2016 Group Training National Conference: Skilling For Growth, Adelaide, 8 April 2016

IMG_2623a.jpgThank you so much for the invitation to once again join you for your national conference.  So much has happened since I last joined you at this same conference in November 2014, in the early days of the Abbott Government and now you meet again in, we presume, the closing days of the Turnbull Government! As I wrote in your most recent journal – Skills and Apprenticeships must be on the agenda for the forthcoming election and Bill Shorten and I are determined to ensure they are. 

The significant issues that have developed across the vocational education and training sector would consume more time than we have today: you would be well aware of the unfolding in late 2014 of the stories of extremely shonky and unethical activities by some significant providers who were exploiting the VET FEE-HELP scheme to rip-off students.  Multiple attempts by four different Ministers over the last eighteen months had failed to rein in this serious problem. 

Whilst each Minister has tinkered with the regulatory system the rorting continued apace – then suddenly at the end of last year the then Minister legislated a freeze on access to the scheme at the providers 2015 level whilst a review took place.  This approach has also seen legitimate, ethical providers have their viability put in jeopardy or students denied access to quality courses.  Labor, at the time, proposed again to the Minister a range of interventions but they weren’t accepted.  These included:  A VET sector Ombudsman to provide an avenue for complaint resolution for students apart from legal representation, a cap on course fees to address the fee-gouging that contributes to excessive debts, a lowered cap on VET FEE-HELP loans, a ban or restriction on the use of brokers and ensuring loan applications for students would be handled by the Department of Education and Training rather than a private college or broker. 

As if the challenges of the blow-out in this scheme and the significant rorting that was occurring wasn’t enough, the government decided to get active on a federal sector takeover, including for the apprenticeship system. Fairfax media revealed a leaked COAG document that outlined the basis for how such a move would work and it was appalling – it was clearly a completely de-regulated and marketised approach with a significant shift of costs on to students. 

It is unclear from the scant references to how this system would work for apprenticeships. While improved and harmonised systems should always be pursued by governments it is also critically important to ensure that quality is sustained and industry needs are well addressed – this ensures the apprentices and their employers feel real and long-lasting value is achieved.  All of this needs far greater consideration than such a short proposition as we saw can deliver. 

However, at last Friday’s COAG meeting of Skills Ministers the proposition had mysteriously disappeared and we wait to see what its status is in the future. 

However, a significant document was released out of last Friday’s meeting: the final report on the review of the national partnership agreement on skills reform by Acil Allen Consulting. 

This report significantly was an endorsement of two major policies already announced by Labor for the upcoming election. 

The report stated that: 

“There have been significant steps taken by state and territory governments in relation to public provision. While it has been widely acknowledged that public providers have generally improved their efficiency and responsiveness, there is also recognition that more remains to be done, both in defining the expectations on and obligations of the public provider, as well as in the public provider clearly defining the commercial realities of providing a suite of contestable and non-contestable services. 

While this tension between the labour market focus of the student entitlement and the broader role of the public provider is acknowledged explicitly in the National Partnership, a number of stakeholders suggested that these different objectives are not always held in balance. Indeed, important community service and educational roles of the public provider were in some instances being eroded in pursuit of the efficiency and responsiveness measures within the National Partnership. Transformation of the public provider role requires a steady, evolutionary process, otherwise there are strong risks of losing the value invested in the current capacity and capability of public provision. 

Any future reform in this area requires government expectations for non-market services to be clearly identified and the cost disadvantages of providing these accurately priced and funded. This includes addressing competitive non-neutralities, workforce and IR policies, maintaining public assets, governance and reporting obligations.” (Pxii) 

This lead to Recommendation 6:

 

DEFINED PUBLIC PROVISION

The role and expected activities of the public provider, both contestable and non-contestable, should be clearly and transparently articulated, costed, and funded accordingly.

 

This is almost identical to Labor’s announced TAFE Guarantee Policy. 

Last year on National TAFE Day in Canberra we announced that a Labor Government will work with Premiers and Chief Ministers on a comprehensive National Priority Plan that defines the unique role of TAFE and places it squarely as the public provider within the VET sector – as the cornerstone of our economy’s need to train and retrain its workforce and to deliver on improving the participation, productivity, innovation and growth efforts required for the nation.

