Monday, 10 February 2020
Trade Support Loans Amendment (Improving Administration) Bill 2019; Second Reading
I rise this afternoon to speak on the Trade Support Loans Amendment (Improving Administration) Bill 2019. I will say upfront that Labor will not seek to oppose this legislation. We welcome the practical effects which will simplify the way overpayments are treated so that trade support loan debts can be repaid through the Australian tax system, establishing an effective offsetting arrangement.
Let's take two examples of overpayment: an apprentice receives a payment larger than their correct payment while undertaking their apprenticeship, and an apprentice has finished her training but has yet to receive her qualification—in the interim she's no longer eligible to receive the payment but mistakenly still receives instalments. Under the current arrangements both overpayments would be recovered through debt arrangements, normally where a payment plan would be agreed between parties and even sometimes through the court system. Under the proposed arrangements, in the two cases, the overpayment in one instalment would be offset by a reduced payment in the next or a subsequent instalment so that debt recovery arrangements do not have to be used. The registrar would have the power to deem the ineligible payment a valid TSL payment, and the amount would be added to the apprentice's total TSL debt to be repaid over time. The other amendments provide the secretary with the discretion to extend the time period for notifying of a change of address and increase the time period, from seven to 14 days, that an apprentice has to inform the department of a change of circumstances. More broadly, this is just another tweak to a sector that requires genuine reform.
The Liberals have trashed the vocational education system. They've torn out funding from under TAFE and training. They've led an apprenticeship numbers freefall and presided over a national shortage of tradies, trainees and apprentices. Apart from the $3 billion they've cut from the sector, Senate estimates reveal there is an additional $1 billion underspend for TAFE, training and apprenticeship programs. It's no wonder the number of Australians doing an apprenticeship or traineeship is lower today than it was a decade ago, even though the Australian population has surged in that time. Under the Liberal government there are 150,000 fewer apprentices and trainees, and there is a shortage of workers in critical services, including plumbing, carpentry, hairdressing and motor mechanics. More people are dropping out of apprenticeships and traineeships than are actually finishing them. There are a myriad of reasons why that's happening, and the government are not addressing any of them. There has been nearly a 10 per cent increase in the number of occupations facing skills shortages. As I said before, they've slashed $3 billion from TAFE funding. Do they really think anyone believes that the underspend is because of a lack of demand? They're kidding themselves if they do.
Youth unemployment is at an all-time high. Employers who are desperate for skilled workers can't get them. Seventy-five per cent of employers are telling us that they can't get skilled workers for their businesses. Kids who would love an apprenticeship or a traineeship could fill those skills gaps in a minute. I know young people who would jump at the offer of a decent future, with a qualification for life, and employers would employ them. Is it any wonder that, under this government, our TAFEs are in disrepair and that apprentice and trainee numbers have fallen off a cliff? The Liberal government in New South Wales have sacked 5,700 staff since coming to power, and, if that wasn't bad enough, they've announced that another 196 jobs are to go out of TAFE before Christmas.
It's in the Liberals' DNA to attack TAFE. With a skills shortage and high youth unemployment, we need a government that believes in the value of TAFE, not one that takes to it with an axe at every opportunity. The government have said that they want to see the VET and university sectors on equal footing. This is a common goal shared across this political divide. But the Liberals have failed to commit to the funding and reform required to achieve this important outcome. In fact, a recent report from the independent National Centre for Vocational Education Research shows that Scott Morrison and the Liberals cut federal funding for TAFE and training by a staggering $326 million last year, an almost 11 per cent drop; $326 million could pay for an extra 32,000 trainees or apprentices.
Nothing illustrates the divide between the university sector and the VET sector like comparing the experiences of students in each system. Professor Nick Klomp, Vice-Chancellor and President of CQUniversity Australia, wrote about this so wonderfully:
Pete and Rebecca both graduate from North Rockhampton High School with good grades. Pete chooses university, Rebecca prefers an apprenticeship. Pete enrols in a Bachelor of Engineering degree, is accepted and can start studying in a guaranteed spot within weeks. Should Pete need it, fully funded programs exist to give him confidence and academic preparedness from even before his first class right through to graduation. As an Australian citizen, Pete is entitled to what is known as "the best loan you'll ever receive"—a low-interest HELP loan with generous income-threshold repayments. This loan covers 100 per cent of the student contribution component of the tuition fees for his four years of study, with the Commonwealth government funding 100 per cent of the remainder of his tuition fees. And Pete's first employer, a local civil engineering firm, gets a fully qualified, job-ready, mature graduate delivered on a silver platter, courtesy of the system. Pete's employer bore no direct expense and bore none of the risk in the administration of Pete's education.
