Monday, 24 February 2020
Trade Support Loans Amendment (Improving Administration) Bill 2019; Second Reading
I rise today to speak in support of the Trade Support Loans Amendment (Improving Administration) Bill 2019, which supports Australia's apprentices and the tradies of our future. I acknowledge the hard work of Senator Cash, who is working to raise the profile of the vocational education and training sector to ensure that it becomes a viable option for many students leaving high school. This is vitally important as we face the challenges of new and emerging industries as well as the evolution of the more traditional trades that the vocational training sector has worked with for many years. As new industries emerge and the more traditional trades become more technologically sophisticated, vocational careers are often a much better job path than university for many young people. Also a vital way to tackle youth unemployment is to give young people the relevant skills for the changing workforce and to make available vocational training and courses that best suit their abilities and interests.
Overall, the Morrison government is investing over $3 billion in 2019-20 to ensure that the VET system delivers the right skills for Australia's workforce of today and tomorrow. This funding includes a range of measures that not only directly support young people in the VET sector but also encourage employers to take on apprentices and trainees. This support comprises $1.1 billion to fund the government's own skills programs, including employer incentives and support for Australian Apprenticeships; $1.5 billion given to the states and territories every year through the National Agreement for Skills and Workforce Development specific purpose payment; and $175 million given to states and territories via the Skilling Australians Fund to support increased apprenticeship and traineeship numbers.
In my home state of Victoria, the coalition government will provide around $1.6 billion over four years through the special purpose payment to support skills development. The Australian government also provides funding directly to Victorian employers to hire apprentices. I'm pleased to say that this includes the $98 million that was paid to employers in 2018-19 under the Australian Apprenticeships Incentives Program and the $62.3 million that was paid to apprentices under the Trade Support Loans program. As at December 2019, 2,000 apprentices in Victoria are expected to attract the new additional identified skills shortage payment for their employer and 3,027 had commenced in an eligible occupation. In 2018, there were 21,453 Victorian enrolments in VET student loan courses, with loans of almost $102 million. Through the Australian Apprentice Wage Subsidy trial we're also supporting over 3,200 employers across regional Australia to engage more Australian apprentices in areas of skill needs. Victoria was allocated a total of 662 places over the two phases of the trial.
The 2019-20 budget committed $50.6 million over four years to trial industry training hubs in 10 regions with high youth unemployment, including Shepparton in Victoria. The Australian government provides $1.5 billion every year to state and territory governments under the National Agreement for Skills and Workforce Development specific purpose payment. Funding from the Commonwealth to the Victorian government under this agreement has been steadily increasing—from around $338 million in 2011-12 to an expected $428 million in 2022-23. Overall, the Commonwealth is investing over $3 billion in 2019-20 to ensure that the VET system delivers the right skills for Australia's workforce.
The coalition government has already implemented policies to support people undertaking apprenticeships and to take on apprentices. Our Skilling Australians Fund will create more apprenticeships to support future productivity, jobs and growth. Over $330 million has been provided to state and territory governments, supporting approximately 80,000 apprenticeship and traineeship opportunities. They target occupations with skills shortages through incentive payments for employers and apprentices. We are investing $50.6 million to trial 10 local industry training hubs in areas of high youth unemployment to ensure that vocational education programs are tailored to meet local workforce needs and skills demands. The hubs aim to improve opportunities for young people in regions with high youth unemployment, specifically targeting Year 11 and 12 students. Each training hub will be managed by a full-time career facilitator, providing an on-the-ground presence while delivering training hub services. I'm very pleased to hear that from January 2021 a training hub will be located in the rural town of Shepparton in my home state of Victoria.
To support Australian apprentices to meet everyday costs while they undertake their training, eligible apprentices will be able to apply for trade support loans. The coalition government introduced these loans in July 2014 to help apprentices successfully complete their apprenticeship. The loans provide around $21,000 over four years to eligible apprentices to assist them with the costs of living and learning while undertaking their training. Similar to a HECS-HELP loan, loans will not have to be repaid until the apprentice is earning an income above the minimum repayment threshold. This threshold was around $45,000 in 2019-20. In order to maintain the real value of the loans, the loan amount will be indexed according to the CPI. Apprentices who successfully complete their apprenticeship will receive a 20 per cent discount on their loan amount.
Trade support loans are by far the best loan any apprentice will receive. It is better than a commercial loan and it demonstrates the importance the coalition government is placing on ensuring that our budding tradies are well supported to complete their apprenticeship. During the 2018-19 financial year the Trade Support Loans program provided financial support to around 56,000 Australians apprentices. While in receipt of the loan, apprentices must notify their provider of any change in their circumstances which may impact their eligibility—for example, if their apprenticeship is suspended or they change employers. Where a loan instalment payment is made and the apprentice has not notified their provider of the change, the apprentice may incur an overpayment debt to the Commonwealth, which needs to be repaid immediately. The bill will allow offsetting arrangements to be implemented where the apprentice is eligible to receive loan instalments in the future. Future instalments are reduced by the loan instalments amount already received in error until the debt is fully remedied.
While in receipt of the loan, apprentices are also required to inform the secretary of the department if their address or circumstances change. Currently apprentices must notify a change of address within 14 days. This bill allows notification to occur after 14 days. Currently apprentices must notify the change of circumstance within seven days. This bill allows notification to occur within 14 days. These changes, importantly, will reduce the administrative burden on apprentices and providers.
The coalition government is committed to ensuring that we are equipping Australians with the skills they need for good, secure jobs. We are committed to ensuring that the economy is managed in such a way that these programs are affordable, effective and targeted to help those take advantage of a modern and growing economy—something Labor could never, ever achieve. I commend this bill to the Senate.
Before I indicate that Labor will be supporting the Trade Support Loans Amendment (Improving Administration) Bill 2019 and make a few comments about the bill itself, I can't let Senator Van's comments about Labor's proposition, in terms of apprenticeships and jobs for blue-collar workers and for working people in regional areas, pass without making this observation: what passes for a government over the other side of the chamber presided over 40,000 jobs being ripped out of the heart of regional Victoria in the auto industry—an announcement that was clapped and cheered by the geniuses opposite, who goaded Holden, Toyota, Ford and Mitsubishi to leave the country—leaving the regional and suburban economies of Victoria and South Australia in absolute squalor.