 We will work with the states and territories to rebalance the contestable and non-contestable funding model to ensure it delivers the outcomes that are intended.  Labor believes there is a place for contestable funding but we must get the balance right. 

Labor is determined that TAFE must remain an essential part of Australia’s skills and training sector as it plays a vital role in servicing our regions, industries in transition and disadvantaged groups. 

As the Australian economy changes, the jobs of the future will change.  Our trades will involve more technology-based skills and workers will need training in these skills to be more effective in the workplace and to remain competitive in the employment market.  New trades and professions will emerge and require quality training programs and upskilling courses. 

It is therefore absolutely critical that we invest in supporting our national asset – our public TAFE sector. 

There are challenges in the way the vocational educational sector is funded which has led to the decline of the TAFE sector nationally.  Over the last year it has become clear that there has been a failure in the market and we have seen the proliferation of opportunistic and sub-standard training providers costing the taxpayers and students millions of dollars. This needs to stop.  

Vocational students need to have access to good quality training but we need a better system in place to ensure TAFE’s viability and strength into the future. The fundamentals of an effective market are clearly missing and no amount of regulation, as important as it is, will change this.  Labor believes the market must find stability through a predominant public provider, complemented by a quality private sector. 

Just as importantly the report identifies the need for a new national approach to the sector which leads to Recommendations 1 & 2: 

Firstly that the system must be guided by an overarching roadmap: 

“Any further reform beyond the current NP should be guided by the development of a strategic roadmap that provides a clear articulation of the role and purpose of VET within the broader education and workforce development systems in Australia, and defines staged goals for achieving the transition.” 

And, secondly, that it be underpinned by a national training system architecture: 

“The architecture of the national training system should be defined and agreed, determining the elements where consistency across jurisdictions is critical to the achievement of training outcomes, and those where local flexibility is necessary for the achievement of these outcomes.” 

It is exactly with a view to achieving these aims that Bill Shorten and I announced in March that a Shorten Labor Government will undertake a comprehensive National Vocational Education and Training Sector Review to build a stronger VET sector and weed out dodgy providers and student rip-offs.  

Despite its importance to Australia’s social and economic future, Australia’s VET sector is at a crossroads. Costs are increasing but quality is declining, particularly in private courses and states which have experienced funding reductions.  

Labor’s review will ensure the VET sector is properly equipped to train Australians for the jobs of the future, proper standards are enforced and the central role of our public TAFE system is recognised.  

Our national skills and training sector used to be the envy of the world – since the election of the Liberal Government it has been significantly damaged by shonks and sharks ripping off vulnerable people.   

People’s livelihoods are being destroyed – and their job prospects ruined.  It is a disgrace – and action must be taken.  

Having a strong VET sector is an important part of Labor’s plan to support and create jobs, increase participation and tackle inequality.  

The vocational education and training sector deserves a comprehensive, evidence-based approach to policy-making to ensure it is fit for the critical task of preparing Australians for the jobs of the future.  

While schools and universities have had full reviews into funding with the Gonski and Bradley reviews – the vocational education and training sector has been left behind.  The sector has not undergone a full review since the Kangan Report in 1974.  

It is time for a full review of the operation of the sector including quality, funding and access.  As new jobs emerge and existing industries go through extensive restructuring the nation will rely on an effective, quality vocational sector to provide the qualifications to enable people to enter the workforce, upskill or retrain.  

This significant policy announcement further demonstrates Labor’s commitment to protecting the reputation of the vocational education and training sector, prioritising the outcomes for students and meeting the national need for a well-trained workforce into the future.  

When we met in November 2014 I outlined a significant number of criticisms of government decisions taken in the Budget that year that cut away at support for apprentices across the country. 

These included the abolition of the Tools For Your Trade payment, the Apprentice Access Program, the Apprentice Mentoring Program, the Apprentice to Business Owner Program and the rebadging of Australian Apprenticeship Centres as Australian Apprenticeships Support Network with less money and more work. 

Between that conference and today we have, as you well know, seen even more cuts.  This includes the decision by previous Minister Macfarlane to take the axe to apprenticeship assistance again by cutting funding to the $12.5 million Joint Group Training Program by 20 per cent that year and axing the program completely in 2015-16. 

