Tuesday, 8 May 2018
Migration Amendment (Skilling Australians Fund) Bill 2018, Migration (Skilling Australians Fund) Charges Bill 2017; In Committee
I thought there was a Greens' amendment ready to come forward. I'm not sure if that's the case.
The CHAIR: I am in the hands of the committee. I can put the question on the bill.
I also thought that there was a Centre Alliance—what does that mean?—amendment before the Senate. I'm not sure where we go. The opposition doesn't have any further amendments. We do have a view on what we've seen from the Greens in terms of their amendment and that from Centre Alliance. So, if one of them wants to speak to those, we are happy to respond.
I've obviously circulated the Greens' amendments. Is it the case that all these other amendments have been dealt with?
The CHAIR: Senator Hanson-Young, my understanding is that the opposition's amendments on sheet 8372 were agreed to on 15 February. That leaves us with the amendments that have been circulated: one from Centre Alliance and one from the Australian Greens.
The others have been withdrawn, have they?
The CHAIR: There's one that's just been withdrawn by Senator Anning.
by leave—I move amendments (1) and (2) on sheet 8394, to the Migration Amendment (Skilling Australians Fund) Bill 2018:
(1) Clause 2, page 2 (table item 1, column 1), omit "3", substitute "4".
(2)Page 3 (after line 5), after clause 3, insert:
4 Review of operation of amendments
(1) The Minister must cause an independent review of the operation of the amendments made by this Act.
(2) The review must:
(a) start as soon as practicable after 18 months after Royal Assent; and
(b) be completed within 6 months.
(3) The Minister must cause a written report about the review to be prepared.
(4) The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the report is given to the Minister.
(5) The report is not a legislative instrument.
Before I speak on the substance of the amendments, I'd like to make the point that there is still a long way to go to fix Australia's vocational education and training system. We don't have to look any further than the appalling failures we saw at TAFE SA last year to know that this sector needs serious reform. These bills do not represent that reform. I need to make that clear. The Migration Amendment (Skilling Australians Fund) Bill 2018 and the accompanying Migration (Skilling Australians Fund) Charges Bill 2017 direct sorely needed money towards training and streamline the system for employer-sponsored visas but do nothing for the structural problems affecting the sector.
Professor John Buchanan, from the University of Sydney Business School, put the problem in a nutshell earlier this year when he told the Senate inquiry into vocational education and training in South Australia that the national VET system was too fragmented and disconnected from the labour market. He made the damning report that TAFE 'is a rare asset' that consecutive Commonwealth governments have slowly eroded. Again to quote Professor Buchanan:
Australia's vocational education system used to be the envy of the English-speaking world. We've done a very good job of trashing a great asset.
It is obvious that the Skilling Australians Fund levy is not perfect. It will not in any way fix our broken system, but it is a dedicated pool of funds, an estimated $1.2 billion over four years, going towards 300,000 apprentices and traineeships. Centre Alliance will not stand in the way of that.
I note that the university sector is unhappy to be paying the levy, calling it a tax on knowledge. Universities rely on temporary skilled visas to import talent and do already invest in skilling Australians. They will pay the levy but will, in the main, not be able to draw down on it. I do have sympathy for their argument. I note that the Greens have proposed an amendment to exempt universities and RTOs from paying that levy. However, it is apparent that this exemption will not get through, as there is no appetite amongst the major parties to reduce the forecast $1.2 billion the levy will collect for apprenticeships and traineeships. I understand that too.
At a time when the VET sector needs a boost as well as serious reform, we don't want to whittle down any funds going towards apprentices and trainees. More to the point, we know there are other groups that are concerned about the impact of this levy, but it's not clear whether their fears will come to pass. For instance, we know there is some concern amongst trade trainers that the levy might have the perverse effect of discouraging employers from taking on apprentices. Currently they need to demonstrate that they put a percentage of their payroll into training in order to be able to sponsor a foreign worker. Under this reform, they will just pay the $1,200 fee for each visa, or $1,800 if we are talking about larger employers. Simply put, there may be adverse impacts, but we can't be sure of how deep or where they might bite.
