Monday, 14 July 2014
Trade Support Loans Bill 2014, Trade Support Loans (Consequential Amendments) Bill 2014; Second Reading
): The Trade Support Loans Bill 2014 purports to implement a coalition election commitment. Indeed, it might be said that it was the only policy on skills and training in the Real Solutions manifesto that the then opposition touted during its campaign. This is a policy that promised that a coalition government:
… will provide better support for Australia's apprentices.
Of course, it sounded good, but the detail was particularly hazy. What was not mentioned in that manifesto was that the coalition as a government intended to scrap the $1 billion Tools For Your Trade program—which is a Labor program—and this has now been done as a result of the government's budget measures.
This is a kick in the guts for apprentices. What the program allowed for was $5,500 grants to be made for apprentices for the cost of tools, books and equipment. What is replacing it is the government's initiative of debt of $20,000. That is what the Trade Support Loans program established by this bill provides for—that is, a concessional, income contingent loan with a lifetime limit of $20,000, repayable when the individual's income reaches the HECS-HELP threshold. This bill provides for a 20 per cent discount on the loan on successful completion of the apprenticeship. If the loans, even with the discount, are promised then the claim that it was a 'better support for Australian apprentices' certainly looks, in my view, very limited in terms of any beneficiaries that would actually take advantage of this program.
Opposition senators and members have been inundated with messages from apprentices who are anxious about what these new debts mean and what they will involve for people over their working lives. In particular, those who started their apprenticeship before the election are angry that the goal posts have been moved and that they will go into debt to buy tools and other equipment they need for their training, which is not what they understood would be the case when they actually started their apprenticeship. This strikes me as another example of where the coalition was content throughout the election to give people the impression that something would occur that was in complete and sharp contrast with what actually has occurred in government. So I would ask for the simple meaning in the English language of 'better support'. Is it reasonable to interpret the term 'better support' to mean that apprentice electricians would no longer be able to buy expensive voltage-testing equipment and safety gear without taking out a loan? Would it be reasonable to assume that 'better support' would mean that apprentice chefs would no longer be able to buy the expensive knives that they need without taking out a loan? Would it be reasonable to assume that hairdressers would no longer be able to buy their scissors, hairdryers, straighteners and curlers without taking out a loan? Would it be reasonable to assume that apprentice plumbers and mechanics would no longer be able to buy their expensive tool kits without having to take out a loan?
While Labor will not oppose the bill, we will, however, make it very clear that we only do so because there is no other financial support that is being provided to support apprentices. We will be proposing two second reading amendments—one that I will be moving and one that Senator Lines will be moving—which would address some of our concerns. I now move:
At the end of the motion, add:
but the Senate notes that the Government has failed to:
(a) advise apprentices before the election that they would be abolishing the Tools for Your Trade program, thus leaving Trade Support Loans as the only form of assistance for the purchase of tools;
(b) adequately ensure that clear and easily understood explanations of the loan, the indexing and the repayment requirements are provided to all apprentices in a consistent format, in particular for school-based apprentices;
(c) put in place adequate privacy protections for the large volumes of information that will be acquired through the Trade Support Loans Program; and
(i) fair and reasonable transition arrangements for current apprentices; and
(ii) apprentices the option of lump sum payments in order to purchase expensive items.
This second reading amendment seeks to have the Senate acknowledge that this government failed to advise apprentices before the election that it would be abolishing the Tools For Your Trade program, thus leaving Trade Support Loans as the only forms of assistance that are available for the purchase of tools; secondly, adequately ensure that clear and easily understood explanations of the loan, the indexing and the repayment requirements are provided to all apprentices in a consistent format, in particular for school-based apprentices; thirdly, failed to put in place adequate privacy protections for the large volumes of information that will be acquired through the Trade Support Loan program; and, fourthly, failed to offer fair and reasonable transition arrangements for current apprentices and the option of lump-sum repayments in order to purchase expensive items.
We have concerns about the methods for achieving the approval for parents and guardians of apprentices under the age of 16. We may well see situations where 16-year-olds are required to take out loan arrangements, especially in the case of school based apprentices at the point of signing up for loans. Senator Lines will be taking up these concerns with her contribution. Paragraph (a) of the amendment acknowledges the lack of openness and honesty in the legislation and that the government did not tell—just simply did not tell—apprentices that it would be axing the Tools For Your Trade program. It duped them by promising better support while intending to lump them with a massive debt. This is a low trick. It is in fact indicated by a number of apprentices who have understood what is going on and have advised the opposition, accordingly.
Paragraph (b) of the amendment emphasises the need for apprentices to be given clear and easily accessible information about the new loans. You would expect normal consumer protection arrangements would provide better arrangements than these—talk laden with terms such as 'concessional interest rates' and 'indexation to the CPI' is neither clear nor easily accessible for most people. That is what we want to know. In simple and direct terms, I think we are entitled to know—and I expect to pursue this through the committee stages—what are the repayments? How are they going to be calculated? What is the effective interest rate and how will it be calculated? The government has failed to explain these measures, and it is information that apprentices have a right to know before they take out a loan. Instead, what we have heard from the Minister for Industry is that he has chosen to admonish apprentices. Without offering any proof whatsoever he has accused apprentices of spending their Tools For Your Trade programs on tattoos and mag wheels.
In estimates we asked for the evidence that supported these extraordinary accusations, but we could get nothing; neither could the department provide any evidence. We learned from the media reports—for instance, from The Courier Mail, 7 July—that the minister has 'collated a wide-ranging list from employers and training providers' that he believes justifies the replacement of the grants with loans. The accusations have varied in the alleged object of spending, although not in substance. Instead of mag wheels and tattoos, we have been told that apprentices allegedly spend their grants on surfboards, parties and hotel rooms. The newspaper reports have given no indication of the alleged number of people who are rorting the system. Even if the allegations are true, there has been nothing to substantiate the claims that the rorters are numerous, let alone typical apprentices. But the government would like us to believe that they are typical. To win support for the trade loans bill, it has now sprung these claims, just as it sprung these odious measures through this particular bill.
The truth of the allegations is that this is about sneering, appealing to a class-based prejudice and trying to generate support for stereotypical prejudice against blue-collar workers. It is shameful language for the minister to use and he should retract it, and the government should apologise. Australian apprentices, the skilled workers of the future, deserve to be treated with a bit more respect. Yet rather than do so, the minister preferred to take unsubstantiated cheap shots at them. He continues to avoid giving clear and concise information about the liabilities that apprentices will face under these new loan arrangements.
Paragraph (c) of Labor's second reading amendment deals with the concerns about privacy, which have been raised by the ACTU in its submission to the Senate Economics Committee, which looked at this particular legislation:
Under clause 75 of the Bill, a person only has to take an oath or affirmation to protect information they receive from apprentices. There do not appear to be any repercussions for a breach of these provisions of failing to adhere to an oath or affirmation. By contrast, under the Higher Education Support Act 2003 the person/officer dealing with personal information has more onerous obligations to meet and the penalty is two years jail.
The bill's explanatory memorandum notes:
A large amount of personal information will likely be acquired through the operation of the Trade Support Loans Programme …
Apprentices will be required to provide tax file numbers and other sensitive information to apprenticeship centres. Yet there are no repercussions for breaches of privacy under this legislation. The issue has been raised on numerous occasions but the government has failed to address those concerns or to put any necessary protections in place.
Paragraph (d) of the amendment concerns the plight of apprentices who based their financial plans on the Tools For Your Trade program and the decision that the loans should be paid in monthly instalments. The apprentices who made their plans expecting that the Tools For Your Trade program would continue did so in good faith. Of course, we now know that it was not justified because this is a government that has no good faith. This is a government that said in opposition during the election it would do one thing and in government said completely the opposite. In fairness, the government should have put transitional arrangements in place for the affected apprentices.
Senator Seselja interjecting—
You doubt that? Do you doubt the fact that this is a government that has throughout its campaign told lies.
This is a government that misled the Australian people throughout its approach to winning office. And when it got into office, it has chosen to repudiate those commitments in a whole range of areas throughout the education system. If you doubt that, then you were obviously not participating in the same election—
I will undoubtedly do that, but I think I was provoked by the ignorance of those opposite. Apprentices should have the option either of receiving the loans in monthly instalments or making financial arrangements that allow them to fulfil their commitments through lump sum payments. Lump sum payments would enable apprentices to buy expensive items such as tools, vehicles, uniforms and fees without having to borrow money commercially, and thereby repaying a loan with a loan. Paying apprentices monthly increases the risk that the loans may be treated as an income supplement rather than assistance in the purchase of expensive but necessary items.
Abolition of the Tools For Your Trade program is not the only decision by which the government has failed to honour its pledge to make life better for apprentices. The government has also scrapped the Australian Apprenticeships Access program, the Australian Apprenticeships Mentoring program and the Apprenticeships to Business Owner program. The mentoring program was aimed at apprentices or aspiring apprentices who face barriers to participation. It was particularly aimed at first-year apprentices, who are the most likely to withdraw from apprenticeships, but apparently the government is not concerned about providing 'better support' for them. It is not only concerned that Australia faces an increased risk of losing their talent, their youthful drive and their energy; it is not concerned that the nation's skilled workforce will not expand as quickly as it could have had we provided the support for apprenticeships which had been there under the previous government.
