Senate debates

Thursday, 15 February 2018


Migration Amendment (Skilling Australians Fund) Bill 2018, Migration (Skilling Australians Fund) Charges Bill 2017; Second Reading

11:00 am

Photo of Doug CameronDoug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | | Hansard source

I rise to speak on behalf of Labor on the Migration Amendment (Skilling Australians Fund) Bill 2018 and the Migration (Skilling Australians Fund) Charges Bill 2017. The bills amend the Migration Act 1958 and provide a framework to collect an additional levy from employers accessing workers under the temporary and permanent employer-sponsored migration programs. Labor referred these bills to the Senate education and employment committee for inquiry to allow for further scrutiny by stakeholders most impacted by this legislation. Stakeholders have been absolutely vocal in raising their concerns about the consequences of the bills.

The bills allow the Minister for Immigration and Border Protection to determine by legislative instrument the manner in which labour market testing must be undertaken for a nominated position and the kinds of evidence that must accompany a visa application. Labour market testing requires employers who want to bring in overseas workers to first test the local labour market. This is to make sure that there are no suitably qualified and experienced local workers readily available to fill those positions prior to bringing in overseas workers. This is about putting local workers first.

Labor has genuine concerns that the Migration Amendment (Skilling Australians Fund) Bill 2018 doesn't legislate strict labour market testing conditions. Labor's private member's bill, the Migration (Skilling Australians Fund) Charges Bill 2017, introduced a more rigorous requirement for labour market testing to be incorporated into legislation, such as a requirement that jobs be advertised for a minimum of four weeks and a ban on job advertisements that target only overseas workers and exclude Australians. In addition to our private members bill, Labor has announced a comprehensive plan to put local jobs first and to invest in employment and training.

The Migration (Skilling Australians Fund) Charges Bill 2017 imposes the nomination training contribution charge payable, sets a charge limit for the nomination training contribution charge and provides for the indexation of the charge limit. These charges will apply to the temporary skills shortage visa, which is to replace the temporary work skilled subclass 457 visa in March 2018 , the employer nomination scheme subclass 186 visa and the regional sponsored migration scheme subclass 187 visa. States and territories are not exempt from paying the nomination training contribution charge. The Commonwealth cannot be liable to pay Commonwealth taxes or fees, although the Migration Amendment (Skilling Australians Fund) Bill 2018 makes the Commonwealth notionally liable to pay the nomination training contribution charge, including possible pecuniary penalties such as fines, for not paying the nomination training contribution charge.

The bill asks Australians to trust that Minister Dutton will do the right thing in a legislative instrument. But Minister Dutton has proved time and time again that he can't be trusted to do the right thing and protect labour market testing. That's why Labor has moved substantive amendments to implement minimum standards for labour market testing. Labor fought and won for labour market testing to be included in amendments to the Building Code as part of the Building and Construction Industry (Improving Productivity) Bill 2013. I will be moving detailed amendments to attempt to fix the government's failures, because labour market testing means local workers get the first shot at local jobs. If the out-of-touch Turnbull government won't protect local workers, Labor will protect them.

The revenue from the levies introduced by this bill will become the sole source of funding for what the government has called the Skilling Australians Fund. The government is claiming that the fund will be $1.47 billion in total, with $1.2 billion raised from visa fees. From 2018-19, the government is saying, the fund will rely entirely on revenue from the visas. There is no guarantee that the revenue from the levies will reach that amount. I will be looking at further amendments, which I will distribute as soon as I possibly can, to actually guarantee the income.

An effective skill formation system is essential to national economic and social prosperity. There was a time not long ago that Australia's apprenticeship system was the envy of the world. In the latest IMD world talent ranking, Australia is towards the bottom of the leaderboard when it comes to apprenticeships and employer commitment. Australia has placed 51st out of 67 nations for the area of apprenticeships sufficiently implemented and 43rd for employee training as a high priority in companies. Under this government we are seeing our international position on training decline. As a consequence, Australia is falling down the world talent rankings when it comes to investment and development of homegrown talent. A recent OECD report shows that Australia has poor capacity to access global value chains as a result of our lack of skills and high-tech manufacturing and complex business services.

