Address to the National Press Club

Speech
  • Minister for Tertiary Education, Skills, Jobs and Workplace Relations

Connecting Skills to Jobs

Thanks and good afternoon everyone.

I acknowledge the traditional owners and custodians of Canberra—the Ngunnawal people—and pay my respects to their elders, past and present.

I am pleased to have the opportunity today to talk about a fundamental challenge that confronts our nation.

That is the challenge of how we manage our future growth to ensure that all Australians benefit.

How we provide opportunities for Australians – regardless of their age or background - to maximise their potential so they can share directly in our success and participate in our society.

How we fulfil the Australian social contract by ensuring the next multi-billion dollar wave of investment in our resources industry brings a dividend for the many not just the few.

And how we use this once in a generation opportunity to build a highly skilled, productive and educated Australian workforce, ready to meet the challenges of the modern, diverse economy.

The essence of our response to these challenges is the need for Australians to be educated and skilled.

In recent decades the value our society places on skills has changed dramatically.I’m sure you are all aware that qualified tradespeople – be they working in small business or construction or mining - command very competitive wages because their skills are in high demand.

That demand has recently grown steadily, and all the forecasts tell us that there is no sign of it slowing.

In the short term we know there will be a spike in demand for skilled workers in the mining and construction sectors as $430 billion in mining investment comes on stream.

But in the longer term, Skills Australia has forecast that future economic demand will be driven by the services sectors and that we will need an additional 2.4 million people within the workforce with qualifications at Certificate III or higher by 2015. To meet industry demand, that figure will rise to 5.2 million by 2025.

And the very nature of work itself is changing due to the impact of rapid technological change.

We are seeing high skill jobs grow at 2.5 times the rate of other jobs.

Never before has there been such an imperative for our nation to invest in skilling its people.

And the economists confirm that investing in our skilled workforce is not only good for individual Australians, it is also critical for our continued economic success and our productivity.

Higher school completion rates, more apprenticeship completions, more university graduations — these are the future for our country.

As Tertiary Education Minister, I am pleased to say that as a direct result of the reforms introduced by Labor, there are now close to 100,000 additional students grasping the opportunity of a university education this year than there were in 2007.

This year, there is a record 521,000 Commonwealth supported student places in Australian universities and other higher education providers, and we anticipate further growth in the years ahead as students respond to the new opportunities that are now available.

And the economic dividend from this investment in our human capital is significant.

Research by KPMG found that in the period 2010–40 the Government’s reforms to higher education will deliver an average of an additional $20 billion in GDP every year and an average of 80,000 additional jobs will be generated each year during the same period.

We have opened the doors of Australia’s universities and Australian students have responded.

One in six of these students are from low-socio-economic backgrounds and many are the first in their families to attend university.

Investing in their education means that on graduating they can expect to join the workforce in high paid, high skilled jobs.Their life opportunities will be totally transformed by their education.

And the good news is that Australia’s apprenticeship and traineeship numbers are also up significantly in recent years—from 410,000 in September 2006 to around 459,000 in March 2011, the highest level ever recorded.

And for the twelve months to March 2011, this includes a 11.5 percent increase in commencements compared with the previous year.

The reason for this is our enormous investment and regulatory and policy improvements.

Since coming into office, Labor has made it a priority to build skills in our workforce, to turn out more apprentices, to train more qualified tradespeople.

It started with our productivity-focused efforts such as our Trade Training Centres, which along with targeted initiatives like Apprentice Kickstart, became part of our response to the Global Financial Crisis. As a result of our investment during the GFC we kept apprentices and tradespeople in work and avoided the skills drain which normally accompanies an economic downturn.

National Skills Week

And while the numbers we have achieved are impressive – it is the real life stories of thousands of Australians that best captures the worth of our investment to date.

The stories of people like Russell Freeburn.

After finishing highschool and working for 12 years in retail, Russell applied for an apprenticeship in light vehicle mechanics.

It was a decision that changed his life.

He found a job he was passionate about and, after finishing his qualification, he also completed a retail traineeship.

Armed with these nationally recognised qualifications he was offered a management position in a local Auto Spares workshop, becoming their youngest manager ever.

Russell is with us today and I congratulate him on his personal and professional success.

We can also look to the achievements of Lucinda Brundell—the 2008 Victorian Apprentice of the year.

Lucinda completed a Certificate III in General Construction (painting and decorating), at the University of Ballarat as part of her apprenticeship with her father’s business.

She thrived in the trade school environment, mentoring fellow students while completing the formal studies for her apprenticeship in half the allocated time.

She now teaches first, second and third year apprentices at the University of Ballarat and has established her own painting and decorating business with her husband. And she has a clutch of major industry awards in her showcase.

From apprentice to painter to mentor and teacher – Lucinda’s experience illustrates the real pathways through life which skills create.

The Gillard Government wants more Australians to join Russell and Lucinda.

And I am pleased today to announce that to encourage people into trades and training this year we have invested in the inaugural National Skills Week.

From the 1st to the 8th of October this year we will celebrate skills – in all their many forms.

Across Australia the Government, in partnership with SkillsOne, will showcase the talents of our nation’s skilled workers from hairdressers to bricklayers, jewellers to tilers.