The Apprentice to Business Owner Program gave people who had recently completed their apprenticeships an opportunity to acquire the skills needed to run a small business. It provided training that led towards a nationally recognised qualification in small business management and included business mentoring support for up to 12 months, but not anymore. Yet again, the coalition has turned its back on small business. Despite all its rhetoric, despite its ideological pretentions, you see example after example of how this government has turned its back on small businesses. It posed as the great friend of small business in the last election, but its record in government proves exactly the opposite.
The Australian Apprenticeships Access Program offered job seekers training and support in applying for apprenticeships. It helped job seekers to build on their existing skills and to decide which apprenticeship would be best for them. Scrapping the program is at least consistent—I must say this for the government—with the attention the government is paying to job seekers. The budget changes to Newstart will make it much harder, not easier, for young people to find work. Scrapping the Australian Apprenticeships Access Program will mean that fewer, not more, people will be able to increase their job skills.
The government talks of providing better support for apprentices, but it has a warped, truncated notion of what that means. It is tells young people to earn or learn and then axes the support measures that provide incentives to take that advice. That is a self-defeating strategy, which will have especially severe repercussions in rural and regional Australia.
In conclusion, as I have indicated, the opposition will support the bill because the trade support loans will now be the only form of support available to apprentices. It is the only measure that is available. The bill would be more palatable, however, if the coalition had not lied to apprentices by vowing during the campaign that it would make life better for them. Therefore we call on the government to acknowledge the concerns raised by apprentices, their parents, employers and industry, and to resolve satisfactorily the difficulties and inconsistencies in this bill, to go back to providing real support for apprenticeships in this country.
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.
It is quite a curious debate we having today, because I could have sworn from Kim Carr's speech that the Labor Party were opposing the legislation. He was relentlessly negative in his attacks on it. I understand the Labor Party will not be opposing the legislation, and that is a good thing. Perhaps it was just relentless negativity—opposition for opposition's sake—all the while acknowledging in his heart of hearts that it is actually a good thing and that he has to vote for it. I am pleased that, despite his strong, harsh words and criticism of what the government has proposed, Kim Carr and the Labor Party will be voting for it. We thank you for that.
We had an interesting contribution from Senator Rhiannon. It is a curious debate in which the government is proposing a scheme where we would have many, many more places in higher education—something like 80,000 more places—and Senator Rhiannon starts by saying that the government is on the warpath regarding access to higher education. It is difficult to see in what kind of topsy-turvy world that is in fact the case. So we had another bizarre contribution from the Greens that we are on the warpath. Not only are we not on the warpath when it comes to higher education except to reform it and make it more accessible as is clear but these trade support loans are, again, about access to apprenticeships, making it easier and providing them to many, many more Australians. That has got to be a good thing.
Australian apprenticeships are incredibly important and play a key role in providing people with valuable and robust skills that will serve them well for the rest of their lives. We all know learning a trade skill is invaluable to the individual, the community and the economy, but there is no shirking away from the fact that learning a skill can also be an expensive endeavour.
Australia' future productivity and competitiveness depend on maintaining our highly skilled and highly trained workforce. A strong workforce is paramount and integral to ensuring that we are able to respond to the changing economic and labour market needs of our nation. It is in recognition of the importance of Australian apprentices and those undertaking a trade and in order to ensure that we further develop our highly skilled and highly trained workforce that we are seeking to implement these Trade Support Loans for up to $20,000 over a four-year apprenticeship.
The Trade Support Loans program was an election commitment from the coalition and will work to complement the Industry Skills Fund that aims to streamline training and deliver close to 200,000 targeted training places along with training support services.
Our Trade Support Loans will provide additional financial assistance to support those who are learning a trade to meet everyday costs. The loans have been designed to provide financial support for apprentices to cover their costs of living and learning whilst in training. These loans will be provided at concessional rates indexed annually. Like the HELP loans provided to university students, these loans will only be repaid via the Australian taxation system once the individual's income reaches a sustainable level, the HELP payment threshold.
In order to provide support where it is needed the most, the loan payments have been heavily weighted to the first two years of the apprenticeship where wages are at their lowest and need for financial support is at its highest. We believe that this is the best and fairest method for providing support to those learning these skills.
According to Australia-wide statistical data provided by the National Centre for Vocational Education Research, in the December quarter 2013 there were 392,200 apprentices and trainees in training. Of a labour force of more than 11.5 million people, this represents a significant number of people who are building the skills to secure a career and transition into long-term employment. This is a successful pathway. The Australian Industry Group report from June 2013 notes that 92.9 per cent of graduates who undertook their training as part of an apprenticeship or traineeship in a trade occupation course were employed after training.
What we do need to look at, however, are the statistics that we see coming from this NCVER data. In the 12 months to 31 December 2013 compared with the previous year, commencements decreased by 25.9 per cent to 244,700, completions decreased by 1.4 per cent to 189,800 and cancellations and withdrawals decreased by 16.4 per cent to 119,900. State and territory data for the 12 months to 31 December 2013 compared with the previous year also showed that here in the ACT commencements fell by 23.8 per cent. According to NCVER data, as at 31 December 2013, the ACT has 9,023 apprentices and trainees in training. For the 12 months ending 31 December 2013, the ACT had 3,158 completions, 4,458 commencements and 2,249 cancellations and withdrawals. Whilst these withdrawals are decreasing, the decreasing commencement and completion data is still indicative of the need to provide additional support to convince those currently training to stick with it and finish their apprenticeships; and to say to those looking to undertake this sort of training that we value their commitment and want to support them through it.
It is unfortunate that many apprentices do not complete their training. I am certain that in many instances this is related to the costs and financial burden associated with doing so. This is something that the Trade Support Loans program aims to address. There are considerable implications for industry if this trend is to continue. Master Builders Australia CEO Wilhelm Harnisch has indicated that Master Builders is concerned that the latest drop in apprentice commencements continues a worrying trend which will impact on the industry over the next five to 10 years. He also indicated that a review of measures to restore business confidence and initiatives to enhance the attractiveness of the apprenticeship system to both apprentices and employers is urgently required.
We need to look at what we can do to address this. I believe the most effective way to help provide this support is by making available the Trade Support Loans program, similar to the HECS-HELP system offered to students at university. This legislation places a great deal of importance on helping people finish their training. In fact, to provide further encouragement to apprentices to complete their training, their repayment amount will be reduced by 20 per cent on successful completion of their training. We want them to succeed. Senator Rhiannon had a bizarre critique of that particular part of the legislation, saying that it was somehow an acknowledgement that the scheme is not fair or is not a good scheme. It is nothing of sort. It is an incentive to finish. Those who finish will get a 20 reduction on their loan. Surely that is a good thing; surely that is something that should be supported. The program is more sustainable than the Tools For Your Trade program, which provided tax-exempt grants up to $5,500. Of course, due to the debt left by Labor we could not afford to keep this program. We had to ensure that our support for apprentices was sustainable over the long term.
It was timely to review apprentice programs following the Fair Work Commission's decision to increase apprentice wages, with some employers providing tools for their apprentices and with most awards including a tool allowance. These loans will help to ease the financial burden associated with undertaking an apprenticeship and ultimately assist in increasing completion rates. They are a helping hand, not a handout. In the interests of flexibility and in order to meet the needs of the individuals undertaking an apprenticeship or trade, these loans will be able to be applied for at any stage during the four-year apprenticeship. The flexibility is such that an apprentice can opt in for six months to buy their tools and then opt out for any further payments. If circumstances change, they are able to opt in at a later year for the payment schedule for that year.
Trade Support Loans say to apprentices that we value them, the work they are undertaking and the skills they are building. Trade Support Loans provide them with additional support when apprentices need it the most. The program aims to ease financial burdens that apprentices may face while they are learning. Ultimately, this program allows them to invest in their future and allows us as a nation to do the same. We value the hard work that they do and the skills that they learn. This should be recognised through additional support for them. We are committed to building a high quality and nationally consistent Australian apprenticeship system, one which supports apprentices and responds to their needs, to employers and to the economy. I commend the bill to the Senate.
I foreshadow an amendment. I believe that amendment has been circulated in the chamber. It calls on the government to determine a method for achieving parental or guardian approval for apprenticeships under the age of 18. It is quite extraordinary that, as a country, we would allow 16-year-olds to be signing up for loans when we are not clear what role the apprentice will play in working out what the loan is. We are particularly concerned about approval for apprentices under the age of 18 and school-based apprenticeships at the point of signing up for loan amounts. I am foreshadowing our amendment.
Although Labor will be supporting this bill, given that the Tools For Your Trade participants have already been notified of the program closure, Labor cannot let that pass without the reminder to the government that this is yet another broken promise. This is a $2 billion broken promise for Australia's apprentices and workers. As we know, there has been a litany of broken promises. Before the election the now Prime Minister assured us that the coalition would provide better support for Australia's apprentices. Given the record of Liberal governments on this, I am not quite sure why people would believe that. Nevertheless, that was the commitment the coalition gave.
