Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

As I was saying before, there have been some key figures in the higher education sector who have come out in opposition to the scrapping of the AWPA, as proposed in the Australian Workforce and Productivity Agency Repeal Bill 2014. Leesa Wheelahan, who is associate professor at the LH Martin Institute for Tertiary Education Leadership and Management at the University of Melbourne, said:

There is now no source of independent advice to government, no way of questioning policy and no research on what Australia needs in the future.

There are others as well who have come out against the abolition of this key body. The current chairman of the AWPA, Philip Bullock, said while confirming the agency's 'disestablishment'—his words:

There are few times in our working lives where we contribute in an area which has the potential to positively impact so many people and for this opportunity we remain grateful.

I think Mr Bullock is right that real people have brighter career prospects as a result of the work that the AWPA has done, and this makes it all the more disappointing that the agency is to be abolished. We are moving these amendments to see that the advice and the analysis is still provided.

Today the opposition is calling on the government to guarantee that independent advice on workforce and productivity issues will continue to be provided and continue to be made publicly available. This advice is much needed. It is crucial to assist government, industry and the education sector to develop the human capital required to create the jobs of the future, in the economy of the future. We are seeking this assurance from the government because the signs so far about workforce issues from this government have not been encouraging, whether it is this abolition of the AWPA; whether it is the abandonment of the Asian Century White Paper, which has been abolished not only from the departmental website but also from the approach and strategy of the government when it comes to the sorts of jobs that we want to be creating in the Asian Century; whether it is the deregulation of university fees, which will make it all the more difficult for young people to undertake meaningful training; whether it is the government's harsh cuts to welfare for young people, their attacks on Medicare, their defunding of future trades training centres, their $30 billion cut to schools, their cuts to Youth Connections, their broken promise on Gonski funding—all of these sorts of things. The cumulative effect of all of these unwise and unfair cuts will be a less skilled, less productive and less dynamic workforce in the future.

It will, unfortunately, risk us missing out on the huge opportunities that are just around the corner for Australia as part of the Asian century. We are witnessing an unprecedented transition in our region and our engagement with Asia has never been more important. The rise of the middle class in Asia will be the most important economic phenomenon of our time. Asia will soon become not only the world's largest producer of goods and services; it will also be the world's largest consumer of them. Australia is perfectly placed to take advantage of the monumental changes underway in our region, but only if we get our workforce right—only if we sort out our human capital and we give our people the best chance to succeed. We need to invest in the tools of success necessary for our young people to succeed right through their working lives. As the authors of the Asian century white paper put it, the tyranny of distance to Europe is being replaced this century by the power of proximity to Asia. We have a lot to offer Asia—our workers have a lot to offer—not only by way of our resources but also in terms of our strong, world-leading institutions and our open and resilient economy. But, as I said, to fully take advantage of these kinds of opportunities, we need to have a highly skilled and dynamic workforce. We need to find ways for our workers to be part of the elaborate global value chains that now characterise world trade.

As the McKinsey Global Institute report Global flows in a digital age has found, by far the greatest growth in global flows lies in knowledge-intensive goods and services. In fact, knowledge-intensive goods flows are growing at 1.3 times the rate of labour-intensive goods. While the developed world is leading the way in exports and imports, China's knowledge-intensive flows are the world's second largest already. So, to be a competitive part of the interconnected economy of the Asia-Pacific, Australia must continue to be a leader in knowledge exports. We need to be innovative and creative, and this all depends on a well-educated, well-trained, modern workforce here in Australia.

The Labor Party, while in government, anticipated these opportunities that lie ahead for Australia and sought to position our country to benefit from the regional economic transition underway. That is why we invested $19 billion in skills and training for smarter jobs and a stronger nation. It is why we developed a needs based funding model for schools, to give every child in Australia—every child, including kids from the poorer areas in my electorate—the chance to get ahead. We introduced the Australian Workforce and Productivity Agency, the agency we are talking about now, to identify the challenges and strategically determine solutions to strengthen our workforce.

