Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition (Social and Community Affairs)) Share this | Hansard source

The incorporated speech read as follows—

I am pleased to contribute to the debate on the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007 before us this evening, and in general terms I support the measures that it contains.

The measures in this bill attempts to address one of the biggest problems confronting Australia at the moment, and that is the shortage of trade labour. Our problem is that the shortage of trade labour is now adding to cost pressures that exist in delivering projects on time and on budget in Australia. It is also at the point where it is essentially going to hold back investment in Australia and reduce export earnings. For example, in the resource and tourism sectors we do not have the available labour to fulfil our potential international commitments in the export sector.

In relation to the budget announcement, the government’s intention is to top up the wages paid to apprentices under 30 years of age and who are undertaking an apprenticeship in an area of skills shortage and that those payments will total $2,000—$1,000 for each of the first and second years of training. The payment also recognises the low level of apprenticeship wages in those first two years of training, estimated to average about $15,000 in the first year and $19,500 in the second year.

Of course, evidence could suggest that these low wage structures may be one of the contributing factors discouraging potential apprentices from undertaking training.

Labor have long acknowledged the importance of encouraging more people into a traditional apprenticeship and has been calling for a trade completion bonus for apprentices since 2005. Labor are critical of the government’s delay in addressing ongoing skills shortages in the economy but we do welcome this measure, albeit belated.

These measures respond in part to the high drop-out rates that have been prevalent for skilled trades training over the last decade. The top-up wage is also be paid to part-time and school based apprentices, who will receive $500 annually and attract the full $2,000 over time.

Labor supports the proposal contained in the bill, but I am reminded of the similarities to Labor’s previously announced policy in relation to the trade completion bonus. I believe this initiative alone does not compensate for the Howard government’s continued complacency and inadequate response to the skills shortage issues confronting the nation.

This measure is about keeping young people in apprenticeships and it comes two years after Labor called for additional payments to apprenticeships in the traditional trades in the form of a $2,000 trade completion bonus for apprentices. The latest annual figures show that, in 2005, nearly 130,000 apprentices and trainees cancelled or withdrew from their courses. That is a staggering 49 per cent of all those who commenced apprenticeships or traineeships that year. While the government often talks about the 400,000 apprentices in training, they fail to mention that only 140,000 of these apprentices are completing their training or the fact that less than a quarter of those in training are undertaking traditional trade apprenticeships.

The average number of traditional trade apprenticeships under the Howard Government has been around 120,000 a year. Under the Hawke-Keating government, it was 13 per cent higher at 137,000 on average. In fact, completion rates under this government have been of concern, falling from 64 per cent in 1998 to only 57 per cent in 2005 compared to the rate under Labor, which was more than 70 per cent when they left government.

In 1997 the Howard government cut funding to TAFEs, reducing Commonwealth investment in vocational education by 13 per cent in the three years to the year 2000. Furthermore, Commonwealth investment only increased by one per cent between 2000 and 2004. According to data from the National Centre for Vocational Education Research, real expenditure per hour of TAFE curriculum has fallen by nearly 24 per cent since 1997. In this context, the expenditure on apprentices in the budget only begins to undo some of the damage done to vocational education and training by the government. This bill is clearly welcomed but is well overdue.

In May 2005 Labor called for the budget to include a trade completion bonus for apprentices as a way forward to addressing the already critical skills crisis, and while it has taken the government two years to accept Labor’s positive policy proposal—it is nonetheless better late than never. Labor’s plan involved two payments of $1,000 to be made to apprentices in traditional trades on the national skills shortage list. The payments were to be exempt from taxation or classification as income for social security purposes. While the government’s apprenticeship wage top-up is to be paid in the first and second years of an apprenticeship, Labor’s trade completion bonus would make one payment of $1,000 halfway through an apprentice’s training and a further $1,000 payment at the completion of their apprenticeship.

The Howard government bill has, disappointingly, not taken up this key element of Labor’s proposal or recognised the need to target this extra payment towards the completion of an apprenticeship rather than the first two years of training. Labor’s trade completion bonus was targeted to increase the rate of completions of traditional trade apprenticeships by providing payments to reward those who continued with their training beyond the first year and again to those who completed their apprenticeship.

The bill allows for the apprenticeship wage top-up payments to be tax-free and not count as income for determining eligibility for income support such as youth allowance or Austudy. Labor strongly supports this measure as it means not only that the apprentice will receive the full $2,000 but that the top-up will not prevent eligible apprentices from receiving additional ongoing income support or push them into a higher tax bracket. This tax-free element of the apprenticeship wage top-up is welcome; however, it draws attention to the government’s poor record in providing income support to Australian apprentices—particularly from regional Australia.

Despite making income support through youth allowance and Austudy available to apprentices for 2005, the harsh participation requirements for these payments have meant that only a small number of apprentices are benefiting from this support. Of the 60,000 apprentices the Department of Education, Science and Training estimated would receive youth allowance in 2005-06, only one-quarter of this number—15,000 apprentices—actually received income support. The department’s explanation for the low take-up rate was that apprenticeship and parental incomes were higher than anticipated, yet the government acknowledges through this apprenticeship wage top-up measure that these wages need supplementing.

