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Speech

Address to the National Press Club, 14 March 2007

Training our workforce for tomorrow

Ladies and Gentlemen, thank you very much for the invitation today.

Before I start, I would like to acknowledge two past Press Club attendees who can’t be here today – Morgan Mellish and Cynthia Banham.

I am sure that I speak for all of us when I say our thoughts and prayers are with both of their families and loved ones.

In the words of Thomas Edison: “Opportunity is missed in most people because it is dressed in overalls and looks like work”.

Yet, in the world of tomorrow, these trades people and the training they receive will be centre stage.

In the years ahead, the demand for university level qualifications is expected to be just over 20 percent of the workforce, which is roughly what it is already.

However, in the future over 60 percent of jobs will require technical or vocational qualifications, yet only 30 percent of the population have these qualifications.

If this is to be corrected we must start by restoring the status of technical and vocational training.

The relentless talking down of technical education through the 80s and 90s has fostered a generation of parents who feel that they have failed if their children do not pursue a university education, regardless of the particular technical, creative or other vocational talents of their children.

This attitude has effectively denied many of the recent generations of young Australians the fulfilment and happiness that comes from doing what you do best, and to the best of your ability.

This attitude continues to deny our country the special talents of so many of our fellow Australians who entered the workforce over the last quarter of a century.

This attitude is changing, and must change. And the Government is driving it.

We need a nation that once again values a high quality technical education as much as a university degree.

I recently had the pleasure of attending the opening by the Prime Minister of one of the Australian Government’s 25 Australian Technical Colleges at Port Macquarie in NSW.

I listened to Father Donnelly, a towering man in more ways than one, a man in his seventies whose career is far from over, a pioneer in reinstating the trades as a career of great value and merit.

Father Donnelly said at the opening, and I quote,

“We first experimented with the concept of a senior secondary vocational school some 30 odd years ago here in Port Macquarie. At the time the concept was treated with something approaching contempt in educational circles.........

Prime Minister, when you first proposed the concept of the Australian Technical Colleges and saw to their implementation, I think you might have written larger than you thought.

Although the emphasis was on the need for skills, there will be 25 of what could be called lighthouses in education, spread through the land, which challenge the way in which we deliver education in high schools.........

This Port Macquarie Technical College, and the 24 others like it, give students a genuine career path in industry (as well as a HSC) and opens the way for the expression of their many and varied talents.” End of quote.

Father Donnelly was right.

These 25 Australian Technical Colleges are lighthouses. They are beacons of excellence. They have an unparalleled and irrevocable link to local industry. They train on state-of-the-art equipment. They will set the standard for technical and vocational teaching, and will lead the way in restoring a technical career as a career path the equal of any.

Already several state governments have announced their intention to follow suit, and to open new secondary technical colleges. This is a great thing if they meet the standard being set by the Australian Technical Colleges.

But technical and vocational education must go beyond young people entering the workforce.

To set Australia up for tomorrow vocational and technical training must be relevant to every age group capable of work.

It is about apprenticeships for tomorrow.

And, it is also about people in mid-career getting ready for the rest of their career.

It is about older workers positioning themselves for a longer stint in the workforce and ultimately a healthier and wealthier retirement.

It is about skilling those without a job to take their place in Australia’s future – including the over 50s, many with disabilities, parents not in the workforce, other jobless and many looking for part-time work.

We need to accept that it is never too late to be trained or re-trained; in fact, it is essential to be trained and re-trained.

We need to reverse the attitude of many employers that the need to train themselves or their staff amounts to failure; these employers have failed if training is not part of their business.

Workplace Environment

There is an urgency about changing attitudes toward training across every age group because this new century is already witness to some major developments which are reshaping the world.

The extraordinary and sudden emergence of China and India has combined with a rapidly ageing population to create labour and skills shortages across all the OECD countries, and will increasingly do so to a remarkable degree.

Within five years it has been estimated that Australia will have 200,000 more jobs than people to fill them.

At the same time as our population is rapidly aging, the nature of our economy continues to shift.

In the 50’s and 60’s migrants walked off the ships at Melbourne or Newcastle or other ports, and typically within days could be working in jobs on assembly lines at the Ford factory, or at the BHP steelworks in Newcastle.

