Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation and Apprenticeships and Training) Share this | Link to this | Hansard source

Many factors have contributed to Australia’s current skill shortages. It is the result of trade training or technical education being talked down over the past 20 to 30 years, leading to a perception in the community that trade training is a second-best option to a university education. It is due to 16 years of uninterrupted strong growth in the economy and, as a consequence, strong jobs growth. We have an unemployment rate now at 4.1 per cent, the lowest since November 1974, and a growing workforce with growth in part-time jobs particularly strong. Some of the shortages are due to where we are in the business cycle. In its 2002 report Nature and causes of skill shortages: Reflections from the Commonwealth National Industry Skills Initiative Working Groups the then Department of Education, Science and Training, looking back over 20 years of skills needs, found that shortages in some areas, such as the construction trades and metal trades were evident at the peak of the business cycle whereas shortages in other areas, such as chefs and pastry cooks, have been widespread for most of the last 20 years. In other words, it is where we are in the business cycle.

The economy has been expanding for 16 years, and it is worth pointing out that in the most recent recession in the early 1990s there were no skill shortages because there was massive unemployment and almost a million people were out of work back then. However, Labor claim that skills shortages in Australia are a direct result of the former government’s neglect of the vocational education and training sector. This is simply not true. It is due to a strongly growing economy over 16 years and, as a consequence, strong jobs growth. In 1996, $1 billion was allocated to the vocational education and training sector. In 2007-08 the former government allocated $2.9 billion to the VET sector, an increase in real terms of 97 per cent. In total, the former government invested $24 billion in skills and training over 11½ years.

In 1996, 30,000 apprentices on average were completing apprenticeships and only 16,000 people over the age of 25 were undertaking one. Compare that to now. Over the last four years we have seen 544,000 apprentices completing an apprenticeship. In 2006 we had over 142,000 people complete an apprenticeship and we now have 160,000 people over the age of 25 currently undertaking an apprenticeship—that is a tenfold increase for mature age apprentices since 1996. We have also seen strong growth in recent years in traditional trade apprenticeships.

By comparison, and despite all their rhetoric about addressing skills shortages, one of the first decisions of the new government has been to scrap incentives for apprenticeships in agriculture and horticulture which provided apprentices with $800 for a tool kit and up to $1,000 to help meet training fees. To meet future skills needs, the former government was establishing 28 Australian technical colleges and had committed during the election that a re-elected coalition government would take that number to 100, at a cost of $2.1 billion. We now have over 2,000 students already receiving high-level training from ATCs—colleges which were opposed by Labor. We forecasted before the election that by next year 10,000 students would be receiving training from Australian technical colleges. Regrettably, these outstanding facilities will be transferred to schools after 2009. In addition to the technical colleges, we invested profoundly in work skill vouchers in order to meet popular demand. We pushed for more autonomy within the TAFE system and we were committed to supporting apprentices throughout their training because we believe there is more to skills and training than just providing training places. Most apprentices receive low wages, particularly during their first two years. That is why we introduced the Tools for Your Trade incentives, Commonwealth trade learning scholarships, Apprenticeship Wage Top-Up, training free vouchers and the living away from home allowance, which we extended to school based apprentices in October 2007.

The bill we are now debating, the Skills Australia Bill 2008, provides for the establishment of Skills Australia. The Rudd government have said that they will invest in additional training places and introduce an advisory board to tell them where these additional places should go. Skills Australia, an independent statutory body that will provide advice to the government on current and future demand for skills and training, will be created by this bill.

We are told this body will provide advice to the government on where to allocate the additional training places promised in Labor’s election policy document Skilling Australia for the future. It is expected that it will collect information and put together data on Australia’s current and future skills needs. There is nothing new about this. This function was done by the Australian National Training Authority. It is now being done by the National Industry Skills Committee and by the Department of Education, Employment and Workplace Relations. This is another of Labor’s boards that were announced during the election campaign to give them, on last count, 81 new bureaucracies.

The seven-member board which will make up Skills Australia will be appointed by the Minister for Education and Minister for Employment and Workplace Relations. To be appointed to the board, members must have between them experience in academia, in the provision of education and training and in economics and industry. However, despite this, who exactly will sit on the board is unclear. While we support the introduction of Skills Australia, its success will rely heavily on the people who sit on the board. Labor continues to stay quiet about who will be on the board.

The Australian Chamber of Commerce and Industry have called for the chair of the board to have an industry background. Again, there has been no response from Labor. The coalition believes it is critical that the new structure envisaged by Labor has strong business input at all levels. The first concern is that, unfortunately, there is inadequate business input in the proposed model outlined in Labor’s policy. The second concern is that the establishment of Skills Australia will create a second advisory body to advise the government on future workforce needs. Currently, there is the National Industry Skills Committee and also, as I said, DEEWR. They both currently perform this function. While Labor is putting a lot of faith in Skills Australia, it is merely a third source of advice for the government on where to allocate training places.

A case in point is that 20,000 training places have been allocated to begin on 1 April. Where these training places are to be allocated was not determined by Skills Australia; it was determined by the National Industry Skills Committee or by the Department of Education, Employment and Workplace Relations itself. Skills Australia is expected to provide advice to the government as to where the additional training places promised by Labor—that is, the additional 450,000 training places over the next four years—should go. This process relates only to these additional places. The arrangements under the 2005-08 Commonwealth-State Agreement for Skilling Australia’s Workforce will not be affected, including the functions of the National Industry Skills Committee. Under that agreement, the National Industry Skills Committee provides advice to the ministerial council on issues such as workforce planning and future training priorities within the Department of Education, Employment and Workplace Relations. The opposition would like to know what the relationship is between Skills Australia and the National Industry Skills Committee. What are the differences between Skills Australia and the National Industry Skills Committee? What will Skills Australia be doing that is not currently performed by the National Industry Skills Committee?

If Labor is serious about reducing duplication and reducing government spending then it should guarantee that Skills Australia and the National Industry Skills Committee will not be undertaking similar duties, duplicating work and research and thus wasting taxpayers’ money. Another concern is that labour forecasting is an imperfect science. Labor is putting enormous faith in the capacity of Skills Australia to forecast future skills needs.

In the Australian on 12 December, Gavin Moodie pointed out that ‘the experience of labour market forecasting has been poor. Anticipating future skills shortages is not easy.’ In fact, Mr Moodie stated that there is no record of any country successfully anticipating future skills needs.

In addition, the opposition has concerns about Labor’s centralised approach. We are told that, with Skills Australia’s advice on which industries are experiencing skills shortages, the government will allocate places directly to those sectors. This will work by the government allocating the additional places, on the advice of Skills Australia, to the industry skills councils, who will allocate the places to employers in those sectors experiencing skills shortages via a tender process and will set up training packages for training providers. In other words, instead of allocating places according to demand from the workforce—that is, where individuals themselves would like to train—the places will be allocated centrally by the minister. This puts enormous power in the hands of the Minister for Education and Minister for Employment and Workplace Relations. It concentrates unprecedented power in the office of the Deputy Prime Minister.

Labor have stated that this model is a demand-side approach. It is nothing of the sort. What they are doing is replacing a market based demand-side policy—the Australian skills vouchers—with a central planning solution where supply is provided by industry skills councils.

In an article in Campus Review entitled ‘Out in the cold’, Amy Owens, a former TAFE manager, had this to say about Labor’s policy:

... these arrangements are predicated on an unprecedented degree of centralised control over the distribution of training effort. They bypass the states and territories, current “user choice” mechanisms and other direct client-provider training transactions, and institutionalise Commonwealth controlled entities as the sole brokers of relations between employers and training providers.

Industry skills councils are bodies which provide training packages. There is considerable concern about the capacity of industry skills councils to deliver these places while focusing on the development of training packages.

A further concern the opposition has is that Labor have to realise that if their intention is to address skills shortages in certain sectors then providing training places has to be met with incentives to enter these particular sectors. If prospective students do not find a particular sector attractive then they will not enter that sector. As one columnist said:

… prospective students will choose to do something else rather than fill empty places in engineering, education and nursing if they don’t find them attractive.

People study what they want to and undertake vocational training in an industry they want to work in. People will follow their dream and find a career which suits their background and interests. If young students do not want to study science at university then they won’t. If they do not want to be a teacher, an accountant, a carpenter, a plumber, an electrician or a mechanic then they won’t. We can encourage people and provide incentives to alleviate the concerns that prospective students may have about undertaking a trade apprenticeship, such as the low apprenticeship wages they face in the first two years of training.

In fact, as a direct result of that concern we introduced a tax-free payment of $1,000 per year for students in the first two years of an apprenticeship in an area of skills shortages. In 2005 we introduced the Tools for Your Trade incentives, providing $800 tool kits to people undertaking an apprenticeship in an industry experiencing skills shortages. Up to 34,000 apprentices were able to receive tool kits each year—although not apprentices in agriculture or horticulture in rural areas—which is more than the number of completed apprenticeships in the last year of the former Labor government. In 2007 we extended that offer to people taking up training in agricultural and horticultural industries and provided them with up to $1,000 to pay for their training fees. Labor have now scrapped this initiative.

Here is another concern. Labor have announced a five-point approach to reduce pressure on inflation. Addressing bottlenecks and constraints in the economy was done by the previous government and it makes good public policy sense. However, sometimes I get the feeling that the left hand does not know what the right hand is doing. Case in point: the Minister for Finance and Deregulation is scrapping incentives for apprentices in the areas of agriculture and horticulture while the Minister for Education is proposing 60,000 additional apprentices over the next four years. It is great to have a plan to deal with inflation, and it is great to have five points, but you have to make sure that there is not an internal contradiction within those five points. It is always good for the left hand to know what the right hand is doing.