What about Rebecca, the aspiring apprentice? The system expects Rebecca, as a 17-year-old, to scour her chosen industry for a potential employer, then negotiate the terms of her employment and training package with senior management. She has zero room for error here. If Rebecca doesn't nail this step, someone else will get her spot. There's no student loan available to Rebecca unless her apprenticeship is geared at the diploma level or higher. And even if she is eligible, Rebecca faces an upfront loan administrative fee that is taxed, from which Pete is exempt. Let's assume Rebecca begins her apprenticeship, which will take 3½ years to complete. There are zero guarantees that she will be allowed to complete her training, even if she performs at the very highest level. This is because she trains at the discretion of her employer, who hires at the discretion of the economy. Should the Australian dollar rise or the price of coal drop, Rebecca may lose her apprenticeship partway through her studies and is effectively cast out on the street to start over—and this happens regularly. Should Rebecca's employer manage to keep her on during volatile periods, they have to endure at least two costly years of high-supervision, low-skill output from Rebecca while her skills develop. Meanwhile, the government contribution received by my university to manage the vital classroom aspects of Rebecca's training is, on average, less than one-third of the funding received for an equivalent higher education qualification. This is despite the provision of qualified educators, practical workshops, learning materials, facilities and consumables being comparable to that of students such as Pete.
Luck is arguably the major factor in determining whether Rebecca's journey through the system is successful, whereas Pete has to worry only about his own merit. Does this reflect on how differently Australia respects the career choices made by Rebecca and Pete?
This is one of the key challenges, and I'm afraid this government is failing to put VET and universities on equal footing.
In my electorate of Cooper, I have manufacturers in textile, clothing, footwear, food production, beverage production and the automotive industry. I have businesses that are desperate for skilled workers, and they see me every other week and tell me they just can't get them and that they would in a minute snap up people on traineeships and apprenticeships. I have parents, young ones and—we mustn't forget—older people needing to reskill, telling me every day that they would jump at a training opportunity. So don't tell me and don't tell the people of Australia that the demand isn't there. That is complete rubbish! And, by saying so, the Prime Minister is misleading the Australian people.
The government are underspending on vocational education and training the same way that they are on the National Disability Insurance Scheme—and it is totally on purpose. The effect of overzealous application of competition policy and privatisation in the VET sector, coupled with chronic underfunding, has had devastating effects. In too many towns and regional centres across Australia, TAFE campuses have closed, courses have been scaled back and fees have increased. Young people in regional areas keen to stay near home and family or unable to afford to move away to study benefit greatly from regional TAFEs, enabling them to gain skills and give them a start. Regional TAFEs are often the hub of a regional town's community. They offer employment; they offer business to local enterprises; and they bring communities together for events and provide an oft-needed boost to morale. This abject failing of the government to protect TAFE has had a real effect on people's lives.
The Australian Industry Group, as I said before, has a survey that found that 75 per cent of businesses are struggling to find the qualified workers they need. This isn't about young people not wanting to work, as the government and some media outlets would have us believe; this is about training and skilling opportunities simply not being available where they are needed. This government is not supporting industry and workers to get the skills they need. While businesses are crying out for more trained staff, there are about 1.9 million Australians who are unemployed or underemployed. Why isn't the Prime Minister taking more responsibility for getting those people into jobs in industries where there's a shortage of workers? It can't be rocket science. I think it's because the Liberal government see this simply as a cost—a threat to their precious surplus, just like the billions of dollars they have underspent on the NDIS and just like they cut funding to TAFE and vocational training.
The minister makes noises—and lots of them—about how important the sector is, how we need to encourage enrolments and how we need to get people to take up courses. The government has announced 10 industry training hubs, but we still have no real information on what they are. Is it a person? Is it a building? Is it an institution? Is it a contract? Labor will support any measure that gets young people into training and jobs, but we need a lot more than 10 hubs. How will it get the kids into TAFE courses if there aren't any TAFEs or vocational education and training providers around the hub? And how do they plan to get them into decent, secure work? We're a little bit scant on the detail of this 'brilliant idea'. We don't even really know where they are going to be chosen to be put. How do the areas get chosen? Who decided who gets one of these hubs and who will get to go there?
