House debates

Monday, 18 June 2007

Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007

Second Reading

Debate resumed from 14 June, on motion by Mr Robb:

That this bill be now read a second time.

upon which Mr Stephen Smith moved by way of amendment:

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 welcomes additional financial support for first and second year apprentices but condemns the Government’s complacency and neglect of vocational education and training over the past 11 long years seen through:

the Government slashing its investment in vocational education and training by 13 per cent in the three years to 2000;
between 2000 and 2004, increasing this investment by only 1 per cent;
the failure of the Government to address the acute shortages of skilled labour across Australia, which the Government itself estimates to be a shortfall of 240,000 skilled workers by 2016;
the cynical political response to the national skills crisis of a standalone network of Australian Technical Colleges that will only produce 10,000 graduates by 2010; and
the failure of the Government to address apprenticeship completion rates, with almost 50 per cent of apprentices cancelling or withdrawing from training each year while Labor has been calling since 2005 for $2000 payments to encourage completion of  traditional trade apprenticeships”.

5:50 pm

Photo of Jennie GeorgeJennie George (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Environment and Heritage) Share this | | Hansard source

I am pleased to be able to speak on the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007, which is before us this evening, and in general terms I support the measures that it contains. In terms of the budget announcement, we know that the government’s intention is to top up the wages paid to apprentices who are under 30 years of age and undertaking an apprenticeship in an area of skills shortage and that those payments will total $2,000—$1,000 for each of the first and second years of training. I think the payment also recognises the low level of apprenticeship wages in those first two years of training, estimated to average about $15,000 in the first year and $19,500 in the second year. Of course, these low wages may in fact be one of the factors that discourage potential apprentices from undertaking training. I also see the measure as responding in some way to the high drop-out rates that have been very prevalent for skilled trades training over the last decade. The top-up wage will also be paid to part-time and school based apprentices, who will receive $500 annually and attract the full $2,000 over a longer period of time.

As indicated in the contributions made by the shadow minister and other speakers in this debate, Labor supports the proposal contained in the bill. It strikes me as very reminiscent of Labor’s previously announced policy in relation to the trade completion bonus. However, I think this initiative on its own does not compensate for the government’s continued complacency and inadequate response to the issues confronting the nation in the huge skill shortage that we see. In looking at some of the contributions to this debate and hearing the member for Hasluck late last week, I think a number of government speakers have attempted to rewrite history and tried to sheet home some blame to previous Labor governments for a decline in the rate of apprenticeship completion and apprenticeship training. Nothing could be further from the truth.

Under the Howard government, the average number of traditional trade apprenticeships has been around 120,000 a year. Under the Hawke-Keating government, it was 13 per cent higher at 137,000 on average. In fact, completion rates under this government have been of concern, falling from 64 per cent in 1998 to only 57 per cent in 2005 compared to the rate under Labor, which was more than 70 per cent when they left government.

I think a lot of the argy-bargy that goes on in this debate is wrongly directed and I for one, having been elected in 2001 to represent the constituents of Throsby, have worked very assiduously and tirelessly to address the lack of apprenticeship opportunities in my own region, the Illawarra. I am pleased that the Minister for Vocational and Further Education is in the chamber this evening for the debate.

I do want to thank the Howard government for the contribution it has made to enable the continuing success of the Illawarra apprenticeship pilot program, which I have chaired since its inception. You may not be aware, Mr Deputy Speaker Hatton, that under this program, at a minimal cost to the federal government, we have actually seen 300 young unemployed people in the Illawarra placed in an apprenticeship. We have done that by recognising that many of our small business owners were saying the reason for not taking young people into an apprenticeship was the perceived lack of productivity in the initial years of training. This scheme is based on a quite substantial subsidy by the state government which pays for six months of prevocational training for the apprentice in training so that, when the young person graduates, they come out of college with the equivalent of the first year of an apprenticeship. We were able, thanks to the good sense of the then Minister for Employment Services, Mr Brough, to get some seed funding through the Job Network providers that provided an additional financial incentive of around $1,000 for our local employers to take on a young person.

I certainly reject any kind of allegation that people on this side of the chamber dropped the ball in terms of apprenticeship training and only focused on, as is alleged in the debate, getting young people into the university system—nothing could be further from the truth. I continue to work hard to ensure that a traditional trade option can be gained by young people, particularly young unemployed people, in the region of Illawarra.

Our latest statistics on unemployment indicate quite an appalling position for young people. Our unemployment rate for teenagers aged 15 to 19 looking for full-time employment—young kids who are disengaged but looking for full-time work—hovers at around 38 to 40 per cent. Our apprenticeship pilot is at very low cost to government. I will return to that later in terms of the huge amounts of money being expended on the Australian technical colleges in comparison to a modest commitment of around $130,000 a year, which has already placed more young people in the Illawarra into an apprenticeship than we will see graduating from the college when it is fully built at a cost of something like $19.6 million. You talk about public policy and good value for money; I hope the minister gives some further consideration to the efficacy of small-scale, local programs that come up with local answers to local problems in a way that does justice to the expenditure of taxpayers’ funds.

The government says that it is all Labor’s fault that there was a decline in apprenticeship training, but very early when I was elected I took this issue up with the then minister to get some hard data. What I found in response to my questions on notice was that the number of apprentices in training in the traditional trades in fact fell from 880 young people in the Illawarra undertaking apprenticeship training in 1996, the first year of this government, to 870 in 2004. So under this government the number of young people in traditional trade training was declining when the alarm bells were ringing about the impending crisis as far as the national skills shortage problem that we have debated on many occasions in the House is concerned. Despite all the knowledge and warnings about the skills crisis, fewer people in my region were training in the traditional trades in 2004 than they were in the first year of this government. When you look at the early years of this decade, you can see that the number of apprentices in training actually fell as low as 630 from a high of 880 in the first year of the Howard government.

You cannot say that the problem of skills shortages developed overnight. The warning bells had been ringing loudly for a considerable period of time. It was not just the Labor Party saying this; it was peak employer organisations like ACCI and the BCA, reports from Senate committees that investigated this issue and of course, very profoundly, TAFE directors who were complaining at the time of the government’s lack of investment in vocational and technical education.

