Stephen Smith (Perth, Australian Labor Party, Shadow Minister for Education and Training) Share this | Link to this | Hansard source

The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 appropriates funds on behalf of the Commonwealth parliament to vocational and educational training, to the government’s so-called Australian technical colleges. As a matter of principle, any expenditure by the Commonwealth to enhance vocational education and training and skills, whether that is in the senior secondary school level or in the tertiary level, is to be welcomed. However, we have such grave reservations about the effectiveness of this allocation of Commonwealth revenues that, whilst we will support the legislation and not oppose it, our reservations will be detailed in a second reading amendment which I will formally move at the conclusion of my remarks.

This is not the first occasion that the House has been seized with legislation in respect of the government’s Australian technical colleges; indeed, it is the third occasion. The position which Labor adopts on this occasion is the same as it did on the previous two occasions, which is to not oppose implementation by the government of its 2004 election commitment but to express, both by way of debate and by second reading amendment, its very grave reservations about the effectiveness of the government’s election commitment and the government’s measure.

The government announced the creation of its Australian technical colleges during the 2004 federal election campaign. That announcement was a political response during a political campaign to a political problem that the government had, and therein lies the basis for our very grave reservations about the effectiveness of this program and the effectiveness and value of the approach that the government has taken and the money that it is expending. Because it was a political response to a political problem, it is not necessarily the best public policy solution.

We know, because it has been detailed regularly in this place—most importantly, detailed by the Reserve Bank of Australia—as one of the reasons why there was and is upward pressure on interest rates, that there is in the Australian community a serious skills crisis. A serious skills crisis does not come along just because we might have a boom in the minerals and petroleum resources industry which people were not necessarily expecting to be of that magnitude or extent; it comes along because of neglect and complacency over the long term. Unquestionably, this government has been both neglectful and complacent when it has come to the skills, education and training of our workforce.

It is acknowledged, belatedly, by the government that there is a skills problem in the Australian community. As is so often the case with this government, the only time that it chose to act was when it was under political pressure. This is another illustration of the government seeking short-term political cover for a long-term economic or social problem, an issue which goes to the long-term international competitiveness of the Australian economy, an issue which goes to our long-term future prosperity as an economy and as a nation. It was a short-term political fix, and therein lies the reservation about the effectiveness of that fix.

I think it is important to make some general remarks about the nature and the framework of vocational education and training in Australia. In my view, the only effective approach to take to enhancing vocational education and training is by the Commonwealth taking a leadership role and acting in cooperation with the states and territories and with industry. That is the most effective way of ensuring that we cater for our long-term skills needs and requirements. The essential starting point for the deficiency in the government’s program is that, having neglected and been complacent and having, over its 10 long years in office, not funded skills training and vocational education and training enough—on the contrary, having removed funding from that area—when it came to effect a political fix, it did so by riding roughshod over the states and not playing a partnership or cooperative role with the states.

Therein lies one of the economic, financial and administrative inefficiencies of the government’s approach. The Australian technical colleges are stand-alone facilities. They are not integrated with nor do they bear any relationship to what the states are doing through the traditional TAFE sector or indeed through TAFE colleges now, working in partnership with industry either at a state or at a local level. So an essential deficiency and criticism that Labor has of the government’s approach in this area is its ignoring of the states and ignoring of the TAFE sector. I do not think even the states or the TAFE sector argue that the states themselves or TAFE have been perfect in this area, but that is not to say that you ignore the instruments which remain effectively responsible for about 70 per cent of the delivery of skills training and vocational education and training in this country. So one fundamental deficiency of the government’s approach is that it is not working in cooperation with the states.

The best way of ensuring that we meet our skills and training needs into the future is by the Commonwealth working cooperatively, through the government of the day, with the states and territories and working cooperatively with industry. This is the best way of ensuring that the Commonwealth’s priorities, the Commonwealth’s needs—those areas which the Commonwealth regards as priorities—are the focus of our vocational and educational skills and training. The approach that the government has taken of a short-term political fix, ignoring and riding roughshod over the states, is a political solution that it fell upon in the course of the 2004 election campaign. What preceded that was a long period of time where it had failed or refused to cooperate with the states and failed or refused to invest in technical and further education.

Let me now move to some of the detail of the legislation. The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 is the second such amendment to the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Act 2005 in as many years. The first amendment bill brought forward the funding of the proposed 24 Australian technical colleges from 2008-09 to 2006-07. The bill before us today seeks to increase the total funding appropriated under the act by $112.6 million from the $343.6 million to $456.2 million over the period 2005 to 2009. It does this by amending column 2 of the financial assistance table under subsection 18(4) of the act. The government says it needs this extra money because of cost increases associated with the start-up of the colleges. As I have indicated, the $112 million is on top of the $340-odd million already allocated to the start-up and running of the colleges.

The fact is that this money represents a significant cost blow-out of the government’s program. This should not be surprising because, by the government’s own admission, it has embarked on a costly project to essentially duplicate vocational education and training infrastructure that exists elsewhere across our vocational education and training system. Instead of looking at joining with vocational education providers already established, in particular the state TAFE systems, and tapping into the existing expertise there to maximise training outcomes, the government has embarked upon a course of setting up its own stand-alone system. That is where the inherent inefficiency comes from and that is where the additional costs are found. The government’s rationale behind the creation of the ATCs program has been twofold: firstly, to isolate and attack the states and territories in an area that has traditionally been one of the responsibilities of the states and, secondly, to try to find a political fix to a policy problem that the government has complacently neglected over a long period of time.

Since the government came to office, over 325,000 people have been turned away from TAFE as a result of a lack of investment by the Howard government. The Australian Industry Group recently estimated that we would require 270,000 more trained people to fill the current skills shortage. A snapshot of the state of our skills shortage is found in the January skilled vacancies index, which shows that it is clear that our current skills crisis is not abating. Skilled vacancies in January rose by 1.4 per cent over the already high December reading. Compared with January 2006, vacancies in the automotive industry in January 2007 rose by 12.5 per cent; for cooks, by 5.3 per cent; for the food industry, by 10.5 per cent; for the printing industry, by nearly 60 per cent; and, for hairdressing, by over 10 per cent.

We have a shortage of skilled and trained workers for two reasons: firstly, the government has actually cut public investment in vocational education and training and, secondly, it has complacently neglected the crisis coming down the track. You only have to look at the OECD figures and analysis to find that public investment in tertiary education, in both universities and technical and vocational training, has declined by seven per cent over the period that the government has been in office compared with competitor OECD members, whose public investment has increased by nearly 50 per cent. In 1997 the government cut funding to Australia’s principal vocational education system, TAFE, with Commonwealth revenues in vocational education decreasing by 13 per cent from 1997 to 2000 and only increasing by one per cent from 2000 to 2004. Vocational education and training funding has also fallen relative to other areas of the education sector.

In effect the amount of vocational education and training funding per student has decreased, with the result of adversely impacting on the quality of vocational education those students receive. The AiG identified in its Manufacturing futures report released in the second half of 2006 that real expenditure per hour for vocational education and training has declined in recent years. Today funding is lower in real terms than it was in Labor’s last year in office. The National Centre for Vocational Education Research shows that real expenditure per hour declined by 16 per cent between 1997 and 2001 and increased only fractionally between 2001 and 2003, leaving a net real expenditure decline. The latest financial data released just last week by the NCVER shows that the Commonwealth’s contribution to overall vocational education and training revenue has declined as a proportion of total revenue down from 22.4 per cent to 22 per cent. TAFE Directors Australia have also identified the fact that, in terms of revenue expenditure, vocational education has fallen behind other education sectors in both aggregate terms and on a per student basis, despite it being the area that will bear the greatest responsibility for the skills, vocational education and training development of our workforce.