This is an issue that these peanuts will never, ever have to confront. They'll never have to worry about it. Never, ever in their lives will they have to worry about putting food on the table—
I remind all senators that interjections are disorderly.
Senator Van interjecting—
Senator Van, I have stated that interjections are disorderly. I'll ask Senator Ayres to reflect on what he said and whether he would withdraw those comments.
Thank you, but I think it would also assist the chamber that, if you're going to withdraw, you just withdraw the comments, without giving us a description of what it means. Thank you, Senator Ayres, you have the call.
I'm very happy to have it, and thank you for that assistance, Madam Acting Deputy President. Labor will support the bill that's in front of the Senate, but I observe that the vocational education system has collapsed under the coalition. The amendments in the bill are designed to reduce the administrative burden on the department and recipients and reduce the reliance on traditional debt recovery.
Apprentices are extremely low-paid. Access to financial support like this actually really matters. Take, for an example, an apprentice boilermaker under the manufacturing and associated industries award. The award rate for a first-year boilermaker apprentice is $12.48 an hour—65 per cent of the minimum wage. In their second year it's $14.75 an hour, and in their third year it's $17.02 an hour. Being trade qualified really matters. It's worth the investment. As somebody who has represented skilled tradespeople my whole working life, I can tell you that these are really good jobs. But almost half of all apprentices drop out before they get their trade, and the low rate of apprentice pay is one of the main reasons that people drop out. If you have to choose between getting a trade and putting food on the table, that makes life very difficult for young apprentices.
Apprentices are also vulnerable, more vulnerable than most people in the community, to wage theft. Australians have followed what has happened particularly in the hospitality industry: George Calombaris, $7.8 million in unpaid wages; Heston Blumenthal, $4 million in unpaid wages; Neil Perry, an estimated $10 million in unpaid wages, with timesheets tampered with and changed. The workers who bore the brunt of this theft weren't lawyers, politicians or journalists; they were apprentice chefs—people at the lowest end of the labour market and some of the lowest paid.
Government senators interjecting—
It might be amusing for senators opposite, but these people are very vulnerable people who have borne the brunt of the coalition's failure to manage the economy and the labour market.
Research from the University of Queensland shows that this exploitation in the hospitality industry is institutionalised. It found that unpaid penalty rates and unpaid superannuation—which I understand, following today's Senate debate, we're giving people an amnesty for—were rife and institutionalised. A first-year apprentice chef being paid award wages makes $474.38 a week. Being underpaid at such a low salary is devastating for young workers. There must be substantial action to increase the pay of apprentices across the board. I want to commend the work of trade unions, who are doing that work. There will always be a need to cover the upfront costs of starting an apprenticeship. That's why we supported the original trade support legislation, and that's why we'll support the legislation here today.
The original trade support loans system was a product of the 2014 budget. I think we all remember the 2014 budget. It provided $2.7 million in funding for the original loan program and cut the Tools for Your Trade program, which represented $1,914 million straight out of the pockets of Australian apprentices. The original Tools for Your Trade program provided $800 in cash. It was a Howard government program, which was expanded by Labor in government, where it was increased substantially to $5,500 over the course of the apprenticeship, including a $1,500 bonus on completion. Labor did that because we're a party that recognises the real value of skilled trades. It's Labor that built the TAFE system around the country, and it's Labor who's going to have to defend it. The Abbott government axed the Tools for Your Trade initiative. The then industry minister—we've had five industry ministers over the course of this government, and no industry policy—Ian Macfarlane, said, 'We've got evidence that they're spending the money on tattoos and mag wheels for their cars, and birthday parties.' That's where the coalition government has come from on these schemes. What an insult to hardworking, low-paid apprentices right at the bottom of the labour market trying to find their path to a decent life or adults who are changing their career, mid-career, who often take a pay cut to retrain. The coalition government has taken every opportunity to make their lives harder, their prospects of completing their apprenticeship more remote and the prospects of getting good jobs in decent industries that pay a decent wage almost impossible in some regional communities.
Those opposite love to dress up in high-vis—we saw a bit of that today. They love to pretend that they've ever done anything with their hands. I've been listening with great interest to the Weatherboard and Iron podcasts of some of the National Party members, who you can almost see from here, but not quite. These people have never struggled to put food on the table on an apprentice wage. People who talk about weatherboard and iron have rarely lived in one of those homes, and they've rarely met anybody who has. All they know is about the sharp suits and the soft chairs in executive life. They don't know the smell of a workshop or the sounds of machines, and they certainly don't know what it takes to run an economy and run a labour market that produces good jobs and a reasonable prospect of a young apprentice coming out of their trade and going into a decent job. We heard a lot today about the increases in jobs. What we haven't heard much about today is good jobs, decent jobs and trade jobs.
In truth, there are 150,000 fewer apprentices every year in this country because the team opposite have mismanaged the economy and mismanaged TAFE. There are now fewer Australians in training than there were a decade ago. That's 150,000 lost opportunities for our kids to have a better life; 150,000 opportunities for people to retrain gone; 150,000 opportunities for decent businesses to invest in their future workforce capability gone; and 150,000 apprenticeships and traineeships that the country needs for a more productive economy and for a better economic future.
I've talked to thousands of tradies over the course of my working life—fitters, machinists, boilermakers, electricians, auto mechanics, sheet-metal workers, aerospace engineers—who are deeply worried that their kids will not have the same opportunities that they have had. They're not actors pretending to be tradespeople wearing the high-vis. I've worked with hundreds of businesses, large and small, that can't afford to let their tradespeople retire because they don't have the workers to replace them. Across the country our TAFEs—mismanaged—are emptying out from deliberate mismanagement. As we face the key challenges of the 21st century, dealing with a more unstable global environment, the re-industrialisation of our economy to avoid climate change, the social and technological challenges of the future of work, we do so without 150,000 extra skilled workers who could have helped the country to build its response.
Instead of dealing with the shortage of skilled tradespeople, what did the advertising executive who passes for a Prime Minister do? He hired an actor. The advertising executive hired an actor to paper over the fact that there is no decent policy from this government, either in the labour market, to create good jobs, or in vocational education or training, to deliver decent jobs and decent apprenticeships for ordinary Australians in the regions. Hiring a television personality to save this government's record on vocational education is like trying to weld with a hairdryer. It might work on the whiteboard when you're doing the marketing exercise, but it will never deliver one extra job in regional New South Wales, one extra job in suburban Brisbane or country Brisbane, or one extra job in Dandenong or Shepparton. It will deliver advertising messages—focus grouped to within an inch of their lives—designed to prop up a government that's lost the capacity to have an agenda for the future of Australia. The Guardian reports that the government is paying Mr Cam $345,000 for 15 months—11 times the wage for a first-year apprentice chef. Minister Cash didn't want you to know that. She put in a very good effort trying to make his salary commercial in confidence.