Experts that submitted to a recent Senate inquiry into the VET system in SA spoke with one voice. They all said the national vocational education and training system needs fundamental reform. Professor John Buchanan identified compelling facts about the system, and he showed that the system is highly fragmented at the same time as being very rigid, and that there are poor connections between the labour market and qualifications. According to COAG data, the system is failing on its own measures. Large for-profit training providers have been making profits in the order of 35 per cent to 50 per cent—profits of up to 50 per cent for companies that are ripping off young Australians trying to access training. He concluded that there is no discipline on the system to preserve quality. Alan Finkel, the Chief Scientist, is concerned that the system is not equal to providing the skills that are needed for technical advances and rapidly changing labour markets that we are entering. Even the Productivity Commission—and I'm no great fan of the Productivity Commission—have called the VET system a mess. Last year, in their five-year productivity review, Shifting the dial, they said:

Despite its important but complex role, the VET sector has been beset with a raft of problems leading to a sector characterised by rapidly rising student debt, high student non-completion rates, poor labour market outcomes for some students, unscrupulous and fraudulent behaviour on the part of some training providers.

The BCA, the Business Council of Australia, is calling for systemic transformation and is of the view that it will take billions of dollars to put the VET system back together.

What has the government been doing in response to this? The government has done nothing to confront the underlying issues that plague the VET system; instead, they came up with the Skilling Australians Fund, which has been roundly criticised for its instability, its lack of sustainability and its failure to deal with the flaws in the VET system. The government has designed a system for funding skill formation, a matter of fundamental importance for ensuring the prosperity of our nation, that relies entirely on uncertain revenue. If the revenue from visas goes down, so will the funding for skills.

The funding mechanism has been condemned by experts and stakeholders. Back in May 2017, when the Skilling Australians Fund was first announced by the government, Professor Peter Noonan from the Mitchell Institute for health and education policy was already describing the flaws in the design of the fund:

Revenue for the fund will be highest when skilled migration is highest, and lowest when employment of locally skilled workers is highest. That means the revenue stream for the fund will be counter-cyclical to the purpose for which it was established: to increase the proportion of locally trained workers and to lessen reliance on temporary skilled migration visas.

Submitters to the Senate inquiry had the following to say about the government's approach. The Law Council of Australia said this:

… the Law Council is concerned that, should the number of skilled migrants decrease due to the Levy, so too would funding. If less funding for training and vocational education is provided to Australian and permanent residents, the demand for overseas labour may increase. Therefore, the Law Council suggests that the Levy should not provide the only source of revenue for the Fund.

It seems like common sense to me: if you want to have a decent training system, you put the funding in. The National Apprentice Employment Network, the organisation that represents group training companies, employing about 10 per cent of apprentices, said:

The VET sector should never be in a position where the best it can do to ensure sustainable funding for apprentices, going forward, is to encourage increased skilled migrant employment.

The Victorian TAFE Association said this:

… the levels of funding provided should first and foremost be driven not by the amount raised by migration charges but by the level required to train and educate Australians that maximises their contribution to Australia's economic success, future productivity and growth.

ACCI, a business group, said that the federal government has sent a strong negative signal about their commitment to vocational training. The Electrical Trades Union called it absurd and said:

The budget of the fund needs to be guaranteed, consistent and decoupled from how much money is actually brought in by the levy. There needs to be a guarantee of funding to ensure there is adequate training and, obviously, the levy can be used to defray. We should not have a system where there is funding for training of Australian workers contingent upon the importation of temporary workers.

The ACTU said:

It is our opinion that the VET funding model outlined in this proposal fundamentally fails to address the real weaknesses in our current VET system.

The government says that their Skilling Australians Fund will have matching funding from the states and territories, but it has been nearly 10 months and there is still no sign of any agreement. I note that the minister has been ringing around, pleading with state ministers to sign off. It was entirely predictable that the government would struggle to make an agreement with the state and territory governments on the Skilling Australians Fund. As ACCI pointed out in its submission to the inquiry:

Given there is no guarantee that the SAF will receive the amount of monies that are projected to be raised through the migration programme use, this has created uncertainty in the negotiations with the states/territories.