As I said before, the Labor opposition do not want to see the coalition dismantle our plan for future prosperity in Australia based on human capital and the tools of success in our workforce. That is why we are seeking to amend the bill today. I commend my very good colleague the member for Cunningham for her amendments, which call on the government to guarantee that the independent advice and analysis on workforce and productivity issues will continue to be provided and publicly available, even if and when this particular agency is abolished. This advice is vital for government, industry and the education sector to respond to the challenges that lie ahead for our economy. With the demise of this body we need to find an alternative way to get that advice.

The last thing I will say is: we need to do all we can to take advantage of the Asian century before us, and that is why this side will be doing its best to make sure Australia moves forwards in this regard, and not backwards.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on the Australian Workforce and Productivity Agency Repeal Bill 2014, which is part of the coalition government's agenda for reforming and streamlining governance arrangements for vocational education and training. After six years of Labor waste and fiscal recklessness, the coalition pledged to the Australian people that the days of waste and mismanagement were over. On budget night, the Minister for Finance indicated that the intention of the Smaller Government Reform Agenda was to ensure the Public Service is as efficient, as effective and as accountable as possible.

Those opposite seem to think that, when it comes to the federal budget, the money just magically appears and is there to use at will, however they wish—and when it runs out they can always borrow more. However, on this side of the chamber we have a different view, indeed one based on reality. On this side of the chamber we understand that Commonwealth money is not for the government of the day to splash around as they please on any whim or impulse of the moment. Instead we believe that the Australian taxpayers' hard-earned money belongs to the Australian people, and every dollar of it must be spent responsibly and in the best interests of the taxpayers. This means that, when there are opportunities to eliminate duplication, remove waste, enhance accountability, streamline government services and reduce the cost of government administration for taxpayers, we take that opportunity.

The previous Labor government set up the Australian Workforce and Productivity Agency to advise the federal Minister for Industry in relation to: Australia's current and future skills and workforce development needs, improving the productivity of the Australian workforce, and the allocation of Commonwealth funding. All of these tasks can be carried out more efficiently by the pre-existing Department of Industry. This agency is an unnecessary and expensive duplication. In winding down the AWPA's operations, AWPA staff and functions will be transferred into the Department of Industry. These functions are core public policy activities and, therefore, do not require an independent statutory framework to be carried out.

It is important to note that activities undertaken by AWPA will continue to be priorities for the Department of Industry, and the valuable work that has been undertaken will continue. The new arrangements will allow the Department of Industry to deliver its core functions more efficiently. These arrangements will streamline processes and strengthen the resources and capability of the Department of Industry to provide targeted advice to the minister.

There will be efficiencies associated with the abolition of the AWPA, through reductions in corporate overheads and costs associated with the AWPA board. There will also be improved accountability, with future advice to the minister being the responsibility of the Secretary of the Department of Industry. There will be streamlined program administration as we will no longer have an industry training program administered by AWPA, the Department of Industry and Industry Skills Councils. Instead, the new Industry Skills Fund will be administered by the Department of Industry. It will be delivered through the single business service delivery initiative, which will make delivery and access simpler and more streamlined for business. This will allow the Australian government to better deliver on its competitiveness agenda through assisting businesses that are seeking to improve their productivity and competitiveness in a global market.

The abolition of AWPA is only one part of the Australian government's broader vocational education and training reform agenda, which has a strong focus on ensuring that the national training system is more responsive to the current and future skill needs of businesses. Other key elements of the VET reform agenda include providing industry with a formal role in relation to policy directions and decision making in the national training system, easing the regulatory burden and creating a more effective and efficient skills and training system. Good progress is being made in all of these areas.

