australian manufacturing workers' union · 2011. 7. 21. · sectors and occupations within...

AUSTRALIAN MANUFACTURING

WORKERS' UNION

SUBMISSION

Independent Pricing and Regulatory Tribunal of New South Wales

Review of the Skills Base in NSW

and the Future Challenges for Vocational Education and Training

February 2006

AMWU Submission Review of the Skills Base in NSW and Challenges for VET

Introduction

1. The Australian Manufacturing Workers’ Union (AMWU) welcomes the opportunity to make submissions to the Independent Pricing and Regulatory Tribunal of New South Wales Review of the Skills Base in NSW and the Future Challenges for Vocational Education and Training.

2. The full name of the AMWU is the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.

3. The AMWU represents approximately 140,000 workers nationally and approximately 40,000 in New South Wales in a broad range of industry sectors and occupations within Australia’s manufacturing industry.

4. As Australia’s largest representative of skilled and qualified manufacturing workers, the AMWU has a strong interest in how Australia services the growing demand for, and strategic importance of, skilled workers.

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Independent Pricing and Regulatory Tribunal of New South Wales

Review of the Skills Base in NSW

and the Future Challenges for Vocational Education and Training

Submitter: Paul Bastian

State Secretary

Organisation: Australian Manufacturing Workers’ Union

Address:

133 Parramatta Road Granville NSW 2142

Phone: 02 9897 2011

Fax: 02 9897 2219

Email:

[email protected]

Contact person in respect of this submission:

Jan Primrose Senior Industrial Research Officer AMWU NSW

133 Parramatta Road Granville NSW 2142

[email protected]

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Recommendations

5. The AMWU urges the Tribunal to make the following recommendations:

1. That the NSW Government take such steps as are necessary to ensure that government incentives and other support measures are prioritised in support of training and apprenticeships in skill shortage areas of strategic importance and particularly in the traditional engineering trade disciplines.

2. User Choice Policy should be reviewed to give greater incentive to those who employ trainees and apprentices in employment in areas/industries/occupations of strategic importance and to those contracted for higher level (AQF IV – Advance Diploma) qualifications that are in demand. This could be achieved by reducing or capping the funding available to lower level and/or fully on job traineeships particularly in less strategically important or sensitive industries.

3. That the NSW government take such steps as are necessary to significantly improve and expand the spread of recognition of prior learning to national qualifications for existing workers. The major obstacles that government must address include:

• The costs to industry of identifying the competencies which workers already hold and what are the competencies which are needed for future development which is prohibitively time consuming and expensive.

• The funding arrangements for registered training organisations which positively discriminate against their commitment to effective recognition of prior learning. The time and expense involved in identifying training needs of firms is not currently taken into account in assessing funding.

4. That the NSW government call for TRA’s mandate to be expanded to operate in conjunction with state training authorities to improve integration of trade recognition process having particular regard to the recognition of the skills of existing workers through recognition of prior learning.

5. That the NSW government subject short term skilled migration to the following conditions:

• Skilled migration is not accepted as a solution to the skills shortage;

• A genuine shortage of skills exists on a short term basis;

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• The employer must demonstrate that all avenues of up-skilling existing workers and recruiting locally have been genuinely exhausted;

• The employer must demonstrate that any workers engaged under skilled migration programs are afforded all of the terms and conditions of employment that are prescribed by the award and enterprise agreement that applies to permanent workers at the workplace;

• The employer must demonstrate that they are making an acceptable contribution to the skills base of Australia;

• The employer must reach agreement with the relevant union/s about the number of and duration of the employment of skilled migrants;

• That appropriate monitoring systems are in place to monitor arrangements in respect of travel, accommodation and recruitment practices.

6. That the NSW government review, in consultation with Unions NSW, the protections afforded to trainees and apprentices, having particular regard to:

a. Failure to deliver the training specified in the Contract of Training;

b. Failure to observe minimum conditions of employment;

c. Failure to observe and apply the provisions of the relevant state legislation; and,

d. Failure to meet the obligations of the Contract of Training.

e. The need to ensure adequate attention is paid to the employment side of the Contract of Training

7. That the NSW government legislate for the introduction of training levies to alleviate persistent skill shortages and build skill formation and training capability.

8. The AMWU submits that new South Wales should adopt positions that are consistent with unequivocal support for the following:

• A single, nationally consistent training system based on industry standards.

• Maintenance of an industry led system with a strong role for unions.

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• Workforce development strategies that are geared to mature and existing workers with sound RPL processes as well as the traditional youth apprenticeships.

• Improved quality of training delivery and outcomes.

• Improved protection for those engaged under Contracts of Training.

• The development and implementation of an integrated industry and workforce development strategy.

• Increased employer investment in workforce development.

• An improved publicly owned TAFE system.

9. The New South Wales State Government should commit to the following:

• Reject the unwarranted interference by the Howard government in the constitutional rights of the states;

• Strongly oppose the accreditation of intermediate, fragmented and or enterprise specific qualifications in the traditional trades.

• Refuse to register apprenticeship or traineeships unless they:

• Are in the appropriate industry;

• Lead to genuine career path and higher classification in the appropriate award;

• Have a training plan of appropriate quality in place prior to registration; and,

• Involve a minimum number of off the job training hours.

• Increase the level of supervision and audit of training providers and employers of apprentices to make sure genuine training outcomes are being achieved

• Prevent artificial extension of apprenticeship or traineeship contracts and ensure that completion is properly regulated by a bipartite industry body and overseen by the State Training Authority

• Strengthen the process for dealing with complaints by apprentices and trainees concerning poor treatment and poor training and introduce an effective and independent disputes process where apprentices and trainees can be effectively represented by unions.

• Establish effective protections for apprentices and trainees under state legislation including no contract approval/registration in the absence of an agreed training plan and no approval/registration

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unless the Contract of Training is covered by the relevant award and is relevant and appropriate to the employment.

