I am pleased to join you today and represent Senator the Hon Simon Birmingham, Assistant Minister for Education and Training who sends his best wishes.
May I begin by acknowledging the work of the Australian Workplace Practitioners’ Network in raising awareness and taking action to boost foundation skills in the workforce, and also convening this conference with the theme of ‘Refresh, Rebrand Re-engage: Foundation Skills at Work’.
The world of work is vastly different to even 10 years ago.
Industries have been redefined and transformed through technology and greater integration into global markets.
On the job learning, formal upskilling through training and ongoing mentorship have become critical factors to ensure that the workforce is able to adapt and work effectively in this new world.
But the need for more well-rounded and skilled employees means learning deficits have become more pronounced in the modern workplace, and a hindrance to those lacking sufficient foundation skills.
Career development and transition is made increasingly difficult without these skills. Individuals and businesses, both large and small, clearly share a common need for improving foundation skills.
Vocational education and training and the work of the AWPN is very important in boosting these foundation skills in our workforce and our population.
I should mention the Government has contracted the Australian Council for Educational Research to develop an interactive online Foundation Skills Assessment Tool to identify and assess an individual’s foundation skill levels.
This includes English language, literacy and numeracy skills as well as employability skills.
The tool will be deployed this year and will help VET students identify where they have literacy and numeracy skill gaps, and what areas they need to focus on given the course they have enrolled in.
Through better and targeted assistance to address these needs, VET graduates will be better equipped to meet the needs of Australian businesses.
While just 21 per cent of school leavers currently proceed into vocational education, it is estimated that around three million Australians participated in some form of VET in 2013.
VET qualifications are designed to provide students with the skills and knowledge they need to do a job. Many Australians use VET courses as a bridge to obtain the necessary foundation skills or entry requirements to embark on a university education, and many university graduates require VET qualifications to pursue their chosen career.
Vocational education is also central to business start-ups, with nearly 40 per cent of business owners holding a certificate level qualification, diploma or advanced diploma.
Clearly a strong and prosperous economy such as Australia’s requires a well-functioning VET system that delivers the skills that businesses need.
That's why improving the vocational education and training system is a vital part of the Government’s Competitiveness Agenda.
We recognise a high quality and high status vocational education and training sector is fundamental to a skilled workforce and a productive economy.
In recent years the Commonwealth and states and territory governments have agreed to introduce more demand driven approaches to the availability of publicly-funded VET qualifications and opened up markets for the supply of VET qualifications.
A more open training market ensures that training is responsive to employer and student needs by letting consumers choose the training and the provider that best meets their needs.
These approaches are significant and important – students should have greater choice in training they receive, how they receive it, and who provides it.
In fact, research on the introduction of greater student choice in Victoria conducted by National Centre for Vocational Education and Research has shown that increasing the opportunities for students to drive VET choices resulted in increased enrolments, including by people from disadvantaged backgrounds.
Our focus is on students and employers, their choices, and the ability of training to improve a graduate’s chances of getting a job.
Australia's VET system is so highly regarded internationally, that many countries are seeking to emulate our system of nationally recognised qualifications. But we must work to retain this high regard.
Since the beginning of the year, Assistant Minister Birmingham has been undertaking extensive consultations on VET Reform. The Minister has heard the views of more than 1,000 representatives of training organisations, industry bodies, employers and students. He has visited employers, large and small, listening to apprentices, trainees and employees of various skills levels.
Quality has been raised as the number one concern, especially the issues of dodgy providers, inadequately delivered qualifications and poorly developed training packages.
Another key issue raised is whether qualifications, training package content and funding incentives are sufficiently geared to the needs of employers and our economy.
Red tape is also mentioned frequently. Between regulators and funding entities, the states and the Commonwealth, we need to ensure that we are not burdening both training providers and employers with excessive reporting regimes, assessments and audits, without necessarily lifting the quality of training.
The status of vocational education is also a key concern, and the issue of how we stop VET pathways being perceived as second rate. A VET qualification needs to and should be seen as equally valuable as a university degree.
The frequency and range of concerns expressed by stakeholders in the VET sector make it clear that the need for reform is real.
The 2013 National Centre for Vocational Education Research survey of Employer Use of the VET System demonstrated increasing employer concern about its ability to meet their needs.
In fact, employers’ use of the VET system has decreased.
Between 2011 and 2013 the proportion of employers using the VET system decreased 4.2 percentage points to 51.9 per cent.
In the same period, the proportion of employers satisfied that vocational qualifications provide employees with the skills they require for the job decreased 6.3 percentage points to 78.3 per cent.
With this in mind, the Government’s clear task is to ensure that VET providers and qualifications are of the highest quality; have the greatest relevance to employment outcomes; can operate as efficiently as possible; and are well regarded by students, parents, employers and the wider community.
Improving the relevance of publicly subsidised training to employers is central to our ambition to boost productivity and competitiveness, which in turn creates more jobs.