I am proud to stand on this side of the chamber. Despite six years of the previous Labor government's engaging in the largest spending binge in our nation's history, despite saddling Australia with $123 billion in deficits and an interest bill of $1,000 million a month, despite causing the fastest deterioration in debt in dollar terms as a share of GDP in modern Australian history, despite all of that, we on this side of the chamber are determined to be responsible with the Australian taxpayers' money, spending it efficiently instead of wasting money on duplication and unnecessary bureaucracy. We are focusing on delivering crucial services, support and education for all Australians. Through this bill, I look forward to seeing the coalition government continue to implement our wider vocational education and training reform agenda. I commend this bill to the House.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Today, I stand to raise my concerns about the abolition of this very important body that addresses the growing skills crisis that we have in this country. It is wrong for people to say that it is red tape, that it is time to move forward and that we do not need more great bureaucracies. The fact is that government has a role to play when it comes to addressing the skills problem we have in this country. We cannot continue to rely on imported skills. We cannot continue to fill our gaps in the skills needs we have in our economy with 457 visas. We need to continue to invest in skills and we need to understand what those skills needs are, which is why this particular agency was established.

It replaced Skills Australia and provided expert, independent advice to the government on the current and emerging future skills and workforce development needs. The Australian Workforce and Productivity Agency, which this bill seeks to abolish, was doing exactly that, providing the expert, independent advice that we need. One of the roles was in the area of industry. For example, the manufacturing sector recently released their report. Manufacturing is an issue that a number of people stand up in this House and present a very doom and gloom picture about and, yes, in some parts of Australia manufacturing is facing a crisis But in my own electorate of Bendigo, we have a good news manufacturing story to share. One of the challenges we always face in our area—and it is one of the issues that manufacturers always discuss with me—is the need for skills, that is, the need to have a workforce that is skilled, a workforce that is ready to work in manufacturers' businesses. Locally, our manufacturing area continues to be strong. Roughly, there are over 6,500 people working in manufacturing in the Bendigo electorate, ranging from food and beverage production to metal and mining equipment and engineering. Central Victoria still continues to be a major producer of food. Currently, there are just over 1,200 people working in the food production sector. There are just under 600 people working in our building manufacturing sector and just under 1,000 people are working in metals and engineering.

One of the reasons for the success of our manufacturing area and why it continues to be strong is that our manufacturers are not afraid of innovation. But with innovation comes the need for a skilled workforce. With innovation comes the need for partnership between industry, government and our education providers to ensure that we have the skills that these manufacturers need. Take, for example, one of our local manufacturers, Keech Australia. Only recently they opened their new innovation centre where they have engaged a workforce producing patterns. They have the biggest 3-D printer in the Southern Hemisphere, at home in Bendigo. In talking to them, I know that the people working in this part of their business have a patchwork arrangement of skills. Some of them have certificates from RMIT; some of them have diplomas from Geelong; some of them have diplomas from Ballarat University and some have degrees from the University of Latrobe. One of the challenges that the managing director at Keech talks to me about is the frustration of finding the people with the right skills. He is concerned that there will not be people in Australia in the future with the skills that he requires to continue to grow this part of their business. Again, this is why we need our governments to invest not only in skills but in research and conversation with manufacturers like Keech Castings to ensure that we have the skilled workforce we need.

Another manufacturer we have in Bendigo is Thales. As we stand here today debating this bill, Thales are in Paris as part of a big roadshow releasing the Hawkei, which is a vehicle designed and tested in Bendigo and Central Victoria. It is a vehicle that is world-class. It is a vehicle that we hope this government will sign the contract for so that Thales in Bendigo can then produce and manufacture this vehicle going forward. This vehicle which we hope this government will sign the contract for so that it can follow the success of the Bendigo built, designed and manufactured Bushmaster was developed in Bendigo. It is not something for which you can get out a sketchbook and develop overnight. You require a skilled workforce. You require an ongoing and maintained skilled workforce. This is another example of why we need to continue to invest in training people to have skills. Who knows that we need these skills in Bendigo? It is more than just the federal member who knows. It is universities, TAFEs and industry. It is through having bodies such as the one we are seeking to abolish today that we can have a national map of the skills that are needed.

Another manufacturer in my area that speaks to me quite often about skills is Hoffman Engineering. Yes, they have a strong manufacturing facility in Perth, but they also have one in Bendigo. I visited their site last week and I asked them, 'Why did you choose Bendigo?' They had a couple of reasons. They could have chosen anywhere on the east coast. They said the reasons why they chose Bendigo were, firstly, the support from local government, the former Labor government and the former federal government for establishing themselves in Bendigo. But the second and most important reason why was that there was already an established heavy and metal engineering skilled workforce. The fact that major manufacturers like Hoffman are willing to move to a town like Bendigo to establish and expand their business is testament to our local skills and our local manufacturing sector. But it also points to the need to continue to map out a plan for where we need skills, who we need to have these skills and what kind of skills we need them to have.

