2014 Group Training National Conference, Grand Chancellor Hotel, Hobart

Thank you for the opportunity to join you today to discuss the Opposition’s perspective on the changes that have been made by the Abbott Government to vocational education and training generally and to apprentice training and programs in particular.

 

I remember coming to talk to you in one of my earliest public speeches as a newly appointed Minister for Higher Education and Skills in Brisbane in April 2013.  Whilst I would obviously be pleased to be addressing you today on the same basis, I am very pleased that there is a Shadow Minister for Vocational Education on our team to talk to you about this critically important sector – but more about that issue shortly.

 

Just over a week ago I attended the State Memorial Service for our 21st Prime Minister, Gough Whitlam.  I reflected in my contribution to the parliamentary debate about the significant role that his government had played in the transformation of the VET system.  While much of the story of his education legacy focuses on the expanded access to university education, it is not often enough acknowledged that his government had as profound an impact on the VET sector.

 

It should not be ignored that in my own shadow portfolio we saw the seeds of a truly national vocational education-and-training system begin to take shape through the Kangan report, the establishment of our modern TAFE system and the ensuing debate on how to grow productivity and participation for all Australians through the VET sector.

 

And, it has been pointed out to me that his Deputy Prime Minister, Lance Barnard, a MP from this great state of Tasmania where you are holding this important conference, was a critical player in the early days of the Group Training movement.

Lance was the chair of one of Australia’s very first group training companies based in Launceston. Indeed, it has been told to me that he served as a very effective ambassador for group training and the memory of his work and his inspiration remains a driving force today.  This is reflected in group training’s Lance Barnard Memorial Oration.

 

So it is very fitting that this conference returns to Tasmania and it gives us the opportunity to reflect on a very distinguished Australian who played such a key role in the work that all of you are doing to build skills and jobs for people today.

I particularly asked Bill Shorten for this Shadow Portfolio because it is an important area of the broader education and training task facing our nation in shaping a competitive future and supporting individuals and industries through the transitions that have been occurring in various sectors and will, undoubtedly continue to challenge us for a good time to come.

 

I would like to explain the value I place on our VET system with reference to my own electorate, based in Wollongong.

 

Many of you would be aware that the Illawarra is a region that has strong historical connections to the mining industry, indeed I come from five generations of coalminers myself.  Being a coastal community it is not surprising that in the twentieth century a thriving manufacturing industry grew up to maximise the opportunities of accessible coal reserves and port facilities.  The Hoskins steelworks established and then was bought out by BHP in the twenties and still continues today as Bluescope Steel.  Many small and medium manufacturers grew in the region to service the coal and steel industries.

 

However, since the 1980’s we have seen waves of restructuring across these sectors, until as recently as 2010, when Bluescope undertook another significant restructure that lead to hundreds of workers being made redundant.

 

There are many regional communities, like mine, going through the same process. I believe that the critical role that vocational education and training plays in ensuring workers are well equipped to adapt as the businesses they work for look to adapt to changing market circumstances; the initial post-school courses that young people undertake to get a start in the workforce; the women who have been out of the workforce raising families and seeking to re-establish themselves in work; or the workers made redundant through restructures who look to have established skills recognised and to add to them or to strike out in new work directions; all of these people in all of these circumstances so often look to our VET options to provide these opportunities in an accessible, affordable way and with the assurance that the content and quality are sufficient to be valued in the jobs marketplace.

 

The reason why I feel so strongly on these issues was clearly described in July this year when the Illawarra Mercury ran a weekend article on the restructuring occurring in our industries and they featured a gentleman called Shane Szabacs. Shane is 39 and was one of the 80 workers who had been made redundant from the manufacturing company, MM Kembla.  Shane had applied for jobs as a production supervisor, plant operator, sales assistant, storeman, in customer service, construction labouring, fence building and pizza delivery had all been unsuccessful.

 

He has had some success with labour hire work and is keen to learn new skills and would like work that is more based on working with and helping people.  Shane’s own words to the journalist are powerful:

 

“You’ve got to think outside the box” he said.

 

“I’d love to go to uni, I’d love to do a social services degree, or get a Certificate 3, Certificate 4, and basically be a case manager for DOCS.  That would be my ideal job. I want to give back, I want to help people. But you can’t just jump into that sort of stuff.