Visit the Ford factory of today, as I have done recently, and you still see assembly lines, and you still see migrants alongside other Australians, but the sophistication of the manufacturing process is breathtaking, the skill levels of the workers remarkable, the training programmes challenging and continuous.

Rapid technological advances are transforming the world of work.

The Solution

To keep Australia strong and prosperous there is no alternative but to tap further sources of labour within our community – older workers, many with disabilities, parents and the unskilled - and to increase productivity in the face of the huge competition coming at us.

We need to tap the talent and the potential in every home, in every working age group and in every neighbourhood. We need to tap every place of learning and every workplace.

On the productivity front we will all need to be fast on our feet, accept change as a normal part of life, be flexible and constantly reviewing what we do, how we do it, what product we produce or service we provide. This is the Australia of tomorrow.

Responsiveness and flexibility must be the touchstone.

It runs against our instinct for the status quo. It means that the sense of discovery that marks our youth will be a constant throughout our lives.

Of course, fostering this flexible attitude and tapping new labour resources requires action on many, many fronts.

There is no silver bullet.

It is why in recent years the Howard Government introduced the WorkChoices legislation, the welfare-to-work legislation, tax changes for seniors, successive rounds of tax cuts, generational reforms to superannuation, legislation to free up independent contractors, more permanent and temporary skilled migrants, industry restructuring such as the Telstra sale and changes to media laws, and a 42 percent real increase in Australian Government spending on all education and training over the last decade.

It is why the Howard Government has dramatically reshaped the incentives and choices within technical training, and increased spending in real terms in vocational and further education by over 90 percent since 1996.

It is why the Australian Government has built 20 technical colleges, with five more in the pipeline to open by next year, across 42 campuses.

It is why we have influenced the training of apprenticeships such that 404,000 people are currently enrolled in apprenticeships, compared with the Hawke/Keating record in 1996 of just 155,000.

It is why we have invested $837 million in wage subsidies for mid-career apprentices, and in providing more than 130,000 training vouchers, valued at up to $3,000 each, and in other initiatives to assist people in mid-career with training, re-training or advanced training opportunities.

It is why more than 40,000 young apprentices have received an $800 tool kit.

It is why the Australian Government established the Institute for Trade Skills Excellence which will, this year, introduce an industry driven star-rating system for institutions providing technical training. Parents and the students themselves want to know the calibre of the institution they plan to attend.

Drivers of Training Reform

A responsive and flexible culture in the workplace is based on choice, access and industry involvement. This has been the guiding philosophy of the Australian Government for the last 10 years.

Choices in training drive innovation and quality, fill training gaps as training organisations compete to meet industry needs, and provides individuals with control over where they get their training, how they get their training and at what level.

It is why I am very supportive of the role of private training organisations and community training organisations.

But choice can be illusory if it is not matched with access. Access should be tailored to individual circumstances, whether on-line to regional centres, on-the-job in small businesses or manufacturing plants, after hours, at home or within the more traditional training environment.

True choice also requires industry involvement in the training agenda to ensure that it is relevant and effective, that it meets not just the demands of today but tomorrow. It is a touch point which underpins the Technical Colleges and the Industry Skills Councils.

The characteristics of choice, access and industry involvement, along with self esteem, incentives and portability will drive our training programs to be responsive and relevant.

These characteristics make up the template against which new and existing policies will be judged.

These are the characteristics which has enabled us to significantly rebuild and strengthen the apprenticeship system over the last decade with pre-vocational education in schools, the introduction of school based apprenticeships, the Australian Technical Colleges, technical scholarships, tool kits and vouchers for business training of apprentices, together with measures to make apprenticeships more flexible and competency rather than time based, including recognition of prior experience.

The Next Stage

While a strong and important focus will continue on those entering the workforce, an increasing spotlight is being shone on those already in the workforce.

The fact is that we are now seeing about 140,000 Australians each year complete apprenticeships. This compares with an average of 30,000 completions a year throughout the 13 years of the last Labor Government.

The Labor Party keeps saying that was a long time ago so why bother about it.

Well, as a Government we have to bother about it because the fact that for well over a decade the Hawke/Keating Governments trained 100,000 less apprentices each year than are being trained today means that there are now more than a million Australians who should have technical training, and don’t.

This is the Labor Party’s lost generation of tradesmen and women.

These one million Australians are today either in their late 20s, 30s or into their 40s, should be at the peak of their productive lives with 10 to 20 years experience, and could now be in big demand if they had had high quality technical training.