The final example of a local manufacturer that I have discussed skills shortages with is Barker Trailers in Woodend. Currently 10 per cent of their workforce are apprentices. They also have some 457 visa workers. They say the only reason why they have these workers is that they cannot get enough skilled people locally. Woodend is a small town. There are about 6,000 people living there, if you take in all the extra areas. One of their challenges in recruiting young apprentices is that they have to travel to do their coursework. To encourage their workers and apprentices to stay on they have gone to the next level of actually hiring a bus. The company, out of their own pocket, hire a bus to drive these workers from Woodend to Ballarat to do their coursework. There is no local TAFE for these apprentices to do their coursework. Getting on a train to Melbourne is fraught as well because of the constant cancellations in the train system. That makes it very hard for their apprentices to get there on time.

When we talk about skills, we need to look at the map of Australia and what we need not just for our current manufacturing and to ensure that we continue to have the skills to keep the businesses such as the ones I have mentioned but also to help us go forward and make sure we continue to support them in the expansion of their businesses, helping small businesses become medium businesses and then large businesses.

But what we have seen from this government so far is that they are smashing any role that government plays in building and developing industry. They are also smashing an entire generation of young people. When I say 'young people' I am not talking about people under 30. About 25 to 30 tends to be the age when people have started their first job, bought their first home and started having children. I am talking about people who are in high school and just about to finish secondary school who are deciding on their career choices. This government are targeting these particular young people through cuts to TAFEs, universities and apprenticeships, ensuring that their pathways through to a good job do not exist.

Take, for example, the changes to university and my own local university of La Trobe. The vice-chancellor and the campus director are worried that the deregulation of university fees, coupled with the funding cuts, will discourage local students from attending university. Right now there are about 4,000 students at La Trobe University. Of those, about 25 per cent are the first in their family to go to university. Linking into the local skills needs they have an engineering course, but the university is worried that because of fee deregulation the cost of that course will discourage local kids from enrolling. That will then put pressure on our manufacturers in making sure that they have the skills they need to continue to grow their businesses. La Trobe University this year welcomed just under 1,400 new students to their campus. What will their numbers be next year? With the government's plan for higher education and its cuts to universities and apprenticeship programs, we just do not know.

Choices for young people in the region are being limited because of this government. What we need to see from government is investment in pathways. We need to ensure that from secondary school through to that first job we are creating pathways and ensuring that people have access to education, whether it be through apprenticeships, TAFE or university. But right now the government has no plans for that and is, in fact, deregulating that and completely smashing what infrastructure we had available.

Suggesting that people should get themselves into hundreds of thousands of debt to obtain their skills is simply not fair. The government's logic that 60 per cent of taxpayers are paying for university fees is also misguided, because people who are taxpayers include people who have university degrees.

This government basically does not have a plan to create jobs in this country. The budget they handed down actually smashes jobs in this country. It is a budget that attacks our industry. It is a budget that has no vision.

I did not think I would be standing here and agreeing with some of the employer associations, but I find myself increasingly agreeing with them, because, like them, people in the Labor Party, people on this side of the House, believe that to continue to have a strong economy we need strong businesses with a skilled workforce. From this government what we have seen is basically the tearing up of that social contract. This bill is just one of many that demonstrates this governments ideologically driven opposition to supporting business growth. The minister took just a few minutes to introduce this bill, and we have seen previous speakers standing up and making short statements. Yet what we have not seen from this government is a plan, a long-term plan, to create jobs in this country. To simply say that people will go out and get a better job, when those better jobs do not exist, is just simply wrong.