The government has itself to blame for being asleep at the watch and for allowing the skills crisis to grow exponentially. The government has presided over 11 long years of neglect and underinvestment. In the early years after the government was elected what did we see? We saw actual funding cuts to TAFE and then a 13 per cent investment in the three years to 2000. Beyond 2000, investment only increased by one per cent, between 2000 and 2004. This was despite all the TAFE directors constantly drawing our attention to unmet demand in the system and lots of young people being turned away from vocational education and training.

The government’s failure to adequately invest is now seeing the nation pay a very high price in the form of acute skills shortages across this country. By the government’s own admission and estimates, a shortage of more than 200,000 skilled workers is projected over the next five years. Those skills shortages actually impede the possibilities for economic growth and development at the regional level. I do not think the Howard government has a clear picture of the impact of the skills shortage at the regional level, and I think more work needs to be done.

I am not suggesting that any magic bullet or one solution is going to solve the crisis, but it does seem to me that regional trends may be quite different from what is happening nationally or even at a state level. For example, the Illawarra’s close proximity to the booming Sydney labour market has had an impact on the ability of local firms to attract suitable candidates. In 2001, according to the census data, 17 per cent of employed people in my region commuted outside the region for work.

Regional skills shortages have a variety of underlying causes, and a multifaceted strategy is needed to address the specifics of each region and the problems they have to contend with. That is why we came up with the local apprenticeship pilot program. We saw that as a sensible way of addressing the high rates of youth unemployment while at the same time targeting those opportunities to areas of skills shortage that we knew existed in the Illawarra.

Our eminent local research body, IRIS, undertook a skills shortage study. It showed that most skilled labour in the Illawarra region is now in short supply relative to demand. And it is not just in the traditional trades. It is in areas like aged-care nurses and carers, at the top of the list, through to boilermakers, chefs, electricians, engineers, fitters and turners, nurses, truck drivers and kitchen hands. So it is not, as I say again, in the traditional trades that the skills shortages are apparent in my region but across a wide range of occupations that need to grow to service the needs of our community. In all the responses to the skills crisis I think the major investment in terms of recent initiatives has been in the Australian technical colleges program.

Photo of Andrew RobbAndrew Robb (Goldstein, Liberal Party, Minister for Vocational and Further Education) Share this | | Hansard source

Mr Robb interjecting

Photo of Jennie GeorgeJennie George (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Environment and Heritage) Share this | | Hansard source

The Prime Minister himself said—and I quote for the edification of the Minister for Vocational and Further Education:

The technical colleges are the centrepiece of our drive to tackle skills shortages and to revolutionise vocational education and training throughout Australia.

In my view it was the case then, as it is today, that statements like this are statements of extreme hyperbole which do not really help to advance the cause of dealing with the huge problem facing the country.

As the minister knows, these colleges will at best train a maximum of 10,000 tradespeople who will graduate between the years 2010 and 2012. That is very fine for the young people who get the opportunity to go to those colleges, but how on earth is this a solution to tackling the skills crisis that is here with us today and that is growing every day? I can hardly say to businesses in the Illawarra, ‘Wait for the 315 young people who will graduate between 2010 and 2012 to fix the skills shortages that we know exist in our region today.’ So that solution, which the Prime Minister himself describes as ‘the centrepiece of our drive to tackle skills shortages’, is merely a drop in the ocean when the estimated skilled labour shortage today is in the order of 100,000 people, growing to more than 200,000 workers over the next five years. The government’s announcement was, in my view, a political fix to a policy problem, a problem that continues to grow and that still needs to be urgently addressed by the new minister.

I talked to a number of parents at the opening of the Illawarra Australian Technical College function. Naturally enough, they were all excited at the prospect of their children’s enrolment, but nearly all I spoke to referred to the load and pressure on these students. As we know, they are supposed to be studying for their HSC, undertaking apprenticeship training and working two days a week. For a 16- or 17-year-old, that is quite a sizeable load. I do not think any of the projections on the part of this government on the output of students from these colleges ever factored in the possibility of high drop-out and attrition rates because of that quite sizeable burden. In fact, the TAFE directors of Australia have also pointed to this problem. Their executive officer, Mr Riordan, said:

The Australian technical college model asks a great deal of 16- and 17-year-olds ... the prospect of drop-out rates is high.

When I raised the specifics of the Illawarra ATC with the minister, I was told in writing in answer to my questions that enrolments at the Illawarra ATC were to be 50 students at the start of this year. Minister, the 50 target was not reached. I understand that a number of students have since dropped out. I understand also that many of them have not been afforded an apprenticeship and employment with a local business, and it is my understanding that all their courses in the trades area are being done at the local technical college.

I ask you, Minister: if we are going to spend $19.6 million of taxpayer funds building a brand new college in Illawarra when we have perfectly reasonable facilities just down the road, is that a wise investment? If you divide $19.6 million by 315 students due to graduate over the next few years at maximum and compare that with the 300 students that have already been placed into an apprenticeship at a cost to the government of around $120,000 a year then I think I have every right to say to my community that this is not good public policy. I still have not had an argument advanced to me as to why these 315 students who are doing their trade training through the TAFE colleges need a brand new building, which will be constructed next year.

Having said that, as I have done in earlier speeches, I again query the value of the expenditure that the government is making on a system that at best will produce 10,000 tradespeople between 2010-12 when we have got a skills crisis today in many regions like my own. My views about this issue are confirmed by people who know even better than I do what happens in the TAFE and the vocational system. Martin Riordan, the executive director of TAFE Directors Australia, said recently:

We think it’s important to reassess the Australian technical colleges because, despite the best intentions in the world, they are a failed model.

After three years and more than half a billion dollars, the Howard government’s Australian technical colleges to date have not produced one graduate, have fewer than 2,000 enrolments, and have outsourced the bulk of their training to the existing TAFE system. On the government’s own estimates, we face a shortage of more than 200,000 skilled workers over the next five years. Again, on the government’s own figures, the ATCs will only produce their first qualified tradesperson in another three years and will see only approximately 10,000 students graduate by 2010. After a decade of underinvestment, the Australian technical colleges, in my view, are simply inadequate as the major response to Australia’s skills crisis. The longer the Howard government pretends that their Australian technical colleges will make up for more than 11 years of complacency and neglect, the more damage will be done to the future prospects of our children and our economy.

