Speech – Vocational Education and Skills Leadership Luncheon,Victorian Chamber of Commerce and Industry

Check against delivery

Thank you for inviting me to speak today. It is always a pleasure to have the opportunity to talk about  the Coalition’s policies to support  business – and today, it is an opportunity for me to explain how backing business supports the vocational education and training system.

As well as outlining the Turnbull Coalition Government’s ongoing plans to strengthen vocational education, I am keen to hear from you here today and look forward to the Q&A and discussion.  

There is never a blank slate in politics, even when you come into Government or come to a new ministry.

I would like to start today by setting the scene of what the Coalition Government inherited in 2013, and how we have worked hard to address substantial legacy issues.

I know it is particularly important to hear about our support for apprentices, and the employers who hire them. So I will also talk to you about our policies, and how Labor’s recent announcements compare.

Finally, I will conclude by outlining our support for business, and specifically how we have spent the last three years ensuring business and industry are at the heart of vocational education and training.

The Turnbull Coalition Government is offering increased support to Australian business in our 2016-17 Budget, and it is important to note that our support for business is a key component that complements specific portfolio plans in this and other sectors.

A strong business sector, a strong economy, and strong employers are critical to a strong VET sector.

Business is at the centre of a strong vocational education and training sector.  We believe the Australian education and training system has to work for both students and employers.

Training must reflect and respond to the needs of industry if it is to benefit employees and the businesses they work for.  Without business, we do not have jobs.

This is particularly true of our apprenticeship system.

Many nations envy our apprenticeship system. And I know that the issue of apprenticeship and traineeship participation is high on your agenda as it is on mine and the Government’s.

Records matter – on this I agree with Sharon.

When Labor was last in Government, they cut $1.2 billion from employer incentives. Incentives specifically designed to help businesses hire and train apprentices.

By cutting incentives nine times between 2011-2013 Labor triggered the biggest decline in new apprentices on record.

There was a 25 per cent drop in Australians starting an apprenticeship in one year alone (2012-2013) due to these cuts.

These were unprecedented cut, and both the Productivity Commission and TAFE Directors Australia have acknowledged that Labor’s cuts to employer incentives drastically reduced the number of apprenticeship commencements, leading to lower numbers in training today.

Labor cut funding to the following incentives:

  • Commencement payments
  • Recommencement payments
  • Completion payments
  • Adult apprentices
  • Part-time apprentices
  • Certificate II qualifications
  • Diploma qualifications

Since coming to government, the Coalition has not cut a single incentive payment to employers of apprentices. Nor do we intend to.

And I would like to clear up the accusation from Labor that the Coalition has cut $1 billion from apprentices; this is simply not true.

I am grateful to have the opportunity to answer Labor’s false claim:

  1. While we removed Labor’s Tools for Your Trade payment worth $914.6 million, we replaced it with our $908 million Trade Support Loans scheme.
  1. We removed a small payment ($66 million) to adult apprentices following the Fair Work Commission’s 2013 decision to introduce higher minimum rates of pay for adult apprentices, which rendered this “top up” obsolete.
  2. Labor alleges we cut mentoring programs, when the truth of the matter is in their own 2012 and 2013 Budgets, Labor cut mentoring in the forward estimates leaving a substantial funding cliff, as they did in so many programs across the government. The Coalition stepped in, introducing access to mentoring for apprentices through our comprehensive Australian Apprenticeship Support Network.

The Coalition has provided much-needed stability in the sector with these arrangements.

ACCI has identified apprenticeships in its top 10 in ten, indeed it is number one, and I can assure you that apprenticeships are high on the Government’s agenda. We have already made progress through the introduction of significant reforms to apprenticeship support services and piloting new programs.

But there is no silver bullet to solve problems and issues years in the making.

However, the Coalition’s plan is starting to yield results. Traditional trade apprenticeships are performing well under the our leadership:

  • In 2015, more people started a plumbing apprenticeship than in any year under Labor
  • Under the Coalition, we have seen increases in commencements for;
    • Construction trades up 35%
    • Carpenters up 25 %
    • Joiners up 28 %
    • Bricklayers up 14 %
    • Electricians up 11 %
    • Glaziers, plasterers, and tilers up 29 %
    • And as I mentioned, plumbers up 57%

These numbers have been achieved under the Coalition through a series of measures designed to reverse Labor’s negative impact on the system.

The Coalition has expanded support services to apprentices and employers, delivered increased financial support to help apprentices complete their training, and announced a comprehensive plan to help more young job seekers move from welfare to work – including as apprentices.