I have outlined some of the important reasons why Labor has very grave reservations about the application of these funds. Let me now read to the House my second reading amendment to reflect some of the detail of those reservations. I move:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House recognises that the present Government has been complacent and neglectful about the Australian economy by:

(1)

presiding over a skills crisis through its continued failure over more than 10 long years in office to ensure Australians get the training they need to get a skilled job and meet the skills needs of the economy;

(2)

failing to make the necessary investments in our schools and TAFE systems to create opportunities for young Australians to access high quality vocational education and training, including at schools;

(3)

failing to increase the number of school-based traditional apprentices and provide funding support for schools in taking up the places;

(4)

creating expensive, inefficient, stand alone colleges, without cooperation with the States within the existing Vocational Education and Training framework;

(5)

riding roughshod over the States and Territories in establishing these Colleges, despite the role the States and Territories play in vocational education and training;

(6)

making Australian industry wait until 2010 for the Australian Technical Colleges to produce their first qualified tradesperson;

(7)

failing to provide support to other regions that have skill shortages, but are not listed for a Technical College”.

I dealt with some of those issues in the course of some of my earlier remarks, so I will now move to some of the areas that I have not covered.

The creation of expensive stand-alone colleges without seeking to cooperate with the states and without seeking to contemplate the use of the existing vocational education and training framework has led to a cost blow-out in the program. On any measure, the creation of a stand-alone facility is expensive. Instead of cooperating with the states and instead of seeing whether existing facilities could be enhanced or refurbished, the Commonwealth has decided to go it alone. That is at the heart of the cost blow-out and the expenditure here.

I note remarks from the new Minister for Vocational and Further Education yesterday indicating some optimism about an acceleration of enrolments, the number of colleges up and running and outcomes. Even on a good day, it will not be until 2010 that the first qualified skilled workers will emerge from the ATCs, in the face of a skills crisis and the demands—some of which I have detailed from the Australian Industry Group. There are 24 to 25 colleges throughout the Commonwealth, which does not go anywhere near meeting the needs in all of the states, regions and local areas so far as vocational education and training is concerned. Anecdotal feedback on and experience with these expensive stand-alone colleges indicate a vast spend on physical infrastructure, and that their creation has been costly and has not been done in a way which is either coordinated with or integrated with the state system.

There is also anecdotal evidence and reports that enrolments in many of these facilities are quite low. As late as yesterday, I noticed in the Illawarra Mercury a short article under the heading ‘College fails to fill classes’ which read:

The Illawarra’s newest technical college is still looking for students one week after classes started.

So far, 38 students have enrolled in the region’s Australian Technical College, which officially opened last Monday.

And that is just one illustration that I have had drawn to my attention. So we have low enrolments, no graduation of skills until 2010 and waste and expense by riding roughshod over the states and going it alone.

It may well be that some of the individual colleges are actually successful. Frankly, that would be more by accident than design and because the moons happen to be in alignment rather than through good public policy, good public administration or good planning. One of those colleges may well be the ATC in the Pilbara, which is aimed at the minerals and petroleum resources industries of Western Australia. That one may work because the moons happen to be in alignment. A minerals and petroleum resources boom in exports to China has seen Western Australia—on the last set of state final demand figures I saw—with economic growth of 14 per cent. The relevant industry chambers in Western Australia—the Chamber of Minerals and Energy and the Chamber of Commerce and Industry—have put their very strong support behind the need to expand the capacity of Western Australia in skills in the minerals and petroleum resources area generally. And, despite reservations at the state government level that the cost of the project was massive when compared with how it could be done more efficiently, very grave reservations, the state government has got behind that project. That college may be a success, but largely because the moons are in alignment, not because of good thought, good public policy or good planning.

I have made the point recently that, since I became shadow minister for education and the Labor Party’s spokesperson on education, my analysis of the ATCs and my starting point so far as the future of the ATCs goes was to sit down with my state colleagues and have a conversation about whether a better approach might be to fold the ATCs into the state system so that we would at least have some coordination, some integration and some cooperation with the states. That is certainly something that I am having a conversation with my state ministerial colleagues about. I do not believe there is a sensible public policy rationale for the Commonwealth to be starting off its own system without having a conversation with the states. That is precisely what the government did on this occasion—in the heat of an election campaign where it had been exposed politically, as a result of complacency and neglect, as the cause of a skills crisis.

The states have had longstanding responsibility in this area. In my view, the sensible way of moving forward is to do this in cooperation and in conjunction with the states, so that the Commonwealth, in cooperation with the states, can apply its own priorities through an integrated system. So my starting point of conversation with the states and my state colleagues is to see what the reaction of the states might be to folding the colleges—those that are up and running after the election—into the state system as a measure of cooperative partnership in the areas of skills and training, not the Commonwealth riding roughshod over the states and waving a big stick.

I was in the House yesterday at question time when the new Minister for Vocational and Further Education, Mr Robb—the member for Goldstein, who recently replaced the former Minister for Vocational and Technical Education, the member for Moreton—argued and asserted that, if the colleges were to be folded back into the states, employers involved would be shown the door. He went on to say:

As a consequence, the unique and innovative role of training students with skills that are highly tailored to the needs of local employers will collapse. The colleges will disappear if they are handed back to the states. If Labor were to hand back these colleges to the states, history would repeat itself and the status of technical training would be reduced once again to that of a second-class career.

Firstly, I do not believe that vocational education and training or a technical career is a second-class career. Just look at any technically qualified person who is currently working in Western Australia. They are handsomely remunerated and they have very fine careers.

Secondly, that analysis by the minister defies the existence of very strong partnerships with local TAFE colleges, in harness and in conjunction with industry. In my own state of Western Australia, the Challenger TAFE, in Fremantle, south of Perth, is a very good example. It is a strong TAFE college, very conscious of the needs of local industry and working hand in glove with local industry. So to take the view that it is not within the capacity of the Commonwealth, working with the states and through the current TAFE system, to have vocational education and training requirements—whether that applies to secondary school students or to those at the tertiary level who have completed secondary school—working hand in glove with industry is, frankly, a nonsense.

The government has been exposed here. The government, in the 2004 election campaign, tried to effect a political fix. It may well have had some short-term political benefit, but we have been left with a long-term public policy problem that will only be resolved by a much greater investment in education generally; it will only be resolved by a much greater investment in further technical and vocational education and training, but making that investment on behalf of the Commonwealth, in conjunction with the states, using facilities that are currently available—refurbishing and enhancing them. We need agreement between the states and the Commonwealth about priorities and agreement with industry about what the skills needs will be down the track. That is the only sensible way forward in this area, and that will be the approach that Labor adopts in opposition and, subsequently, in government. I formally move the second reading amendment that I have detailed to the House and which has been circulated:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House recognises that the present Government has been complacent and neglectful about the Australian economy by:

(1)

presiding over a skills crisis through its continued failure over more than 10 long years in office to ensure Australians get the training they need to get a skilled job and meet the skills needs of the economy;

(2)

failing to make the necessary investments in our schools and TAFE systems to create opportunities for young Australians to access high quality vocational education and training, including at schools;

(3)

failing to increase the number of school-based traditional apprentices and provide funding support for schools in taking up the places;

(4)

creating expensive, inefficient, stand alone colleges, without cooperation with the States within the existing Vocational Education and Training framework;

(5)

riding roughshod over the States and Territories in establishing these Colleges, despite the role the States and Territories play in vocational education and training;

(6)

making Australian industry wait until 2010 for the Australian Technical Colleges to produce their first qualified tradesperson;

(7)

failing to provide support to other regions that have skill shortages, but are not listed for a Technical College”.

Duncan Kerr (Denison, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Arch Bevis (Brisbane, Australian Labor Party, Shadow Minister for Homeland Security) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Perth has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Alan Cadman (Mitchell, Liberal Party) Share this | Link to this | Hansard source

From the day that the concept of a new approach to trade training and trade education was discussed by the government—beginning with Brendan Nelson, who at that stage was the Minister for Education, Science and Training and raised the significance of technical education—those thoughts have been rejected by the ALP. They have consistently knocked the concept of any change. They have said that the states know how to provide technical and further education. The fact is that they have all been failing  to do that. There are a reduced number of apprentices and trainees, with skills that are sorely needed by Australia. They have failed to recognise this. There has been consistent denigration by the ALP of any proposal for change. There is no doubt that that rejection of any change in or improvement to technical and further education has been shown today, here in the House, by the opposition spokesman.

