SPEECH: National Apprentice Employment Conference

02 August 2019

Speech to the National Apprentice Employment Conference on the importance of high quality skills and training.

I acknowledge the traditional owners of the land on which we meet, and I pay my respects to elders past, present and emerging.

I would like to thank Dianne, Bill and the National Apprentice Employment Network Board for inviting me to speak to you all.

My appointment as Shadow Minister for Skills gives me a role in shaping the future of skills and vocational education - it is a responsibility I relish. 

I have big shoes to fill, following in the footsteps of Senator Doug Cameron, who made a substantial and lasting contribution to this area.  

I hope to do him proud.

I am also honoured to work alongside the wonderful Tanya Plibersek and Graham Perrett – together we’ll ensure the skills and training sector thrives. 

The importance of high quality group training: 
I want to spend today talking about the need to elevate vocational training and the role of group training, with an eye firmly on the future. 

For our young adults, for our employers, for our economy, we must work towards putting VET on the same footing as the university system.

The national benefits of high performing apprenticeship systems are substantial.

Better than any other training model, skills gained in a quality apprenticeship closely match the needs of employers and the labour market.

High quality group training is a key part of our vocational education and training system.

Group training, at its best, helps promote decent, sustainable work-based learning by facilitating a fairer sharing of the risks associated with employment and skill formation. 

It is a great Australian innovation that we can be genuinely proud of.

Without it our apprenticeship system would be diminished.

High quality group training will be crucial to the skills and training sector in Australia, particularly with a future comprising of fractured employment, precarious work and ever changing technology. 

Students need a constant and that is you.

Take for example Electrogroup. Electrogroup was formed in 1998 in Queensland, founded by Master Electricians Australia and the Electrical Trades Union. 

Currently their completion rate is around 95%, a truly fantastic achievement for the organisation and a great credit to their apprentices and industry partners. 

How do they do this? They provide services just like your wonderful organisations do:

  • They ensure apprentices have continual work and can complete their competencies.
  • Provide tools and protection equipment, and income protection. For their 300 currently enrolled apprentices this means that extra bit of security you don’t often get when dealing with employers directly.
  • By the end of an apprenticeship at Electrogroup, it is likely an apprentice will have accessed around 30 mentors who help them seek out placements and provide different skill sets and ranges of life experience.
  • These services are invaluable, and provide an experience that apprentices will carry with them for the rest of their career. 

It is clear from the example of Electrogroup - a wonderful marriage of unions, employers and workers - that group training increases the level of participation in apprenticeships and traineeships, it increases the quality of the skills being formed during apprenticeships, it improves access to decent jobs and career prospects.

As we see increased skills shortages across the country and a floundering economy, the relevance of group training continues to rise.

Getting people, particularly young people, into work is a top priority and group training organisations will be at the forefront of this drive of employment. 

Through skilling up young workers and providing them with the opportunity to access decent and fulfilling work, GTOs serve an important role in fostering the next generation of Australian workers. GTOs help to stimulate our economy and provide our young people with the decency that work brings and the certainty that so many workers today do not have.

So you have my thanks – for the work you do, the education you provide, the lifelong skills you impart and the jobs you deliver. 

Current state of play:
Given these undeniable benefits, the decline in trade apprenticeships is all the more troubling.
Trust in the VET system is at an all-time low and data shows a weakening of the sector under the Coalition.

  • Completion rates for apprentices and trainees who commenced training in 2014 have decreased to 57%. Most apprentices identify employment related conditions as the reason for leaving.
  • In the past six years, government funded full-year training equivalents have decreased by 30.6%
  • Nearly 22,000 fewer students have enrolled in government funded vocational education and training compared to 2017, representing a 1.9% drop in student numbers.
  • Total government funded hours of VET are down;
  • There are 150,000 fewer apprentices than when Labor was in government.
  • Apprentices continue to be exploited.
  • The government continues to ignore the legacy issues of VET FEE HELP – 5,000 complaints to the VET Student Ombudsman and no end in sight.