Professor Peter Noonan made the same observation nearly a year ago:

Unless the Commonwealth guarantees funding levels and continues to make up any shortfall in the revenue, it will be difficult, if not impossible, for the Commonwealth to enter meaningful, bilateral agreements with the states through the fund.

While the government is failing to settle agreements with the states because their funding mechanism is so absurd, the Senate inquiry was being told about apprentice vacancies—1,000 in New South Wales alone—that can't be filled. And we know there is a potential skills crisis looming in the disability and aged care sectors.

In their original announcement, the government claimed that the Skilling Australians Fund would lead to an additional 300,000 apprentices and trainees over the forward estimates. The Department of Education and Training is saying it will develop up to 300,000 apprentices, trainees, pre-apprentices, pre-trainees and higher apprentices. If the government pursues that target within that time frame with this farcical funding regime, Labor is very concerned that the quality of apprenticeships and traineeships will suffer. The last thing we need is a return to poor quality traineeships that are simply wage subsidies for already low-paid jobs.

Like Labor, stakeholders are understandably concerned that the Skilling Australians Fund might be used to undermine the quality of apprentice training. Witnesses referred to discussions between the state and federal governments about projects to fund what was described variously as a 'new style of apprenticeships,' 'an apprentice-like experience,' and, 'training that shares similar characteristics to an apprenticeship'. I know Mr Banerjee, from the department, is quite oblique at times, but this takes obliqueness to a new level.

The National Apprentice Employment Network had this to say about what the government is talking to the states about:

There have also been some discussions around the weakening of those guidelines to include things such as apprentice-like employment, and we have seen programs such as the builders program in South Australia and other institutional based trade training programs that fundamentally, through our experience with employers, do not necessarily result in employment capabilities of the individuals participating in them.

Ms Tiltman referred to the Bob Day student builder pilot. The government paid $2 million—to the registered training organisation that then Senator Bob Day founded and chaired for 10 years—to fund 20 students to undertake a carpentry course in a classroom. Minister Birmingham has assured us in this place that these 20 students would end up with building licences. I've got to tell anyone in South Australia listening in: if someone says they've got a building licence, they might never have been on a building site for paid work in their life. It is an absolute nonsense. But it was done by this government to placate Senator Bob Day at the time, to guarantee his vote on bills in this place. It is just outrageous that the training system would be used to bribe a senator in this place.

Ms Tiltman went on to explain the damage that can be done to unsuspecting students enrolling in courses that they think will lead them into work, when, in fact, the industry won't take them on. She described taking calls from people that have completed an institutionally based course and can't get a job because they don't have the experience and they're competing in the labour market with fully qualified tradespeople who have completed an apprenticeship. Not surprisingly, there has been strong opposition to the use of institutionally based training as a replacement for apprenticeships and traineeships. The government needs to ensure that the fund provides quality skills development that the community and employers can trust. What we've heard so far doesn't instil confidence.

The government has done nothing to ensure the sustainability of TAFE. Nationally, there has been a 20 per cent drop in government-funded training at TAFE between 2013 and 2016. We're in serious danger of losing the institutional capacity to deliver skills if we don't sustain our TAFE network. That should be of major concern to the government, and yet there is no reference to TAFE in any of the government's announcements about the Skilling Australians Fund. They sit back and watch as TAFE doors close and skills shortage courses are struck off the list of offerings. We have a situation in South Australia where the Liberal opposition are promising to move to a fully contestable training system if they win government. That would mean a $70-million cut to TAFE per year in South Australia. They are happy to decimate TAFE and throw the students of South Australia onto the mercy of a flawed training market, where private for-profit providers have made profits of between 35 and 50 per cent.

A government without a plan for education and training has no plan for Australia's future. The Turnbull government has no answer on jobs. This is a government that can't deliver on the fundamentals. During the course of this debate, we will raise issues that need to be addressed. (Time expired)

11:20 am

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party, Shadow Minister for Environment and Water (Senate)) Share this | | Hansard source

We have the Migration Amendment (Skilling Australians Fund) Bill 2018 and the Migration (Skilling Australians Fund) Charges Bill 2017 before us today. We know that these bills seek to amend the Migration Act to provide a framework to collect an additional levy from employers accessing workers under the temporary and permanent employer-sponsored migration programs. This is a worthy endeavour, and one worth supporting, but it is inherently flawed in terms of whether it will do due justice to our TAFE and education and training sectors. I want to say from the outset that the government has a long way to go in this regard.