But it did not take Mr Abbott very long, once he became Prime Minister, to axe all of the vital support for Australia's apprentices and workers, putting our skill base and future job creation at risk. Right across our economy, we are seeing a real dumbing down, by the Abbott government, of the smart skills the Australian workforce needs to be competitive. We need to be a smarter economy, and that means we need to be looking to the future to develop up the skills and workforce that we need. We do not need the government to be ripping down every support scheme, completely deserting the field and somehow leaving it to the will of the market. The market will not provide the future skills necessary because most businesses are in the business of making a profit from today and very few are looking to our future needs. That is the role government has to play. It has to look at what smart skills we need for the future, how we as a country will develop those, and what the role of government is. It is not the role of government to completely desert the field.
We need to be competitive, absolutely. We need to support our economy and we need to provide our workers with real opportunities to earn a decent wage. The way to do that is to provide a skilled economy. But what we have seen the Abbott government doing so far is the complete reverse of that. They have made university degrees unaffordable, they have cut funds to TAFE, they have ripped funds from our school and, most recently, they have attacked the benefits family use in relation to child care, which is absolutely critical. If we are to get men and women in Australia contributing to the economy, we have got to have affordable child care; but we have seen the government rip that apart too.
Unemployment is on the rise, particularly youth unemployment. In many places in Australia youth unemployment is a very, very serious problem. What is the government's response to that? What are they doing to support young people into work? Where is that support and assistance from government? 'Earn and learn' is not a support program; it is a punishment. Support programs have been cut, and earn and learn has taken the place of a whole range of those programs. It seems that the government's agenda is about a job at any cost. And what of the jobs in our economy? The biggest growth has been in health care and social assistance, important areas of our economy, critical areas. But what is happening to our manufacturing skills base? As companies close, as the car industry starts to tail down, what is the government's commitment to ensuring a skilled workforce in other areas of our economy for the future? Where is that development going on? What we are seeing now in the health and social assistance workforce is the emergence of low-paying jobs. The majority of the workforce in that sector, unless they are skilled—nurses, physios or doctors—earns about $22 an hour. Not only is that not enough to bring up a family; it is not enough to sustain an individual. Where is the government's commitment to the skilled jobs of the future? I am really struggling to find it. I do not believe they have that commitment; they are leaving it to the market.
Tools For Your Trade, no matter what spin the government tries to put on it, does absolutely nothing to create new apprenticeships. It is fine if you have already got an apprenticeship, because you might be able to enter into a loan—although Labor is very concerned about 16-year-olds entering into loans—but it does not encourage new jobs and it certainly does not encourage the development of new skills. Prior to the 2013 election Mr Abbott announced the Trade Support Loans. In doing so, he certainly did not tell our apprentices that the government was going to scrap Labor's $1 billion Tools For Your Trade program, which gave apprentices about $5,500 each to assist them with the cost of tools. Nobody would suggest that apprentices have the money to buy the sorts of tools they need to develop their skills, but this seems to be the only program the Abbott government has left in place. The government has changed the program and tailored it—and we are now going to have 16-year-olds entering into loans if Labor's amendment is not supported—but, in and of itself, it will not create one additional job.
Another promise Mr Abbott has broken was that Australia's 400,000 apprentices would get more financial assistance to help them learn their trade and find a good job. Well, where is that assistance? Tools For Your Trade does not find people a job and it does not create new opportunities for apprentices. After the election Mr Abbott has ripped away most of that support and broken his promise to apprentices. It would seem that, prior to the election, the coalition was prepared to promise anything; and then, on winning government, they just change their minds and pretend they have not broken a promise. But clearly, in relation to Australia's future workforce, the government has severely let them down.
This broken promise or omission of the full story by the Prime Minister now means that what was an optional loan available, in addition to the Tools For Your Trade payment, is now the only financial support offered to apprentices. If the coalition think that this is some kind of job-creating scheme, they are sadly mistaken. Not only that, they are misleading Australia's future apprentices.
We know that many apprentices have huge costs for tools and equipment and, under the Abbott government's program, they will now be left with a debt rather than being provided with funds to purchase tools. Again, what we are seeing from this Abbott government is a complete misunderstanding of how the apprenticeship system works. Apprentices are on very low wages. They incur costs. Many of them are required to supply uniforms. They have to travel to and from work. They have general living costs. Mr Abbott and his government are now saying: 'On top of that low wage, you have to take out a loan. We don't know whether you'll have much say in that loan. It is a debt that could be privatised sometime in the future, but you will take out a loan and that's all the support that we're offering.'
Many of those apprentices who have already commenced their trade will now have the payments they were expecting to receive cancelled. That could mean a loss of up to $3,700 for first-year apprentices. Suddenly, because the Abbott government has failed to deliver on yet another election commitment, those apprentices have been left out in the cold. And $3,700 is a lot of money for anyone in this country, but it is a massive amount of money for a young apprentice who is earning maybe 50 or 65 per cent of the adult wage. It is a big loss and all we have to take its place is a loan, the details of which we are not sure.
The provision of the optional loan is not opposed by Labor, but it should not have come at the expense of the Tools For Your Trade scheme. It should have appropriate advice in place to ensure informed and voluntary decisions by apprentices, some of whom are school-based apprentices.
It really should be ringing alarm bells—it certainly is for Labor—that we can say to a 16-year-old, who is perhaps still at school, 'You're able to take on this loan,' when that person in the normal course of events is not able to sign contracts or vote. They have few opportunities to really exercise the rights we afford adults. Yet the Abbott government sees fit to say to these young people: 'It's okay for you to take out this loan. Just trust us, it will be all right. We'll hit you with a debt. At some future date we might privatise that debt and you will incur further costs. And, by the way, at the end of your apprenticeship we'll do nothing to help you get a job so that you can pay back the debt.' It is very alarming that we are saying to young people, at the age of 16: 'It's okay to sign up for a debt.' Will that happen without parental guidance? Who knows? If there is a default on the debt, will the parents of a 16-year-old suddenly be labelled with that debt? What happens when the apprentice perhaps fails and does not complete the apprenticeship? There are a whole range of unanswered questions and Australians have the right to be informed. But we know that the Abbott government is particularly good at lacking in transparency and certainly very good at breaking promises. What the Abbott government has probably been the best at to date is breaking its pre-election commitments and promises.
Not only do we now have uncertainty around this tools scheme, but the Abbott government has taken the axe to all of the support programs for apprentices. It is tough to be an apprentice in this day and age, to commit yourself to a low wage for quite a few years of study, at the end of which you will be rewarded with a job. It is a tough decision, when your mates are out being young people and you have got commitments, study and so forth. We should be doing everything we can to promote and support apprentices in this country. But, again, from the Abbott government, that is not so.
As well as axing the Tools For Your Trade program, the Abbott government have also axed the Australian Apprentices Access Program, again, against the backdrop of very high youth unemployment. They have axed the Australian Apprenticeships Mentoring Program and the Apprentice to Business Owner Program. It seems as though the Abbott government are saying to business: 'Yes, we want you to increase the number of apprentices you have in your business, but guess what? We're not going to give you any support to do that. You are well and truly on your own.'
We know that businesses will not offer apprentices unless there is support. Support for tools does not support a business, it does not create the skills of the future and it does not create ongoing employment for apprentices once they finish their trade.
To make a loan of $20,000 available to a school-based apprentice needs some further explanation. Clearly, we need to see the detail of what is being made available. We need to see how parents or guardians sign onto that scheme. We need those checks and balances in place. What we do not want to see is people as young as 16 entering into loans and perhaps defaulting on those loans. But it seems at this point the government has failed to put in place any measure to protect children. And they are children at 16. They are not able to vote, to drive or do a raft of things in our community and yet the Abbott government sees fit to saddle them, seemingly without any protection, with a very expensive loan. We must have parental or guardian oversight of these sorts of loans.
On top of this, Mr Abbott says he wants people to work until age 70, while at the same time cutting investment in training for workers. His priorities and those of the Abbott government are severely twisted. If we want to be a skilled-up and productive economy, we must invest in training opportunities. We have to be the smart country, but there is no investment coming from the Abbott government. It has just been left to the market, which, as we have seen before, will not look at the opportunities for the future. And the government have indicated that that they are looking to outsource, to give away, the debt management for the trade support loans, so we could have young people with a debt being pursued by loan sharks, getting a black mark on their credit rating and not being able to take credit out in the future because of this ill-thought-out scheme which seemingly enables 16-year-olds to take on a massive debt. This is clearly not right and it is why Labor is foreshadowing an amendment to require parents or guardians to be signatories to these loans. To saddle 16-year-old children with $20,000 debts which are then put into the hands of private debt collectors is quite disgraceful.
The Australian Apprenticeships Access Program assisted vulnerable job seekers who find it difficult to enter employment with nationally recognised prevocational training, support and assistance. I do not understand why a government which says it is concerned about youth unemployment—across many parts of our country, there is very high youth unemployment—would axe that program and leave absolutely nothing to replace it with. We have just thrown young people aside, and all we have got is: 'You have to earn or learn, or you will be severely punished.' We know that many young people, particularly in areas of high unemployment, need additional support. They need prevocational advice and support, and they certainly need mentoring to stay in the workplace, to successfully complete their apprenticeships and to be the highly skilled and well-paid workers that we need into the future to ensure that our economy remains productive. But, again, the Abbott government just seems to want to dumb this down. The Australian Apprenticeships Mentoring Program assisted young people who face barriers to participation. This is another program that has gone. So I really question where the Abbott government's commitment to young people in our country is. We have got a program of debt being able to be taken on, and we have got support and assistance programs slashed and burnt. I have foreshadowed the amendment that Labor wishes to move. I urge the government to take a serious look at it and support it.