• Oppose any changes to the system for recognition of overseas migrant’s skills and qualifications without a proper tri-partite review of the current system which involves the states, trade unions and employer organisations;

• Oppose any move to accelerate completion of apprenticeships unless the process for assessment involves:

• supervision by the relevant Industry Skills Council to verify that competency, both on and off the job, has been achieved; and’

• agreement between the employer, apprentice and the RTO; and,

• There is an effective appeals process in place to ensure that the interests of the parties to the Contract of Training are protected.

• Consult closely with the trade unions before any agreement is reached on changes to the apprenticeship system.

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Section 1

Context

6. The inquiry which is the subject of this submission must be considered in the context in which skills shortages are occurring. What follows is an attempt to identify major issues confronting industry and governments as they grapple with the challenges of ensuring that VET strategies meet the challenges of the future.

7. Section 2 of this submission deals with the specific questions raised in the Review Issues Paper.

8. The AMWU argues that Australia clearly faces some very significant problems including:

• A dramatic decline in our balance of trade, and particularly our balance of trade in elaborately transformed manufactured products. Those economies which have a strong base in the production of elaborately transformed manufactured products are those countries with more stable economies and better living standards. Although exports of elaborately transformed manufacturers have increased, this increase has been overshadowed by the dramatic increase in imports.

• The emerging threats posed by a plethora of free trade agreements, most notably the proposed agreement with China which will place even more pressure on Australia’s ability to compete in a global context:

It is worthwhile to consider that in 2003 prices, for every plasma television Australia imported, Australia had to export in the vicinity of 150 tonnes of iron ore. If Australia is to maintain and improve its standard of living, a trade and industry policy built on the 19th and early 20th century view of Australia as an agricultural and mineral supplier for the rest of the world is clearly neither economically, socially, nor environmentally viable.

At a time when developing nations are building information technology industries from the ground up, Australia must do better than relying on trade and industry policies aimed at encouraging the exportation of low value added products. In terms of exporting high and medium-high technology goods the only OECD economies Australia performs better than are Turkey, Greece, New Zealand and Iceland. This is not a formula for a high wage – high growth economy of the future

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• Significant and ongoing skill shortages, particularly in areas of traditional trades and in specific regional areas.

• Growing levels of income in-equality, particularly on a rural and regional basis.

• Persistent levels of high unemployment, particularly in rural and regional areas and amongst younger persons.

• A dramatic growth in forms of non standard, precarious employment, particularly casual and contract work. Between 1982 and 2002 casual employment more than doubled to 27.3% of the workforce. The increase in casual employment accounted for ¾ of all jobs growth and 90% of these jobs were low paid - earning less than $500.00 pw.

• Decreasing job security with increased levels of involuntary job mobility.

• Declining levels of employer investment in vocational education and training, particularly vocational education and training that leads to portable national qualifications.

• Decline in enrolments and course offerings in the post-trade and para-professional levels in key skill areas such as engineering.

‘WorkChoice’s and the Howard Government approach to the labour market

9. The AMWU submits that the Howard Government recent amendments to Australia’s workplace relations legislation exemplify the Prime Minister’s contempt for the rights of working Australian’s and their communities.

10. The legislation plumbs new depths of exploitation of those least able to defend themselves and signals the beginning of an unravelling of the very training system that Australia will depend on for its future.

11. There are 3 major areas that the legislation fails trainees and apprentices and fails the Australian economy.

• The undermining of Australia’s national training system in the short term interests of employers

• The destruction of career paths and nationally consistent classifications linked to a ‘dumbing down’ of the Australian workforce

• Exploitation of Australia’s entry level trainees and apprentices

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The undermining of Australia’s national training system in the short term interests of employers

12. It is clear from the legislation that the Howard Government view of the long term future for Australia is a low skill – low wage future where workers are dependent on their employer for their very existence.

13. Whilst the rest of the world is working to build their skills base and exploit innovation and creativity based on knowledge and skill, Australia is destined to take the low road.

14. The legislation removes any limitation in awards on the range of apprenticeships or traineeships. This is designed to

• Enforce the agenda promoted by the Federal Government and some employer organisations in the Council of Australian Government and other forum’s for narrower more enterprise specific training and for partial trade qualifications. The awards currently prevent this from occurring. These qualifications do not give apprentices the breadth of knowledge or skills to operate in a dynamic and mobile workforce, and they artificially inhibit career paths.

• Remove any restrictions on school based and part time apprenticeship arrangements.

• Allow workers to be employed on low apprenticeship and traineeship wages with no right to reclassification or career path at the end. For example in the metal industry the appropriate traineeship for production workers is the engineering production certificate. However, many employers are pushing the delivery of a process manufacturing certificate which, despite having limited relevance to the work, can be done more easily, and which entitles the employer to higher subsidies. Given the qualification is not related to the actual work of the worker or recognised in the classification structure, they don’t have to reclassify an employee who completes the training.

15. The ‘WorkChoices’ legislation removes protections in existing awards that ensure that apprentices get a full quality qualification outcome. This will mean that instead of being guaranteed a trade qualification as a passport to a valued career, the Government and their employer allies will be able to put young people onto very low wages to be trained in parts of a trade rather than the whole trade.

16. The AMWU submits that this is exactly the opposite of what our economy needs. We need a high skills, high wage path for our young people not dead end qualifications.

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The destruction of career paths and nationally consistent classifications will lead to the ‘dumbing down’ of the Australian workforce

17. The whole of the classification structure in awards and the requirements about how classification and training may be regulated become non-allowable and are removed from awards. They do not remain in awards as protected matters (unlike annual leave, personal leave and parental leave).

18. At first the classification structure and the definitions are preserved (for existing employees) as part of the Australian Pay and Conditions Standard (APCS) for a particular award but regulation about training and classification process are immediately removed from all regulation.

19. Classification structures and definitions become subject to change by administrative decision through the award review task force and the Fair Pay Commission.

20. The outcome will be the removal of any link between training and nationally consistent award classifications and pay and the destruction of career paths. The link between completion of apprenticeship and traineeship and future career or higher classification is being broken.