As I understood it from his speech, here is what the Australian Labor Party intend to do. In government they consistently failed to support technical and further education. So will they do the same thing again if they ever have the chance to govern? Of course they will. The opposition spokesman said today that they would close down the Australian technical colleges and that he is negotiating the process by which that would be done. So a whole band of new and alternative education, a challenge to the status quo, a challenge to the way in which things are done—a combination of industry and education working together, possibly for the first time, in an effective, cooperative arrangement with the flexibility of delivering education programs that are attractive to young people and that provide an opportunity to move quickly into trades when they leave school—will be rejected by the ALP. A rejection of that will, I believe, bring on a conflict that will mirror the current conflict between government and non-government schools. It will also highlight the continual backing of the teachers unions by the Australian Labor Party.

Instead of working out what is best for our students, for our families and for Australia’s needs, and having participants cooperate to get a result, it seems that the Australian Labor Party, by these pronouncements today, have stuck with the old framework. Their attitude is: ‘The states will deliver it, and whatever they want to do will be okay with us because we have no real priorities.’ From the policies repeated today, the intention of the Australian Labor Party seems to be that the states will deal with technical and further education and that we will give them more money to do the same thing over and over again. I think that is a crazy and wrong approach.

One only has to read about the priorities in my own state to see what should be happening there. One only has to look at the way in which New South Wales residents have been let down by their government on these issues. There are 47,000 job vacancies in New South Wales. The demographic changes will cut the size of the workforce in the coming years. There are significant skills shortages in the public sector and in regional New South Wales, despite its poor economic performance. There is an apprenticeship completion rate of 45 per cent in New South Wales.

Victoria and New South Wales have a heap to answer for for the failure rate of their TAFE students. It is about the way in which they present their courses. It is about the way in which they charge. It is all about cost recovery. The system is rigid and incapable of change. Unfortunately, in both of those states, the completion rate is low compared with other states. I think that is a let-down not by the federal government but by state governments incapable of delivering programs in trades and further technical skills that are attractive to young people, who are sorely needed in those areas. Australia has a proud, world-class training system. When our students go to compete at the trades ‘Olympics’ they score extremely well. They beat many other countries time and again. Students from my own electorate have topped their trades in the world.

The Australian government, since about the year 2000, have been trying to discuss with the states how we can do things better. The frustration of Brendan Nelson, the current Minister for Defence, day after day at the dispatch box trying to persuade, cajole, argue with and threaten the states into doing more was just not bearing fruit; in fact, the number of apprenticeships that this government was able to produce by 2004 had grown to approximately 400,000, nearly three times the number of apprentices who were in training in 1995 under the Australian Labor Party. The number then, in 1995, was only 140,000. By the year 2000 this government had successfully raised the numbers but realised we needed to go further. What were the results of those discussions? They were a flop. The states would not shift. They were too locked in. They were too rigid and too controlled by the trade unions and by the teacher’s federation, in my view. The rigidity was there.

A new approach was needed, and the Australian technical colleges are a new approach. Will it be the ideal pattern for the future? Maybe it will; maybe it will not. But it is a brilliant start, because both the young people whom I have spoken to and the tradesmen who will be employing them when they finish are excited by the changes. Let me give an example of what is occurring in Western Sydney. It was difficult to start something in Western Sydney. There are a number of reasons for that, but it is up and running. It was only in January this year that the New South Wales government agreed on what the courses should be. For goodness sake, if anybody is dragging the chain and trying to prevent young people from entering trades, it is the government of New South Wales. I think that its approach has been deplorable. There has been no interest in trying to meet some of the challenges of the future.

If the New South Wales government were to look at what needs to be done, they would continue to support the COAG national reform agenda. They would want to be in there, having a say, instead of being dog in the manger with the future of young people and the needs of New South Wales. They need to work with the Commonwealth and the other states, and they need to have nationally recognised qualifications. But, no, New South Wales wants to have its own way of doing things and its own courses, structured in a certain way. So, when the federal ministers, both Dr Nelson and Mr Hardgrave, spoke to New South Wales people, a blank wall went up. There are destructive disincentives for Australian apprenticeships being practised by the government of New South Wales. Long hours of training—long years of training, in many instances—relatively low wages and the attractiveness of learning while you earn is being offset by hesitancy in making a rigid four-year commitment. Greater flexibility, which the Australian technical colleges offer, is not available.

So there is a need for states to change. They have not changed, and so the Australian technical colleges are working like this: between year 11 and year 12 students work a full day. They start study at eight o’clock in the morning and finish at five o’clock. They have roughly seven months of school. They have a couple of months on the job and they spend the remainder of the year learning skills in their technical trade. What is this producing? At the end of two years, in the time a student achieves their higher school certificate, they have the first year of their apprenticeship completed. They have trade skills, they know about the workplace and they are a very desirable employee. And the changes that have been brought about by the introduction of the Australian technical colleges are going to produce massive effects in the workforce right across Australia—one only has to look at the take-up rate.

The reason for this amendment, this appropriation of additional funds being required, is that the take-up rate during 2006 has been greater. Five colleges commenced in 2006: East Melbourne, Gladstone, Gold Coast, Northern Tasmania and Port Macquarie. A further 16 are to commence this year. North Queensland, North Brisbane, Adelaide South, Gippsland, Bendigo, Perth South, Hunter, Geelong, Northern Adelaide, Sunshine, Illawarra, Spencer Gulf, Warrnambool, Darwin and Western Sydney have all commenced, and Pilbara will open in mid-2007. There will be a further three opening during 2008. They will be Central Coast, Dubbo and Queanbeyan. Two thousand students across Australia will attend Australian technical colleges this year. The Australian Labor Party has knocked this program as having a slow start. It has not been a slow start. From a rapid introduction, there are 2,000 students in colleges this year and the expectation is that around 7,500 will be attending colleges each year once they are fully operational in 2009.

It is an extraordinary achievement, and one that challenges the states, in my view, to do more. I think that the states, particularly New South Wales, need to be providing support for school based career advisers to encourage students to consider professional advice about their careers and about education, training and opportunities for their future. And the trades must be part of that process. There needs to be a ministerial council in New South Wales to work out what needs to be done in vocational education in schools. There needs to be recognition of prior learning. But all that seems to be happening in New South Wales is that they are jacking up fees and saying that they need more migrant tradesmen. They do not appear to be capable of approaching the job and doing something worthwhile themselves. So I really feel that there needs to be a change in outlook.

Let me give the House a couple of examples. Recently I had a discussion with a young man, a mature student, who wants to take up plumbing. He has done his first four years, which I understand qualifies him for certificate III, and he needs to do certificate IV, which is all theory. He is going to do two subjects a year and will attend college one night a week. During this time he will study advanced plumbing to equip him to become a master tradesman who is able to do anything. After four years he is licensed but he needs these additional qualifications, so he needs another two years of study. The cost of study for one night a week for six months is $1,150. I am told that, only two years ago, this course was a fraction of that price. Some centres are even charging up to $2,200 per segment for these last two years of a plumbing course. If one looks at some of the further subjects, which are not compulsory but which need to be added to these single subjects, one is looking at a possible total cost of about $6,000 for the additional two years to get the final trade licensing that a plumber needs.

I think this is so wrong. What they are doing is milking people in need. This young bloke has two kids. He is changing careers. He has a proven career of the past, and he is a mature student. He said, ‘I’m going to battle and find that money because I need to change my career. But I don’t know about the young blokes who are in their twenties with a couple of kids and in the final years of their course. They’re out on the job and need to get that final licence to establish themselves one day as a licensed plumber operating on their own, as a contractor or a subcontractor, but they’re never going to do it.’ Is it any wonder we have such a failure in completion rates? Not only that; what is even more ridiculous is that, of the four subjects that are supposed to be completed in those years, only three are compulsory and they need not complete the fourth.

Let me give you an idea of what they are. There are four components, including advanced gas, water and sanitary drainage. The one that is optional—which is probably the most important of the lot—is plumbing contracting principles. That is the thing that equips a bloke to go out and do the job in a responsible manner. That is optional in New South Wales. You do not have to do it; you can just do the three. You pay for the four and you can do the three, but you do not have to complete the most significant one; it is not mandatory. It is no wonder that we have a dropout rate of such significance in New South Wales. The Financial Review of 9 June said that in Victoria the completion rate for 1998-2002 was 64 per cent, falling to 57 per cent for 2002-05. The figures provided in the recent publication of the New South Wales business chamber indicate that it is down to a 45 per cent completion rate. This is the way it has changed in the two states.

