Stephen Smith (Perth, Australian Labor Party, Shadow Minister for Education and Training) Share this | Hansard source

The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 appropriates funds on behalf of the Commonwealth parliament to vocational and educational training, to the government’s so-called Australian technical colleges. As a matter of principle, any expenditure by the Commonwealth to enhance vocational education and training and skills, whether that is in the senior secondary school level or in the tertiary level, is to be welcomed. However, we have such grave reservations about the effectiveness of this allocation of Commonwealth revenues that, whilst we will support the legislation and not oppose it, our reservations will be detailed in a second reading amendment which I will formally move at the conclusion of my remarks.

This is not the first occasion that the House has been seized with legislation in respect of the government’s Australian technical colleges; indeed, it is the third occasion. The position which Labor adopts on this occasion is the same as it did on the previous two occasions, which is to not oppose implementation by the government of its 2004 election commitment but to express, both by way of debate and by second reading amendment, its very grave reservations about the effectiveness of the government’s election commitment and the government’s measure.

The government announced the creation of its Australian technical colleges during the 2004 federal election campaign. That announcement was a political response during a political campaign to a political problem that the government had, and therein lies the basis for our very grave reservations about the effectiveness of this program and the effectiveness and value of the approach that the government has taken and the money that it is expending. Because it was a political response to a political problem, it is not necessarily the best public policy solution.

We know, because it has been detailed regularly in this place—most importantly, detailed by the Reserve Bank of Australia—as one of the reasons why there was and is upward pressure on interest rates, that there is in the Australian community a serious skills crisis. A serious skills crisis does not come along just because we might have a boom in the minerals and petroleum resources industry which people were not necessarily expecting to be of that magnitude or extent; it comes along because of neglect and complacency over the long term. Unquestionably, this government has been both neglectful and complacent when it has come to the skills, education and training of our workforce.

It is acknowledged, belatedly, by the government that there is a skills problem in the Australian community. As is so often the case with this government, the only time that it chose to act was when it was under political pressure. This is another illustration of the government seeking short-term political cover for a long-term economic or social problem, an issue which goes to the long-term international competitiveness of the Australian economy, an issue which goes to our long-term future prosperity as an economy and as a nation. It was a short-term political fix, and therein lies the reservation about the effectiveness of that fix.

I think it is important to make some general remarks about the nature and the framework of vocational education and training in Australia. In my view, the only effective approach to take to enhancing vocational education and training is by the Commonwealth taking a leadership role and acting in cooperation with the states and territories and with industry. That is the most effective way of ensuring that we cater for our long-term skills needs and requirements. The essential starting point for the deficiency in the government’s program is that, having neglected and been complacent and having, over its 10 long years in office, not funded skills training and vocational education and training enough—on the contrary, having removed funding from that area—when it came to effect a political fix, it did so by riding roughshod over the states and not playing a partnership or cooperative role with the states.

Therein lies one of the economic, financial and administrative inefficiencies of the government’s approach. The Australian technical colleges are stand-alone facilities. They are not integrated with nor do they bear any relationship to what the states are doing through the traditional TAFE sector or indeed through TAFE colleges now, working in partnership with industry either at a state or at a local level. So an essential deficiency and criticism that Labor has of the government’s approach in this area is its ignoring of the states and ignoring of the TAFE sector. I do not think even the states or the TAFE sector argue that the states themselves or TAFE have been perfect in this area, but that is not to say that you ignore the instruments which remain effectively responsible for about 70 per cent of the delivery of skills training and vocational education and training in this country. So one fundamental deficiency of the government’s approach is that it is not working in cooperation with the states.

The best way of ensuring that we meet our skills and training needs into the future is by the Commonwealth working cooperatively, through the government of the day, with the states and territories and working cooperatively with industry. This is the best way of ensuring that the Commonwealth’s priorities, the Commonwealth’s needs—those areas which the Commonwealth regards as priorities—are the focus of our vocational and educational skills and training. The approach that the government has taken of a short-term political fix, ignoring and riding roughshod over the states, is a political solution that it fell upon in the course of the 2004 election campaign. What preceded that was a long period of time where it had failed or refused to cooperate with the states and failed or refused to invest in technical and further education.

