Dr David Kemp

Minister

Speech

A MODERN APPRENTICESHIP & TRAINEESHIP SYSTEM

Address to the MTIA National Personnel and Industrial Relations Conference

THE HON. DR DAVID KEMP MP. MINISTER FOR SCHOOLS, VOCATIONAL EDUCATION AND TRAINING

Canberra Hyatt Hotel

Thursday 2 May, 1996

Mr Bob Herbert, representatives from MTIA member companies, distinguished guests, ladies and gentleman. It is indeed a great pleasure to be here this afternoon to outline to you the Government's training agenda for the future and I thank you for your kind invitation.

I would like to take this opportunity to present to you the Government's vision for training. The MTIA has a valuable role to play in the training of this nation, and I know that you share my excitement as we strive towards a skilled future for Australia.

Australia's vocational education and training system has undergone many changes over the last few years. Some have been successful and provide a good basis for further development. Others have failed to deliver their promised objectives.

There are some good aspects in the recent history of vocational education and training. There has been some flexibility introduced into apprenticeship and traineeship arrangements and a great deal of goodwill and commitment to change demonstrated by employers and employer bodies such as the MTIA. But the current system simply has not delivered the promised growth in apprenticeship and traineeship numbers: it has put off too many employers who see it as rigid and complex, and not reduce youth unemployment. and, perhaps most disturbing, it has left too many young people unemployed.

Australia is competing in a global economy that is changing rapidly through new technologies, especially in information and communications.

In a global environment, increased productivity is essential to increased competitiveness, which in turn is the basis of Australia's future prosperity.

Productivity is directly related to the skills and abilities of enterprises and the people who work in them. As skill needs change at an ever increasing rate, productivity also depends on the ability of firms and workers to continue to learn and to innovate.

We need to continue to develop the "training culture" in Australian business. I am pleased to acknowledge that the MTIA has taken a lead in this area.

By "training culture", I mean a recognition at all levels of an enterprise that the provisions of quality training is important to improve productivity.

I know that many employers, especially in small and medium size enterprises, want to make a commitment to training, but have been discouraged by the seemingly impenetrable maze of industrial relations regulations, bureaucratic structures and even the jargon that can characterise training.

Enterprises which can't get the skilled workers they need or keep their employees trained to meet the demands of new methods and technologies will fall behind. People with few skills will be vulnerable in the labour market. And young people without skills will find it hard to enter the labour market at all.

There is a clear correlation between youth unemployment and lack of vocational skills and qualifications. A recent survey by the Australian Bureau of Statistics found that among 19 year olds:

Those who had had not completed their schooling and had no vocational qualification had an unemployment rate of 26.8%;
Those who had completed only secondary school had an unemployment rate of 17.8%; and
Those who held a skilled vocational qualification had a much lower unemployment rate of 7%.

Against this background, what is the role of government in upgrading Australia's skills?

The role of government

Government's role should be:

To provide a framework of law and regulation within which nationally recognised and supported training can occur;
To support that aspect of training which will not be provided in the marketplace;
To ensure that young people have access to the education and training they need to enter the workforce on a secure footing;
To promote the value of investment in further education and training and remove disincentives for such investment;
To ensure that education and training systems function as efficiently as possible and, where necessary, intervene strategically to avoid the effects of serious shortfalls in training investment (such as skills shortages); and
To provide assistance for those who may be disadvantaged in access to education and training opportunities, including the unemployed.
It is not the role of government to force employers to provide training, to regulate the training system down to the most minute detail, to monopolise the provision of training or to undertake the full responsibility for financing the costs of training, which must ultimately be justified by its contribution to the productivity of the individual enterprise.

A Modern Apprenticeship and Traineeship System

The Government has announced the development of a Modern Australian Apprenticeship and Traineeship system as our main priority in improving the vocational education and training system. Our approach to this task will reflect the broader view of the government's role in the training system: it will balance our responsibilities to young people with a recognition of the needs of enterprises for relevant training and streamlined processes.

