Release type: Speech

Date:

The Minerals Council of Australia

The Minerals Council of Australia, Canberra, 28 May 2008

Acknowledgements

Firstly, I would like to acknowledge the traditional owners of the land on which we meet - the Ngunnawal and Ngambri people. As many of you in the resource sector would know, through your long association with Indigenous Australians, the importance of recognition and reconciliation cannot be overstated, and is an economic as well as a moral priority.

Thank you Chris for your kind welcome and thank you to the Minerals Council for inviting me to address the Minerals Council’s Minerals Industry Seminar.

I would also like to take this opportunity to publicly congratulate Ian Smith on his recent election as Chairman of the Minerals Council.

Ian, with mining helping propel Australia to a new level of prosperity, you’ve got one of the most important jobs in the country, and I wish you well.

At a mining industry conference last month I commented on the professional and genuinely friendly working relationship that we have developed, despite our sometimes robust disagreements, and I look forward to continuing that relationship with Ian and the Minerals Council.

The theme of my address today isRebuilding Australia’s Institutional and Intellectual Skills Capacity. It’s a happy coincidence that I have come here today directly from opening the inaugural meeting of Skills Australia, a body that I know the Minerals Council strongly supports. I will talk more about that later.

THE SKILLS EQUATION

The skills equation facing the mining sector is one most Australians now understand.

Australia has enjoyed sustained economic growth for more than a decade and a half.

The resource sector has, of course, been the major contributor to the nation’s growth as a result of the current commodities ‘super cycle’.

With the sector employing more than half a million people and bringing in $115 billion in export earnings this financial year, it is clear that the minerals and mining industry is central to the future of Australia’s economy.

I think when historians look back on the scale of this achievement they’re going to see it as something special.

It really is a heroic story of immense scientific expertise, technological know-how, engineering construction and sheer hard physical work. We can all sense that it’s a pivotal moment in our national history – nation-building on a grand scale – and an opportunity that we mustn’t squander.

The Rudd Government is determined not to squander it. We want your achievements to lead to a permanently strong and productive Australian economy.

If we are going to do so, there are a number of challenges we have to head off.

The first of course is the effect of growing and projected skill shortages on the industry itself, inflation and interest rates. We have to reduce these pressures and this will involve significant human capital investments.

Research indicates that Australia faces a shortfall of 240,000 skilled workers by 2016.

With over $357 billion worth of projects in the pipeline, the resource sector is feeling these shortages acutely.

Your own organisation estimates the industry will need 70,000 new workers by 2015, with nearly 60,000 of these falling into the skilled, semi-skilled, professional and technical employee categories.

The Industry Skills Council for the mining sector, Skills DMC, believes the figure is around 53,000 new recruits per year to satisfy demand and replace retiring workers.

The challenge for all of us is to put in place the programs and incentives that will provide Australia’s workforce with the necessary training and skills to ensure our future prosperity.

I want to acknowledge the huge investments the Minerals Council and the resource sector are making on their own initiative to tackle the skills issues facing the industry.

The mining industry faces many challenges in training and workforce development, often being faced with remote locations and the need to train people on expensive equipment and technology. Despite these difficulties, the industry invests heavily in training, with great results for businesses and local communities.

Rio Tinto Aluminium in Weipa received an Excellence Award for Training last year. Rio, like many other mining companies, is committed to ensuring 15 per cent of their workforce comes from the local Indigenous population, with specialist traineeships on offer and cultural awareness training for other employees.

As well doing great things to support the training and development of the local Indigenous community, Rio have their own Operational Training Centre on site for apprentices and trainees. They also provide opportunities for existing employees to enrol in other traineeships, allowing them to get nationally accredited, transferable qualifications while they are working.

There are many other examples of your industry taking the lead on training, like GEMCO in the NT who offer scholarships, bursaries and a range of other development opportunities, or Worsley Alumina in WA who also have their own training department on-site.

I was also pleased to see yesterday the Minerals Council announce it’s aspiration to have 1000 Indigenous job seekers in training in your industry.

SKILLING AUSTRALIA FOR THE FUTURE

The skill shortages facing the resources sector were part of the inspiration behind Kevin Rudd’s promise of an Education Revolution. We regard education and training as one of the keys to the future productivity, growth and prosperity of the country.

In the recent budget, the Government provided $19.3 billion to deliver on its commitments to deliver a world class education and training system.

We see these Budget commitments as the first down payment to ensure all Australians have the opportunity to learn and prosper in the modern Australian economy.

