Henry Pike (Bowman, Liberal National Party) Share this | Hansard source

It is an interesting topic that we're debating today, the Free TAFE Bill 2024. It's one that I think should be important to all members across the chamber. We heard a bit there from the member for Gorton about what the overarching objective of the policy is. If we forget about the partisanship for a moment I think that we can boil it down to the fact that we need to determine a way, within this building, to ensure that the future needs of Australia's economy are met. I think the question needs to be: how do we do that in the most efficient and effective way that we possibly can?

It's not just about giving those individual Australians the opportunity to make more of their opportunity in life—to earn more money and to create more opportunity for themselves and their families. It's also about the broader economic opportunity for Australia. How do we ensure that our young people—and in many cases, not-so-young people—have the skills required to boost our economic chances, to make us competitive internationally and to meet those needs in our communities?

I think about the skill shortages that are currently in place within the electorate of Bowman. We've got a massive housing shortage at the moment. I know that's not unique to me but a problem we're facing across the board. A lot of that challenge, of course, are issues around planning and approvals at the local government level, but a large part of it—and I talk to a lot of building companies within my electorate and my background is in the property sector—is those skill shortages. They can't find enough people to build the homes that they need. That's why it's important we try to tackle that. And it's important that we make sure, when we invest taxpayer funds in initiatives that are seeking to address it, that it's done in the most prudent and most effective way.

Unfortunately, as the bill currently stands, the coalition will have to vote against it, because what we've uncovered is that this promise—we'll acknowledge that this was a promise of this government—is unfunded. It's going to permanently increase Commonwealth spending by $500 million a year, and it's going to commit the Commonwealth to funding fee-free TAFE—I note that's a set of three words that's a challenge to say quickly—before there's been an opportunity to properly evaluate the effectiveness of the program. We've got some serious concerns about the effectiveness of it, and I'll be outlining a bit of that today.

I think we uncovered in Senate estimates recently that there's been no review conducted into Labor's fee-free TAFE expenditure to date, which is quite remarkable given that we've reached a point where there has already been a billion dollars of Commonwealth investment in this program. We think it's not appropriate to legislate a commitment to permanently fund a program without telling Australians how much it will cost, reviewing how it's working and how we can improve it, and determining what the dropout rate is and how we can prevent it from being as high as it is. I think we owe it to Australian students to be upfront about that and to demonstrate that we are investing in them but doing it in a way that's responsible for the long haul.

Part of our problem with this legislation is that we want to support every student, not just some. There are some great TAFE institutions across this country. I've got a wonderful TAFE at Alexandra Hills, and in a minute I'll talk about what the former federal government invested in that institution. But we want to ensure that, regardless of whether individuals—a local Redlander or any local who's represented within this parliament—want to undertake their training within a TAFE institution or through an independent provider within their area, they are given an appropriate level of support and that the federal government isn't putting its thumb on the balance, which will create poor outcomes overall.

The problem is that this policy essentially directs funds to just one part of the training sector. I recognise that there are other federal investments made in private institutions, but this is a significant investment and to favour just one element of the whole training ecosystem is not helpful. We're not anti-TAFE. We're just concerned that federal funding through this program is going only to the TAFE institutions.

Of course, we've heard a bit of debate within this chamber about the dropout rate amongst those undertaking these fee-free TAFE courses. We understand that the dropout rate could as be as low as 13 per cent. Then you look at comments recently from the South Australian skills minister. He gave evidence to the South Australian parliament on 30 October that in South Australia the dropout rate for free-free TAFE is 12.5 per cent. This definitely gives us a clue as to what could be happening across the rest of Australia.

I want to turn to a report the Productivity Commission have released, which is the report of their five-year productivity inquiry. They talked about options for providing subsidy allocations in the VET sector.

I won't read the whole thing verbatim, but I'll talk about their key headlines. They talked about how free tertiary places carry a fiscal cost and are unlikely to improve outcomes. This is from the Productivity Commission, who we task, in this country, with taking a look at the broader picture of these policies and determining what is the most effective way for a federal government to invest. It said that fee-free TAFE policies are also unlikely to provide community-wide benefits, as suggested by the outcomes of this policy in Victoria. It went on to note:

Although enrolments increased at TAFEs, this probably reflected substitution from students who would have otherwise studied at private and community providers. For example, there were fewer enrolments in the Diploma of Nursing at non-TAFE providers, against the trend of previous years. Some private providers claimed that many students were feeling a financial pressure to study at TAFE.

It also went on to note:

It weakened competition as the market share of TAFEs increased at the expense of private and community providers, diverging from the national trend.