We have committed ourselves to maintaining and strengthening the specific term "apprenticeship". Not only is the term widely recognised and supported in the community, but it defines precisely those things to be encouraged - quality training that leads to real jobs.

Today, I outline the main changes to be introduced to apprenticeships and traineeships. Some of these will build on current strengths. But as a new government we can and must seize the opportunity for some more fundamental changes, particularly to clear away the barriers in the industrial relations system created under the former government.

I will avoid endless working parties and pilot projects that continue on for years. But equally, I am not interested in new schemes dreamt up behind bureaucratic closed doors and pushed on to employers. If the new system is to be one in which employers can feel a genuine sense of ownership and control then employers must have a major role in its design and management.

So, what will this mean for industry?

The modern apprenticeship and traineeship system will be industry owned, and industry driven, with minimum bureaucratic interference. Training arrangements will be based on industry-agreed competency standards and qualifications, and be within a national framework to provide guidance and quality assurance. The training arrangements will also be flexible to ensure they meet the individual needs of particular industries or regions.

A less regulated, simplified and flexible training system will give industry a greater opportunity for involvement at the regional level. Business and community partnerships will strengthen the links between school, training, and work, and will ensure that the needs of small business are met.

Business's views will be heard and taken into account so that the system makes training more relevant and attractive to enterprises. I have already held substantial discussions with business leaders and industry associations which has proved invaluable for identifying the barriers to increasing training and in providing government with a range of options for improvements. Consultation with industry will continue.

Let me now outline the other key changes which must be made to apprenticeships and traineeships and which will be reflected in the training system more generally. The details of the arrangements necessary to implement the new system will be developed with employers and state and territory governments.

There must be clear pathways for young people from school into productive work;
A national framework needs to ensure that skills are portable and that firms can train their staff without being hindered by state and territory borders;
Training arrangements should be essentially matters for agreement between employers and employees at the enterprise level;
There must be a fair system to recognise the short-term costs to employers and trainees of undertaking training as well as the longer-term benefits; and
There must be local responses to local needs.

Many of these points may sound familiar. Some of them have, to a certain extent, been the stated objectives of so-called training reform to date. Some progress has been made in some areas. But there is scope for much greater progress and for some genuinely new approaches.

A national framework

There is a need for a national framework for the training system including apprenticeships and traineeships. People need to know that their skills and qualifications are portable between jobs; an employer in one state needs to have confidence in the quality of training undertaken by a prospective employee from another state; and an employer who operates in several states needs to be able to put training arrangements in place across their organisation without being impeded by state and territory differences.

The key to an effective national framework is a 'common currency' - a readily understandable and useful base on which everything else is built. Competency standards, broadly framed and used flexibly, can be the common currency of Australia's training system. The government will maintain a competency-based approach to training but will work to make sure that competency standards are a useful tool for employers, not a rigid system which hampers flexibility in training outcomes at the enterprise level.

Other elements of a national framework should be virtually invisible when it comes to doing business in the training system.

The current system of approving and accrediting courses is far from that - it is complex and unnecessarily cumbersome.

Currently an employer must work through complicated procedures in order to be able to take on an apprentice or trainee.

Typically, if there is no training package that can be taken off the shelf to use, employers have to wait while an industry working group puts one together

- This usually takes 3 to 6 months;

Then the new package has to go through bureaucratic processes and the industrial relations commission:

- States and territories decide on accreditation of the package;

- If training has not been recognised in this field before, they will usually have to 'declare' a vocation;

- Training providers will have to seek registration from the state or territory;

- After the training package has got through all this, the Commonwealth will determine its eligibility for subsidies and incentive payments;

- The training arrangements will have had to be incorporated into industrial arrangements;

All this adds at least another two months.

When there is a package ready, the employer has to enter into two agreements with government:

- One with the State or Territory that is responsible for monitoring the training arrangements, and

- Another with the Commonwealth for the payment of employer subsidies and incentives;

This adds several weeks to the time taken from recruitment until subsidies and incentives are received by the business.

