Gary Hardgrave (Moreton, Liberal Party) Share this | Link to this | Hansard source

I am very pleased to participate in this debate on the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007, not simply as the former minister responsible for many of the initiatives that this piece of legislation is meant to deal with but also as the son of a tradesman, a metal machinist by trade. My father remarked for probably 25 or 30 years on how sad it was to see a general decline in the psyche of presentations from government and from those with apparent influence on the importance of the nation-building skills—the trade skills. I see the member for Macarthur is at the table. I know he is proud to be a motor mechanic. On this side, we have a lot of people with trade skills who have come to this parliament. As the bishop in Port Pirie said last year, there is something absolutely noble about doing something with your hands and involving yourself in productive enterprise as a result of doing something constructive with your hands.

This government, in all of its breath, in all of its statements and all of its policy settings since 1996, has been about restoring the sense of importance associated with people with trade skills. It has always been gratifying to me to hear direct feedback from people who felt pretty well underdone in the Labor years, where they talked down careers in the trades. I always saw the great irony in that: a party that was built out of the loins of the working class and was set here—and still is set here—to do the bidding of the union movement spent so much time in government talking down the importance of trade skills. When we came to office in 1996, there was an enormously sad and bad set of circumstances that we had to deal with, despite what the member for Perth was trying to suggest in his contribution yesterday. The current situation in Australia makes the measures contained within this legislation so necessary. People around this country are seeking to take on apprentices, and we need to make sure that, if people in the early years of an apprenticeship are not able to sustain themselves as they might do in the latter years of their apprenticeship, they are given access to government assistance. Never before in the history of this country have things like youth allowance been extended to people in trade training. Never before have we seen this sort of wage top-up extended to Australian apprentices.

This bill, which reflects the changes made and the additions introduced in the most recent federal budget, makes sure that there is not an impost through the social security system or the taxation system on those who are on a sufficiently low wage structure that they qualify for the additional benefits that the government is now offering them. We are saying to people who are taking on an apprenticeship in trade occupations included on the migration occupations in demand list—trades listed as experiencing skills shortages—that they will be eligible to receive $1,000 for each of the first two years of their apprenticeship. Payments of $500 will be made biannually to full-time apprentices at the six-month, 12-month, 18-month and 24-month points of their training.

I think it would be wrong and inconsistent of me if I did not note that it is important that the parliament understands that we are not as a government endorsing the old industrial revolution approach of time based training. In Queensland and, increasingly, in Victoria—but not in the state of New South Wales, which has the worst apprenticeship system in country—we are seeing people having prior experience recognised under the recognition of prior learning. These people are able to start their apprenticeship with part of the requirements of that apprenticeship being acknowledged as already completed due to their own prior work experience and are able to complete their apprenticeships a lot faster than the traditional three-year or four-year period. To my mind and the government’s mind, the competency of the apprentice is far more important than the amount of time that they are actually in training.

This measure is about their first and second years of apprentice training—for school based apprentices, a concept new to New South Wales this year. For years the Australian Education Union and the New South Wales Teachers Federation railed against the idea of school based apprentices, certificate III and above in the trade. How dare kids in New South Wales have the opportunities that Queenslanders have had for a decade! The day after the state of origin series has been sealed—I will tempt the wrath of Deputy Speaker Hatton, as he is a New South Welshman—I make the point that finally New South Wales will allow kids to start trade training while they are at school at a real trade training level. This legislation covers that contingency as well. It allows them to gain access to it as part-time school based apprentices.

What does this mean? It means they can get to the end of year 12 with their year 12 leaving certificate, the New South Wales standard ticket, like they do in Queensland. These students will also have earned money because their part-time job has been the practical side of their trade training. They will also have advanced their trade apprenticeships so that when they start, if they choose to, a full-time apprenticeship they will be in a position to complete it after they have finished school, will accelerate through the whole trade training process, will have some of the competencies squared away, signed off and agreed to and will be in a position to be in their trade faster and, of course, will have earned money along the way.

Starting the process at school makes a huge amount of sense. It was a very good suggestion when the government put it forward in 1997. The first state to grab hold of it was Queensland, and 10 years down the track they have over half the numbers of students who are involved in school based apprenticeships in the whole of the country. Last year, while Queensland had about 8,000 out of 15,000 apprentices, New South Wales had none. I make the point again to be very consistent. This measure backs the students and the employers that invest in their businesses in the best way they possibly can—by taking on people as apprentices, and particularly as school based apprentices. It backs the parents by also making sure that this payment is amortised over a part-time scheme. In other words, they can gain it over several years, not just in the first and second years of training.

I greatly welcome this initiative. It allows the flexibility that is desperately needed in the system. It also acknowledges that in the first couple of years—despite my conversation about competency being the basis for advancement, not time in training—people in apprenticeships tend to be more poorly paid than in their latter couple of years. In saying that, it is important to know that something like 60 per cent of people in Australian businesses today are paying their apprentices way above the set rate because there is a very competitive market out there now for quality people taking on apprenticeships. Good apprentices are able to say to their bosses, ‘Pay me more, or I am going to continue my apprenticeship down the road’—and well might they because, as it currently stands, there are too many jobs and not enough people for them in Australia today.