In conclusion, I reiterate that I do not accept the criticisms that people on this side of the chamber are not interested in apprenticeship training. As I have pointed out, I have had a longstanding involvement in my region trying to address the problem of high levels of youth unemployment and to match the prospects of our young unemployed people with an apprenticeship with many of the small and medium sized businesses in the Illawarra. To that extent, I want to again acknowledge the contribution and support for the maintenance of that initiative that has recently been provided—although I was quite disappointed that at the launch the senator who resides in the Illawarra was not gracious enough to make the point that the state government was contributing about four times the amount of funds from the federal government by underwriting the prevocational courses, the six months that are undertaken by these young people. It is a great pilot program. It has worked well, and I think it is producing results far more effectively than the ATCs. (Time expired)

6:11 pm

Photo of Kay HullKay Hull (Riverina, National Party) Share this | | Hansard source

Time and time again since I came into this House nine years ago, I have raised the issue of the need to recognise trades and services as occupations. I am almost starting to feel like a cracked record. It is exciting when you have been raising an issue that you can then come in and talk about the way in which it is being addressed. It is with extreme pleasure that I support the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007. A strong and growing economy requires skilled employees. Assistance that is provided under our initiatives will encourage many young people to consider technical and trade training to ensure that we have a skilled workforce to meet our future work needs in Australia.

For around 29 years, my family business, of which I have been a part at various stages, has employed apprentices. We saw the initiatives that were in place and were then displaced by a significant push towards ensuring that every child had a university education. Again, as I have said in this House many times, I do not dispute that there are many students who should rightly go to university but there are many students—about 70 per cent of those attending high school—who do not go on to university. These students were made to feel less adequate, less worthy, in many of our schools because they did not want to pursue a vocation in higher education or a university degree. I thought this was very sad and I have raised this on numerous occasions over many years before even coming into this House. As a parent of three very bright boys, I was continually harassed and had peer pressure applied when people asked about where my boys were going to university. Each of my boys had individually decided not to go to university but to get a trade. The view was that I was letting my children down by not forcing them to get a university education.

None of my children wanted a university education. They wanted to do a trade and, as I said, they are quite bright and were doing very well at school. I recall those days very vividly. I would have to explain why my children wanted to pursue a trade and not do a university degree, even though their marks would easily qualify them for any degree they chose.

I recall those days of fostering apprentices in our own business and encouraging young people to be apprentices. I urged them to be absolutely proud of their vocation and the work that they did and to feel worthwhile. Many of the students who did work experience with us were relegated to the back of the classroom because they had no ambition, because their ambition was only to do an apprenticeship. I thought that was extremely difficult for those young people and their families because they really did know what they wanted to do.

Time and time again, we recognised that we could no longer get essential services dealt with in our electorate—services such as building, concreting, bricklaying, carpentry, joinery, electrical wiring, panelbeating, mechanical engineering. We were going to be confronted with a significant trades, services and skills shortage. To the government’s credit, it recognised this issue. Again, I have brought this matter to the attention of the House many times. It is my experience that many of the apprentices who started in our business went on to have their own businesses. I assisted them to set up their businesses, which were in opposition to ours, and to set up their bookkeeping systems and help them along the pathway. The benefit of having a qualification is that you become a price-maker rather than just a price-taker. I am very proud of the people who started their working lives with our family business and who moved on to find their own premises, start their own businesses and employ many other people simply because they had a qualification recognised by insurance companies when they were required look at their business and skills.

I am very proud of people who can build a house, starting with a plot of land and ending up with a fabulous home full of innovation. It never ceases to amaze me how clever some people are, such as concreters and those who work with their hands. Many children are excellent with their hands but may not be able to manage the theory. Many of our apprentices over the years could pass all of their practical tests but were unable to pass their theory tests, but that was the way they operated.

It is fabulous to see how the number of apprentices has grown under this government. I do not know how the member for Throsby had a reduction in the number of apprentices in her area. Maybe it is a problem of living close to Sydney city and the migration that occurs out of the areas around Wollongong. That is certainly not my experience. In October 2006, I announced that in the electorate of Riverina there was a 164 per cent increase in the number of apprentices since 1996 when the coalition was first elected. Figures from the National Centre for Vocational Education Research showed that as at October last year there were 3,750 apprentices in training in the Riverina electorate, up from 1,420 apprentices in March 1996. I am not quite sure why the member for Throsby has had a downturn. The figures released showed that nationally there were 403,600 Australian Apprenticeships in training in the March quarter in 2006, a 161 per cent increase since the coalition was elected in 1996. The report also showed that in the 12 months to 31 March 2006, there were significant increases in commencements of Australian Apprenticeships, including in higher level qualifications and Australian school based apprenticeships. Nationwide, commencements of Australian Apprenticeships grew to 271,100, an increase at that time of five per cent. And the significant thing is that the number of completions of Australian Apprenticeships grew to 142,600, an increase of six per cent. And there was a six per cent increase in the number of females taking up Australian Apprenticeships. I found that news sensational.

The difficulty faced in rural and regional centres was highlighted by a mum who contacted me just a few weeks ago about her son. Apprenticeship wages are very low. They are recognisably low. I grappled with this well before I was elected. I ran a taskforce when I was on Wagga Wagga City Council to see how we could change that. There are lots of times when small businesses are not able to afford higher wages. Whilst they might have one tradesman, if they employ an apprentice they might end up with half a tradesman and an apprentice because the tradesman’s work capacity is reduced by the amount of time spent teaching an apprentice. Taking on apprentices reduces the return to the small business. This lady contacted my office a few weeks ago to say her son, who lived in a town outside Wagga Wagga, was travelling to and from Wagga Wagga daily. With the price of petrol extraordinarily high and all his travelling, his wages were so low that, although he loved what he was doing, he was considering leaving that job because his overheads and costs were so high. He could probably move to an industry in the town and become a meat process worker, which is where young students end up in many rural communities. But he really did want to do this apprenticeship. That was actually before the budget was announced. I was thrilled when I was able to send this mother the details of our top-up payments that would come into play so that she could pass them on to her son.