This bill abolishes a body that was doing good work. This bill will not tackle an issue that will continue to be an issue into the future. This bill does not address our growing need for skills. (Time expired)

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I never thought I would stand in this House and utter the words 'bring back Gibbons as the member for Bendigo'. Not only did the member for Bendigo run into this House late, but she obviously did not even read the bill nor indeed her own side's amendment. She did not address one iota of the bill before the House. In fact, in her closing comments she said this bill is about establishing AWPA. It is actually about abolishing AWPA. So I would suggest that before the member gets up and makes long-winded statements in this House she should actually try reading a bill and then not just turning up on time but actually understanding what she is debating.

The Australian Workforce and Productivity Agency Repeal Bill 2014 repeals the Australian Workforce and Productivity Agency Act 2008 and abolishes the Australian Workforce and Productivity Agency, known as the agency. The agency was established to provide advice in relation to Australia's current and future skills and workforce development needs, based on an economy-wide analysis of industry trends. There is also a range of other functions relating to research and analysis of industry workforce and skills needs, including developing the Skilled Occupations List. In winding down the agency's operations, the agency staff and functions will be transferred to the Department of Industry. I will restate that for members opposite, who seem to think there will be mass sackings. In winding down the agency's operations, the agency staff and functions will be transferred to the Department of Industry. These functions are core public policy activities and therefore do not require an independent statutory framework to be carried out. They are the core business of government.

The change will strengthen resources and the capacity of the Department of Industry to provide targeted advice, to improve accountability and to make sure they interact with the industry that actually provides the jobs. What is critical is that the Department of Industry, the public servants whom the other side seem to have no faith in to provide advice to the government, actually interact with industry and deliver the necessary requirements so that we can create greater prosperity for this nation.

This bill is a critical part of this government's agenda for reforming and streamlining governance arrangements for vocational education and training, as well as rationalising the number of portfolio bodies across government. As a part of these proposed changes, we will facilitate much stronger linkages between the skills and the industry functions of the department. We will improve the accountability by instituting direct reporting lines through the secretary of the department. There will be efficiencies—small efficiencies—associated with the abolition of AWPA, through reductions in corporate overheads and the removal of the AWPA board.

Let's make no bones about it. This is about providing a straight line from industry needs, through to the department, and through to the minister, and then we can expedite the results. This is about stronger engagement. I will bring up one case as an example. As the shadow minister for tourism during the term of the previous government I understood the need for cooks and chefs, food professionals, to be placed back on the Skilled Occupations List. I had had discussions with industry, and industry said that AWPA, who prepare the information for the Skilled Occupations List just were not listening. Back on 13 December a round table with the restaurant, catering and hospitality industry was put together, and AWPA presented. It is true what AWPA said: of the number of people who come in under the Skilled Occupations List, cooks and chefs were the highest of any occupation coming into Australia. The fundamental problem, though, is that people were taking up the opportunity to come in under that occupation and were then not working in that occupation. I understand that the minister, Senator Cash, has been doing some work in relation to that with the industry. What is key and critical here is the term 'engagement direct with industry' for understanding their concerns and delivering real outcomes.

The abolition of AWPA is only a part of the Australian government's broader VET reform agenda. We have a stronger focus on ensuring our national training system is more responsive to the current and future skills needs of businesses, because it is the businesses that will employ the people involved in the training.

We will introduce a new Industry and Skills Advisory Committee. This new advisory committee will provide industry with a formal role in relation to policy directions and decision making in the national training system and will include both industry representatives and selected senior officials. It will also have the consideration of VET sector regulation to ease the regulatory burden and create more effective and efficient skills and training systems, including examining the standards for providers and regulators to ensure that they better recognise the different levels of risk posed by different providers in enabling VET regulators to deal more effectively with poor quality in the sector to improve confidence in that sector.

So, we are recommending a change. In listening to the comments and the amendment put forward by the member for Cunningham, you would believe that she had absolutely no confidence at all in the Public Service to provide quality advice to the department. I go back to what I said earlier: the responsibilities of the people and public servants involved in AWPA will be transferred back to the department. They will be the same people. When they worked for AWPA she had confidence in their ability to provide quality information to the government; when they work for the department, she has no such confidence. The member also criticised the government for not making this policy announcement with the bells and whistles. Well, the minister undertook at COAG on 3 April to make the announcement. The minister wrote directly to every board member. The minister does not believe in policy by press announcement, like members of the Labor Party opposite; we believe in talking to the affected people, to the industry stakeholders, and working with them to deliver real outcomes.