Exploitation of Australia’s trainees and apprentices

21. The Prime Minister's strategy also takes out of the hands of the Arbitration Commission the fixing of wages for apprentices and trainees. This means that the already starvation wages - $242 per week for a first year apprentice- will fall further in real terms.

22. The legislation:

• Makes the setting of rates and pay and progression arrangements a matter for the Fair Pay Commission whose terms of reference include setting trainee and apprentice rates of pay so they are ‘competitive in the labour market’ which the AMWU submits is Howard government code for ‘cheap’.

• Separates the setting of training rates from the setting of general classification rates. This allows for them to be further lowered. It is clear that the Commonwealth wants to change progression rules to make them competency based – meaning at the whim of the employer.

• Removes any limit on the duration of training arrangements. This is designed to allow workers to be kept indefinitely on training wages. It is further designed to prevent the award from regulating how workers complete an apprenticeship or traineeship and leave this essentially to the employer to determine. This means under the guise of competency based progression the employer will essentially determine competency.

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It will prevent any safeguards in awards such as involvement of State Training Authorities, Skills Councils or ITABs in determination of competency.

• Encourages employers to discount wages for training hours without any safeguards as to whether relevant quality training is actually provided. The current weak safeguards in awards will be removed. A major issue with part time apprenticeship and traineeship has always been how “training time” and “work time” are determined. The move to express all ACPS rates as hourly rates with the condition that the training hours can be either included or not in those rates essentially allows for the stripping back of the current protections provided by the formula in the National Training Wage Award and introducing the so called simpler approach of either “paying 1.25 time hourly rate for working time” (leaving the boss to describe whatever hours they like as training time) or paying ordinary discounted trainee rate for both training and working hours.

• Extends part time and school based arrangements to industries where there are significant health and safety risks.

The way forward and the role of State Governments.

23. Whilst the ‘WorkChoices’ legislation is disastrous for trainees and apprentices generally, the states still have rights that they could invoke to shield apprentices and trainees from some of the impact.

24. For instance there is no restriction in the legislation on the capacity to the States to determine what contracts of apprenticeship or traineeship training they shall register or not register. The only limitation on this is the requirements of the Commonwealth and State agreements for mutual recognition of Training Package qualifications and agreements to fund all apprenticeships and traineeships. There is also an agreed national “contract of training” form.

25. Australia’s future, if we are to maintain a decent and sustainable standard of living for all, will depend on our capacity to build a skills ands knowledge base that can drive and exploit the levels of research and development, innovation and creativity that are required to compete at the high value added end of the global economy.

26. To do that we need to consolidate the strengths of our existing national training system and provide some incentive and justice that will encourage young people to adopt careers in the economically critical high value adding careers such as those in our manufacturing and engineering industries.

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27. The AMWU submits that new South Wales should adopt positions that are consistent with unequivocal support for the following:

• A single, nationally consistent training system based on industry standards.

• Maintenance of an industry led system with a strong role for unions.

• Workforce development strategies that are geared to mature and existing workers with sound RPL processes as well as the traditional youth apprenticeships.

• Improved quality of training delivery and outcomes.

• Improved protection for those engaged under Contracts of Training.

• The development and implementation of an integrated industry and workforce development strategy.

• Increased employer investment in workforce development.

• An improved publicly owned TAFE system.

28. The New South Wales State Government should commit to the following:

• Reject the unwarranted interference by the Howard government in the constitutional rights of the states;

• Strongly oppose the accreditation of intermediate, fragmented and or enterprise specific qualifications in the traditional trades.

• Refuse to register apprenticeship or traineeships unless they:

Are in the appropriate industry;

Lead to genuine career path and higher classification in the appropriate award;

Have a training plan of appropriate quality in place prior to registration; and,

Involve a minimum number of off the job training hours.

• Increase the level of supervision and audit of training providers and employers of apprentices to make sure genuine training outcomes are being achieved

• Prevent artificial extension of apprenticeship or traineeship contracts and ensure that completion is properly regulated by a bipartite industry body and overseen by the State Training Authority

• Strengthen the process for dealing with complaints by apprentices and trainees concerning poor treatment and poor training and introduce an effective and independent disputes process where apprentices and trainees can be effectively represented by unions.

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• Establish effective protections for apprentices and trainees under state legislation including no contract approval/registration in the absence of an agreed training plan and no approval/registration unless the Contract of Training is covered by the relevant award and is relevant and appropriate to the employment.

• Oppose any changes to the system for recognition of overseas migrant’s skills and qualifications without a proper tri-partite review of the current system which involves the states, trade unions and employer organisations;

• Oppose any move to accelerate completion of apprenticeships unless the process for assessment involves:

• supervision by the relevant Industry Skills Council to verify that competency, both on and off the job, has been achieved; and’

• agreement between the employer, apprentice and the RTO; and,

• There is an effective appeals process in place to ensure that the interests of the parties to the Contract of Training are protected.

• Consult closely with the trade unions before any agreement is reached on changes to the apprenticeship system.

VET, Labour Market and Industry Policy

29. It is quite clear that an underlying cause of many of the problems confronting industry is the lack of any effective, coordinated policy which links vocational education and training, labour market, and industry policy.

30. Current policy settings focus on allowing market forces to determine the direction of vocational education and training. Labour market and industry policy settings run totally counter to those necessary to promote a positive vocational education and training system that is capable of matching demand and supply.

31. The AMWU submits that the current focus on using skilled migration as a solution to perceived widespread skills shortages is naïve and risks distracting attention from the more strategic issue of what Australia needs to do to establish its capability in the vitally important areas of:

• Increasing investment in the medium to long terms skills needs of Australia;

• Building capability in anticipating shifting patterns of demand;

• Eliminating the impediments to the take-up by young Australians of apprenticeships, particularly in manufacturing and engineering trades which include:

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• Discriminatory wage structures that fail to recognise both the increasing ages and educational achievement of prospective apprentices;

• A downward trend in the availability of traditional apprenticeships that has seen commencements in companies employing over 100 employees halve;

• Despite some adjustments to the Commonwealth incentive scheme, there is still a bias towards shorter term traineeships which do not require intensive training or support which encourages New Apprenticeship Centres and Registered Training Organisations to concentrate on areas which provide the greatest commercial return rather that meeting demand;

• The lack of protection from abuse and exploitation including the absence of training, failure to observe minimum conditions of employment, failure to meet the obligations of the Contract of Training amongst others.