The flexibility offered by the Australian technical colleges is terrific. A lot of students want to go into the trades, but they have not had decent maths or decent English early in their education. However, they can get remediation. A technical college has to take everybody and enrol them and then apply the remediation. The Australian technical colleges can assess students on the way in, design personalised courses for them and give them additional hours. They have the flexibility of employers being involved in the design of courses and they have tradesmen on the boards of the Australian technical colleges, as well as educators. The Australian government has produced a magnificent result, an amazing success that will contribute mightily to Australia’s needs in technical and further education. It is an attractive opening in which students and employers can become involved in a high-calibre career—they can all participate—and the Australian government is spearheading change in this area. Under the current state arrangements operating in New South Wales and Victoria in particular, it is too closed, too inflexible and too difficult. Other states may be more flexible. I believe that the TAFE teachers are trying hard and the institutes are trying hard, but the policies overriding those make it almost impossible to meet the goals of Australia. We need a unified approach to trades. We need to have objectives which are flexible and which allow people to take up trades—objectives which are encouraging and offer people a wonderful opportunity.

My electorate is full of young families, and the heads of those families are self-employed tradesmen. They are in building trades of all sorts, and there are mechanics and people in a whole range of other trades such as pneumatics, hydraulics and all the rest of it. They are very successful people. They work extremely hard, start early in the morning and work long hours. They may be running only small businesses—one or two people or just a single tradesman and his missus running the books—but they are some of the best people in Australia, and they are really committed to Australia’s future. They want to see Australia succeed, and they are committed to their homes and their families. They want to produce the best results for them as well. I believe that any government that restricts, limits or hobbles that process is not worth keeping and not worth feeding. Unfortunately, it appears that only too often Victoria and New South Wales are obstructive rather than supportive of our brilliant, young, new tradesmen.

Bob McMullan (Fraser, Australian Labor Party, Shadow Minister for Federal/State Relations) Share this | Link to this | Hansard source

I rise to support the amendment to the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 moved by my colleague the member for Perth. When the Leader of the Opposition took that job, he gave high priority to the task of ending the blame game and getting rid of the attempts by one level of government to explain away their failure by blaming the activity on the other. Australians are sick and tired of the blame game—and if the speech by the member for Mitchell had been broadcast, they would understand why. I have never heard a more old-fashioned, tired exposition of the blame game than that which we just heard. There was not one step forward in what he had to say. It was a straight 1990s exposition of the modern Liberal Party. In the 1970s, he would have been kicked out of the Liberal Party for saying all that, but these days it is the modern Liberal Party version and it is sad.

The question of our skills crisis is a very serious one, but the most remarkable thing about the skills crisis is that everybody knew it was coming. Nobody has been taken by surprise, but nobody thought that the federal government setting up a parallel system of vocational education and training colleges was a sensible solution—not even the Howard government in 2003. They did not think about it in 1997, 1998 or 1999. Everybody who has ever been engaged in the political process knows what happened. In the run-up to the 2004 election, the people in the policy think tank said, ‘The research says we have a problem with skills. The public has perceived we are not doing enough, so we have to dream up a policy for the election.’ Because a proper solution would have required lengthy discussion with the states and an agreed program of reform, it was incapable of being done in the time available. In the eight previous years, no effort had been made to do that. That option was not open, so they dreamt up this nightmare of a parallel system of Australian technical colleges.

Think about this analogy: what would people say if the federal government said, ‘We have a clever idea. We are going to set up federal government hospitals in Bundaberg because of the problem the Queensland government has with health’? No sane person would have thought that was a good solution. Everybody knew there was a problem at Bundaberg hospital, but nobody thought that the Commonwealth should set up some hospitals and then it would all be solved. We could have it run on AWAs—that will solve the problem! That is just a very sad example of what is worst about the management of federal-state relations. The Business Council of Australia articulated their concern about the profound crisis in our federal system and released a report that said the shortcomings in our federal system—the waste and the duplication—are costing Australians $9 billion a year. What was the example they used to highlight the worst of it? It was the Commonwealth’s attitude on vocational education and training—and that is before we had this mad system! The report stated:

The Commonwealth/State agreement on Skilling Australia’s Workforce provides a good example of where funding ... in fact provides perverse incentives and opens the way for the imposition of overly prescriptive requirements on the States ... The agreement:

• does not provide incentives or rewards for improving quality of training,
• imposes maintenance of effort requirements in both activity and spending which are disincentives to efficiency (so it rewards the more inefficient States), and,
• imposes highly prescriptive requirements at provider level which have nothing to do with training outcomes.

That is dead right. So what is it that we are trying to achieve? Any sensible person who sought a reform of vocational education and training would talk to the states. It would not be easy, but the previous government did come to an agreement, which this government abolished. I am not advocating that we go back to that model. We need to go forward, but we need to go forward to a new sort of agreement that is about outcomes and not about inputs. This government is about regulating the inputs in schools and not worrying about the outcomes.

All the contemporary literature and the good analysis, both Australian and international, about the efficient operation of federations say that the central agency—in Australia it is the Commonwealth government—should primarily be about funding in the areas that are best done locally. That is not everything; it is not defence or economic management, which should be done centrally. The advantage that federalism brings in vast countries like Australia, the United States and Canada is that it allows the delivery to respond to local variation. But if you have that in an unfettered way, what you get is widening differentiation between the states and regions in the country because the strongest have the capacity to do the most. The federal body can have an equalising function and a standard setting function to say, ‘We have a national interest in what is going to happen with regard to skills.’ Ten years of neglect have created a profound national crisis in schools. We need to address it by setting outcomes that we require the states to achieve and providing an incentive system so that those who achieve it get rewarded, and those who do not achieve it do not get rewarded. That is the way we go about getting reform.

If you tried to imagine the worst possible mechanism for getting a broadly based enhancement of Australia’s skills training regime, you would invent a parallel scheme. We have three out there: there is private vocational education and training, there is the TAFE system and now there is the Commonwealth system. Even if the Commonwealth system were magnificent, its scale is totally trivial compared to the scale of the problem we face. The minister, in his first answer in question time yesterday, made it clear that the system is not going to achieve the specified outcomes. If his ambitious outline of what is going to happen this year were to come true, we will still only be getting to 2,000 students by the end of this year—far fewer than the Prime Minister promised at the last election. But that is very convenient, because it means that he can promise it again at the next election—and he will. It is typical. This problem arises on a triennial basis, just before every election, but in between nothing happens.

This system is entirely trivial compared to the scale of the national skills problem. Its dollars would be much better spent on incentives for the improvement and reform of the state system, where most of the training is going to take place, even if this scheme comes to its full and comprehensive fruition as promised—and I do not believe it will. As the title of this bill says, we need to ‘achieve Australia’s skills needs’. As Dr Peter Kell from Wollongong University said:

A skills shortage is no accident when you under invest for 10 years.   

That is absolutely right. All the international data says that Australia has been falling behind the pack in investing in post-secondary education. The government cannot say that it did not know this was coming. It was advised on a number of occasions by the Reserve Bank. The Reserve Bank warned that declining skills in the workforce was a looming problem:

Localised prejudices are certainly evident in some official wage measures as well as through business liaison which points to substantial increases in wages for skilled employees.

The Productivity Commission was also warning the government as follows:

The challenge for Australia is to further strengthen and improve the national training system so it delivers what Australian business communities and individuals need to build their own personal, and our collective, economic and social prosperity.

All the proposals for reform in our federation look across a range of issues, and high up on the agenda is doing something better about our federal-state relationships as they relate to skills. There is more to do about preschool—a very big issue. It is a question of long-term investment in enhancing the economic performance and social equity of this country. The neglect of preschool education has been a scandal. Investment in preschool education is not going to do much to address our current skills crisis, but it is an investment that needs to be made. More needs to be done in schools, particularly in the area of maths and science, which has been highlighted by the conference being held here in Canberra today. More needs to be done about university, where the international data is humiliating for Australia. Our performance is so bad compared to all those with whom we hope to compete. It is flying in the face of the data that says that investment in that area of education is critical to modern successful economic performance. Central within those three areas where our performance is lagging and where reform is needed is the need to do something about skills.