While the opposition offers qualified support for Skills Australia, we do not agree that the establishment should come at the expense of important incentive packages. If Labor do not support apprenticeship places with extra incentives then we will end up with a whole lot of research on where we have skills shortages but we will not have any students undertaking the training, because they will not be able to afford to pay their training fees or get a tool kit. There has been a shortage of chefs and pastry chefs for 20 years, and there are much more fundamental problems than simply providing the training places. While it is good in principle to allocate additional training places, it does not mean much if the people cannot afford to pay their training fees or cannot complete their apprenticeships due to financial hardship.

We also introduced a living away from home allowance for those who had to move away from home to complete their training. We extended that last year so that school based apprentices could receive this support. That is another thing that has been scrapped by the minister for finance’s razor gang cuts of February: Labor did not believe that school based apprentices required support and have scrapped that initiative as well. While it is good in principle to allocate additional training places, it does not mean a lot if secondary students cannot afford to move away from home to complete their training.

To encourage people to take up additional places, we also need to raise the perception of trade training. An apprenticeship should be, and needs to be, seen as important and as prized as a university degree. The former government’s Australian technical colleges were part of a longer plan to raise the prestige of trade training. Labor’s trade-training centres for all secondary schools will do nothing to raise the prestige of trade training—in fact, if anything they may do the opposite. The introduction of FEE-HELP into the VET industry was also part of this process to remove the barriers for people who want to upgrade their qualifications or take a higher VET qualification by attending a full-fee course. Labor are talking about introducing these places into the VET sector, but they are yet to provide us with any detail on how it will work in practice. For example: how will TAFE and the registered training organisations cope with the additional places?

We wanted to see greater autonomy given to TAFEs, to the level enjoyed by universities. With greater autonomy, TAFEs could respond to emerging labour needs much better than any politician can. If Labor really want to address skills shortages then they should not rely on these additional places and Skills Australia alone. The point is this: we offer qualified support for the establishment of Skills Australia, we support the extra training places and we agree with competitive tendering in the allocation of packages. But this has all been funded through the scrapping of the popular work skills voucher program. We are concerned about Labor’s approach of scrapping the work skills vouchers, which allow people to take up the training that they believe will benefit them in the courses they would like to do.

Workforce planning is difficult. When Labor were last in government they relied heavily on the Bureau of Labour Market Research. It failed to anticipate many workforce shortages. Their proposed model is a top-down approach which does not allow local TAFEs or registered training organisations to respond to local emerging needs. It has no way of responding as to where individuals would like to train themselves. The idea of Skills Australia is not a bad one, but our concerns are that under Labor’s proposed model there is insufficient input from business, who will be providing these future jobs, and that we have moved from a more responsive, demand-side approach to one where the supply of training places will be allocated in Minister Gillard’s surplus office.

Brendan O'Connor (Gorton, Australian Labor Party, Minister for Employment Participation) Share this | Link to this | Hansard source

I rise to support the Skills Australia Bill 2008. The bill will provide for the establishment of a statutory authority, Skills Australia, which will enable the government to properly establish what skills are needed and where they need to be located. Skills Australia is a key plank in the Australian government’s five-point plan to fight inflation. The Prime Minister and other ministers, and indeed other members of government, have made the point very clear that we have a 16-year-high inflation rate. It is a legacy that was left by the Howard government and something that we have to attend to. It occurred as a result of a number of factors, not least of all the failure of the previous government to anticipate the skill deficiency. I will accept some of the assertions made by the opposition—indeed, by the shadow minister—that you cannot anticipate precisely all of the skill deficiencies that will beset the country. But to think that after almost 12 years in government the Howard government could not have anticipated the lack of skills that were causing concern to employers and industry across the country is a hard thing to accept. The fact is that the previous government stopped thinking about public policy and stopped considering the importance of this particular area. This bill will start to get the country back on track to have a policy in the area of skills that will be demand driven.

Debate interrupted; adjournment proposed and negatived.

That is one of the problems that we confront. We have had a government that ignored this area of public policy. It did not acknowledge that the problem was as big as it was, and as a result we now have hundreds of occupational groups which need people with expertise and qualifications to fill positions. Skills Australia, as a statutory authority, will provide expertise to the government in order to attend to this particular shortage. As I was saying before being interrupted procedurally, we are going to ensure that this is a demand-driven approach, to the extent that we will ensure that employers will be given an opportunity to identify the skills they need to ensure a successful business.

Over the last decade employers have been disengaged from this area, to a point where people are acquiring skills that are not necessary. Indeed, in the case of the shortages, there has not been sufficient involvement of employers and industry in the area of skills. We believe Skills Australia will provide leadership and will advise the government appropriately in order to ensure that we focus on those needs. We know that there are major problems. We have got capacity constraints in the economy. We are attending to our fiscal responsibilities by ensuring that the budget surplus this year will be 1.5 per cent or more of GDP. We are encouraging private savings. We are going to ensure that there is a proper focus on removing bottlenecks in the economy. And we are focusing—and this bill exemplifies that particular focus—on the skills requirements of this nation. Fifthly, we are going to increase employment participation because it is critical that we do so in order to fight inflation and to prevent, wherever possible, increases in interest rates. This bill is part of the approach that the government is taking. We are filling the void that was left by the Howard government.

With respect to my own portfolio, it has been announced by the government that there will be 450,000 VET places over the course of the next four years, 175,000 of which will target people who are not in work, who are looking to enter the workforce or who are marginally attached to the workforce. I am very happy to be working in that area. It is a critical area because it provides the wherewithal for jobseekers to have the requisite skills to be in demand by employers who are crying out for labour.

A series of reports outlined in recent times have gone to the problems that have beset the country as a result of the previous government’s inaction. Firstly, VECCI made the point that the Work for the Dole scheme was deficient in many respects. Indeed, VECCI indicated as recently as last week that the Work for the Dole scheme should be overhauled or even scrapped because it does not give the unemployed useful skills. That is certainly one of the contentions in the submission they provided to the government as a result of the review that we are undertaking to look at the effectiveness of employment programs and employment services generally. VECCI were clear that that scheme is deficient in providing activities that would lead to employment. In fact, I am aware of occasions on which job seekers are having greater difficulty finding work because they are undertaking nonsensical activities in some of the Work for the Dole programs. I have been to a number of Work for the Dole programs and I have seen some elements which I am happy with. I am not particularly keen on other elements, because there seems to be a lot of contrivance when it comes to the activities for job seekers, but I am certainly keen to maintain any elements that will provide the participants with work skills or work experience that provide them with a greater capacity to find work. But VECCI do have a point when they suggest that there are areas which are seriously deficient and where some of the activities would not lead in any way to improving the likelihood of a job seeker finding work.

I can also point to comments made with respect to this particular area by the BCA. The BCA has made it very clear that the previous government neglected the skills crisis. They had been warned time and time again by all sorts of bodies, not least of all by the Reserve Bank of Australia. Indeed, employer bodies for the last decade had been warning the previous government about the growing skills shortages in this country, effectively saying they must attend to them. That particular plea by that employer body and other employer bodies fell on deaf ears because the government, of course, did not seek to attend to that particular problem. Mr Greig Gailey, the President of the Business Council of Australia, is the author of a recent article in a daily newspaper. He said:

More than ever, governments need to focus on fiscal policies and broader reform agendas in areas such as infrastructure, education, skills and workforce participation that collectively enhance the nation’s capacity to grow.

But recent federal budgets have not kept pace with the economy’s structural needs.

Instead of focusing on policy settings that invest in those areas of the economy that drive long-term growth, recent budget spending has remained fixed on driving even greater demand and consumption in the short term.

The BCA president is quite right in identifying the failure by the previous government to attend to those matters. This bill is about rectifying that problem. This bill is part of the solution that will be undertaken by this government in attending to this very important area of public policy, so I am very happy to be speaking today on this matter. It is very important that we get this right. Establishing Skills Australia will be one of the first of many steps that this government will take as part of a comprehensive approach to confronting and dealing with the skill challenges of our nation. When we establish Skills Australia we will be helping to ensure that this nation can maintain its prosperity and improve its productivity, which, in recent times at least, has been in decline. We need to do that as a matter of urgency.

I acknowledge the comments made by the shadow minister who, whilst criticising some areas of the bill, welcomed the fact that there would be some attention given to the skills area. He has asked some questions about the composition of Skills Australia, which are legitimate questions to raise, and I think those answers will be forthcoming. It is reasonable to put to the government the question of whether the seven personnel on the board of this statutory authority are in keeping with the criteria set down in the bill, and I am confident that that will be the case.

The main area of disagreement is that we on this side say that the previous government did not focus on this area. As the economics editor of the Age said in February, only a few weeks ago, the Howard government dropped the ball on the skills agenda. It turned to other matters, one of which was its own survival. But it would have had a better chance of survival if it had attended to the things that ordinary Australians need. What ordinary Australians need is a job or the skills that are attractive to a prospective employer. As the Minister for Employment Participation, I want to ensure that the programs we have out there for job seekers to participate in are effective, that the training is meaningful and that the employers are engaged with the government and other bodies to make sure that we match the skills needs to the skills. I understand the argument put by the shadow minister that, if somebody does not want to acquire a particular skill or attain a form of education, it cannot be forced upon them. I understand that, if someone is averse to acquiring a particular skill, it is not easy to suggest that they do so. But, equally, it is critical for us to ensure that job seekers are focused on skills that are in demand. It is going to be futile, in terms of the vocational prospects of job seekers, if we do not ensure that the skills they are acquiring have something to do with the real world and something to do with the demands of employers in this country.