The Liberals keep referring to what happened in Labor's time. Well, we were actually trying to stop a well-used rort by employers who were putting trainees through certificates, sometimes without the employee's knowledge, using dodgy providers. We stopped that, quite rightly. But, you see, Labor had a plan—a plan to revitalise the public provider, restart the VET system and rebuild the sector. This government has learnt nothing. It has no plan to rebuild and revitalise. Numbers have fallen to a lower point than a decade ago. The government can't keep blaming everyone else. They can't keep blaming anyone other than themselves.
'Oh,' said the Prime Minister, 'there's nothing to see here,' when he was asked about this underspend, 'because it's a demand-driven system. We pay on demand,' he said, 'We pay everything that's asked of us.' Well, people and businesses need a skills training sector that is properly funded, that is properly resourced and that has educators who are properly trained and properly paid—I might add, through decent jobs—with the ability to skill these kids and unemployed adults as a pathway to meaningful employment. The government hasn't delivered on a single element of those.
Day after day I hear of young people who do their best—they're trying to skill up; they're trying to get a job—but they are up against a system that is actively pushing them away. They are up against funding cuts and a government that is actually hostile towards VET and, by extension, a government that is dismantling the already limited pathways for young people to gain employment. The latest statistics from the ABS show we have a youth unemployment rate of 11.8 per cent, and we know that it's so much higher in our regional areas. That's around 295,000 young people who are actively searching for work but coming up short. Interestingly, I have been meeting with employers in my electorate and around Victoria who are crying out for skilled workers. Manufacturers, people in food production, disability equipment manufacturers and many more are worried about how they will attract a productive and skilled workforce. This is not simply because nobody wants these jobs. It's symptomatic of a skills shortage crisis gripping Australia. Maybe young people aren't gaining the skills needed to take up these jobs, because of the $3 billion cut from vocational education. Maybe it has something to do with the fact that their $525 million dollar Skills Package includes only $54.5 million of new funding. Maybe it has something to do with the continued funding cuts, the closure of TAFE campuses around Australia or the government's refusal to listen to the sector, to young people or to educators screaming out for real investment. The government's answer to all this is a few hubs, and we're not sure what or where they are.
Let's not forget that the government hired Scott Cam. Scott Cam has been snapped up by the government to promote Australia's trades to young people. Don't get me wrong; I'm sure he is a good bloke and I take no offence at the promotion of trades. But young people should be taking up trades and we should be promoting secure, decent jobs. I do, however, find it shocking that the government is paying the National Careers Ambassador—I don't know how much—while they cut $3 billion from the sector and underspend by nearly another $1 billion. They see fit to cut all of that money from VET, to cut funds from group training organisations, to cut TAFE funding and to put educators out of work. Their policies have caused the number of apprentices and trainees to fall by 150,000, and they are more likely to drop out than to finish, and we have a skills crisis. Even when all of that is true, when all of this is happening right around them, when there is a perfect storm coming their way with regard to skills shortages and youth unemployment, what do they? They hire a celebrity. Great—just great!
At least this announcement provided some comic relief from the reality of the government's plan for employment and skills training in Australia. The situation we currently face is an indictment of this government. We are simultaneously experiencing a crisis in youth unemployment and a crisis in skills shortages. It is bad enough dealing with one of these, but both of them at the same time is hard. If we continue down this path we will jeopardise our future economic growth, we will undermine the opportunity for Australians to meet their full potential and, very importantly, we will compromise our ability as a nation to use the skills, knowledge, discoveries and inventions of our people to compete with the rest of the world. We know that nine out of 10 jobs created in the future will need a post-secondary-school education, either TAFE or university, so we need to increase participation in both universities and our VET sector in order to make sure that we as a nation are prepared for the world of work. Every young school leaver should have a choice about their future, based on their ability and not their postcode or their parents' credit card. It is just not fair that a student on the North Shore of Sydney is five times more likely to go to university than a student in the Moreton Bay region of Queensland.
Funding education is an investment in our nation's future prosperity, not a cost burden. A government without a plan for education and training has no plan for Australia's future, and if it's not planning for the future why is this government here at all? This third-term government simply refuses to deliver a genuine reform package that overhauls and properly funds vocational training providers to deliver the services their students need. Consequently, 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 notes that the Government has failed students, workers, business and the economy by:
(1) presiding over a national shortage in skilled tradespeople, noting that the number of Australians doing an apprenticeship or traineeship is lower today than it was a decade ago;
(2) failing to tackle falling completion rates, as there are more people dropping out of apprenticeships and traineeships than finishing them; and
(3) cutting TAFE and training by over $3 billion and short-changing vocational education by nearly $1 billion".