The wage top-up is fantastic for first- and second-year apprentices under 30 who are undertaking an apprenticeship in a trade occupation that has been included on the migration occupations in demand list. They will be eligible to receive $1,000 for each of the first two years of their apprenticeship. The payment of $500 will be made bi-annually to full-time apprentices at the six-, 12-, 18- and 24-month points of their training. Part-time and Australian school based apprentices will receive $500 annually up to a total of $2,000. That wage top-up measure joins a range of other measures, including the tax-free $1,000 Commonwealth trade learning scholarship and an $800 tool kit under Tools for Your Trade. Another new measure that was announced in the budget last year—maybe it was two years ago—was a $500 fee voucher to assist with the cost of course fees. Those are real benefits for apprentices and are extraordinarily welcomed by those on very low wages.

If you can get a top-up and pay $500 towards the cost of your course fees, it is pretty significant. Once you have worked for a period of time you are able to keep your tool kit. From memory, you have to work for three months, and after you have worked for another six months you are able to keep your tool kit. That is really important because sometimes it takes an extraordinary amount of attention to be able to fund your tool kit to do your apprenticeship. We have done all of these things over a number of years, since the Prime Minister said that a qualification in a trade is every bit as valuable as a university degree, and have absolutely focused on ensuring that our rhetoric actually meets the requirements.

I turn my attention to how New South Wales Labor has assisted with apprenticeship training and funding. They raised TAFE fees by over 300 per cent. That is how New South Wales Labor wanted to assist young apprentices and resolve our skills shortage in rural and regional Australia: they actually raised TAFE fees by over 300 per cent. You can stand in this House and talk about issues, but it is about doing things. When I listen to what has been said in this House, it seems like the old ‘do as I say, not as I do’ syndrome. There is no doubt that the Howard-Vaile government has absolutely focused its attention on apprentices, trades and services, and for this I am very grateful. I have seen many people in my electorate who have been enjoying financial success in trade and service areas. It is indeed a vital investment for our social prosperity, especially in our rural and regional areas. It is also a vital component of the survival of many of our small communities. Quite often in rural and regional areas you see the export of our most valuable commodity: our young people.

I must compliment New South Wales TAFE, Riverina Institute, because their dedication has been extraordinary. The dedication of the teachers in New South Wales TAFE has been absolutely fantastic in ensuring that the apprenticeships that the Australian government funds under the new apprenticeship system are offered to many places right across my electorate. I pay due credit to Rosemary Campbell and her New South Wales TAFE teachers right across my electorate because I am finding that many of our young people are getting great opportunities, funded by the Commonwealth and delivered by the state TAFE system. I do not have a technical school in my electorate. I hear some discussion every now and again in local media that the New South Wales government might put a trade school in Griffith, in my electorate, but as yet I am unaware of the detail of that. When I look at the way in which life and politics should run, I see that it should be a joint initiative to ensure that the kids of Australia who want to get a trade—whether it is in hairdressing, panelbeating, mechanics, electrical engineering or whatever career they want to have—are assisted as easily as if they were attending a university course.

We have to remember that, until the Howard government decided to assist apprentices and provide more funding, the only money that was provided to assist any student was provided to university students in HECS relief. That is pretty incredible. We have now rectified that extraordinary position and those children, who have every right to access a career of their choice, are now being assisted through this process. It is with great pleasure that, rather than coming into the House and raising the issue as something that has not been addressed or should be addressed even further, I come into the House to congratulate the government on announcing these initiatives.

In addition to the other accumulative benefits that the Howard-Vaile government has been providing to apprentices and young people, particularly in the electorate of Riverina, I reiterate what a sensational success they have been in my electorate, with a 164 per cent increase in the number of apprentices since this government took office in 1996, when the coalition was first elected. Rather than having to come into the House on a continual basis and raise the plight of the trades and services areas, to have 3,750-plus apprentices now in training in the Riverina who are able to take advantage of these warm gestures of the Howard government brings me great pleasure. In conclusion, I commend the bill to the House and urge government to consider even further benefits for the apprentices who will make up our skilled trades force in the future.

6:31 pm

Photo of Jill HallJill Hall (Shortland, Australian Labor Party) Share this | | Hansard source

Under the Howard government’s stewardship, Australia has been plunged into a chronic skills shortage which has been driven by a government that has failed to recognise the economic signals that point to the need for investment in training for the future. One of the first acts of the Howard government was to slash funding to TAFE. As a consequence of that slashing, TAFE was forced to increase fees to remain viable. It has also led to a reduction in courses.

The legislation that we have before us today, the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007, is supported by this side of the House, as anything that can be done to encourage young people to undertake apprenticeships is well and truly welcomed. We must recognise that in Australia we are part of a global economy and the most important element of that, from Australia’s perspective, is that we have a trained, skilled workforce. That is so important to our economy and so important for the future.

The legislation before us today honours a budget commitment to provide $2,000 over two years to Australian apprentices who are under 30 and are undertaking an Australian apprenticeship in a trade occupation identified as experiencing national skills shortages. Coming from the Hunter area, I know that employers are unable to fill positions because there is not the skilled workforce, and I know that there are many young people who would like to undertake apprenticeships who are being denied the opportunity.

This payment will assist young people who are undertaking apprenticeships and it very much reflects the proposal Labor introduced back in 2005. There is an enormous skills shortage and it is very important to encourage people into traditional apprenticeships. That is something that I do not think that the government has done. Members on the other side talk about the number of apprenticeships that have been undertaken under its stewardship but, when you really analyse those figures, you find that they are not in the area of traditional apprenticeships or traditional trades.

Labor has previously announced a trade completion bonus, which has been mirrored, in part, in the budget and in this piece of legislation. Because it will be beneficial, we on this side of the House will support the legislation. But I must say that I find myself much more inclined to reflect on the amendment, and I will talk on it a little bit later. It is important to note that first- and second-year apprenticeships can be particularly difficult. This is when apprentices have very low wages. Therefore, top-up payments really help young people when they are undertaking an apprenticeship. I have spoken to many young people in my electorate, and they have emphasised to me how difficult it is and how they struggle to survive while they are undertaking their apprenticeships.