• In particular, studies have shown that many trainees do not have an agreed training plan as required by the contract and many report that they receive very little quality off-the-job training.

• Improving performance in the critically important area of apprenticeship completions which continue to trend dramatically downwards compared to historic levels; and,

• Australian governments at both a State and Federal level must take immediate action to improve Australia’s trade performance, including a commitment to a co-ordinated strategy to ensure the future of the Australian manufacturing industry in a competitive global economy.

The current and future demand for labour

32. The AMWU believes that the skills shortage issues facing Australia have their roots in the attitudes of Australia’s employers and are evident in the following comments1 of Mr. Peter Hendy, CEO ACCI:

“…. ACCI’s 2004 Pre-Election Survey found that 79 percent of employers are concerned about their ability to recruit employees with appropriate skills and ACCI’s quarterly Survey of Investor Confidence reported during the last year that the availability of suitably qualified employees was now the number one constraint on future business investment decisions. ….”(emphasis added)

1 Speech – Australia’s skill shortages and the need for reform, Australian Mines and Metals Association National Conference 10 March 2005

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33. The comments reproduced above are symptomatic of the problem with skills and workforce development in Australia. Australian employers believe that it the responsibility of some-one else to deliver up to them “employees with appropriate skills” and “suitably qualified employees”

34. The AMWU supports the sentiments of the ACTU as expressed in its decision of 22 March 2005 (Skills Shortage) and in particular commends the following sentiments to the inquiry:

“…. Executive notes that there is now widespread recognition of a major skills shortage in the traditional trade areas (including construction, metal manufacturing, electrical and vehicle trades. Executive notes that this skills shortage has been recognised by the union movement as critical for some time but, until recently was ignored by federal government and employers. …. “ and,

“…. Executive recognises that the existing skill shortage requires immediate action and sustained longer term strategies. In doing so Executive endorses the role of Industry Skills Councils as a primary source of relevant and timely information on emerging skill needs for Australian Industry. ….” and,

“…. With increased government and employer investment and some policy adjustment a skills crisis can be averted. ….” and,

“…. Executive strongly opposes any attempts by employers and governments to use skills shortages to implement short term knee jerk strategies that do nothing to address the long term need to develop a sound skill base in Australia. ….” and,

“…. Executive also rejects any attempts to ‘solve’ the skills shortage by the use of guest labour or implementation of narrow and/or enterprise based apprenticeships where this is not in accordance with the principles underlying the national training framework of developing nationally recognised portable skills that are appropriately remunerated. ….“ and,

“…. Further Executive rejects attempts by employers to use skills shortages as an excuse to globally outsource or send jobs offshore, Not only is this damaging to local employment but will exacerbate the skills shortage crisis. ….” and,

Executive recognises that the current skill shortage and activities to avoid future skill shortages will only be successfully addressed in circumstances where unions and employers work co-operatively and with a shared objective. ….”

The economic and social impact of skills shortages

35. The AMWU notes the assertions of the AiGroup2 that privatisation, globalisation, increased contracting out and the perception that trades are unattractive career propositions are significant factors that have resulted in a serious capacity restraint on the growth of Australian industry and have led to skills shortages estimated to total some 18,000 to 21,000 positions.

2 Contemporary Apprenticeships in the 21st Century (AiGroup 2005)

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36. The AMWU believes that the issues associated with the retention and attraction of skilled workers are complex but have their roots in the very nature of the region and the nature of the employment.

37. In respect of the regional drivers of retention and attraction, the AMWU believes that the uncertainty that is consuming industry in regional and rural NSW through the emergence of threats associated with globalisation and Free Trade Agreements will act, with an increasing potency, as a major impediment to retention and attraction of skilled workers to regional and rural areas of the state.

38. The strategies of local governments must be integrated into a state-wide strategy designed to maximise confidence in the longer term viability of regional and rural areas through investments in community infrastructure and community services.

39. Industry development is currently too heavily centred on the individual enterprise, many of whom lack the critical mass required for effective workforce development.

40. The state could add value to these efforts by encouraging sectoral, or regional workforce development plans in conjunction with community development activities.

Disconnect between industry demand and supply and resourcing structures – funding wrong things

Skilled Migration 41. There is evidence that skilled migration is in fact compromising our ability as

a nation to become more self sufficient. A case in point that illustrates the concern is the recent importation of Chinese boilermakers and welders by a Ballarat truck manufacturer:

“Labor demanded answers from the government today about why Maxitrans Transport imported Chinese boilermakers and welders instead of training Australian workers, blaming the situation on the skills shortage.

Prime Minister John Howard said the furore over the case was misplaced because the Chinese workers were not acting as substitutes for the apprentices, but as experienced, qualified workers, and the company had agreed to employ them last year, before the 2005 intake of apprentices. He said he had sympathy for the young men whose apprenticeships were put on hold. …”3 (emphasis added)

3 Media release by Ms Jenny Macklin MP 12 November 2004

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42. The AMWU submits that the growing belief that Australia can in some way ‘solve’ skills shortages through skilled migration is flawed when seen in the context of growing evidence of international skills shortages.

43. The government approach is one that clearly establishes Australia in the global competition for skilled labour at a time when our reputation in the areas of humanitarian migration and our treatment of asylum seekers is under increasing attack for its mean-spiritedness.

44. If Australia is to encourage the migration to Australia of migrants with skills that are in demand, we must significantly improve our reputation in the area of treatment of those who migrate to Australia.