If the government continues to ignore the underlying flaws in the VET system and continues to cut funds for skill development - access to decent work and to quality skills development for Australians will diminish further.

That will be a tragedy for our national prosperity and wellbeing.

Labor’s vision for the future:
I know this conference is focused on the future but I did want to take a minute to speak about what Labor would have done, if we had won the last election. 

This is important because I believe we would have tackled many of the challenges the sector is facing. 

Most importantly, Labor was committed to a National Inquiry into Post-Secondary Education. It is widely accepted that the system is in crisis, and is not able to adequately support Australia’s education and skills needs.

There has never been a national review that considers the full gamut of post-school education and we knew how crucial and timely it was to do so. 

We were focused on elevating the role of the VET sector including a commitment to boost apprentice numbers across the country on government funded projects. 

It’s generally accepted that incentives to employers and apprentices do help but the flip side of that coin is increasing demand. You need jobs for the apprentices to be employed in. There is a role for direct government intervention to increase demand for trades by things like increasing spending on infrastructure with clear procurement policies.

So under Labor, as least one in 10 jobs on all major infrastructure and defence projects would be filled by an apprentice or trainee. It would have resulted in thousands of additional apprentice and trainee opportunities for people right across Australia.

I was particularly proud that Labor knew how important it was to get more women into trades and we knew how important group training organisations were to that. 

We had committed $12 million for experienced group training companies to provide direct assistance to employers, hosts and female apprentices to help build gender inclusive trade workplaces and employment. 

Well paid traditional trades in electrical, building, automotive and engineering continue to be male dominated with as few as 2 percent tradeswomen.

We need to do better and lift those dismal numbers. From opposition - I am still committed to this job. I’ll work with the government to develop policies to address this important imbalance. 

Rewarding good employers beyond initial incentives programs helps to support the workplaces that have quality on the job training.

Governments can and should back learning workplaces with funding for industry or place based co-investment strategies. For example - job and skill compacts with employers, unions and TAFEs. 

So I am disappointed that we didn’t win – but just like the theme of this conference – we must push on. I’ll be working as hard as I can over the next three years to elevate the role of the vocational training sector.

The imbalance between vocational training and universities:
Now nothing illustrates the divide between the university sector and the VET sector when we compare the experiences of students in each system  

Professor Nick Klomp, the Vice-Chancellor and President of duel CQ University Australia wrote about this so wonderfully that I’m going to quote him: 

“Pete and Rebecca both graduate from North Rockhampton High School with good grades. Pete chooses university, Rebecca prefers an apprenticeship.

Pete enrols in a bachelor of engineering degree, is accepted, and can start studying in a guaranteed spot within weeks. Should Pete need it, fully funded programs exist to give him confidence and academic prepared-ness from even before his first class, right through to graduation.

As an Australian citizen, Pete is entitled to what is known as “the best loan you’ll ever receive” — a low interest HELP loan with generous income-threshold repayments.

This loan covers 100 per cent of the student contribution component of the tuition fees for his four years of study with the commonwealth government funding 100 per cent of the remainder of his tuition fees.

And Pete’s first employer — a local civil engineering firm — gets a fully qualified, job-ready, mature graduate delivered on a silver platter courtesy of the system. Pete’s employer bore no direct expense, and wore none of the risk, in the administration of Pete’s education.

What about Rebecca, the aspiring apprentice?

The system expects Rebecca, as a 17-year-old, to scour her chosen industry for a potential employer, and then negotiate the terms of her employment and training package with senior management. She has zero room for error here; if Rebecca doesn’t nail this step, someone else will get her spot.

There is no student loan available to Rebecca unless her apprenticeship is geared at the diploma level or higher; and even if she is eligible Rebecca faces an upfront loan administrative fee (that is, tax), from which Pete is exempt.