As I said at the time and as you know all too well: 

“As outlined in my speech to the Group Training National Conference this morning, in many areas, particularly in regional Australia, the employers are predominantly small and medium businesses who are simply focused on making ends meet and would find taking on an apprenticeship a challenge.  This is why Group Training Organisations play such a critical role of the training infrastructure. 

“It has become more difficult for young people to get their first job and they often don’t have the pathway to connect to employers who may be interested in hiring an apprentice and this is where Group Training Organisations step in – to make connections between employers and prospective apprentices and to help build a strong and successful relationship between the two.”

In MYEFO at the end of 2014 the then Abbott Government again took the axe to skills funding by cutting another $200 million - the Budget update cut $66 million in support for Adult Australian Apprentices and slashed over 10,000 training places from the Skills for Education and Employment program. 

The Adult Australian Apprentices program was put in place to remove barriers to completing an apprenticeship and to encourage up-skilling for adult workers over the age of 25. 

 Adult apprentices studying a Certificate III or IV could receive $150 per week (up to $7,800 per year) in the first year and $100 per week (up to $5,200 per year) in the second year of their apprenticeship and, as you know, a significant number of apprentices are now mature age which often means they are trying to live independently and may also have partners and children, so this was a significant blow to them. 

The best that could be said about the subsequent 2015/16 Budget was that it didn’t make any further cuts but there was no new funding for apprentices, no new funding for upskilling existing workers, no funding for Group Training, and no support for areas and industries in transition. 

Not long after the Budget, in the face of continuing reports of lower apprentice commencements and completions former Minister Birmingham said:

“what we’re desperately trying to do now is work on policies and strategies that can rebuild the system”

Minister Simon Birmingham, 2GB, 21 May 2015

 

Well we are still waiting for any apprentice initiatives from this Government, nearly a year later and as another Budget looms. 

There are signs that we should be worried about the skills portfolio, even under a new Prime Minister and Treasurer as in December’s MYEFO there were further portfolio cuts - $273.8 million over four years from the Industry Skills Fund and $122.9 million from the Skills for Education and Employment (SEE) Program. 

The cumulative effects of cuts and neglect of the apprenticeship program is clear with the most recent figures released by NCVER again demonstrating that the Abbott/Turnbull Government’s cuts continue to cause apprentice numbers to plummet, including a 19.3 per cent cut in commencements and a 6 per cent decrease in completions.   

In September 2013 there were 417,700 apprentices in training.  Now, because of the Liberal Government’s savage cuts there are now only 295,300 apprentices (September 2015).  

That is 122,400 fewer apprentices in training.  

This Government has developed no new incentives to combat this problem much less get ahead of the game by looking for innovation and opportunity in the sector. 

In March this year in Wollongong I launched Energy Skills Australia’s “Energy Industry Apprenticeship Progression Management System Report”.  This was a report on an apprenticeship innovation project funded under the previous Labor Government and utilising some of the now abolished programs, including the apprentice mentoring program, the apprenticeships advisers program and the accelerated apprenticeships program.

This project achieved a very significant outcome – the apprentice retention rate of 93%.  This is a truly significant achievement as the completion rate for the Certificate III electrician trade qualification had previously remained consistent at around 62%. 

This is the type of innovation and investment that is needed to lift commencement and completion rates and retain confidence in the apprenticeship system – we see nothing like this from the current government. 

As Labor’s Shadow Minister I have met apprentices, employers and training providers across the country – many of your Group Training members have also provided me with ongoing updates and advice and I want to publicly thank you for that as I have worked on Labor’s VET and apprenticeship policies. 

I would just like to finish by also thanking your outgoing CEO, Jim Barron, who holds a wealth of knowledge on the sector and has been a fierce and consistent advocate for group training but also for apprenticeships more broadly and I sincerely wish him well for the future. 

Thank you all for your generosity in inviting me to participate today and to many of your forums over the last nearly three years since the previous election.  And so we march on to the next one, determined to put skills, vocational education and training and apprenticeships and traineeships firmly on the agenda for that contest.

HOST: From a Labor perspective what would be step one in returning the VET sector to become once again the envy of the world? 