This is a very important debate that we are having in this chamber. The bill itself is critical because it is going to set the path for the way in which the government will be advised as to the skills that are needed in this country. It is seeking—in a better way, I would argue—to anticipate the skills required. Again, I accept that you cannot precisely anticipate all skills that are needed, but I think the previous government could have done more in this area to ensure that there were not so many employers crying out for people with the requisite skills.

There are, of course, other ways in which employers can seek the right labour with the right skills. They have the capacity to attract labour from overseas. That mechanism was used by the previous government and a similar mechanism will be used by this government. There are other areas of policy to attract people back into the workforce. You can have incentives that will see second income earners coming back into the workforce or working longer—for example, the tax cuts that have been announced and that will take effect. Those tax cuts, by increasing the incentive, will increase the likelihood of, for example, second income earners coming back into the workforce or working for longer hours. There are other areas of public policy that you can change to encourage people to stay longer in the workforce. But my primary focus is to ensure that those people who are unemployed or underemployed and who can work and want to work—indeed, in many cases they are compelled to look for work—are provided with proper targeted training in order to fill the skills need. On that basis, I commend the bill to the House and hope that the opposition accede to the bill and to the reasoning behind it.

Tony Smith (Casey, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

I will just take a brief moment to support the earlier remarks of the shadow minister for employment participation, apprenticeships and training, the member for Boothby, on behalf of the opposition. As he said, we give this bill qualified support but we do so thinking that there are a number of pitfalls and potential flaws that the new government should very much take heed of. Let me first of all deal with some of what the previous government did. Over a 12-year period from 1996 we had record apprenticeship funding and record apprenticeship growth. As the member for Boothby outlined, we introduced a range of incentives and initiatives to promote trades and apprenticeships. A great number of those—nearly all in fact—are being scrapped as the price of Skills Australia.

But let me first deal with some of the substance, as the member for Boothby did, and deal with the remarks of the previous speaker. Forecasting of this nature is notoriously difficult. I know the previous speaker acknowledged that. He also needs to acknowledge that the track record of this is not good, not just in Australia but anywhere in the world. That is a fact. Throughout the world no-one has done this well, and to put all of the eggs in one basket with this new body is certainly ambitious. If it works everyone will be happy. This is not a political point, but that needs to be recognised very much up front. As the member for Boothby said, the personnel of the seven-member board, how the board works, how those personnel interact with the industry skills councils and how all that plays out on the ground where it really matters will be critical. As he also said, creating places of itself looks and sounds good but creating a place does not mean that that place will be filled. In that sense, it will very much need to be the slickest and smoothest bureaucratic operation that this town has ever known if it is really going to work in the way those opposite hope it does.

As I said earlier, and as the shadow minister outlined in great detail, this body is being created at the cost of a number of key initiatives and incentives that were introduced by the previous government. Work skills vouchers are being scrapped, business skills vouchers are being scrapped and the Australian technical colleges are being scrapped. There are a range of other initiatives that are also being scrapped, including the living away from home allowance and, as we saw in the first days of this government, incentives for apprenticeships in the agricultural and horticultural areas. That is $47.7 million worth of cuts. We point out in this debate that those cuts are not in keeping with the government’s pre-election commitments at all. That has been acknowledged by those in the agricultural and horticultural sectors. The previous government pledged that none of the incentives whatsoever—

Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation and Apprenticeships and Training) Share this | Link to this | Hansard source

Or subsidies.

Tony Smith (Casey, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

or subsidies—would be reduced or scrapped. We note that for the record. The government should at least acknowledge that. It cannot hide that fact. It cannot hide the fact that what was in its pre-election policy is completely at odds with the early action of the minister for finance. That is something that the agricultural and horticultural industries are becoming well aware of. Specifically, we refer to the $800 to purchase tool kits and the contribution of up to $1,000 to their fees. On the one hand, members opposite claim that nothing was done by the previous government yet that their abolition of all these incentives is necessary for the creation of this body to do all the things they hope it will do. You cannot have it both ways. That range of incentives was there to provide resources to people wanting to take up a trade and an apprenticeship. They were extended to the agricultural and horticultural areas and they were extended in a number of other ways, as the shadow minister outlined.

Those opposite should at least acknowledge that the incentives were all there. They are abolishing them all because they have one single solution which they are sure will work. We are giving this qualified support. We have our doubts but we say to those opposite that while advice is good—and I do not speak disrespectfully of the advice that they are getting from their departments—quite often it is worth having an open mind about these things. We will not know for quite a period of time whether this is working. This is the only shot in the locker for those opposite on this important area so I urge them to implement it very carefully and, as the shadow minister said, to ensure that those who are appointed to that body are of the best calibre and include a good mix of representatives.

I also want to address some of the other initiatives that those opposite have mooted, particularly in the pre-election period. The trades training centres in schools in particular are another plank, I suppose, of their approach to skills. I urge those opposite to re-examine this. It will not work. There are 2,650 secondary schools across Australia. The Prime Minister, when he was Leader of the Opposition, stood here at this dispatch box giving his speech in reply to the budget and promised to create a trades training centre in every single one of those 2,650 secondary schools. It sounded good. It was designed for a budget night reply but it was not designed with any deep policy thought. This is the government’s alternative to the Australian technical colleges.

The Australian technical colleges were created to make up for the failure of previous state governments—and I say Liberal and Labor—who did this country a great disservice in abolishing technical schools. I do not say that in any partisan way. There is enough blame to go around from those decisions of governments in different states 20 and 30 years ago. And because the state governments today will not acknowledge that fault, the federal government set about establishing the Australian technical colleges. We had established, I think, 23 heading towards 28 and pledged another 100 during the election campaign. Leave aside the election promises and what was popular and what was not, the reason the previous government did not say we will have a trade training centre in every single school is that in policy terms it was clear it would not work and it cannot work. If those opposite backflip on this policy, I will applaud not criticise. It will not work. For those ministers responsible for this, you will be explaining this away for a long period of time.

The technical colleges were established so there was a scale of things. These were to be real, dedicated colleges, and some exist today. There was key business input at the board level in their establishment, creating a clear link and pathway into the job fields in those particular local communities. Local community input is critical. There is no group of politicians or bureaucrats in Canberra that is expert on a particular local community and the job prospects that are going to be there in the next two, three, five or 10 years. Getting industry involvement in the creation of these technical colleges, having them part and parcel of the board of management and having a scale of things and a scale of investment so that the students attending them actually got the best possible trades education were the motivations behind it. Those opposite in their heart of hearts know that. Their policy was created for television consumption and to get through an election campaign. It was not created to help fix the skills crisis.

When you think there are going to be 2,650 trades training centres in name with an investment of between half a million dollars and $1.5 million—on average, I think, $900,000, as the shadow minister said in earlier remarks in this House and in the media—anyone with the most paltry knowledge of trades will know that is not going to buy very much. It will buy the trades training centre sign to hang onto the workshop door, and those opposite will dutifully go round and open the centres. It will buy some equipment. If you look at the hospitality industry, with which I am familiar, it is not going to purchase much. It will purchase an oven—not a good one; not one you would get at a proper Australian technical college. So you will have these small centres, many of which will be glorified garages, but what happens if the school decides its trades training centre is going to be in hospitality and a significant proportion of the school population want to do automotive? They will be studying in the kitchen or they will be going to another school.

I appeal to those members opposite: this will not work. It is over a 10-year period and it is a small investment spread across 2,650 locations. Twenty and 30 years ago, we would all agree, unless I am mistaken, that it was a mistake for state governments, both Labor and Liberal, to abolish technical schools. That is what happened, and I have heard members on both sides of this House say that was a mistake. The reason there were not small-scale facilities at every single secondary school is precisely that they did not give the scale necessary. That is why the solution is to right what was wrong and go back to the way it was.

Let’s take suburban Melbourne, because the member opposite and I are from the great state of Victoria. When we grew up—and I think we are about the same age; he just looks a bit older than me—

Brendan O'Connor (Gorton, Australian Labor Party, Minister for Employment Participation) Share this | Link to this | Hansard source

I am older and wiser.

Tony Smith (Casey, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

And he declares, in line with the new government’s approach, that he is wiser. That is good. He can make some remarks on that at another time. Roughly speaking, you had two or three high schools for one technical school, all in one community. We know that the bureaucrats are advising the government that this policy cannot work. We know that. We know that there is pressure to water this down and to try and get them to cluster in as many as they can. Those opposite should recognise that, whilst their policy was popular, this is not going to work in a practical sense. As I said, if they backflip, we will applaud. The shadow minister and I will applaud that.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

Schools have changed a bit since you were there—

Tony Smith (Casey, Liberal Party, Shadow Minister for Education, Apprenticeships and Training) Share this | Link to this | Hansard source

The new member may wish to interject; it will only prolong me in my remarks. He will learn from his whip that Labor actually are trying to move through this rather quickly tonight. I advise him to get back to his emails on his computer. We want to see improved trades and apprenticeships. As we said, we will give qualified support to this bill. As the shadow minister said, taking away those incentives that provide funds for people in a real, tangible and meaningful way is a mistake. I would ask those opposite, as they go forward, to consider that and consider their trade training centre policy, which is not going to fulfil its objective.

