Release type: Speech

Date:

Address to Western Australian Chamber of Commerce and Industry Workforce Summit

Ministers:

The Hon Julia Gillard MP
Deputy Prime Minister
Minister for Education
Minister for Employment and Workplace Relations

PERTH CONVENTION EXHIBITION CENTRE

1:15pm Tuesday8 June 2010

In this great State of Western Australia, we celebrate two modern miracles.

One is the extraordinary rise of the resources sector.

And the other is the extraordinary rise of the Fremantle Dockers… and the possibility that a team can travel from third last to a premiership in just twelve months. It’s the stuff dreams are made of.

I have come here today to tell you that as Deputy Prime Minister in the Rudd Government, I won’t be standing in the way of the first miracle – but as a passionate supporter of the Western Bulldogs I will be standing in the way of the second.

Whether the Dockers or the Bulldogs win, we can all at least rejoice in the fact that a team from the west will have won the flag – even if mine’s from the western suburbs not Western Australia.

Us Westies have to stick together.

A STRONG ECONOMY AND A FAIR SHARE FOR WORKING FAMILIES

And as a Government, we have asked the nation to stick together in some difficult global economic circumstances.

Of course, the Rudd Government was elected with an ambitious agenda including a big agenda on education and skills.

This Chamber has been a national leader in developing forward-looking education and training policy. Your education reform advocacy has zeroed-in on some of the most crucial long-term structural issues, in particular:

  • The need to find the best ways to pay our teachers more.
  • A national curriculum.
  • The need for transparency and national consistency in measuring the progress of schools and students, through reforms like the My School website.
  • And the need to improve Australia’s performance in teaching job-ready skills in our schools by following through with the construction of Trade Training Centres.

And as a Government we have made good progress on these issues of critical concern.

When this State and the nation as a whole was threatened by the global financial crisis, we acted decisively and did what we had to do and Australia has come through stronger than most countries.

Now, as a Government we are determined to continue the job we began for Australian families.

Including getting the budget back to surplus by 2013 – three years earlier than expected – to keep the economy strong and spending under control.

And I am determined to continue our education and skills reforms.

So our task today isn’t to discuss football skills, it is to take another step in the public policy discussion about developing the skilled workforce this State needs for its continued economic growth.

I thank the Chamber for hosting this timely event and for its continued role at the forefront of public policy debate in Western Australian.

But as we meet today, we are all aware that the airwaves are crowded with discussion, debate and dissension about the Rudd Government’s proposed Resources Super Profits Tax.

So while today I do want to focus on skills, it makes sense to place my understanding of the skills needs of this State and the resources sector in the context of the dominant public policy debate of today.

RESOURCES SUPER PROFIT TAX

I want to start by putting a very simple proposition to you – that our future is really in our own hands and we need to make the best possible decisions about how to shape it.

A passionate debate about shaping that future isn’t a bad thing.

Passion means we care intensely.

Debate means we are exchanging views.

I don’t think a passionate debate is something to fear.

But I am concerned that as the debate rages, there is fear being generated in some parts of the Western Australian community.

Today, I want to reassure that there is no need for fear.

In fact, while the debate is energetic and animated, I actually detect some key points of agreement.

First, an emerging consensus that the resource sector can pay more tax.

Second, that more tax can be paid while employment in the sector still grows.

And, in case it has not been transparent to you, let me add a third point of agreement – everyone, including every member of the Rudd Government, wants to see Western Australia fairly benefit from the proposed new tax arrangements.

The minerals we dig up and the energy we tap are fuelling a new era of prosperity. But while our mineral and energy wealth is vast, it is finite.

So as we use this resource - mine it, tap it, sell it – our obligation is not just to enjoy the benefits today but to use some of that wealth to contribute to a stronger economy for the future.

A stronger economy that can offer families today and their children and grand children a fairer share.

I believe our nation’s wealth doesn’t just lie under the ground, it lies in our people.

Our capital is both physical and human.

Together they offer the way forward.

Crucially here in Western Australia they offer the solution to the conundrum of how to promote development without a two-speed economy, and how to maintain growth without the destructive cycle of boom and bust.