We all welcome the fact that under this bill there will be an increase in spending on the training of Australians, but the way that it is being done is a scandal—a waste, a duplication and a scandal. Everybody knows this policy has not been a success. The poor previous minister carried the can and got dumped. I am sure a lot of people blame the department, but neither the minister nor the department are responsible. I did not think the previous minister was one of the stars of the government in any of his previous positions, but it is not his fault. This policy is a dog. It could not work. The best will in the world could not make it work. And, if it succeeds, it makes no significant contribution to solving the problem. Everybody knows that. They knew it on the day it was announced. The Prime Minister knew it on the day he decided to announce it. Everybody knows the policy has not been a success. It could not have been a success.

By the end of last year only five of the promised colleges were functioning. The new minister said yesterday in question time that, while more colleges would be coming online this year, the total number of students will still only be 2,000—absolutely irrelevant to the broad sweep of the challenge facing Australia. We have been experiencing strong economic growth. The world has been driving demand for what we want to produce, and we have been riding on the back of that boom. There are now all sorts of long-term issues about the sustainability of that boom and the lack of investment in other areas of the proceeds of the boom to guarantee our future prosperity. Nowhere is it more stark than in this area. The very failure to invest some of the proceeds of that boom in skills is putting the boom itself at risk because the skill shortages are contributing to pressures on the labour supply in particular industries and regions, particularly those booming the most.

The Prime Minister, as we all know, is a very clever politician. He saw in the lead-up to the last election that he had a political problem. One wishes he had seen that the nation had a social and economic problem. But we all know he is very clever with these political quick fixes. He saw a political problem and he came up with a political solution. He announced on the day, to the incredulity of everybody who knows anything about the area, that the Commonwealth would set up its own system of technical colleges. It would have been funny if it were not sad.

I empathise with the challenge faced by the department in implementing this extraordinary policy. It is an example of the worst sort of federal-state relations—a knee-jerk reaction to solve a political problem for the Commonwealth—which involves duplication and inefficiency.

What did the BCA say when, with the very comprehensive economic analysis that they commissioned, they assessed the $9 billion cost to the Australian economy of the waste, inefficiency and duplication? They said that the lines of responsibility are not clearly defined. How could that be more clearly illustrated than here, where we have a conscious decision to duplicate a federal system? It is not a takeover—I do not think I would have agreed with that, but at least it would have clarified the line of responsibility—but it is a duplication. It is a classic example of waste and inefficiency.

The establishment of Australian technical colleges in parallel with the TAFE system cuts across all good principles of how a federation should work. We need a new round of economic reforms. All the analysts—driven by the Business Council of Australia but including independent advisors such as Professor Garnaut—say that the next big wave of micro-economic reform is going to have to come from, or include within it, reform of federal-state relations. And there has been no more adverse step in the reform of federal-state relations than the decision to establish a needless duplication in the training system to meet our national skills crisis.

I am a great believer in the benefits of competition, and I think that opening the forces of competition in our training system is worthwhile, but I am not a fan of different levels of government duplicating the same area of activity. The system loses cohesiveness and the duplication outweighs any potential advantages. You get a misalignment of priorities.

At its best, federalism suggests that needs will be better met at a local, regional or state level, through the principle of subsidiarity: carrying out the function at the lowest level at which it can be most effectively delivered. That is certainly not exemplified by the Commonwealth’s setting up of a parallel system of technical colleges. The Commonwealth should be focusing on training outcomes and on incentives to the states and the other suppliers to meet those outcomes. They should have an incentive based model—as in all the best federal-state relations reform models—that will encourage participants to meet that requirement, be an incentive for innovation and get the best benefit out of competitive federalism.

The Commonwealth should focus on setting priorities that ensure Australians have access to more training, better training and more appropriate training. Money currently being wasted on the pointless duplication of the TAFE system by the Australian technical colleges should be invested in our skills sector by providing incentives for innovation, reform and better outcomes.

I repeat what I said in opening: I welcome the increase in funding for skills education but I call on the Howard government to stop playing politics with this issue that is so vital for Australia’s future. We need to be smart in how we spend our money. We need to develop our human capital and, through this, maintain the momentum that will eventually build a better future for all Australians by finding ways for all to participate and achieve in our economy. And we need to focus on reform of our federal-state relations. There is no worse example of bad practice in this area than the duplication inherent in the system of Australian technical colleges.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

I am pleased today to speak on the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006. It gives me the opportunity to say a number of things about the technical college system, and particularly about the technical college that is going to be in the region of my electorate of Canning in Western Australia.

Before I speak about that I am almost obliged to respond to some of the things said by the member for Fraser. He is obviously out there trying to brush up his credentials on federal-state relations and to demonstrate that he needs a guernsey on it. This is the person who said, in his speech, ‘Let’s stop the blame game and let’s stop playing politics.’ But what did he do throughout the whole damn speech that he just gave? He spent the whole time pouring scorn, in a snide and cynical way, over this whole process. That was his contribution: firstly, to try and showcase his federal-state relations credentials; and, secondly, to try and rubbish the whole system.

He knows that this system was in need of greater funding and in need of an alternative system, because the state TAFE training system is broken—and I will later give you some evidence about why the state TAFE system is in such bad shape. The member for Fraser is not somebody I take a lot of notice of because he is the man who misled this parliament on the ethanol issue. As a result of that we do not take what he says for granted; it needs to be examined very carefully. Mark Latham was right about him when he sacked him. Amazingly, the Labor Party wanted to go ahead with new blood but they went back and got a timeserver and put the member for Fraser in place. Putting a timeserver back on the front bench is a strange way of taking the party forward.

The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill, which is before us today, is very important because it is aimed at providing additional funding of $112.6 million over the years 2005 to 2009 for the establishment and operation of Australian technical colleges. We know that the original initiative was funded at $343.6 million for 24 colleges. That was increased to 25 colleges, and, when you add $112.6 million, we now have $456.2 million, almost half a billion dollars, that the federal government is committing to further training, particularly for our young people in upskilling them for jobs.

You cannot have it both ways. You cannot have the member for Fraser and those on the other side saying this is—what were his words?—‘needless duplication’, a funding mechanism which is a waste and a scandal, when the federal government is putting in place a world-class training regime for young people to upskill our workforce. We know that Australia at the moment is going through one of the biggest booms it has ever had, and it is going to keep running for some time. To all the naysayers over there that say, ‘You should have seen this coming years ago,’ and all that sort of stuff, I say that we have seen it coming and that is why we have put in place a mechanism to try and upskill our young people.

But in the meantime we have to import skilled labour through the 457 visa program and other regional and state government sponsorships to fill the void of this hugely growing economy. In this hugely growing economy we need skilled workers, and you do not just invent them overnight. The TAFE system has been a dismal failure in providing this. To give an example, one of the TAFE teachers in my area came to me and said: ‘Mr Randall, I can’t believe what goes on at this TAFE that I teach at. There are more administrators and teachers than there are students.’ The administrators all have a car and a fuel card and spend most of their time being bureaucrats, and the teachers are underemployed because there are not enough students there.

In Western Australia, as Mr Deputy Speaker Haase would know, in the north-west, for example, it is very difficult to attract students into training when they can go out and earn the sort of money that they are earning as trades assistants, for example, without any skills. My nephew, over Christmas lunch, happened to tell me that he earns $1,200 a week as a trades assistant in Karratha. Why would he now take up an apprenticeship or a skill training regime when he can leave school early and go and get that sort of money? That is the challenge—to try and get enough people into this system.

The proof of the pudding is in what is happening today, and that is that these Australian technical colleges are receiving very good enrolments. It is patchy in some areas. In my state, at the Perth South Australian Technical College, there are enrolments before they have even opened their doors—that demonstrates how popular it is. The young people are voting with their feet. They want to join Australian technical colleges that actually teach skills.

The Prime Minister put in place the mechanism of Australian technical colleges because TAFEs were not teaching skills. They were teaching everything but skills. You could go and do courses in aromatherapy, flower arranging or transcendental meditation, but could you get a real course in upskilling automotive electricians? It was very difficult. Because the state governments absolutely slugged through fees and charges students going into these courses, they were not interested. They were not interested because, firstly, it did not provide them with the course that they wanted and, secondly, they were getting slugged in the neck.