We need a serious effort from government to recruit and retain young Australians as apprentices. We have to rebuild our skills system. The government should start by retaining the apprentices and trainees who have already started their apprenticeships. Only 56.7 per cent of apprentices and trainees complete their courses, and that figure is going down. This means that over 43 per cent of apprentices and trainees drop out before they are qualified. That is a huge cost to business and a huge cost to the government. More importantly, it is huge lost opportunities for thousands of young women and men whom our system is letting down.
The number one reason cited by apprentices and trainees who left was, for many of them, workplace culture. Of women who dropped out, 44.7 per cent reported being bullied at work. Another reason that young apprentices cited was pay and working conditions—
That is beneath you, Senator Scarr. It is actually a deeper cultural problem, across all workplaces: it is about valuing younger workers and looking after people; it is about building a culture at work where people are treated with respect and are paid decently and know they've got a future; it is about the institutions representing them having a say at work; and it is about people being valued for the work that they do. This is serious stuff that actually matters in ordinary workplaces and we ought to take those issues seriously.
The other issues that drive big apprentice drop-outs are, of course, about pay and working conditions. If most apprentices live below the poverty line, they will continue to drop out in large numbers. It takes until the fourth year of an apprenticeship to be paid above the minimum wage. If young people can earn substantially more bagging groceries or working in a call centre, they will continue to drop out of apprenticeships. We need to recruit more apprentices and support more women into apprenticeships. Many trades, particularly the construction industry, represent some of the most gender-segregated workplaces in the country. For example, only 2½ per cent of automotive tradespeople are women. A University of Sydney study shows that only 50 per cent of automotive tradespeople would describe their workplaces as environments where men and women are treated equally. Other trades have dramatic under-representation of women. They include electricians, telecommunication trades, construction trades, metal fabrication and plumbing. These figures have remained stagnant and have not moved for three decades. As a country, we need to deal with industry policy that creates good jobs and that doesn't send good jobs, in particular good manufacturing jobs, overseas.
Like so many other areas of policy, the government doesn't have a plan for our skill system beyond advertising campaigns, hiring actors, putting the hi-vis on and doing press conferences. It's important that we improve the system of trade support loans. This is not the first time I've stood up here supporting a piece of government legislation but opposing the way that the government has failed to deal with the sector properly. We will support this legislation, but it barely touches the surface of what we need to achieve for Australian workplaces and to deliver real apprenticeship and training opportunities for people particularly in our regions and in our suburbs.
I rise tonight to speak in support of the Trade Support Loans Amendment (Improving Administration) Bill 2019. Apprenticeships and getting young Australians into trades is incredibly important for the future of our nation. Almost every aspect of our future depends, in a large part, on having a skilled workforce to help build this nation. Whether it's in the construction centre, building the infrastructure such as the homes and the offices that Australia needs in order to grow and expand; in the energy sector, which has so much opportunity for the future; or in the mining sector, which employs so many people around Australia and will continue to be a key industry and a major competitive advantage for Australia in the decades to come, apprentices are critical. The Morrison government has a strong plan to support them. That's why we took a very significant policy to the election to create more apprentices. I look forward to speaking about that policy here tonight.
The reason that I nominated to be considered for the Senate and the reason I ran as a Liberal candidate is I've seen too many young Tasmanians, people my age, having to leave our island state for job opportunities that they feel they can't have at home. These people don't want to have to leave, but they feel that they can't enjoy the employment opportunities in Tasmania that they could in other places. We, as a government, need to be making sure that there are opportunities for our young people in Australia more broadly but also in my island state—perhaps a little selfishly as a Tasmanian. I'm advocating very strongly that we should make sure there are job opportunities in my island state for our young people, and investing in the trades is a really important part of doing this. Not every young Australian wants to go to university. Not every young Australian wants to pursue a career that might require them to have a university degree, and there is absolutely nothing wrong with that. We should be encouraging as much choice for our young people as possible so that they have options for future study. I think investing in the trades is an incredibly important part of this. That's why I was so proud to stand as a candidate in the federal election last year and stand alongside my coalition counterparts and fight for these policies—part of which we are obviously discussing here in the chamber this evening—to make sure that Australians across the age spectrum, but particularly our young people, can have opportunities, whether that's higher education at universities or pursuing a trade. This piece of legislation here this evening is a really important part of that.
In speaking about the election policies that we were fighting for in May last year, the coalition had a $585 million Delivering Skills for Today and Tomorrow package that will create more apprenticeships around the country. This means an additional 80,000 apprentice positions will be created over five years in occupations with skills shortages through incentive payments for employers and apprentices. We're establishing 10 national industry training hubs in areas of high youth unemployment to ensure vocational education meets local workforce needs. As part of this package employers and the new apprentices they hire in 10 national skill shortage occupations may be eligible for the additional identified skills shortage payment. This payment will deliver up to $4,000 in support to eligible employers and $2,000 to new apprentices. This is a really important new incentive to boost occupations with critical skills shortages.
We also established phase 2 of the Australian Apprentice Wage Subsidy trial, in July last year. That trial provides support to employers in the first three years of an Australian apprenticeship, offering 75 per cent of the first-year award wage, 50 per cent of the second-year award wage and 25 per cent of the third-year award wage. We are also lowering the age of eligibility for the Support for Adult Australian Apprentices incentive from 25 to 21 years for apprentices commencing from 1 July last year, and that gives employers more support when they seek to engage adult apprentices in areas of identified skills need. These are practical measures to support those who want to employ an apprentice and further incentivise those business owners who might be considering putting on an additional apprentice. Like I said, these policies are all about creating new opportunities and encouraging people to enter the trades.