 

“The advice that I would give? I should have continually upskilled. I should have continually been doing tickets, TAFE courses, not rested on my laurels. That’s the mistake I made.”

 

At the same time as people like Shane; sectors like manufacturing; and regions like the Illawarra and locally here in Tasmania; are in the process of significant structural change - the nature of work and the relevance of knowledge and skills are also changing. This is also reflected in the nature and structure of businesses – the expansion of contract work, small business operations, home-based entrepreneurs and so forth; all providing new and significant opportunities and real innovation that contributes to the growth of the nation’s productivity, wealth and well-being.

Given how significant, therefore, the VET system is to this national task and how critical it is to the success of individuals, businesses, communities and the nation; I feel very strongly that we must be vigilant in protecting the system as a whole.

 

After the election, I was particularly keen to see how the new government would manage the Skills portfolio. They had said very little about Skills in opposition so there weren’t many pointers as to what direction they would be likely to go in, I think the only pre-election commitment was the one regarding the apprentice loan scheme. Like many people when the Ministry was announced, I presumed that the Skills portfolio had moved with Higher Education into Minister Pyne’s portfolio and was a bit surprised to find it wasn’t there.

 

Like many people I had to go hunting for it, there was no Minister for Skills identified by title in the Ministry. Indeed, your own CEO, Jim Barron in your publication at the time reflected the same concern:

 

Jim said, “It is worth noting that this is the first time in a very long time when there is neither a federal department nor a federal minister with the words: skills, training, vocation or tertiary education in their titles.”

 

As a Parliamentary Secretary and Minister in the previous government I had already noted that these terms have rarely ever been mentioned in major milestone documents produced by the Abbott Opposition.

In the election platform document Real Solutions the term skills and the policy areas of skill and workforce development were almost invisible.  On page 41 just over one hundred words addressed the topic of “Investing in job skills training” and more than half of these words were about immigration and school-based language studies.

That was probably the first sign that I was correct to have real concerns about what the new government was going to do with the portfolio.

 

Following that we saw the release of the Government’s Commission of Audit and, again, that caused me very great concern, it recommended that the federal government fundamentally abandon the field on Vocational Education and Training and I think that is absolutely the wrong way to go. What Federal and State Governments of all persuasions have been doing now for decades is in fact getting together to better co-ordinate a national approach. People move around the country and they do expect that there is a more consistent national approach to the portability of their qualifications, so I think the Commission of Audit very much reflected a failure to understand the national significance of the Skills area and the Vocational Education Training path that so you are involved in delivering.

 

The Commission of Audit was followed by the Federal Budget and there are areas that are of real concern for Labor in the significant cuts from the Skills Portfolio.

This includes firstly what has happened with apprenticeships. The government did move to introduce its Apprentice Loan scheme but we were quite angry on behalf of apprentices that the Government before the election gave them no indication that this program would be at the cost of the Tools for Your Trade payments which provided direct financial support to all eligible apprentices to get the tools they need for their trade and to assist with other costs.

 

Many of you would have received the same feedback that I, and my parliamentary colleagues, have about the intense disappointment among apprentices about this decision.  I recently visited a construction site in Werribee outside Melbourne and spoke directly to about 20 apprentices across a number of trades – some were mature age apprentices.  They were all angry about the removal of the Tools for your Trade payments and quite scathing about the Trade Support Loans as a replacement option.  The view is probably best captured in the comments of Joshua, an electrical apprentice who responded to my online survey.  In his words Joshua said: “Tools for your trade while 25% of the amount of loans on offer was a lot better.  You didn’t have to pay it back and it was at convenient times. Almost like a motivation to get to the next stage.”

 

Just as importantly for me were other very significant apprenticeship support programs that had been abolished in the Budget.

 

The first one is the Apprenticeship Access program which particularly targeted very disadvantaged young people to get them the skills and appropriate knowledge to get access to apprenticeships. In November 2012 I visited the MTA Autostart Access program at Granville with Julie Owens, Member for Parramatta. I saw firsthand an impressive program that helped people, very vulnerable jobseekers, get themselves ready to gain a full apprenticeship.  I met local car business owners and managers and representatives of the Motor Traders Association all dedicated to helping young adults get a start in a region plagued by youth unemployment.  With no notice or evidence of failure this scheme was abolished in the Budget.

