Nick Xenophon (SA, Independent) Share this | Hansard source

I do not oppose this bill as a means of supporting apprentices but I believe that there are some serious defects with it and it needs to be amended quite significantly. I also have serious reservations about the immediate and long-term consequences of recent funding cuts for TAFEs. Worrying figures from the National Centre for Vocational Education Research show that, since 2012, national apprenticeship commencements have declined from 330,500 to 244,700. In my home state of South Australia apprenticeship commencements have fallen to from 25,600 to 15,700 during the same period—that is, a very significant and worrying reduction of more than 30 per cent. These figures show it is clear that we need measures to encourage the take-up and completion of apprenticeships. Equally as important, however, are measures to assist workplaces and training institutions to provide opportunities for apprentices.

TAFE Directors Australia, the peak body representing Australia's 58 TAFE institutions, have raised concerns with me about the real cost of the proposed Trade Support Loans. Unlike current HECS or FEE-HELP loans, which are paid directly to Commonwealth registered institutions, the Trade Support Loans are paid directly to students. As with university study, there is often no guarantee of employment following qualification. Combined with a labour market that has been tightening, there are some concerns about apprentices' ability to service their debts to the Commonwealth and the long-term consequences of their indebtedness.

The labour market is tightening, and it is getting worse. Rossi boots, an iconic South Australian company, missed out on a Defence procurement tender because there was a cheaper import. That does not take into account the whole-of-life costs and the social and economic benefits of making something here in Australia. Where people are employed locally they spend their money in the local community and they pay their taxes—and the company pays its taxes. That is very different from just exporting jobs using Australian taxpayers' dollars.

I acknowledge the analysis conducted by the Australian Greens which has shown it could take a carpenter up to 34 years to repay their loan, a welder up to 13 years and an automotive engineer up to 23 years. The government has disputed these figures and tells us it will take apprentices about eight years on average to repay the loans. Even if the government's figures are correct, with no restrictions on how the loan money is spent these loans could be a very expensive exercise for apprentices in the long term.

I have serious doubts, too, as to whether this loan scheme is the most effective use of public money to correct the worrying reductions in apprenticeship commencements, particularly in the face of recent budget cuts to other programs. These cuts include programs that target disadvantaged and migrant Australians by preparing them for TAFE and other apprenticeships. These programs have demonstrated track records in creating enormous opportunities for vulnerable Australians to enter and remain in the workforce. Although funding to help apprentices with living expenses may assist them to see out their apprenticeship, I am concerned that this measure may come at the cost of programs that encourage apprenticeship take-up. Of further concern is the cessation, without warning, of the Tools For Your Trade grant program. Thousands of apprentices across the country have entered into three- or four-year training contracts on the understanding and belief that they would receive grants of up to $5,500 over the course of their apprenticeship. For apprentices who are in the final years of their course, this news has been a particularly hard blow.

I am concerned that we need to look at this piece of legislation in the context of other amendments that are being proposed. It is important to note that the opposition has called on the government to determine a method of parental approval for loans taken out by apprentices aged younger than 18, which I strongly support; it is a question of appropriate consent for a minor. The Australian Greens have an amendment to include in this legislation a requirement for parental consent, which I think is very appropriate. I congratulate Senator Rhiannon for moving those amendments because they are entirely appropriate. There are a number of other Greens amendments which will be dealt with in the committee stage. I am broadly supportive of ensuring that, if you are going to slash TAFE, you have some safeguards in place.

I also note that the Tools For Your Trade program is having all sorts of consequences: it is retrospective in nature; it was done without warning; apprentices have already started. I note that Senator Day has just entered the chamber. He has a very credible and well-recognised home building company and has been passionate about apprentices as well. I am concerned that, if the government takes away funding like this, it will have a very, very negative impact.

I will not vote against this bill, but I will be supporting a number of amendments that I believe will make this bill fairer. Overall, I do not support the massive cuts to TAFE; we are going in the wrong direction if you want to support the whole issue of apprenticeships; we are slipping behind. If we want to build up skills in this nation and ensure that young Australians have a chance to learn and practice a trade, then slashing money from TAFE and taking money away from apprenticeship programs is a negative step. Having a loan program with certain limits and safeguards may be a way around it, but it is only a short-term solution. The government needs to acknowledge the economic costs of this. What modelling has the government done of the impact this will have on apprenticeship numbers—in particular, taking away Tools For Your Trade, which may have negative consequences in terms of the number of apprenticeships in this country? I look forward to the committee stages of this bill.