It is my pleasure to rise to speak in support of the apprentice trades loans scheme as it has been put forward to the Senate today in the Trade Support Loans Bill 2014 and the Trade Support Loans (Consequential Amendments) Bill 2014. The starting point in all of these activities is that, if it is broken, then you have got to fix it. We know the apprenticeship scheme around Australia at the moment is broken. Why do we say that? Because, firstly, there are not enough apprentices going into training; secondly, there are not enough who are completing their training; and, thirdly, those of them who do complete their training, and those who fall by the wayside, generally are dissatisfied because of the conditions under which they went into those programs and because expectations may not have been met.
My colleague Senator Lines, also from Western Australia, mentioned the Australian Apprenticeships Access Program. One of the failures of the access program was that, with a KPI of 40 per cent, it was only achieving 25 per cent—just half what its expected outcomes were. That gives you an indication of why this government had to make changes—and make changes we have. From my own background in business, I am very proud to say that I have employed apprentices at every opportunity. Sometimes they have stayed with us on completion. Other times, bigger companies have snaffled them, which has always been a cause of complaint to me. But I am proud to say that, almost without exception, those who started apprenticeships with me did conclude them and I was able to employ them.
This scheme is an investment of some $1.9 billion, following up support of some $476 million in the Industry Skills Fund. How is it being structured? It is being structured around a skills needs list, which I have in front of me, of over 70 areas that have been identified for apprenticeships. That does not take into account agriculture and horticulture, which, as you would expect, Mr Acting Deputy President, I would be very pleased to speak to separately. But, as part of my contribution, I do want to speak about school based traineeships and the success of this program and indeed how this new scheme is going to interleave with these school based programs. And, unless I am interrupted by my colleagues, I hope to get to what I believe to be very exciting information, which has only come to me in the last 30 minutes, from the director of the Kwinana Industries Council, on the industrial strip in Western Australia.
But let us go back and reflect. Why did the old Tools For Your Trade program, of $5,500, fail? I do not know whether you did the old course in bricklaying, as I did, Mr Acting Deputy President, but the cost of tools for bricklaying is meagre compared to the cost of tools required in other trade areas. It is sufficient to say that the quality of my bricklaying led me not to that trade but eventually into the Senate, but nevertheless it does make the point that the funds required for different trades are so substantially different that the figure of $5,500 is excessive for some and meaningless for others. So what does this program do? First of all, it has a loans scheme for up to $20,000. It is structured as $8,000 paid on a monthly basis, some $666, in the first year of an apprenticeship. It reduces from $8,000 to $6,000 in the second year, then to $4,000 and then to $2,000. I make the point that it is not compulsory to take out this loan.
We hear comparisons being made by my colleagues on the other side going on about low-paid apprenticeships et cetera. They seem to overlook the fact that, when somebody is a student—studying a diploma, a higher diploma, a pre-university bachelor degree or a degree itself—they are not working at all unless they work during vacation time. Whilst an apprentice's wage may be low, it is infinitely higher than the nil wage of somebody who is studying for a diploma or a degree. So, in many instances, the need for a loan may not be there—or, indeed, they may not need to borrow the full $20,000 over the four years. But it gets better, as the repayment of these moneys during their traineeship or apprenticeship is nil—nothing; no money at all. Even if the person did not need the $20,000, at the interest rate that they will eventually pay—currently at 3.75 per cent—who would not take it out? Who would not take the loan at 3.75 per cent, when a personal loan at the moment is nine per cent or 10 per cent?
It is so generous that, during their period of training, there is zero cost initially. Only when they have concluded their traineeship or apprenticeship will they actually start repaying this loan—but only when their salary or their wage gets to, at the moment, some $53,000 a year. Of course, with CPI, that figure will increase—probably to $56,000 to $57,000 a year when a young apprentice starting out today would be likely to conclude, and they will not have to pay any of that back until that time. It has been estimated that, once they are fully qualified, the payback period would be about five years. I travel around the world a bit, and I do not know of any other scheme in existence where somebody can borrow with absolutely no impost on them at the time, pay nothing on graduation, upon completion, and only start paying back, under the tax regime, according to their income earned once they are on about $53,000 a year—or soon to become about $56,000 a year.
Who is eligible for this? Those doing apprenticeships or traineeships at certificate III or IV qualification leading to an occupation, as I mentioned, amongst the 70-plus occupations on the National Skills Needs List. What that does is focus the attention of young people into areas which have been identified by industry, by employers and by governments of both persuasions as being necessary—which, you would therefore expect to lead to not only employment but also useful, enjoyable careers for them. How tremendous is that perspective. Of course, an alternative is an apprenticeship or a traineeship at certificate II, III or IV levels in the agriculture and the horticultural sectors. Again, in that instance, there is no limit.
Mr Acting Deputy President Gallacher, you know my very keen interest in the field of agriculture, agribusiness and horticulture. I had the pleasure of chairing a Senate inquiry in 2010 into higher education and skills needs in the agriculture and agribusiness sectors of this country. At that time we identified very, very significant needs. It was always a great disappointment to me that at the time Labor Party ceased in government in September 2013 they still had not, under parliamentary and Senate custom, responded to the report of and the recommendations from that inquiry. I hope that is not an indicator of their lack of interest in regional and rural and, particularly, agriculture and agribusiness employment.
The interesting point that came out of that exercise was the need for traineeships rather than apprenticeships in agriculture and horticulture and the need for modules of learning and skills development which somebody could interleave around the demands of the working place—around seasonal conditions, seeding, harvesting, fruit picking et cetera. Traineeships were, by far and away, the more preferable avenue for those people. I completely applaud Minister Macfarlane and his staff for their initiative in allowing certificate II, III or IV level qualifications in the agriculture and horticulture sectors—and I would hope that they would extend to the agricultural machinery sector. In my home state of Western Australia and in other states, they are screaming out for young people to go into the agricultural machinery world. Time does not permit me today to reflect on the excellence of Australia's contribution to agricultural machinery development—going back to the stump-jump plough and the original McKay harvester. We have an incredibly proud history in this country of developing agricultural machinery that provide jobs and employment opportunities not only in this country but also around the world. I am very hopeful and I would expect that the agriculture and horticulture sector would extend to agricultural machinery training and apprenticeships for young people.
The conditions of this program include an opt-in provision. Every six months, the apprentice or trainee, and/or their parents if they are under the age of 18—and I intend to come back to that to address Senator Lines' frenetic and ill-founded criticisms that she spoke about a few moments ago—receive information as to the status of their loan. As I say, it is to be repaid equivalent to the higher education HECS-HELP scheme. Minister Macfarlane must have been predicting Senator Lines' concerns—and I quote:
Can school-based apprentices or trainees access the loan? The answer of course is yes, they can, including those under the age of 18 years. Australian Apprenticeship Centres will soon have information for apprentices and their parents to ensure they understand the responsibilities associated, consistent with other loans such as HELP.
But here is the point:
Note: When a minor (under the age of 18 years) signs up for an apprenticeship, their national training contract is co-signed by their parent or guardian, as the contract is a common law contract between an employer and an employee formalising the terms and conditions. Having co-signed the training contract, a parent will be aware that their child is in training and could be eligible for apprenticeship incentives.
I have vastly more confidence in 16-year-olds than Senator Lines appears to have when it comes to understanding these matters. I do not think there are too many 16-year-olds these days that do not have a credit card or do not have a mobile phone or do not have a mobile phone debt. If it was good enough for me in 1967 as a 16-year-old to sign a cadetship in veterinary science, I think 46 years later most 16-year-olds can, with their parents, sign the contract and understand what it is all about.
I speak if I may on the question of the possibility for these programs to include students still at school. As I mentioned earlier, I would like to share with the Senate a wonderful program which this particular trade loans scheme will feed directly into—that is, one given to me by the director of the Kwinana Industries Council in Western Australia, Mr Chris Oughton. It is a scheme that has now been undertaken for the last 15 years by participating engineering companies up and down the Kwinana strip south of Perth in WA. It involves full-time students at the Gilmore College in Kwinana and training undertaken by the wonderful Challenger colleges in WA.
Mr Oughton told me less than an hour ago that they have had, over the last 15 years, a 98 per cent success rate. Students who start the program in year 11 go through the program to the end of year 12. At the end of that period of time, if my mathematics of multiplying 14 per year by 15 years is accurate, that is 210 students. Better than 200 of those 210 have found employment in the engineering area up and down the Kwinana industrial strip. For those of you who are not familiar with Kwinana, it is one of the highest unemployment areas in Australia. Confounding, isn't it, when you think of our industry south of Perth such as BHP, BP, Alcoa the big shipbuilding industries associated with Henderson. Yet it has been through the intervention of the Kwinana Industries Council, the Gilmore College, the students themselves and the Challenger college along with employers that this program has been undertaken.
Mr Oughton, when I explained to him that school based trainees will be able to participate, said to me that this is critically important. I will tell you why—and I hope I have recorded it accurately. He said to me that if a student is participating in a school based traineeship then the cost of the TAFE component of the program is met whereas if they are only on a work placement then they or their families have got to pay the cost of the TAFE training component. Look how this program is going to feed into that exercise. It has been a fact that there has been a dropping off of enthusiasm by some people. Some employers have not been in a position with the downturn of the economy to actually pay these students on their one day a week. In other instances the students themselves have required financial support.
