Monday, 10 February 2020
Trade Support Loans Amendment (Improving Administration) Bill 2019; Second Reading
Labor will be supporting this bill, but I'm also speaking in support of the second reading amendment that's been moved by the shadow assistant minister, which rightly points out what this government has done to the trade and vocational training system in this country with the withdrawal of funding—with the large fall in the number of people commencing and finishing apprenticeships in this country and the fact that the public vocational education and training system is in the worst state that it's ever been in this country.
This bill, the Trade Support Loans Amendment (Improving Administration) Bill 2019, makes some tweaks to the program of loans available to apprentices undertaking a qualifying apprenticeship in an occupation where there's a national skills shortage. But our vocational system doesn't just need tweaks; it needs genuine reform. It's crying out for genuine reform, and fiddling at the edges of the current system won't address the problems that undermine vocational training and education in Australia that are having a severe impact on productivity and the international competitiveness of our economy. Australians want someone who's a leader, a government that will show leadership, on this issue of promoting vocational education and training in Australia.
Often when we think of our education system, the concentration and the focus is on school education. We've seen what's been occurring in that sector over recent years with the dramatic fall in Australia's international rankings, according to the PISA outcomes. But just as important to school education is ongoing education. In fact, that's the key to lifting productivity and providing people with the means to get good, full-time, genuine employment in the workforce. And a strong vocational system, government-backed, that ensures that vocational education and training and apprenticeships are available to all—regardless of your background, regardless of your parents' income, regardless of where you live—is very important. We know that those opposite have been involved in fundamentally undermining the public education system when it comes to trades and apprenticeships, particularly the TAFE system, by withdrawing funding, by restructuring, by increasing competitive pressures within the industry and, basically, by ensuring that the system, through a combination of a federal and state Liberal government, doesn't prosper into the future.
It's no wonder that our vocational system has been trashed by the Abbot-Turnbull-Morrison government. Funding cuts to TAFE and training, apprenticeship numbers falling and shortages of tradies, apprentices and trainees—this third-term government simply refuses to deliver a genuine reform package that overhauls the vocational training sector. More than six years of this Liberal government has left Australia facing a crisis in our vocational education and training sector and a severe skills shortage in certain industries throughout the country. That's why Labor took to the last election a policy of promoting scholarships for people who were willing to take on apprenticeships and further training in areas where there are skills shortages throughout this country. In a number of key occupations, particularly engineering related occupations—and I include both computer engineering and more physical engineering occupations throughout the country—there has been a massive shortage of skills, with employers unable to get the necessary qualified people to fill positions within their organisations. That's necessitated one of the largest increases in visas for foreign workers to come into Australia to take on those roles for which employers have been unable to find local, domestic, qualified, skilled labour to take on here in Australia. If this government doesn't do something serious to fix the skills crisis that they've created, we could be looking at this continuing for decades and being a serious handbrake on growth and productivity in this country, particularly with a growing population.
We've all seen in recent years what population growth has done, particularly in cities like Melbourne, Sydney and Brisbane, in terms of the liveability of those cities and the provision of public transport and transport infrastructure and the lack of that transport infrastructure to keep up with the pace of population growth. A lot of that is due to the fact that there are serious skills shortages in those engineering and building trades that have put a handbrake on the development of many of those projects. It's not uncommon to hear stories of welders, specialist plumbers and specialist carpenters being imported from overseas to fill positions on infrastructure projects because there are simply not enough tradies here in Australia to do that work. That's what happens when you decimate the public vocational training and education system in this country. The results speak for themselves. This isn't rhetoric from the Labor Party. This isn't the Labor Party being partisan. The facts and the numbers speak for themselves. That fact is that under this Liberal government there were 150,000 fewer apprentices and trainees in Australia than when they took government. That says everything about their commitment to vocational education and training in this country. That's causing a shortage of workers in critical services, including plumbing, carpentry, welding, hairdressing and motor mechanics. The number of Australians doing an apprenticeship or traineeship today is lower than it was a decade ago. These are areas where government can make a difference, and that's why Labor was proposing such scholarships to boost the number of people and to wipe out those TAFE fees for people in areas where there were skills shortages, in order to encourage particularly younger Australians, when they finish school, to look at the trade route as a serious career option.
There are more people dropping out of apprenticeships and traineeships at the moment than there are finishing them. That is a shocking statistic for any government to have under their watch: more people dropping out of apprenticeships than there are finishing. There's nearly a 10 per cent increase in the number of occupations facing skills shortages. We all know that this government has slashed $3 billion from TAFE and training. That's the result of slashing that funding from TAFE and vocational training: you get those falls in the number of people starting and finishing apprenticeships and traineeships.