 

Another program that was abolished is the Apprenticeships Mentoring program. Many of you would be aware that there has been a consistent concern about the number of apprentices that are actually completing their training and this program was very much appreciated, not only by the apprentices, but also by employers.

 

In March of 2013 I launched the Construction Apprenticeship Mentoring Scheme at the Master Builders’ ACT Training Centre.  In government we had allocated $3.4 million to this scheme working in partnership with Master Builders Australia to establish a national coordinator and engagement officers, recruiting hundreds of volunteer mentors to offer crucial support to young apprentices. 

 

This was an $80 million dollar Australian Apprenticeships Mentoring Program doing work critical to improving completion rates that the government claims it is concerned about and so I really am at a loss to understand why this program was also abolished.

 

The other more recently introduced program that has been abolished is the Apprentice to Business Owner Program. As Minister in May 2013 I was very pleased to announce the start of this $19.4 million program. We quite clearly understood that across a whole lot of industry sectors people finish their apprenticeship and then go out and operate as a sub-contractors, sole operators or small businesses and the AtoB program was a good initiative to provide them with the sorts of skills they might need that you don’t get in your apprenticeship, those sorts of small business management skills, as well as trade specific skills and licensing training.

 

So we had nearly $1 billion over three programs plus the incentive payment of Tools for Your Trade that were cut in the Budget and I believe this was a very short sighted action and apparently quite contradictory to the Governments increased “Earn or Learn” requirements.

 

I would also like to touch on an issue in the apprenticeship commentary by the current government that does give me some degree of frustration. In March this year I attended the TAFE Directors Australia National Scholarships Foundation Dinner in Canberra and I listened to Minister Sussan Ley give a speech in which she outlined the government’s interest in making apprenticeships “more attractive” to young people. There is quite a bit of commentary about in recent times suggesting that the trades have an image problem and I have struggled to see the origins in evidence of this presumption.

 

In reality, you rarely hear from employers complaining that they are advertising apprenticeships but no-one is applying for them.  In many areas, like my own in the Illawarra, young people and their parents are desperate to get them a start in an apprenticeship and there are always far more young people looking for vacancies than there are apprenticeships on offer.

It is true that employers will often express concern about the entry-level skills of young people, about their work readiness and about the quality assurance of the training they do receive.  These are all legitimate areas for policy development and programs to be introduced, whether at the school or post-school level.  It is for these reasons that Labor in government put significant investment into trades training centres, why we had flexible targeting such as through the Apprentice Kickstart program, and why we had programs to support employers in upgrading the skills of their existing employees through co-funding programs such as the National Workforce Development Program.

 

There is clearly some real value in the school-based apprenticeship model but it is certainly no silver bullet as the Government is presenting.  It is an appropriate program for some students but for many students programs that give a taster of trades or provide generic vocational skills so they can better target the trade they may be interested in undertaking are more appropriate.

 

Importantly also, as many commentators in the sector have highlighted, the availability of employers willing to enrol young people whilst still at school can be a significant barrier. In many places the employers are predominantly small and medium businesses who are simply focussed on making ends meet and would find taking on an apprentice a challenge – this is the reason why, for me, Group Training Organisations remain such a critical part of the training infrastructure.  To expect this market to also provide for thousands of school students also wanting an apprenticeship is going to create even more pressure.  Many students who enrolled in the Howard government’s technical colleges were still without an employer when Labor came to government exactly because of this problem.

 

The entry-level jobs market is changing.  It has become more difficult for young people to get their first job, employers are regularly advertising entry-level jobs with a two year minimum experience requirement and vocational training is increasingly important as the pathway between leaving school and getting a job. 

 

The Abbott Government’s simplistic school-based debate no doubt reflects the lower order importance they have given vocational education. The vocational challenge is so much more than the “kids leaving school to get a traditional trade” that dominates their policy discussion on the sector.  Whilst we all care deeply about getting that pathway for our young people operating as effectively as possible, it is just as important to support our schools to provide wider and more meaningful vocational courses and to continue to invest in trades training centres. We also must to look to a strengthened post-secondary sector, our public TAFEs are a national asset that is being decimated by conservative State Governments, and the quality private sector is being badly undermined by shonky providers.