Jennie George (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

I will return to some of the comments made by the member for Casey in terms of the debate about the Skills Australia Bill 2008. He did stray from the topic quite considerably. I guess there will be opportunities at different times to return to the issues that were canvassed in relation to trade centres in the secondary school system. But the bill before us tonight has come to the chamber as a priority piece of legislation. It was decided to fast-track the creation of Skills Australia to do a number of things, including to help lift the productive capacity of our economy by dealing with the very severe skill shortages that exist. It seems the member for Casey is still finding it hard to acknowledge the profound problem that we have in terms of those skill shortages. In trying to address that systemic problem, we hope that it will also help in the commitment that we have to fight inflation.

As the member for Gorton indicated in his contribution, we hope the outcome of this legislation will lead to the provision of some additional 450,000 training places. With a sense of urgency, as I understand it, the first 20,000 of these places will be coming onstream by 4 April. Very importantly, over the four-year period, up to 65,000 additional apprenticeships will be supported. I think that gives you a sense of the urgency and the dimension of the problem that the minister and this side of the chamber are trying to comprehend and deal with.

You only have to look at report after report from a range of employer organisations to heed the warnings—and the alarm bells should have been ringing a long time before. Over the period of the life of the Howard government it seems all we had were knee-jerk reactions and ad hoc decisions, but it was really a failure to grasp the fundamental problems in the economy. According to even recent AiG reports that I looked at, they talk about the fact that one in two firms are still experiencing difficulties obtaining skilled labour and yet one in five young adults have not completed year 12 or a certificate III vocational qualification. So I think it would be wrong to see, as the member for Casey did, this as our only response to the issue of apprenticeship training and upgrading of skills and the skill shortage. There will be a whole raft of complementary initiatives and programs that will be undertaken by the Rudd Labor government.

This is a very important issue. The government’s own estimates show Australia facing a shortage of more than 200,000 skilled workers over the next five years. That is a huge problem that we are contending with. It is a big challenge made greater by the fact that, according to the Ai Group, nearly 90 per cent of all available jobs now require a post-school qualification. But, as we know—and I know it is the case in my electorate—around half of our current workforce lack these qualifications. So there is a great need to also upskill the existing workforce in higher levels of skill attainment.

These skill shortages—certainly in my own region—span right across our regional economy from unskilled jobs through to managerial and professional occupations but, very importantly, in the skilled trades we have a major problem throughout Australia. It is a problem that the former government really did not comprehend in terms of the magnitude of the issue. As the member for Gorton made very clear, the Reserve Bank had been warning of the consequences of skill shortages for more than a decade and continues to talk about the capacity constraints that the skill shortages are creating in our economy. The interrelationship between capacity constraints and the inflation genie being out of the bottle is one thing that is of concern to us all.

The member for Casey resorted to the usual obfuscation that members of the Howard government did when they were on this side of the chamber. I think he made reference to the record level of apprenticeships under the Howard government. The fact is, of course, that the Howard government and its ministers were very adept at obfuscating the issue of just what an apprenticeship was, and combining apprenticeships with traineeships to inflate the figures. In fact, I think our record under Labor prior to the Howard government stands up pretty well.

Over the 11 years that the Howard government were in office, the average annual number of traditional trade apprenticeships was about 120,000. This compares to the 137,000 annual average traditional trade apprenticeships under the previous Labor government. So in fact we had a better record than was occurring under the Howard government, despite the fact that they were constantly berating the then opposition as being an opposition that had lost sight of the importance of traditional trades training and the apprenticeship system. The facts tell quite a different story. I think it would be wise for the member for Casey and the shadow minister to have a look at the record of the Howard government.

We also know that when the Howard government were first elected there were substantial cuts to the TAFE and vocational system. They reduced Commonwealth investment by about 13 per cent in the three years to the year 2000. After that, despite the huge unmet demand and thousands of people being turned away, the allocations increased by roughly one per cent between 2000 and 2004. So I do not think the record is as the member for Casey has tried to portray it this evening.

I said earlier that the member for Casey resorted to obfuscation on the issue. I can remember the Howard government saying that 544,000 people completed apprenticeships over the last four years. The truth was quite different to that. Of the 142,000 apprenticeship completions in 2006—the apprenticeships as they were determined by the government, which included traineeships—less than half of those, just 56,000, were in the traditional trades. So they have got away with a lot of obfuscation and a lot of inappropriate criticism being directed to the then opposition about our lack of regard for the area of trade training and apprenticeships.

The member for Casey got up and made a virtue out of the Australian technical colleges. Really, when you look at the half a billion dollars spent on a stand-alone network of Australian technical colleges, that at best will only produce 10,000 graduates by 2010, you have to wonder what the merits are in the duplication of services and the wasteful expenditure of taxpayer funds that we saw invested in these colleges. The member for Casey talked about the issue of scale. Let me tell you, down in the Illawarra the scale was very small. I hope I am absolutely correct: I think the projected enrolment for the first year of our college was 50, and they did not make that; and, in 2008, the projected enrolment of 191 students simply will not be met. And yet the Rudd Labor government, in honouring the contracts that were entered into, is about to spend up to $13.6 million in building a brand new building for this small number of students. I do not think one can justify that at all. I think the Howard government’s belief that somehow these ATCs were the centrepiece of their attempt to deal with the skills crisis has been found very wanting.

In conclusion I just want to say that I am delighted that the Minister for Education and Minister for Employment and Workplace Relations has brought this bill to parliament very early in its sitting. It establishes the urgency with which we are dealing with this huge problem—a problem that has been building up over the last decade, a problem that came as no surprise to anybody, a problem that was talked about by employer organisations, by the ACTU and by a whole raft of people, including the TAFE directors. We all saw it coming, and the government’s response was too little, too late.

The member for Casey bemoans the fact that some of the programs that had been instituted are not going to continue into the future. I guess the reason for that would be that many of those ad hoc responses were not sufficient to deal with the endemic problem of skills shortages. This new body, Skills Australia, will provide the Rudd government with high-quality advice about current, emerging and future skills needs in Australia. It will have industry as its focus and will try to identify priority skills and training needs. Skills Australia will also provide advice on the allocation of skills training places, and those training places will be allocated according to industry demand.

I think this is a great initiative. I commend the minister for the speedy way in which she has managed to bring this legislation to the parliament. It shows the urgency of the problem and the fact that we are really serious about it. We believe that this new authority will provide our government with strategic advice about current and future skills needs so that our policy response and programs can do much more to address the gap between the demand for and the supply of skilled labour and skilled workers, which was sadly neglected by the former Howard government.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

I rise this evening to support the Skills Australia Bill 2008. I think it makes sense. I welcome anything that looks at enhancing and increasing opportunities for employers and young people in rural and regional Australia. I am hopeful and optimistic that the intention behind creating Skills Australia is to ensure that it is for all Australians, including those in rural and regional areas.

I have spoken many times in support of measures by the previous government to alleviate the skills shortage, particularly measures that are continuing strongly in my electorate. For nine years, I made it a point, when everyone was focused on university degrees, to focus on apprenticeships, trades and certificates. I will not change that point of view, because that is where the majority of Australian opportunities lie. As I have said before in this House many times, we cannot all be chiefs; there have to be some indians. It is vitally important that our young people in the electorate of Riverina and in other electorates are given opportunities to work and to own their own businesses as a result of having done an apprenticeship in some trade or other occupation.

In my electorate I have an ongoing issue with employers being unable to find skilled workers locally. It is becoming increasingly difficult. More and more of the employers in my electorate are having to source skilled workers from overseas. They do not want to do that. They do not want to go to the expense of doing that. But the local tradespeople and the local businesses, in order to secure their current employment, to get productivity gains up, to meet their forward contracts and to cater to their market, do need more workers. At this point in time many of them are forced to go overseas and look for skilled workers to bring in under the skilled migration program.

The establishment of Skills Australia, in my understanding from reading the bill, will enable the government to receive quality advice about the current, emerging and future skills needs of Australia. That is a bit questionable. I am not sure that anybody has ever been able to forecast or anticipate what skills are going to be available and required. I hark back to the Intergenerational report, which the former Treasurer, Peter Costello, was master of. I look at that and see the difficulties that the new body will have in forecasting and anticipating the needs for the future. Today we talked a lot in this House about carers, elderly people and aged care. I am very concerned for the disability sector. I wonder, when there will be such a small number of people entering the workforce between 2020 and 2030, how on earth we are going to actually get the people with the skills and the training to be able to care for and meet the needs of the disabled and the elderly. It is a very big issue and, hopefully, Skills Australia will have the adequate expertise to make provisions for the future.

In supporting the bill, I urge the Minister for Education and Minister for Employment and Workplace Relations to ensure that Skills Australia will have an adequate representation of a cross-section of rural and regional industry and rural and regional people, because we are every bit as entitled as everyone else to have our views and issues reflected when these forecasts are happening and decisions are being made.

It is my understanding that the Skills Australia concept has received wide support from the industry. But, again, I want to ensure that there is strong rural and regional business input at all levels. I am not quite sure—it has not been clear—of the relationship that will be formed between Skills Australia and the National Industry Skills Committee. I think that is something that needs some very careful thought.