Earlier, in the Main Committee, I spoke on the House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation report, entitled Current vacancies: workforce challenges facing the Australian tourism sector, that was tabled in the parliament earlier today. Mr Deputy Speaker Barresi, you were chairing that committee when we talked to an employer, a restaurant owner, in Cairns. He put to us that one of the issues for apprentices and also for employing people in that industry was the need to bring some sort of equity into their wages. That is where the apprenticeship top-up payment will be quite useful.

Full-time apprentices will receive $1,000 per year: a total of $2,000. Part-time and school based apprentices will receive $500 annually over a longer time frame, once again totalling $2,000. This will be for trades which are experiencing skills shortages. Looking at the report that was tabled, which looked at skills shortages in the tourism industry, I think that there is probably not a trades area which is not experiencing skills shortages, be it electricians, chefs or any trade that is associated with that industry. So anything that can be done to encourage young people to undertake training in the traditional trades is very welcome.

Many young people withdraw from their apprenticeships before they complete them, for a variety of reasons. One of the main reasons, I believe, is the wages that they receive. When their mates are out there earning higher wages, many young apprentices will look to the now and not look to the future, when by completing their studies they would end up on a much higher wage in the long run. The latest annual figures show that in 2005 nearly 130,000 apprentices and trainees cancelled or withdrew from their courses. Whilst the government often talks about 400,000 apprentices in training, it fails to mention—and this is a point I think is very important—that only 140,000 of those apprentices are completing their training, and less than a quarter of those in training are undertaking traditional apprenticeship training.

This legislation looks at that traditional apprenticeship training, an area that is of vital importance to Australia as a nation because it addresses the skills shortages that have been allowed to emerge in our country. The average number of traditional trade apprentices under this government has been about 120,000 a year. The sad fact is that, under the Hawke and Keating governments, it was 13 per cent higher, at 137,000. When you look at the completion rate for traditional trade apprenticeships, in those areas where Australia faces the greatest shortages, the government’s record is even worse, with only 24,700 traditional apprentices completing their training in 2005.

We need the completion of those apprenticeships and we need to have many more young people undertaking apprenticeships. This government has really let Australia down in that regard. Whilst there has been an increase in new apprenticeships, the areas where we have the real skills shortages have not been addressed. This legislation should help to a degree. It should benefit young people such as those who have told me that the hardest part about completing their apprenticeship is not the training, not the study, but the fact that they are struggling financially whilst their mates are out there earning a larger income.

Skills shortages are not something that we on this side of the House have invented. They have been allowed to develop over a long period of time by the government. The government has withdrawn funding from the states, from the TAFE colleges. I think this to some extent has been driven by its ideological hatred of the states and its opposition to public institutions such as TAFE colleges. The fact that it has withdrawn funding from TAFE colleges has created quite a problem. Earlier this year, I was talking to some young people in my electorate who were trying to undertake pre-apprenticeship courses at my local TAFE, Belmont TAFE. They had been unable to do so because the TAFE had had to cut those courses—a metal fabrication pre-apprenticeship course and an engineering pre-apprenticeship course—because they did not have enough money to run them. I was contacted by a number of young people in my area, and luckily I was able to find somewhere else for them. I think one of the young people was able to undertake pre-apprenticeship training at another college because he had parents who could take him there—it is quite a distance to travel and it is not on a public transport route. There were many barriers put in front of these people.

We have to properly fund our system as well as ensuring that our apprentices receive enough money to live on. This is one part of it addressed, but I met with TAFE teachers here in parliament a couple of weeks ago and they highlighted to me the inadequacy of the funding from the Commonwealth to the states for courses within the TAFE system. Funding would lead to the training of many more tradesmen in the future and is desperately needed in this time of skills shortages.

In his address-in-reply to the budget the Leader of the Opposition undertook that, if a Labor government is elected later this year, Labor will provide a trades training centres in schools program. It will provide $2.5 billion in capital funding over the next decade to build new trade centres in all of Australia’s 2,650 secondary schools. It will focus on providing state-of-the-art trade workshops in the areas where we have skills shortages, and information and communication technology facilities and equipment to promote the teaching of vocational education. Schools will be able to apply for funding of between $500,000 and $1.5 million to build trade workshops, computer laboratories and other facilities. These initiatives will all lead towards a highly skilled workforce and make sure that our young people have the skills and training that they need to address the issues of the future so that we can continue to be a country that can compete globally, rather than ending up being a Third World country.

I would now like to turn to the second reading amendment moved by the shadow minister. Part of that amendment dealt with Australian technical colleges. The first point I would like to make is to ask where the three new colleges will be built. The second point I would make is that, as was highlighted in the shadow minister’s second reading amendment, by 2010 these Australian technical colleges will have produced only 10,000 graduates, and we certainly need a lot more than that. I would like to share with the House how the Australian technical college program has been operating in the Hunter region.

In March last year, I met with two very distraught fathers. Both their sons were attending the Newcastle ATC. They were most concerned because their sons had enrolled at the college full of hope and expectations that they were going to get the skills they needed to become electricians. When they enrolled they found that there were no tools, there were no workbenches and there was not even a job placement officer. Two job placement officers have now been employed, but at that time there was not one. There was no work experience organised for the young people who were enrolling in the college. Even the teachers were saying that the college should not have started at the beginning of the year. It started in February, and it did so for one reason only: because the government insisted that it should do so.

I raised this issue with the minister and I put to him just how disappointed the families were and how let down they felt by a scheme that they thought would provide an excellent opportunity for their sons. Both students at that time were considering withdrawing from the college. By the end of March, not one of the 60 students who had enrolled in the course had started with an employer. Work experience had not even begun to be negotiated, workers compensation had not been negotiated and the college facilities were virtually non-existent. On the last weekend in March, the parents were going to gather together at the college and build the workbenches. They had already sought donations of tools. By the time I saw them, the tools were in place but the kids still had no workbenches.