Let me now move to some of the detail of the legislation. The Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Amendment Bill (No. 2) 2006 is the second such amendment to the Australian Technical Colleges (Flexibility in Achieving Australia’s Skills Needs) Act 2005 in as many years. The first amendment bill brought forward the funding of the proposed 24 Australian technical colleges from 2008-09 to 2006-07. The bill before us today seeks to increase the total funding appropriated under the act by $112.6 million from the $343.6 million to $456.2 million over the period 2005 to 2009. It does this by amending column 2 of the financial assistance table under subsection 18(4) of the act. The government says it needs this extra money because of cost increases associated with the start-up of the colleges. As I have indicated, the $112 million is on top of the $340-odd million already allocated to the start-up and running of the colleges.

The fact is that this money represents a significant cost blow-out of the government’s program. This should not be surprising because, by the government’s own admission, it has embarked on a costly project to essentially duplicate vocational education and training infrastructure that exists elsewhere across our vocational education and training system. Instead of looking at joining with vocational education providers already established, in particular the state TAFE systems, and tapping into the existing expertise there to maximise training outcomes, the government has embarked upon a course of setting up its own stand-alone system. That is where the inherent inefficiency comes from and that is where the additional costs are found. The government’s rationale behind the creation of the ATCs program has been twofold: firstly, to isolate and attack the states and territories in an area that has traditionally been one of the responsibilities of the states and, secondly, to try to find a political fix to a policy problem that the government has complacently neglected over a long period of time.

Since the government came to office, over 325,000 people have been turned away from TAFE as a result of a lack of investment by the Howard government. The Australian Industry Group recently estimated that we would require 270,000 more trained people to fill the current skills shortage. A snapshot of the state of our skills shortage is found in the January skilled vacancies index, which shows that it is clear that our current skills crisis is not abating. Skilled vacancies in January rose by 1.4 per cent over the already high December reading. Compared with January 2006, vacancies in the automotive industry in January 2007 rose by 12.5 per cent; for cooks, by 5.3 per cent; for the food industry, by 10.5 per cent; for the printing industry, by nearly 60 per cent; and, for hairdressing, by over 10 per cent.

We have a shortage of skilled and trained workers for two reasons: firstly, the government has actually cut public investment in vocational education and training and, secondly, it has complacently neglected the crisis coming down the track. You only have to look at the OECD figures and analysis to find that public investment in tertiary education, in both universities and technical and vocational training, has declined by seven per cent over the period that the government has been in office compared with competitor OECD members, whose public investment has increased by nearly 50 per cent. In 1997 the government cut funding to Australia’s principal vocational education system, TAFE, with Commonwealth revenues in vocational education decreasing by 13 per cent from 1997 to 2000 and only increasing by one per cent from 2000 to 2004. Vocational education and training funding has also fallen relative to other areas of the education sector.

In effect the amount of vocational education and training funding per student has decreased, with the result of adversely impacting on the quality of vocational education those students receive. The AiG identified in its Manufacturing futures report released in the second half of 2006 that real expenditure per hour for vocational education and training has declined in recent years. Today funding is lower in real terms than it was in Labor’s last year in office. The National Centre for Vocational Education Research shows that real expenditure per hour declined by 16 per cent between 1997 and 2001 and increased only fractionally between 2001 and 2003, leaving a net real expenditure decline. The latest financial data released just last week by the NCVER shows that the Commonwealth’s contribution to overall vocational education and training revenue has declined as a proportion of total revenue down from 22.4 per cent to 22 per cent. TAFE Directors Australia have also identified the fact that, in terms of revenue expenditure, vocational education has fallen behind other education sectors in both aggregate terms and on a per student basis, despite it being the area that will bear the greatest responsibility for the skills, vocational education and training development of our workforce.