The state governments cannot have it both ways, and neither can the opposition by saying, ‘At the end of the day we have a very good system in place.’ The TAFE system is largely broke all around Australia. Then we get the member for Perth—the opposition spokesman who has been dumped as industrial relations spokesman because he could not sell it; now he is going to try and sell this—saying that if Labor were to come to power they would dump the college plan. An article in the Financial Review on Monday the 5th by Sophie Morris said:

The federal government’s new trade high schools are likely to be handed over to the states if a Labor government is elected.

He is their spokesman, so obviously it is Labor Party policy. Once these technical colleges are established, he would take them and hand them over to the broken and dismantled system of TAFEs in the states.

We are going to fund them properly. With half a billion dollars in the initial set-up plus the ongoing recurrent funding, we will see that this is done properly—properly staffed and properly resourced in terms of educational facilities and tools. But you cannot say that about the TAFEs. In fact, the TAFE system in my state in particular is almost laughable because people who try and get into it, as I said, do not get the meaningful courses that they want and the charges are exorbitant. The article goes on to say:

As Labor tries to make education an election issue, education and training spokesman Stephen Smith said that a Labor government would probably dump the policy, which was the coalition’s skills centrepiece ...

Mr Smith told The Australian Financial Review that he saw no good reason for the government’s Australian Technical Colleges for senior high school students.

“I don’t see a sensible public policy rationale for the commonwealth trying to start up its own technical system when you’ve got the states having primary responsibility for secondary schools and for the TAFE system for many years ...

“My starting point would be: is it possible to fold these ones which are already up and running, is it possible to fold them sensibly into what the states are doing, and in the course of that reflect our own priorities?”

That is the danger. I say to the parents of all the students out there in Australia who want to get into this system: the Labor Party, should you put your student into one of these colleges, will shove them back into the state TAFE system, with all its ramifications. It is scary to think what a Labor government in the future would do with training.

What is their history on training? What did the previous Keating-Hawke Labor government do in terms of training? The member for Hotham was their minister charged with the responsibility for training and employment. They started these beautiful things called Working Nation training centres, where you could do a brickies course in three weeks. I went out to some of these when I was the member for Swan. I have to tell you: I would not want them building my house. They were not put up by a plumbline, I can assure you. They were probably put up by somebody who was not too good at putting an eye down a bead. I would not want these people doing these quick fix, mickey mouse courses putting up my brick house, thank you very much, because it would not stay up for long.

But there they were. They had Bill Hunter—remember him?—standing there in those expensive ads saying, ‘We’ve got these people job-ready to go into the workforce.’ The only one who made any money out of it was Bill Hunter. He got an enormous amount of money for running the ads. He was probably the only one who got well remunerated. It was in effect a way of taking all these unemployed young people off the unemployment list and putting them in a short-term fix to alter the stats so they did not look too bad. It did not last long, because in reality with some of these jobs it was costing something like $60,000 per person to train them on these short, mickey mouse courses and to put them into some sort of training regime which did not last long. At the end of the day it was an absolute failure. So that is Labor’s past. That is what they have done in the past, and in the future their only alternative is, rather than try and put into place a decent skills training regime, that they are going to fold these colleges back into TAFEs, in the broken state that they are in.

I can point out quite clearly that the Perth South Technical College—which the member for Hasluck, Stuart Henry, and I have fought hard for—is going to be a success. One of the reasons I am very proud to be associated with working hard and making a strong argument to have it located in Perth South is that the eastern corridor of Perth in particular has been bereft of skills training and tertiary training. When the previous education minister, Brendan Nelson, was in place I was able to get him to agree to provide 20 university funded places for the Armadale region. That was most welcomed by the city of Armadale and the whole community of Armadale, and the Curtin university provided the facilities and the linkage to the local schools. In fact, they got more than 20 places, because they were able to maximise their funding to fund more than 20 students. This was a first step. We had the former member for Hasluck, Sharon Jackson, out there saying, ‘Ah, there’s nothing in the eastern suburbs,’ and all she was doing was criticising. Well, she is trying to come back again, but I think she will have a bit of trouble against the current member for Hasluck, Stuart Henry, because he is actually out there working and he knows a lot about skills training. He used to run this sector in Perth himself. I do not know if he is down to speak on this bill, but if he is then it will be an eloquent speech because he knows the subject like the back of his hand.

Anyway, Sharon is going to have a job ahead of her trying to do this, because at the end of the day there she was, bemoaning the facts. It is a typical Labor thing: yelling and screaming and saying, ‘Shock, horror,’ but not providing any alternative. We are providing the alternative. As soon as we provide the job training places out there, what do the Labor Party do? What did the member for Fraser say? He said they are ‘a waste, duplication and scandalous.’ This was a man who said, ‘Let’s not get involved in the politics of it.’

The Australian Technical College, Perth South is going to be located on two sites, one at Maddington and one in Armadale. Maddington is in the electorate of the member for Hasluck, just up the road from me. It is probably only about three to five kilometres from my electorate office, and the Armadale campus is just a couple of kilometres up the road. So the two campuses are very close. They are actually going to be involved in real, meaningful skills training. The Armadale campus will concentrate on the construction industry—that is brickies, plumbers et cetera—which is going to be fantastic, and the Maddington campus is going to be providing automotive training: for car electricians, upholsterers, panel beaters et cetera. That is going to be fantastic, and the young people in that region are taking hold of this straight away, as I will indicate in a moment in terms of enrolments.

In fact, I will indicate it now. Let me point out that the first-year intake for both campuses has been targeted for 90 people, and you will ask in a moment, ‘Why is it so low?’ Well, you will see in a moment that, as a lead-in to the construction and facilities available, 90 is quite appropriate. Currently, even before they open, the enrolment is 61. Enrolments are expected to jump once classrooms are finished, and there will be over 300 by the third year. At the moment the temporary classrooms for the students in Armadale are almost ready, and until then the students will be housed at Maddington. Industry is now enthusiastically joining the party, and enrolments for this year will be 90 within the next few weeks.

One of the keys to the Perth South college is flexibility. For example they are outlining the curriculum and the courses available, but it came to pass that steel fixing was an area that they need further support with. Steel fixing was not planned, but since the industry became interested there have been 14 enrolments for the steel fixing course. Given the fact that you can earn about a thousand bucks a week as a steel fixer no matter what age you are, is it any wonder that young kids want to get involved in the steel fixing side of the construction industry?

Interestingly, the Armadale campus will cost $4.75 million plus $1.5 million for the land—not inexpensive—and the Gosnells campus is going to cost $5.5 million. Can I say at this point—and I digress—that I am really aggrieved about the process, in that it missed out on an opportunity. The RAC had a magnificent site on the highway in Maddington which could have been had for something like $2.3 million. The previous minister was aware of this and wrote to the state department and to the Australian Stirling Skills Training group, who are running this institution, and said, ‘Look, even though you haven’t received all the paperwork yet, I’m telling you that you will be awarded this and you should go and get that centre.’ But they did not, and there was not enough courage from the board at that stage. A whole range of incidents came together so that they did not go and buy it, and they got beaten by Silver Chain. I do not know why Silver Chain would want a facility like that, but at any rate it is a magnificent facility. They could have got it for something like $2.2 million or $2.3 million, and now building a purpose-built one is going to cost $5.5 million. So I am pretty annoyed that they did not show enough initiative to go and do that.

One of the reasons this process has been slow is that they have had a lot of difficulty getting approvals from the state department of DEST. Thank goodness the new minister has intervened over the last few days and has made sure that DEST got on and signed their approval to lease, because what they wanted was the leasing arrangement for this rather than the purchase. As a result, this is going to happen now. The builder was waiting to build—the footings were poured and everything was ready to go—but DEST wanted so much compliance and further information, and there was duplication and a wrong form. But when Trevor Williams, from Stirling Skills Training, wrote to Margaret Cameron and said, ‘If you don’t hurry up, we are going to lose our builder,’ that was a cause of concern to me. So I got straight onto the new minister and made sure that we saw this happen. That is one of the reasons why there has been some lag time.

In fact, there has been a deliberate intervention by certain people to try to slow this process. A school principal, when we actually turned the first sod there, said to me, ‘Look, the Perth South district education has made it clear to me as a school principal that they want to see this process go slow.’ That is the state government again trying to put a bit of heat on with nefarious behaviour and trying to cause grief to a federal government initiative. He said: ‘I will not have a bar of it. I am just letting you know that that is the direction I have seen from the Perth South district office on this.’

