November 11, 2017

Skilling Australians Fund

By Senator Doug Cameron

Effective skills formation is essential to our national economic and social wellbeing. It will be the difference between whether as a nation we prosper or decline.

The Australian economy is changing and the skills people need to get well-paid and secure jobs are changing as well. Working people and job seekers are faced with fundamental questions. Which industries will provide good, secure jobs? What jobs will be available in the future? Will there be quality apprenticeships and traineeships available for them? Will there be sufficient funding to train them for a lifetime of skills acquisition?

Since the Coalition took office the number of government-funded hours of vocational education and training delivery dropped 20 per cent. The number of apprentices and trainees in training has fallen by 138,000 – including 41, 200 fewer trade and technical trainees and apprentices.

The government’s Trade Support Loans have accumulated to 382 million dollars of debt for 44, 000 Australian Apprentices - including 8,000 young people under the age of 18 that are carrying between them 31 million dollars of debt.

The trend to increasingly shift the cost of skills development onto individuals, particularly young people before even fully entering the labour market, is troubling - particularly as it coincides with a withdrawal of investment in skills by employers.

At the same time, more than one in three employers report difficulty in filling jobs. Where job vacancies exist we need to ensure that local communities have the skills to fill them.

These are urgent and serious challenges. Underemployment is at record highs and unemployment is far too common – particularly among younger Australians, in the regions and for retrenched workers. The labour share of national income has fallen to historic lows. The majority of the proceeds of the anaemic economic growth we have experienced under the Liberals has gone to business profits, and not to workers.

It is in this context that the Turnbull government announced the creation of a Skilling Australians Fund as part of its 2017 Budget. The government claims that it will provide $1.5 billion over four years from 2017-18 and will prioritise apprenticeships and traineeships.

From 2018-19, funding for the measure will be determined by the ‘training fund contribution levy’.

It is a proposal that relies entirely on insecure funding generated by visa fees for foreign workers to fund training. If the number of visas goes down, the funding for vocational education and training will drop.

Research released in August by the Australian Population Research Institute predicts that due to the government’s immigration policy changes, there will be a dramatic drop in the number of skilled migration visas.

Not surprisingly then, independent analysts have identified that the Skilling Australians funding model is inherently flawed.

The government has designed a system of funding for skill formation - a matter of fundamental importance for ensuring the prosperity of our nation - that relies entirely on uncertain revenue.

The government insists the Fund will support 300,000 more apprentices, trainees and higher-level skilled Australians over the next four years. According to the government’s employment projections, achieving that target would require 30 per cent of all new jobs, up to the year 2020, going to apprentices and trainees — even though they currently occupy just 2.2 per cent of jobs.

If the government pursues that target within that timeframe, with this absurd funding regime, there is a great risk that quality will suffer. The last thing we need is a return to ‘burger flipper’ traineeships propped up by incentives to employers that are simply wage subsidies for low paid jobs.

The Turnbull government is seeking an agreement so that the Skilling Australians Fund will operate with matched funding from the states and territories. Eligibility for the fund will be defined by the Commonwealth. It will fund projects focused on the government’s priorities. States' access to the Fund will be conditional on their agreement to meet yet to be determined measures.

So far the government has failed to reach an agreement with the states and territories.

We are two months into the financial year in which the Skilling Australians Fund should be operating, and we've been told next to nothing about it by the government. To date the Minister for Education and Training, Simon Birmingham, has failed to answer the most basic questions about the nature of the Fund and the associated national partnership agreement.

Australia needs to invest in education, skills and training more than ever. Yet, since coming to office, the government has cut money from schools and universities, and more than $2.8 billion from TAFE, skills and training. A further $637 million cut from the skills budget compared to existing arrangements was hidden in the 2017 Budget.

Most egregiously, the government is allowing our TAFE system to decline. The future of TAFE is a matter of great national importance – yet there is no secure provision for TAFE in the Skilling Australian Fund.

The TAFE Network is the backbone of trades training in this country. It supports students who thrive in an adult learning environment and it delivers critical education and training services to metropolitan, regional and rural Australia. It plays a vital role in our evolving skill formation system - sitting at the forefront of 21st century challenges.

Minister Birmingham is on the record as saying the TAFE system is not his business, that the responsibility lies with the states. When he and his Assistant Minister Karen Andrews sit down with the state governments to negotiate, it is clear they will not be ensuring the TAFE system is properly funded.

Labor’s commitment to TAFE is unequivocal.

If we are to be a nation with well-paid secure jobs in the future, we need to be investing in TAFE and skills. Nationally there was a 30 percent drop in government funded training at TAFE between 2013 and 2016. We are in serious danger of losing the institutional capacity to deliver skills if we don’t sustain our TAFE network.

We have seen profiteering and exploitation in the training market leave students with unserviceable debts and unfinished courses. It has diminished the professionalism of VET teaching. It has undermined quality and trust in our vocational and education system.

The government has wasted four years with cuts to skills and wilful neglect of TAFE. The Skilling Australians Fund offers no hope of realising a sustainable skill development system.

Under Labor the days of the training market gravy train will end.

Labor has announced that we will secure funding for vocational education and training in the Budget and ensure that at least two thirds of it will go to the most trusted VET provider in the country - and that is TAFE.

Senator Doug Cameron is the Shadow Minister for Skills and Apprenticeships and a qualified fitter and machinist

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