We have established a new high level advisory body, Skills Australia, to help tackle the big issues we face around skills and to give the Government expert independent advice on skills needs across the economy, both now and in the future. The Board, which includes Keith Spence who some of you may know from Woodside Mining, met for the first time this morning and I was encouraged by their enthusiasm for what is a mammoth task.

Skills Australia will need to engage with all stakeholders to get the best advice and information, including industry groups like the Minerals Council.

But Skills Australia is just one plank in our plan to tackle the skills crisis.

We are also committed to providing up to 630,000 additional training places over the next five years, focusing on jobseekers and those in the existing workforce.

We have already made the first 20,000 of these places available to jobseekers from April, with more than 3500 students enrolled and 380 registered training organisations participating already and hundreds more signing up every week.

From July, we will begin the rollout of places for those in the existing workforce. Earlier this month, I was particularly pleased to announce with my colleague Mark McGowan, the WA Minister for Education, that Western Australia will be the first state to join with us in delivering the program.

These places will be targeted at higher level skills and key industries including mining and construction. Targeting training to areas of need and placing industry at the centre of the training system are key aims of the Productivity Places Program.

Industry Skills Councils, including Skills DMC that services your sectors, will play a much greater role in providing intelligence and advice and working with employers, training providers and government to allocate these new training places.

We are committed to giving industry a voice and working in partnership to create a system that will meet demand. In early April we released a Discussion Paper to seek a range of views on the policy and implementation issues. I was pleased to see that the Minerals Council made a valuable submission.

The Budget also delivered on a range of other initiatives in the vocational education and training area, including $2.5 billion to establish Trades Training Centres in secondary schools and a range of measures to encourage on-the-job training for VET in Schools students.

HIGHER EDUCATION

The Budget also delivered a number of significant commitments in higher education that are directly relevant to the resource sector.

I know one of the industry’s frustrations with the higher education system is the relatively low proportion of engineering graduates we are producing.

It’s a frustration I share and something the Review of Higher Education will be more than willing to receive submissions about. I encourage you to make a submission.

In the meantime, we’re addressing the issue in a number of other ways. From 1 January 2009 students who are starting to study maths and science will have their student contribution amount lowered from $7412 to $4162.

We have also introduced two new scholarship categories for students studying specialist courses, including engineering. Together the National Priority Scholarships and the National Accommodation Scholarships will be funded to provide 44,000 new places for students studying priority disciplines, bringing the total of Commonwealth supported scholarships to 88,000.

Let me acknowledge and welcome the public support that the Minerals Council has given to the Budget measures that I have outlined here today. Only by working together can we build extra capacity into the Australian economy and Australia’s workforce.

In welcoming the support that the Minerals Council has given, I also note that you have said there is more to be done. I agree.

The Education Revolution is designed to increase our productive capacity now and into the future.

It aims to make Australia the most educated and highly skilled workforce in the world.

There is no better demonstration of this long term commitment than the new $11 billion Education Investment Fund.

Over the next two years the government will make a new investment of $5 billion from the surplus and roll in the $6 billion form the Higher Education Endowment Fund.

The fund will support capital expenditure and renewal of facilities. Unlike the HEEF, the fund will include the vocational education and training sector.

Proposals put forward will need to clearly demonstrate that projects are of strategic national, state or regional investment value. Proposals will need to ensure that funding is directed towards meeting national priorities.

In the training sector, investment outcomes would need to demonstrate a strong strategic value and address current and projected skills needs while improving the sector’s productivity.

Consultation and collaboration with industry will be strongly encouraged to ensure the broader advancement and growth of the sector. Industry investment in projects will further strengthen the case for accessing funding through the EIF.

This massive $11 billion investment in education and training infrastructure will transform the higher education and training sectors.

It will gear these sectors to deliver the training and education needs of individuals and industry by equipping our institutions with state of the art facilities and technology needed to meet our goal of a world-class education system.

CONCLUSION

The measures I have outlined today are only the beginning of the Education Revolution and the Rudd Government’s commitment to Skilling Australia for the Future.

We have a unique opportunity to drive the reforms necessary to create an education and training system that meets the needs of all of its stakeholders – industry, workers, students, schools and institutions.

The Rudd Labor Government is working cooperatively with our state and territory colleagues to create an education and training system that is efficient, responsive and flexible.

This cooperative approach will lead to a truly national system that removes the barriers that exist in our current system.

Through the Education Revolution, the Rudd Labor Government is committed to providing the leadership that will drive the reform that is needed.

As a key driver of the economy the resource industry is a crucial partner in the Education Revolution.

I look forward to continuing this partnership into the future.

Thank you.