In finishing, I would say that this is a great outcome. There have been frustrations and delays. DEST requires information about a three-year lease, which is not very attractive to someone who wants to involve themselves in a lease. It should be for a longer period than that. But the whole community is grateful for this federal government initiative. The young people are grateful for this initiative on training and educational opportunities, particularly out in the eastern corridor of the Perth area. I know that it will be welcomed in the Pilbara in the north. We are actually fixing something that the states dropped the ball on. We are going to make sure that young people get opportunities, which they have been deprived of, to be upskilled in the future workforce of Australia. (Time expired)

Jennie George (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Environment and Heritage) Share this | Link to this | Hansard source

I have made several contributions in the House on the government’s Australian technical colleges program. I have consistently questioned whether the expenditure on these 25 colleges is in fact good public policy and to what extent the program would play any meaningful role in addressing the skills crisis which is now facing our nation. As we know, it is a skills crisis that is a severe obstacle to Australia’s economic fortunes.

It is very easy for the member for Canning to again play the blame game and try to transfer the responsibility to state governments. But, under the watch of the Howard government, for years a range of credible organisations, including their friends in the business community, have been alerting the government to our growing skills crisis. Rather belatedly, the government had to confront this reality and admit that such a shortage actually existed. However, rather than accepting their failure to deal with the crisis after 10 long years in government, they came up with the rather spurious rationalisation that Australia’s skill shortages were a manifestation of a buoyant economy.

I have to challenge that assertion and I do so on the basis of the region that I represent. One would have to ask how it is that, in a region like the Illawarra—where we have unemployment rates at around 10 per cent, together with record levels of unemployment among teenagers looking for full-time work, at around 40 per cent—side by side with these horrendous indicators of unemployment we have skills shortages. So this rationalisation that somehow you have to expect skills shortages because we are travelling so well economically certainly does not hold up in the area that I represent. In fact, it is a very potent mix to have high unemployment rates, especially among young people desperately wanting to get into an apprenticeship, coupled with business crying out for labour to fill their shortages now, not in 2010 to 2012 when we would expect the first graduates to be emerging from these colleges.

The government has only itself to blame for allowing the skills crisis to develop on its watch. It has been asleep at the wheel while this crisis grew around it. A small indication that it has been asleep on its watch is the response to some questions on notice to the former minister about what was happening to apprenticeship training in the Illawarra from 1996 onwards. By the government’s own admission, the number of apprentices in training in the traditional trades in fact fell from 880 young people in training in 1996, which was the first year of this government, to 870 in 2004. So the number of young people in training for an apprenticeship was in fact declining at a time when the alarm bells should have been ringing for this government.

Despite all of the knowledge and warnings about the skills crisis, fewer people in my region were training in the traditional trades in 2004 than in the first year of this government. When you look at the early 2000s, you see that the number of apprentices in training in the Illawarra had fallen to 630. So you cannot say that this is a problem that developed overnight. The warning bells were ringing loudly for a considerable period of time. As we know from all of the reports that we had from the TAFE directors, this was at a time when cuts were being made, there was a lack of investment in vocational education and there was huge unmet demand in the system. Young people who would have made excellent apprentices and trainees were in fact being turned away from the gates of our local TAFE colleges.

When we first heard the proposal about these Australian technical colleges as an election promise, the Prime Minister said at the time, ‘The technical colleges are the centrepiece of our drive to tackle skills shortages and to revolutionise vocational education and training throughout Australia.’ In my view, it was the case then as it is today that that statement was one of extreme hyperbole. The 25 colleges, as we know, will at best train a maximum of 7½ thousand tradespeople who will graduate between the years 2010-12. How on earth is that a solution to tackling the skills crisis that is here with us today and that is growing every day? I cannot say to the businesses in the Illawarra, ‘Wait for the 315 young people who will graduate between 2010-12 to fill the skills shortages that we know exist today.’ So the solution was a mere drop in the ocean when the estimated skilled labour shortage today is in the order of 100,000 people. The government’s announcement was, in my view, a political fix to the policy problem of Australia’s crisis in skilled labour—a problem that continues to grow and that still needs to be urgently addressed by the new minister.

On behalf of the people I represent, I think it is quite reasonable to query whether the expenditure on these colleges is good public policy and to ask the question: would not the same outcomes be achieved without duplicating the existing provisions for school based apprenticeships, the provisions that are available for apprenticeship training in the TAFE sector and, indeed, the increasing interface between the VET stream in schools and local TAFE institutes? We are asked in the bill before us today to increase the funding allocation for these 25 colleges by another $112.6 million. The total allocation would grow from $343.6 million to $456.2 million over the period 2005-09. You have to ask: why is this increase in funding needed? We were told by the minister—who obviously did not satisfy the Prime Minister about his capacity to implement an urgent response to Australia’s skills crisis and who now finds himself on the back bench—in his second reading speech that the additional funds are needed because:

... the continued success of the Australian technical colleges ... program reflects the better than expected progress that has been achieved to date in implementing this Howard government initiative.

Nothing could be further from the truth.

By the end of last year, just five of these colleges had commenced operation. Some two years after the grand announcement was made, the minister at the time was claiming satisfaction with the hundreds of enrolments. There were five colleges up and running last year—on the Gold Coast and at Gladstone, Port Macquarie, Eastern Melbourne and Northern Tasmania. Between these five colleges, there were 340 enrolments. Even that minimal figure was skewed by the fact that, at Port Macquarie, the newly labelled Australian technical college with 205 enrolments previously operated as the long-established St Joseph’s vocational college. So there were 205 students at a college that already existed. It was relabelled and rebadged as Port Macquarie Australian Technical College. If you subtract the 205 enrolments from the 340 total enrolments, it is a pretty pathetic performance. I recall at one stage that the Australian Technical College Gladstone had only one student enrolled.

So some two years after the announcement, after we spent about $50 million of taxpayer funds, we had 350 students, minus the enrolments that were already there in Port Macquarie, in only five colleges. You have to ask: is this what the minister claimed to be a great success? I do not think so. Now we are being asked to approve an additional $112.6 million. We were told—and I quote again from the former minister, the no longer minister for vocational education and training—that ‘the operational cost necessary to get each college up and running is far higher than originally expected’.

Let us look at the situation in the Illawarra where we do have one of these colleges. Last Friday night, I attended a very pleasant function in Wollongong to meet the parents of students enrolled at our college. The comments I make in my contribution about the government’s program do not reflect at all on the parents, the students, the staff or the board members who have all worked enthusiastically and tirelessly to get the Illawarra college operational. My comments are directed at the failure of government policy and the continued tardy implementation of real programs to address real problems insofar as our skills crisis is concerned.

I talked to a number of parents at the function and they were, naturally enough, excited at the prospect of their child’s enrolment. Nearly all I spoke to referred to the load and the pressure for these students because, as we know, they are supposed to be studying for their HSC, undertaking apprenticeship training and working two days a week. For a 16- or 17-year-old, I think that is a sizeable load. I do not think any of the projections on the part of the government for the maximum output of the 7,500 students ever factored in the possibility of drop-out and attrition rates because of that quite sizeable burden on 16- and 17-year-olds. In fact, the TAFE directors of Australia also pointed to this problem. Their executive officer, Mr Riordan, said ‘The Australian technical college model asks a great deal of 16- and 17-year-olds’ and that ‘the prospect of drop-out rates is high’.

When I raised the specifics of the Illawarra college with the minister, I was told that enrolments at our local college were to be 50 students at the start of this year. This is some two years after the announcement. Our students are currently in leased facilities and, not surprisingly, are going to undertake their training at the local TAFE college just down the road. But instead of using the facilities that TAFE can provide, the government proposes to build a brand new building, which will be constructed and operational from 2008.

I think it is reasonable for me to ask the government: do these students really need a brand new building when the majority of their week will be spent in employment with their employer? When they are not with their employer, they will be at the local TAFE college doing their apprenticeship training. By 2009, it is anticipated that enrolments will reach 315 students, and that will be the maximum. During that period we will have spent $19.6 million of taxpayer funds. If you work that out on a per capita basis—divide $19.6 million by 315 students—you have got to ask whether that investment is really justified. That raises the question that numerous people have referred to: why have we gone to the extent of duplicating the existing TAFE system which has for decades provided outstanding vocational training, particularly for young apprentices?