We also hope to celebrate the success of the Skillaroos — Australia’s team which will compete in the 41st International WorldSkills competition in London during Skills Week.

The inaugural National Skills Week will feature hundreds of activities across Australia where people can find out more about skills either through a career open day, a community skills expo or talk from a VET ambassador at their local high school.

I am pleased to acknowledge that we have two Skills Week ambassadors with us here today:

  • Mr Jason Bryan — the current Australian Apprentice of the Year who I understand has already had the opportunity to share his story with a variety of groups; and
  • Mr Russell Freeburn —the current runner-up Aboriginal and Torres Strait Islander Student of the Year and the high achiever I spoke about earlier.

The Week of events is also being supported by Rotary and News Limited publications across the nation – I thank both organisations for their involvement.

National Skills Week will be a time to shine a spotlight on the hundreds of careers and thousands of training places available to Australians of all ages.

It will raise the status of practical and vocational learning and allow us to acknowledge the contribution of our skilled workers to our economy and community.

This, along with our investment in trade training centres and trade cadetships, is about sending a very clear message.

A message that technical education is highly valued in Australia and that getting a trade or skills qualification is a passport to a high-paid and rewarding job.

Through National Skills Week we will showcase the life changing opportunities that exist as a result of our record investment in skills.

Investment in skills

I’m sure most of you are aware that the Government’s commitment to skills training was the centrepiece of this year’s Budget in which we announced a $3 billion investment in skills and training to address the skills shortages being experienced by industry.

Our Budget investment placed industry at the centre of our efforts to target skills and training and respond to the pressures of the patchwork economy.

We outlined a program of reform for apprenticeships and Vocational Education and Training and committed to a funding model that sees the Government and industry working in partnership to identify and jointly fund training to meet critical skills shortages.

We committed funds to accelerate and mentor apprentices, to partner with business to provide targeted skills training and to create a new workforce agency to direct our investment.

Our Budget initiatives were enthusiastically endorsed by business, educators and unions alike – each acknowledging the critical need to build a skilled workforce to meet the unprecedented demand in the mining and construction industries as well as the areas of significant demand for labour such as the services industries.

Our Budget measures were modelled on the success of industry-led training programs including the Enterprise Based Productivity Places Program. Our training effort saw almost one million people enrol in training courses and the Critical Skills Investment Fund has recently awarded $28 million to companies across Australia to upskill existing workers and train new employees.

The Government devised programs which are both agile and responsive to industry needs.

As you are aware, for some time now my Cabinet colleagues and I have also been highlighting the patchwork nature of the Australian economy.

We have spoken of the unprecedented demand for skills as the resources and construction industries boom.

And we have discussed how the increased demand for our resources is producing a high Australian dollar — a dollar which has been near or above parity with the US dollar for the past 11 months.

This unprecedented strength in our currency is putting considerable pressure on export-exposed and manufacturing industries.

The Government sees a positive future for an internationally competitive manufacturing sector and we will work with industry to meet the challenges it confronts.

Ours is an economy which is undergoing significant restructure and that process has accelerated in recent months.

Last month Australians were given a stark illustration of how the patchwork economy is being experienced by working men and women.

In the same week that BHP announced a record $22.5 billion profit and forecast continued strong growth for its resources divisions, steel-maker BlueScope Steel announced it was closing two of its production facilities and scrapping 1000 jobs.And as these 1000 workers struggled to come to terms with the prospect of losing their jobs, BHP pointed to more than 1300 vacancies in its operations in Queensland and Western Australia alone. The restructuring or our economy is gathering pace and we must act decisively to seize the opportunities that this readjustment offers.

So today I announce Skills Connect – a range of initiatives designed to immediately target the pressure points in our patchwork economy, meets skills shortages and match skilled workers to new jobs.

Skills Connect will see the consolidation of a number of skills programs to allow the Government to target the pressures emerging in the economy and ensure employers and workers are better able to access training support.

Skills Connect will allow industry to come to government with a whole-of-workforce proposal that can draw on:

  • The Accelerated Apprenticeship Program to provide competency-based pathways that recognise skills as they are acquired;
  • The Apprenticeship Mentoring Program to support apprentices to complete their training;
  • The Workplace Language and Literacy Program to support the large number of workers who don’t have the language and literacy skills needed to access training.

As a result, employers who need training support on a range of workforce issues will be able to work with their industry skills council to develop a proposal for funding that potentially covers all of these areas.

It will be a one-stop-shop.

To lead this effort the Government will appoint an interim Board for the new National Workforce and Productivity Agency and bring forward the work of the Agency to have it begin on October 1 - nine months ahead of its scheduled start date in July 2012.

I am pleased to announce that the head of the Australian Chamber of Commerce and Industry, Peter Anderson and the secretary of the Australian Workers Union, Paul Howes, will join members of the current board of Skills Australia which includes chairman Philip Bullock, AIG CEO Heather Ridout and ACTU President Ged Kearney - to form a interim Board for the Agency.

In coming weeks I will also appoint a productivity economist to serve on the interim board.