45. The AMWU has bitter recent experience of the appalling treatment of skilled migrants. It is our submission that the risks of exploitation outweigh the perceived benefits:

”Push for Racism at Work Australian Defence Industries (ADI) wants to duck Australian laws so it can deny jobs to thousands of citizens on the basis of their nationality or race.

ADI has applied for an exemption from Western Australia’s Equal Opportunities Act so it can sack or transfer employees to comply with requirements attached to specific US defence contracts.

Unions WA has been formally joined to the company’s application and AMWU secretary, Jock Ferguson, is promising to fight ADI every step of the way.

“This application is a direct attack on Australian values and the Australian way of life at the instigation of a foreign power,” Ferguson says. “It’s industrial apartheid, it’s outrageous and it is unacceptable because it reinforces negative racial stereotypes.

“When migrants come to this country we expect them to abide by Australian laws. It is not unreasonable to expect their employers to do the same thing.

People born in at least 20 countries, including China and Vietnam, are barred from working on specified US defence contracts but the ADI application would allow it to deny work to anyone not born in Australia or the US. ….”4 and,

“Freespirit Renounces ‘Slavery’” Months of AMWU pressure have convinced the WA “slave labour” rort company to cut ties with programs organised by the state’s powerful Chamber of Commerce and Industry.

“The company only entered into this area on the invitation of the CCIWA. Freespirit will not get involved with any of these programs again,” managing director, Paul Rigby, pledged last week.

The decision followed AMWU claims that 29 skilled tradesmen had been imported from South Africa and paid effective rates as low as $8.60 an hour.

4 Media statement – Jock Ferguson, AMWU State Secretary WA. www.amwu.asn.au

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The pipe fitters, welders and boilermakers walked off sites around WA two months ago to protest their treatment.

One boilermaker likened his situation to “slavery” ….”5 and,

46. The Construction, Forestry, Mining and Energy Union also reports serious concerns about the motivation of some employer participation in skilled migration schemes:

“Vanstone Shows Brickie’s Cleavage Thousands of foreign bricklayers and carpenters will hit the Australian building industry as the boom tapers off, under changes to the skilled immigration program.

And foreign childcare workers, included in the Migration Occupations in Demand for the first time, will be shipped into Australia without having any formal assessment of their qualifications.

CFMEU national secretary John Sutton says the extension of the skilled migration program comes at precisely the time in the building cycle and will leave Aussie tradesmen on the scrap heap.

Under the changes announced by immigration Minister Amanda Vanstone this week, the Migration Occupations in Demand list will now include: bricklayers, carpenters, joiners, fibrous and solid plasterers, as well as cabinet makers, plumbers and electricians

Sutton says the net result of the intake would be a new pool of cheap labour in the industry, just at the time when activity is slowing.

"You do not need to be an Einstein to work out that if there is a downturn in the industry, it will be the cheap imports that will keep their jobs," Sutton says.

"In our experience, employer sponsorship of migrant workers has resulted in scandalous exploitation of those workers as cheap labour.

"Migrant workers who are unaware of Australia's health and safety regulations have been exposed to serious injury and in one case death."

Sutton says the Federal Government would be better off employing 20,000 young Australians as trades apprentices, rather relying on migrant intakes and sending 10 department officers to boost employer expertise in engaging migrants. ….”6

47. The few examples cited above are, in the view of the AMWU, indicative of the factors that too often motivate employers to engage in skilled migration, those being:

• Avoidance of their obligation to contribute, through training, to the national skills pool;

5 Media statement – Jock Ferguson, AMWU State Secretary WA. www.amwu.asn.au

6 Media Statement – John Sutton National Secretary, CFMEU http://workers.labor.net.au/259/print_index.html

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http://workers.labor.net.au/259/print_index.html


• Avoidance of their obligation to respect Australian law as it relates to the terms and conditions of those they employ.

Tradesmen’s Rights Recognition Process 48. Current arrangements for overseas skills recognition through the

Tradesmen’s Rights Recognition process are subject to stresses which result from chronic under-resourcing.

49. A legislative Review7 report into the operation of the Tradesmen’s Rights Regulation Act 1946 indicates that applications for assessment have ‘trended downward since the early eighties’.

50. The AMWU submits that the downward trend results from the rationalisation of the operations of TRA to the extent that applications were discouraged and that the costs associated with applications became prohibitive.

51. The AMWU submits that the recent announcement by Senator Vanstone, Minister for Immigration and Multicultural and Indigenous Affairs, of additional resources for TRA will not alleviate the problem, or improve access to the services of TRA, if the additional resources are geared to providing direct support to individual employers rather than making the services of TRA more generally accessible.

52. The AMWU submits that the direction mapped out by the Commonwealth in respect of vocational education and training will place considerable capacity restraints on the states as they balance identified needs with funding criteria which will add little to Australia’ ability to meet the challenges of a global economy.

53. The Commonwealth direction is fundamentally misplaced and represents a view of vocational education and training that will further entrench skills shortages.

Skilled Migration 54. Skilled migration as a distinct migration category has grown rapidly in the

last decade. Over the period 1995-96 to 2003-04, skilled migrants to Australia, as a proportion of the total number arriving under the ‘Migration Program’ (excluding humanitarian commitments), increased from 29 per cent to over 62 per cent. The planned proportion for 2005-06 is 70 per cent or about 98 000 people8.

7 Report of the Legislation Review of the Tradesmen's Rights Regulation Act 1946

8 Productivity Commission, “Economic Impacts of Migration and Population growth”, Issues paper, August 2005, p.7

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55. The table below demonstrates that the increase in skilled migration has been at the expense of family immigration. The AMWU argues that the short term fix of skilled migration not only reduces the long term productivity of the Australian economy but also unfairly penalises citizens attempting to reunite with their overseas families.

