Tony Sheldon (NSW, Australian Labor Party) Share this | Hansard source

Australia is part of a global supply chain that sees the raw resources of Australia exported to the world. We are highly efficient and productive in many of our industries, and we don't see this for free. The resources sector is an incredible source of profits for the Australian economy. In the last financial year it generated $273 million—more than half of all exports from Australia by value. The sector employs 244,000 Australians. When the broader mining, equipment, technology and services industries are included, the resources sector employs over 1.1 million people, or around 10 per cent of total employment. Average weekly earnings in the mining industry were $2,721 per week in 2018—64 per cent higher than the average Australian weekly earnings. The mining sector is expected to grow at 2.4 per cent per annum over the five years to 2022.

Australia also has extensive reserves of critical minerals like lithium, scandium, rare earths and tungsten. Greenbushes lithium mine in Western Australia is the world's largest hard rock lithium mine. It is particularly important in Western Australia, where 103,000 people are employed in resources. The resources are not the entire economy or 100 per cent of our exports. We should not forget our agricultural sector, when we talk of commodities; according to Department of Foreign Affairs and Trade's figures, Trade and investment at a glance 2019, we are the world's largest exporter of wool—which is no surprise to any of us—and the second-largest exporter of beef, lentils and cotton. We are not, as this motion suggests, averse to manufactured or value-added goods. Instead, Australia is the fifth-largest exporter of wine and the world's third-largest supplier of international education services. It is simple to say we are not a one-trick pony.

However, refined metals manufacture has become less competitive in this country in the face of growing international competition, and the economic output has declined. While Australia has developed a natural competitive advantage in mining, which is benefiting all Australians, downstream processing industries such as metal smelting are less clear in terms of their business case or the competitive advantage they have in Australia. This doesn't mean we don't have a steel industry. The Australian Steel Institute says that over 100,000 Australians are employed in steel, which include those in iron and steel manufacturing, fabrication and casting activities. Across a variety of sizes of enterprises from small to corporate, the industry has an annual turnover of $29 billion and contributes $11 billion per year to Australia's GDP, according to the Australian Bureau of Statistics. The integrated Australian steel chain holds more than two million tonnes of inventory made available through distributors located at over 300 sites across the country.

The sources of competitive advantage in Australia do not automatically transfer to the metal processing industry, which is reliant on a range of different business inputs and technologies. International markets for steel, aluminium and copper are highly competitive. Currently Australia is not able to compete effectively with low-cost producers of these refined metals, due to higher energy costs and inefficient supply chains for other inputs such as chemicals and machine parts.

Australia first must resolve its energy market challenges before it can consider policies for greater domestic processing of minerals. For further processing to maximise national income, it must be encouraged in a way which does not detract from performance of other sectors of the economy. Most jobs in a newly expanded metal processing industry would be highly skilled positions such as engineers, IT professionals and technicians. These skills are already in high demand in Australia, with workers possessing such capabilities already deployed in high-paid jobs across a number of industries. Before any expansion of Australia's metal processing industry through government mandate can be considered, a proper examination of the broader labour-market impact is needed.

That brings me to the fact that I admire Senator Patrick's optimism, because this government hasn't delivered on the skills that are required in this country. They haven't delivered on the existing skills challenges, and they certainly wouldn't deliver under these skills challenges, if this motion was put into effect in government policy.

A recent report revealed that the federal government had underspent its budget for TAFE, training and apprenticeships by almost $1 billion in the past five years. That's on top of previous cuts. At the same time, Australia has experienced a skills shortage, and critics are warning of serious repercussions to the country. I have one quote from Tanya Plibersek which I think is quite apt to be using here. She said:

If the Liberals don't do something serious to fix the skills crisis they have created, we could be looking at the extinction of the Australian tradie.

At the time of the 2018 survey, the Ai Group called for new approaches to education, training and reskilling to maximise the benefits of the digital economy. Chief Executive Innes Willox said:

Our survey has found major skills demand issues facing employers. It provides an important gauge of employer sentiment around skill needs, education and training at a critical time for industry transformation.

The number of Australians doing an apprenticeship or a traineeship is lower today than it was a decade ago. These days, more trainees drop out of their study than finish it. In October, the Morrison government named the TV host and former carpenter Scott Cam as the country's first National Careers Ambassador. I have nothing against Scott—I enjoy watching him on TV—but to announce this as an alternative to improving skills and apprenticeship development is like an episode of Utopia. In fact, I think the Prime Minister watched the same episode I did. What you do is you get somebody who is a noted carpenter and TV personality and name them as a policy, when there's no policy. I want to see more Australian plumbers, electricians, bakers, lawyers and consultants produced. That's what Scott Morrison said, but he's doing it by employing more actors. I'm not against Australian actors being employed—far from it—but that's not a skills policy.

Let's look at young Zac Hicks, a 21-year-old, third-year apprentice electrician from the Sutherland Shire in New South Wales. At some point in the next year he will be able to sit his capstone assessment, and, if successful, will officially qualify as an electrician. That would set him on a path to becoming one of the best-paid tradies in Australia. But first Mr Hicks has to get through his study. That is proving increasingly challenging—as I see here—in a state that has suffered state and federal budget cuts. He says students at his TAFE are offered little or no tutoring, despite the complex and technical nature of their course, and the tools provided are blunt or broken. Worst of all, he’s just learned he has to wait months to start a required subject, setting back his entire apprenticeship. Young Zac says:

I’m pretty frustrated, because I’m on the minimum wage, and when the government is doing all these massive slashes to TAFE, it’s really hard to get to the main goal, which is a huge pay rise at the end.

Mr Hicks earns about $17 an hour. Once qualified, he'll earn $50 an hour. The Electrical Trades Union national apprenticeship officer, Mark Burgess, said Mr Hicks’s experience is not uncommon:

We’re seeing employers already crying out because of the skills shortage. Our industry has a fairly high average age; generally the baby boomers are looking to retire, and we’re concerned if there’s not enough apprentices put on soon, then it will get worse in the future.

Quite clearly, the government has no policy, and I think Senator Patrick is very optimistic.