The irony is that the Labor Party, the self professed party of the worker, obsessed about university education during their years in government, while failing to provide more than one million Australians with vocational and technical training.

And it continues today. In Kevin Rudd’s 27 page so-called Education Revolution manifesto, a lonely four paragraphs were devoted to vocational and technical education.

This Labor legacy of one million untrained Australians are part of the 3.4 million adults in the workforce who have either not completed a full secondary education or have no significant skills training.

Too many adults don’t have the school qualifications or the skills training for effective participation in the modern workplace.

It is why the Australian Government last year committed $837 million to boosting skills and qualification levels among both older Australians and those in mid-career.

It is why today there are 160,000 mature age people undertaking apprenticeships, 6,000 more than the total number of people, of all age groups, undertaking apprenticeships in 1996.

Skills at Every Level

We must also find ways to stimulate interest in training amongst people who have missed out on training opportunities.

In this regard, recognition of prior experience is also essential. The training system needs to give credit for experience on the job as an incentive to study, and to shorten completion times and the costs involved.

Small and medium sized businesses will require particular assistance and support because they often face considerable difficulty in restructuring work arrangements to allow their employees to train. Training in the workplace and on-line are critical future options.

Community organisations providing education services will also play an increasingly strong role, especially with adults not in the workforce who can’t access work based training, and for those who may not be comfortable in more formal educational institutions.

Community organisations currently deliver around 15 percent of all formal vocational and technical training, have the highest client satisfaction rates of all training organisations and are twice as likely to have delivered in rural or remote locations.

This demand for more flexible work and training arrangements is coming from employers and employee alike.

They want training tailored to meet a wide range of needs – whether it be a four week skills course or an Advanced Diploma. Workers want portable skills and flexible sets of skills that can be built upon over time.

Workers want to be able to respond to change – both in the workplace and in their own circumstances and stage of life. For example, many older tradespeople who struggle physically to do what they have done for
30 years, have found new careers as educators, technical advisers or in skilled retail jobs, such as in major hardware stores.

The greater involvement of mothers in the workforce means that more workers have substantial responsibilities outside work. Delayed child bearing and increased life expectancy also results in workers increasingly finding themselves with demands from both children and needy parents – the ‘sandwich’ generation.

All of this underscores the need for choices.

Industry Involvement in Training

Increasingly, a world leading feature of Australia’s training sector is the growing influence of industry in shaping the content of vocational and technical training.

This has reached a high point with the recent opening of 20 of the 25 Australian Technical colleges where the Board of Management of each College includes local industry leaders and experienced educators. They oversee the curriculum, the acquisition of state-of-the-art equipment and foster close industry contact with the students and teaching staff.

This principle must be extended across all training organisations in Australia.

While I have only been in this job a couple of months, it’s clear to me that Australia’s TAFE sector would benefit from greater microeconomic reform.

The nation’s 74 TAFE colleges, across 1,386 locations, teach more than three quarters of all vocational and technical students. The leading TAFEs are typically $100 million businesses, with a client base totalling more than 1.4 million individuals, and industry sectors relying critically on their performance.

They need to be responsive to the users of the system – employers and students alike. That in the end is what microeconomic reform is all about.

Through our annual $1.2 billion VET funding agreement with the States, the Australian Government is endeavouring to drive change towards a more responsive and flexible system with increased competition, more performance-based employment contracts and far greater responsiveness to industry.

To achieve this, TAFE colleges need a measure of autonomy at least equal to that which universities enjoy.

Yet, many State governments still exercise choking centralised control which precludes effective industry involvement, and leads to little meaningful connection with the workplace during training and little experience and training on current technology.

Victoria runs by far the most decentralised model, where TAFEs are able to operate on a commercial basis, independent of centralised control. Queensland is starting to head in that direction.

Is it any wonder why Victorian TAFEs can be more flexible in delivering courses and training; why Victorian TAFEs can adjust to new course demands faster; why Victorian TAFEs are able to develop customised curriculum to suit individual and employer requirements; why Victorian TAFEs raise the largest amount of revenue, or why Victorian TAFEs have more overseas campuses than any other State and have more students studying for a Diploma, or higher, than in any other State.

The irony is, the reforms that make the Victorian TAFE system the outstanding performer in Australia started in the mid 90s because the State had to become competitive again, after the basket case that was Victoria in the late 80s and early 90s.

