Monday, 18 June 2007
Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007
I am very pleased to have an opportunity to speak to the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007, which gives effect to a commitment in this year’s budget to invest in young Australian apprentices. Those under 30 undertaking an Australian apprenticeship in a trade occupation where there is a shortage of skilled workers nationally will benefit from these measures. The benefit is the apprenticeship wage top-up, which amounts to $2,000 over two years. The apprenticeship wage top-up recognises the particular difficulty for many young people in the first and second years of an apprenticeship, when wages are at their lowest point. Further, the bill acknowledges the importance of these young people to the continued prosperity of Australia as well as, at a personal level, equipping them with the skills they will need to secure their own futures.
The global trading environment is highly competitive, and Australia’s ability to maximise its natural advantages will rely on a high level of training to remain economically competitive and encourage improved performance in economic growth. We must be prepared to invest heavily in the training and education of our young people. As a member from the big state, Western Australia, where we have a great deal of mining and extractive industries, I believe we must recognise the importance of value-adding to our product. To be able to do that successfully for the future, we need to have people trained and skilled. A total of $342 million will be invested over four years in a scheme that will pay a wage top-up to apprentices over a two-year period at the six-month, 12-month, 18-month and 24-month points of their training. For those undertaking full-time apprenticeships, a payment of $1,000 per annum will be available. Young people engaged in Australian school based apprenticeships will receive $500 annually over a longer time frame, but still totalling $2,000.
Australia has undergone unprecedented economic growth, placing a very high demand on all trades. In order to meet the demand in the many trade areas, the government has relaxed the migration work visa arrangement. This has been absolutely necessary. I listened with interest to the comments from the member for Shortland. Perhaps she has a very poor memory because, notwithstanding the fact that we have had unprecedented economic growth, I think that, in large part, today’s shortage of skilled tradespeople is due to the neglect of the Labor government during their incumbency. Their policy failed to place appropriate emphasis on careers in trades. Again, notwithstanding some of the figures quoted by the member for Shortland—who, as I said, may have a very poor memory—under the previous Labor government and, indeed, under the state Labor governments, there was and has been no attempt to modernise the technical colleges. The technical colleges are supported by the federal government but are run and administered by the state governments. These colleges have become outmoded, lumbering, cumbersome organisations that are unable to meet modern training requirements—and I will come back to that shortly.
In large measure, the previous Labor government has to take responsibility for the skills shortage. It was the hold of the union movement over the training of tradespeople and an unwillingness to modernise trade and training measures which directly led to a generation of young people who did not want to undertake an academic career but who had little opportunity to train in a contemporary apprenticeship and training system that was relevant to today’s requirements. It is no wonder that, in many cases, young people have not completed their apprenticeships. Once they get into the system, they recognise that it is a cumbersome system and that it is not relevant to modern trade practice. That in no way reflects on some of the very dedicated and talented teachers and administrators of technical education in Australia. But it does reflect badly on the poor leadership of state governments in the area of training and apprenticeships and on their inability to convince the union movement that they have to stop protecting their own little fiefdoms and start looking at a decent, modern training and apprenticeship system. In fact, in part, the reason the Howard government has established the Australian technical colleges is that it has been almost impossible for the state Labor governments to break the union hold over many areas of trade curriculum, leading to a training and apprenticeship system that is badly in need of an overhaul.
I will go to an example. A few years ago I visited a die-making factory. The owners asked me to go down there and talk to them. The owner and his wife ran the factory and they were extremely busy—in fact, they had a full order book and they were turning work away—and they were desperate for more apprentices. Some of the business they turned away went offshore to Korea, notwithstanding the fact that the Australian factory that I visited could do the job at a more competitive rate and to a higher, and a properly finished, standard. In fact, often the client—who had been told that the product would have to be manufactured overseas—would return the product to this factory in Australia to do the finishing work, because the product was unusable until it had been properly finished off.
The owner of the factory and his wife explained to me that, under the apprenticeship system, a die maker needed first to become a fitter and turner, which took three years. That was okay because they would take on a young person from school and, by the time they became a fitter and turner, they would be on adult wages. The problem was that, to become a die maker, they had to then do a further three-year apprenticeship, and that would be on adult wages. This became a difficulty for a small family-owned factory. These people were themselves experienced tradespeople, and they showed me all the state-of-the-art equipment that they used in their factory. The die-making processes had changed since the old days, and they now used a CAD system—a computer-aided design system. They believed that the training requirements were archaic and that a person could become competent in these processes over a much shorter time period if the training system were modernised.
This is not an isolated case. I heard this story from various industries, and at the time I followed through by writing to ANTA—as it then was—and the federal minister. But it seems to me that the state systems are too entrenched and are dominated, as I said, by unions reluctant to make the necessary changes. I hasten to add that it is not the quality of teaching that is being criticised here. Teachers have been held back by the system. It is a system rooted in outmoded trade-training practices that is in question. It was a great tragedy that, during their incumbency, Labor placed almost sole emphasis on university study and professional qualifications at the expense of those young people who may not have been academically inclined but who had great skills and talents to contribute through the trade and vocational training areas. This is not for one moment to impute that higher education is not desirable or important; clearly, it is, and every young person who has the willingness and the ability to go on to higher education should be encouraged to do so—without question. But we must value the talents and abilities of everyone in our society and recognise the interdependence between disciplines. The brain surgeon, for example, cannot successfully operate without those who design and craft the instruments and equipment so vital to operate. Everything from operating tables to lighting and medical equipment must be designed and then manufactured and crafted by very skilled tradespeople. What the coalition has been able to do is to engender value in all trades, vocations and professions and to recognise that very important interdependence between the professions and the trades.