I will meet with the interim Board over the coming weeks and task them with providing advice to Government as to those industries and regions being most impacted by the structural adjustment which is occurring and how best the Government can apply our training funding.

The interim board of the Agency will be charged with the complementary objectives of funding training for the Australian workforce to meet the skills demands of booming industries and providing practical, targeted training to those workers directly affected by restructuring.

The immediate challenge is to act as a skills broker. To match the needs of emerging industries such as clean energy, along with established and booming industries such as mining and construction, to those sectors confronting the pressures of structural adjustment.

We need to identify and overcome the barriers which will allow this skills match-making process to succeed.

To support the Agency, the Government will focus its skills and training investment to ensure that workers are given the training they need to make the transition from sectors in our economy which are facing decline to areas in which there is strong and growing demand.

We will expand the Workforce Development Fund’s $75 million 2011-12 Budget by $50 million through the consolidation of the existing Critical Skills Investment Fund.

The Government will also streamline its skills programs, providing easier access to a further $60 million from the existing apprenticeship and workplace-based language and literacy training initiatives outlined in this year’s Budget.

Employers will be able to engage with the Government on training support across all these programs.

At this critical time employers need simple, easy to access processes to ensure they can get the support they need.

So rather than have employers separately applying to three or four different programs, they will be able to engage with Government directly on their entire workforce needs.

I want to stress that the Government is committed to achieving the objectives of these critical programs. Now more than ever we need to accelerate the training of apprentices, boost apprenticeship completion rates and equip all workers with literacy levels that enable them to achieve higher qualifications in their workplaces.

In total, the Government will make $110 million immediately available to industry for the remainder of 2011-12.

The interim board of the National Workforce and Productivity Agency will advise the Government on how to best target the use of these training funds.

The Department of Education, Employment and Workplace Relations will support the streamlining of these programs and the early establishment of the Agency.

We must continue to be nimble, responsive and flexible.

We must build workforce resilience and flexibility and better support the transition of displaced workers to new jobs.

I am confident the National Workforce and Productivity Agency will be able to partner industry to direct funding to support both existing employees and new job seekers, and employers most affected by the structural adjustments occurring across sectors and regions.

At the inaugural meeting of the Resources Advisory Council, mining sector companies and unions confirmed the continued strong demand for skilled workers in the resources sector.

To support the labour needs of this critical sector the Gillard Government will also appoint new Fly-In, Fly-Out Co-ordinators in four additional regions, following the establishment of a coordinator in Cairns.

We will be consulting with state jurisdictions and industry on the priority locations for the additional places in this program.

FIFO Coordinators capitalise on fly-in fly-out job opportunities in Australia’s growing resources and infrastructure industries by developing links between projects in remote locations and skilled workers in regions experiencing high unemployment.

The FIFO Coordinator will assist resource companies to attract and connect skilled workers from the four regions to jobs on mining, construction and infrastructure projects in remote areas.

The Coordinators will establish training and employment pathways for skilled workers and unemployed job seekers as well as linking mining companies with airline and airport services to facilitate FIFO workers.

The project was one of the recommendations from the National Resource Sector Workforce Strategy launched in March this year.

The ‘patchwork’ nature of the economic pressures emerging in the economy also highlights the need for the Commonwealth to continue to work collaboratively with each jurisdiction.

This is an issue I intend to raise with my state counterparts in coming months.

Conclusion

In conclusion ladies and gentlemen it is clear that the economic picture we confront as a nation is both complex and rapidly evolving.

The measures I have outlined today are designed to build on our skills programs and keep Australia ahead of the game.

Just as we responded decisively and positively to the most serious financial crisis our world has seen since the Great Depression, Labor will once again steer the Australian economy through this period of economic structural adjustment.

It is the role of good governments to be both responsible and responsive.

To adjust their settings and policies to match the needs of the economy.

Since coming into office we have created almost three quarters of a million jobs. We have done this by working in partnership with industry and tailoring our investment.

The initiatives I have announced today will inform discussions at next month’s Future Jobs Forum.

I think it is most appropriate that the Future Jobs Forum on October 6th will be held during National Skills Week.

As the nation celebrates the talents and contribution of our skilled workers, industry and union leaders, academics and economists will look at further ways to best position our economy for the years ahead and how to best spread the benefits of strong growth to all corners of our patchwork economy.

Labor has made a record investment in the education and training of the Australian people.

An additional 100,000 students are now at university thanks to our reforms and never before has the nation had so many people in apprenticeships and traineeships.

Labor understands the economic challenges our nation confronts.

People want governments to respond with real, practical help. And that’s exactly what we are doing.

We are implementing a strategic, timely and targeted response.

It’s a shared responsibility that involves not just governments in their role as policy makers and funders, but industries in their role as trainers, unions in their role as participants in our training schemes, and individuals as people looking to build better lives for themselves.Together we can match supply with demand, create a new and flexible training system and provide Australian workers with the assistance they need to transition to new jobs in booming industries

By equipping Australians with the skills they need to be first in line for tomorrow’s high paid, high skilled jobs we will also secure the future growth of our economy and ensure that all Australians are able to share in our success.

Thank you.

For more information

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