The charges enabled in this legislation will apply to the temporary skills shortage visa, which we know replaces the 457 visa—that happened last March; the employer nomination scheme (subclass 186) visa; and the regional sponsored migration scheme (subclass 187) visa. We also understand that the immigration minister can determine by legislative instrument the manner in which labour market testing must be undertaken for a nominated position and the kinds of evidence that must accompany a nomination.

As I've said, Labor does not disagree that an additional levy on temporary skilled visas is, potentially, a skilled migration policy that can help ensure that local workers get the first shot at local jobs. But the simple fact is that this bill does not go far enough in ensuring that local jobs for local people come first. Equally importantly, this bill does little to ensure adequate funding for our TAFE and further education sector—which is what we need to support in order to drive the creation of the skills that this nation needs, so that we don't have to rely on overseas labour.

So there are issues with this bill, particularly with the Skilling Australians Fund. The revenue collected from the training contribution charge provided for in this bill goes to the Skilling Australians Fund, as we know. It is a training fund administered by the Department of Education and Training for the funding of apprenticeships and traineeships. In theory, this sounds terrific. Of course we should be putting more money into skills and training. But the funding in this bill is not stable and it is not guaranteed. The bill relies solely on skilled visas as the source of income for this fund to train local workers. The funding is dependent on the number of skilled visas and subsequent revenue from the nomination training contribution charge.

What is perhaps most concerning is that the Skilling Australians Fund makes no reference to critical support for our technical and further education sector. Any serious discussion about skills and education in our nation must have a conversation about TAFE, must include TAFE, must fund TAFE and must prioritise TAFE. We cannot in this nation allow our economy to rely solely on for-profit providers, many of which have a track record of exploiting people in the training sector. I have seen this firsthand. I've seen training providers offer training courses hand over fist in things that are cheap to run and easy to deliver, at the expense of what our economy really needs. The kinds of courses that TAFE can deliver—this is particularly an issue with things like diesel mechanics, welders and fitters—are all those trades where you need proper facilities and proper example trade environments to run your training. TAFE is the backbone of that quality training in our nation, yet more and more, because of underfunding, TAFEs are closing their doors on the very courses that are part of the skills shortage in our nation. We must ensure that our public vocational education sector is well funded to provide the training and skills we need in our country for the future.

The Liberals have a terrible track record. Labor doubts the shaky funding for the Skilling Australians Fund will ever raise enough revenue to ensure the skills and training for Australians through the TAFE sector. In examining this legislation, independent analysis has very much backed up these concerns. That analysis shows the design of the Skilling Australians Fund is inherently flawed. If the number of visas goes down, so will funding for skills. The ACTU highlighted this at the Senate inquiry, where they said:

In the absence of real transparency and firm commitments from the federal government about guaranteed levels of VET funding, the measures proposed by these bills will simply never be enough.

The government needs to invest in education, skills and training more than ever, and Australia really needs it. TAFE Directors Australia submitted the following to the inquiry:

TDA wishes to raise the broader concern that the Skilling Australians Fund risks focussing on apprenticeships and traineeships at the expense of responding to other important priorities facing the Australian economy. The priorities include mitigating the impact of automation, artificial intelligence and other disruptive technologies on the levels and types of skill workers, and ultimately ensuring that all Australians are active participants in the labour market, which is so central to sustaining the nation's GDP, and ensuring our ongoing international competitiveness.

I share those concerns. In other words, without strategic thought and investment about where skills and training need to go to cope with the future economy of our nation, we will be in trouble.

This bill provides none of that strategic foresight and none of that investment; instead, it provides a fund where the market can let rip on who gets to train and do what, which is an incredible mismatch with the kinds of skills and education that young people and older people retraining need to engage in the workforce. The ACTU included in their submission:

It is our opinion that the VET funding model outlined in this proposal fundamentally fails to address the real weaknesses in our current VET system. A relatively small, unstable funding source is not an effective remedy for a system in which few of the current issues can be considered to be caused by lack of funding.