BIRD: I really do believe that the first step in returning the reputation of the sector and some stability to the sector is to have a national review as we’ve outlined. Now people sort of get a bit “ohhh another review”, I don’t intend it to be another review. We saw Gonski as a process to deliver a real road map for the future for the school sector and indeed you can see it is right at the front in the heat of the current election debate. We saw the Bradley review see significant change and reform for the University sector and give it a road map for the future. We need that for the vocational sector. 

You would know because I have been saying it to you for a number of years that I particularly asked Bill Shorten for this portfolio, it’s never been a stand- alone portfolio before, because I felt this sector was treated like a poor cousin and I have said publicly I think that is because many of us in politics and many of our dedicated bureaucrats that work in Departments, many of the journalists who write the stories, we all went to school so we understand the school sector, we all have an opinion and we are happy to talk until the cows come home about it. The vast majority of us were trained at University so we understand that sector and it gets column inches and lots of attention but the VET sector is the major post-secondary sector it trains the majority of Australians and yet there is so little, I’d argue, depth and breadth of understanding about it and I think it has suffered because of that. 

I was pleased the government followed the initiative and established a dedicated Minister as well but I think it is well time that we started to realise that there is a lot of disruption happening in many, many industries. If you read some of the environmental scams that have been put out in recent years you can see the intervention of digital disruption happening across the board and its why there is not low skilled entry levelled jobs there anymore. People need a post school qualification and a lot of those people are going to rely on this sector so we need to get it right for the future. 

I think that is absolutely the first step and then of course funding has to follow that so that gives you the road map and then you find ways to ensure funding that so you can deliver what you say you want it to achieve. 

QUESTIONER:          Thank you for your support over the last number of years for not only VET but for Group Training as well. Just a blunt question I suppose the opposition will always get the rhetoric is there for supporting Group Training? but would the opposition, Labor, reconsider funding for Group Training? 

BIRD:           Thanks for that question, we will definitely have policy out on apprenticeships and all the structures that go around that before the election, that’s my job at the moment so perhaps if your conference was a little further down the track I might have been able to make announcements for you, I can’t today. 

You can rest comfortably assured that I’ve got great support from my leader, Bill Shorten, to have strong policy in this area and that is exactly what I am working on and I am happy to answer questions, because to be quite honest over the last two and half years I have used you guys as my brains trust to pick your brains as well. That is absolutely on the agenda and we will have a lot more to say before the election in that space. 

QUESTIONER:          Founding father of Group Training 30 years ago, I wanted to ask you a question today in a different role, I am past chair of Council of Small Business of Australia, actually have worked with Bill Shorten in his small business role as well. Number one is a thank you I got a copy of the getting business booming report in which you were a member of the committee and thank you very much for the recommendation in there related to the Access Program and return of support for Group Training, I noted from your answer of the previous question, clearly it is high on your agenda we like to see it at the top, it’s just a small plea. 

More interestingly the Group Training product is one which is extremely important to the small business community in Australia, you know that and you made mention of it. Some recent work has indicated that for a small business of which there are 2.3 million thereabouts, actually operating business in Australia, only a third of which employ or employ an outsider so there is plenty of options for more jobs there and a willingness but they said it is too hard. An analysis of that recently showed that for a small enterprise to take on its first employee all of the work, preparation, red tape, time compliance an area in which they are not well equip, anyhow, will have cost them $6000 on the day before the new employee starts. That’s a huge upfront commitment and therefore one where Group Training can play a really significant role in helping them both avoid those costs but we need support. 

A number of the current programs, and its happened in the past as well, that are available from the government, I noticed even today on a new small business ombudsman report about job active, up to $10,000 of support of a not so young person entering the workforce. That program specifically excludes Group Training organisations, is it that we are not good enough and yet we have the highest standard of employer, you actually have to meet standards for employment that other people don’t. 

So really my question and point is, when, and there is no doubt that the electoral cycle changes, when Labor is returned to government in Australia can we look forward to a circumstance where the proven best employer, history of 500,000 apprentices will not be treated as a leper and will be able to enjoy the same benefits as any other employer in the government program? 