Our wholesale reappraisal of the way training packages are developed, by whom and what they contain is all about responding to the needs of employers.
Industry will be at the heart of this process, because it is employers who know what skills and competencies they need in their employees including their future employees, to possess.
We are also encouraging greater utilisation of training opportunities by employers in growth sector industries through our $476 million Industry Skills Fund.
In March this year, the government announced a $38 million employer-led training pilot for micro, small and medium sized businesses which employ an unemployed young Australian.
Effective support for apprentices and their employers at all stages of an apprenticeship will be increased and red tape decreased through the establishment of the new $600 million Apprenticeships Support Network and complementary management system that will ease paper based records and enhance e-business capabilities.
The Government has also introduced new Trade Support Loans – an optional income-contingent loan like HECS or VET FEE-HELP, targeted specifically to apprentices so as to assist them with meeting the cost of living during those early years.
More than 18,000 Trade Support Loans have been accessed since the Programme began in July 2014.
The new framework for VET in Schools, adopted nationally last year, provides a platform from which to improve the vocational education many commence in school – and this work will continue throughout 2015, particularly with regard to career advice.
Offering students solid vocational training in their secondary schooling is one of the best ways that governments can help young people navigate the sometimes confusing pathway from school to a rewarding career.
We are also aware of significant data gaps in the measurement of VET activity and outcomes.
The new Unique Student Identifier and Total VET Activity research seek to fill this void so that all future policy decisions are based on the best possible knowledge.
And now to the vexed issue of quality – and how community perceptions about the VET system are being influenced by the unscrupulous behaviour of a few dodgy providers.
The National Vocational Education and Training Regulator Amendment Bill 2015 was passed earlier this week.
This package of measures will enable the Government to create new quality standards in order to quickly address any problems with VET providers or VET courses.
Anyone who is marketing a VET course will need to clearly identify which RTO is providing the qualification and the registration period for RTOs will be extended from five to seven years to enable Australian Skills Quality Authority to focus on investigating and acting upon high risk and poor quality providers.
This extension will enable ASQA to focus its compliance efforts on those doing the wrong thing rather than on re-registration audits, which providers expect and prepare for.
To help protect students and ensure they are fully informed about their training and the associated debt, ASQA is already working with consumer law agencies, and measures in the legislation, including broader information-sharing provisions, will further this consumer protection.
One of the key issues under discussion is the growth, and misuse, of VET FEE-HELP.
Since the previous government relaxed conditions on providers the growth in VET FEE-HELP has escalated dramatically, at a rate twice that predicted in 2012.
The value of VET FEE-HELP loans issued between 2012 and 2013 grew from $325 million to $699 million, a growth rate of 115 per cent.
In 2014 it grew to around $1.5 billion based on data reported to date, also a growth rate of 115 per cent. And growth of this nature is forecast to continue.
Meanwhile, the number of VET FEE-HELP enrolments in management and commerce surged by 154 per cent, from about 18,425 in 2012 to more than 46,773 in 2013. This equates to more than $324 million in loans in 2013. The data for 2014 will be available in May 2015.
We support the principles of VET FEE-HELP but we will not support abuse of this scheme by people out to make a quick buck at the expense of the vulnerable and the taxpayer.
The Government last week announced a rolling campaign of legislative and other changes to deal with rogue training providers and better protect students taking out an estimated $16.3 billion in unnecessary VET FEE-HELP loans over the next decade.
This includes a number of measures, ranging from:
- banning providers from offering inducements or incentives to students to get them to sign up to courses that they don’t need to
- banning miraculously short diploma or advanced diploma courses and
- stopping marketing agents and brokers ‘freelancing’ to sign up as many students as possible.
- Importantly, it also includes giving students clear information that helps them understand that VET FEE-HELP loans are real debts that impact their credit rating and are expected to be repaid and
- making it easier for the government to cancel student debts that have been generated by training providers or brokers who breach the new guidelines.
This a comprehensive crack down on dodgy activities, to be complemented by an enhanced compliance regime, supported by more than $18 million for activities like more random audits on both students and training providers.
The Government is already working with industry on the implementation of these measures while we begin implementation, with the ban on inducements to commence from 1 April.
We will be monitoring the effectiveness of these measures closely and reviewing the program again within two years.
It is also now easier for anyone with a complaint about the VET sector with the establishment of the new National Training Complaints Hotline – 13 38 73.
This is a joint initiative with state and territory governments. Anyone with a complaint or query about the training sector now has one number to call, so they can report a complaint and have it referred to the right authority for consideration.
The VET reform agenda is multi-faceted. Every aspect of it is about getting better outcomes for students, employers, training providers and taxpayers.
This Government is focused on ensuring that vocational education and training is valued by all Australians and that it delivers the skills our students, employers and economy need to maintain our world class standard of living.
I wish you all well as you consider and discuss these issues during this conference and for the future.