So, at the core of this is not only a lack of funding; it is also a lack of systemic oversight for our TAFE sector. Essentially we have a government in the Liberal coalition that refuses to take any responsibility for sitting down with industry and sitting down with technical and further education providers to work out what the priorities of our nation really need to be. We've gone a long way backwards in this regard in recent years.

I agree with comments of my fellow Labor senators in their dissenting report from the inquiry into this bill. They've raised serious concerns with the design of the fund. Skills and training policy should never be dictated by the number of visa applications being made. Importantly, any funding from this fund could never make up for the massive cuts to TAFE that have taken place under this government.

There are issues with this bill also in relation to labour market testing. It is of great concern that this bill does not legislate strict conditions for labour market testing. It provides no defined parameters and relies on the immigration minister to determine the manner in which labour market testing is undertaken by legislative instrument. That is simply not good enough for us on this side of the chamber. Temporary visas should be used only where there is a genuine skills shortage, and vigorous labour market testing needs to be conducted to ensure that there really are no suitably qualified workers available to fill a position before permission is given to bring in overseas workers.

These changes, according to the ACTU, leave the labour market testing process virtually entirely in the hands of the minister. In other words, there doesn't have to be any process that's agreed by industry, that's agreed by people in this place, that's worked through with the TAFE sector, and that matches up with where skills shortages are and actually aligns skills shortages with where we invest in education and training places. This is simply not good enough. The ACTU also said, 'Poor labour market testing standards have facilitated the widespread use of 457 visas and the real harm done to many temporary visa workers through exploitation and wage theft.' My own union, the Australian Manufacturing Workers' Union, raised concerns. They said: 'The ease with which temporary worker visas can be achieved is driving higher demand. We think that calls for greater regulation, tighter regulation in respect of labour market testing.'

We share these concerns from the ACTU and the AMWU. This bill does not provide strict enough labour market testing across all occupations and skilled visas. We're simply asked to trust that Peter Dutton will do the right thing with his instrument. But Minister Peter Dutton has proven time and time again that he can't be trusted to do the right thing in labour market testing. Time after time the government proves that they cannot be trusted on labour market testing. You can't trust the Turnbull government with local jobs, and this bill is further evidence of that. The bill simply fails to legislate for strict labour market testing across all occupations and all skilled visa areas.

Mr President, can you blame us on this side for being sceptical? This government has a terrible track record on training. This government has a terrible track record on labour market testing. The Abbott-Turnbull government has ripped $2.8 billion out of skills and training over its five years in government. That has had a terrible impact on people's opportunities in this nation. We know that there was a $637 million cut from skills and training in the last budget alone. There are close to 140,000 fewer trainees and apprenticeships since the Liberals came into government. There are 41,000 fewer trade apprentices. And there was a 30 per cent drop in government funding for the TAFE sector between 2013 and 2016 alone. What an appalling track record. This bill can in no way go nearly far enough in making up for this government's lack of commitment to education and training in this nation.

Now, we know and those opposite should also know that the future of TAFE is absolutely vital to the future of our country, but they are not interested in investing in skills. A government with no plan for technical and further education in our training has no plan for Australia's future—no plan for jobs, no answers on skills, no answers on training and no answers on TAFE. This government simply can't deliver on the most fundamental aspects of a skills policy for our nation: a secure and rational funding base that deals with the real issues in our labour market and matches them up properly. This is a government that's simply not up to the job.

We have in our country underemployment at record highs and unemployment that is far too common, especially for young Australians and people in our regions. I see this right around Western Australia. Investing in skills and training to enable these young people and these local workers to get well-paid and secure jobs is essential. I see firsthand, right around Western Australia, the daily struggle of our young people in accessing the opportunities that they need. We've got fantastic up-and-coming economic opportunities in Western Australia with rail manufacturing and with defence manufacturing, but we will not have the skilled workforce that we need to do these jobs, because the government is simply not connecting people up with these opportunities with the education and training that they need to do them. What's the point in expanding and investing in these industries if, essentially, you then have to pull in overseas workers to do the job?