Along with the failure to provide adequate financial support for apprentices and to address the completion rates, particularly in traditional trades, the government has presided over 11 long years of neglect and underinvestment in the vocational education and training sector. Over the past decade the government has slashed investment in vocational education and training and as a nation we are now paying a high price in the form of acute skills shortages across the country. The government’s own estimates show Australia facing a shortage of more than 200,000 skilled workers over the next five years. The government’s cynical political response to this national skills crisis has been to spend nearly half a billion dollars on a stand-alone network of Australian technical colleges that will, at best, on the government’s own figures, produce 10,000 graduates by 2010.

While the government has been in power, the TAFE system has turned away over 325,000 and it is crying out for additional recurrent funding and much-needed investment in infrastructure. Instead, the government is establishing 30 duplicate Australian technical colleges across the country, generally scattered in marginal seats.

Of the 20 colleges that are currently open, two-thirds are not registered training organisations and are being forced to use the facility of existing TAFEs due to delays and implementation problems. THREE years after Prime Minister Howard unveiled the system of Australian Technical Colleges, still not one student has graduated and enrolments are below capacity.

It is estimated the federal Government spends $25,000 to train each students in an Australian Technical College, compared with $9500 to $12,000 for a TAFE student.

On the government’s own figures, in the face of a skills shortage of anywhere between 200,000 and 240,000 positions over the next five years, the stand-alone Australian Technical Colleges duplicated in marginal seats scattered around the countryside will purportedly produce 10,000 graduates. Such is the government’s neglect, incompetence and complacency when it comes to addressing a long-term skills crisis.

In announcing an additional $84 million over five years to establish three of these new Australian Technical Colleges in Brisbane, Sydney and Perth the Treasurer Mr. Costello did not offer any form of assistance or incentive to potential students from regional Australia to help them relocate to allow access to these colleges.

The skills shortage is hitting hard in Regional Australia. The Howard Government gives lip service to providing regionally trained professionals such as doctors and veterinarians, what about trades apprentices and Technical Colleges. Access to training institutions like the Australian Technical Colleges in regionally based locations will alleviate numerous issues. It is a commonly held belief that if you can get people trained in regional areas closer to their homes and support networks, that this will help professionals and tradespeople stay in the regions.

Tertiary education has become a pathway of life for all Australian students as the job market grows and globalisation reaches our shores. For rural people, the way into a future with a sound, challenging education enabling students and families to live their lives and achieving their aspirations is having access to educational pathways. Students who live in rural and remote Australia are still being denied this access. Barriers are placed before them which severely restrict their ability to access tertiary education.

The logistics for a rural and remote student to attend tertiary studies—be they technical colleges, TAFE or any other training institutions—is more and more becoming beyond their financial means. Fuel, travel, accommodation and other costs related to attending training are increasing and inherently more for rural students.

In order to seriously address the magnitude of the current skills crisis, attention needs to focus on the areas of maximum impact, including TAFEs, which remain responsible for the substantial majority of postsecondary vocational education and training; vocational education and training in schools; and on-the-job trades training.

Labor has announced a $2.5 billion trades training centres plan aimed at the one million students in years 9, 10, 11 and 12 in all of Australia’s 2,650 secondary schools. The plan will provide secondary schools with between half a million dollars and $1.5 million to build or upgrade vocational education and training facilities in order to keep kids in schools, enhance the profile and quality of vocational education and training in schools and provide career paths to trades and apprenticeships for students.

As well as providing infrastructure to improve vocational education and trades training in secondary schools, Labor has a plan to introduce a job ready certificate for vocational education and training in schools. This certificate will assess the job readiness of secondary school students engaged in trades and vocational education and training. Students will obtain the job ready certificate through the job training placements as part of Labor’s trades training centres in schools proposal. The job ready certificate will be a stand-alone statement of a student’s readiness for work and will be in addition to a year 12 certificate and any separate vocational education or trades training qualification. The certificate will provide students who complete secondary school with an increased focus and awareness of the skills necessary in the modern workplace. It will also provide employers with a tangible reference, including whether students are capable and ready to work.

The job ready certificate will demonstrate that students possess basic workplace skills, including communication, initiative and enterprise, self-management, technology, teamwork, problem solving, and planning and organisation. At present, there is no requirement for education and training providers to formally issue a statement of these job ready or employability skills.

Australia’s ability to meet the growing need for skilled employees across the country is crucial to ensuring our future prosperity. The job ready certificate is a key part of Labor’s $2.5 billion trades training in schools plan, which includes $84 million to ensure students are involved in trades training and receive one-day-a--week, on-the-job training for 20 weeks a year. This will be implemented in consultation and cooperation with industry, states, territories and the states and independent school systems. That stands in stark contrast to the approach and attitude taken by the Howard government: refusal to work cooperatively with the states and the territories and refusal to acknowledge that the TAFE system still trains, in Australia, 75 per cent of the students or 85 per cent of the hours.

These measures are welcome albeit better late than never.