I also ask: could the skills crisis in the Illawarra have been addressed in a more cost-effective manner? I believe it could have been. I chair a committee called the Illawarra and Shoalhaven Apprenticeship Program. Over the past several years we have managed to place 250 unemployed kids into apprenticeships. All we have ever asked of this government is an ongoing commitment of about $100,000 a year to make that project ongoing and viable. Just think about it. Over the last couple of years, at a cost of something less than a quarter of a million dollars from the federal government, 250 young unemployed people in the Illawarra have been placed in apprenticeships and yet, at best, we are going to have 315 students coming out of our local Australian technical college—with a brand new building—and we are going to spend $19.6 million on that program. Not one question has been asked about whether that is a wise investment of taxpayer funds. But every time we go to the government to get an ongoing commitment of $100,000 a year to employ a project coordinator to continue to place young people into apprenticeships, we cannot get any firm commitments from this government. I think that is unjust and inequitable. I ask again: is this expenditure a wise investment of the funds bequeathed from the taxpayers to government and is it good public policy?

There is no doubt in my mind—and it was pretty obvious when the former minister who had responsibility for this program ended up losing his portfolio in the last reshuffle—that the Prime Minister also came to the same judgement that many people in the community have, and that is that the program has been bungled. We are told now, according to a recent headline in one of the national newspapers, ‘Mr Fix-it has the tools to restore colleges.’ We now have a new minister, and he points out in this article that one of his first tasks will be ‘getting the technical colleges program back on track’. I wish him all the best, because the government has raised expectations and it is failing to deliver. My views about this issue are confirmed by people who know even better than I do what happens in TAFE and the vocational system. Martin Riordan, the Executive Director of TAFE Directors Australia, said recently, ‘We think it’s important to reassess the Australian technical colleges because, despite the best intentions in the world, they are a failed model.’ Mr Riordan wants the Commonwealth to review the progress of the technical colleges program at the COAG meeting in April.

I want to put a number of questions to the minister, and I do so in all sincerity, because I think the time has come for a serious re-examination of this program. I ask: is the expenditure of $456.2 million on 25 colleges that will train a maximum of 7,500 students, who will not graduate until at least 2010, good public policy and a sound investment? Could this investment have produced better outcomes in dealing with skills shortages, and in a shorter time frame, through the existing school and TAFE programs and interface? What programs does the government have in place to deal with the shortages that exist right now—estimated at around 100,000 in terms of the needs of skilled labour? Of course, I want to know when I am going to get an answer to a very modest request for an ongoing commitment of $100,000 a year to ensure that young unemployed people in the Illawarra region continue to have access to apprenticeships. I do not think that is too much to ask when we have in our region a youth unemployment rate of 40 per cent—among the highest in the nation.

We have had a successful program working on the ground. We are not asking for $19.6 million, much of which is going to creating a brand new building that is not really required; but we are asking for some contribution to an innovative local program. Investment in vocational education and apprenticeship training is an issue of serious national importance, as is the crisis in the availability of skilled labour. The electorate is tired of quick political fixes which are based on spin rather than on substance. I think there are serious deficiencies in the Australian technical college model. My views are confirmed by the directors of the TAFE institutes throughout Australia, and I think that the matters that I have raised today warrant serious consideration at the highest levels of government.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I will only be addressing the House for a very short amount of time with respect to the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006. I was somewhat disappointed by the honourable member for Throsby in the way she condemned the Illawarra Australian Technical College. If she does not want this facility in her electorate then I would be happy to have it transferred to the Sunshine Coast, which was a serious omission from the first 25 technical colleges announced around Australia. If Labor members do not want the technical colleges which have been allocated to them then I am quite sure that coalition members will be very keen to have young people in their electorates given the additional opportunities which will obviously flow from the establishment of these colleges. This, of course, was an initiative announced by the Prime Minister in his policy speech prior to the 2004 federal election.

The purpose of this bill is to ensure that the infrastructure required to help develop a future workforce with the necessary skills required by Australian industry is available. All of us receive many complaints from employers who spend an inordinate amount of money advertising with a view to obtaining people who are able to be worthwhile employees and earn an income for their families but, in doing so, make a contribution towards the growth and success of a certain industry. There is no doubt that in Australia one of the major problems we have in 2007 is the skills shortage. This was the reason that the Australian technical colleges were announced by the Prime Minister prior to the last election.

The Australian government is well underway with the development of 25 technical colleges around Australia. The majority of these already have finalised funding agreements right through until 2009 with the Australian government. This will ensure that their operations can continue at least until that period. It is expected that some 21 colleges will be operating by the end of this year.

A college is to be established at North Brisbane, and it is anticipated that it will open in 2007. While it was the intention that the North Brisbane college would service the Sunshine Coast—and no doubt it will to a certain extent—given that the road system between the Sunshine Coast and Brisbane is not quite what should be, it becomes in my view a matter of pressing urgency that the Australian government should look at an Australian technical college for the region. If the government is looking at expanding the number of Australian technical colleges, it should consider that the Sunshine Coast is the 12th largest urban conurbation in Australia and perhaps the fastest growing area in the country.

These colleges, despite criticism in the contribution made by the member for Throsby, are wonderful institutions that will make a big difference for young people who are looking to secure trade qualifications. These institutions will also make a substantial contribution to the success of Australian industry and to the growth of our economy because they will be able to turn out qualified people who will be able to help businesses grow and boost their local economies. Despite the criticism directed towards the Australian technical colleges, I think they are a wonderful thing for Australia and we need more, not fewer, of them. It is quite wrong to criticise the former minister, as the member for Throsby did when she spoke a little while ago.

The bill currently being debated amends the funding amounts available to these colleges between the years 2006 and 2009 from the $343.6 million allocated to $456.2 million. This necessary increase in the amount of funding available will help these colleges achieve their goals. The Australian technical colleges are successful and popular, and this funding increase reflects this success. In fact, the support for the colleges has been so strong that a number are now opening earlier than initially envisaged.

These colleges are unique and sensible in that they allow students to begin their studies towards gaining a trade qualification while they are still at school. This means that they are on the road to getting real qualifications earlier than would have been the case in the past, which in turn means that they will complete their training earlier. It is a system that meets both the needs of students and the requirements of the country. Over time the presence of these ATCs will mean businesses that require electricians, plumbers, carpenters and workers with other related skills will have a greater supply of such workers, and eventually some 7,500 work-ready young people annually will emerge from the colleges. Some 2,000 young people will already be enrolled in the colleges by later this year.

These institutions will make certain that students are taught the latest methods using the latest equipment. These young men and women will emerge as well-trained individuals with the types of skills required by contemporary business owners. In what is a sensible facet of the colleges, they are tied closely to the local communities in which they are located. Instead of having operational decisions made from a remote head office, the local boards that manage each of the colleges are able to make managerial decisions that ensure that the institution meets the specific needs of that region. This is a sensible move because the skills needs of one region will be quite different from the skills needs of other regions. By addressing the specific needs of each area, the network of colleges will address the overall skills needs of the nation.

This bill will make sure that these colleges have the necessary financial backing from the government to enable these goals to be met. This bill outlines the additional funds that will be disbursed in the following amounts over the following years: 2006-07, $27.848 million; 2007-08, $42.628 million; 2008-09, $32.647 million; and 2009-10, $9.509 million. These ATCs will provide students with viable career paths into worthwhile employment. Trade qualifications are rewarding, worthwhile having and provide a potentially lucrative alternative to a university degree.

The only plea I make to the government is that an Australian technical college be established on the Sunshine Coast. If Labor members who are quick to stand in the chamber and criticise their local Australian technical college are prepared to pass that college onto other regions, I am sure those regions would welcome the establishment of a college. The former minister said he would like one, and I hope he gets one as well.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for Northern Australia and Indigenous Affairs) Share this | Link to this | Hansard source

I am pleased to be able to speak to the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 and will elaborate on the points I would like to make after question time.

David Hawker (Speaker) Share this | Link to this | Hansard source

I thank the member for Lingiari. Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.