We will streamline these processes significantly to reduce delays and cut the red tape. State and Territory governments are supportive of reforms in this direction and I am confident that we will make real improvements.

In conjunction with our proposed new industrial relations arrangements, the process for approval of training packages will be streamlined.

We will allow regional and industry organisations to approve the training packages that are needed by business in their region or industry. National standards will have to be met but, for the individual enterprise, the approving body will be one which understands their local or industry-specific needs.

This is related to the Government's policy on Industry Training Advisory Bodies. Some Bodies are successful and some are not. We intend to introduce substantial flexibility into the industry training arrangements, to make the more responsive to the needs of industry and more representative of the needs of business.

Agreements for training

In the past the industrial relations system has determined whether and how Australian businesses provided training for young people. Unions and employers could determine in the industrial relations system:

* whether an apprenticeship or traineeship could occur at all;

* what training would and would not be provided;

* the number of hours each week that would be spent in training; and

* where and how training would be provided.

The practical effect was to entrench the industrial relations domination of training, whereby industrial relations concerns overrode the needs of industry for apprentices and trainees in particular occupations and for flexibility in delivery arrangements.

Our approach is to cut through the industrial relations red tape to make it easy for employers to take on apprentices and trainees.

Employers and employees who negotiate an Australian Workplace Agreement will be able to enter into a training arrangement which determines the skills training needed and suitable delivery arrangements. The model will provide flexibility at enterprise level, but also ensures that training is provided in a planned way.

Compare this to the indenture system for apprenticeships where a separate training arrangement has to be approved and registered through State / Territory training bodies and separate industrial relations processes determine employment conditions. This process results in delays and the potential for training arrangements to be held up by industrial issues.

Under the present system, young people are not given any particular support or protection. Employer support is crucial to trainees gaining their skills, particularly when the training is provided on-the-job, but this support is sometimes not provided.

We will put monitoring arrangements in place to redress this situation.

Responsive training

Training providers, particularly the TAFE system, will need to change to fit in with the greater flexibility and industry-responsiveness that these changes to industrial relations arrangements and training approval processes will bring.

Industry must be involved in:

Identifying its skill needs now;
Forecasting its future needs; and,
Together with government, developing priorities and strategies to meet those needs.

Within this framework, industry must be able to respond to change at regional and enterprise levels.

The government is committed to increasing competition and opportunities for the public and private providers in the training system in a way that empowers the users of the system. This means that users must be able to choose from an array of courses and programs and be able to adapt existing ones to meet their needs; and that training providers must adjust their products to meet the skill needs of the workplace.

User choice enables enterprises and individuals to exercise more choice over the publicly funded off-the-job training. Employers and individuals will be able to choose the provider, mode of delivery, training content and place of delivery - placing the driving forces for training delivery at the local level at the point of demand, rather than the point of supply.

Where user choice arrangements apply, decisions taken by enterprises or trainees will direct the allocation of public funding. While government would be involved with industry in identifying training needs at national level and this perspective would influence funding decisions at macro-level, funding will flow to particular training components only through choice exercised by employers and trainees.

In Queensland, four engineering traineeships have been developed by JOBSKO, which is the industry training company for the metal and engineering sector. The TAFE provides the 'off-the-job' training component of the traineeship actually in the workplace. TAFE teachers develop a work plan in consultation with the employer and trainee, based on the training plan. This covers the requirements of national curriculum and matches the activities of the trainee in the workplace. The employer supervises the trainee while the TAFE teacher is available for advice and carries out an assessment against the requirements of the module at an agreed time.

The training is integrated with the employer's business to develop skills in accordance with national competency standards.

This is a very good example of the work that is going on within the TAFE sector to increase flexibility in delivery and make the system work better for employers.

I believe this change needs to continue, and in particular we need to look at different roles for TAFE teachers. Perhaps what we are talking about is a change in role from classroom teacher to mobile mentor.

Sharing the costs

While there are clear benefits to both employers and trainees in undertaking training - benefits that will be enhanced by the changes we want to make to the training system and which we will be promoting actively - there are also short-term costs.