Minister Macfarlane's program is going to open this up far more widely to that cohort of students. In a high-unemployment low-socioeconomic area, you can see where the coalition is focusing all of its training, its apprentice programs, its pre-degrees, its degrees and its higher-degree programs. But it gets even better as a result of what Mr Oughton told me. I think this will be a catalyst to accelerate. He had only just come out of an important meeting in Perth a few minutes ago—discussing this very matter as it happened—but he told me that they are going to extend this beyond engineering to include telecommunications technology, processed plant operations, business activities, hospitality and IT. So we are going to see in this area of enormous need for trades and other training the benefit of this program initiated by Minister Macfarlane and actually see this focused even further for school based trainees.
Exactly in line with the area I speak of in IT, several of our colleagues recently had the opportunity to see demonstrations by the 3D company here in Parliament House of the use of new printing technology. This technology—as you would be aware but others may not be—actually allows the printing of tools. It allows the printing of a home. In Holland recently, a complete house was built by printing technologies. They told me the other day that in New York this year, in the four days of the car show—Senator Mason is already booking his ticket—they are going to build a motor car and drive it away from the show.
As a veterinarian, I have an interest in tissue reproduction and I have an interest very much in the whole question of the availability of organs for transplant. Our wonderful Professor Fiona Wood in Perth, largely as a result of the shocking circumstance of the Bali bombings, and her team have developed a technique now of taking skin, growing that skin tissue in the laboratory, producing it as a spray and spraying it on to badly burnt victims. They were telling me the other day—and this is very relevant to our discussion—that for a person requiring a kidney transplant, they will be able to take that person's kidney tissue, grow a new tissue by printing and put that kidney back in. Why is this relevant? They said to me the biggest limit to us remaining right out there in the forefront, where Australia happens to be at the moment, will be trained technicians. And they are already focussing on upper primary and secondary so that we can move into the skills development area because we will be needing thousands of young Australians to be trained in this particular technology. Don't worry about the future; the future for Australia has never been better. But we need to recognise that apprentices and apprenticeships and trainees and traineeships are as important to this country as higher degrees and graduate degrees. I for one think that the government is absolutely on the right path when it comes to elevating apprentices and trainees through the scheme we are discussing today.
I agree with the previous speaker about the importance of apprenticeships. The Trade Support Loans Bill 2014 and Trade Support Loans (Consequential Amendments) Bill 2014 establish the Trade Support Loans Program for Australian apprentices. The establishment of this program was a commitment of the Abbott government in the lead-up to the last election. However, what Mr Abbott did not tell apprentices was that the coalition were going to scrap Labor's $1 billion Tools For Your Trade program. He was deceitful. That deceit now means that what was thought to be an optional loan available in addition to the $5,500 Tools For Your Trade payment is now the only financial support this government will offer to apprentices.
The Abbott budget has taken an axe to the vital supports for Australia's apprentices and workers. These short-sighted decisions put our nation's skills base and future job creation at risk. These cuts highlight the hypocrisy of Mr Abbott's 'earn or learn' ultimatum to young Australians, and it hits apprentices; those starting out in their careers, those who can least afford it.
One Tasmanian man—and I have mentioned this man in the Senate previously—contacted my office to say he was raising his grandson, who was lucky enough to have a bricklaying apprenticeship. His grandson is in his first year of his apprenticeship. He brings home $400 a week and pays board. He is worried that his grandson will not be able to purchase his tools without the support of the Tools For Your Trade program. He does not want to see his grandson take out a loan when his income is already very low.
These and other concerns are all reasonable. Yet the minister has been unable to explain the program and address the concerns which have been raised. In fact, the Abbott government gagged members in the other place from raising the very real concerns of apprentices, families, employers and industry—and the very real concerns that have been raised in this chamber and the other chamber by members of parliament.
Labor will support this bill because the Abbott government has axed all other support for apprentices starting out in their careers, and Labor will not leave apprentices with nothing. However, Labor thinks there are a number of important issues which do need to be acknowledged. A significant issue for those who have already commenced their apprenticeships is that there are no grandfathering arrangements for those who have made financial commitments based on the Tools For Your Trade scheme. Another issue Labor has raised is the lack of information about the total liability that apprentices will face under the Trade Support Loans program. The minister has been completely unable to clearly and properly explain what this liability might be.
Given that Mr Macfarlane is unable to answer questions around financial liability, you can understand why people in the community might have concerns about young apprentices taking on a debt under the program. Labor is also concerned about inadequate protections for school based apprentices and other apprentices under 18 years of age. These concerns remain unaddressed by Mr Macfarlane. In the Senate committee inquiry and in the other place, Labor has also raised concerns about the adequacy of the privacy protections under this scheme.
Also of significant concern is the government's decision to offer these loans as a monthly payment rather than a lump sum option each year. Many apprentices already struggle to live fortnight to fortnight on low wages. Providing monthly payments will not be of assistance to these apprentices who need to outlay large sums of money up front to purchase expensive tools and equipment. This may lead to the situation where apprentices will need to take out loans from other institutions to be able to buy the tools and equipment they need to start their apprenticeships. What this means is that these apprentices will then be taking a loan out from the government to repay the other loan and may even lead to the temptation for many apprentices to use these loans as a wage supplement.
It is for these reasons that the shadow minister, Sharon Bird, sought to move second reading amendments in the other place, and that Senator Carr and Senator Lines will move second reading amendments in this place. These amendments seek to address a number of concerns that have been raised in relation to this scheme but that the government has failed to address. Labor understands that providing real support to apprentices and others who set out to train for a career is important. We understand the importance of creating opportunities for young people. But it is obvious, in spite of their rhetoric, that the Abbott government is not genuine about supporting young people into employment. In fact the budget cuts to education, changes to higher education, cuts to support for apprentices, cuts to Newstart and the punitive approach to young people who find themselves unemployed show the government has no real interest in supporting young people and developing their opportunities.
Youth unemployment is undeniably and unacceptably high, especially in my home state of Tasmania, where in some parts of the state it is as high as 20 per cent—that is, one in five young people without a job. Yet Mr Abbott has completely dismantled the crucial programs that support young people into employment. Not only does the budget cut nearly $1 billion in support payments under the Tools For Your Trade program—which, as I am sure, Mr Acting Deputy President, you would know, was an initiative of the Howard government—but it also slashes a further $1 billion in investment in skills and training.
The Abbott government has taken the axe to vital skills and training programs such as the National Workforce Development Fund, the Workplace English Language and Literacy program, the Australian Apprenticeships Access Program, the Accelerated Australian Apprenticeships program, the Australian Apprenticeships Mentoring Program, the National Partnership Agreement on Training Places for Single Parents, the Alternative Pathways program, the Apprenticeship to Business Owner Program, the Productive Ageing through Community Education, and the Step Into Skills program. These programs are critical in providing basic literacy and numeracy skills, supporting apprentices and upskilling existing workers to meet the needs of the modern workplace.
The government have tried to appease community backlash—and there has been considerable community concern—about these cuts by announcing a paltry $5 million for apprentice mentoring. This does not make up for axing $1 billion in investment in skills and training. If the government truly recognised the benefit of mentoring apprentices they would never have cut the Australian Apprentices Mentoring Program in the first place. The Abbott government have betrayed Australian apprentices and workers with these cuts. Investing in skills delivers a growing economy with strong employment and improved productivity. The Abbott government refuses to invest in Australia's workers, industries and regions. They are selling our future short.
Many apprentices have huge costs for tools and equipment. They will now be left with a debt under the Abbott government's program rather than being provided with funds to purchase tools. Many apprentices—including the young apprentice bricklayer I referred to earlier—who have already commenced their trade will now have the payments they were expecting to receive cancelled. This could mean that up to $3,700 for a first-year apprentice has been lost in future payments.
The provision of the optional loan is not opposed by Labor, but it should not have come at the expense of the Tools for Your Trade scheme and should have appropriate advice requirements in place to ensure informed and voluntary decisions by apprentices, some of whom are school based apprentices. The Abbott government took the axe to support for all apprentices. As well as axing the Tools for Your Trade program, they have axed, as I said, many other programs that are designed to support apprentices. Trade Support Loans of $20,000 will be available to school based apprentices aged between 16 and 18 years, and the government have failed to put in any measures to protect children, such as requiring a parent to accompany them. The government confirmed that they are looking to outsource debt management for Trade Support Loans and are potentially happy to saddle 16-year-old children with $20,000 debts and leave them in the hands of private debt collectors. This is one of the most savage cuts in the very long list of skills programs cut by this government.
In comments in The Australian, Tony Nicholson, the Director of the Brotherhood of St Laurence, makes the point that 'learn or earn' demands on young people require the government to provide the support and training programs needed to get young people the skills they need and get them into work. The Australian Apprenticeships Access Program assisted vulnerable job seekers who find it difficult to enter employment with nationally recognised prevocational training, support and assistance. The program is delivered by local providers who work with local employers to deliver training to meet industry needs, and participants receive individualised intensive job search assistance.