Australian Apprenticeships Centres already service Australian apprentices right across Australia. They will be explaining this initiative and providing claim forms to eligible Australian apprentices to claim access to it. Once the form has been completed and returned, the payment will be made directly into the Australian apprentice’s nominated bank account. It is as direct government assistance as you can possibly have, and it is important, as this legislation spells out, that it does not then impact on their social security system or taxation requirements. Some people are saying: ‘The initiative seems to be only available to younger apprenticeships. Why is this the case?’ We already announced in the Skills for the Future package last October a series of assistance to Australian apprentices aged 30 and above which will take effect from 1 July. They are a series of measures to back the lost generation who started, or maybe aspired to, an apprenticeship at a time when the government in power did all that it could to dissuade businesses from taking on apprentices. It talked down the concept of the trades, talked up, ‘If you do not have a university degree you are a dud’—that was the kind of language that we were hearing—and said to businesses, ‘If you hire mistakes you can’t get rid of them.’ The unfair dismissal laws under the industrial relations regime had a huge impact on businesses’ decisions to invest in themselves by taking on apprentices: if they hired a problem, how could they get rid of them, and so forth. Under the contract of training, apprentices have to meet the requirements to progress, and business also has a requirement to look after apprentices. Nevertheless, the psychology in Australian businesses was: ‘We do not want to take on people. Apprentices cost us more than we gain.’

Equally, the trade training system was geared around—and in most places it still is, as a result of the domination of the TAFE sector—businesses having to work in with when TAFE wants to operate. TAFE does not want to operate 24/7 and does not want to operate 52 weeks a year. Too many TAFEs are still operating 36 weeks a year from nine to four on Monday to Friday with only 20 hours of average student contact time per week. Those sorts of things drive businesses away from taking on apprentices, but the government is working with the states to bring about a change to that approach. There is a lot more proactivity coming out of the state owned TAFE system now than ever before.

The Skills for the Future package announced on 12 October last year handed older apprentices support for mid-career apprentice initiatives. In other words, it backed businesses and individual apprentices of an older age to make the decision to go and do what they wanted to do years ago when the Labor Party talked them out of their apprenticeships. Of the order of 30,000 people missed out on an opportunity to take on trade training when the Labor government was last in power. So much for the party that supposedly—in their rhetoric, anyway—represents the workers of Australia. As a result of the Skills for the Future package, eligible Australian apprentices aged 30 years or over will receive $150 per week—$7,800 per annum—in the first year of their apprenticeship training and $100 per week—$5,200 per annum—in their second year of training. Again, competency based advances could mean that some of these mature age apprentices will complete their formal training, once there has been a proper recognition of prior learning factored in, far faster than the traditional three- or four-year trade training approach.

As I said, this legislation very much encourages the take-up of part-time and Australian school based apprenticeships. Twenty years ago I started a part-time university degree, but 20 years ago you could not start a part-time apprenticeship. We are now starting to see more and more people being able to transition from one career to another. Any one of us in this place might want to be a plumber. Previously, we would have had to cease what we were doing here to start the training for a plumbing apprenticeship, but not anymore. More and more businesses are understanding the value of giving people an opportunity, in an arrangement that would vary from workplace to workplace, to start their work experience and their training—the competency-building exercise—and become an apprentice on a part-time basis. We are putting in place the measures available under this legislation on a pro rata basis. That means that the first $500 payment, rather than being paid after six months, will be available after 12 months. The second $500 will be available after the first 24 months, the third after 36 months and the fourth after 48 months. If you, Mr Deputy Speaker, or I decided that we wanted to gear ourselves towards the lucrative trade of plumbing—and the plumbing industry hates being made the butt of jokes about the fact that plumbers are paid more than lawyers; all I know is that whenever I have a problem with the plumbing I am awfully glad that they have the abilities that they have—then we could do thast over a period of years. Perhaps we would not qualify for this payment, but others might if they were doing it on a part-time basis.

This is yet another measure from a government that have shown themselves to be strongly supportive of the workers and the doers of Australia. We strongly stand in the corner of those who aspire to be a part of the workers and the doers in this country. We are not the party that represents the non-productive culture and class in Australia—we leave that to the opposition. The Liberal Party and the National Party represent those who work hard and aspire to do better. We want to say to the parents of young people—in the sit-down chats that I hope they will be able to have, in the discussions about career paths to come—that working with your hands and feeling a great sense of personal satisfaction in working with your hands is a noble path to follow. It is the people who work with their hands who are more likely than others to own the fancy beach houses at Noosa. It is important that we back them in every possible way.

I want to take a couple of moments to reflect on some comments that the member for Perth made—and I am sure that the minister will do this in his summing-up speech. It is extraordinary that the member for Perth showed himself to be a puppet of the Australian Education Union. We have had a series of education spokespeople from the opposition who have done this time and again, and in his contribution yesterday the member for Perth did it also. He was talking about completion bonuses, an opposition plan to make a payment at the end of people’s training. He fails to understand that the statistics from the National Centre for Vocational Education Research show very plainly that something like 90 per cent of people who move from an apprenticeship that they start, either by dropping out or moving to another one—the so-called non-completers, and this is where the non-completion rate is drawn from—do so in the first or second year of their apprenticeship. The fact that the government’s initiatives have been very much tied to the first and second year of training, when the wage pressures are greater, focuses the money better. Under Labor, you get $1,000 at the end of 24 months; under the government, you get $2,000, plus the $800 tool kit, something that those opposite never dreamed of. I make this point very clearly: this side, by its actions, not simply by its words, has backed those who decide to take on trade training in every possible way.

