Senate debates

Monday, 14 July 2014


Trade Support Loans Bill 2014, Trade Support Loans (Consequential Amendments) Bill 2014; Second Reading

11:55 am

Photo of Lee RhiannonLee Rhiannon (NSW, Australian Greens) Share this | Hansard source

The government is on the war path against a fair, accessible, higher education system and Tools For Your Trade is the latest program in the gun sites of this out-of-touch government. Tools For Your Trade started in 2010, providing assistance to most apprentices in the form of cash payments of $5,500 to help with training, purchasing tools and other costs. This is the reality, or rather was the reality as Tools For Your Trade finished on 1 July 2014. If you happen to listen to the Minister for Industry, Ian Macfarlane, you would hear his sensational talk about young men heading off to the tattoo parlour, getting mag wheels for their cars, having parties and generally misbehaving and misusing the money. He said he has proof of this. He still has not provided that proof. It is time he did so because he is insulting a large number of people who are taking on apprentices to become the skilled workforce that Australia very much needs. Talking about the loss of this scheme, someone with considerable insight said to me, 'The Tools For Your Trade has nothing on all the allowances MPs get,' but that is a story for another day.

I would like to emphasise that the minister has said he has evidence to back up his claims. He should really come forward with that evidence. I challenge him to produce it. About 50,000 people accessed the Tools For Your Trade program before it was wound up. It was available for any apprentices undertaking certain trades at certificate III or certificate IV level. The National Skills Needs List identifies trades for which there is a national skills shortage. That is one of the reasons the Greens have great concern about how this new way of managing apprentices will play out. Most people do not want to start life with a debt, the prospect of which can be a disincentive for people considering whether they should take on an apprenticeship.

As at 20 August 2013 there were 65 professions on that list, ranging from aircraft maintenance engineer to pastry cook, to telecommunications technician. Upon completion of their training, it is likely that the 50,000 apprentices will go on to provide services which are needed to build Australia, to contribute to us being a skilled, creative and innovative nation with a dynamic workforce. We all know how crucial this is to the very future of our country, to the fabric of our society and to our future economic growth. Not only will it keep Australia highly competitive in the international market but also it will allow our economy to innovate, to contribute and to achieve great things. Without a skilled workforce, we will not have efficient public transport, transition to cleaner energy and state-of-the-art telecommunications, all of which are necessary in our society at present, nor will we skilled mechanics, plumbers or builders—the list goes on and on. This is what the government is putting at risk. As a society we should be doing everything possible to ensure that people who want to learn a trade are supported and encouraged in every way possible and given the best chance to do so, and that is what was being taken away when Tools For Your Trade was wound up.

I said in my opening remarks that the coalition is on the warpath with public, tertiary and higher education. The government is now going after apprentices, and not just by scrapping the Tools For Your Trade program; they have also cut the Australian Apprenticeships Access Program and the Australian Apprenticeships Mentoring Program.

Tools For Your Trade is being replaced with a loan—that is what this bill does. The Trade Support Loans program will provide loans of up to $20,000 and is modelled on the HECS system for university students. The government knows this will be unpopular and has come up with a selling point, as we see so often when the government comes forward with some unpopular measure. In this case, the selling point is that, if an apprentice finishes their training, they will have 20 per cent of their loan knocked off. Why they are attaching this incentive is that—and, again, I give emphasis to this fact—the government knows that this scheme in itself is a huge disincentive to young people taking up apprenticeships. That is a huge worry because, at the moment—and I hear this time and time again—young people are often just thinking about when they can get a good pay cheque and where they can get a job that will give that to them, and if they can get such a job—and it is often the unskilled jobs that initially will provide much more money—that is what they will go for, and that is why the Tools For Your Trade was so important: that support was given from day one to people making the important decision to take on an apprenticeship.

If an employer decides to let an apprentice go after a few years, that apprentice will still be saddled with this debt and will not have a qualification. That is another problem with this program and how it could play out, and another part of the disincentive. Young people will be talking to each other. They will start to realise what could happen to them. They know that often employers' companies go belly up and people lose their apprenticeships and that they could still be left with this debt. It is so deeply wrong.

Apprentices will need to begin repaying their loan when their income exceeds a minimum annual threshold. In 2014-15, this was $53,345. One of the obvious problems here is that the government is taking away the $5,500 from apprentices and making them taking out a loan if they need assistance while studying. Most people will need assistance; we know that. About 50,000 apprentices who will still be enrolled will be disadvantaged right now because money that they had understood that they would receive—that was quite clearly set out, with that $5,500—has now been wound up. We know that some of them would have been paid $800 at three months, $1,000 at 12 months, $1,000 at 24 months, and $1,200 at 36 months. And, upon successful completion, they would have been paid the final $1,500. But, as of 1 July, all payments to help support their studies have stopped. Now apprentices can either take out a loan, if they need assistance to finish their studies, and be saddled with a debt they had not planned for, or they could stop studying and be left with no skill or no trade qualification. What a position to be put in! Firstly, the money does not come through, when you had a clear guarantee—and, coming from the government, people would have thought that this was an absolute certainty. So, first, all the money does not come through, and now they find themselves in a very difficult position—forced into taking out a loan or possibly, through financial circumstances and the resistance a lot of people have to going into debt, dropping out. That is a terrible position to put young people in who are just starting out on their future career.