The government recognises that it has a role in supporting the provision of training, particularly through apprenticeships and traineeships, and will continue to provide financial support for employers who take on apprentices and trainees. The processes for obtaining employer payments will be streamlined in line with the arrangements for training approval which I outlined earlier.

Local responses

A major objective in our approach to reforming the training system is to build partnerships between communities, industries, schools and parents at regional levels.

We will work to empower regional communities.

In modernising the vocational education and training system, we must make training relevant to regional community and industry needs. Regional leadership is essential to integrating training and regional development.

We need to devolve responsibility for delivering training to local TAFE colleges and other training providers at the local level so that businesses and enterprises can get the training they need. We need to consider how to devolve real control over public funding for vocational education within a governmental system where the states are responsible for managing that delivery.

A centralised approach will not work. We will build a partnership approach at regional level, involving industries, communities and training providers. Communities need to be empowered to decide for themselves on how their training needs, and the needs of their young people, can best be met.

We will establish regional and community employment councils which will plan training delivery and promote small and medium business development in their regions. They will be employer-led, including representatives from the wider community (including young people and older unemployed).

These regional and community employment councils will increase the planning role of employers, especially small and medium business, and will bring together the training and business sectors. They will develop youth employment strategies at local level.

We will pilot the councils in five regions of high unemployment.

Other formal consultative mechanisms include the regional development organisations, area consultative committees, employer servicing units and the regional development ministerial council.

We are committed to supporting group training companies and other regional industry organisations to provide a complete quality assurance and workplace assessment service - to both prevent exploitation of young people and to ensure that training is of the highest standard.

There are more than 100 Group Training Companies in Australia, employing more than 19,000 apprentices and trainees.

The government is committed to enhancing and expanding the group training approach.

Group training will:

Act as brokers to help young people plan an appropriate workplace-based program;
Provide employment to increased numbers of apprentices and trainees, extending coverage into the small and medium enterprises;
Work closely with schools; and
Act as managing agents to oversight contracted training under apprenticeships and traineeships.

Pathways for young people

Vocational education in schools is one area where we can build on the considerable progress made in recent years.

Although it is by no means their only function, schools have an important role to play in laying the foundation for young people's transition to working life. Unfortunately, some schools are not yet meeting this need for all young people. This is clear from the numbers who drop out from school and further education or training, very often to become unemployed, or who remain but are uninterested and disruptive.

We need to do more to ensure that all young people gain the key competencies, such as problem solving and team work, which are essential for working life. We also need to provide vocational options in senior secondary schools which link more effectively with workplace needs and are integrated with apprenticeships and traineeships.

Some promising new models have been developed, with the involvement of the Australian Student Traineeship Foundation, which are based on very strong links with local industries.

School-based vocational education needs to lead to apprenticeships and traineeships so that young people entering the workforce are productive at a very early stage of their employment.

Both business and our young people will gain from improving and extending school-based vocational education programs. The government will encourage more partnerships between schools and industry which will help make school more relevant to the majority of young people that do not go on to study at university. Enterprises and industry will take a leading role in shaping school vocational programs.

As with school-based vocational programs, the government will also ensure that, as far as possible, the training provided under labour market programs for unemployed people links in with job opportunities - either directly into apprenticeships or traineeships, or indirectly by linking into further training that will provide a recognised qualification.

Conclusion

The reform of Australian vocational education and training system is an exciting and challenging task. In conclusion, I want to emphasise that, in tackling this task, the government is committed to producing a system that:

Meets the economic needs of a modern Australia, participating in a changing global economy;
Is driven by industry and employer requirements;
Operates through a partnership approach at national and regional levels;
Is simpler and more flexible; and
Provides training opportunities for young people that leads to real jobs - the jobs of the future.

I would again like to thank the MTIA for extending an invitation to outline the Government's plan to modernise training in Australia. It is my intention to work closely with industry and business as we seek to modernise training and repair the broken pathways from school to employment. I look forward to working with you as we lay the foundations of what will be a most exciting, yet crucial time in Australia's development.

THANK YOU.

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