Another important skills initiative of the Morrison government in my own home state of Tasmania is the Energising Tasmania initiative, and this is something that I'm very excited about. This policy is an investment of $17 million, through Energising Tasmania, to develop a Tasmanian workforce with the priority skills needed to support the Battery of the Nation initiative and renewable energy and these related sectors. It is a really exciting partnership with the Tasmanian government to address critical training and skills development needs of high priority. I was with Minister Cash in the north-west of Tasmania with the then candidate for Braddon—now member for Braddon—Gavin Pearce, when we announced the funding for this commitment. It is a very exciting project. But the most important thing about Energising Tasmania is that government and industry are working together to identify what skills are going to be required. We know that Battery of the Nation is a very exciting new venture for Tasmania and we know that there will be opportunities to train and retrain people in the appropriate skills that they need if this project is going to be a success, so that's why the government has invested this $17 million through Energising Tasmania to make sure that our local workforce can keep up with the demand of this new and emerging industry, and I think that's very exciting.
In talking about the fact that so many young people of my age have had to leave Tasmania—this Energising Tasmania, Battery of the Nation was not an opportunity that was around when I was finishing high school and considering my future career. I'm not sure I would have quite been cut out to build the Battery of the Nation myself, knowing that my practical skills are, perhaps, not quite up to scratch in that regard. But it is fantastic that these opportunities are here. It is about giving young people more choice and understanding of what those opportunities are for them to contribute to their local economy.
The point of Energising Tasmania is to remove the up-front costs associated with vocational education and training to lift barriers to training so more Tasmanians can train for the skills that local business and industry need. Fee-free training will be available in the priority areas identified by industry, including project management, civil construction, electro technology, resource management, building and construction, water industry operations and engineering.
Through our new training grants fund up to 2½ thousand fully subsidised training places will be provided over the next five years, including traineeships, apprenticeships and pre-apprenticeships in areas of identified skills need. This is exactly what skills programs should be doing—identifying the growth industries in each state. We know in Tasmania that hydro and pumped hydro potential, along with other technology, is a growth area. Putting in place mechanisms to build the workforce that's needed to deliver on that potential, this initiative will contribute strongly to the aims of the Battery of the Nation project to achieve an affordable and reliable clean energy future for Tasmania and for the rest of the country. It will drive increased employment opportunities across Tasmania, including in regional areas with high unemployment. To that end, I'm sure the member for Braddon, Gavin Pearce, would agree with me that this is a such fantastic initiative for the north-west coast of Tasmania. This is an area that needs initiatives like this so that the young people there, and the locals there, can work locally if they want to.
The bill that we're discussing here tonight is just another element of our commitment to supporting apprentices. The Australian government introduced the Trade Support Loans Scheme in July 2014 to help Australian apprentices successfully complete their apprenticeships. The loans provide just over $21,000 over four years to eligible apprentices to assist them with the costs of living and learning while undertaking their training.
During the 2018-19 financial year, the Trade Support Loans program provided financial support to 55,998 Australian apprentices. Arguably, those are 55,998 Australian apprentices who may not otherwise have been able to seek out an apprenticeship. The TSL debts are normally repaid through the Australian taxation system once a former apprentice's income reaches the minimum repayment income threshold. These payments are managed by the Australian Apprenticeship Support Network providers. While in receipt of Trade Support Loans, apprentices must notify their AASN provider of any change in their circumstances that may impact their eligibility for TSL—for example, if their apprenticeship is suspended or if they change employers. Where an instalment payment is made and the apprentice has not notified their AASN provider of the change, the apprentice may incur an overpayment debt to the Commonwealth, which needs to be repaid immediately. The amendment that we are discussing here today will allow offsetting arrangements to be implemented where the apprentice is eligible to receive TSL instalments in the future.
As I said, this piece of legislation that we're discussing here tonight is just one of a whole suite of measures that the Morrison coalition government is putting in place to support industries, to support apprentices and to make sure that we have the skills that we need for the jobs of the future. The coalition government is committed to ensuring that Australians have the right skills for the workforce of today and tomorrow. Indeed, in 2019-20 we are investing over $3 billion in vocational education and training, which includes $1½ billion given to the states and territories every year through the National Agreement on Skills and Workforce Development; $1.1 billion to fund the government's own skills program, including employer incentives and support for apprentices; and just a little bit left over to the states and territories via the Skilling Australians Fund to support increased apprenticeships and traineeship numbers.
We are also, of course, still paying to fix Labor's failed VET FEE-HELP scheme. Since 2016, over 66,500 students had VET FEE-HELP loan debts of over $1 billion re-credited by the Commonwealth. Under this disastrous scheme, dodgy providers flourished and student exploitation was high. Students were systematically exploited and signed up to accumulate huge debts for training packages that were never delivered. That's why we've introduced VET Student Loans—so that students can gain their qualifications safe in the knowledge that they will not be ripped off. The government's skills package is contributing to an increase in Commonwealth funding to VET over the budget forward estimates. Funding from the Commonwealth to the states and territories under the national agreement has been steadily increasing from around $1.36 billion in 2011-12 to an expected $1.6 billion in 2022-23. The numbers speak for themselves. This government has a very firm commitment to ensure that our VET sector continues to flourish.
Just in summarising what I've said here tonight, because I recognise that my time is not far from expiring, as a relatively new member of the coalition government—and I will still lay claim to being relatively new for maybe another six or so months—it is personally pleasing and satisfying for me to be here working in a government that is taking really seriously the issue of ensuring that young people can have access to the skills that they need for the jobs that they want to have. Coming from Tasmania, this issue is always so front and centre for me. I've seen so many of my friends and my family members leaving Tasmania—whether it is when they've finished high school, when they've finished university or a couple of years into their chosen career—because they feel that they can't have employment opportunities in Tasmania like they can on the mainland. I've always considered myself incredibly fortunate to have lived and worked in Tasmania all of my life, but I know that I'm one of the lucky ones. Most people haven't had the pleasure of doing that. Some of my friends now living interstate want to come back to Tasmania. They know we have a fantastic lifestyle in Tasmania and they want those opportunities there—not just for them to be able to come home to, but of course, for their children as well.
So policies such as the ones that I've talked about tonight, enabled through the legislation that we're debating here this evening, are such an important part of this government demonstrating to the Australian people its commitment to our next generation of workers—its commitment to ensuring that there are job opportunities there for the next generation and that, most importantly, they are appropriately skilled to go into those jobs and have a successful career. As I said at the start, for some people, that's going to university. I was one of those people, and there is nothing wrong with that, but at the same time we should still be concentrating much of our efforts on the trades, because, as I've set out here tonight in talking about everything that's happening in my home state of Tasmania, the trades have such an important role to play. What we really need to be doing, I believe, is making sure that our young people are aware of the trades and the potential career benefits that can come out of a pathway that they pursue through that. This policy, this legislation that we're discussing here this evening, is an important part of that. I commend the bill to the Senate.