I wrote to the minister and I received a response. In that response, the minister informed me that they were confident that activities were being undertaken to ensure that there would be work experience placements for the apprentices. He went on to highlight the positives about the Australian technical college system—talking about alternative pathways for year 12 senior students—and, of course, blamed the state government. He said that since I had written there had been a parents open day and information session at the Newcastle campus on 28 March, and he said that he hoped that the parents were happy following that. He really did not answer any of my questions. After I received the minister’s response, I rang the parents and I spoke to one of the young boys, Sam. As of two weeks ago, Sam still did not have a work placement. I rang on the day that he was supposed to be out on his work placement, and he was sitting at home waiting, because the government had failed to organise the placement. The government needs to do a lot more for young people like Sam. The government has let these young people down with its ill-planned ATC program. But I do support the legislation before us today. (Time expired)

6:51 pm

Photo of Judi MoylanJudi Moylan (Pearce, Liberal Party) Share this | | Hansard source

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.

7:10 pm

Photo of Bob KatterBob Katter (Kennedy, Independent) Share this | | Hansard source

If you walk through that door you will see a huge portrait of Charles McDonald, the first member for Kennedy. In his first speech when he came into this place he spoke diametrically against what the honourable member for Pearce was endorsing in her speech—that is, the bringing of people from overseas to take our jobs at what he saw, and at what a lot of us see today, as a much lower wage level than would otherwise occur. At the time, the population of Queensland was predominantly Chinese, not European. The majority of Queensland’s population before the turn of the century was Chinese, and large numbers of Kanakas had been blackbirded into Australia, some of them with great violence. The honourable member for Dawson is here and has probably read the famous book on the Kanakas coming to Queensland. McDonald’s vehemence was quite understandable. People had fought fiercely to get a fair go for the worker and, when they had achieved these conditions, they saw employers bringing people in from overseas who worked at nothing like the award wages, completely undermining all the work that they had done to establish some sort of decent income for the Australian working class.

To put that in perspective and to clothe it in reality, in the mining industry—off which my forebears in Australia have lived for close to 130 or 140 years—in the early 1900s one in 32 of us who went down the mineshaft never came back up or came back up with a terrible lung disease. That was overcome by union action, and even though I have always been on the conservative side of politics I have always been a very strong supporter of trade union action because I can clearly see the necessity for it, particularly in a large workplace such as a mine. If you want to see what happens when the big mining companies run a country, you have to look at the model of Cecil Rhodes, who destroyed a fair proportion of the Matabele nation and destroyed some 28,000 women and children in concentration camps. Regrettably, we were fighting on the side of the British, so we must share some of the blame for what happened to the Boers—the white Africans, if you like—in those concentration camps. They lost the war, and the running of the government was taken over by the huge mining magnates who brought massive amounts of cheap labour in from central Africa.

The government of South Africa accepted this; they rolled over. They accepted the argument that they could not be competitive in mining unless they had this supercheap labour from central Africa. So they accepted that. The Boers—the South Africans, if you like—woke up one morning and found that they did not actually own their country, that the people who had come from central Africa owned their country. They did not have a very pleasant time afterwards. It may well be said that they did not give these people a very pleasant time before.

Fiji has suffered exactly the same problems. The British colonial rulers in Fiji decided in their wisdom to bring out labourers from the Indian subcontinent and from Ceylon, or Sri Lanka, as it is now called. Again, the Fijian people woke up one morning and found that they did not own their country. In the Torres Strait—and I had the very great honour of being the state minister with responsibilities for the Torres Strait for a significant proportion of my life—people had pictures of Rabuka in many of their homes. They regarded him as a great hero, because they did not want to lose their country to some foreigners. And, if you bring in workers under section 457 visas, which is a very great controversy—the government has pulled back on it, thank goodness—one can clearly see where we might head.

There are those who would construe those remarks of Charles McDonald, the first member for Kennedy, as very racist. But I would defend him and say that they were not racist at all; they were about working-class people who had fought hard for pay and conditions and were winning the battle. At the time he made those speeches, as I said, one in 32 of them who were going down the mine did not come back up, or did so with a terrible terminal lung disease. He represented mainly Charters Towers, which was the biggest city in Queensland then, and he represented mainly those people, and they had a fight that was literally about life and death. So we view this situation with very great worry.

Now, if we are not going to bring in people under section 457 visas then we have to train people ourselves. I want to quote Councillor Fox, who is a member of the Cardwell Shire Council in my electorate. He is a builder, and of course with Cyclone Larry there has been immense demand for builders. Councillor Fox is a great advocate of employing apprentices. He says that ‘it really is a good deal for the employer’. There are many people who say, ‘We lose these people for two months of the year and they get paid very high wages relative to their value to the operation.’ But Councillor Fox spoke very strongly in favour of having apprentices.

I want to bring this important issue to the attention of the House. Through the great game of rugby league, which creates lines of communication which no other institution or mechanism in this country can create, when we were handing over the trophy for rugby league supremacy for the gulf and mid-west to Travis Fraser, who is the very outstanding captain of the football team up there, I said, ‘How’s work going; are you doing an apprenticeship?’ And he said, ‘Yes, but I had to give it up.’ I asked why, saying, ‘I’m very intrigued about why you would give it up.’ They have big mines near Doomadgee, his hometown, so there is very good work, very highly paid work, available to them, particularly if they have trade qualifications. So I was very surprised that he gave up his apprenticeship. But he has a wife and two or three kids to support—his little son was playing touch football with us. Travis is still a very young man. He is at the age when people should be doing apprenticeships. But people get married and have children—or they have children and do not get married, whatever the case may be—and they have responsibilities. What I am saying is really very spot on, because under an apprenticeship you get, I don’t know, $30,000 or $35,000 and you cannot possibly, particularly in country Australia, have any hope of keeping a wife and kids alive on $35,000 a year. That might be possible if you are living at home in a city, but it most certainly is not possible when you have to set up your own home and look after a wife and kids.

A lot of these people, if they do not have an apprenticeship, will simply go on the dole, unemployment benefit. The government has got to consider the case of Travis Fraser, because on that unassailable logic turns the country’s prosperity at the moment. There is no doubt that in the mining industry in Australia—and the comments of the member for Pearce are very accurate—we are desperate for skilled tradesmen and, unless we want to go down the Fijian or South African road and see our country lost to different races of people that will come into Australia, we must confront the issue of apprenticeships.