Australian Migration, selected categories

Category of migration Units 1985-86 1990-91 1995-96 2000-01 2003-04 2005-06 (planned)

Migration program Family % 79.2 54.6 68.3 41.5 36.9 30.0 Skill % 20.2 44.4 29.0 55.2 62.3 69.6 Family no. 63,439 61,261 56,689 33,453 42,199 42,000 Skill no. 16,180 49,817 24,070 44,497 71,246 97,440 Temporary entry Business % - - 58.7 53.6 52.8 - Total no. 88,800 139,000 310,855 562,362 641,904 -

56. We have also seen a massive increase temporary skilled migration under the heading temporary business entrants. This category has increased by 86.3% between 1995-96 and 2003-04 (182 000 entrants to 339 000 entrants).

57. Rather than increasing the long term economic potential of the economy there is evidence that skilled migration is in fact compromising our ability as a nation to become more self sufficient. A case in point that illustrates the concern is the recent importation of Chinese boilermakers and welders by a Ballarat truck manufacturer:

“Labor demanded answers from the government today about why Maxitrans Transport imported Chinese boilermakers and welders instead of training Australian workers, blaming the situation on the skills shortage.

Prime Minister John Howard said the furore over the case was misplaced because the Chinese workers were not acting as substitutes for the apprentices, but as experienced, qualified workers, and the company had agreed to employ them last year, before the 2005 intake of apprentices. He said he had sympathy for the young men whose apprenticeships were put on hold. …”9 (emphasis added)

58. The AMWU submits that the growing belief that Australia can in some way ‘solve’ skills shortages through skilled migration is flawed when seen in the context of growing evidence of international skills shortages.

9 Media release by Ms Jenny Macklin MP 12 November 2004

21


59. Paul Baker, Director of Federal and NSW Government and Social Infrastructure for Hudson Global Resources has argued that immigration will not solve the skills shortage:

“The downward spiral of a declining workforce over the next 5 to 7 years will not be solved by immigration…Canada boasts that they have the skilled immigration workforce sewn up; we have given them five years start…Australia is no longer the preferred destination for skilled overseas workers and conditions in their own countries are significantly better than they were.”10

60. While permanent skilled migration has a role, albeit a small one, in a modern economy, the AMWU submits that temporary skilled migration is counterproductive. Temporary skilled migration is a substitute for skills training and in the long term reduces productivity by reducing the long term ability of Australia to build skills capacity.

61. Furthermore the long term skill needs of industry are not served by tying skilled migration to individual firm needs. This represents classic short termism and will reduce the long term productivity of the Australian economy.

62. Temporary skilled migration undermines current and future skill formation and is likely to have an impact on the future competitiveness of Australian businesses. As Pickersgill has argued:

“The major problem for skill formation is that the demands for flexibility from employers are expressed in ways that do not support coherent skill formation practices’.”11

63. It is an issue that the Business Council of Australia also seems concerned about. Recently they argued that a form of short termism12 has been infecting Australian businesses. Short-termism occurs where there is:

“ an excessive preoccupation with projects, activities and investment designed to deliver improved near-term returns and outcomes at the expense of those that could deliver higher returns and outcomes over the long run.”13

10 Workplace Info, “Poachers of skilled workers should be penalised, seminar told”, 22/8/05, p.2

11 Pickersgill R. (2001) Skill Formation in Australia and Beyond, International Journal of Employment Studies, Vol. 9, p.134

12 The causes of this managerial short-termism are documented in a recent Business Council of Australia report. This short termism takes the form of a number of

pressures:

• global of integration of capital markets and acceleration in the net flows into and out of countries in search of investment;

• an increase in the volume of funds under management as a result, for example, of compulsory superannuation. Competition amongst superannuation funds and

the pressure of quarterly reporting 'is seen as a problem because it encourages group herd- that is, decision-making on the basis of short-term movements in

the market and among competitors' (BCA 2004: 42)

• the short tenure of funds managers, just under three years in Australia (BCA 2004: 42) and of CEOs of major corporations at 4.4 years which is

half the global average (BCA 2004: 44).

13 Ibid., p.37

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64. The implication of this short tenure is that 'local CEOs have just two to three years to deliver concrete results before their jobs are at risk. A corporate strategy that delivers negative returns during this period, even if it will deliver strong longer-term results for the company, can be fatal to the CEOs' tenure'14. It leads to a situation where managers favour 'investment in highly observable projects, where progress is easy to demonstrate' and to lower investment in 'less tangible projects, such as in human capital or certain types of R&D'15. Nowhere is this short-termism better demonstrated than business’s obsession with temporary skilled migration.

65. In addition, to its short term nature, the AMWU also submits that there exist significant levels of fraud in employer sponsored temporary migration. There is an incentive for individuals seeking to migrate to Australia to fraudulently claim skills, especially if they are working with unethical migration agents.

66. There is also a fundamental equity issue at stake here. Foreign nationals residing in Australia on temporary student or tourist visas holders who complete skills training in skills shortage areas can apply for permanency while here. In contrast, refugees must apply offshore. This is an policy that is fundamentally discriminatory.

67. This discriminatory policy is worsened by anecdotal evidence suggesting that some student/tourist visa holders who remain in the country on this basis intentionally choose to not secure employment in the area of skills shortage they were trained in. The skilled migration entry is just a loophole for some to obtain permanent residency.

68. The changes in arrangements announced recently by the Minister for Immigration and Multi-cultural and Indigenous Affairs, Senator Vanstone, compound the flawed policy approach of government in that they continue to encourage and resource skilled migration on a narrow enterprise based focus in the absence of an industry wide strategy to meet the challenges of skills shortages.16

69. Should Australia continue to increase its skilled migrant intake, the federal Government must ensure that adequate resources are devoted to recognise skills sets. However, the system to accredit migrants’ skills must not differ from accreditation for Australian citizens. That is, we should not set minimum standards skills recognition for migrants when much higher industry standards are set for Australians retraining.

14 Ibid., p.44

15 Ibid., p.41

16 Media Release – Senator Amanda Vanstone: 2005-06 Migration (Non-Humanitarian) Program

http://www.minister.immi.gov.au/media_releases/media05/v05052.htm

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70. The AMWU also believes that the principal source of advice about industry training and skill needs must be industry itself. There is a strong argument for better resourcing of state and national bi-partite industry training advisory bodies.

