Release type: Speech

Date:

Group Training Association of Victoria

Group Training Association of Victoria, Annual State Conference, 8 April 2008 Craig’s Royal Hotel,10 Lydiard Street Ballarat

Acknowledgments

  • The Wathaurong people [Woth-er-ong], the traditional custodians of this land;
  • Ms Catherine King MP- Federal member for Ballarat
  • Mr John Ackland – Board Chair Group Training Association Victoria
  • Mr Jim Barron –Chief Executive Officer, Group Training Australia Ltd
  • Mr Peter Thomas – Chair Victorian Skills Commission

Introduction

Thank you to the Group Training Association of Victoria for inviting me to speak to you today.

It would be remiss of me not to mention the passing of one of Ballarat’s favourite sones, John Button.

A great Minister with a zeal for reform and innovation and last year he chaired a study on workforce participation.

Today to share with you some of the new strategies the Australian Government has developed to address the skills needs of the Australian economy.

In talking about the Government’s strategies I would like to emphasise that all sectors of our economy need to work together to ensure Australia remains a prosperous nation.

The Australian Government has an ambitious agenda to drive productivity.

And as Minister for Employment Participation, my focus is to boost the nation’s workforce and lift productivity to ensure that we stay globally competitive and deliver prosperity to future generations of Australians.

VET History

To put things into perspective, let’s look at how we arrived at today’s economic situation.

Vocational Education and Training has its roots in the mid to late nineteenth century, when training institutions and employment were centred on a narrow band of trade related industries.

More than 15 technical institutions were established in Victoria between 1870 and 1890 including the Ballarat and Bendigo schools of mines and forerunner of the Royal Melbourne Institute of Technology.

Up to World War II the need for apprenticeships and trade occupations dominated vocational education but a post-war expansion of industry saw the introduction of technical and para-professional occupations and courses.

The 1960s saw great social and economic changes in Australia with the expansion of industry and commerce which led to increased demand for high level qualifications with university qualifications the preferred career path for most young people.

The 1974 Kangan report put TAFE on the national agenda with momentum gathering in the 1980s and 90s following increasing reliance on digital technology and greater specialisation of jobs.

Today VET qualifications are recognised as a major part of our nation’s skills set and integral the future prosperity of our nation.

It is not accident the Deputy Prime Minister is the Minister responsible for TAFE.

Now more thanone in eightworking age Australians is enrolled in vocational education and training.

But there is still much that can be done.

In order to ensure skills training is targeting the greatest areas of shortages Australia’s training system needs to undergo a fundamental shift, from a system driven by the needs of providers, to a system that responds to the needs of employers, industry and the economy.

Not only must this system provide apprentices and trainees with more relevant qualifications, it also needs to offer greater support to complete training and a better chance of securing a job and improving their job prospects.

But more about this later.

The Australian Economic situation

So why is there such an urgent need to increase the number of people with qualifications in our workforce?

Seventeen years of sustained economic growth in Australia has resulted in a significant ‘problem of prosperity’ – a chronic shortage of skilled labour.

A shortage the previous Liberal Government failed to address despite constant warnings, include 20 from the Reserve Bank of Australia.

Labour force participation is at a near record high of 65.2 per cent, and the unemployment rate is at 4.1 per cent, a near 33 year low.

In 1999 the Migration Occupations in Demand or MODL list (pronounced "modal") had 18 occupations. Now it has 95 listed - a massive 400% increase.

Today it occupations in demand range from accountants, engineers, medical practitioners, to cooks, electricians, and motor mechanics.

It is estimated that without intervention over the next three years Australia is likely to experience a shortfall of some 195,000 workers.

As things currently stand over the next 40 years Australia’s demographic destiny will see the proportion of Australians aged over 65 double.

Over the same period, workforce participation rate is projected to decline from 64.5 per cent today to around 57 per cent.

All of these indicators point to a risk that Australia’s prosperity will be constrained by skill shortages, an ageing population and lagging productivity growth.

New Labour Markets

But the strong employment growth over the past decade hasn’t been uniformly felt in all sectors of the workforce.

The most recent data from the OECD has Australia25th out of 30countries in terms of participation amongst prime aged men (25 to 54 years) and22nd out of 30for childbearing aged women (25-44 years).

While there is more thanhalf a millionAustralians who would like to work more than they presently.

We all know that today’s job market is dramatically different to that a decade ago. There is increased fluidity in the market and people can no longer expect a "job for life".

People may have many careers in their lifetime which is why life long learning is important and flexibility in moving in and out of training pathways.

The employment services system needs to respond to this demand to alleviate the high levels of under employed Australians.

Social Inclusion Agenda

But as well as the economic imperative for increasing the number of people in our nation’s workforce, there is also a strong social argument for encouraging more people into jobs.

Having a job is part of our social identity and is often the first question we ask a person after being introduced ?

We all know that having a job connects us with the world around us, and gives shape to our lives and creates opportunities for financial independence.

Yet despite considerable improvements in employment outcomes, many groups continue to face unacceptably high unemployment rates and ongoing labour market disadvantage including:

  • young people who lack workplace experience;
  • Indigenous Australians;
  • mature age people;
  • sole parents;
  • people with disabilities; and
  • people with a mental illness.

In today’s climate of low unemployment, those who remain unemployed often face the greatest barriers including low skill levels and employer and community attitudes.

But I believe that Group Training Organisations like yours have an important role to play in lifting these barriers by helping people increase skill levels and change negative attitudes about employing certain people.

What the Rudd Government is doing:

So what is the Rudd Government doing to boost the number of people participating in our workforce?

As I touched on before, we recognise a ‘demand-driven’ approach to delivering skills and training that will provide more incentive for employers and Group Training Organisations and training providers to work collaboratively.

We have promised to boost the number of Vocational Education and Training places by 450,000 including 175,000 for those who are not working or marginally attached to the labour force.

65,000 of these extra places have allocated to Australian Apprenticeships.

At that launch, Acting Prime Minister Gillard also released a discussion paper on the Productivity Places Program to seeking feedback from the community implementation arrangements for the 450,000 extra places.

I encourage all Group Training Organisations to be part of this feedback process.

As well as extra training places, the Rudd Government is reviewing the current suite of employment programs.

The review will be completed before the current service contracts end in June next year.

So far have received more than 260 submissions about how we can improve the provision of employment services.

It is clear that many providers and other stakeholders share the Government’s concerns that the current system is too complex, too rule-bound and too inflexible

We need to see what’s working and what’s not in getting people into meaningful jobs.

The Rudd Government is also establishing Skills Australia bringing together economic, education and industry expertise to provide government with advice about the future skill needs of this country.

Group Training Organisations, including those of you here today, can help us in this goal by identifying employer training needs and matching appropriate training solutions that suit the host employers’ workplace.

The new website skills and training info.com.au provides details of occupations and qualifications that may be used for Australian Apprenticeships arrangements and types of training available under the Productivity Places Program.

CONCLUSION

All of you here today have a big part in helping not only the Australian Government achieve our skills agenda but in the future prosperity of our nation.

The group training network is the largest employer of apprentices and trainees in Victoria.

More than 8,200 Australian Apprentices were in training in Victoria as at September, 62 per cent of those were in traditional trades.

By continuing to help provide valuable skills and training you will help the Australian Government to drive productivity growth, increase workforce participation and address skill shortages.

If we achieve results that the late John Button would be proud to be associated, we will have succeeded.

Thank you again for giving me the opportunity to speak to you today. I am happy to answer any questions you may have.