I'm delighted to rise in support of the Trade Support Loans Amendment (Improving Administration) Bill 2019. Unlike those on the other side, we haven't walked away from the mining, farming, agriculture and forestry industries. There's no point in doing an apprenticeship if you haven't got a job to go to. If you want TAFE to flourish, you need to support these industries, not make promises on the never-never about having a zero carbon target in 2050, which is only going to smash the farming industry, the mining industry and the forestry industry. We're going to end up having our entire manufacturing industry going offshore. That is not what we want.
In response to Senator Ayres, who talked about us being on the side of the suits: no-one loved suits more than Paul Keating. What a great job he did with the manufacturing industry, with the Button plan! He absolutely destroyed Victoria. Once the jewel in the crown, the manufacturing state of this country, it has now been destroyed thanks to Paul Keating and Bob Hawke and their neoliberal agenda.
Anyway, I'm pleased to rise in support of the Trade Support Loans Amendment (Improving Administration) Bill 2019. It is an important step in ensuring that both the vocational education and training sector and apprenticeships are treated with the same importance, respect and focus as the university sector. It is particularly important that we do more to restore balance and sustainability to the higher education system. As a government and as a parliament, we must do all we reasonably can to encourage more Australians to take full advantage of vocational and trade training. It's a great pathway to a rewarding career and financial security. Apprenticeship data from last year shows that the number of apprenticeship opportunities is increasing. This is a positive sign, but there is more to be done.
Passing this bill will certainly strip much of the red tape from the current trade support loans, a worthwhile program, not dissimilar to HECS, which provides income-contingent loans to Australian apprentices in a range of occupations. This bill promises to make gaining and paying for a trade qualification that much easier. An apprentice receiving payments under the TSL program may incur an overpayment debt to the Commonwealth should their circumstances change. It is a strict requirement that any such overpayment be repaid immediately, often triggering a recovery process which is both frustrating and protracted for the Commonwealth and the apprentice alike. Changing circumstances under the program may include if a business shuts down, causing an apprentice to lose both their income and their TSL eligibility. It's easy to see how, in a situation like this, a young apprentice may forget to notify the Australian Apprenticeship Support Network within the required 14-day window. The introduction of a longer, more practical notice period is one of the measures in this bill designed to reduce the pressure on Australian apprentices.
Additional amendments to the Trade Support Loans Act 2014 that form part of this bill include specific offsetting arrangements for apprentices who remain eligible for future TSL payments. These arrangements can be implemented relatively quickly and easily and allow for overpayments to be offset against future TSL instalments, while total TSL debt is transferred to the ATO and recovered through the taxation system. The alignment of notice periods for persons to respond and provide information under the act will help to further reduce the administrative burden for both the apprentice and the AASN provider.
The Morrison government supports our apprentices and trainees in every possible way. Rather than treating those with a vocational education as second-class citizens, as many of the university educated urban elites now do, this government aims to do precisely the opposite. Only this Liberal-National government will ensure that Australia's vocational training and apprenticeship programs are administered and delivered with integrity, with value and in a financially sustainable way.
The evidence is clear. This is why during the last financial year we supported over 50,000 apprentices across Australia with the Trade Support Loans scheme alone. We know things can be tough and we want to ensure that our apprentices can manage while they focus on completing their training. This bill will significantly reduce the burden on our apprentices.
We should never forget that the largest decline in the number of apprenticeships in our nation's history occurred in 2012-13 under the last Labor government. Those opposite cut a whopping $1.2 billion from employer incentive programs to take on apprentices. This is Labor's record on apprenticeships. This was Labor's record when today's shadow Treasurer was the chief of staff of the then Treasurer and when Senator Wong and the member for Grayndler both had seats at the cabinet table. What did they do when not signing off on school halls, pink batts and the dismemberment of John Howard's border protection regime? I'll tell you what they did. They took a knife to the vocational training sector and they slashed it to blazes in a pathetic attempt to prop up a failed budget. And they have the gall to come into this chamber with mock virtue trickling from the corners of their mouths and claim to stand up for hardworking Australians. Well, the Australian people are on to them, and Australians won't be fooled a second time.
In stark contrast to the appalling failures of those opposite and in addition to the sensible measures announced in this bill, the Morrison government has expanded the wage subsidy trial for apprentices to create a further 80,000 places and has invested funds for a new skills shortage payment. However, government can only do so much. I'm confident that the Morrison government's significant investment in our vocational education sector will encourage parents and young people to appreciate what vocational training and apprenticeships can do for them. It is unfortunate that in recent decades we have seen a powerful urban culture slowly shift importance and esteem away from vocational education. Plumbers, carpenters, electricians and butchers all create and grow small businesses which drive our economy and create jobs.
It is unfortunate—no, it's worse than that; it's tragic—that in my home state of Queensland the Labor government is working so hard and so deliberately under state treasurer and de facto premier Jackie Trad to entrench this anti-trade sentiment. Only last May the Queensland Audit Office revealed that Queensland TAFE faces a significant financial risk due to declining student numbers. This revelation from the Queensland Audit Office is a direct result of the gross negligence and financial mismanagement of the Palaszczuk Labor government, a government which has spent millions on rebranding hospitals and giving handouts to senior bureaucrats, not to mention over $2 million spent on international travel in the last two years alone.
Federal Labor will, of course, point to other essential government reforms in the vocational education space, including reforms to correct their own policy failures, such as the disastrous VET FEE-HELP program. We should never forget that VET FEE-HELP was yet another stroke of policy genius from the Labor Party, a policy that quickly turned to scam and only let dodgy operators prosper while leaving a trail of debt laden victims with virtually zero employment prospects in its wake. This is a rare Labor skill. Only Labor can design a scheme that costs countless millions of dollars and only makes the situation worse.
Labor don't only make a dog's breakfast of the VET sector by their direct mismanagement when in government; they also threaten to choke off the very reason for vocational training itself. Labor's policy positions on climate, energy, industrial relations and taxation effectively provide a clear and present danger to the industrial and mining sectors, which provide the jobs that apprentices ultimately perform. Labor's ongoing war on mining, forestry and manufacturing means that apprentices seeking work and rewarding careers in these industries are firmly in Labor's sights. Labor say they believe in education, and that's fine, but the whole point of a vocational education is to have a meaningful, well-paying and rewarding job at the end of that training. If the industry isn't there then the job isn't there, and if the job isn't there then who needs training? It's a pity Labor appears wilfully ignorant of the real economy side of the VET coin.