 

The pathway to work through vocational education and adult second-chance education and training is absolutely critical to our national economic well-being, growth and job opportunities.  A quality VET sector delivers the skills needed to continue improving productivity and participation – it has a hard economic value as well as a significant social dividend.  The Federal Government must start treating it with the priority it demands – if vocational education has an image and respect problem anywhere, it is with the Abbott Government.

In September the Prime Minister and the Minister announced the establishment of a “new” Australian Apprenticeships Support Network but this was simply a stunt that rebadged the existing Australian Apprenticeship Centres. 

Worse still it was based on a secret cut of another $10 million per year from the Budget allocation for the Australian Apprenticeship Centres. 

With reduced funding, the new Network will now be expected to do additional tasks such as providing job matching, mentoring and support.

The Labor government had provided $50 million for the Australian Apprenticeship Access Program and the Australian Apprenticeship Mentoring Program and these were axed by the Abbott Government in the budget earlier this year.

The Minister when he  established Trade Support Loans tasked the Australian Apprenticeship Centres with the job of processing these applications – now he is saying they spend too much time doing paperwork. This just doesn’t add up.

This is just a cut to skills dressed up as a new initiative.  Now they have rolled five apprenticeship services into one program with less money.

Existing Apprenticeship Centres were allocated approximately $210 million per year over the forward estimates.  The Government’s announcement cut the annual allocation by $10 million. A request for tender is now out and the Government intends this new network to operate from 1 July next year so I will follow this issue closely.

The other area I just want to mention about the Budget cuts is some of the co-investment programs, in particular the Workplace English Language and Literacy program and the National Workforce Development Program. Both of those have been instrumental in providing opportunities in the up-skilling of existing workers – exactly the sort of programs that assisted workers such as Shane who I discussed earlier.

 

As one great example that I saw was when I visited some aged care facilities where people were getting a program that combined the language and literacy within a digital skills course and for many of these aged care workers it was a first time they had done a qualification since their time at school and they were really proud of what they had achieved.

 

I would point out, for example, that the Australian Industry Group, in its own Budget Submission to the federal government, indicated their support for those programs continuing. Now I acknowledge there are some replacement initiatives in the Budget. There was the new Industry Skills Fund, however, it’s half as much money as the abolished programs and it is very specific and narrow in its targeting to small and medium enterprises and to a small and very specific range of industry sectors as well.

 

All of this occurs in the midst of the Minister’s initiated VET Reform Review and the changes proposed by the Higher Education Minister  which will impact also on the vocational sector with no indication that funding will even be restored to previous levels in the Skills Portfolio.

 

In all this change I firmly believe the Government is making a critical error in narrowing the base of advice it is receiving and returning too much of the task back to the department. I do believe that the voice of employers and industry is invaluable and critical to effective policy-making and funding decisions. I also believe that the voice of RTOs and peak sector bodies, suc as your own, are also invaluable and critically important.  The expertise on skills analysis, program design and delivery, assessment and quality assurance must never be lost.

 

In the Abbott Government’s eagerness to remove any traces of good Labor programs and policy, I believe that they have acted prematurely in abolishing the Australian Workforce and Productivity Agency (AWPA).  The decision to axe our peak strategic policy and research body on skills was made with no formal announcement, not even a media release.

 

AWPA was established in 2012 by the former Labor Government, replacing Skills Australia, to provide expert, independent advice to government on current, emerging and future skills and workforce development needs.  AWPA brought together the peak national bodies such as ACCI, AiGroup and the ACTU to achieve industry leadership.  AWPA also took a tripartite approach to skills and training where industry, training providers and unions had a strong voice.

 

I am also deeply concerned about the Minister’s plans to further narrow down his access to advice by completely abolishing Industry Skills Councils. The Minister’s new VET Advisory Board has come out of nowhere, has no training provider or union representation and there was no information provided explaining the establishment, purpose and composition of the Board. The Minister has hand-picked five people at the expense of others with extensive experience in the VET system.

 

But I am also very concerned that there is another perspective that I am increasingly concerned is getting lost – and that is the perspective of Shane – the student or potential student who seeks to build a lifetime of work from the knowledge and skills they gain from their education and training.