This government has taken the axe to support for all apprentices. There was no warning to young tradies about the cut to Tools for Your Trade before the election and they are quite right to be furious about these cuts. The budget also cut the Australian Apprenticeships Mentoring Program—a program for young people who face barriers to participation. The program helps apprentices successfully complete their apprenticeships and provides support to their employers or supervisors. Mr Abbott has slashed nearly $2 billion out of skills programs and over $1 billion of these funds supported apprentices. Labor put in place real support to help young people, particularly in rural and regional Australia, get and finish an apprenticeship. Mr Abbott is ripping this support away. Young apprentices with the world at their feet will not get the support they need and deserve.
As I said earlier in my contribution, Labor will not oppose these bills. We ask the government to very seriously consider the issues highlighted in the amendments that Labor senators will put forward to make the scheme work effectively and fairly for apprentices, whom this legislation is intended to assist. I ask the government to seriously consider support for the second reading amendments that Labor senators will put forward to ensure that this scheme in some way works effectively and fairly for Australian apprentices, particularly apprentices from my home state of Tasmania.
As I skip into the chamber to join you, I reflect on what a wonderful day it is today for the French. It is their national day, Bastille Day—a celebration of 225 years ago, the march to the Bastille. The government led Europe at that stage in reform against the aristocracy.
Senator Cameron, we celebrate democracies across all nations. We acknowledge that there have been many dysfunctional regimes over many hundreds and even thousands of years. I like to treat everybody equally, but I also like to give people the opportunity to help themselves and not be helped incessantly by others to the point where society becomes dysfunctional because it becomes an expectation. You do not need to lecture me on the foibles of socialism, Senator Cameron, through you, Mr Acting Deputy President. I join with the French and the French Australians here today to celebrate their national day. Vive la France!
I rise today to speak on the Trade Support Loans Bill. I heard the last few minutes of the contribution made by Senator Brown. In her contribution, Senator Brown, indicated the Tools For Your Trade was started under the Howard government. That is quite right, but it was a voucher system. When Labor came into power—just like everything else—they turned it into cash-splash with relatively no accountability and no responsibility towards it. As a government, in the first nine months of our reign, we have sought, on the economics of this country, to implement these reforms in these very important trade areas, which will help our productivity grow, so we can reduce the trade deficit that we have with countries like France. We are half a billion dollars in deficit. We export somewhere in the vicinity of $600 million worth of goods to France. Yet, we import a bit over $1.1 billion worth of their goods. Anything we can do to make this country more productive and get it going after the sad six years of the Labor government, where we ground to a halt in a lot of these industrial areas, could only be seen as good.
We have heard many differing opinions this morning from the contributions made from the other side of the chamber on the Trade Support Loans Bill. However, I would like to correct a few of those opinions, particularly of Senator Carr and Senator Rhiannon, who join us in the chamber. The Tools For Your Trade payments failed. Under Labor's administration, this program had become unaccountable and out of hand. That did little to help apprentices complete their training because it was only given in the latter years rather than when apprentices needed it the most. Senator Rhiannon, who is in doubt as to the accountability of the program, will be reassured in the knowledge that this program will not only provide financial support to apprentices but also provide financial incentive for them to complete their qualifications.
Firstly, let me set the scene. I can only take it back to my own experience in South Australia, to the electorate of Wakefield—which is also the electorate I live in, one of the areas of high youth unemployment in this country—nearly 45 per cent.
About the only thing that we can remember of Mr Champion, over the six years he was in government, was his call for the state Premier to introduce a minister for the northern suburbs, because he could not affect any change in that area. He was unable to influence any change. I do not need to remind you, Mr Acting Deputy President, of the assertions which Mr Champion had made prior to last year's election, saying that he had actually saved Holden until 2022. They know no bounds, across the other side, in what they will represent. It is like an eraser has been put across the six years of government—that Senator Cameron and his government, in which he was a minister in. They do not understand the drivers of manufacturing, which has driven a lot of manufacturing away from this country. A carbon tax drives jobs offshore.
Let me get back to the electorate of Wakefield. It covers an area of nearly 6½ square kilometres from Salisbury in the northern suburbs of Adelaide to the Clare Valley, 135 kilometres north. Wakefield is named after Edward Wakefield, whose theories of colonisation had a great impact on the formation of settlement in Western Australia and South Australia. The electorate covers industries ranging from commercial retail, technology-based industry, defence, manufacturing, cereal crops, sheep, cattle, market gardens and viticulture. As you can see and hear, it is indeed a very diverse electorate. As I said earlier to the interjections, it has the highest youth unemployment rate for not only South Australia but nearly the whole of Australia. I, for one, am not going to sit back like the member for Wakefield and his Senate colleagues like the former minister, Senator Cameron, in the Rudd-Gillard-Rudd governments. That probably gives you some idea of the dysfunction that presided over these increased levels of youth unemployment.
The Abbott-led coalition government is building a stronger economy by supporting apprentices to successfully complete their qualifications. This government is delivering on its commitment to introduce Trade Support Loans for apprentices to encourage more young people to take up a trade and complete their qualifications. We are committed to providing opportunities for a hand up and not a handout. We are committed to building a high-quality and nationally consistent Australian apprenticeship system, which supports our apprentices and responds to the needs of employers and the economy. Australia's future productivity and competitiveness depends on a highly skilled and trained workforce. We do the unemployed a great disservice by allowing them to languish on welfare. Trade support loans will provide real support for current apprentices to complete their skills training and to provide a stronger incentive for young Australians to become apprentices. One of the largest challenges in this field is completing a qualification. Nationally, only about one in two apprentices finish their training. I have firsthand experience in this: my son is a third-year carpentry apprentice and he finds it very difficult to get by. I know that this scheme is most welcomed by him and by his employer. I am sure all industry trades on the building sites in the south-east of South Australia will enjoy the benefit of this initiative from the Abbott government.
Investing in infrastructure and abolishing job-destroying taxes is the first step to growing jobs for a sustainable long-term solution for our unemployed. Trade support loans are a part of this strategy. This is the policy we took to the election and this is the policy we are implementing. This is one reason people voted for us on 7 September last year.
Senator Cameron, I would be very interested to know where you got your money printing press from when you ran the government because you just kept printing money. It was true socialism and it all worked very well right up until you run out of everybody else's money.
I am passionate about the northern suburbs of Adelaide and it would do well for the current member for Wakefield to become the same way. The implementation of trade support loans will benefit this area greatly. The member for Wakefield has given up. He was quoted only late last year calling for a 'minister for the northern Adelaide'. That is his job, surely. He is the member for Wakefield, which takes in the northern suburbs. Why do we need a minister? We already have one elected member. Why does he not stay and do his job? Let us talk about his state Labor colleagues who cover the northern suburbs of Adelaide. What have they been doing for the past 12 years? They are still in government, into their 13th year. There are six state Labor colleagues out there in the northern suburbs presiding over one of the highest unemployment rates in the nation. If you look at the facts—
No, I will not give up, Senator Cameron, through you Mr Acting Deputy President. Giving up is very much in the vocabulary of those on the opposite side. They just give up and move along to the next issue, to something else: 'Can't do it, too hard, move along, just give up.' 'Give up' does not exist in our vocabulary but it is very much a part of Labor behaviour and the way in which they run their agenda. The Trade Support Loans scheme offers loans of up to $20,000 which are repayable through the tax system with a safety net—only when they are working and earning a sustainable income of more than $50,000.
Of course it is. Money is not free. When will you work out that money is not free, that you have to earn it? This is a hand up, not a hand out. This is going to help young people at the most critical time of their lives. It is no different from somebody starting a business when they need a loan for the business. It is no different at all. They get a loan for the business and repay the loan. We are equipping young apprentices with the money, with the ability to get to work, with the ability to buy a car and with the ability to buy the tools of trade. They can get this loan so that they can earn and then allocate money they earn. It is no different from anybody going to university and getting a degree. It is no different from HECS.
I want to empower the trades of this country. I do not know why anybody wants to put a block in front of people living effectively, working effectively and being able to get to work. Why would they not choose to train in a skill? This system will grow the pie, it will grow productivity and it will grow manufacturing because more and more people will be able to go into training knowing full well that they will be able to pay their bills. What can the loan money be spent on? These loans are designed to provide financial support for apprentices to cover their cost of living and learning while training.
Senator Cameron interjecting—
They must be coming quite confounded by what I am saying. It makes common sense, does it not?
Senator Cameron interjecting—
Thank you for the acknowledgement, Senator Cameron. How can it be disgraceful? It is just common sense. I am yet to hear from one of the union people on the other side of the businesses which they ran, when they took on trainees and apprentices and how it worked for them in the initial years. What do I hear? Nothing. There were no businesses run by those on the other side, were there? You have not run any businesses. You have just tried to run businesses for other people. I am talking about people who understand the way in which the economy works and understand the drivers of the economy. I would not expect to ever hear anything from you people on the other side about anything that makes sense in the business community because you do not understand it. You do not talk to business owners and you do not get it. Business is not in your DNA and it never will be.
I will give you some examples of what the money can be spent on. Apprentices are given the options to opt-in for six months to buy their tools and then opt-out of any further payments, or apprentices could save their first year's payments to buy a second hand vehicle and then opt-out of further payments, or apprentices can take on the full loan to cover living expenses through their years of training and when they complete their qualification they will get 20 per cent off the $20,000.
