ACCI CONFERENCE ON VET AND APPRENTICESHIPS
20 JUNE 2016
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Thank you for the invitation to join you today to talk about a subject on which I am very passionate – my portfolio of vocational education and apprenticeships.
You have no doubt noticed that Labor under Bill Shorten has given a very high priority to these two areas in this election campaign.
Since the last election I have been very critical of the Liberal Government’s complete neglect of the sector and failure to address the crisis in apprentices in training numbers.
To date, as we enter the final fortnight of the campaign, the Government has continued this neglect by failing to outline a vision for the sector in the future or any specific policies to address the numerous issues we face.
The contrast between their silence and Labor’s strong platform of policies could not be more stark.
I am very conscious of the significant interest ACCI has taken in the sector, and in apprenticeships in particular, including in your most recent pre-Budget submission. So I am very pleased to have the opportunity to discuss our announcements with you today.
In his Budget Reply speech Bill Shorten said:
“Labor will make training and skills a national priority.
Creating jobs in our regions;
Re-training adult workers; and
Helping modernise our industries and technologies.
We are delivering on that commitment with a significant range of important policies.
A NATIONAL VET SECTOR REVIEW
Firstly, 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 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.
Labor is committed to protecting the reputation of the sector, prioritising the outcomes for students and meeting the national need for a well-trained workforce into the future.
A TAFE FUNDING GUARANTEE
Under the Abbott-Turnbull Government, Australia’s TAFEs are struggling. In the past two years we have seen the closures of TAFEs, reductions in staffing, ever-increasing course costs and unscrupulous private providers and brokers preying on vulnerable people.
This must not be allowed to continue. TAFE must be backed by governments as it is critical to our future.
Labor has a plan to back TAFE into the future by developing a comprehensive National Priority Plan that defines the unique role of TAFE as our public provider and delivers on this by working with the states and territories to provide ongoing guaranteed TAFE funding.
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.
Under Labor’s plan for TAFE, a Shorten 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 deliver on improving the participation, productivity, innovation and growth efforts required for the nation.
Labor is firmly committed to a strong TAFE sector.
We understand how critically important TAFE is to so many students, communities, industries and businesses. It is a national asset and we must work across all levels of government to ensure its future.
RESTORING INTEGRITY AND STOPPING RIP-OFFS
A Shorten Labor Government will introduce a loan cap of $8,000 a year in the VET FEE-HELP program as part of an integrity package to stop the massive waste of taxpayers’ money, to prevent price gouging of students and improve training outcomes.
Under the Liberals, the VET FEE-HELP loans scheme has escalated from $699 million in 2013 to $1.7 billion in 2014 and is expected to have blown out to over $3 billion for 2015.
At the same time, students are being ripped off by unscrupulous colleges and dodgy providers - and taxpayers are being forced to pick up the tab.
In some colleges it is costing taxpayers over a million dollars in VET FEE-HELP loans to produce a single graduate.
In 2014, the ten largest private training college recipients of VET FEE-HELP subsidies in Australia were paid $900 million in government subsidies - yet less than five per cent of their students graduated.
Labor will stop this waste of taxpayers’ money and exploitation of students. Our plan will restore integrity to the system, by cleaning out the dodgy private providers who have been ripping Australians off for too long.
Labor’s plan to rein in these taxpayer subsidies and restore integrity to the vocational education sector will save Australian taxpayers $6 billion over ten years.
There will be an exemption on legitimate high-cost courses such as nursing and engineering following ministerial approval.
Other measures in Labor’s integrity package include:
- Ensuring that funding for providers is linked to student progress
- Set national priorities to help meet the skills needs of industry
- Crackdown on the use of brokers to recruit students
- Ensure that only the highest quality colleges get access to funding
- Tougher powers to audit, investigate and suspend unscrupulous providers
COMMONWEALTH INSTITUTES OF HIGHER EDUCATION
Labor has a plan to expand access to higher education and support local jobs in outer suburban and regional Australia.
Investing in education and training is the single most important thing we can do to maintain Australia’s prosperity and secure the jobs of the future.
Labor is committed to opening up access to higher education to more Australians and supporting universities as critical drivers of innovation across the economy.
A Shorten Labor Government will build on this record – not just because it is the fair thing to do, but because our future prosperity depends on it.
A Shorten Labor Government will work to establish Commonwealth Institutes of Higher Education to deliver new higher education qualifications in the outer suburbs and regional areas where existing universities struggle to give Australians access. A network of pilot sites, with universities working together with TAFE, will address acute need in areas of under-participation while trialling approaches tailored to local conditions and designed to give students options.