This bill builds on the government's proven commitment to the VET sector. It was the Liberal-National government which made available up to $1.5 billion over five years for the Skilling Australians Fund and, in the process, helped to create thousands of extra apprenticeships to build the national skills base and create the jobs that underpin our strong economy. I am proud to be part of a government that is working hard to restore vocational education and training to its rightful place and make our VET system world class. While the reforms outlined by this bill may seem relatively modest and administrative in nature, their impact will be widely felt. A stronger VET system means an even stronger economy, especially when underlying industries are encouraged and supported, by this Liberal-National government, with lower taxes, less red tape and greater access to markets. I commend the bill to the Senate.
I, too, rise to speak on the Trade Support Loans Amendment (Improving Administration) Bill 2019. As part of our commitment to vocational skills, the Australian government introduced the Trade Support Loans scheme in July 2014 to help Australian apprentices successfully complete their apprenticeship. These loans provide up to $21,078 over four years to eligible apprentices to assist them with the costs of living and learning while undertaking their training. The bill represents a reasonable and measured change to the program to provide for offsetting, where participants remain eligible for TSL payments in the future, and a range of other administrative changes.
The scheme was introduced at a time when Australia's skills pipeline was incredibly broken. There weren't enough apprentices going into training, and even fewer were completing their training. Many of those who did fell by the wayside because of the fragmented approach to skills and employment in place under previous governments. This took place under a backdrop of an economy in repair—one which was only just starting to produce the jobs that we are now starting to see the results of today.
Since 2014 this program has been extraordinarily successful. This has been due in no small part to the coalition government's broader economic agenda. Not only are we providing support to young Australians looking to get into their chosen profession; we're ensuring that there are long-term and sustainable jobs for them when they finish their training. The economy we have overseen is delivering for them. We're helping so many young Australians to realise their aspirations. In fact, 55,998 in the last financial year alone participated in this program.
Unlike many in this chamber—the Greens and those opposite—we want people to have a go. We want people to undertake a qualification, to get out there and start a business, if that's what they choose to do, and to make a success of themselves. And we know that as a government our role is to ensure that the economic conditions in this country are such that all Australians are able to realise the opportunity we are afforded as members of this great nation.
We are a lucky country. It's a phrase we hear so often in this place, but for me as a Western Australian there is no place with more opportunity and potential than the great state that I represent. As someone who has come into the Australian Senate having spent my working life getting people into meaningful employment through gaining vocational skills, there is no-one more proud of this government's record than me. But I didn't start my career working in the vocational sector; I was actually a student in the vocational sector. That's where I started. I did an apprenticeship in electronic servicing. Back then, there wasn't a loan scheme; there was only a small grant that you'd get provided as an apprentice. From memory, I think it was about $250. I used that money to buy a soldering iron, to buy a pair of cutters to put in my tool bag and to buy a volt meter, which I had to use as part of my job. I still have those items today, and I cherish them very much. I use them quite regularly when I've got a repair job at home.
But I would have loved to have had the kind of support that this government is providing through this scheme as a young apprentice starting out. I had a 1972 Honda Civic—that vehicle is older then me—and it wasn't very reliable. There were times when my boss was quite upset at me, because my car would break down on the way to work, and it was becoming quite an issue. It wasn't until I got into my apprenticeship and started to earn the salary that I could build up the means to buy my next car, which was a Toyota Celica—which wasn't exactly the best choice of vehicle, I've got to say. It took me some time. For that first nine months or so I was very irregular in getting to work on time, because I had problems with my car. But had I had this loan available to me then, I wouldn't have had such a hurdle in starting out in my career, because I could have used those funds to help me get into a reliable vehicle much earlier. This scheme is available for the person receiving it to use it for what they need in order to advance in their career and in their trade.
These programs don't operate in isolation. We know that you can't just throw money at a program and expect it to work. It's a convenient point of oversight by those opposite that this government has a range of policies and initiatives in this place to ensure that our strong, job-creating economy is one that delivers benefits and opportunities for all Australians. The Morrison government is delivering the job opportunities, providing pathways and ensuring that all Australians are able to realise their aspirations—programs such as the Try, Test and Learn Fund; the Individual Placement and Support program; the PaTH program, which is helping young people as well, providing a new and bright future for so many in this country who want nothing more than a job. As a Liberal I'm extremely proud that the coalition government has committed over $40 million to roll out the VTEC program across Australia, a program I was involved in that is seeing tens of thousands of Indigenous people go into training with a guarantee of a job at the completion of that training program. We know, from the data we've seen through that program, that over 70 per cent of those jobseekers are still in work some six months later. This is a remarkable achievement by those individuals who have gone into the program as well as by those who are delivering it—those training providers, those support workers, those mentors who are helping jobseekers to address their barriers to employment and to see them train and then successfully go into those jobs.
Throughout my life, I've worked with people from all walks of life—from our cities to our remote regions—many of whom were individuals and families who had found themselves entrenched in our welfare system, with significant barriers to finding a job. Have I ever heard them sympathise with the unfunded empathy and meaningless gestures of those opposite? No. They want new skills. They want meaningful employment. I've been privileged to see the reality and practical effect of this on countless lives. When you lift people up so that they can see the horizon, when they earn their first pay cheque, when they see that they can independently support their family and take part in all the advantages that 21st century life enables, the transformation is truly amazing.
That is why I'm proud to be part of a government that has seen over 1.5 million jobs created since coming into office—a government which is overseeing an economy that will create 1.25 million jobs over the next five years. These are not just part-time and casual jobs; they're full-time, long-term, well-paying and sustainable jobs. This means that we've also seen the lowest levels of welfare dependency in 30 years. This is our record, the record of the Morrison government. Between 2014 and 2019, 185,000 fewer Australians were on welfare, despite a population increase of over two million.
We're committed to ensuring that Australians have the right skills for the workforce of today and tomorrow. This is what our economic agenda is delivering, and this is what our $3 billion investment in vocational education is delivering. We're providing an increasing share of funding to train the next generation of Australians. This includes $1.5 billion to the states and territories every year through the National Agreement for Skills and Workforce Development; $1.1 billion to fund the government's own skills programs, including employer incentives and support for apprentices; and $175 million to the states and territories via the Skilling Australians Fund to support increased apprenticeship and traineeship numbers.