The coalition government has strongly committed to restoring the status of trade and technical vocations and to ensure that all young Australians see value in pursuing an apprenticeship if they do not wish to enter other fields. This measure will target those young people in an apprenticeship where there is a demonstrated skills shortage and where those skill areas are listed on the migration occupations in demand list. It is a very wide-ranging list, I might say—the occupations range from hairdressing to electronic engineering. This will ensure that we maximise the opportunity for young Australians to fully participate in the workforce and to develop valuable trades. The value of the apprenticeship top-up payments will be exempted from assessment as income under the Social Security Act 1991, the Veterans’ Entitlements Act 1986 and the Income Tax Assessment Act 1997. This bill also amends those acts to ensure that young apprentices receive the full value of this top-up payment and that it will not affect their eligibility for any pension or other allowance that they may be entitled to.
These measures build on the many other initiatives of the Howard government to restore value and respect for the trades. These include tax-free $1,000 Commonwealth trade learning scholarships, an $800 toolkit under Tools for Your Trade—and I heard the member for Riverina speak very eloquently on that. Another new measure was announced as part of this year’s budget: the $500 fee vouchers to assist with the cost of course fees. These will be available to apprentices of any age who commenced a trade qualification in an area of skills shortage on or after 1 July 2006. The benefits outlined in this bill will be available from 1 July this year, so they will be available very quickly—almost immediately. The government anticipates that over the next four years some 228,000 Australian apprentices will benefit from this initiative.
Further, the coalition government’s initiative to establish a further three new Australian technical colleges—one in each of Perth, Brisbane and Western Sydney—will ensure that each of Australia’s five largest cities have two Australian technical colleges. I heard the member for Shortland surmising the location of these, but I am hopeful that in Western Australia one of these at least will service the Pearce community, because it is a community that has a long tradition with certain trades, particularly engineering and agriculture, along with many others. In WA we have seen a bit of a concentration of higher education and technical education in the western suburbs and the southern and northern coastal areas, with very little in the eastern corridor. I am particularly hopeful that one of the bids for the colleges in Western Australia will service the Pearce electorate, where the need is very great and the interest is very high.
There is also support for fast-track apprenticeships to help apprentices reach their qualifications sooner, while still meeting the requirements of employers and industry. This is something that I was talking about before which seems to have been put in the too-hard basket by the many state and territory governments. It has been left to the federal government to try and resolve the need to reconfigure the apprenticeship and training system to ensure that it is relevant to today’s pressing and demanding requirements. FEE-HELP for diploma and advanced diploma courses will be available to encourage those already with trade qualifications to further build on their skills and knowledge. This will further enhance trade and vocational skills.
It is important that we continue to press the notion that learning is a lifetime occupation. In the fast-moving technological age in which we live, our futures will be very dependent on how quickly we can adapt to the changing circumstances around us. For most of us, that will require us to continue to learn and to develop new skills and to continue to do some retraining throughout our life. This is a very important part of the government’s initiative and will ensure that people who already have qualifications are able to top up those qualifications on an ongoing basis. The new measures are designed to attract new apprentices, with higher wages and shorter apprenticeships. They will enhance the increase in status and availability of technical training in years 11 and 12 and ensure that top-up tradespeople can undertake high-level technical studies. These new measures together will be implemented with a total investment by the Commonwealth of $638 million.
The measures that will be implemented as part of this bill are complemented by existing incentives introduced by the Howard government, including the following employer incentives: $4,000 per apprentice; $800 for toolkits payable to apprentices; $1,000 trade scholarships for apprentices in small and medium sized businesses; a $13,000 wage subsidy for mature age apprentices; work skills vouchers up to $3,000 for individuals aged 25 or over who do not have year 12 or equivalent qualifications; business skill training vouchers up to $500 for apprentices; the living away from home allowance; Austudy and Abstudy; and a $1,000 regional allowance for apprentices. These incentives are on top of the $1.2 billion contribution by the Commonwealth to the state and territory governments for vocational education and training funding and to the existing 25 Australian technical colleges, valued at $468.2 million.
This government has provided a very comprehensive approach to meet the apprenticeship and training requirements for now and for the future and to improve career opportunities for young people. The government has also included in these measures benefits for those embarking on jobs in the non-skilled category that may benefit from the living away from home allowance, the youth allowance and Austudy. Employers of apprentices in non skills shortage areas are also able to receive commencement incentives for certificates II, III and IV and selected diploma and advanced diploma qualifications, which all have quite considerable incentives ranging from $1,200 to $2,500. There is also a recommencement incentive for certificates III and IV amounting to $750, and there are additional Australian school based apprenticeships, retention incentives, innovation incentives for emerging industries, incentives for mature age workers and special group-training incentives. The government recognises that once somebody enters an apprenticeship there is a need for incentives to keep them there as well as a need to make the training relevant. Claiming for these benefits is made easy through the Australian Apprenticeships centres, whose staff will explain the initiatives and provide claim forms to eligible Australian apprentices. Once the form has been completed and returned, the payment will be made directly to the nominated bank account. There is no need for people to worry that they do not fully understand the system; the Australian Apprenticeships centres will be able to assist anybody who has a query.
This bill provides for important additional measures to ensure a future for those interested in pursuing a trade, providing additional opportunities for choice in careers that are personally rewarding and make an important contribution to the future economic growth and prosperity of our country. These are forward-looking measures that invest in Australia’s future. I commend the Treasurer, who announced these measures in the budget and who brought down a budget that looks forward and addresses investment in the future. I commend the minister responsible for this bill, the Minister for Vocational and Further Education, and I give it my full support.