The resources boom is a huge opportunity which is creating great wealth for many people. That is a fact to be celebrated. But the reality is that sustaining that prosperity is also a huge challenge. It is a challenge, not just of finding and skilling the people to take advantage of these opportunities. It is a challenge ofequipping communitiesso that they can prosper as well.

I’ve been to Gorgon and to Pluto this year. I have seen the scale and speed with which those projects are being constructed.

I have also been to Karratha, to Broome and to Kununurra. And I know the pressures, as well as the opportunities, that are created by this extraordinary level of economic activity.

If we want the benefits of this boom to last, we have to make sure that whole communities are equipped to prosper.

That means further investing in infrastructure beyond the investments we have already made as economic stimulus. And it means investing in skills.

I do have faith in the Australian people to think and plan for the long term prosperity of this country and to put the resources that they own to good use – and that’s the core of what this tax debate is about.

All revenue from this tax will be used to deliver a stronger economy for Australian families, who deserve a fairer share.

About a third of the package will directly assist the resources sector.

The proceeds from the tax will create new roads, rail lines and ports with an emphasis on the needs of mining communities and mining states.

TheResource Exploration Rebatewill help small companies search for new deposits.

The package will alsocut the company tax rateto boost the competitiveness of all industries across the whole economy. Small businesses will get a head start with a cut in their company tax rates ahead of other businesses and special tax help when they buy new capital.

It will help grow a more diverse and innovative national economy. And, importantly, it will allow us to ease infrastructure pressure on the great resource State of Western Australian.

EASING THE SKILLS PRESSURE GENERATED BY THE BOOM

The pressure being generated by the boom is a good problem to have – but it’s a problem we’re all experiencing.

We get reports every day about teachers, electricians, plumbers, chefs leaving their classrooms, downing their tools and abandoning restaurants to get higher wages driving trucks, digging mines and feeding oil rig workers.

We all know the frustrations this can cause:

  • Experienced teachers being lost to our child’s school.
  • Long waits for basic services.
  • Restaurants forced to close and family businesses undermined.
  • Small businesses screaming out for more employees.

None of us blames anyone for heading to the diggings.

But this movement does means - as the Chamber’s members have told us - we need a visionary skills agenda for the country.

Each of us here has a stake in creating it and making it work.

It’s a task that stretches from educating and finding more engineers and train drivers for finding more aged care nurses and childcare workers.

Western Australia’s skills challenges are those of the nation writ large.

Construction, mineral extraction and the professional and technical needs of the resources sector do pose significant labour market challenges.

But estimates from my Department also indicate that the health and social care sector in WA is anticipated to grow by more than 22 percent over the next five years. Education is anticipated to grow by nearly 16 percent over the same period.

That is why the steps that the Rudd Government has taken – to dedicate 50,000 training places in the Productivity Places Program to health and social care, to uncap university places from 2012, to invest in training more doctors and nurses and to better reward universities who teach teachers – are so important.

And why even during the Global Financial Crisis new skills were created. For instance, we assisted more than 4,000 Western Australian businesses and more than 8,000 local apprentices to continue or complete their apprenticeship.

The Apprentice Kickstart initiative, with the support of this Chamber and businesses across the state, enabled more than 2800 young Western Australians to get a start in a trade apprenticeship over the summer.

We avoided losing a generation of young people and a further compounding of the State’s skills deficit.

LONG-TERM HUMAN CAPITAL CHALLENGES

Now we have to meet thelong-termhuman capital challenges.

Despite Western Australia’s strong economic performance, the Chamber has also concluded: ‘The State’s record for utilising its human potential… is not as consistent.’ And failing to engage all our people will: ‘have long-term social costs, and will significantly reduce the productivity of the State’s population.’

How can we have an under-supply of labour when we have an over-supply of the unemployed and the disengaged?

Here in Australia – and notably here in the West – we still have communities in which too many young people have low aspirations and limited scope to complete Year-12.

Around 360,000 young Australians have not obtained at least a Year 12 or Certificate II qualification and are not studying for a qualification.

In the 12 months to April 2010, there were around 38,000 disengaged young people in Western Australia (around 15,000 teenagers, and 23,000 young adults).