As an example of that, as I said, on the public statements that were made in relation to the abolition of AWPA on 3 April 2014, at the first session of the COAG Industry and Skills Council meeting the Minister for Industry advised leaders from various industry sectors of the government's intention to roll the functions of AWPA into the department. In fact, the chair of AWPA, Mr Philip Bullock, issued a subsequent statement on 9 April confirming the government's intention. I will quote part of that statement:

In terms of future arrangements, we are pleased that the Minister has decided that many of the functions of AWPA will transfer and be incorporated into the Department of Industry. The agency’s secretariat staff are public servants within the Department of Industry which will assist the transfer process. The Government will in due course initiate the necessary legislative changes.

which is what we are doing today. So, we consulted, we engaged and we led, and we are determined to deliver real outcomes. These outcomes are about driving skills reforms with the industry itself in the driving seat—not in the back seat, not left behind at the bus stop but actually in the driver's seat.

The member for Cunningham also asked about the National workforce development strategy 2016. I would like to remind that member that, again, as with all of AWPA's reports, including the National workforce development strategy 2013, the reality is—and I am just looking at this amendment here again—in relation to the critical independent research to government and industry in relation to Australia's current and emerging future skills in the workforce need to continue to be carried out and made public, the former Labor government never responded to those reports. So, they did their reports, and such is the quality of the work that the former government refused to respond to those reports. So it is somewhat idiotic for a member to walk in here and put this form of an amendment on the table when their own government, the creator of AWPA, did not even bother responding to the reports. I say to the member for Cunningham, like the member for Bendigo: when you walk into this House, please understand what you are doing when you are debating. The shadow minister should have been better informed of the processes and the outcomes and some of the reports that had occurred in the sector that she purports to represent. The fact is that AWPA, while adding research to the skills productivity base, was yet another body and layer of the skills system that Labor had made so confusing and fractured that it made getting solutions to some of the issues raised by industry and other bodies like AWPA so difficult to address.

The National workforce development strategyexamined the workforce needs under four different growth scenarios. The main finding is that Australia's needs for higher-level qualifications will exceed demand for lower-level qualifications. Under the government's bill the department will have responsibility for skills needs forecasting. This will take a variety of forms, from skills lists to discussion documents. It will be used to inform government policy and ensure that training expenditure matches future skills needs. In other words, we will be building a workforce that is actually employable, that will help our nation's economy grow and deliver real outcomes and results.

But scenario planning is not a function required by the AWPA legislation. Whether it was the best way of considering future skills needs will be considered as part of future work planning. The key will be to ensure that the VET and higher education sectors respond to the changing needs of Australia by meeting the needs of jobs, now and into the future. Some of the work that AWPA has done has been first-class. Some of it has required change, and that is what we are undertaking here today. I say to the member opposite that our intention is to reduce corporate overheads, to bring about a more streamlined, interactive forum where industry can engage directly with the department and through to the minister. And if an urgent requirement occurs it will be delivered very quickly.

So, I am concerned by the quality of some of the debate. But I do want to thank the member for Bowman, who rightly pointed out that it was the Labor government who failed to formally respond to any of the reports put forward by AWPA. I want to thank the member for Ryan for a very concise appraisal of the legislation, a speech whereby the member actually understood what was said. Indeed, the member for Banks pointed out that it was we on this side who undertake the process of spending and investing in skills needs better than Labor. The reality is that Labor will never reform the process; they will just throw more money at the process, and they care very little about the outcomes.

The government will not be supporting the amendment, a pious amendment, put forward by the member for Cunningham. We understand what is required because we have been engaging with industry not just in the last nine months of government but indeed the whole way through the period when we were in opposition. That is why we have come to this decision that AWPA needs to go, that we need to bring this body within the confines of the department, and we will continue to engage and deliver real outcomes. Therefore, we reject the amendment and recommend the bill in its original form to the House.

Amendment negatived.

Bill read a second time.