While the Institutes model is a new form of collaboration, it is not a new kind of a university. Commonwealth institutes will be joint ventures between universities, TAFEs, industry and in many cases local and State governments. They will deliver a mix of higher education with technically focused vocational education specifically designed to drive innovation and productivity growth in industry and enterprises. The applied nature of learning and the close link between theory and practice will offer a unique student experience compared to universities or in training.
Many students eligible for tertiary education are seeking a practical vocational approach to learning. Commonwealth Institutes will be the specialist providers in the delivery of hands-on work-integrated learning. Applied real-world learning will be its distinguishing feature.
Commonwealth Institutes will deliver Advanced Diplomas and Associate Degrees, as specified by Australian Qualifications Framework Level 6. Students will have a tradeable exit qualification and the option to continue on to bachelor-level study at university.
As a condition of funding, Commonwealth Institutes will be required to demonstrate engagement with industry and links to regional labour market need, give instruction that leads to real economy jobs, and offer an articulation pathway to higher study at a university.
For the first time Australia will have a network of tertiary education institutions which bring together the best of applied higher education and high order technical and vocational skills to deliver an innovation and technology driven boost to the Australian economy.
A Shorten Labor Government will establish a national network of Commonwealth Institutes of Higher Education by:
(a) Funding the establishment of a network of pilot Institutes in areas of demonstrated policy need and existing vocational training, higher education and industry collaboration.
(b) Increasing the availability of Commonwealth supported places at the advanced diploma and associate degree levels to support the development of new pathways to work that combine academic learning and technical skills. These places will be funded at 70 per cent of the full university rate, consistent with established policy expectations for sub-degree places (to which the notional research premium does not apply).
(c) Conducting feasibility studies in every State and Territory into where Commonwealth Institutes should be located to expand access to higher education and work-ready high-skill vocational training.
(d) Conducting progressive impact assessments of the pilot Institutes and encouraging the sharing of best practice and shared challenges.
(e) Shaped by the outcome of the assessments and the feasibility studies, opening the program for bids to established new Institutes in areas of identified need and capability. Consortia of universities, TAFEs or other tertiary education providers will be encouraged to apply, in concert with industry and local and State Governments.
Demographic analysis shows regions of persistent low participation and attainment, particularly in outer metropolitan and regional Australia. In a number of these areas, local communities, businesses and institutions have already identified their needs and opportunities, and progressed plans to work together to address them. Many of these collaborations are very well advanced, and leverage off existing infrastructure and relationships. Some require capital investment, while others require funding only for development, staffing and student load.
An initial pilot project at two sites has already been announced: the University of Tasmania’s Northern Transformation Project, targeting Launceston and Burnie, to which Labor committed $150 million on 28 April. The project is set to create 3,110 jobs, including 265 additional academic and professional staff jobs and support 12 000 new students into higher education in North and North-West Tasmania. The plan is estimated to deliver $1.1 billion economic output during the construction phase alone and an additional $428 million a year in economic activity.
A total of ten pilot sites will be established in all States, in locations where need is demonstrated, and where institutions, industry and local communities are ready to implement locally tailored pilot Institutes.
Having a good job is the foundation for a good life. As our economy transitions, more and more Australians are finding a gap between the skills they have and the ones employers are looking for. Young Australians are also finding it harder than ever to get into work if they don’t have post-school qualifications.
Labor understands that vocational education and training plays an important role in giving Australians the real skills they need to get good jobs and keep them into the future.
That’s why we back apprentices. Labor will help more young people into apprenticeships by creating 10,000 new Apprentice Ready places and help retrenched workers gain formal recognition of their skills through accelerated apprenticeships so they can find their next job.
In 2015 the number of Australians in training for an apprenticeship reached its lowest level since 2001. That’s because the Abbott-Turnbull Government has cut $2.75 billion from the skills portfolio – including $1 billion from apprentices alone – since the 2013 election.
The drop off in apprenticeships means fewer Australians are gaining the hands-on skills employers are crying out for.
It also means tens of thousands of Australians are missing out on quality training that makes them more employable. People with post-secondary vocational qualifications are much more likely to have a job than those without, with 76 per cent of Australians with an Advanced Diploma, Diploma or Certificate III or IV being in work compared with just 44 per cent of those with Year 11 or below as their highest attainment.
In some of Australia’s transitioning industries, workers will face real challenges finding work in the future unless they upskill or retrain. For example, across Australia’s manufacturing sector, 45 per cent of workers have no qualifications past Year 12. Yet the Industry Skills Councils estimate 87 per cent of available jobs in manufacturing now require post-secondary qualifications.
Australia needs more apprentices to build our skilled workforce, and more Australians need good quality training to secure their working futures. Labor will invest in apprenticeships because we believe in backing Australia’s greatest resource: our people.