71. Current arrangements for recording and reporting on skills shortages lag the real time needs of industry and lack direct linkages to accurate and timely industry intelligence that can be collated into a coherent industry training and workforce development plan.

72. The AMWU submits that TAFE, as a service provider, must play a key role in responding to identified industry needs in partnership with well resourced bi-partite industry advisory bodies.

The Way Forward

73. The AMWU submits that Australia needs a coherent and integrated policy approach to skills development capable of operating at the industry level in the national interest.

74. Given the high levels of labour mobility and high levels of precarious employment, skill formation policies and training policies, including skilled migration programs, which are simply geared to the internal processes of a firm are inappropriate and counter-productive.

75. The external labour market for firms, that is the recruitment of labour externally, has become more important that internal skill formation. It is also quite clear from studies for the Victorian Manufacturing Council and elsewhere that many firms are unable and unwilling to provide adequate resources and time for skill formation and training on the job.

76. Many firms, particularly smaller firms, are not able to provide trainees or apprentices with the necessary variety of work and training experiences to be able to acquire broad based qualifications to support the development of the wider industry labour and training markets.

77. In this context, the significant skill shortages and the significant decline that has occurred in traditional apprenticeships in manufacturing can only be addressed through more collective industry wide approaches.

78. Given that the workforce is ageing, addressing the skills issues for manufacturing requires an examination of existing workers separately from the issue of entry level workers.

79. But in respect of this there are a number of considerations that must be factored in to any policy response:

24


• Levels of subsidies to employees do not reflect the significant additional costs involved and time involved in engineering and manufacturing apprenticeships.

• The funding for registered training organisations is based on student placement and therefore it is much more profitable for registered training organisations to move into areas such as business services where equipment capital costs are low and teaching costs are also lower.

• Linkages between pre-apprenticeship or block institutional training and apprenticeship arrangements.

• Apprenticeships or Cadetships with higher level qualification outcomes need to be promoted. This could be more attractive to young people as it promises higher wage outcomes. It can also be more attractive to industry in providing more flexible workers to meet new demands of technology and work organisation.

• Reviewing the entry level wages for traditional apprentices.

• Significant change to the incentive arrangements to adequately reflect the additional costs to employers of engineering apprenticeships and training and the much greater global competitive pressures under which they operate.

• Much closer links between incentives for research and development and incentives for training.

• Significant programmes are required to develop appropriate partnerships between schools and TAFE’s to promote engineering apprenticeship commencements in schools.

• Specific programmes are required in respect of the promotion of engineering careers through professional development for teachers.

80. In respect of existing workers it is quite clear that the spread of recognition of prior learning towards national qualifications for existing workers has been very poor. The major obstacles are as follows:

• The process of identifying within firms what are the competencies which workers already hold and what are the competencies which are needed for future development, that is, the development of a training plan is quite expensive and time consuming.

• Most employers and employees have considerable difficulty in identifying what it is they know, and what it is they need to know. Where this process has been undertaken it removes a major barrier to

25


the future participation by both firms and individuals in further training.

• The funding arrangements for registered training organisations are positively discriminating against their involvement in effective recognition of prior learning. The time and expense involved in identifying training needs of firms is not taken into account in assessing funding.

• Fragmented enterprise bargaining has also encouraged competition based on lowering labour costs and intensifying work. This has pushed the issues of training and skill formation off the agenda for the purposes of improving productive performance and industrial negotiations.

• Significant decreases in training have also accompanied processes of privatisation and contracting out which have been encouraged by both general government policy and industrial relations and labour market policy in particular.

81. The solutions to the problem of lack of investment and access in training for existing workers are complex but include the following:

• Introduction of measures to increase the level of employer investment in training. This should include linkages between research and development assistance funding and training incentives. It should also include taxation relief and taxation penalties linked to firms investment in training that leads to national qualifications and serves the interests of the overall industry and economy.

• Government incentives to promote collaborative and collective arrangements between firms and involving trade unions to promote increased training investment and cooperative training and skill development arrangements.

• Introduction of schemes to promote investment in recognition of prior learning and the development of training plans.

• Introduction of appropriate regulation and measures to improve skills transition for workers facing restructuring and potential redundancy.

• Specific programmes to address the very sharp decline in para-professional training and qualifications are also needed. This should include specific funding to support Cadetship type arrangements and programmes for workers to progress to these higher level technical qualifications.

Section 2

KEY ISSUES FOR STAKEHOLDERS

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Forecast supply and demand for skills in NSW over the next 20 years

What types of skills are currently in short supply within NSW?

82. One of the critical shortcomings of the skills supply system is its inability to accurately forecast demand in a coherent way.

83. Supply is, sadly, often not driven by demand even where demand can be predicted.

84. The prediction of demand must be a function of industry and the supply side of the system must be responsive to industry advice in this regard.

85. Significant additional resources must be allocated to industry training advisory bodies for the collection and collation of coherent advice to government on skills demand and the mechanisms to meet the demand in conjunction with National Industry Skills Councils.

86. Governments, both federal and state, must encourage collaboration between state and national industry advisory bodies and fund that collaboration.

87. The AMWU submits that significant and worsening skills shortages exist in skilled trades and technical areas of industry including:

• Mechanical trades

i. Fitters

ii. Machinists

iii. Toolmakers

• Fabrication Trades

i. Boilermakers

ii. Welders

iii. Sheet-metal Workers

• Technicians

i. Non destructive testing technicians

ii. Metallurgists

iii. Toolmaking project management technicians

Are these skills shortages likely to be resolved through the normal operation of the labour market or do they require specific attention?

88. Despite a recent upturn in the number of apprenticeship commencements in the mechanical and fabrication trades, the decade of inattention to these

27


areas by industry and government means the normal operation of the labour market will not of itself alleviate these shortages without specific attention.