If you listened to what the member for Perth had to say yesterday, the other difference is that the ambition of the Labor Party—again using the Australian Education Union’s view of the world—is to have something like 2,500 trade training centres, one in every high school around Australia. That creates an impossible situation. Teachers in my electorate are laughing about this proposal. How are we going to find 2,500 additional carpentry teachers, 2,500 additional mechanics teachers and 2,500 additional plumbing teachers? It can only ever be a holding pattern with a very low-level type of training, rather than the certificate III and above training which the government is providing through things such as the Australian technical college initiative and, indeed, the school based apprenticeships initiative which is being used in Queensland and Victoria. Labor is trying to slow down kids’ progress and trying to entrench the fact that they cannot start a real apprenticeship until they finish year 12. That kind of slowing down of progress is further deteriorating the attraction of apprenticeships.

Apprenticeship wages are geared around someone starting an apprenticeship at 15 or 16, in the main. But Labor seems to always want them to start at 17 and 18. This is straight out of the Australian Education Union’s mouths. They want to keep kids in the school until year 12 because it justifies the money that they want the school system rather than the vocational education system to have. I also believe that, under Labor’s enterprise approach on this, one of the first lessons would be to show them how to join a union, because under a Labor government it will be ‘no ticket, no start’, and everybody in Australia understands that.

This government is instead saying, ‘We’ll back personal initiative and personal ambition.’ We want to give a hand up to those who are unable, perhaps through the restrictions in wages that they face in their first couple of years of training, to justify taking on that training to start with. We will give them the extra assistance—assistance that was never on the books and never available under the previous Labor government. In every possible way, the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007 furthers the ambition of this government to have a work-ready, capable and well-skilled Australian workforce for the decades ahead. The challenges are enormous in an environment in which there are so many jobs and not enough people. The competitive opportunities that kids have the power to choose from are immense. The earlier we get the kids involved in trade training the better, and the more encouragement they hear from people such as us, regardless of our political complexion, the better. I would simply ask Labor members to speak about things in that kind of positive way. They need to talk up the ambitions of the trades. I see that the member for Batman is next, and I am sure that he will. But there are others on the other side who frankly do not get it and do not understand the value of doing things with your hands.

Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Transport, Roads and Tourism) Share this | Link to this | Hansard source

I welcome the opportunity to speak on what I regard as being an exceptionally important issue. It is the challenge of all political parties and governments to try to make some progress on one of the biggest problems confronting Australia at the moment, and that is the shortage of trade labour. Our problem is that the shortage of trade labour is now adding to cost pressures that exist in delivering projects on time and on budget in Australia. It is also at the point where it is essentially going to hold back investment in Australia and reduce export earnings. For example, in the resource and tourism sectors we do not have the available labour to fulfil our potential international commitments in the export sector. I simply say that this is a very important debate.

The training system in Australia can never be allowed to stand still. Labor found that in its period of government from 1983 to 1996, and the Howard government is now experiencing the same challenge. That is because the world of work in Australia has changed dramatically over the last 20 years. Some industries have grown in importance, obviously because of decisions—which were correct—that were made by the Hawke and Keating governments to further open up Australia to global competitive pressures. That effectively has meant that in my area, the constituency of Batman, industries that were historically important to Australia, such as the saddlery, leather and canvas industry, the textile, clothing and footwear industry and the automotive industry, have declined in importance. On the other hand, the service sector has grown in importance in my electorate. Education now is the biggest employer in my electorate, through La Trobe University and the Northern Melbourne Institute of TAFE. There has been an associated growth in the provision of financial services. Aged care is also where there are new jobs.

We as a nation always have to try to make sure that we adjust our training system to meet the needs of emerging industries. As the member for Perth outlined in the debate on this bill yesterday, the record shows that the Howard government has been all too slow to adjust to the changing world of work over the last 11½ years. Having said that, I must say that the opposition understands the importance of the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007. It is about the government finally taking up the suggestion by the Labor Party that something had to be done to encourage our young people who commence an apprenticeship to see it through. We need to create a completion bonus or an additional incentive to encourage people to put their head down and to complete the training. Labor understands that, for young people, the first- and second-year apprentice wages are not all that good. Apprentices see their mates, when they meet from time to time, on Friday night or on Saturday at the football, who have a few more dollars in their pockets because they have chosen not to undertake an apprenticeship but to work as labourers or factory hands and earn more in the first couple of years of employment. That grates on those apprentices because they are doing the training and going to TAFE, and in their minds a few more dollars would help.

That is what the trade completion bonus proposed by Labor would do. It is now emerging in the form of an incentive of $2,000 over two years, as proposed by the Howard government. That will apply to people under 30 who undertake an Australian apprenticeship in a trade occupation area. So, one way or another, both sides of politics are trying to work out how we do the right thing by young people who are prepared to take up an apprenticeship—to give them some additional financial reward. We need to encourage them to do the right thing by themselves, their families and their communities and to complete their trade, which will guarantee an active working life.