Last year the Coalition Government launched the Australian Apprenticeship Support Network—which VECCI is part of— to help employers nationwide, particularly small businesses, to recruit, train and retain apprentices across Australia throughout 400 locations.

This network provides more services in more locations than Labor’s alternative when they were in government. The network has assisted more than 270,000 employers, apprentices and prospective employers since it began.

And we have delivered increased financial support to help more than 40,000 apprentices with the costs of living – such as petrol, rent costs, food costs, and transport, as well as costs associated with tools and training – through Trade Support Loans worth up to $20,000 each.

This is an entirely optional scheme: if you need help you can access it, and if you can make ends meet with your wage then you don’t have to access it. You can opt-out at any time, and you are not required to borrow the full amount. And most importantly apprentices only start to pay it back when they are earning a decent wage.

Our Trade Support Loans provide the most assistance in the early years of training when wages are lowest, and support completions by offering a completion bonus of 20 per cent back on the total loan amount.

Labor recently announced their intention to scrap Trade Support Loans for a scaled-down iteration of their previous program, Tools for Your Trade.

I would like to compare and contrast our support programs. I’ll use Bill Shorten’s example of a first year construction apprentice earning around $420 per week before tax.

Now, Labor haven’t yet provided the details of their Tools for Your Trade policy, but we do know that it is a total of $3,000 over the life of an apprenticeship – including the completion incentive.

I will be generous and assume that a first year apprentice, when their wage is at its lowest, can access one third of the total amount available – $1,000.

This will lift this apprentice’s $420 weekly wage by $19.25 a week.

This same apprentice under the Coalition can receive up to $153.85 per week – or $8,000 over their first year.

The Coalition is committed to seeing completions rise, and our policy puts up to $4,000 back in the pockets of apprentices who complete.

This maximum completion bonus is $1000 than Labor’s policy.

When they were last in office, Labor cut $1.2 billion of incentives to employers of apprentices. Now, Labor’s plan to come back into office is to effectively cut support to apprentices by $17,000.

And in addition, we’re also helping young job seekers move into work – including as apprentices.

In last month’s Budget, Treasurer Scott Morrison announced the Coalition Government’s youth employment package, known as PaTH, where employers who hire an eligible young job seeker, including as an apprentice will receive a wage subsidy of up to $10,000.

I am pleased to announce that the wage subsidy is in addition to existing incentives through the Australian Apprenticeship Incentives Programme, which offers support for employers of eligible apprentices, with payments of up to $4,000 per apprentice.

This means that under the Turnbull Coalition Government, an employer can access up to $14,000 if they hire a young jobseeker as an apprentice through PaTH.

In contrast to Labor’s announcement yesterday, our jobs support package provides direct support to business when it is needed to employ someone.

Critically, our program recognises that business creates jobs, not government. And we incentivise employers to put young jobseekers into real jobs as well as providing the job specific vocational skills that will prepare young people for the world of work. This is a program that has been supported by everyone from employers to social services groups – everyone except Labor and the unions.

Labor’s alternative, Working Futures, is for the Commonwealth Government to create something that isn’t quite a job, where the Commonwealth pays a young person to turn up to a workplace – where they are not employed or part of the team –for six months, while the Commonwealth– not the workplace – pays them. There have been a few questions raised about this policy:

  1. What happens after that six months? What incentive is there for the employer offer that person a job so they can finish their training that has been promised? As most certificate IIIs are longer than six months.
  2. An apprenticeship or traineeship requires a contract of training, as many of you would know. Who is the employer in this artificial scenario? Labor’s factsheet says the Commonwealth government will be paying their trainee wage. So, will the Commonwealth be responsible for ensuring they receive quality work-based training, and the opportunity to complete their training once the 6 months is up?
  3. Another question Labor needs to answer is whether the Commonwealth or the host workplace are responsible, for example, for the young person’s WorkCover insurance? And who is liable if this employee of the Commonwealth has an accident in one of your workplaces?
  1. And, perhaps most significantly, what will this program do to the job market for apprentices, when they are forced to compete for entry-level training positions?

One of the biggest complaints I hear from employers is the lack of job-readiness of young people.

Employers want to hire someone who understands the importance of punctuality, someone who has good people and team skills and someone who is well presented, and ideally with a little bit of experience in the workplace.

The Coalition Government has been exploring options to support employers and prospective apprentices through our pre-apprenticeship programs.

With the support of the Australian Government, the Apprenticeship Employment Network has embarked on a Multi-industry School Based and Pre-Apprenticeship Support Pilot Project here in Melbourne. This program will see up to 2,000 young people get a taste for several possible careers, before making a decision on which, if any, apprenticeship is right for them.