It makes eminent sense. It just makes sense. If they finish, they get a reward—a reward for effort; not just a reward for nothing but a reward for effort.
How long will it probably take for an apprentice to pay off their loan? Well, that is what happens—you pay off a loan; you get a 20 per cent completion bonus. If you take that into account, it will be five years after the repayments start. So that leg up into a productive life—
a profitable life, a life with choices, is going to take about five years to repay.
Let us look at Labor's record on youth unemployment. Under Labor, the teen unemployment rate went from 19.6 per cent in November 2007 to 27.3 per cent in September 2013. I do not hear anything at all from the other side on that one! These are indisputable facts: from November 2007 to September 2013, what is disgusting is that they on the other side presided over a nearly 10 per cent increase in youth unemployment.
That is the case, Senator O'Neill—through you, Mr Acting Deputy President Back—and I will ask you to come back into the chamber and you can prove me wrong with your facts. Under Labor, the unemployment rate for young people rose from 9.9 to 12.7 per cent—55,000 more young Australians were unemployed after six years of Labor government. Fifty-five thousand more Australians were unemployed after you had finished with your wrecking ball of fiscal mismanagement and had gone through the budget, where we had $123 billion worth of accumulated debt and spiralling towards a $667 billion national debt. You cannot look at me straight in the eye and tell me that that is wrong.
We are about supporting communities. The coalition government is also looking to support those people who move, either to the city or the country, to take up a job in places where work is available. The Relocation Assistance to Take up a Job program provides $6,000 to relocate to a regional area, or $3,000 to relocate to a capital city, and an extra $3,000 if relocating with dependent children. That is a hand up, not a handout.
Apprenticeships are part of this program.
They would be lifters, Senator Cameron—through you, Mr Acting Deputy President Bernardi—because they are going out to find jobs. This has been such an enjoyable contribution! I personally know that there are jobs out there, that are available in places like Port Lincoln and Port Wakefield. The relocation support program— (Time expired)
I am pleased to be able to speak in the chamber today on this very important matter. I come to it as a sister to brothers who were very much committed to becoming part of the trade part of our economy, who gathered their skills through undertaking trade qualifications. That has led them into being able to run small businesses and employ many people with the skills that they got as young men who sought a trade qualification. Apart from the ripping apart of TAFE, what so concerns me about the agenda of those opposite is that they really do not understand the nature of the kind of access to money that was happening under the former government, when we were enabling our young tradies to get the money that they needed to get a ute and be able to get on and do the sorts of work that they needed to do.
Labor is absolutely committed to making sure that our young Australians have the support that they need to stay in education, to stay in training and to develop the skills they need to get to stay in work or to achieve work. I could not tell you how proud parents and teachers were of all the trade training centres that I was able to see in my time in the 43rd Parliament that were delivered by the Labor government, which understood the nature of learning and young people and understood parents.
I am sure that there are some people sitting here in the gallery today and certainly people listening to this broadcast who go to sleep at night worrying about what job their son or daughter might be able to undertake, and whether they will be able to keep them at school through years 11 and 12 because they know, instinctively and because of the factual record, that, if you can stay at school and you can get a qualification, you are going to be able to improve your life. You will earn so much more money with these qualifications. There are parents struggling with, 'How do I get my 17-year-old son out of bed this morning and get him to go to school when he hates the learning experience there, because all he really wants to do is to become a tradie?' That yearning of Australian parents and young people who needed access to that learning was answered by the trade training skill centres that were established in schools—established in contexts where professional teachers, well trained, were able to continue to wrap care around these young people, where school counsellors and careers guidance were available in a school community where they were known, and where they could keep their friendships and the supports for their learning as they commenced their training to become masters of trades, vital to our economy and vital to our life.
We understand the importance of training and care in this sector, and I am very concerned about this bill, but we will not be opposing this bill—and that was made very clear by Senator Carr earlier this morning—because we are not going to stand in the way of everything that this terrible government is trying to do. But we are doing our best to put some brakes on what is a very bad proposal by a government that is only here because it lied to the Australian people. There are a lot of lies that are hidden in the detail that they do not want us to discuss about this bill that is before the chamber today, the Trade Support Loans Bill 2014.
Our efforts at this time are dedicated to fixing a number of serious concerns and problems that were raised following the introduction of this particular piece of legislation. The Abbott government is trying to put a bandaid on a problem that the former Labor government was already addressing. Access to support while you are gaining a trade is clearly an issue.
If you come from a regional area of Australia, as I do, where there is no adequate public transport system to move young people to jobs, one of first things you have to do—certainly in New South Wales—is undertake 120 hours training with a parent or a significant adult to help you get your licence. Because there is no bus from Copacabana at six o'clock in the morning to get you to your trades job where you are doing your training at Ourimbah by seven in the morning. It simply does not exist. You have to have enough money to go and buy a ute and you have to have a ute to put your gear in. These practical realities are something I understand—I have lived in communities where the trades sector is the most important part of the economy—and they have to be attended to.
Those opposite have come up with this scheme of: 'We will loan you $20,000 and put you in debt.' But they have not explained if having a lump sum payment is even going to allow someone to buy a $4,000 or $5,000 ute—and they are pretty hard to come by even when I see the cars by the side of the road as I drive up and down the Central Coast roads—that is going to be reliable enough to get you to work so you do not lose your job. Four or $5,000 is not a lot of money. What this government is proposing is not going to address that first-base need and that is evidenced by how out of touch those opposite are with what is really required.
However, after the backlash from apprentices, their parents and employers who have tried to wake this government up to the reality of what their failed implementation process is, the government have decided to come over with a few goodies, to put a little display in the window, to take away the stench of what they are doing. We have had $914 million axed from the Tools for Your Trade program. We have had $32 million axed from the Australian Apprenticeships Mentoring Program. We have had $18 million axed from the Australian Apprenticeship Access Program and $11 million dollars axed from the Apprentice Business to Owner program. Despite nearly a billion dollars of cuts, these guys think they are doing something—or pretending they are doing something—good for the country by offering $5 million to support our apprentices to take out a loan.
It is a shameful revelation of just how twisted the priorities of this government are, and which are on display day after day in this place. They are replacing Labor's very popular and effective Tools for Your Trade program—and this is a program Tony Abbott did not tell voters he would be cutting. He is bringing in the Trade Support Loans program. The problem is it is not flying with the people, because this government has a trust problem. It is clearly evident in this chamber; we could not have seen it more clearly than we did last Thursday. No-one trusts this government. No-one trusts Tony Abbott, because they have been nailed between the eyes with the lies that have been coming forth day after day.
Apprentices should not trust this government either, because a $20,000 loan for a 16- or 17-year-old who is still at school is an absolute crock. It is a disgraceful, and there is no sense of any public good. It completely belies the fact that some young people at 16 or 17 might not exactly know the perfect trade for them. What if they want to be an apprentice hairdresser and they have dreamed about it forever? They finally get there. They set themselves up with this loan and, three months in, they realise that this is not their dream profession but they are then saddled with a debt that this terrible government has inflicted upon them.
Right now, following the government's failure to have the Trade Support Loans Bill 2014 debated, apprentices around the entire nation are in limbo because of this shambolic government's decision to end the Tools for Your Trade program in June. They just do not know where they stand. We have got young people across the country who have got a debt from buying a vehicle to get themselves moving. All of a sudden, this government have come in—the adults in the room—and, pardon me, no apprentices know what you are doing. You are not supporting these vulnerable young people at a critical point in their lives. Not only has the Liberal government hurt our apprentices by cutting a billion dollars from the budget; they are being left in the lurch, because no support is coming from this government. It is just a legislative mess, and it is messing with the wrong people. It is messing with young people who have a right to a vision for their future that is far, far more positive and outreaching than this government that is seeking to shut things down left, right and centre.
As recently as 29 June, we had the Prime Minister say:
And from this week, there’ll be new concessional Trade Support Loans available to apprentices learning a trade.
It sounds very good. He went on to say:
This will help apprentices complete their studies.
But the problem is: it was wrong. It was a lie and it is disappointing to see the Prime Minister get such a simple fact wrong about such a vital program for young people in our community. He is giving false hope to those apprentices who thought they might have seen the light at the end of this gloomy, Liberal induced tunnel.
If these loans are not available, the minister must step up and reintroduce the Tools for Your Trade program, because apprentices who are operating and who planned their financial future with assistance from their families and the Tools for Your Trade program are now going to be suffering even more with no assistance, while the government sorts out this mess of a program that they are trying to push through this place today.
As I said earlier, Labor will not be in opposition for opposition's sake, but we have a government that is trying to gag debate on this issue. It is shameful. Why do they want to gag it? Because they do not want to have the media and me standing up and identifying the one billion dollars worth of cuts that they have inflicted on Australia and our young people. They are trying to hide from some very simple but important and effective amendments that we want to move. The fact that they want to shut down debate shows how hypocritical this government is and how disgraceful they are in seeking to shut down important debate and amendments to improve the lives of ordinary Australians. They just do not care, and they do not get it.