Commonwealth Funded Infrastructure Projects
A Shorten Labor Government will boost apprenticeships across the country, giving more Australians the opportunity to gain real skills and a good job.
Labor will do this by ensuring a proportion of the jobs on major federally funded-projects are delivered as apprenticeships.
We will start with a target of seeing one in 10 jobs on Labor’s priority infrastructure projects filled by Australian apprentices. This will create 2,600 new apprenticeship places for young workers seeking a job and real skills.
In government, we will also work with the States and Territories and industry to develop procurement rules for apprentices that will apply to all infrastructure, construction and defence projects with capital expenditure over $10 million.
This will create tens of thousands more apprenticeship places in the years to come.
But we will go further by putting unemployed young people on the path to an apprenticeship by delivering 10,000 places in a national Apprentice Ready program.
As well as creating new training opportunities for young Australians. This program will offer a 20-week, industry endorsed pre-apprenticeship course for trades on the National Skills Needs List. Delivered through our TAFE colleges, Apprentice Ready will be targeted to young Australians who have been unemployed for six months or more.
Labor will provide funding to the States and Territories to conduct Apprentice Ready, which will give young people the skills they need to be job-ready and provide a “taster” of several high quality trades to help them choose an apprenticeship that suits their interests.
We will also put in place TAFE-based student-industry liaison officers to connect Apprentice Ready participants with employers, and provide mentoring throughout the first year of their apprenticeships. This is a critical time, as about 30 per cent of apprentices currently drop out within their first 12 months of training. 
Labor will also provide an additional incentive payment of $1,000 to employers who hire Apprentice Ready apprentices.
National Skills Recognition Entitlement pilot
Many mature aged workers have a wealth of knowledge and experience, but no formal recognition of the skills they have developed through decades of work.
That makes it hard for them to re-enter the workforce after a retrenchment because they lack the formal qualifications employers need. It leaves too many Australian workers feeling like opportunities have passed them by.
That’s why Labor will pilot a National Skills Recognition Entitlement program to help mature-aged, retrenched workers get their skills recognised. Based on the successful National Apprentice Program, the pilot will help map the skills workers have to emerging occupations and relevant apprenticeship or technical traineeship qualifications.
The National Skills Recognition Entitlement pilot will operate in regions in transition which are affected by significant workforce shifts, such as the manufacturing regions of South Australia, Victoria and Townsville in Queensland. It will target retrenched workers through the development of individual gap training plans tailored to the individual’s experience and industry’s requirements.
This innovative and successful mature-aged apprenticeship model aims to have the majority of adult apprentices complete their apprenticeship within 18 months, allowing them to re-establish their careers in industries with skills shortages. This not only gets them back to work sooner, but ensures they have the skills to stay working in a good job.
Our plans to connect more young workers to apprenticeships and fast-track qualifications for mature workers will stop the rapid fall in Australians taking up a trade. We will help more people gain real skills and get good jobs, while ensuring Australia’s future workforce is a high skilled, well trained and innovative one.
Supporting Apprentices from Start to Finish
Too few Australians are starting apprenticeships today and too many of those who do are dropping out before they finish.
A Shorten Labor Government will turn this around by giving apprentices real support when they need it by bringing back Tools for Your Trade – the valuable apprentice support program axed by the Abbott-Turnbull Government.
Australian apprentices earn between 55 and 90 per cent of a standard wage while they are training, meaning a first year construction apprentice may take home base pay of as little as $420 a week.
This makes it hard to cover the cost of equipment, transport, books and other work essentials. Tools for Your Trade helps apprentices with these costs throughout their training to get over the hurdles that prevent them from completing.
From 1 July 2017, workers starting an apprenticeship will be eligible for $3,000 in payments throughout their training. Payments will be spaced to provide support to apprentices as they train and back them all the way to completion.
Supporting Group Training
Labor will also boost Group Training Organisations to help small and medium businesses take on more apprentices across Australia.
Group Training Organisations help these businesses participate in apprenticeships by managing the administrative and personnel side of hiring an apprentice.
They take care of training, setting up work placements and managing administrative functions like pay, leave and superannuation. This leaves businesses free to focus on developing on-the-job skills with their apprentices.
Labor will invest in Group Training so that these organisations can help to get more apprentices into work, with $10 million a year in new funding over the next four years.
We believe every Australian should have the chance to gain real skills and a good job. Australian apprenticeships have given millions of workers that opportunity over the past few decades.
I can assure you that Labor backs apprentices and vocational training, because we believe every Australian should have the chance to gain real skills and a good job.
I have had the opportunity to work with you both in Government and Opposition and I know we share a passion for the sector and for apprenticeships so I look forward to hopefully working with you further if we are successful on July 2nd.