For that reason, we have proposed an amendment for a review of the legislation in 18 months, to look at any unintended consequences on employers paying the levy. Allowing the levy to operate for a year before reviewing its operation should provide better information through which to fine-tune the program. In this instance, I think it will be a better approach than trying to pick winners and losers at the outset, through exemptions. For that reason, I urge fellow senators to support our amendment.
I indicate on behalf of the opposition that we will be supporting this amendment. The Migration Amendment (Skilling Australians Fund) Bill 2018 is now about 12 months old. It was announced in the last budget, and here we are with another budget tonight and we don't have any agreement.
This government has been incapable of getting any agreement with any of the state governments to actually implement their Skilling Australians Fund even after many discussions with the states. This is a government that is completely out of touch with vocational education and training. This is a government that would rather give over $2 million to their mates in Family First to support their pet project, which will be a failed experiment in South Australia, instead of supporting the TAFE system.
I think we've all watched in horror what's happened to the TAFE system—the TAFE system that's so important to kids and communities, the TAFE system that gets young people into training and education. We've watched in horror the cuts that this government has implemented in the whole vocational education and training system. They are totally supportive of a competitive model in the vocational education system, the competitive model that gave us Careers Australia. I'm not sure if Senator Griff has actually caught up with the outcome of what he described as the 'appalling failures' of TAFE SA. There were no appalling failures in TAFE SA compared to the failures and the appalling conduct and the rip-offs that took place in the private sector. The problem that TAFE SA found themselves in was that their funding had been cut and that their courses, that were actually allowing them to fund other courses, were going to the private sector—the easily delivered courses were going to the private sector—and that was causing a problem for TAFE SA to continue providing the skills and training that were required.
It's okay to stand up here and attack TAFE South Australia for political purposes, but that is gone; that's fixed. It was never a big problem. It was an absolute beat-up. When we had the hearing, we soon found out that the big problem was not with TAFE SA but with companies like Careers Australia being given more funding. One private company was getting more funding than the whole of TAFE SA. Six hundred million dollars was given to Careers Australia, who then delivered about $40 million of payouts to the directors and then went bust, leaving thousands of kids, thousands of young Australians, with no capacity to complete their apprenticeships and no capacity to complete their training. Instead of trying to make some pathetic political point on TAFE SA, Senator Griff, maybe you should look at the real problems with the vocational educational system. Maybe you should look at the privatisation problems that are in the system. Maybe you should look at the problems that competition policy has delivered in this system. You might have a look at the rip-offs that the private sector engaged in in that system. What we see in this country is the big banks ripping off their customers, and we see private vocational education providers ripping off young Australians. It's about time this stopped. And it's about time we concentrated on doing the right thing by the TAFE system, by the skills system, by the vocational education system in this country.
I'm one of the few people here who has actually engaged in the TAFE system. I was trained in the equivalent of the TAFE system in Scotland. That system allowed me to get an apprenticeship, to come to Australia, to look after my family through my trade, and to eventually get into the trade union movement and end up a senator. That's what my trade gave me. And that opportunity should still be there for young Australians—to get a trade, to get skills in the new areas that are emerging, to be able to take their skills around the world, and to have access to a decent vocational educational and training system.
We support these amendments, but I would hope that your group actually focuses on the key issues that are the problem—that is, the privatisation that's taking place, the failure of competition policy in the VET system and the rip-offs that took place by private providers. Those things have been the problem. The Skilling Australians Fund has now been there for 12 months but has still not been delivered. Many businesspeople and many employer organisations are very concerned that the payments system, totally funding the VET system through the visa system, is unsustainable in the long term. Many of the experts and academics that have looked at it say, 'This is a crazy proposition.'
We will support the bill because we need funding in the VET system. If the bill doesn't go through, there's no funding in the VET system. But there's an obligation on this rabble of a government to actually get deals put in place to make this a reality. Twelve months on, they haven't been able to do it. This was announced in the last budget. We've got another budget coming up tonight, and this incompetent government has been unable to deliver on what it announced 12 months ago.