There must be incentives to encourage people to undertake training in areas of skills need. Supplying additional places will not automatically ease the skills shortage; you have to put incentives into place in order that business operators and others will take up the opportunities. There has been no real action to date from any Labor government—and I do not single out this Labor government, but I talk primarily about that of New South Wales, the state that I hail from—to ensure that incentives are put in place. In fact, I am very concerned about the current Labor government’s first 100 days. I have to be critical about this because it affects the people that I represent. I am not criticising the government purely for the sake of being critical; I think I have grounds for being critical about the cuts that have already been made to the incentive program for agricultural and horticultural trainees. Cutting the apprenticeship incentives for the agriculture and horticulture program—a $47.7 million assistance scheme designed to encourage workers to return to agricultural industries by providing grants of $800 for tool kits and up to $1,000 to help with training fees—is very sad and is not a very good signal of the commitment to and understanding of the needs and issues of rural and regional youth who are looking to enter the workforce.

It is very important that we encourage our young people to stay and work in regional areas. I try to encourage them to stay and work in the Riverina. I have worked tirelessly with Charles Sturt University and Riverina TAFE to give our kids opportunities in exciting career pathways. We now have veterinary science, dentistry, clinical sciences and pharmacy at Charles Sturt University in Wagga Wagga. These are the sorts of career options that many young people want to follow. If you introduce them into a rural and regional university you are more likely to get rural and regional kids staying and working in regional areas. I have worked similarly with TAFE. We have some fabulous joint programs, diplomas and degrees with Riverina TAFE and Charles Sturt University. To see this assistance scheme scrapped was very disappointing. We need to keep strengthening our regions, and I am concerned that the opposition does not really understand the needs of rural and regional areas and the support that rural apprentices require.

Belinda Neal (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

They certainly don’t; the opposition is completely clueless.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

I am sorry—you are dead right. I am so used to it; it takes a little bit of undoing. I am concerned that the government does not understand the training needs of rural apprentices. Unless we do something really serious and continue with the incentive programs to ensure that young people remain in rural and regional Australia, there will be a price to pay, and all Australians will pay that price. It is absolutely imperative that agriculture is considered one of the fundamental requirements of the Australian people.

We have some significant issues that we need to confront. I would like to read out some statistics. I am not quite sure where the member for Throsby got her statistics from with respect to the former government’s approach to apprenticeships. In 2006 there were 3,750 apprenticeships in training in the Riverina electorate. That is not a fudged figure. There was no smoke and mirrors or cloaks and daggers to get those numbers. In March 1996 there were 1,420 apprentices. That figure well and truly more than doubled in that period of time.

As a medium-enterprise businessperson and a prolific trainer of apprentices, I know the difficulties in the years prior to the Howard government’s election in getting any incentives or recognition for training apprentices. It was simply all about university degrees. Those who wanted to go to TAFE or do the admirable trades and services apprenticeship in any area were simply considered not worthy. I raised it in this House with the government that I had been part of since my election in 1998. I was very concerned about the way in which parents were considered unsuccessful if their child was not doing a university degree. If you were at a barbecue and somebody asked you what your child was studying at university, the drop-dead barbecue stopper was to say, ‘My son is a panelbeating apprentice.’ The peer pressure on parents to send children to university regardless of whether or not it was really their forte was quite strong, and a lot of young people were in university doing degrees that did not lead to better employment prospects.

We saw the decline of apprenticeships over that period of time. It took some time before the former government picked up and ran with this issue that needed to be addressed. Thankfully, they finally did and I congratulate this government for continuing on that pathway. I hope there is particular consideration for those rural and regional people who make up such a great part of the nation’s prosperity and GDP.

The New South Wales state government has issued a press release through Adrian Piccoli, the member for Murrumbidgee, announcing that there will be a trade school in Griffith. I congratulate the state government for putting a trade school in Griffith. I have long sought a technical college in the Griffith area because I think it is one of those areas that desperately require some sort of functional area where kids can concentrate on entering a valuable trade. I do congratulate the New South Wales state government and hopefully we will see that school opened in 2009. Surely the construction of that facility will be on track.

In supporting the bill we have before us today, I say to the minister: well done for pursuing the skills that Australia workers require. I do not accept the criticisms and accusations of lethargy directed at the previous government because I think that our track record on vocational education and training genuinely speaks for itself. You cannot fudge the truth. You can allege percentages and use smoke and mirrors, but you simply cannot fudge the truth. The truth is there to be known. I am sure there is further growth that can take place with Skills Australia. All I ask of the minister is that she ensure Skills Australia has adequate representation from rural and regional Australia, because we are certainly entitled to have access and support as well. In supporting the bill, I urge and encourage the minister to ensure rural and regional Australians are included and that we do govern for all of Australia.

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

The Skills Australia Bill 2008 establishes a vital element of Labor’s skills strategy, Skills Australia. This will provide the Australian government with independent, high-quality advice to assist with better targeting of support for the workforce development needs of businesses and workers across the country. Skills Australia will comprise seven experts drawn from a range of backgrounds including economics, industry, academia and training providers. The legislation establishes the operational arrangements to support the independent body, including provisions relating to conflict of interest issues, arrangements for the appointment and service of members, remuneration of members, procedures about conduct and arrangements for working groups to provide it with the capacity to investigate issues deeply by drawing on a wide range of stakeholders.

This is sorely needed legislation. We now have a skills crisis of massive proportions. In vocational education and training, on the former government’s own estimates, Australia faces a shortage of more than 200,000 skilled workers over the next five years. By the year 2016, that will be 240,000 skilled workers. This skills crisis has been building for a decade. Indeed, the Reserve Bank of Australia warned the previous government as far back as 1997 that a skills shortage was one of the capacity constraints in our economy adversely affecting our economic growth. The previous government ignored the warnings; they simply were not interested. Indeed, they attacked the TAFE system. They slashed funding to TAFE, which is the largest single provider of training in Australia—back in 1997, they reduced the Commonwealth investment in TAFE by 6.6 per cent for the following three years to 2000. This had damaging flow-on consequences for TAFE, including that TAFE has not been able to adequately meet the demand for training. Over the life of the previous government more than 325,000 people were turned away from the TAFE system.

I want to make a couple of remarks about the importance of TAFE to underscore what a debacle this was. In 2005 there were 1.64 million students in the vocational education and training system in Australia—more than one in four persons aged between 15 and 19; indeed, more than 10 per cent of all working age Australians. Of those students, 1.26 million—that is to say, 77 per cent—studied in TAFE. Since 1997 enrolments in the vocational education and training area have grown by over 13 per cent and in 2005 TAFE provided 304 million annual student hours of vocational education and training. Clearly, from these figures TAFE is a vital public asset which is the engine and heart of the whole vocational education and training system. TAFE plays complex and multifaceted roles in the development of Australia’s education and skills base, in strengthening industry, in the achievement of broader government objectives and in the social cohesiveness of communities, particularly in regional areas.

During the Liberal years vocational education and training funding decreased in real terms, especially in relation to the growth in the system. Commonwealth government funding of TAFE declined by 24 per cent between 1997 and 2004. At the same time we had the introduction of Australian technical colleges. They were introduced at a cost of $343 million over five years to the Australian taxpayer, in the process rising to more than $580 million in real funding with further election promises made in 2007. The previous government promised that these technical colleges would address the skills shortages and provide vocational education and training to young people, which the former Prime Minister claimed was otherwise not available. This was simply not true. This is exactly the role which TAFE carries out, and the previous government’s hostility towards TAFE was very damaging to this nation’s best interests. The technical colleges simply duplicated the TAFE system. They were set up as a private provider in competition to the public system, the TAFE system, which has been literally starved of growth funding by the Howard government. Indeed a Senate estimates committee found the ATCs to be an outrageously expensive way to train apprentices when compared with the TAFE system.

The bottom line is that TAFE is and must be a major player in addressing skills shortages. A serious funding shortfall has shown itself in the form of higher class sizes, reductions in TAFE courses and cuts to student services. There has been a high level of unmet demand for vocational education and training courses at a time when we need potentially qualified and skilled people in the Australian workforce. In my state of Victoria the TAFE teaching workforce has an average age of 53 years. There are serious skills shortages in the TAFE teaching profession. There is a need to attract and recruit to the profession—and retain—expert industry professionals. There is clearly a need to address the professional development of this teaching workforce as a priority. We need qualified plumbers, accountants and the like in TAFE and we need them to have teaching qualifications to address the literacy and numeracy difficulties in the general population.

I want to mention the particular problem of casual employment in TAFE, and I thank Gillian Robertson and Rob Stewart from the Victorian branch of the Australian Education Union for the information that they have provided to me and no doubt others on this issue. A 2002 study estimated that more than 50 per cent of TAFE teachers in Australia were casually employed, with a figure as high as 70 per cent in some states. Casually employed teachers are often paid only for the hours that they teach, so they are not able to cover a great deal of the other work that their teaching generates, such as administration, managing student issues, student counselling and so on. This casual employment undermines quality. These teachers often work large amounts of unpaid time to manage the workload generated by their teaching. They are neither funded nor encouraged to participate in the professional life of their TAFE. Most often they are neither encouraged nor funded to participate in their own professional development. Many casually employed teachers in TAFE report unmanageable levels of travel as they attempt to cobble together enough work to survive.

Underfunding forces TAFE employers to use casual employment. Indeed many TAFE employers acknowledge the unacceptably high levels of casual employment and point to government underfunding as the cause. This effectively means that TAFE teachers, whether casually or securely employed, are carrying the burden of underfunding. Casual employment acts as a disincentive to experienced industry teachers coming into TAFE. Most industries report that poor working conditions and low salaries are a disincentive to those working in industry to take up TAFE teaching. In trades areas in particular, people nominate the inability to get secure employment as a major reason for not pursuing teaching in TAFE as a profession. These are very serious issues and problems. I hope that this government will be able over time to progressively address these very important issues.