The labour underutilisation rate in Western Australia, that is the combination of unemployment and underemployment, stands at 12.8 of the labour force.

We can do better than this. We have to.

And that is exactly what our reform agenda and our investments are about.

Improving early years services and giving every child a good start.

Improving school attainment through better teachers, better facilities, a national curriculum and better transitions at year 12.

Opening up universities and training places to more people and driving up quality.

And, crucially, lifting investment in workforce skills in the places and for the workers where it matters most for the economy.

That is why this year’s Budget took another big step forward in skills reform, with aSkills for Sustainable Growth strategyfirmly focussed on the changing needs of our economy.

It targets critical areas of skills shortage, creates opportunities for young Australians, and addresses the growing crisis in the levels of literacy and numeracy needed for a modern economy.

A new Critical Skills Investment Fund will work in partnership with businesses in the resources, construction, infrastructure and renewable energy sectors to create at least 39,000 new training places over the next four years.

Much of its initial focus will be on Western Australia and Queensland and these states will work with us on its implementation. The fund will bring new skills into WA’s mining communities and help ensure that the success of these communities does not come at the expense of others.

The Rudd Government has also extended the Apprentice Kickstart program to help a further 22 500 young Australians to commence an apprenticeship with a small or medium sized employer working in trades that are in demand.

Working with employers and unions, the government will promote a more flexible apprenticeship system that provides young people with the skills employers need.

The seeds of better outcomes lie in improving the apprenticeship experience – better mentoring and workplace supervision; embedding competency based progression and improving pay opportunities.

In our adult workforce, an estimated 4.5 million Australians have inadequate language, literacy and numeracy skills. It’s a silent epidemic afflicting Australia’s economic performance.

Sixty per cent of unemployed Australians currently lack the basic capabilities necessary to pass a Certificate III qualification. This is a tragedy for them, an opportunity cost for business and a price our economy cannot afford.

The Foundation Skills package announced in the Budget will give 140,000 people the chance to improve their literacy, numeracy and language skills and become job ready or move to a higher-level job.

Modelling done by Skills Australia tells us that 4.6 million additional qualifications may be required over the next 15 years due to employment growth to keep our economy at the optimal level of productivity.

So we must reform our training system and we will do so through our Training System for the Future Strategy, which will provide incentives to vocational education providers to raise the quality and transparency of the training they provide.

Part of this will include an offer to the States and Territories to establish a national training entitlement to address the learning needs and improve the job readiness of young Australians.

These are reforms we simply have to make to keep building a stronger economy that delivers a fairer share to working families.

CONCLUSION

I want to conclude by telling you about a visit I recently made to a primary school in Perth called Queen’s Park Primary. I met there a builder who had given his workers redundancy notices, which he was able to rescind because of the announcement of Building the Education Revolution. At the same school I was told the librarian had postponed her retirement because she was so excited about getting to work in the new library.

In Broome at the High School, I had the honour of opening the Trade Training Centre which is giving kids real skills for real jobs.

And I have met with principals of schools that have become independent State Schools and who are now more empowered to manage their school. This reform has been supported by our Smarter Schools National Partnership.

Each school I visited or heard about has been touched by our reform agenda, an agenda our political opponents are determined to stop with planned cuts to Building the Education Revolution, Trades Training Centres, computers in schools and the national partnership programs that are driving reform.

What the story of each of these schools says to me is this.

There will always be fierce political debate about the future of our country.

But it is in all of our interests for that debate to focus on the reality of what is happening rather than the rhetorical hysteria that can so easily take hold in our media debates.

The reality is that the Rudd Government has made good progress on our ambitious agenda while doing what we had to do to bring Australia through the global financial crisis stronger than most countries.

We have begun to deliver the long term investment in skills and infrastructure that all our communities need if they are going to prosper.

There is a lot more work to do.

But to make real progress in building a stronger economy that delivers a fairer sharer to working families, we need to make sure we invest in the needs of real communities and that we find new ways to boost the skills of all our workers.

There is no other way to reduce the pressures now upon us. And that means every sector needs to pay its fair share and keep on taking part in building a stronger, fairer, Australia.

Thank you.