The thing that intrigues me greatly is that I come into this place and hear everyone stand up and talk about apprenticeships. I think it was the third highest ranking issue in the last federal election; certainly, in the electorate of Kennedy I would have put it at No. 2, second to health, which was a state government matter, so as a federal government matter it was probably the major issue. All I can say is that, in the major two cities, the major two population centres, in the Kennedy electorate, Mount Isa and Innisfail, there were TAFEs built at a cost of some $40 million to $50 million, and both of them are empty. A secondary school has moved into the one in Mount Isa, so it is half a secondary school and half a TAFE. With the other one, they are desperately trying to find people to lease it out to or, arguably, I am told, to sell it to.

When I was elected member for Kennedy, I went along to their annual nights at which they give out their diplomas and, at both those centres, I would have thought there were 700 or 800 people there. If they had a diploma night now, we would be lucky to get 20 there. So, whilst everyone is talking about it, all I can say is that on the ground the TAFEs are simply vanishing. There is simply nobody there. But 200,000 people live in the Kennedy electorate—in fact, a little over 200,000 people—and there is effectively no TAFE operating inside Kennedy. These people are not wealthy enough to be able to go and live in cities like Townsville, Cairns or Brisbane to complete a TAFE course, and that is the reason the TAFEs were put in the area originally.

I do not fully understand who is to blame for this and I have a limited amount of time to devote to it. But, as I understand it, tertiary education comes under the federal government’s responsibilities, so we in this place must take full responsibility for this. We are sitting here congratulating ourselves on handing out $1,000 over two years. I do not think that is going to influence anyone’s judgement—neither an employer’s nor an employee’s. I laud the government for doing it and say, ‘Yes, that’s very nice.’ But I doubt whether there is a single person in Australia whose judgement it is going to influence. It most certainly is not going to influence the judgement of Travis Fraser, who was in his third or fourth year of his apprenticeship. He just could not sustain keeping his family alive any longer.

As on so many other issues, we come in and talk about it but no-one has sat down and thought this thing out. All I can say is that, on the ground, there are 200,000 people living in North Queensland in the biggest mineral province on earth, I think we are producing about $12,000 million a year from the gulf and north-west Queensland and we cannot get any apprentices. We cannot get any apprentices because of the argument that Travis Fraser so eloquently put to me that evening at the rugby league handover.

Lawrence Hartnett was the founder of the motor vehicle industry in Australia—one of the truly great Australians. He came from a very wealthy, upper-class family and he did his apprenticeship at Vickers in England, at that time the greatest engineering company on earth. They built giant ships, power station generators, aeroplane engines, motor vehicle engines; they were the greatest builders of that age on the planet, going back to the early part of the last century. When Lawrence Hartnett applied for the job, he got an interview with the international head of Vickers. He wanted to do their management traineeship because he wanted to be an engineer and become a very powerful and influential man inside Vickers. That was his ambition as a young man but the boss of Vickers, internationally a person employing some 100,000 people, said, ‘In this outfit, if you want to take my job then you start as a fitter and turner as I did.’ So Lawrence Hartnett started as a diesel fitter. He said, ‘I went from starched collars and cuffs to greasy overalls and the rougher demeanour of the working class.’ He said, ‘I grew to like them very much.’ When he came to Australia, he was home because it was a place made up of very much those sorts of people.

But the point of the story is that if you have enlightened corporate government then what you want at the top is not someone who is used to playing with figures on a computer screen or on the stock market and playing at becoming a boardroom tiger but someone who actually knows how to put a screw into a hole. That is a very important thing for people to know: how a piece of machinery works. That was the great strength of the British nation and the great strength of the Vickers’ operation in those years. They created people like Lawrence Hartnett, who came to Australia and, along with Ben Chifley, created our great motor vehicle industry in Australia, which may be collapsing now but served this country well for half a century. The point I am trying to make is that, when England was great, their people were trained in a trade not at a university. Even if they were, like Lawrence Hartnett, from a very rich, upper-class background, just like the head of Vickers, they were expected to get their hands dirty and grease under their fingernails on the workshop floor.

In conclusion, I pay very great tribute to Charlie Sartain, the head of Xstrata Copper worldwide, also the head of Mount Isa Mines, and his appointment of Steve de Kruijff as the boss. It is the first time in my life that a major mine in Australia has been run by a person with trade qualifications and in this case probably even less than trade qualifications initially. Whilst Mr de Kruijff might have trained later on and undertaken some courses, he came straight up from an unskilled labourer’s position with the company. It is a great tribute to that company. One of the reasons that it is going so well at the present moment is the sort of enlightened leadership that it provides in areas such as this.

There is only one School of Mines in Australia; I think it is still operating in Western Australia. The whole country’s economy depends upon mining and we have one School of Mines. We have only one metallurgy school in Australia, which is also in Western Australia. Is the government serious about this $1,000? Seriously, is anyone going to take on an apprentice or take on an apprenticeship for an extra $1,000? The sorry nature of this is that Travis Fraser is not, and Travis is the person who we have to be able to put into an apprenticeship if this country is going to survive and prosper in its present situation.

One of the great industries of Australia, the motor vehicle industry, up until very recently anyway, was created by a person who simply had a trade. In fact, the great Henry Ford never went near a university; he was simply a tradesman—that was all he had. The great Alexander Graham Bell was also a tradesman and had never been near a university. If you want these great industries to prosper and thrive, it has to be through people who have got dirt under their fingernails and know how things work at the lowest level.

For a person who spent a fair few years at university and has their name in gold lettering above the door at the law faculty library at the University of Queensland, I of all people know only too well it is so easy to get the technical knowledge that you need but so hard to get the practical knowledge, which we are not providing in Australia. All I can say, on behalf of the 200,000 Australians whom I represent, is that we have effectively no TAFEs operating for those 200,000 people. We cannot afford for our kids to go away to the big city, they cannot afford to go away and most certainly their employer cannot afford to see them go away for block training. We are simply locked out of this training. There are thousands of Travis Frasers out there, and $1,000 is not going to solve that problem.

