Zali Steggall (Warringah, Independent) Share this | Hansard source

I rise today to address this House on a deceptively simple yet incredibly important bill, the Trade Support Loans Amendment Bill 2023. It's accompanied by the Student Loans (Overseas Debtors Repayment Levy) Amendment Bill 2023. So what are the trade support loans bills? Trade support loans are interest-free income based government loans that act as an incentive for people to complete their training in priority trade occupations. The loans are interest free while you are studying but then are indexed by CPI. Provided studies are successfully completed, the amount to be repaid is discounted by 20 per cent. I will return to the question of the CPI indexing later in my speech, as we know that is problematic across a number of areas.

What trades are supported in this proposal? Currently, the occupations included are limited to the traditional trades. This limitation does not serve the new economy, I would say, and does not achieve equity and certainty, and certainly does not benefit a whole range of occupations where Australia has a desperate and current identified need. So to remove current limitations, the Trade Support Loans Amendment Bill allows the minister, by legislative instrument, to extend the types of occupations that will be covered and that will enable trainees to qualify for this type of discounted loan whilst completing their training and studies.

What are the changes being made by this legislation? This expanded list of occupations, to be called the Australian Apprenticeships Priority List, has the potential to dramatically expand eligibility for loans to apprentices and trainees working in a very broad range of occupations that we know are subject to skills shortages. Australia's skills shortage is the second highest in OECD countries. We have been advised that the list will include occupations such as early childhood education, aged care and disability care but also will include occupations such as enrolled nursing, personal care assistants, therapists, dental technicians and many more.

The inclusion of these occupations where current shortages exist is to be applauded. We have to recognise that, traditionally, apprenticeships and traineeships have been overwhelmingly in male dominated occupations. Only a very small number have been available in occupations that are more female focused. So expanding this list to create some gender equity for young people in accessing the scheme is incredibly important.

Do the changes proposed in this bill match the need? The Australian Apprenticeships Priority List is a real crux of the change in this legislation. Getting this list right places a substantial and ongoing responsibility on the minister to ensure that the list is sufficiently expensive and reflective of current needs as well as anticipating future needs, and, realistically, it needs to remain dynamic to enable us to meet future challenges.

What can we do to ensure the list becomes anticipatory rather than purely reactive? Getting it right requires understanding of and responding to the breadth of current needs and opportunities. Getting it right also requires anticipating what the new economy needs are going to be now and well into the future. The February 2023 Labour market update lists the top 20 occupations in high demand nationally. These include a range of ICT disciplines from chefs to construction managers, retail managers, advertising and marketing professionals, physiotherapists and gardeners, so the needs are very broad.

The Labour market update also noted that it's important to recognise that there are many more occupations of key significance to the economy and the wellbeing of Australians. The need for additional workers in the new economy will include, for example, electricians with specialties such as heating, ventilation and air-conditioning, and, depending on what the government wants to do with our metals processing sector, metallurgists and other trades involved in the processing of critical minerals. The need for STEM qualifications tops every list.

What are the benefits? The people and businesses in Warringah, for example, have been crying out for such changes. Many of my Warringah constituents have raised the challenges faced in employment, and in operating and building businesses because of skills shortages and the difficulty in accessing talent and workforce. This bill will benefit many businesses around Australia, and also in Warringah—as well as Warringah residents and all Australians. There will be an increased number of Australians who will be able to afford occupational training. Those already in training and facing hardship will be able to get discounted loans to ease that hardship. Those in training are more likely to complete their training because of the 20 per cent deduction for completing their apprenticeship or traineeship. That is the incentive—the carrot to get through. Currently, the statistics for completion are simply not good enough, and we are wasting resources in training up but not getting that completion factor.

There will be increased choice in careers due to the broadening of occupations supported and by increasing the accessibility to those occupations. And there will be increased availability of trainees and qualified people for business and industry to employ. The bill will support the new economy by encouraging sustainable and inclusive economic growth; by contributing to the reduction of inequities, in particular gender inequity; and by boosting workforce participation by addressing the barriers for women, people with disabilities and low-income earners. It will reduce significant disadvantage by abolishing the current emphasis on favoured male-dominated industries; by pursuing broad based economic growth and job creation; and by embedding positive government interventions to support inclusion and sustainable growth.