I have outlined some of the important reasons why Labor has very grave reservations about the application of these funds. Let me now read to the House my second reading amendment to reflect some of the detail of those reservations. I move:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House recognises that the present Government has been complacent and neglectful about the Australian economy by:

(1)

presiding over a skills crisis through its continued failure over more than 10 long years in office to ensure Australians get the training they need to get a skilled job and meet the skills needs of the economy;

(2)

failing to make the necessary investments in our schools and TAFE systems to create opportunities for young Australians to access high quality vocational education and training, including at schools;

(3)

failing to increase the number of school-based traditional apprentices and provide funding support for schools in taking up the places;

(4)

creating expensive, inefficient, stand alone colleges, without cooperation with the States within the existing Vocational Education and Training framework;

(5)

riding roughshod over the States and Territories in establishing these Colleges, despite the role the States and Territories play in vocational education and training;

(6)

making Australian industry wait until 2010 for the Australian Technical Colleges to produce their first qualified tradesperson;

(7)

failing to provide support to other regions that have skill shortages, but are not listed for a Technical College”.

I dealt with some of those issues in the course of some of my earlier remarks, so I will now move to some of the areas that I have not covered.

The creation of expensive stand-alone colleges without seeking to cooperate with the states and without seeking to contemplate the use of the existing vocational education and training framework has led to a cost blow-out in the program. On any measure, the creation of a stand-alone facility is expensive. Instead of cooperating with the states and instead of seeing whether existing facilities could be enhanced or refurbished, the Commonwealth has decided to go it alone. That is at the heart of the cost blow-out and the expenditure here.

I note remarks from the new Minister for Vocational and Further Education yesterday indicating some optimism about an acceleration of enrolments, the number of colleges up and running and outcomes. Even on a good day, it will not be until 2010 that the first qualified skilled workers will emerge from the ATCs, in the face of a skills crisis and the demands—some of which I have detailed from the Australian Industry Group. There are 24 to 25 colleges throughout the Commonwealth, which does not go anywhere near meeting the needs in all of the states, regions and local areas so far as vocational education and training is concerned. Anecdotal feedback on and experience with these expensive stand-alone colleges indicate a vast spend on physical infrastructure, and that their creation has been costly and has not been done in a way which is either coordinated with or integrated with the state system.

There is also anecdotal evidence and reports that enrolments in many of these facilities are quite low. As late as yesterday, I noticed in the Illawarra Mercury a short article under the heading ‘College fails to fill classes’ which read:

The Illawarra’s newest technical college is still looking for students one week after classes started.

So far, 38 students have enrolled in the region’s Australian Technical College, which officially opened last Monday.

And that is just one illustration that I have had drawn to my attention. So we have low enrolments, no graduation of skills until 2010 and waste and expense by riding roughshod over the states and going it alone.

It may well be that some of the individual colleges are actually successful. Frankly, that would be more by accident than design and because the moons happen to be in alignment rather than through good public policy, good public administration or good planning. One of those colleges may well be the ATC in the Pilbara, which is aimed at the minerals and petroleum resources industries of Western Australia. That one may work because the moons happen to be in alignment. A minerals and petroleum resources boom in exports to China has seen Western Australia—on the last set of state final demand figures I saw—with economic growth of 14 per cent. The relevant industry chambers in Western Australia—the Chamber of Minerals and Energy and the Chamber of Commerce and Industry—have put their very strong support behind the need to expand the capacity of Western Australia in skills in the minerals and petroleum resources area generally. And, despite reservations at the state government level that the cost of the project was massive when compared with how it could be done more efficiently, very grave reservations, the state government has got behind that project. That college may be a success, but largely because the moons are in alignment, not because of good thought, good public policy or good planning.