Let’s assume Rebecca begins her apprenticeship, which will take 3½ years to complete. There are zero guarantees that she will be allowed to complete her training, even if she performs at the highest level.

This is because she trains at the discretion of her employer, who hires at the discretion of the economy. Should the Australian dollar rise, or the price of coal drop, Rebecca may lose her apprenticeship part-way through her studies, and is effectively cast out on the street to start over. (This happens regularly, by the way.)

Should Rebecca’s employer manage to keep her on during volatile periods, they have to endure at least two costly years of “high-supervision, low-skill” output from Rebecca while her skills develop.

Meanwhile, the government contribution received by my university to manage the vital classroom aspects of Rebecca’s training is, on average, less than one-third of the funding received for an equivalent higher education qualification.

This is despite the provision of qualified educators, practical workshops, learning materials, facilities and consumables being comparable to that of students such as Pete.

Luck is arguably the major factor in determining whether Rebecca’s journey through the system is successful, whereas Pete has to worry only about his own merit. Does this reflect on how differently Australia respects the career choices made by Rebecca and Pete?

And this my friends is the challenge that governments must meet. How do we put VET and Universities on equal footing?

Looking to the future: Different but equal
The Government have said they want to see the VET and university sectors on equal footing. This is a common goal shared across this political divide.

But the Liberals have failed to commit to the funding and reform required to achieve this important outcome.

Their answer to the ongoing demise of the VET sector is a $525 million skills package.  Yet Senate estimates confirmed that only $54.5 million of this is new funding for the sector.

Given the problems in the system with adaptability and responsiveness, quality in provision, and mismatch between qualifications and jobs, without systematic reform it is likely that the present cracks in the system will widen.

If the Government is truly going to “upgrade” the VET sector, it must commit to proper reform and resourcing.

Any reform will have to consider student loans and debt. Apprentices must not finish their apprenticeship with crippling debts for their technical training. 

Industry and government must recognise that apprenticeships are an investment in economic and social growth – they are not a cost.

What does the future, beyond 2020, look like for vocational education?

We are on the precipice of significant structural transformation - and the skills system we have in place will play a critical role in how we fair as a nation.

Could it be that we aim for a Finnish style model where the university and vocational systems are widely regarded as different but equal? 

In Finland there is transferability between the two streams: few status differentials and no dead ends. There is relatively seamless movement of students within the higher education sector; between their universities and their close equivalents of Australia’s TAFE institutes.

Furthermore, in Finland the vocational secondary schooling option is often in higher demand than the academic option.

Academics Välimaa and Muhonen noted

“The state follows the principle of ‘equal but different’ by producing both a skilled vocational labour force and a high-quality academic labour force. Together with the policy principle of life-long learning this is seen to serve better the needs of knowledge-based society than a single system of higher education based on vertical stratification of institutions[1].”

Unfortunately, this is not the case in Australia, where to choose university rather than a TAFE institute has become a status thing. We need to break this down and achieve a better balance between ‘vocational’ – and ‘academic’ – learning.

A ‘future proof’ system needs to ensure that new skills and knowledge are being learnt across the life course – but also that the workforce is increasingly able to move between different jobs and industries – which will require acquisition of broad-based and deep technical skills and knowledge that is highly transferrable.

Technological change, such as artificial intelligence and automation are transforming existing industries and changing the skills required for high-quality jobs.

Our sovereign prosperity demands that both our white-collar and blue-collar workforces perform well.
From the example of Pete and Rebecca that I read out earlier – I think it’s clear that high quality group training will be crucial for the ongoing success of apprenticeships and trades. They smooth the way – help to make the transition from student to skilled worker so much easier and even out the disruptions thrust upon the economy.

In conclusion I would like to take a moment to pay tribute to the people who spend their days delivering high quality group training.

Your professionalism - your hard work and commitment to assisting young people into the world of work – deserves our support and gratitude. Thanks.