In addition to this, we are paying to fix Labor's failed VET FEE-HELP scheme. The failure of Labor's scheme and the impacts of Labor's cuts cast a long shadow over the entire sector. Since 2016, over 66,500 students have had VET FEE-HELP loan debts of over $1 billion recredited by the Commonwealth. Repairing this disastrous program has been an ongoing agenda item across all three terms of this government.
We've ended the systemic exploitation of students by dodgy providers, where they signed up to accumulate huge debts for training packages that were never delivered. There is nothing more demoralising than going into a training course, having been told it is going to be something terrific for your life, and getting sold a pup—going through that training course, and there's nothing at the end of it. It's completely demoralising. We remember the days when we saw ads for dodgy providers, standing out the front of Centrelink, preying upon vulnerable Australians, handing out laptops and iPads, the latest tech, if you signed up for a course with extraordinary fees—exorbitant fees.
We've ensured that this will never happen again. No government in good conscience could allow this behaviour to flourish, yet Labor did. In contrast, we've introduced VET Student Loans so that students can access financial support to gain their qualifications, safe in the knowledge that they will not be ripped off. The students have the control here. The loan is in their hands, and they are in charge of their own finances. They've got the ability to make their own decisions, and we're empowering them to be able to do that.
Let's reflect on the appalling record of those opposite in this space. Over just two years, all the same faces opposite gutted over $1.2 billion from the employer incentives to take on apprentices. Nine times in two years the Labor Party wielded the knife against apprenticeship incentives. Every time they needed to make a cut they went straight for the apprentices. This was a consequence of a Labor government that could not control the budget. When the Leader of the Opposition was Deputy Prime Minister, he, along with Senator Wong as the finance minister and the member for McMahon as Treasurer, cut over $240 million out of apprenticeship incentives in a single year. That has to be a record. This is just the beginning of the mess that Labor left behind—a mess that has taken us six years to fix. They presided over an economy that failed to create jobs, and this resulted in our vocational education programs training many Australians just for the sake of it, with little prospect of employment at the end.
You'd think that from all of this they would have learnt a lesson. Whilst we on this side of the chamber continue to stand for growing jobs and growing our industries, they do not. We want to encourage new investment in resource projects across the country that drive jobs in regional centres and lift millions across the world out of poverty. All those members over there, including those in the Otis group, do not. This is the type of country they want to see Australians living in—no investment, no industry, no jobs, no regional economies and no future. It seems that only under duress do they support any industry that drives our economy.
The Morrison government is undeterred and focused on getting on with the job of ensuring Australia has a world-class vocational education system. I'm a product of the trade training system. That was part of my early career. It laid a foundation for me. I know what impact that this is having. I have met many apprentices who are benefiting from the support of this program. I know what it would have meant when I was a young apprentice. I can see the difference that it's making in their lives. The government is committed to providing support to young apprentices so that they can get on and build a fantastic career and have the economic independence that they deserve.
It is a real privilege to follow Senator O'Sullivan when speaking on the Trade Support Loans Amendment (Improving Administration) Bill 2019. I know Senator O'Sullivan has done in his working life as much as anyone in this place to provide people in some of our most disadvantaged communities with access to training, real employment and careers. Many of us here maybe take that for granted, but he provided those opportunities to people who didn't have those opportunities before. So I open my remarks by acknowledging Senator O'Sullivan's real contribution in this area. It really is inspiring.
Another inspiring thing, which I was fortunate to be associated with in my preparliamentary career in the mining industry, is the provision of apprenticeships and training opportunities to people in one of the poorest countries in the world—Laos. In that environment there were hardly any training opportunities for young Lao people. The company I worked for there set up an apprenticeship training program at both of its mine sites. It put dozens of young Lao people through apprenticeship training programs. We saw how important it was to those young people in that poor country, how it transformed their lives and how it gave them skills, education and training that they could take forward for the rest of their lives and for the benefit of their people.
I stand in this place to speak on this subject because I'm extraordinarily passionate about the difference that education, training and apprenticeships can make to young people, whether they be here in Australia—in our regions, cities or the poorest and most socially disadvantaged areas—or in other parts of the world. It's absolutely fundamental that we provide our young people with those educational training opportunities.
I'd like to make another preliminary observation in this debate. When I was preparing these remarks I recollected a conversation I had with a good friend just after we had finished high school. That's going back 33 years, but I still remember this conversation. Thirty-three years ago, as I was about to attend the University of Queensland and take on a tertiary education, my friend, who didn't go to university, said: 'Paul, you know what? We need to reflect, as a society, on the fact that someone like you is going to university.' At that time university was free, so for two of my five years at university I had the benefit of a free education. My friend said that we needed to reflect on the fact that he was someone that wasn't going down the university path, and where was the support for him? I think one of the best things about this loan program is that it provides opportunities for people who aren't going to university to access quality training, to access apprenticeships and to actually get the support they need to obtain that education and training for the rest of their life. So it is a great honour to speak in favour of this legislation.
Before I speak in relation to the actual content of this bill, I want to address some of the remarks of Senator Ayres in this debate earlier. I have great respect for Senator Ayres and for the work he did prior to coming to this place, standing up for working people. When he says he is passionate about apprenticeships across our economy, whether it be in the regions or the cities, wherever it may be, I absolutely can see that passion when he speaks and when he addresses this chamber. However, it is difficult to sit by and listen to Senator Ayres blame this government for the current situation with respect to apprenticeship numbers. It's difficult to sit here and listen to that in the context where the greatest fall in apprentice numbers on record, in this country's history, occurred in 2012 to 2013, under a Labor government, when apprenticeship numbers fell by 110,000, or 22 per cent. That was under the previous Labor government. It is difficult to sit by and not respond to Senator Ayres's comments, when over just two years those opposite—many of them are still there—when they were in government gutted over $1.2 billion from employer incentives to take on apprentices. What was one of the reasons for this? The debacle, as Senator O'Sullivan referred to, of the VET FEE-HELP program. And it was an absolute debacle. We're still paying the costs of that debacle today.