That is what is so dear to the hearts of the Labor Party—the world of work. We all appreciate that we still define ourselves by our capacity to hold down a job and to put food on the table. We want to make sure that if your children get sick you can afford to take them to the doctor, that you can educate your kids and that, from time to time, you can take them on an outing or have a holiday. But, without the opportunity of holding down a gainful job, that is not possible. Those who undertake some form of training at the completion of schooling, be it an apprenticeship or university education, have the best capacity to hold down a job for the whole of their working life. That is what this debate is about.

I say to the government that I understand that they are also committed to the world of work. But for members of the government and, in this instance, the former Minister for Vocational Education and Training, the member for Moreton, to suggest that Labor Party members do not care about work and apprenticeships is just plain wrong. It is a reflection on him and the fact that he has passed his use-by date. I think he is still suffering from relevance deprivation after having been sacked by the Prime Minister for nonperformance in the vocational education portfolio earlier this year. It is also well known around Brisbane at the moment that he is in the job market. If an attractive offer were to be made he would be out the door at the next election. But, unfortunately, it seems that the private sector is not interested in him because he failed to deliver on the vocational education front during his period as a minister in what I regard as being one of the most important portfolios of government.

It is for the reasons I have outlined that the opposition welcomed the announcement on budget night of apprenticeship incentives from the government. We are prepared to give credit where credit is due. One way or another, we have all made mistakes on the apprenticeship training front. We seriously question now whether or not it was appropriate to abolish—and governments of both political persuasions were responsible for this—the tech colleges of the past. We are all now trying to reinvent the wheel on that front. I think it is fairly well accepted in the Australian community now that, for whatever reason, both major political parties got it wrong. That undermined trade training in Australia.

I must say that I am delighted to have a cluster operation in my electorate, at Northland Secondary College, which has the support of employers, the Australian government and the Victorian government. It will create an opportunity for young people across all the schools in my electorate to come in and undertake a day’s training per week as part of their apprenticeship. That is the way forward. I hope that the proposals of the Leader of the Opposition in his budget response this year are actually taken up on that basis. Schools should not be going their individual ways but should be working collectively in a region to create a cluster opportunity so that each week those kids who desire an apprenticeship can leave their normal high school, go to a semi-work situation and undertake their trade training on a regular basis as part of the start of an apprenticeship whilst at school.

We have a responsibility as a nation to equip ourselves for the future via some form of training for as many young Australians as we can achieve, be it through a trade training opportunity or a university opportunity. It is about building our future prosperity. It is also about overcoming some of the foreign debt problems that currently confront Australia. These are boom times, but we could do better. We are now losing export earnings and the capacity to build a better future because we do not have the tradespeople to actually do the jobs, to tackle the infrastructure bottlenecks, to overcome the challenges of climate change, to assist people in improving their health, to do something about energy security in Australia and also—in that context—to do something about the national security of Australia.

Setting aside the issue of politics, it is also appropriate that we accept that we have a national crisis on the trade training front at the moment that threatens the economic health of Australia. We are talking about a skills crisis that sees a shortage of around 83,000 workers in Australia at this point in time. In youth we learn and in age we understand, and I have been around in politics long enough to understand the serious implications that such a shortage of skilled workers could have on the nation’s future, our economy and Australia’s investment and growth opportunities. I also appreciate that there is a human face to this issue. While there is no silver bullet, the government has the ability to create the right climate for fixing this crisis. If we do not, it will directly impact on the quality of life and social welfare of so many Australians, particularly young people. I am talking about not just Australia’s current youth but our future generations, who are currently working through their school years and who will enter the workforce in the next five to 10 years. So we have to get the foundations of this system right now.

It came as no surprise to many of us who move around the community that two of the top four occupational job vacancy groups on the Department of Employment and Workplace Relations website last month were labourers, factory and machine workers, and positions in the food, hospitality and tourism sectors. In those two areas alone, there were nearly 21,000 vacancies advertised in May. It is a trend that becomes all the more disturbing when you look at the skilled vacancies index and realise that the demand for workers is not abating. Last month saw increases in demand of 1.9 per cent not only for building and engineering professionals but also for those in construction trades. While the increased demand for engineering professionals is obviously of concern, when you compare the indexes of professional positions versus trade vacancies, there is a huge gap. It is clear that on the ground everyone—from small business to large multinationals—is seeking out trade workers. They are in direct competition with one another.

The truth is that those trade workers have become a rare commodity in Australia, a resource-rich nation that is letting itself down on the training front. Business and industry have therefore quickly come to the realisation, as they place ads for positions that no-one replies to, that traditional trades may not have been fashionable as an education pathway a decade ago. That needs to change and to change quickly. That is clearly the position of the opposition, as reflected in the Leader of the Opposition’s address in reply to the budget this year. It is a change in mindset that the opposition do not need to embrace, as we have never shied away from acknowledging the importance of encouraging more people into traditional apprenticeships. It was bread and butter for the Hawke and Keating governments, which, I might remind the House, created the Australian National Training Authority to force all state and territory governments—in association with the Commonwealth, trade unions and employers—to get more serious about trade training in Australia. We saw the challenge coming, we grasped the nettle and we tried to do something about it. It is only since 1996 that we have had a manipulation of the numbers to suggest that what were best regarded as traineeships in the non-traditional areas were counted as apprenticeships to hide the failure of the government in traditional trades training. That is where we have gone backwards and that is where Australia is now suffering.