We must invest in education and skills training more than ever. Effective skills formation is the critical fundamental to our national economic and social prosperity. The Turnbull government should be preparing Australians with skills for a transforming labour market, for the massive technology changes that we know we will experience. But we see a designed training fund that relies exclusively on a levy for skilled migrant visas. It demonstrates how out of touch the Prime Minister is and how, yet again, they're relying solely on skilled visas and the fees attached to those to train local workers through this very unstable fund. It's simply not enough.

Those opposite have also failed to protect the penalty rates for 700,000 of Australia's workers and are now failing to protect local workers in getting the first shot at local jobs. Only yesterday in the House the Turnbull government voted against a Labor amendment to ensure local workers can apply for local jobs first before an employer can bring in workers from overseas. Our amendments moved in the lower house and in this place should be supported. Labor's agenda with amendments to this bill and our agenda in government is about having a plan for local jobs and about having a plan for TAFE. That is at the centre of our agenda. It is about having a genuine plan to put local workers first and to ensure businesses are training and employing local workers. This is what the real agenda for our nation should be.

11:40 am

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party, Shadow Assistant Minister for Innovation) Share this | | Hansard source

I too rise to make a contribution to the debate on the Migration Amendment (Skilling Australians Fund) Bill 2018, following on from that of my great colleague Senator Pratt, with regard to one of the fundamental institutions that provides a safe, educated workforce for the things that Australians need every day, like hairdressers and electricians. They do pretty important work in our community and they are a valuable part of the skill set of our community. Sadly, we've seen an incredible degradation of the capacity of TAFE to provide the sorts of skills and the standard of skills and training that Australia has certainly come to expect and was once prided on around the world. This legislation is so important because the decisions that this government makes have a profound impact down the track on what Australians experience.

I just want to put on the record a related matter with regard to what the government did about apprentices and access to support for apprentices shortly after they were elected. Under the watch of Tony Abbott, something that disappeared very, very quickly was Tools for Your Trade. Hairdressers have quite an expensive set of scissors to purchase, and electricians need particular gear to do their job, as do plumbers and all of those attending TAFE. Instead of getting a leg-up from support and government funding to provide the basic tools for their trade, they were offered an alternative that the government sold as something potentially good for those attending TAFE. The consequences of that have come home to roost. Just three weeks ago, I was at a hairdresser on the Central Coast, where I was talking to a wonderful young woman who is now acquiring a $20,000 debt at the rate of $650 a month. That is the debt burden that she is acquiring. She hasn't got a car. She was planning to save for a car, but she's been coerced into signing up for one of these $20,000 loans that this government has foisted on the Australian youth sector. It is predominantly youth. Often young people with very limited literacy skills are being implicated in that system. That failure is having impacts right across our entire community. What we're discussing today is another iteration of how we break down TAFE, how we take away proper training and how we break the sector. That's what the outcome will be if this piece of legislation is passed here today.

We've seen, through this piece of legislation, incredible contesting of the government's assertions about what the legislation is actually going to achieve. I have to say that, given the decay of trust in the VET sector and the TAFE sector, we should be listening to the experts who are giving us very, very clear evidence about their great concern about what this government is trying to inflict on us all. Professor Noonan, from the Mitchell Institute for Health and Education Policy, described the flaws back in May of last year, so it's not like the government haven't had a chance to hear what's going on. Professor Noonan said the flaws in the design of the fund that is proposed under this piece of legislation, the Migration Amendment (Skilling Australians Fund) Bill 2018, include:

… revenue for the fund will be highest when skilled migration is highest, and lowest when employment of locally skilled workers is highest. That means the revenue stream for the fund will be counter-cyclical to the purpose for which it was established: to increase the proportion of locally trained workers and to lessen reliance on temporary skilled migration visas.

These people know what they're talking about. Professor Noonan clearly understands the problems with creating a fund to supply all of the money for a TAFE or VET system based on employers paying only when they bring in skilled migration. It's a system that simply doesn't work.

Photo of Scott RyanScott Ryan (President) Share this | | Hansard source

Order! It being 11.45 am the debate is interrupted. Senator O'Neill, you will be in continuation when the debate resumes. Senator McGrath.