The benefit of this approach is that it helps young people get hands on opportunities to learn skills and make a more informed choice of apprenticeship, which we know will assist with improved completion rates, career outcomes and, in essence, job satisfaction, which we know is very important in the workplace.

The Coalition has also embarked on five Apprenticeship Training – alternative delivery pilots which will test and open up alternative training approaches more broadly to provide greater skills development, choice and industry acceptance.

We have already announced three pilots will receive funding, and we are inviting submissions for a further two pilots. So, if you have a great idea to create more opportunities for apprentices, then I would encourage you to lodge a submission.  The process is now open and submissions close on 29 July 2016.

Unfortunately, our work and cooperation with employers and industry has drawn criticism from Labor. The Coalition will not shy away from working with business, industry, and stakeholders. It is employers who create job opportunities for apprentices, and employers and industry who understand the changing skills needs of a modern economy.

66 per cent of apprentices in Australia are employed by small and medium sized businesses. And, as you heard through the Budget we have substantial support for these businesses:

  • Cutting taxes to 27.5 per cent for businesses turning over less than $10 million per year;
  • Increasing the unincorporated tax discount from 5 per cent to 8 per cent, capped at $1,000 for small businesses with a turnover less than $5 million;
  • Extending access to the instant asset write off so that small businesses with a turnover less than $10 million can instantly deduct each and every asset under $20,000
  • Making life easier by simplifying Business Activity Statements.

We know that this will drive more investment, more growth, and more jobs – including more opportunities for apprentices.

Turning to the sector more broadly, I know many of you will have only heard bad news recently about the training sector. The consequences of Labor’s flawed VET FEE-HELP scheme continue to cause damage to the sector. The measures introduced by the Coalition in early 2015 have stopped the most egregious behaviour. There are numerous actions underway in the courts and elsewhere that will see more stories of misbehaviour and abuse emerge.

I might say that it has probably been three quarters of my job, in my time in this role, dealing with the disasters in VET FEE-HELP. From the court action underway, to the police action that you may have read about, to taking care of students – thousands of whom who have lost a provider, no fault of their own – and putting in place measures and getting on top of the detail of all of the problems from what is, undoubtedly, one of the worst public policy measures ever conceived in terms of the amount of money wasted.

However, it is important to reflect on the positives.

Almost four million students participate in the vocational education and training system each year.

On the whole, both students and employers are satisfied with Australia’s training system.

The National Centre for Vocational Education Research indicated that 87 per cent of students surveyed last year were satisfied with the overall quality of training. It’s similar for employers: 84 per cent were satisfied with nationally recognised training.

It is important that we actually talk about the positives, as a relatively small yet egregiously abused program like VET FEE-HELP cannot be allowed to damage the wider success of the sector.

The role of Government is to encourage industry focussed and industry led training. Government is here to ensure quality, and value for money for employers, students and for taxpayers.

Quality is really the key and the Turnbull Coalition Government is pleased that the Australian Industry and Skills Committee is playing an important role here.

We are also very aware that it’s the employers that know what skills are required to do the jobs in their businesses. You know the skills that employees need to be a successful, and we have given you the lead role in developing VET training packages through the Australian Industry and Skills Committee. And I am pleased to acknowledge the work that ACCI has done to support the introduction of this important initiative.

Since April 2015, the Australian Industry and Skills Committee, supported by Industry Reference Committees (IRCs), is putting the employers’ needs at the heart of new arrangements.

These IRC members offer their expertise on the skills and knowledge required to be successful in the workplace. They decide what goes into the training package to be considered by the Australian Industry and Skills Committee – not government or other intermediaries that may have no real connection to industry.

Skills Service Organisations support the IRCs by consulting employers, employees and others in the specific industries to keep track of emerging issues and trends both here and overseas. They help identify the skills required, and do the technical drafting of training packages.

The work undertaken by the Australian Industry and Skills Committee, Industry Reference Committees, and Skills Service Organisations ensures that on the ground needs and changes of employers and industry are reflected in the training of our next generation of employees, apprentices, and trainees.  This is critical to ensure a truly vocational training sector.

The Coalition is working with stakeholders, industry, employers, students, trainees, and apprentices to ensure it continues to improve and gets the best results for all Australians.

A re-elected Turnbull Government will continue to back employer leadership in the training sector.

The best way to have an effective vocational education and training sector is to put employers, business, industry,  and the changing needs of our economy at the centre of it.

Thank you for the opportunity to speak today.



Author: senatorryan

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