We take the view that the amendments are reasonable. We will accept the amendments. I am happy to sit and talk to Senator Griff and his team about exactly what the problems are in the VET system and where we want to go. If we are fortunate enough to be elected at the next election, we will have a comprehensive analysis and review of the VET system and we will look at the issues that are required to be fixed to make sure that young Australians can get apprenticeships and traineeships, to make sure that their skills are recognised across the country and to make sure that they can articulate through the VET system into the university system. These are the issues that are important. They are important for Australian skills, important for our engineering base, important for our aged-care base and important for the NDIS. These are all areas that are so essential in making sure that we can look after people in this country and that we can compete domestically and internationally.
I've said before that you've only got to look at some of the OECD reports to see that we do not have the skills and capacity to compete in global value chains. We are not doing it. We are failing. After nearly five years of this government, nothing has improved. It's all been this ideological approach that competition policy will fix it, that privatisation will fix it, that we'll fix it by screwing young workers so that they have to make a contribution to the payments. I did my apprenticeship almost half a century ago. I had better conditions half a century ago as an apprentice fitter and machinist than some of our apprentices have got now. My boss had to pay my travel to and from tech. My boss had to pay the fees at tech.
All the Business Council of Australia want to do is get their hands on $80 billion worth of taxpayers' money, but they don't want to pay for their apprentices and their trainees to get their skills. It's a completely different view in Germany. The employers in Germany understand that training and skills are an investment for their company in the future and an investment for the individuals in their future. They take a completely different view from the troglodyte approach of the coalition and the troglodyte approach of the Business Council of Australia. It's about time they started thinking about the skills we need to make sure that our young people have an opportunity for a trade or a traineeship, that they have an opportunity to build their life with high skills and decent wages. Instead of cutting penalty rates, instead of attacking the trade union movement, how about concentrating on the real issues of importance?
We probably won't see any of that in the budget tonight, because the key issue in the budget tonight won't be about skills. It won't be about training. It'll be about handing $80 billion to big business in this country, and $17 billion to the banks. How ridiculous is that. That's the plan that Malcolm Turnbull has. That's the plan that the coalition has. It's not a plan about the things that make a difference. It's not about looking after young people. It's not about looking after apprentices. It's about simply handing money over to the people that fund coalition election campaigns: the finance sector and the big banks. People should understand that when they see the budget tonight. The government will probably have nothing positive to say about skills, because, as I've indicated, it's 12 months since the last budget, when they announced the Skilling Australians Fund, and businesses themselves are saying, 'We don't think this will work. We don't know that the money is going to come in on the visas to make sure the funding is there.'
That's why Labor have said we will not rely simply on visas to make sure we have a decent vocational education system in this country. We will make sure that we have a proper analysis of the VET system and make sure that young Australians have that opportunity—the opportunity that I had almost a century ago to get an apprenticeship, come to Australia and ply my skills in Australia. I thought Australia got a good deal when they brought me here. Some of my bosses didn't think so when I became a trade unionist, looking after working people. Young people should have an opportunity to get a trade. Young people should have an alternative to the university system. VET is an alternative pathway, and this government has neglected it. All the government has ever wanted to do is look after its mates and get a vote from Family First in South Australia. The government's position on skills and training has been an absolute disgrace.
During National Skills Week last year, where was the Minister for Education and Training? The minister was in India, praising the education and skills system in India. He wasn't here doing anything about education skills and TAFE in this country. TAFE is an absolutely iconic organisation in this country. It's an organisation that gives young people an opportunity to get a trade. It's an organisation that allows people in rural and regional Australia to get access to skills training.
Labor will make a difference. If we are fortunate enough to be elected, we will fix this VET system. We will make sure we've got a strong TAFE system. We will make sure that young people have an opportunity to actually get a skill that can see them, and their families, through for the rest of their lives; that they've got ongoing training; and that the costs are not continually piling up—cost transfers, costs getting pushed from the employer and from government back onto the individual young apprentice or trainee.
So we support these amendments. We've got the same concerns about this bill, but we need this bill to go through to make sure that there is a VET system that continues in the short term. In the longer term, Labor would completely review the system and make sure it works for young Australians and for everyone that wants to get the skills—to make sure we've got the skills in this country to allow us to compete internationally, make sure we build the new skills for the future and make sure we've got the funding for it. This bill doesn't do it completely, but we must accept that this bill goes through. That's why we will accept these amendments. We will support these amendments, but we still think there is lots more work to be done in the VET system.