Apprenticeships in the traditional trade areas of construction, electronics, automotive, catering and metalwork have always, and will always, go to the core, the bricks and mortar, of our nation and our society. They are the engine room of what is required at the moment, be it in the resources, the transport, the building and construction or the tourism sectors—just to name a few sectors crying out for skilled labour at the moment. They will fill our requirements for future mechanics, construction workers, chefs, drivers and mining workers—jobs that our society just cannot do without. I am pleased to say that apprenticeships have started to make a slight comeback in Australia, thanks to widespread anecdotes about wealthy tradespeople. Yet the complete failure of the government to recognise the importance of apprenticeships and create a culture that encourages young people into traditional trades has led the nation to face a crisis at this point. We cannot afford to let that crisis go on, because it is squeezing our economic capacity. The number of apprentices and trainees in training last year was virtually unchanged from one year earlier. And, while there were increases in the resources boom states of Queensland and Western Australia, there were declines in the remaining states and territories.

There is also a responsibility on state and territory Labor governments in some instances to be more serious about trades training. The House should recall that it was Labor in government that started the school pre-apprenticeships. We saw the benefits of those who did not want to go to university starting their apprenticeship training at school, which enabled them to complete their post-school apprenticeship earlier. That effectively meant that they were more job ready and attractive to employers. We understood the important needs of employers and the requirement of government, through the education system, to do something about assisting small and large employers who are prepared to take on the responsibility.

Training young people in Australia is a huge responsibility, so I want to say to the private sector, especially those employers doing the right thing: thank you. But I also want to say to a range of other employers in Australia that it is not acceptable to go on the job market and try to body-snatch off an employer who is doing the right thing, by offering a few more dollars to their trained labour. It is the responsibility of all employers in Australia—and I know it is a huge responsibility; it adds stress to one’s business—to accept the need to train Australians. So, to those who are doing a good job: thanks very much. But, to those who are not pulling their weight, I think I can say on behalf of everybody in the House that we all have a responsibility, including in our own electorate offices, to take on young people and train them. Training is the key to their future, and it is the key to our nation’s future.

In the portfolios I cover as a shadow minister, training is the key issue raised with me in discussions over the last couple of years about the resources sector, the energy sector, the forestry sector and, in more recent times, the transport sector and the hospitality and tourism sector. Finally employers accept that they are also part of the problem and they are looking for government assistance to try and be part of the solution. That is what the bill before the House today is about. The government accepts, as does the opposition, that the government has to take part in offering incentives to assist in encouraging young people not only to start apprenticeships but also to complete them. The measure in this bill is about a higher financial reward for doing the right thing by themselves and by their employer.

However, more has to be done. Across the states we have now started to review the length of apprenticeships. That means that in some apprenticeship training areas we can reduce the period of an apprenticeship without undermining the quality of the outcome. By starting more apprenticeships at school we can also shorten the length of those apprenticeships more than we have done in the past. I am pleased to say that in some apprenticeship areas now, such as in the vehicle repair industry in Victoria, kids who start their apprenticeship at school can have the post-school period of that apprenticeship reduced to three years. And, once they commence the apprenticeship post school, the rates are the second-, third- and fourth-year rates rather than the lower rate traditionally applied in the first year of an apprenticeship after school. That is tremendously important to young people so that they can meet their own financial commitments. Industry by industry, in association with the unions, who are the apprentices’ representatives in many instances, and with the employer organisations we have to do the hard work of looking at how we can streamline apprenticeship training in Australia but without undermining the quality of the training outcome. We do not want shoddy tradespeople in Australia. We have prided ourselves internationally as a nation that produced quality workers, and that is why, historically, we were prepared to invest in training opportunities in Australia.

There is a willingness by young people to undertake apprenticeships, but they require employers to take them on, and the employers require government assistance, through a partnership of federal, state and territory governments, to be able to carry the load of apprenticeship training in Australia. The Labor Party firmly believe the federal government has to do more in this area, and this budget measure is part of that debate. It is akin to the trade completion bonus that Labor put out for policy debate and consideration some 18 months to two years ago. We are pleased that the government has finally reacted on this front. By whatever measure, something had to be done to increase the financial payments for young apprentices of Australia. This bonus provides $2,000 in two instalments for traditional apprentices who complete their training, while Labor’s proposed skills account would pay the up-front fees of all Australian apprentices in traditional areas. People should not underestimate the cost impact of that on some young people and their families. It is not inconsiderable. We focus on the issue of HECS and higher education payments from time to time, but a lot of low-income families find these apprenticeship training fees in TAFEs are a serious financial impost on them and their families.

I commend the government for taking this initiative. As I said, it is akin to Labor’s trade completion bonus. So, by whatever measure, we are finally starting to make some progress as a nation on a fundamental challenge— that is, how we can get more apprentices, especially in our traditional trade areas but, more importantly, having attracted them, how we encourage them to complete their apprenticeship and go on to a very worthwhile work opportunity in life. I commend to the House the second reading amendment to the bill moved by Mr Stephen Smith, the shadow minister for education and training and member for Perth. (Time expired)

David Fawcett (Wakefield, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak to the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007. This bill amends the Income Tax Assessment Act 1997, the Social Security Act 1991 and the Veterans’ Entitlements Act 1986 in order to provide an exemption for the apprenticeship wage top-up payments introduced in this budget so that the recipients obtain the full benefit and, in turn, the full incentive that is designed to come from these measures. In this year’s budget the government, in its Realising Our Potential measures, introduced this wage top-up for apprentices who are under 30 years of age and who are undertaking Australian Apprenticeships in areas of skills shortages as currently defined by the migration occupations in demand list. These payments will total $2,000—$1,000 for each of the first two years of trading. This recognises that the wages apprentices receive in the first couple of years of their apprenticeships are low by current standards and that there are many incentives for them to move beyond their apprenticeship into other work where even their partial skills are recognised and paid well. In the first couple of years of training the wages can be from as low as $15,000 up to close to $20,000 in the second year, which is not a lot in today’s terms, so you can understand why many of these young people choose to move into other areas that pay better.