I have made the point recently that, since I became shadow minister for education and the Labor Party’s spokesperson on education, my analysis of the ATCs and my starting point so far as the future of the ATCs goes was to sit down with my state colleagues and have a conversation about whether a better approach might be to fold the ATCs into the state system so that we would at least have some coordination, some integration and some cooperation with the states. That is certainly something that I am having a conversation with my state ministerial colleagues about. I do not believe there is a sensible public policy rationale for the Commonwealth to be starting off its own system without having a conversation with the states. That is precisely what the government did on this occasion—in the heat of an election campaign where it had been exposed politically, as a result of complacency and neglect, as the cause of a skills crisis.

The states have had longstanding responsibility in this area. In my view, the sensible way of moving forward is to do this in cooperation and in conjunction with the states, so that the Commonwealth, in cooperation with the states, can apply its own priorities through an integrated system. So my starting point of conversation with the states and my state colleagues is to see what the reaction of the states might be to folding the colleges—those that are up and running after the election—into the state system as a measure of cooperative partnership in the areas of skills and training, not the Commonwealth riding roughshod over the states and waving a big stick.

I was in the House yesterday at question time when the new Minister for Vocational and Further Education, Mr Robb—the member for Goldstein, who recently replaced the former Minister for Vocational and Technical Education, the member for Moreton—argued and asserted that, if the colleges were to be folded back into the states, employers involved would be shown the door. He went on to say:

As a consequence, the unique and innovative role of training students with skills that are highly tailored to the needs of local employers will collapse. The colleges will disappear if they are handed back to the states. If Labor were to hand back these colleges to the states, history would repeat itself and the status of technical training would be reduced once again to that of a second-class career.

Firstly, I do not believe that vocational education and training or a technical career is a second-class career. Just look at any technically qualified person who is currently working in Western Australia. They are handsomely remunerated and they have very fine careers.

Secondly, that analysis by the minister defies the existence of very strong partnerships with local TAFE colleges, in harness and in conjunction with industry. In my own state of Western Australia, the Challenger TAFE, in Fremantle, south of Perth, is a very good example. It is a strong TAFE college, very conscious of the needs of local industry and working hand in glove with local industry. So to take the view that it is not within the capacity of the Commonwealth, working with the states and through the current TAFE system, to have vocational education and training requirements—whether that applies to secondary school students or to those at the tertiary level who have completed secondary school—working hand in glove with industry is, frankly, a nonsense.

The government has been exposed here. The government, in the 2004 election campaign, tried to effect a political fix. It may well have had some short-term political benefit, but we have been left with a long-term public policy problem that will only be resolved by a much greater investment in education generally; it will only be resolved by a much greater investment in further technical and vocational education and training, but making that investment on behalf of the Commonwealth, in conjunction with the states, using facilities that are currently available—refurbishing and enhancing them. We need agreement between the states and the Commonwealth about priorities and agreement with industry about what the skills needs will be down the track. That is the only sensible way forward in this area, and that will be the approach that Labor adopts in opposition and, subsequently, in government. I formally move the second reading amendment that I have detailed to the House and which has been circulated:

That all words after “That” be omitted with a view to substituting the following words:“whilst not declining to give the bill a second reading, the House recognises that the present Government has been complacent and neglectful about the Australian economy by:

(1)

presiding over a skills crisis through its continued failure over more than 10 long years in office to ensure Australians get the training they need to get a skilled job and meet the skills needs of the economy;

(2)

failing to make the necessary investments in our schools and TAFE systems to create opportunities for young Australians to access high quality vocational education and training, including at schools;

(3)

failing to increase the number of school-based traditional apprentices and provide funding support for schools in taking up the places;

(4)

creating expensive, inefficient, stand alone colleges, without cooperation with the States within the existing Vocational Education and Training framework;

(5)

riding roughshod over the States and Territories in establishing these Colleges, despite the role the States and Territories play in vocational education and training;

(6)

making Australian industry wait until 2010 for the Australian Technical Colleges to produce their first qualified tradesperson;

(7)

failing to provide support to other regions that have skill shortages, but are not listed for a Technical College”.

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