Increasing the autonomy of TAFEs like they have done in Victoria would breathe new life into a massive training infrastructure, and is essential if vocational and technical training is to have the responsiveness and flexibility needed for the Australia of tomorrow.

This is a matter I intend to take up with my State Ministerial counterparts at our mid-year meeting.

Higher Level Training

Tradespeople deserve the special support and the status which are available to university graduates.

The Australian Technical Colleges are a critical first step.

In this regard, access to higher level technical qualifications can allow apprentices to keep several options open.

It can lead to much greater specialisation in their trade, eventually reaching a status of Master Artisan.

It can lead to further training and careers ‘beyond-the-tools’, in technical areas and business.

And, for some it can allow a seamless move to other studies at a university or a technical institute.

These options do require the development of a ‘Master Artisan’ stream of experience and study to retain and recognise highly specialised and advanced trade skills.

In Europe there has been a strong tradition of honouring Master Artisans, and passing the skills of artisans down from one generation to the next.

I intend to strongly encourage such recognition, qualifications and training.

In getting many apprentices on the road to higher level technical qualifications we need an approach that also accelerates trade training and gives quicker learning apprentices access to higher level training.

One first step I would like to explore is the introduction of a Trade Diploma as a complement to an apprenticeship.

Conceptually it would be like undertaking an Honours stream within a degree course. Certificate III would remain the base level requirement to gain an apprenticeship, together with the requisite on-the-job training.

Those invited to undertake a Trade Diploma (just as someone is invited to do an Honours year within a degree course) would reach a Level 5 qualification and still be required to do the requisite on-the-job training in order to complete the apprenticeship and the qualification, and be eligible to register as a qualified tradesman or woman.

Those with a Trade Diploma would then be eligible at any future point in time to undertake a Level 6 Advanced Diploma, and/or receive credits towards some other advanced qualification at a university or Institute of Technology or move to a Master Artisan career progression.

Recognition of prior experience for mid-career apprentices undertaking a Trade Diploma would be a part of the competency based assessment in completing such an apprenticeship.

Such a training option extends existing Australian Apprenticeship arrangements and increases the opportunities for higher level trade careers.

Such a qualification would need to be driven by industry and developed within the national training framework.

Low Level Skills Training

Apart from promoting higher level qualifications we must not lose sight of the importance of basic skills - specific sets of skills to enable people to successfully perform in jobs which don’t require long formal training programs.

In this regard the life skills and previous experience of the ‘grey’ market is not properly valued. Nor are those with no formal training who could perform very effectively with two to four week courses which give them skills necessary for certain jobs in hospitality, retail or other sectors.

As an example, the Statement of Attainment available in Victoria, requires 18 days of off-the-job training to enable people to become a short-order breakfast chef or room service chef. Many of the students who complete this course find work in cafes, restaurants and function centres. Further down the track they can use this short training course, combined with their working experience, as a building block towards a trade qualification as a cook, a chef, or a baker.

To make the most of existing skills in the workforce, we need to ensure that people are given credit for the work they have done towards a qualification or other forms of recognised short course training. All training and experience should be viewed as building blocks.

On-line Training Platform

In the near future elements of such short course training, along with components of more formal technical training courses, will be available electronically.

All vocational and technical training organisations, could be connected to a dedicated high bandwidth network to enable them to deliver leading edge on-line teaching products.

People would be able to undertake training any time, any place. This would further open the door to high quality training for people in rural, regional and remote areas, and in metropolitan homes and workplaces.

The Australian and State Government’s have together spent $105 million over recent years to prepare for the new era of on-line learning.

I am now assessing the role that the Australian Government could and should play in a move to a national on-line learning platform which would deliver accredited training on-line in the workplace, in the school or training organisation, or in the home.

We have the opportunity to develop an Australian solution for Australian circumstances, to meet our unique geographical and education challenges.

Conclusion

I began this speech by talking about the world of tomorrow – about present action and plans to set us up for the future.

A plan for our young people, for those mid-career and those in the later years of their working life.

A plan to restore the true value of technical and vocational training, where a trade or technical qualification is as prized as a university degree.

A plan for training to be responsive and flexible, to provide choice.

We must continue the rapid reform of the training system and tackle the remaining sacred cows standing in the way of all Australian workers reaching their full potential.

END

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