To add to this insult, the Abbott government is trying to portray itself as the champion of apprentices by boasting that this legislation provides better support for apprentices and trainees. That is something we see time and time again in the higher education debate, where the reality of what faces people coming into higher education is turned on its head and the government tries to be very deceptive with regard to the debt burden and the increasing costs. The government says that the trade loans will be indexed each year by the rate of the consumer price index. However, in the May Senate estimates, they did not rule out charging real interest rates on the debt accrued through the Trade Support Loans program. Given that the government has arbitrarily decided to increase interest rates on the debts of students who have already graduated from university and are currently in the workforce, it is not hard to work out that this could well be where the government is heading with regard to apprenticeships—another factor that will put apprentices under more stress and pressure.

The Department of Industry has also confirmed that they are investigating options to privatise the administration of the Trade Support Loans program—to put it out to the financial services sector. This plan also suggest a move down the track to a real interest rate. I cannot see why a private operator would take on the administration of the loans if the interest rate was not changed as, without this change, they could not make a profit. So this is where the government should come clean and put on the table—bring it into the debate today—what their real intention is with this interest rate.

The ACTU has provided some useful material on this. They have opposed the loans scheme and, in their submission to the inquiry on the bill, they stated:

… the answer does not lie with an apprentice loans scheme that only serves to shift the costs of an apprenticeship onto apprentices themselves and leaves them with a future debt to pay off when they finish their apprenticeship and start their career. Moreover, we do not support an apprentice loans scheme when it has been introduced at the expense of other initiatives and programs abolished in the recent budget that provided practical support to apprentices in dealing with the very issues that are proven to contribute to non-completion.

The Greens will bring forward a number of amendments to try and ensure that this program is not as damaging as it could well play out to be. Our amendments are designed to transform the loans scheme into a fairer system of direct government assistance. They would lower the cap on the total loan available to $10,000 and make up the difference through matching direct government assistance, and they would allow apprentices to earn more before paying off their debt and to pay it back at a lower rate. I will go into more detail about our amendments when we go into committee.

One important aspect I wish to give emphasis to is that we insert a clause that would waive the debt for any apprentice that is dismissed from their apprenticeship or traineeship as a result of their employer. I would ask senators to give careful consideration to this. If you are serious—and I believe some people would believe the loans scheme can work and bring benefits to apprentices; I disagree with that but I imagine that some people honestly believe that—surely consideration must be given to the issue of what happens if an apprentice who has a loan is then dismissed by their employer. They should not then be left with this huge debt burden that is so wrong. It is wrong morally. It is wrong if we are trying to build up a skilled workforce, and I worry about the message it sends to young people who are considering what trade they will take on.

I acknowledge these in many ways are last-ditch amendments to help mitigate against potentially severe negative consequences of these schemes. I understand that they will be rejected by the coalition and Labor, and I find it disappointing that Labor will not support any of our amendments. We need to put on the record that, while we hear so many strong statements from Labor senators about their commitment to a skilled workforce and to the TAFE system, with Labor so readily working with the government to convert this into a loan scheme, it is a reminder about what happened to TAFE when Labor were in government. What we are seeing play out with state governments ripping the heart of TAFE has come about, because of the openings that Labor created with the COAG agreement and not tightening up the contracts when the money for TAFE and vocational education and training went to the states. Labor's policy opened up the whole possibility of the need for TAFE to go into competitive tendering, and we can see the damage that is occurring around the country to public vocational education and training. I have a real concern about the way this is playing out.

When you look at the meaning of the measures that are set out in this piece of legislation, the government does not have a clear vision for the Australian workforce for our future. It is limited by their own obsession with moving costs onto individuals. By going along with the government's legislation and refusing to support any of the Greens amendments, Labor has got caught up in that lack of vision for our future.

If we want to build a sustainable, innovative and clean economy, we need to invest in our apprentices. They are the absolute foundation of how this country works from our individual needs, our homes and own day-to-day life to how we build this nation from the infrastructure and the services to much of what makes Australia a wonderful country. I worry very deeply about how, without that skilled workforce and planning from this parliament, we ensure that that skilled workforce is maintained and expanded to meet the challenges of the 21st century. We are damaging the very fabric of this country.


No comments