Don't just take my words for it. I've got an article here from the University of Melbourne, written by Francesca Saccaro and Robyn Wright. Let me quote from this article:
Amendments to the HESA legislation enabled substantial growth in the number of approved VET FEE-HELP providers from 37 in 2009 to 254 in 2014, a huge increase in eligible courses and a massive increase in VET FEE-HELP loans by both private and public providers. Large scale business opportunities were seized. Private providers went 'public', selling shares which over time became worthless. The "no upfront fees" and "pay later" slogans—
This is how they were advertising those programs under Labor—
sometimes translated to "free courses", was an easy sell, especially to those who were cash poor and living for today.
They are not my words; they are those authors' words. Then they give a number of case studies of some of the absolutely abhorrent marketing techniques engaged in by some of these providers. Here are two examples. Example one: an older woman in her early 70s was at the Bankstown Central shopping centre, having lunch with her Bible group, when they were approached by a young man asking them if they would like a free laptop and a free diploma in community services. He assured them that though they had to sign up for a government loan they would never have to repay it, as they would need to earn over $50,000. This was a group of pensioners signed up for a VET-FEE program under Labor—a group of pensioners in a Bible study—an absolute disgrace, and they agreed they would never be earning that much. Of course they wouldn't be earning that much. They were pensioners in a Bible group. The whole group signed up and got their laptops. That's what happened under Labor. The whole group signed up and got their laptops under Labor.
Here's the other example: in March 2014 a group of senior citizens from Bankstown, all from culturally and linguistically diverse backgrounds and with little English, were talked into enrolling in computer classes with Unique International College in Granville—absolutely unique—and Aspire College of Education in Parramatta. It turned out that there was no computer class, and they were all enrolled in different diploma courses and had filled out forms to take out VET FEE-HELP. This was under the previous Labor government. Senator Tim Ayres didn't mention it in his comments, but this is what happened under the previous government. They were each offered a free computer iPad or $1,000 cash—'There you go'—by taking out the loan. They were told, 'There's no need to come to class,' but if they wished they could come and free lunch would be offered.
There's apparently no such thing as a free lunch, but under Labor these unscrupulous marketeers were out there offering a free lunch. But there was no free lunch for the Australian taxpayer. They alleged, in Aspire college, that they had a canteen that could accommodate a couple of hundred people, and, on the day, it was packed with senior citizens enjoying their free lunch. That's under the previous Labor government. We didn't hear that from Senator Tim Ayres, not at all.
If those listening to this debate want to be reminded of the legacy of these rorts under the previous Labor government, they should go to the StudyAssist helpline. Those poor people who maybe still have some of that Labor legacy debt coming from that failed scheme can go to the StudyAssist website, and they'll find a number of notices from some of those dodgy education providers. The StudyAssist government website says: 'Notice for former students of Smart City Vocational College Pty Ltd'. It states:
If you were enrolled into a course with Smart City Vocational College Pty Ltd (Smart City) and commenced studies between—
two nominated dates—
… you may have had your VET FEE-HELP debt removed.
Why? It continues:
This decision was made by a delegate of the Secretary of the Department of Education, Skills and Employment under sub-clause 46AA(1) of schedule 1A of the Higher Education Support Act 2003 because it is considered reasonably likely—
Under Labor's previous program—
… that Smart City (or its agents) engaged in inappropriate conduct in relation to the person's unit of study or course.
It's an absolute debacle, an unmitigated disaster. Just like the pink batts public policy debacle and the changing the rules with respect to boat arrivals from offshore public policy debacle, this is another public policy debacle under Labor.
There are pages of these institutions. I'd forgotten how bad this was, and clearly those opposite have as well because they don't deign to even refer to it in their comments: 'Notice for former students of Australian Institute of Professional Education Pty Ltd'. They can get their fees refunded as well. Why? It says:
… because it is considered reasonably likely that ASCET (or its agents) engaged in inappropriate conduct in relation to the person's unit of study or course.
Under Labor's failed scheme. Here's another one: 'Notice for former students of ASCET Institute of Technology Pty Ltd'. It's the same thing, and: 'Notice for formers students of The Australian Academy of Business'. There are pages of these rorts. It's an absolute public policy disaster and a disgrace.
I will not sit here and be lectured by those opposite with respect to what is or what is not effective and efficient vocational educational training, because those opposite were absolutely clueless when they were in government. You actually weep tears when you think what good that money could have been applied to with a well-run, efficient policy with the benefit of those hundreds of millions of dollars which were squandered under those opposite instead of lining the pockets of every rogue and dodgy marketeer signing up 70-year-old pensioners in Bankstown city hall, for goodness sake!
The coalition is quite prepared to defend its record in relation to these matters. In 2019-20 the coalition is investing over $3 billion in vocational education training—not in dodgy schemes, where courses aren't delivered, but in real, practical schemes which will deliver skills and jobs for young people. This includes: $1.5 billion given to the states and territories every year through the National Agreement for Skills and Workforce Development; $1.1 billion to fund the government's own skills programs, including employers incentives and support for apprentices; $175 million to the states and territories via the Skilling Australians Fund to support increased apprenticeships and traineeship numbers; and $2.3 million to Tasmania to support increased apprenticeships and trainees needed for the Battery of the Nation initiative, the renewable energy sector and related sectors. These are schemes delivering real training and real jobs to young people in this country. When I look at those schemes I can't help but return to the lost opportunity of those hundreds of millions of dollars which were squandered under the previous Labor government and the difference it could have made to young people's lives if that program had been efficiently and effectively managed.
This legislation deals with quite a technical matter in relation to ensuring that when an apprentice is perhaps overpaid in certain circumstances, an instalment of TSL, that money can be offset against future payments instead of having to be repaid. It is quite a simple piece of legislation. It corrects something that has perhaps caused an administrative burden which is not necessary. I applaud the legislation, and I applaud what the government has achieved in the vocational education and training space.
I thank all senators for their contributions in this debate so far. The Trade Support Loans Amendment (Improving Administration) Bill 2019 will improve the administration of the Trade Support Loans program. The bill will provide another avenue for Australian apprentices to repay an overpayment debt and it will also align the notification period to allow more flexibility when administering the program.
I also thank the Senate Standing Committee for the Scrutiny of Bills for their consideration. As requested by the committee, an addendum to the explanatory memorandum has been tabled to explain why it is necessary and appropriate to leave significant matters such as the circumstances in which the amounts of later trade support loans instalments may be reduced to delegated legislation. I commend the bill to the Senate.
Question agreed to.
Bill read a second time.