So we had seen the national trend going in the different direction, and, due to the market manipulation in Victoria by the state government's policies, we saw that flip, and that's not necessarily a good thing, as we've uncovered with the—there are some dodgy providers out there. I think we all admit that, and I think governments from both sides of the chamber have been working to try to knock them out of the industry. But there are also some bloody good providers. There are some really good providers in this country. There are many in my electorate, and they do a great job in training our young people.

The Productivity Commission report went on to say:

There is also no evidence that the quality of delivery is higher at public than private providers …

And I think this side of the chamber acknowledges that. It went on to conclude:

Therefore, free TAFE is not a means to increase quality of outcomes.

In that context, the additional cost of funding free TAFE would be better spent elsewhere, potentially on widening access to VET, other forms of skills acquisition or other ways of improving the education system.

While I'm referring to the 5-year productivity inquiry report from the Productivity Commission, I want to also note what it had to say with regard to student debt, which is, of course, a matter that has been debated in this chamber at some length. It described it as a 'purely redistributive measure', and said:

As in the case of free education, it would be regressive, benefiting those who have attended university and tend to have higher incomes, with the largest payments going to those who have completed courses with higher expected lifetime earnings, such as medicine, law, and engineering …

There you go. There should be some reading over Christmas for the government in relation to Productivity Commission reports.

Looking at the questioning of departmental officials at the Senate estimates that occurred over recent weeks, there has been no performance review of the fee-free TAFE policy, and one will not be completed until June 2025, after the federal election—I'm sure. This means that Labor is effectively committing to permanently fund a program without knowing whether this is actually having the effect on the ground that we want it to have. The minister did answer a question last week in relation to this, when he said that it takes up to four years to get usable data out of these completion number stats. I find that remarkable. I think that, if we're investing at this level as the federal government, we should be able to insist we get quicker data than that and get a proper sense before we commit fully, to determine whether this is effective, if there are other means by which we could be doing this and how we can ensure that we're not getting a dropout rate that's concerning to us.

While fee-free TAFE is only delivering what we understand to be a completion rate of 13 per cent, industry led training providers have completion rates of around 80 to 90 per cent. Industry sources suggest that free TAFE fail rates could be as high as 55 to 60 per cent across many courses, and some in the training sector have indicated some courses could have failure rates as high as 70 to 90 per cent. In Victoria, it's worth noting that just one per cent of those who registered for a free certificate IV in plumbing successfully completed their training.

I want to reflect a bit on the coalition's record in terms of backing young Australians, and even older Australians, to develop the skills that they need. We don't want to just back one side of the sector; we want to back the whole sector.

The coalition handed the Albanese government a skills and training system not just trending up but powering ahead on the back of record investments guaranteed by a strong economy. The policies of the coalition invested over $13 billion into skills over the final two years of the government alone, representing the most significant reforms in Australian skills in over a decade. Trade apprentices in training hit record highs in the final months of the coalition government, and, as of June 2022, there were 429,000 apprentices and trainees in training and 277,900 commencements. Data release from the National Centre for Vocational Education Research confirms that Australia has lost almost 85,000 apprentices and trainees from the national training pipeline since this government came to office—effectively one in five. The data shows the number of apprentices in training has dropped to around 350,000 in March 2024, and over the same period new training commencements dropped to just 166,200 in March, meaning that over 100,000 fewer apprentices and trainees have started a trade or skill since Labor took office—or a drop of about 40 per cent. The important thing is there is a lead time with these. We want to make a dent in the skills shortage, and, if training numbers are dropping off, that will have a significant impact.

I want to touch on some of the coalition investment we have seen in my neck of the woods. The previous government were able to invest $1.2 million for an upgrade of the electrical labs at Alexandra Hills TAFE facility. That was part of our $500 million Revitalising TAFE Campuses Across Australia program. It was a pleasure for me to join the then minister there to see the first trainees in that facility, in the dying days in the last term of parliament. It was the first stage of the new electrical engineering upgrades, including a new electrical wiring bay workshop, as well as classrooms and soldering facilities. This upgrade has supported the doubling of students at that TAFE. That's the sort of meaningful investment that businesses in my electorate need to get those trades to build the homes and make the investments within the property sector that we desperately need in my neck of the woods. We've seen up to 840 students use the facilities there this year. That's a fantastic improvement from the facilities that were there before, which were quite outdated.

The rhetoric that we've been hearing from those opposite around the fact that the coalition don't support the TAFE sector, that we somehow want to demonise those who are going to TAFE or training people at TAFE doesn't match the reality on the ground. Most of the investment was really worthwhile, and the key thing here is we want to be looking after all students, not just a chosen few.

In my final seconds, I'll just reiterate that we don't want to have to support a system or scheme that is underfunded, that's going to permanently increasing expenditure by $500 million a year and that, currently, has not been reviewed. We don't know how effective it's going to be.

Debate adjourned.

See this speech in context