These payments will be tax free and they will not count as income towards determining eligibility for income support, for things such as youth allowance or Austudy. This builds on some of the other incentives and initiatives that the government has taken to encourage people to take up careers in trades, such as the mid-career apprenticeships for those over 30 years of age where substantially more is provided—close to $8,000 in the first year and just over $5,000 in the second year—to mature age apprentices. This recognises that it is a huge ask for people to make that transition when they have responsibilities for their home and family, and also for an employer, who does not yet see the productivity coming out of them, to give a wage that can sustain them. So this is an iterative step, building on those earlier announcements, to try and encourage people to move into the area of trades. There have been a range of other measures that have targeted the apprentices themselves—things like the extension of youth allowance and Austudy for over-25-year-olds as well as the Commonwealth trade learning scholarships and the tool kits which have been provided under the Tools for Your Trade initiatives.

I think that it is important in the context of addressing this bill to look at the broader perspective on trade training in Australia. Over the last 11 years the Howard government has increased annual spending on vocational and further education by some 99 per cent, which is a significant investment. Despite this, there is still a really strong case for ongoing change. What we are seeing at the moment, portrayed often as a skills crisis, is really a workforce shortage. Whether you are talking about an unskilled workforce or semiskilled or graduates or technically qualified people or the ageing of the population, the growth in the economy is seeing a huge demand for workers. There is no one approach that is going to suddenly be a magic pill that will fix all of those problems. It takes steady iterative work to introduce a range of measures to bring this about.

In terms of addressing the workforce shortage, the Howard government are taking a number of measures including making sure that we can get everyone who can work into the workforce and encouraging those who are there to stay there. There are things like the pension bonus scheme and the Welfare to Work program. Last week in the electorate of Wakefield, which I have the privilege of representing in this place, we had a forum with the Minister for Workforce Participation and we issued some 1,700 invitations to people who had indicated a concern around welfare to come and discuss any concerns they had about this program. We found that most people who turned up were very favourable towards the support that was being given to make it possible for people to gain work. Whether in receipt of parenting payments or on a disability payment, when people recognise the significant investment that is being made to encourage them to make use of the abilities they have to move into the workforce they see there is a genuine attempt to give them a helping hand, and it was very positively received.

Secondly, we need to get back to the days of having trade training as a valued career path for young people rather than it being seen as a second option if you could not make it to university. The reality is that only some 30 per cent of our young people leave secondary education and go on to universities. It is to the shame, I think, of this nation that over the last couple of decades there has been a move away from valuing trade training and it is for that reason that I have strongly supported the creation of the Australian technical college in Wakefield as well as the others around Australia. We have seen very strong support from industry, small businesses and from parents and students and they participate in the technical college. The boards that run the college are actually controlled by industry so that they have a direct say in the make-up of the curriculum, the kinds of work placements and the outcomes that are achieved by the young people who are doing the apprenticeships through the school based new apprenticeship system.

Thirdly, we need to ensure that those who start an apprenticeship actually finish it. That is part of the measures that this bill today addresses to make it easier for people to do that. Finally, we need to encourage a culture both in the workforce itself and particularly among the employers that says that it is worth investing in the ongoing upskilling of our workforce so that people, whether at a point where they never finish school or whether at a point where they can further their qualifications, either tertiary or trade, can continue and employers can see that the community sees a benefit in that investment.

One of the programs that this government has put in place which I strongly support is skilling Australia’s defence industry. In representing an area where there is a growing defence presence in uniform people, defence science and technology, and defence industry, I welcome the fact that we are now seeing a partnership between the Australian government and industry to invest money into training opportunities, whether that be at the first-tier provider level—and they are particularly looking there at graduates and project managers, systems integrators et cetera—or whether it is flowing some of those funds down to the second- and third-tier small to medium enterprises. Many of these small to medium enterprises employ the apprentices that undertake the trade training. I welcome these sorts of initiatives from the government which see partnerships develop that create that culture of investment in our young people and in our more mature workforce so that we have the skills we need to move forward and to be competitive into the future.

The drop-out rate is an issue. Forty-two per cent of those who start apprenticeships drop out, some 38 per cent of those in the first couple of years. It is a huge attrition rate. This is part of the reason that the government has taken the step to provide additional incentives for young people in their first couple of years. Not only are we providing the wage top-up; there is also the $500 fee voucher to help offset the cost of fees so that the young people receive a total of $3,000. On top of that we provide a $4,000 employer incentive, the $13,000 wage subsidy for mature age apprentices, a $1,000 trade scholarship, the $800 tool kit, and the $1,000 regional incentives to support those who are aiming to undertake trade training and live in a regional area.