We urge the government to sit down and look at some serious approaches that will enable us to go down this pathway. I venture to suggest to the government that if we are paying somebody with a wife and three kids some $35,000 a year—or whatever it is—in unemployment benefits then surely we can afford to put some of that towards paying these people to do a trade. That would benefit the mining industry tremendously. It would head off where we are heading pell-mell at the moment—down the Fijian or South African road which so terrified Australians back in 1901, when Charles McDonald stood in this place. Lastly, it would give our young people a go. Maybe there are a lot of Lawrence Hartnetts out there. Maybe a Travis Fraser who is a Lawrence Hartnett in the making, but under the present system a Lawrence Hartnett can never happen in Australia if he comes from country Australia. (Time expired)

7:31 pm

Photo of Andrew RobbAndrew Robb (Goldstein, Liberal Party, Minister for Vocational and Further Education) Share this | | Hansard source

In summing up, I would like to thank all those who have spoken on the Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007, which deals with apprenticeship wage top-ups for Australian apprentices. At the same time I would like to acknowledge the support indicated by both sides of the House for the provisions in this legislation.

In saying that, I am sorry that many of those opposite took the opportunity to rewrite history and also to misrepresent the very significant steps that have been taken and are being taken by the Howard government in regard to vocational and technical training, especially the leadership that the Howard government has shown in raising the status of vocational and technical training and the occupations that relate to that training. You would think that the state governments would be undertaking that role, given their responsibilities, but in fact after listening to all those opposite you could be forgiven for thinking that the state governments have absolutely no responsibility for vocational and technical training, much less primary responsibility, a responsibility they have sadly neglected.

It is really only through this government’s leadership in the last couple of years with the Australian technical colleges, where on the initiative of the Howard government we have introduced 20 new colleges which are open and a further eight which are in the pipeline, that the state governments have promised in excess of 40 technical schools. It is a great thing that they have followed the lead of the Howard government. We now have just on 70 new technical colleges promised throughout the country. It is a great initiative. It will mean that, by 2009, close to 35,000 young Australians will be in dedicated technical colleges for their years 11 and 12, finishing their year 12 certificate and also being one-third of the way through an apprenticeship. This is a great initiative. It is a real revolution in technical education. The leadership shown by the Howard government and the importance of the states now following suit in so many regards must be acknowledged.

The Social Security Amendment (Apprenticeship Wage Top-Up for Australian Apprentices) Bill 2007 deals with the apprenticeship wage top-up for Australian apprentices announced by the Treasurer on budget night. This measure will provide $2,000 tax free to apprentices to help in their first two years of an apprenticeship when their wages are not as high as they might otherwise be. Apprentices are important to our ongoing economic growth, and we need to make sure that those who commence an apprenticeship are given assistance to see it through.

The other important aspect of this initiative is to provide $1,000 tax free at a time when apprentices are earning somewhere between $15,000 and $19,000 and when their mates are often going down the road and taking unskilled jobs in warehouses or somewhere else for another $5,000 or $10,000. There is a great temptation not to look to the future and to go and seek money in those early years just after leaving school. This $1,000 top-up for those first two years is not only an important contribution that will provide some valuable dollars in the pocket to help apprentices through that period but also a signal from the government on behalf of the broader community that what these apprentices are doing is something that we as a community value. There is a strong commitment from the government, on behalf of the broader community, to these young people to make the most of the talents that they have been born with.

The bill exempts apprenticeship wage top-up payments for Australian apprentices from income tax through an amendment to the Income Tax Assessment Act 1997. Very importantly, to ensure that the wage top-up is not taxed, they will get $1,000 in their pockets to spend as they see fit. Importantly, the bill also amends the Social Security Act 1991 and the Veterans’ Entitlements Act 1986 to exempt the apprenticeship wage top-up payments from social security and veterans’ entitlement income testing. This ensures that Australian apprentices receive the full benefit of all of these measures in the initial years of their training.

The wage top-up is one of a number of measures that the Howard government is providing to assist apprentices. Apprentices may also be eligible for apprentice fee vouchers of $500 a year in the first two years in those trades where we are facing skills shortages. They may be eligible for $1,000 Commonwealth trade learning scholarships and $800 for tools for the trade. There is also support for mid-career apprentices. We are providing a total of $15,000 in wage subsidy for those over the age of 30 who are undertaking a mid-career apprenticeship. There are now many thousands in that category. This initiative begins on 1 July this year.

They may also be eligible for living away from home allowance, which begins at $17 per week in the first year; Austudy; Abstudy; and youth allowance—a whole raft of measures which are directed specifically to the apprentices themselves to make it easier and possible for them to get through those apprenticeship years, which are financially difficult but, importantly, to show that there is serious acknowledgment and a level of support in the community for them to make that effort and give full expression to the talents they have.

Not only are we providing initiatives for apprentices; we have also got initiatives and incentives for employers of apprentices who may be eligible for commencement and completion payments of up to $4,000 in total. There are $1,000 innovation payments, additional payments for employers taking on Australian school based apprentices, rural and regional incentives, declared drought area incentives and mature age worker incentives. Ensuring that Australian apprentices have the support they need to undertake their training will encourage people to participate in Australian apprenticeships. Apprenticeship numbers have already increased 158 per cent since 1996 with currently 400,000 apprentices in training compared with 154,000 in 1996. These initiatives will encourage more young people to see an apprenticeship as a valued career path.

The Howard government has increased real spending on vocational and technical education by 99 per cent in real terms since 1996 from $1 billion to just short of $3 billion; an enormous contribution, an important contribution—a contribution which you would not be aware of if you listened to those opposite during this debate. It is a very significant attempt to assist the states, which have prime responsibility for social technical training, to meet the skills gaps that we are confronting after many years of uninterrupted economic growth and an ageing population, and the pressures which come with both of those developments. We are seeing a record $11 billion commitment over four years from the Howard government on initiatives such as support for Australian apprentices but also on Skills for the Future for those in mid-career for training of people throughout their life. There is also support for 28 Australian technical colleges and $5 billion to the states to assist them through the Skilling Australia’s Workforce agreement to provide important funding for TAFEs and other registered training organisations.

This is a huge commitment from a government that has been working very hard over 11 years to provide leadership on vocational and technical education. These measures will assist Australian apprentices, who are an important part of our workforce, and I commend the bill to the House.

Photo of Kim WilkieKim Wilkie (Swan, Australian Labor Party) Share this | | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Perth has moved as an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Question agreed to.

Original question agreed to.

Bill read a second time.