I indicate on behalf of the government that we won't be supporting the amendments moved by Senator Griff. A review of the Skilling Australians Fund and levy may be of limited value in terms of the proposed 18-month time frame. Any such review would be best contained outside of the bill itself. The fund will be managed through a new multi-year project-based national partnership agreement with the state and territory governments. Pursuing a review of the levy after only 18 months could jeopardise the certainty in the agreement for the state and territory projects and the certainty provided to employers in the states. A review of the agreement will be completed 12 months prior to its expiry, and the review is prescribed in the agreement.
The CHAIR: The question is that amendments (1) and (2) on sheet 8394, moved by Senator Griff, be agreed to.
I move Greens amendment (1) on sheet 8387:
(1) Schedule 1, item 12, page 6 (after line 6), after section 140ZM, insert:
140ZMA Exemption for higher education providers and registered training organisations
Despite section 140ZM, the following are not liable to pay nomination training contribution charge:
(a) higher education providers (within the meaning of the Higher Education Support Act 2003);
(b) registered training organisations (within the meaning of the National Vocational Education and Training Regulator Act 2011).
This amendment, as circulated by the Greens, deals with the issue of the tax on knowledge, which is effectively part of what this bill does. The government are obsessed with cuts to higher education institutions. They're doing it over and over again. We've got another bill listed for debate this week which will make it even harder for university students to pay back their HECS debts. We wait with bated breath as to what will be in the budget tonight in relation to further cuts to our higher education institutions. This bill just shuffles money from one part of the education sector to another. It effectively amounts to a $15 million a year cut to universities.
The Greens amendment that I have moved exempts universities and registered training organisations from the Skilling Australians Fund charge. It does so because the Skilling Australians Fund is supposed to be about paying to train Australians to fill skills shortages. There's no economic rationale for charging trainers to fund trainers. Australia has no monopoly on world-class educators and researchers. We compete with the rest of the world for the best and brightest to create our own best and brightest. This bill, if it goes through unamended, will work against Australia's ability to do that. If we're going to make that harder, we're going to be short-changing ourselves.
I recognise that the exemption will marginally reduce the value of the fund itself. That is self-evident. Let's ensure that we can protect our universities from even more cuts by ensuring that they are exempt in this way. If the argument that the government put up for voting against this amendment is that the fund will not adequately fund skills training, then they should put more money into the fund. They should stop short-changing our higher education institutions and training providers.
The Skilling Australians Fund would compel any employer, including universities, to pay $1,800 for every overseas employee coming to Australia on a temporary skilled visa. If it applies to universities, it will amount to a $15 million a year cut, as previously mentioned. The money that trainers pay and that comes back to trainers is churn and cost with no economic benefit. This is just more of the government's obsession with cuts, cuts, cuts to education. It is effectively introducing a tax on a base that is then handed back to the same base. It is charging on the way in and forcing them to pay on the way out. It just doesn't make economic sense. By exempting universities, as this amendment does, trainers would be left better off. By including them, as this bill currently does, unamended, our training institutions and our trainers will be left worse off.
I urge the Senate to support this commonsense amendment to improve the legislation in this way. The Greens will support the legislation, but we just don't see sense in making universities pay for something that ultimately, at the end of the day, just ends up being churn and cost with no benefit—cuts, cuts, cuts. This government is obsessed with making it harder for our universities.
Labor will not be supporting the Greens amendment. I think if you looked at what Senator Hanson-Young said you would probably try to identify areas where you could make cuts in expenditure in the university system. I just looked at it, and the one I would note is that Australia's 38 public university vice-chancellors were paid an average of $890,000 in 2016, and 12 of them earned more than $1 million. The best-paid vice-chancellor was Sydney University professor Michael Spence, who received $1.4 million after a 56 per cent increase over five years. If there are ways of saving money for the universities, how about looking there? They must be the highest-paid vice-chancellors of universities in the world. I've got some sympathy for the argument about funding for universities, but give us a break. I mean, this is just outrageous.
On the amendment that has been moved, these issues were not recommended by the Senate Education and Employment Legislation Committee inquiry. And I have to say, Senator Hanson-Young, we hadn't seen this amendment. It came in late—no discussions, no engagement with Labor on the issues that you've raised. But that's fine; that's how your party normally operates. But you can't be expecting us to simply agree to something we're not consulted about.