Not only have they cut funding, not only have we got fewer people starting apprenticeships, but they have also, in combination with Liberal governments, particularly in the state that I represent of New South Wales, had massive hikes in the cost of fees to take on apprenticeships and traineeships in New South Wales. I'm talking cost hikes in the vicinity of 300 per cent increase in fees over one year. That is a deterrent to people, particularly from lower socioeconomic backgrounds and people who aren't well off, from starting apprenticeships and traineeships. That's not the sort of system that we want to be encouraging when we have a shortage of skilled workers and a shortage of people taking on training in the vocational sector.
But the Liberal government just doesn't care enough or have the capacity to do the hard work and what needs to be done to rebuild the TAFE system, not only in New South Wales but in other areas as well. Unlike Labor, the government doesn't understand the critical role of TAFE as the public provider, the value in skills and apprenticeships or the value of hardworking and passionate public TAFE teachers. I want to pay tribute to the TAFE teachers, not only in the electorate that I represent but across Australia, for their passion and their commitment to public vocational training. It is admirable that people who take on trades and build businesses give back to their particular trade by taking on the role of being TAFE teachers. It's something that we need to encourage more. It's, again, something that Labor was looking at at the last election—to encourage more people to look at the trades as a vocational area for teaching into the future.
The effect of the overzealous application of some competition policy and privatisation in the VET sector, coupled with a chronic underfunding, has had devastating effects on the sector. Too often we've seen dodgy providers overload students for a quick profit and then go belly up, leaving students out of pocket and without the qualifications that they need. I will say, it did take this government a very, very long time to act on that, when the writing was on the wall for many years. We all saw the stories of dodgy providers encouraging people to sign up to courses with the promise of a laptop and other inducements when they knew very, very well that they weren't getting value for money. Ultimately they went bust and left many, many students in the lurch, having paid big fees to access those courses, with no qualifications and nowhere to go and, in some cases, no recognition of the prior learning that they'd undertaken.
The TAFE system in Australia is in serious decline under this government, and Labor will hold the government to account for those cuts to funding, for those reductions in the number of people starting apprenticeships and, indeed, for the massive increases in fees. All of this, collectively, is discouraging Australians from taking up apprenticeships and trades. It's reflected in the numbers, and it's a handbrake on growth and productivity improvements in this country.
This bill amends the Trade Support Loans Act to introduce offsetting arrangements as an alternative way of recovering overpayment trade-support loan debts. It also increases the time period that a TSL recipient has to inform the department of changes to circumstances. The amendments are designed to reduce the administrative burden on the department and the recipients and reduce the reliance on traditional debt-recovery practices.
The TSL program makes loans available to apprentices who've undertaken a qualifying apprenticeship in an occupation where there's a national skills shortage. The loans are concessional income contingent and subject to a lifetime limit of $20,000, indexed from 2017. The loans are repaid through a similar mechanism to the HECS-HELP loans scheme system and recovered through the taxation system once the recipient meets the minimum income threshold. The key amendment in this bill will change the way overpayments are treated to reduce the circumstances in which current debt-recovery processes have to be used. Under the current arrangements, when a recipient receives an incorrect payment it becomes an overpayment debt to the Commonwealth and is recovered as a judgement debt through the courts or under a repayment arrangement. There are proposed amendments introducing an alternative offsetting arrangement, where the underpayment can be recovered by reducing a future payment instalment or be determined as a legitimate TSL payment and added to the recipient's total TSL debt to be repaid once the recipient meets the minimum income threshold. For instance, if an apprentice receives a payment larger than his correct payment rate whilst undertaking his apprenticeship, the overlap could be offset by a reduced payment in the next or subsequent instalment so that debt-recovery arrangements do not have to be used.
The other amendments provide the secretary with a discretion to extend the time period for notifying of a change of address and increase, from seven to 14 days, the time period that an apprentice has to inform the department of a change to circumstances.
These changes represent sensible minor amendments to this particular scheme, and that's why Labor will support them. But as I mentioned at the outset, what is needed—instead of tinkering around the edges and minor changes—is wholesale support for a stronger TAFE and vocational training system in this country. We need a system that is built on the premise of an increase in funding and an increase in a commitment from a government to support vocational training in this country and hopefully arrest the woeful decline that we've seen in apprenticeship starts and finishes in this country and the underlying effect that has had on productivity and on growth in Australia.