But the opportunity for more is there, so what else should the government be addressing? This bill is a critical step, and I encourage the government to expand and extend its support to the new economy by providing benefits that are far-reaching and which will enable Australians to prosper into the future. We should aim to address our fall to 25th in the Global Innovation Index—in 2018 we were at 17th and we're now at 25th—through an expanded emphasis on skilling the broadest range possible. Innovation will play a huge role in the future of the Australian economy. Equipping and upskilling new and existing workers for future jobs with STEM skills will be a key enabler for Australia to embrace new economy opportunities. And important contributions to the workplace and the economy flow from those who are re-entering the workforce after an extended absence, but it's easy for them to be overlooked. They'll need not only the financial support possible under this trade support loans bill but they're also crying out for a simplified training pathway to facilitate their return to work. That includes more tailored training offerings which more accurately take into account their earlier training and their incredible wealth of on-the-job experience. This is where gender equity plays a huge role, as we know that there's a huge number of women who, through caring responsibilities, have left the workforce and who want to return to the workforce and paid employment, but who are limited by that access to retraining and the difficulty of those training pathways.

And we have to talk about indexation; it's a really critical issue. CPI is applied to all student loans, including loans under this Trade Support Loans Amendment Bill. There has been a concerning increase in student debt over the past two years because of above-target inflation and, hence, above-average indexation. We've gone from 3.9 per cent last year to 7.1 per cent this year. The rise is creating great consternation among the younger generations, who are facing higher costs of study and higher levels of debt, and now the debt is growing at rates faster than they can possibly pay down. This year the increase will rise faster than the average home loan, and nearly double the rate of wages growth. While I hope that this year is an anomaly, I think it has shown that the system is actually not quite right and that it's time for the government to look at that. We can't afford to put additional burdens on younger generations who are already struggling with the cost of living and the housing crisis. Graduates in the 20 to 29 age group will take the brunt of this CPI increase, with their increase rising by an average of some $2,069 on the median debt of a bit over $29,000 from study. With an increasing number of jobs requiring further education and training into the future, we must seek ways to reduce the fear of a debt burden on our younger generations and on older Australians seeking to retrain and re-enter the workforce.

Alternative solutions need to be considered to relieve this burden. One potential mitigation would be to consider changing the indexation rate to be the lower rate of either the consumer price index or the Reserve Bank of Australia's official cash rate over the course of the year. To give the House an example of what that would do this year: it would mean indexation would be approximately 2.66 per cent rather than the planned 7.1 per cent. Alternatively, the government could also consider linking the wage price index—indexation would be linked to the wage price index—which is as it's done in the UK, for example. That would create a link between ability to repay and increase of debt.

As the government considers further incentives around education, it must consider the disincentives to study that exist in the system and address the fear of the debt burden incurred by those training, whether it be through tertiary education or apprenticeships and traineeships. Fear of that debt burden is real. It is a very prominent part of decision-making and we must, in this place—and I urge the government to—do more to address that fear and concern, and deal with the debts incurred and how they will exacerbate future cost-of-living pressures for young Australians. I believe the current statistics are that we have about four people working in Australia, in the system, for every one person that doesn't work. In 20 years I believe it's anticipated that we will change that ratio to about two people working for every one person working. That says our system needs to adapt and change, and that we must incentivise training and participation in the workforce.

I commend the government on the Trade Support Loans Amendment Bill 2023. I will support this legislation, but I encourage the government to be dogged in pursuing innovation and innovative solutions to address training and workforce issues, as I have highlighted, and to maximise workforce potential and contribution in our emerging new economy. Do not just look to immigration as a way of solving jobs and skills shortages, because that creates a whole range of other problems when it comes to infrastructure, housing and other access. We should first make sure we are maximising utilisation and participation of Australians here now. That means addressing gender inequity issues and opportunities for training and access to paid employment. I urge the government to consider further action in this fight. Thank you.

See this speech in context