There are other programs that the government has put in place to help people reach the threshold where they can even start to look at taking on formal trade training. A large number of Australians have not actually finished secondary school and last year the government committed $837 million to a program to provide vouchers that allow individuals to access up to $3,000 of training to bring them to the point where they can take on additional training. In less than five months there have been some 14,000 vouchers with some 640 training providers providing over 6,200 courses. These have been uncapped so that more people can take advantage of this. This demonstrates that there is an unmet need here which the government has recognised and it is helping people to move to that point where they can take up further trade training.

Some of the other choke points in the trade training system do not just relate to the salaries received by apprentices and their ability to stay in the system to complete their training; we also need to look at who can provide the trade training. We have talked about the Australian technical colleges, and I welcome the support of the state governments around Australia that are now looking to replicate the model—I particularly notice that South Australia are looking to replicate the model—that has been put forward by the Australian government of trade training at schools coming back to the dedicated trade schools that were got rid of, particularly in the 1970s in South Australia.

The TAFE colleges around Australia—there are 74 of them—have nearly three-quarters of all of the vocational and technical students in Australia. But, just as the technical colleges have been well received because they are very responsive to the needs of local employers and industry, we need to see an increase in the ability of TAFE colleges to respond to the needs of the employers and the communities they are located in. This is not just us saying this; there have been reports completed on it. The NSW Independent Pricing and Regulatory Tribunal’s report to their state government said that VET is a key part of the whole-of-government strategy to improve their supply of skilled labour. But it said that they needed to remove the constraints on TAFEs regarding commercial revenue retention, they needed to negotiate future industrial agreements so that any change in pay and conditions is linked to productivity agreements and they needed to provide the directors of the TAFE institutes with far more discretion and flexibility to attract and retain staff. They also needed to have a more commercial focus and to be able to engage with third parties so that they can have partnerships that benefit the students and the industry.

South Australia have undergone a number of reforms in their TAFE systems and have reduced their TAFE institutes to three broader structures. Whilst there have been efficiencies in doing this—which I welcome—they have been at the expense of training delivery, with no commensurate reductions in the level of administrative costs. There is still a large amount of authority going back into the department rather than being delegated down to the TAFE directors. I would certainly encourage the South Australian government to move down this path so that the TAFEs can play a more active role—because they are fine institutions with many good teachers—and respond to industry needs and we can see more young people moving into that area.

There has been an amount of misinformation peddled around as to whether there are enough places at TAFEs. In particular, the opposition have talked at times, and the Education Union have talked at times, about unmet demand. They talk about the fact that unmet demand is high and therefore it are this government that is preventing people going through TAFE. It is important to note that the figures for unmet demand include not only traditional trades, which are the focus of today’s discussion, but also non-qualification and leisure courses. They also include people who are unsuccessful in their application to enter a course because their scores were too low, they applied too late or TAFE cancelled courses because of insufficient numbers. So the statistics that have been brought forward do not bear any direct correlation to the areas of skills shortage Australia so desperately needs to address.

Even taking these figures into account, though, compared with 1995, using the same analysis, the unmet demand has decreased by half, which is a significant achievement. That is because of the 99 per cent increase by this government that we talked about at the start of this address. The number of publicly funded vocational and technical education students has increased by 26 per cent and, over the period 2005-08, the Australian government has provided 167,000 additional places. These have taken place through the Commonwealth-State Agreement for Skilling Australia’s Workforce, the Australian technical colleges, the Australian New Apprenticeships Access Program, which alone has provided 20,000 places, and the Group Training in the Trades program, which delivered 11½ thousand places. So there has been a significant investment by this government in trade training, and I welcome any future cooperation on behalf of the states to see that uptake continue.

There is one last area that I would like to touch on briefly, and that is the potential for industry to be involved in encouraging young people to consider trades as well as the technical and engineering and maths and science fields. I spoke yesterday in the House to a bill about higher education and the fact that the government is increasing incentives for universities to offer places in disciplines such as engineering, and maths and science, as well as this investment in trade training, but unless we have the young people who want to move into those places then those places will remain unfilled.

One of the things the government funded through the Sustainable Regions Program in South Australia was the Northern Adelaide Advanced Manufacturing Industry Group, which encourages companies such as BAE Systems, Tenix, General Motors Holden and a number of other component suppliers to become involved in a partnership with high schools in the area so that they can go into the high schools and work with the science teachers to help them see how the subjects they are teaching in either trade or technology areas are used in the workplace. They can help the teachers in practical experiments and projects that are run in the school, and they can bring the children and the teachers into the workplace to see how those skills can translate to a career in a wide range of industries, whether it be in auto, in defence, in the aerospace sector or in advanced manufacturing. This means that young people at that critical year 9 or 10 point, where they are making decisions about where their future will lie, have the knowledge and information to make decisions to go down the path that will see them take up trade training, engineering or maths or go in any of the directions this country needs to continue to move forward.

The last point I would like to make is that the reason we have been able to make this investment, and the reason this investment is required, is because of the good economic management of the government. Vision without dollars is hallucination. This government has had the vision for the education sector and the wherewithal to make the investment in it so that we are seeing a future for education in Australia. It is a future not only for education but also for demand for jobs. The fact that there is a workforce shortage and a skills shortage is because the jobs are out there waiting for people to take them. That is because the government has set in place a framework whereby industry and individuals have the encouragement and the incentive to invest in this country in creating jobs. That means that, when young people finish their training, whether it be through school, through a trade or through university, they have a job they can go to.