BIRD:  Look I think your comments and question encapsulate a lot of frustration in the sector about how Group Training has been treated over the last 2 and a half years. I hear that consistently and you refer to the House of Reps committee report and it highlights the issue. I was meeting with Michelle Rowland, our Shadow spokesperson on Small Business yesterday and we were talking directly about these issues. 

I think what is particularly frustrating for me, and Michelle is finding the same thing, with the Small Business sector and its link to Vocational Training and apprenticeships in particular, is two-fold. One is as employers. A lot of small business people are really dedicated tradespeople and one of the great things about our apprenticeship system is I think, and it’s not written as a training outcome and it’s not in a training package, but we have developed a culture of professionalism amongst our tradespeople in Australia, over decades, and they take great pride in what they do They have a very strong commitment to passing that expertise on to the next generation. 

A lot of these people I talk to feel almost guilty if they can’t take an apprentice on because they have such a strong culture about that and the reality is, as you outline, it’s become just too costly for them and that is exactly where joint Group Training program and Group Training organisations were able to take up that opportunity. As a direct employer it’s a significantly important sector so why you would forget it in all of the different brands of government policy is backward and it is certainly not something I would take forward as a view from Labor. 

Secondly, an enormous number of those small businesses, you know the government loves to talk innovation start-ups, let me tell you a lot of start-ups and a lot of emerging small businesses are trades based people so they’re out there and that is partly what our apprentice to business owner program was about. It is recognising that many people finish their trade, or indeed their vocational training qualification and they go on to set up themselves as a sole trader or small business and to provide an avenue to support that and to do that. 

I give the example, I met the lady who set up the website Shoes Of Prey, some of you may be familiar with this, I’m sure you gentlemen are individually designing your shoes and ordering them. That was a match of a young woman who had a very tradition trade, shoe making, and matching that with the IT systems has enabled her to drive an online presence and it is now a multi- million dollar business. 

That is the reality of innovation, it’s not just about taking University IT graduates into new jobs and business in that sector, although that is important, it should be applied across the vocational sector as well because there is so much innovation and idea for new jobs and new business’ there so we don’t get it right if we lose the quality of that sector then we are actually losing innovation, we are losing job opportunities for the future and so there are two really important aspects to the point you make about small business and I think that they’re sadly not given enough focus and attention. 

I noticed that some of the senior academics, I think it is someone you had yesterday so I won’t name them as I need to go back and check the magazine, had an article saying that he was greatly frustrated that the government put out their innovation statement all talking about what they were doing in schools and talking about what they were doing in universities and completely ignored the innovation that happens in the vocational sector and there is some fantastic stories to be told there. 

I hope you can see from today’s contribution that I am very determined that that does not continue. 

QUESTIONER:          My question should be close to your heart and close to mine, I grew up in Wollongong, did my apprenticeship….. 

BIRD:           When are you coming home? 

QUESTIONER:                    It’s too cold there, it’s too cold here. I did my apprenticeship in and around the steel industry in Port Kembla. We can have all the apprenticeship policy we want, and I work in the government system in the Northern Territory so I am a part of the machine, but we can’t have apprentices without jobs. So is there any flavour or any appetite within government of either colour do you think to be open to, I suppose, disincentive at least with commonwealth and state government infrastructure projects to mandate the use of Australian made products which in turn creates Australian based jobs and flows on to more apprentices in the Australian workforce? 

BIRD: Great question and very pertinent to where we sit today. This is going to be a real debate also in this election. I am very hard lined of the view, it wouldn’t surprise you given I represent the Port Kembla Steelworks, that there are some strategic foundational industries that drive a lot of innovation in our sector. For example at Port Kembla you have got the steel making capacity and then you have got an extraordinarily successful business that sits beside that in Colorbond and I’m of the view that actually making things is the foundation for driving innovation in may products so if you give away all your capacity to make things you lose an innovation driver in a nation. 

Even just yesterday you would have hopefully seen that Bill Shorten made some very strong comments about the need for a National Steel Plan in this country. We had to do it a couple of decades ago when the industry was again right at the forefront of danger in retaining its presence in Australia and we need to do it again. From my portfolio perspective a lot of that is because a lot of the really quality opportunities to get pathways into employment come out of that sector. 

