already hanging over their heads. That is exactly right, that is what the previous government has done. Each Australian's share of the debt that they created is today $13,500. That is for every man, woman and child, every pensioner—people that will never have the capacity to earn money to help pay that back. That is what they have done. The member for Lalor also said, 'I am concerned about the younger acquiring these debts.' I would hope that the member for Lalor would stand up and use those same comments and support the government in the plans that we have to try and get the debt and deficit disaster that we have inherited under control.

Then there was the member for Bendigo, again carping and whining about debts. She is saying, 'The government is saying you just cannot get yourself into further debt. That is simply not good enough.' She went on, 'Saying that is fine. You can get yourself into $100,000 worth of debt. It is not good enough.' If nothing is done, the average family of four in this country will owe $100,000. The average family's share of the nation's debt will be $100,000 and interest repayments on that debt will be $5,000 a year. How in 10 years time is the average family of four going to find $5,000 to pay the interest on the debt? And that is every year. That is the burden that we are putting on our children and grandchildren to pay every single year until they start paying that debt off.

This is an important bill. We need a training system that provides the skills that industry needs and delivers real jobs. That is why we on this side of the House are committed to building a high-quality and nationally consistent Australian apprenticeship system which actually responds to the needs of employers and the economy and supports apprentices. The scheme is all about giving young Australians a hand up, not a handout. There is a big difference. Not only that, the handout that the previous Labor government was giving them was all borrowed money. We want to give a hand up to those young apprentices so that they can actually get started on their trades course, get on the way so that they can have a prosperous future.

The trade support loans that this bill refers to will provide substantial support to eligible apprentices to assist them with the costs of living and learning while undertaking an apprenticeship. The trade support loans of up to $20,000 will be available to apprentices studying in skills needed areas. The trade support loans target occupations on the national skills list such as plumbers, diesel mechanics, electricians and fitters as well as priority areas in horticulture and agriculture. The apprentices will have access to the greatest financial support in the early years when they need it most. They can access $8,000 in their first year, $6,000 in their second year, $4,000 in their third and $2,000 in their fourth. The loans are flexible to meet the needs of each individual. If you do not want to take that loan you do not have to do. For instance, an apprentice can opt in for six months only to buy their tools. They could save up the first year's payments to buy a second-hand vehicle and then opt out of further payments or they can take the full loan to cover their living expenses throughout the years of training. As an incentive to complete their training, apprentices who finish will be eligible for a 20 per cent discount on their loan, which if they take the full $20,000 is $4,000. It is like $4,000 in their pockets. That is the encouragement we are giving to make sure they get through and complete their course. The loans are interest-free but are indexed to the CPI.

Subject to the passage of this legislation, which we hope will also pass in the other place behind us, apprentices will be able to opt in for trade support loans from 1 July 2014 in line with the year of their apprenticeship. They can opt out of their loan whenever they wish if their needs change. For instance, a second year apprentice will be eligible for the second, third and fourth year payments if they wish to receive them.

We believe that apprentices, like university students, are capable of managing contingent loans. It is also very important to note that they will not actually have to make any repayments until they have a sustainable income of more than $50,000 a year. My advice to someone who is thinking about getting into a trade is to grab this with both hands, even if you use the money to get yourself up and running, get yourself started. Alternatively, put the money in, take the government's money, put it in a term deposit, take the 20 per cent credit when you finish your course, and when you have finished your trade and you have got on the ground you can use that money to start your own small business. This is a tremendous incentive for young people to take up an apprenticeship. I fully commend this bill to the House.

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