I welcome that economic management. I encourage the Australian community, as we approach the election at the end of this year, to consider their options and the fact that on one side you have a government that has the vision and economic credibility to bring that about and on the other side you have an opposition that, through the Education Union and through some of the statements it has made in this place, has opposed many of the measures that have brought about that economic framework and the initiatives and developments in education. In this particular case I welcome their support for this bill. I commend this bill to the House.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

I wish to speak in support of the second reading amendment to the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007. It states:

“whilst not declining to give the bill a second reading, the House welcomes additional financial support for first and second year apprentices but condemns the Government’s complacency and neglect of vocational education and training over the past 11 long years seen through:

(1)

the Government slashing its investment in vocational education and training by 13 per cent in the three years to 2000;

(2)

between 2000 and 2004 increasing this investment by only 1 per cent;

(3)

the failure of the Government to address the acute shortages of skilled labour across Australia, which the Government itself estimates to be a shortfall of 240,000 skilled workers by 2016;

(4)

the cynical political response to the national skills crisis of a standalone network of Australian Technical Colleges that will only produce 10,000 graduates by 2010; and

(5)

the failure of the Government to address apprenticeship completion rates, with almost 50 per cent of apprentices cancelling or withdrawing from training each year while Labor has been calling since 2005 for $2000 payments to encourage completion of traditional trade apprenticeships”.

This last point is a matter of great concern. A number of speakers in this debate have reflected on apprenticeship completion rates. In my own electorate I have been made aware of an example of a first-year apprentice carpenter who started off on a wage of $140 per week. Even at the end of that first year, that apprentice carpenter was receiving only $190 per week in his hand. That apprentice carpenter dropped out in order to pursue more lucrative arrangements for unskilled labourers. Indeed, there are jobs around where people can earn $500 or $600 a week and even up to $1,000 a week as unskilled labourers.

We in this House know that it is better for the individual to complete their apprenticeship or traineeship. We know that it is in this nation’s interests that we develop the skills. We say things like, ‘It’s hard to put an old head on young shoulders,’ but frankly it is up to us to ensure that young people are better rewarded for sticking at their apprenticeships.

In my area there is an organisation known as Apprenticeships Plus. They and their hardy band of host employers do a terrific job in relation to apprenticeships. The employers agree to take on the responsibility of having an apprentice or trainee in their workplace. They support that person through on-the-job and off-the-job training across the entire course of their placement. Our local community recognises that one of the biggest financial commitments and the most important investment that any business can make is in its staff. I certainly want to take this opportunity to acknowledge the time, the initiative and the diligent efforts that the host employers and their staff have provided for their apprentices.

Whilst outcomes from taking on apprentices and trainees vary widely, host employers continue to show a commitment to community participation and a willingness to invest in school leavers, job seekers and secondary school students from within their local areas. I offer my appreciation to those host employers who create opportunities to provide a base for lifelong commitment to a vocation and give apprentices and trainees life skills and choices.

Apprenticeships Plus, like others that operate in this field, have advised me that there is a very high rate of attrition in the first 12 months. Indeed, each year they have to set a budget for the number of apprentices who commence, the number of apprentices who complete and the number of apprentices who drop out. Of those who do not complete successfully, most leave for two reasons. One is a change of career path and the other is that they are simply not earning enough.

For the coming year, Apprenticeships Plus has framed its budget in terms of the prospect that some 40 per cent of apprentices and trainees will drop out. That is simply not good enough. They have given me the example of an apprentice in the horticulture field working in parks and gardens who left school at year 11. This apprentice was earning between $8 and $8.50 per hour. Then he moved out of home and the consequence of his moving out of home and having to pay rent was that he threw in the apprenticeship for a $10-an-hour job sorting recyclable plastics for a well-known recycling company. This is the kind of problem that Australia faces and that this government needs to address.

The bill before the House is aimed at keeping people in apprenticeships. It comes some two years after Labor began calling for additional payments to apprentices in the traditional trades in the form of a $2,000 trade completion bonus for apprentices. It has all the hallmarks of a government dragged kicking and screaming, in the shadows of an election, to do something. The latest annual figures show that in 2005 over 128,000 apprentices and trainees cancelled or withdrew from their courses. That is a staggering 49 per cent of all those who commenced apprenticeships or traineeships that year.

While the government seeks to talk about 400,000 apprentices in training, it fails to mention that only 140,000 of these apprentices are completing their training and it fails to mention the fact that less than a quarter of those in training are undertaking traditional trade apprenticeships. After 11 long years of this government being in office, the average number of traditional trade apprenticeships has been around 120,000 a year. The average achieved by the previous Labor government was 13 per cent higher, at 137,000.

When you look at completion rates for these traditional trade apprenticeships, an area where Australia faces the most dire shortages, the government’s record is even worse, with only 24,700 traditional apprentices completing their training in 2005. Over the term of the Howard government, completion rates for traditional trade apprenticeships have fallen from 64 per cent in 1998 to 57 per cent in 2005. This is significantly less than in Labor’s last year in office.

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

Order! It being 2.00 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.