Now there are new and emerging opportunities but they build on, I’d argue, the base of having the traditional opportunities there and so one of the things that we think is very important is to look at where we can maximise apprentice opportunities in those areas. You probably remember under the Building Education Revolution we had a requirement in that program for 10 percent of the employment base to be apprentices in that sector and as part of supporting them, fear we had when the Global Financial Crisis hit, that we would see that massive drop off in apprentice commencement as it happened in the previous economic downturn. That was very successful alongside the Kickstart Apprenticeship Program in that we actually sustained the level of apprentices in this country through the Global Financial Crisis which had not happened in economic downturns before. 

That’s an area I am particularly interested in looking at, building on our experience of that sort of program is to what we can do into the future. Some of you may have heard me talk about this before but I grew up on the Appin mine site, my dad is an Electrical Engineer by trade, and I remember when I was at school, he began each year with a massive apprentice recruitment. You were talking hundreds of apprentices, the same happened in a lot of the other big organisations such as State Rail, Electricity Commission and so forth. We have increasingly seen that base to drive our traditional apprenticeships decline and we are increasingly looking for the small to medium business sector to pick up that change and so I don’t think you can do that fairly without making sure that the big ones, as much as you can get them involved, and take that responsibility and training for the future they just sort of poach everybody else’s training effort and that we support small to medium business who want to participate in it as well. 

QUESTIONER:          Getting back to the relevance of Group Training and it’s encouraging to hear you say that you have an understanding of Group Training and the involvement that we have had. For the future when you do get back into power and if you are the Minister would you, and we all understand what consultation means, and with degrees of consultation, consultation could be “this is what we are going to do and we have told you and now you have been consulted”. 

One of the things I think with Group Training organisations, and again we have already acknowledged in this room there is a lot of knowledge, a lot of involvement and expertise in the VET sector. I guess what I am really asking is if you do get back into power for you to seriously include GTO’s at the beginning of consultation. You talk about views and input that is something that we can look at the network across the country and our tentacles are extending to every corner of Australia so I put to you and I would like to hear your response, be it brief or lengthy, with respect to where Group Training would stand in that whole process and input into the VET sector. 

BIRD: Thanks, it’s a great question and I’ve heard a lot of frustration about the nature of consultation and I think you have described very aptly and very often it is the decision that is made and then there is a sort of tick box process that happens. 

I hope if you have a look at everything I have said over the last two and a half years I hope you can take that this a very genuine comment from me. I’m a TAFE teacher by training, when I went into the Parliament I was involved in the Education Committee and then in both Ministerial portfolios and now in the Shadow Ministerial portfolio I have retained involvement in the VET sector. If there is one enduring lesson I have learnt from that it is that I’m not the font of all wisdom and nor are the rest of the parliament or bureaucracy. 

There are decades of experience sitting out there in places like Group Training organisations and places like the Industry Skills Councils that we previously had, in places like Employer Associations where there are units where people who are really dedicated to the training and skills sector operate. And many, many of our unions who have worked in this space for decades too. 

This is the sector that I regard as quite unique in that people who work in it are extraordinarily passionate about it and tend to spend decades in it and so that they have been through every government brain snap, every reform where someone has gone “I think this is a great idea, lets run with this”, every change in the economy. Organisations like Group Training, that you have actually pointed out, has nation-wide coverage but also industry-wide coverage with both apprentices and trainees with direct experience of all industries and I was very critical of one of the first decisions of the government to disband AWPA, because I thought it was a peak level opportunity to bring a tri-partite representative group together and I was very critical of disbanding the expertise of the Industry Skills Councils, with that mind that you might reform and restructure things, but I was very worried that there were people whose expertise would be lost.

I can assure you that my view is that it’s just a dumb decision to seek to make reform in a sector as large and complex as this one without mining every expertise and knowledge. I just cannot see why you wouldn’t do that. It does make it more difficult because there are intense debates amongst all those people but I have to say I think that it’s one of those sectors where, the Industry Skills Council showed this, you can bring in employers and unions to the door and they put all there other disagreements at the door and they come together and are really united about skills, apprenticeships and getting outcomes for the sector and this is quite unique.  I can tell you I just think it would be a really dumb decision by any government to not be extensively mining that expertise and knowledge in developing your responses not in deciding how you are implementing already made decisions. 

ENDS