In the national debates, the perspective of the RTO generally covers what courses they are running, what student groups they are dealing with, what government demands and regulator requirements they are managing, their cost base and so forth; so it’s a perspective based in the issues of the “here and now”. Similarly with the employer groups, businesses who are looking at training, considering what their current business model is, what the established skills of their existing workforce are, what new knowledge or skills they need to bring in so they can change a production process or to update a service delivery model – again very much an immediate term view of their needs of the training sector.  But what is often lost is the longer-term needs of the person who is the direct target of the training - that is the student.  I am not intending to claim that either RTOs or employers are not concerned for the lifetime well-being of the student; but, of course, their priority will be on a much shorter term horizon.

My view is that the best protection for that student, that jobseeker or that worker is the rigorous maintenance of the quality of the sector.

The vocational sector is extremely diverse. The Productivity Commission report released in January this year showed that recurrent expenditure on VET by Australian, state and territory governments — not private expenditure; just government expenditure — in 2012 was $6 billion. That was equal to $397.77 per Australian aged 15-64. In 2012, 32.2 per cent of Australians aged 15-64 held a certificate or diploma as their highest level qualification and approximately 1.9 million Australians were reported as participating in VET programs at 22,486 locations across Australia.

With such a large, diverse and critically important sector we all share in the benefits of quality training and we all suffer when the sector’s reputation is damaged. Federal Labor in government established a national regulator, ASQA, as one mechanism to provide the assurances that are needed to protect the quality and reputation of the sector.  Recent reports by the regulator have shown exactly why this task is needed. These include the broader report on Marketing and Advertising Practices and the Industry-specific reports covering the aged and community care sectors and the White Card in the construction sector and only in recent weeks, the significant issues highlighted in their annual report and media reports on sectors such as childcare.

These industry reports combined with the report into Marketing and advertising practices indicate that some VET providers are combining the demand for qualifications with unethical marketing practices; unscrupulous enrolment procedures; manipulation of funding options and/or poor quality delivery to take advantage of students.

There is discussion about the nature of the regulator’s task and how this can be best achieved, particularly following the release by the Minister of the ASQA Process Review in June.  No doubt there is some capacity, as there always is with any new authority, to review and seek efficiencies in its operation. 

I acknowledge that the Minister has now allocated additional funding to the regulator and that new standards are being implemented.  I sincerely hope that these actions are successful in addressing the behaviour too many providers who are seeking to recruit students through incorrect and sometimes unscrupulous marketing and enrolment procedures and I continue to hear of examples of this type of activity as I am sure many of you do.  As this most often involves quite vulnerable learners, the impact, financially and educationally, can be devastating for the individuals.

I have in the last few weeks called on the Minister to do more, including:

  • convene an urgent meeting with the Education Minister to ensure there are no abuses of the VET FEE HELP system by poor quality or unscrupulous providers;
  • call an urgent meeting of the COAG Industry and Skills Council to guarantee federal money is not being provided to poor quality providers;
  • ensure that the move to risk based assessment intervention by ASQA on RTOs is limited, at least in the first stage, to only high quality providers with long term track records who have not had any breaches of Standard 15; and
  • provide continued support to Industry Skills Councils beyond 1 July to give stability to the system. 

In the vocational education sector all participants have one common interest and that is quality.  Whether you are a funding provider, a registered training organisation, a student or an employer; Federal Labor understands that the quality of the outcomes in vocational education have significant implications for you.

And that is why we will continue to pursue this vital agenda with you as a long-term, experienced and important player in the national task.

I acknowledge that there is always room for improvement and there is always an imperative to move.  The world brings new challenges to our doorstep such as the pressures on our manufacturing sector – and these challenges can become real opportunities if we get the education and training right.  Emerging innovations in technology bring us great new business and industry opportunities and we need to match them with the people ready to grab them and build new futures.

Our schools and universities are central to this task and alongside them sits our vocational education and training system – an equal partner as critical to this task as the other two.  Increasingly people will move between them in different ways adding the pieces of knowledge and skills as and when they need them.  It is about Jobs, Careers and Community; it is about the entry-level, upskilling and shared responsibility between workers and their employers; it is about local responsiveness and national portability about workplace relevance and lifetime building blocks.  These balances should not, and cannot, be failed as so much is at stake for individuals, their communities and out national prosperity.

 

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