The problem with this whole bill is that the Turnbull government has made these visa payments the only source of funding for skills in the VET system. We've got serious concerns about the insecurity of that revenue—and we're not the only ones who have said that. You've indicated it. The employer organisations have indicated worries about security for this fund. But this is what this rabble of a government has decided to do—this incompetent government, this decaying government, this government that is interested only in fighting each other and not dealing with the key issues for the Australian public. This is what they've decided to do. This is what we're faced with. And I suppose when One Nation is going across the floor, supporting this government on all of these issues, it makes it difficult to stop some of these crazy propositions that come here. We've got a combination of these Independents, of One Nation, of the government, supporting these propositions. These will get through. What we have to do is try to ameliorate the problems. That's why we have indicated that we want labour market testing, and we thank the crossbench and the Greens for supporting the labour market testing proposal we put up. This is not simply about academics coming in. This is about universities bringing in skilled trades, the same as businesses are bringing them in. We want Australians to get the first chance at jobs in this country.
As I said, this is the only source of funding for the VET system. Since the Abbott-Turnbull government was elected, we've seen 140,000 apprenticeships and traineeships decline under it—a decline of 35 per cent. The Skilling Australians Fund relies exclusively on fees from temporary and permanent skilled visas. Any exemptions could have serious implications on funding for Australia's skills and training sector, including the number of apprenticeships for young Australians.
Labor is aware the Turnbull government rushed skilled migration changes and created uncertainty in the university and education sector. This arrogant government failed to consult about the changes. That's why Labor led the way by announcing a new four-year visa for world leaders in science, medicine, academia, research and technology, with a pathway to permanent residency for educators, innovators and researchers of global standing. The new SMART visa will allow universities, research institutes, medical, scientific and advanced technology industries and companies, and public research agencies to bring the best and brightest to Australia to collaborate with their local counterparts. This is not a tax on knowledge, as Senator Hanson-Young has said. We take the view that you can actually deal with this, and that's what our SMART visa would do. Labor's superior policy means Australia can remain a world leader in innovation, medical and scientific research as well as in high-tech industries. We need to have access to the very best minds from around the world; we've got no argument about that. We just think there are better ways of doing it than this government has come up with.
Given our concerns, and the implications an exemption could have for a number of apprenticeships for young people across Australia, Labor will not be supporting this amendment. We need a decent VET system in this country. We need the TAFE system to be operating effectively. We are saying that we will make sure TAFE is properly funded. We will have that inquiry into the VET system if we are fortunate enough to be elected at the next election. We've got the answers on skills and apprenticeships. We've got the answers on VET. We've got the answers on making sure we can compete internationally. We are far ahead of the government on these issues, and nothing this government does in tonight's budget—which focuses on simply handing $80 billion to big business and $17 billion to the banks—will fix those problems. The coalition should stop worrying about how much the finance sector and the banking sector are going to put in their pockets for the next election. They should focus on the key issues for Australians—that is, getting a roof over their heads, getting proper skills and training, getting a decent health system and getting a decent education system. These are the issues for us, and these are the issues that this government continually fails on.
We take the view that the amendment should not be supported. We take the view that the best way to fix this is to make sure that, after the next election, there is a Labor government dealing with the issues of importance to the Australian public, making sure we've got jobs and skills and making sure that we can compete internationally. These are the issues of importance to the Australian public.
I must admit I was tempted to support Senator Hanson-Young on this amendment. The bottom line is to come down in favour of what Senator Cameron has said in not supporting it. It was a pretty good argument about robbing Peter to pay Paul. I can understand that. But I think it also runs this risk: by exempting higher education providers and registered training organisations, it would appear that you are supporting and encouraging more 457 visas, and, despite the rumours, I don't support that and won't support that. That is why, also, I'll be supporting Senator Cameron on the labour market testing provisions, as some other crossbenchers will. So I will not be supporting this amendment.
I indicate on behalf of the government that we won't be supporting the amendment moved by the Australian Greens. The higher education and training sector does account for a number of temporary and permanent employer-sponsored nominations, and we believe that the arrangements that we're putting in place should be comprehensive.