Over the years, I have taken a big interest in unemployment because of its impact on the community that I represent. I have come to the conclusion that unemployment nowadays is all about education and skills. If you have got the education and you have got the skills then you will get a job; if you haven’t, best of luck! I think it is regrettable that the path that we have gone down as a nation is to import skilled migrants to meet our skills needs rather than to put a decent investment into our own young people in the form of skills training and education. I have talked about what has happened with TAFE. We have seen the same thing with tertiary education, with domestic undergraduate commencements essentially flat-lining during the era of the previous government. At the same time we had undergraduate commencements by overseas students dramatically increasing—thanks to a government which preferred overseas students because they paid full fees—we also had cutbacks in federal government support for universities and cutbacks in federal government support for TAFE and therefore a move to meet our need for skilled labour by essentially outsourcing our demand for skills and training. This has led to a growing addiction to skilled migration. It has gone up from 24,000 back in 1996 to over 100,000 now, so it has quadrupled. I think this is a short-sighted approach. I think that the answer lies in training young Australians and providing proper educational and training opportunities. I commend the government for introducing this bill and for its attention to skills issues, and I commend this bill to the House.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

Little is more important to a parent than their children’s future. It has often been said in this place that education really is the key to our economic future. It is also the key to our kids’ future. Clearly our economic future is very important to us all. As a matter of fact, it is probably the single biggest motivating force for members representing their electorates in this place—at least, I would hope so. We clearly acknowledge that there is nothing more important than the future growth of our economy and that one of the things we must do is ensure that there is an adequate supply of skilled labour. The Skills Australia Bill 2008 is a tangible response to the need to provide this country with a supply of skilled labour. It is the first response in 11 years to address the economic constraints imposed on our productivity by the distinct shortage in the supply of skilled labour at present. This bill is part of Labor’s five-point plan to address the inflationary pressures on our economy that we see at present, and one of the major things is the economic restraint imposed by the limited skilled labour available.

I have seen this up close and personal. I have two sons who now are both tradesmen. One of my boys works in the construction industry and the other works in the mining industry. Having knowledge of someone who works in the mining industry over recent times, I know the actual effects of the skills shortage there. Without putting too fine a point on it, the money that can be earned in that industry is certainly very big and it attracts a lot of young people. My son comes from the outer metropolitan areas of Sydney but he works at Blackwater, which is very close to your electorate of Maranoa, Mr Deputy Speaker Scott. He works side-by-side with a lot of young fellows out of Melbourne, Launceston, Hobart and every other mainland city. He works as an electrician.

The reason why skills are in short supply in other areas of our economy, particularly in the skilled trade areas, is that so many young people are now working in the mines. Mining companies can afford to pay good money, but, if you live in an outer metropolitan area of Sydney, or indeed any other area, it becomes a very difficult exercise to get a power point fixed or essential trade work done. This all came about because, when it was elected some 11 years ago, the Howard government saw fit to wind back the commitment to trade based training. It saw fit to wind back by 6.6 per cent Commonwealth investment in TAFE. What we have seen since 1997 is some 325 young people turned away from TAFE. These young people would have been our future electricians and carpenters but never got their start. At the stage where they were winding back their investment in those areas this same government saw fit to abolish the Australian National Training Authority because they thought: ‘Industry will take care of all that. We don’t have to worry about that. They will do that themselves.’ That was just a failed judgement on the part of the Howard government because, quite frankly, what we are now seeing is the direct product of years of neglect in attending to the supply of skilled labour in this country.

It is not simply the member for Werriwa standing here now and saying this; this is something that was put to the Howard government over the years since 1997. It was put to them by the Reserve Bank of Australia, who indicated the economic need for the government to address the mounting skills shortage they observed throughout the economy. It was put to the government no less than 20 times over a decade that it needed to act and do something about looking at the deplorable state of skills development within the Australian economy. As a consequence, as the member for Wills correctly pointed out, it left industry with no alternative but to apply short-term fixes to the skills problem by relying on 457 visas for the temporary importation of labour into this country to do the work that should have been performed by Australian labour. This should demonstrate that we cannot take a short-term fix to the issue of financial debt—as the Howard government did in those days—and cut off funds to the thing that can actually generate job growth and economic growth within the country.

But what was probably more disturbing, apart from the 20 warnings that were given by the Reserve Bank and apart from abolishing the Australian National Training Authority, were the comments by the then Minister for Vocational and Further Education, Mr Andrew Robb. At an industry forum he admitted: ‘We have got a problem with skills shortages. I mean that we knew it was coming but it has arrived with force and now it is going to get worse.’ That is not bad commentary from a minister who was responsible for skills development! He could hardly claim to be prophetic. Of course they knew there was a problem. There were 20 warnings that suggested as much from the Reserve Bank. And he was right in one respect: it is going to get worse unless it is addressed—and that is what this bill is designed to do. This bill is a tangible response to addressing the skills shortage. It is the first response in 11 years, but it is certainly one that, first and foremost, actually addresses vocational education. It has regard to, for instance, what the ACCI and St George Bank have been saying in their annual survey over the last three years, which is that the prime economic constraint in the economy at the moment is the skills shortage.

This bill will establish the independent body Skills Australia. It will be responsible for providing advice to the government on skills needs and skills development. It will work very closely with industry. As an independent statutory organisation it will consist of seven members drawn from a range of backgrounds, including economics, industry, academia and training providers. It will take a focused view on the provision of skills in this country. It will not only look at what is required now; it will address what will be required as a result of our projected economic growth in the future. It will do what the Howard government failed to do—that is, plan ahead. This organisation will be the key organisation to provide advice on the allocation of 450,000 skilled training places from 2007 to 2011. These are crucial, established training positions, if we are serious about addressing the economic constraints in our economy as it presently stands.

The Rudd Labor government is committed to tackling skills shortages and tackling them head-on. We understand the urgent need to increase the supply of skilled workers. We will ensure that investment is targeted where it is really needed. We will ensure that the results of this achievement are in line with the current demands of industry and also with the projected position of industry over the decades ahead.

This is a far-reaching bill in what it seeks to establish. It will be as visionary as when the Australian National Training Authority was first introduced under the Hawke administration. It will not only seriously address the skills shortages in this country; it will lay down the foundations to give skills development a real future in Australia.

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

It gives me great pleasure to have the opportunity to speak to the Skills Australia Bill 2008. This bill represents the first instalment of Labor delivering on its election commitments to address the skills crisis that is restricting our economic growth and fuelling inflation. Delivering on another election commitment, this bill will allow for the establishment of Skills Australia. Skills Australia will be a statutory body and will provide independent expert advice relating to the nation’s workforce skills and development needs. It will be steered by a chair and six other members drawn from industry, economics, academia and educational backgrounds. Skills Australia will advise the Minister for Education and Minister for Employment and Workplace Relations directly.

The bill outlines the constitution and membership of Skills Australia, including the chair and six other members, to be appointed by the minister. Skills Australia will present to the minister an annual report, which the minister will table in this place.

The creation of Skills Australia represents a significant shift in skills and training planning in this country. Gone are the days of the Howard government and the narrow and failed voucher system which was driven by the supply of labour. Skills Australia will make sure that Australian government policies to address the skills shortage are driven by the real and emerging demands of industry. We need to ask ourselves how we got to the point where skills shortages are one of the biggest impediments to economic growth through gains in productivity.

Addressing the skills crisis is a top priority for the Rudd Labor government, unlike those opposite who chose to ignore the 20 warnings over the past years from the Reserve Bank that skills shortages were limiting economic growth, driving up inflation and therefore driving up interest rates. Those opposite reduced funding for the TAFE system, denying more than 300,000 Australians the chance to gain further vocational education and training during the life of the previous government.

I do not have to look too far myself to see the impact that skills shortages are having on our economy. I just need to look at my own electorate of Canberra and the ACT more generally. In the ACT we have the lowest unemployment rate in the country, currently at 2.1 per cent. We have the highest number of job advertisements, in proportion to the workforce, of anywhere in Australia. We have the nation’s highest workforce participation rate, at almost 73 per cent, and we actually have far more jobs advertised than there are people unemployed.

Whilst this is a great position, in one sense, for the ACT economy, it highlights the impacts that those skills shortages are having on local businesses. As I talk to employers in my electorate, they constantly state that the skills shortage is their biggest impediment to growing their business. While the Howard government sat on its hands, the state and territory governments have been quite active in taking steps to identify skills shortages and finding ways to fix them. The ACT Labor government established the ACT Skills Commission, which released its interim report in October last year. I congratulate the ACT Stanhope government for taking this significant step and getting on with the job of attacking the skills shortages problem in our community. I note that the interim report has been well received here in Canberra by business groups, unions, training providers and the broader community. I commend the Canberra Business Council and its CEO, Chris Peters, on their positive contribution and leadership through the business community in addressing the impacts of the skills shortage here in the ACT.

Of course, the skills crisis is a national problem. It requires national leadership from the federal government and, ultimately, a national solution. Establishing Skills Australia is an important first step in tackling those skills shortages. The Rudd Labor government will be funding the creation of an additional 450,000 training places over the next four years. Unlike those opposite, we on this side of the House recognise that we cannot afford to sit back and allow this lack of attention to continue. We believe in swift action to address the skills crisis, which is why we will have an additional 20,000 training places available from April this year.