The Abbott government gagging members in the House and here raises my concerns that this government does not want scrutiny applied to its shameful policies. It is a slap in the face to the thousands of apprentices who will be worse off under Tony Abbott's cruel cuts to education. When the minister was asked a question in the House of Representatives, it was like a move that would have been applauded in a State of Origin game—weaving, dashing left and right all around the place trying to hide from the scrutiny of questions about financial liability. All he had to say was accusation after accusation about these young people who are just trying to get out and have a go, talking about them being irresponsible with money. He could not explain or make it perfectly clear the total liability that the apprentices will be facing if they take on these Trade Support Loans. This is why we have some very real concerns that need to be addressed in this place today.
As I said, we are not opposing the legislation, despite this shambolic way it has been handled. But these are some of the questions that we need answers to. How are apprentices going to access the loans if there is no legislative framework in place? To make this happen, you have to have a legislative framework. That is a minor point, but it might need attending to. Have protections been put in place for school-based apprentices who are under 18? If you are doing an apprenticeship course at school and you are aged 15 or 16, can you get a loan? Should you be giving a loan to kids at school, putting them in debt to the tune of $20,000? Is there something morally repugnant about that? Certainly there is to me, but we just do not know about those opposite. Saddling the least privileged with high levels of debt is the model of education that this government is set to inflict on this country. Have the privacy provisions in the legislation been strengthened to ensure that apprentices' personal information is protected? We have no answer. They are not answering those questions and are trying to cut debate on this.
Right now, we feel that there are inadequate protections for school-based apprentices and other apprentices under the age of 18 years. This is something that has been forgotten or ignored by this government. It is not just a $5,500 support payment as it was under Labor. That was the government helping you to get on the road, to get your gear and to get your trade. That is what it was; it was $5,500 to help apprentices. This is entirely different. This is applying for a $20,000 loan, a loan that the government will be extending to apprentices and some who are still at school and under the age of 18 years.
The next semester of TAFE will commence very shortly. Apprentices are going to need books and equipment. They need to know where they stand in relation to the Trade Support Loans. But we have no clarity from a government that is in disarray, that got to office on the back of a set of policy lies and very little competency. That is being revealed here. Under Labor, apprentices had the certainty and the flexibility of having the payment. They did not have to worry about repayments. It was an investment in young people. Having worked as a teacher for nearly 20 years and having taught teachers, I have confidence in the young people of Australia. With a bit of support they can do amazing things. This government has a very different view. They have a miserly, mean and debt-ridden view for the future of the youth of Australia. What they are trying to inflict on our country is a disgrace.
Another major issue we have on this side of the chamber is around the government's decision to give these loans only as a monthly payment. That is not going to help the person who needs a lump sum to buy that ute to get going. It simply does not match. There is a gap between the wild rhetoric of those opposite. Their holier-than-thou attitude clearly indicates that they think they can impose this on young people without listening to them, their families or their employers; without looking to the future with inspiration and vision to see an educated, enabled group of young people who have got their trades—vital to our economy. The benefit of Labor's Tools For Your Trade program that invested in young people was around providing that lump sum. It is expensive to get a trade. My brother Sean, who is no longer with us, delighted in his first years of being a plant mechanic. Tools, boxes to put those tools in and a ute to get to work in were vital things for him. It was very difficult for him, but his life would have been improved with $5,500 support from the government. A $20,000 debt, on the other hand, would have been a liability hanging around his neck.
The monthly loan payments proposed by those opposite really do one shameful thing. We have even heard it in the speeches today. They do not even realise how bad it is, what they are saying here. They are saying that monthly loan payments are going to be used by apprentices to prop up their wage. That is what this is about. It is: 'If you want a trade, you had better know that you are going to get a really, really low wage. You just have got to accept that.' And if it is too hard for them to manage on a really, really low wage, the wages will not be improved the wages. No, that is not their plan—go out and get a $20,000 loan. That is what this legislation is about—a $20,000 rock necklace for the youth of Australia. The government have no vision for education. They have no sense of investing in young people. They only have a sense of, 'You want it, you pay for it, and we will punish you and leave you with that liability hanging around your neck'. It is a shameful view of the future.
As the legislation stands currently, apprentices would not be able to purchase that new vehicle for work, that van or that ute. Apprentices would not be able to purchase a new set of knives or a professional set of hair scissors. Make no mistake about it: these loans proposed by those opposite are a salary supplement that young tradespeople will have to pay back at the end of their training. In the House of Representatives, the minister made the point over and over again, demonising the young people undertaking education, that Labor's Tools For Your Trade was not spent on what it was intended for—and without Labor's suggestions, neither will the Trade Support Loans.
The reality is that the Abbott government has revealed in its budget that it is determined to be unfair, to hurt the easiest target and to marginalise the most vulnerable. For young Australians, whether they go to university or TAFE, this government wants to take away opportunities and burden them with incredible levels of debt—because it sees only a dystopian view of the future where the rich are richer, the poor are poorer, and young people do not even have a place. If this government was actually listening to the young people of Australia, to their parents, who worry about them as they go to sleep at night, and to the employers, it would not be putting this shambolic piece of legislation before us; it would continue Labor's support program as it was—enabling the young people of this country. (Time expired)
I do not oppose this bill as a means of supporting apprentices but I believe that there are some serious defects with it and it needs to be amended quite significantly. I also have serious reservations about the immediate and long-term consequences of recent funding cuts for TAFEs. Worrying figures from the National Centre for Vocational Education Research show that, since 2012, national apprenticeship commencements have declined from 330,500 to 244,700. In my home state of South Australia apprenticeship commencements have fallen to from 25,600 to 15,700 during the same period—that is, a very significant and worrying reduction of more than 30 per cent. These figures show it is clear that we need measures to encourage the take-up and completion of apprenticeships. Equally as important, however, are measures to assist workplaces and training institutions to provide opportunities for apprentices.
TAFE Directors Australia, the peak body representing Australia's 58 TAFE institutions, have raised concerns with me about the real cost of the proposed Trade Support Loans. Unlike current HECS or FEE-HELP loans, which are paid directly to Commonwealth registered institutions, the Trade Support Loans are paid directly to students. As with university study, there is often no guarantee of employment following qualification. Combined with a labour market that has been tightening, there are some concerns about apprentices' ability to service their debts to the Commonwealth and the long-term consequences of their indebtedness.
The labour market is tightening, and it is getting worse. Rossi boots, an iconic South Australian company, missed out on a Defence procurement tender because there was a cheaper import. That does not take into account the whole-of-life costs and the social and economic benefits of making something here in Australia. Where people are employed locally they spend their money in the local community and they pay their taxes—and the company pays its taxes. That is very different from just exporting jobs using Australian taxpayers' dollars.
I acknowledge the analysis conducted by the Australian Greens which has shown it could take a carpenter up to 34 years to repay their loan, a welder up to 13 years and an automotive engineer up to 23 years. The government has disputed these figures and tells us it will take apprentices about eight years on average to repay the loans. Even if the government's figures are correct, with no restrictions on how the loan money is spent these loans could be a very expensive exercise for apprentices in the long term.
I have serious doubts, too, as to whether this loan scheme is the most effective use of public money to correct the worrying reductions in apprenticeship commencements, particularly in the face of recent budget cuts to other programs. These cuts include programs that target disadvantaged and migrant Australians by preparing them for TAFE and other apprenticeships. These programs have demonstrated track records in creating enormous opportunities for vulnerable Australians to enter and remain in the workforce. Although funding to help apprentices with living expenses may assist them to see out their apprenticeship, I am concerned that this measure may come at the cost of programs that encourage apprenticeship take-up. Of further concern is the cessation, without warning, of the Tools For Your Trade grant program. Thousands of apprentices across the country have entered into three- or four-year training contracts on the understanding and belief that they would receive grants of up to $5,500 over the course of their apprenticeship. For apprentices who are in the final years of their course, this news has been a particularly hard blow.
I am concerned that we need to look at this piece of legislation in the context of other amendments that are being proposed. It is important to note that the opposition has called on the government to determine a method of parental approval for loans taken out by apprentices aged younger than 18, which I strongly support; it is a question of appropriate consent for a minor. The Australian Greens have an amendment to include in this legislation a requirement for parental consent, which I think is very appropriate. I congratulate Senator Rhiannon for moving those amendments because they are entirely appropriate. There are a number of other Greens amendments which will be dealt with in the committee stage. I am broadly supportive of ensuring that, if you are going to slash TAFE, you have some safeguards in place.
I also note that the Tools For Your Trade program is having all sorts of consequences: it is retrospective in nature; it was done without warning; apprentices have already started. I note that Senator Day has just entered the chamber. He has a very credible and well-recognised home building company and has been passionate about apprentices as well. I am concerned that, if the government takes away funding like this, it will have a very, very negative impact.
I will not vote against this bill, but I will be supporting a number of amendments that I believe will make this bill fairer. Overall, I do not support the massive cuts to TAFE; we are going in the wrong direction if you want to support the whole issue of apprenticeships; we are slipping behind. If we want to build up skills in this nation and ensure that young Australians have a chance to learn and practice a trade, then slashing money from TAFE and taking money away from apprenticeship programs is a negative step. Having a loan program with certain limits and safeguards may be a way around it, but it is only a short-term solution. The government needs to acknowledge the economic costs of this. What modelling has the government done of the impact this will have on apprenticeship numbers—in particular, taking away Tools For Your Trade, which may have negative consequences in terms of the number of apprenticeships in this country? I look forward to the committee stages of this bill.