That is a real, immediate change. From next month, an additional 20,000 Australians will be able to access vocational training. These places will be directed at those people who are currently outside the workforce. This will mean another 20,000 people, with newly attained skills, can enter the workforce on completion of their training. This will make a huge difference to employers around the country and to my own town of Canberra. Labor will also be supporting 65,000 apprenticeships over the next four years.

I have in my hand the skills in demand list for the ACT, provided by the Department of Employment and Workplace Relations. It makes for some fascinating reading and clearly shows the breadth of the skills crisis in my community. In the ACT, we have critical shortages in all engineering trades, all automotive trades, all electrical and electronics trades, all food trades, and all construction trades bar one: stonemasons. We also have serious shortages in professions and in information and communication technology sectors. This means that vacancies cannot be filled for occupations such as architects, metal machinists, locksmiths, welders, sheet metal workers, motor mechanics, panelbeaters, spray painters, electricians, refrigeration and air conditioning mechanics, computer programmers and other IT specialists, roof tilers and even brickies, through to butcher, baker and cabinet maker—the list goes on and on. It really makes one wonder how on earth a government of 12 years could allow this situation to develop.

It is only with real, direct and timely action that we can begin to address the skills crisis left unaddressed for so long by the former government. I am very pleased to be part of a government that is taking swift action and definitive action on this critical issue. The establishment of Skills Australia is the start. It will lay the foundation for continued positive action from the Rudd Labor government to address the skills crisis. I am looking forward to both the establishment of Skills Australia and a turnaround in the deplorable state of affairs left by the previous government.

Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Link to this | Hansard source

I would like to start with what we all agree on. I think that every inaugural speech from both sides of politics has extolled the virtues of education and skills. They are all correct: learning has real power. The acquisition of skills, be it a certificate III or a four-year apprenticeship, can have the power to change a life, to transform and diffuse technology and to assist the rise and rise of consumer wealth. For all of us here who love education, the influence of skills is not news. Imagination, innovation and entrepreneurship flow from a fertile and well-trained mind. But an educated, skilled nation does not simply wake up to find itself highly skilled. Knowledge is a process of accumulation, not instant genius. Our nation and our people, more than ever, need the persistent and consistent promotion of skills. The notion of one job and one organisation for life is no longer relevant to the fluid and transient 21st century. The requirement for labour skills and talents will rise and change with market trends. Jobs once thought safe will evaporate. In our new century, our workers must be able to rapidly adapt to a changing work environment and have to be supported in their need to train and retrain and be students and apprentices again to acquire multiple skills for multiple careers.

I think one of the real capacity constraints facing our nation is the underdeveloped talent of our workers. Australians have innate talent; there can be no doubt about that. But they need leadership and they need skills training to develop their abilities. One of the most important things that we can do in this place is to help build an individual’s skills, giving them not only what they need to have a satisfying working life across many careers but also the wherewithal to contribute to our society and our community to their full potential. Corporations, governments and, indeed, nations who support and build workers’ skills will, in turn, build their own competitive edge, ensuring their future success in the global marketplace. Yet one of the major failures of the Howard government was its cavalier, leave-it-alone attitude towards our future prosperity, evidenced by its neglect of skills formation in Australia. Australia has not trained enough new or existing workers to keep up with the demands on our economy and our workforce.

There is an unprecedented demand for our resources across the world. Mineral and energy resource prices are at all-time highs. Our iron, steel, alumina and aluminium exports are contributing to building and shaping the future of the world. But the previous government sorely neglected our need to remain globally competitive and the sustainability of our prosperity. Twenty times in the last three years the Reserve Bank warned that capacity constraints, including skill shortages, were driving up inflation. Indeed, the Minerals Council estimated that projects in excess of $100 billion were under threat from capacity constraints, including lack of skills training. Substantial growth opportunities, particularly in regional and remote parts of Australia, may be lost. It has been left to Labor to repair the legacy of the previous government.

Skills Australia is a key plank of the government’s five-point plan to fight inflation and to secure higher living standards for all Australians. Labor recognises that our economy is constrained by limits to its capacity to sustain higher growth without inflation, in large part because of a lack of skilled workers. The Minister for Employment and Workplace Relations outlined in her second reading speech on the Skills Australia Bill 2008 the depth of the skills shortages, in particular in the mining and construction sectors. Whilst in the last five years there were 54,000 new jobs created in mining, there has been a fivefold increase in vacancies in the sector, and we see the delay, mothballing and increasing costs of many projects. Indeed, by 2015 there will be a requirement for another 70,000 people in the resources sector. These are problems that Labor needs to solve.

In my own electorate of Maribyrnong, over 7,000 people work in manufacturing. It is the single largest industry employing my constituents. Policies which invest in the skills of the people of Maribyrnong will also, in turn, secure a competitive future for manufacturing. Policies about skills training are particularly relevant in my electorate because there are more technicians, trade workers and machinery operators and drivers than there are workers in any other collective group of occupations in the seat. Investment in skills creation is fundamental to the next wave of economic reform. As the minister indicated in her second reading speech, Skills Australia is the first step of many that this government will take as part of a comprehensive approach to secure a prosperous future which maximises workforce participation and productivity. Having people outside of the workforce is a waste of the national economic potential. International research shows that without substantial and significant upskilling in the workforce our relative skill level will be lower than those of our international competitors in the future, affecting our future performance economically.

The Productivity Commission revealed that the surge in productivity growth from the 1990s was by far the major factor behind average income acceleration in that period. Indeed, much of the high productivity growth through skills development and high performing industries in the nineties was passed on to consumers in the form of lower prices at the time. The legislation establishing Skills Australia sets out the objectives of the new statutory body, which are to provide for expert and independent advice in relation to Australia’s workforce skills and development needs. This will target what the government is doing in line with what industry is demanding. Industry demand, in the analysis of the workforce skills needs across industry, will be at the heart of the skills training program. I am also pleased that Skills Australia holds the promise of developing and maintaining relationships with the states and territories and with their relevant authorities and others interested in workforce development across all of our workforce.

Labor’s focus on new training places—an extra 450,000 training places over the next four years—with many of these training places leading to higher level qualifications, such as certificate III level or above, will enhance the quantity, the quality and the depth of the skills of our workforce for years to come. The consultative and cooperative approach adopted by this bill, and the Skilling Australia for the Future policy, shows the government’s commitment to working constructively to align skills development policies and training with industry priorities. I applaud the support for up to 65,000 apprenticeships over the next four years under the Skilling Australia for the Future policy. Apprentices play a crucial role in building Australia’s skills base, and acquiring new skills will help lift the participation rate and lower the unemployment rate for 15- to 19-year-olds in particular. After all, people with high qualifications have higher rates of participation and employment, and their working lives tend to extend longer than those without qualifications.

But this Skilling Australia proposition is also vital to lifting those outside the social and economic mainstream into employment. Under the Howard government the Australian training system insufficiently helped those who were outside the workforce to re-enter it. Australia’s record on training those without employment is, in fact, poor. Under the previous government, Australia spent 0.04 per cent of its gross domestic product on training those who were not employed. We were the fifth lowest in the OECD—a shameful result. There are an estimated 526,000 15- to 24-year-olds not engaged in full-time work or study. Skilling Australia provides the opportunity to potentially rescue a lost generation and to ensure much more engagement in the workforce. Also, another 544,000 people who are underemployed in Australia will have greater access to skills training and will be able to participate more fully and satisfactorily in the Australian workforce. Enhanced vocational training is critical to delivering a genuine full employment economy, where existing workers’ jobs are secure and where those outside the workforce have the wherewithal to participate more fully. That is why I am particularly pleased by Labor’s commitment to allocating more than a third of the additional new training places to people currently outside of or marginally attached to the workforce to equip them with the skills that they need to gain employment. Indeed, the remaining places will be targeted at training people who are currently employed but need to upgrade their skills.

In my capacity as Parliamentary Secretary for Disabilities and Children’s Services, I have become acutely aware of the impediments to entry or re-entry to the workforce for people with a disability or mental illness. Rudd Labor certainly recognises the merits of certified training and assisting people on income support payments to acquire skills and gain lasting employment. Our government understands that those with a disability or mental illness should be given the vocational and employment opportunities that they deserve to gain and retain work. As I said in my first speech to this House, it will do this:

... not so people with disability receive special treatment but so they receive the same treatment as everybody else—the rights which are theirs, with the dignity that they deserve.

The government’s commitments under Skilling Australia for the Future and other policies, such as Labor’s national strategy for mental health and disability employment, chaired by the Minister for Employment and Workplace Relations and me, will contribute to the government’s social inclusion agenda. This legislation enhances the lives of people in many ways which we can only begin to appreciate. In conclusion, I believe that the Rudd Labor government understands that Australia will be what it knows. I congratulate the minister on this bill and commend it to the House.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

Tonight I rise to speak on the Skills Australia Bill 2008, which is currently before the House. This bill highlights the determination of the Rudd government to tackle Australia’s worsening skills crisis, a crisis that has been compounded by a decade of inaction under the previous government and one that has significant economic and social implications for limiting Australia’s ability to meet its future challenges. The purpose of the Skills Australia Bill 2008 is to establish an independent statutory body, Skills Australia, whose role will be to provide the government with high-quality advice about the current, emerging and future skills needs of Australia. The establishment of Skills Australia is an important part of this government’s commitment to safeguarding Australia’s long-term prosperity. This includes making sure that the right conditions are in place to guarantee Australia’s continued economic development. Among other things, this depends heavily on our capacity as a nation to produce a skilled workforce and to lift Australia’s flagging productivity rate. It also requires a more sustained focus on social inclusion, a term which describes a society where all have an opportunity to participate fully and meaningfully in the workforce and in community life.

The establishment of Skills Australia will help to identify specific skills shortages in our economy. It will also help identify and plan for the relevant pathways to address these shortages. Comprised of seven members drawn from a range of backgrounds including economics, industry, academia and training providers, its mandate will be to match more closely the range of skills training available in Australia with the needs of our changing economy, especially when it comes to those areas where skills shortages are most acute. Skills Australia will help industry and business plan for a future where people with the necessary skills and training will be available to take them forward. It will help us inform young people of job market openings and optimum training options. It will help us advise existing workforce participants who are looking to retrain, take advantage of new pathways or, indeed, return to the workforce following redundancy or other interruptions to their working lives and it will help schools, universities and TAFE colleges tailor the courses they offer to suit the needs of both students and local employers.

We know that Australia faces a shortage of more than 200,000 skilled workers over the next five years. Within eight years that figure is likely to reach 240,000. The need to combat Australia’s skills crisis has never been as immediate or as pressing as it is now. This crisis has been building for a decade, but the previous government simply ignored all the warnings. The net result is that today’s skills shortages have already started to hold this country back. The situation was made worse by the Howard government’s decision to slash funding to the TAFE sector, the largest single provider of training in Australia, and by the abject failure of its Australian technical colleges program. More than 325,000 people were turned away from the TAFE system during the years of the previous government. Skills Australia will provide important information to this government, which is committed to turning the situation around as quickly as possible.

The commitment to matching up the demand for skills and training with an increased skills capacity in the workforce will benefit the whole nation, but it will particularly be important for the people and industries in my electorate of Calwell. Currently, large numbers of the people I represent in Calwell depend on the manufacturing industry for their jobs and wellbeing. Indeed, statistics for the northern region of metropolitan Melbourne, of which Calwell is a part, show that employment in manufacturing accounts for over 60,000 jobs. Many of our local industries, however, face an uncertain future. A number have closed altogether, others have drastically reduced in size and made long-serving workers redundant, and others are busy restructuring and downsizing in a desperate bid to stay viable. We have many experienced and well-trained workers who face employment uncertainty, while we have an economy limited by a lack of people with the necessary skills for the future. We have an obligation to avoid the terrible waste of such a situation.

A complete lack of interest at the national government level in local manufacturing over the last decade—in procurement policies which favour home-grown manufacturing, in nurturing innovation or in actively encouraging research and development—has left local industry exposed to the onslaught of global competition with little to defend itself. Australian manufacturing has a proud tradition. We cannot compete with low-wage countries when it comes to old-style mass production. Where Australia’s future lies is with high technology creation and innovation. We need to utilise the brains and creativity of our community, and that is where skills development and training become crucial. We can compete internationally by investing in skills and training and by looking to new products, new markets and new methods of production. To do this, we need specialised skills, we need targeted training and we need creative minds and forward thinkers.

One such innovation that the Rudd government will nurture is the development of green cars. Automotive manufacturers in Calwell will benefit from a $500 million green car innovation fund. This measure will help generate $2 billion in investment to secure jobs and tackle climate change by manufacturing low-emission vehicles in Australia. Calwell has a number of companies in the automotive sector. If we can match existing industry and existing skills with a properly targeted program for skills development and readiness to meet the growing demand for environmentally sustainable transport, we will achieve a great deal for the future of our local and national economy as well as improve our air quality. It is precisely this sort of integrated policy development that we need in the 21st century.

In Calwell, we also need housing, infrastructure and a range of human services—all areas which suffer from the crisis in skills shortages—yet we have higher than average unemployment and underemployment and not enough training places for people who want them. Here is a typical picture of mismatch between supply and demand, between willingness to participate and the opportunity to do so.

Most importantly, Calwell’s manufacturing history means that we have a plentiful supply of the most valuable asset a healthy economy needs—namely, our people. The people of Calwell, like those of so many other multicultural urban communities of working people around Australia, are resourceful, hardworking, resilient and very adaptable. We have a diverse community with an enormous range of existing skills and great potential for the acquisition of more skills. We speak a wide range of languages—surely one of the most overlooked skills in this country, especially in an increasingly globalised economy. We have a wonderful TAFE college, Kangan Batman TAFE, which is giving its students excellent training and support to enter the workforce as well as practical experience in the workplace. We have Victoria University’s Sunbury campus, serving tertiary students in that community and beyond.

Our local schools in Calwell are producing some wonderfully bright, enthusiastic, ambitious and dynamic young people. I recently hosted a reception for the highest achieving VCE students of 2007 in my electorate. Looking around at the kids in the room that day, I felt proud that in this part of the world we are producing Australia’s future leaders, thinkers and creators. A number of schools in my electorate have introduced some very innovative programs to give their students every possible chance of going out into the world with the intellectual tools to engage with technology, inquiry, knowledge and problem-solving. The Rudd government is committed to encouraging such programs and to boosting the federal government’s investment in education.

The work of Skills Australia in identifying short-term and longer term needs in the economy is just one component in the overall plan to reskill Australia. Investing in Australian schools to ensure that today’s students are able to successfully tackle the challenges of a rapidly changing workforce is another complementary component. Providing our children with a world-class education system is crucial not only to their future success but also to Australia’s ability to compete globally. The National Secondary School Computer Fund is one such component of the government’s plan to meet this challenge head-on. Enabling schools to provide their students with new or upgraded information and communications technology as well as improved access to high-speed broadband internet is central to ensuring that students develop computer literacy, greater independence in learning and problem-solving and familiarity with up-to-date technology. These skills will form an important foundation for students who move on to more specialised education, training and work.

Trades training centres are another important initiative that this government is introducing. In 2001, the Northern Melbourne Area Consultative Committee initiated research to identify the causes of skill shortages in northern Melbourne. One of the major findings of this research was that most schools were aiming to prepare students for university education but were failing to adequately cater for those students who were not considering a university pathway. These students were not receiving information or exposure to opportunities in trades training areas aligned with regional industry needs, such as manufacturing, engineering, furnishing, construction and the automotive sector. This lack of information was compounded by negative perceptions about the nature of jobs available in these industries. For instance, many students and their parents still saw trades jobs as menial, dirty and often dangerous, despite the enormous changes in computer and other technology, safety and career prospects in so many of the trades.

The new trades training centres supported by this government, in partnership with the states, will have a major impact in reducing skill shortages across Australia. In Calwell, this policy provides us with a unique opportunity to establish a number of trades training centres in strategic locations across the electorate and to align these centres with the skills base sought by regional industries in areas like manufacturing, engineering, construction and the automotive sector.

By building stronger partnerships between local industry and local education providers, a core aim must be to make sure that these training centres are relevant to the local context so that students in Calwell who do not opt for university have the sorts of skills and training that local employers are looking for. This is one way to ensure the long-term viability and success of trades training centres. It also means providing strong employment opportunities and a seamless transition to apprenticeships for local school leavers whilst making sure that local industry has access to the skills it needs to grow. I congratulate the Minister for Education, Employment and Workplace Relations and Social Inclusion for introducing this important bill and I commend the bill to the House.

Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Link to this | Hansard source

in reply—Can I thank everybody who spoke on the Skills Australia Bill 2008 in the course of this debate. Whilst I obviously do not necessarily agree with every comment made by every member of the House during the course of the debate, I thank all members for their input. I think the large number of speakers from the government side shows just how seriously the Rudd Labor government takes the skills agenda. The Skills Australia Bill 2008 will establish Skills Australia, a statutory body that will provide the Australian government with independent, high-quality advice to assist us in targeting government investment in training. It will give the Australian government advice that we can use to assist businesses and workers across the country.

Skills Australia is a key plank in the Australian government’s five-point plan to fight inflation. This is a plan that addresses both the demand side and supply side pressures on inflation. Establishing Skills Australia is the first of many steps this government will take as part of a comprehensive approach to overcoming the challenges our nation faces in securing a prosperous and productive future for Australian working families. Skills Australia will provide advice on the causal factors and impact of future and persistent skill shortages. Skills Australia will be comprised of experts drawn from a range of backgrounds, including economics, industry, academia and education and training provision. It represents an intellectual as well as a financial investment in the skills agenda.

Skills Australia will play a pivotal role in boosting productivity and participation in the economy by providing high-quality advice to the government. This will ensure that policies can be directed towards closing the skills gap—the gap between demand for and supply of skilled workers. Our Skilling Australia for the Future policy will increase and deepen the skills capacity of the Australian workforce and ensure demand for skills and training is better matched to training opportunities.

The Australian government’s plan for our future skilled workforce will help close the skills gap in the Australian economy in three ways. First, we will fund an additional 450,000 training places over the next four years. The government will take the advice of the Reserve Bank of Australia—the advice ignored by the former government—and we will act seriously and with urgency to make 20,000 of these new training places available from April 2008. These initial places will be directed to those outside the workforce and will help many Australians gain employment and stimulate workforce participation rates. Secondly, we will ensure that most of the 450,000 places lead to a higher level qualification, such as at certificate III level or above. Thirdly and most importantly, we will place industry demand at the heart of the skills training system. The Australian government will align skills development policies and training delivery with industry priorities and position the training system to better meet the needs of individuals and industry. New training places under the Skilling Australia for the Future policy will therefore be allocated according to industry demand.

These measures, combined with other initiatives being progressively announced and implemented by the Australian government, represent a significant investment in addressing skill shortages, reducing inflation and securing a prosperous future for all Australians. I commend the bill to the House.

Question agreed to.

Bill read a second time.