89. The Howard governments ‘WorkChoices’ is specifically geared to the creation of a free market in labour at a time when competition driven by free trade agreements is systematically destroying Australian industry’s ability to compete. These agreements expose Australia to competition based on the cost of labour in countries such as China, Thailand, Mexico etc at the very time when skills shortages are driving up the cost of labour in Australia.

90. Australia, even without the pressures of a skills shortage, cannot compete on the basis of wages. We could, however, compete at the high skill, high quality, high value added end of the global market, but this would require a shift in government and VET sector thinking away from support for low level, low skill traineeships which have been growing at an exponential rate since taxpayer funding has established a for-profit private training sector.

What skills and occupations are likely to be in demand in NSW over the next 20 years?

91. Australia has a choice to make in relation to the direction it takes. It can take the ‘WorkChoices’ route to low skill, low wage, survival of the fittest where the ‘market’ for labour temporarily rewards skills in demand, whilst skills delivery systems turn away from training in those skills due to cost and profit factors, or it can choose to build capacity in skills delivery systems that are geared to the occupations in demand in the context of a sound national training system in which skills supply is geared to identified demand.

92. As indicated above, the trick is in anticipating demand, and the systems designed for that purpose appear to be at the bottom of the food chain. The AMWU submits that the principal source of advice about industry skills needs can only be industry, operating in a bi-partite manner, through well resourced, professional advisory bodies.

93. The AMWU submits that the skills and occupations likely to be in demand in NSW over the next 20 years will, if governments choose the high road, have certain characteristics:

• Occupations based on qualifications in the range of AQF IV to Advanced Diploma

• Founded on generic industry, as opposed to enterprise, skills and competencies, that underpin portability, mobility and ‘nimbleness’.

• Occupations that rely on innovation, autonomy and ongoing workforce development rather than ad-hoc training.

Are these skills and occupations likely to be very different from those in demand now?

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94. The National Training System has for some years now been under threat from those who believe that the path to prosperity begins at the enterprise.

95. The AMWU believes that the path to prosperity for all begins with a National Training System that services the needs of industry at the level of the industry. It is only through an approach which delivers skills for the industry that the issues of portability, mobility and ‘nimbleness’, so crucial in an environment of constant competitive pressure, change and evolution will be delivered. Skills formation strategies geared to the internal processes of a single enterprise, by definition, will require remedial effort when the market shifts.

96. The critical efforts of taxpayer funded workforce development must be targeted at broad skills that have industry wide relevance. Enterprise based training strategies that lie outside the industry framework should be the responsibility of those enterprises, not the public purse.

What are the strategies that need to be used in addressing skill shortages and other structural issues in rural, regional and remote labour markets? How are training opportunities to be provided equitably and effectively across NSW in order to meet the needs of regional communities and industries? How can the needs of regional communities undergoing significant demographic change or economic restructuring be addressed?

97. Training and workforce development have been used over many years as if they were the solution to a range of issues they are ill equipped to deal with. Many see them as solutions to things as diverse as school retention, welfare to work, regional development and labour market adjustment.

98. The AMWU submits that the Vocational Education and Training system is a system designed to educate and train people in the context of a job or occupation. That is to make people fit for employment in a job or occupation. An actual job or occupation.

99. According to the Oxford Dictionary, The word vocation means ‘Divine call to, or sense of fitness for, a career or occupation’. the Macquarie Dictionary defines vocational as ‘of or pertaining to a vocation or occupation’.

100. This contrasts markedly with many of the uses to which out VET system is put.

101. The needs of rural and regional communities will not be addresses by skills alone although as Kaye Schofield and her colleagues once said, “Skills are not the answer, but there is no answer without skills.”

The Tribunal invites views on the extent to which future changes in the nature of work require changes in training that favour generic and institutional training, for example, to provide more emphasis on foundation skills that promote problem solving and human interrelations.

29


102. The AMWU strongly supports the view that increasingly, more emphasis on foundation skills that promote problem solving and human interrelations is required rather than increased emphasis on the narrow, task based skills requirements of individual employers at the expense of portability, national recognition and flexibility.

The Tribunal invites views on the outcomes from VET, and in particular, whether the proliferation of New Apprenticeships reflects value for money. Are there any steps that could be taken to improve the value for money of New Apprenticeships, including the possibility of changing their funding in some way?

103. User Choice Policy should be reviewed to give greater incentive to those who employ trainees and apprentices in employment in areas/industries/occupations of strategic importance and to those contracted for higher level qualifications that are in demand. This could be achieved by reducing or capping the funding available to lower level and/or fully on job traineeships particularly in less strategically important or sensitive industries.

The Tribunal invites stakeholders to comment on how well Training Packages reflect current workplace requirements and the future skill needs of NSW. Comments are invited on the appropriate balance in training between generic skill development and competency outcomes.

104. The AMWU believed that properly resourced National Industry Skills Councils, with strong relationships with industry and state industry advisory bodies remain the best source of industry advice on the training and workforce development needs of industry.

105. the AMWU believes that training packages in the key industries in which the AMWU has an interest represent an accurate bi-partite reflection of current workplace requirements.

The Tribunal invites views on the suitability of the current regulatory and quality assurance arrangements of the VET system in relation to registration, accreditation and auditing in order to best support future skill requirements. What mechanisms can be developed to address the quality assurance of training system outputs including the skills and knowledge of graduates?

106. Many of the quality issues affecting completions, industry relevance, and the achievement of competency to industry standards would be enhanced by more closely matching the training delivery to the needs of the actual occupation or vocation that the person is to be engaged in. That is not to say the training should be based on a narrow enterprise view of the training required, but rather reflect the industry view as expressed by the relevant industry skills council.

107. A shift to outcomes based auditing of RTO’s and the exercise of some discipline over new Apprenticeship Centres to more closely align the

30


training plan to the occupation is critical if industry is to get what the taxpayer pays for.

The Tribunal invites views on completion rates for VET courses, how they have been trending, and what this implies for the effectiveness s of these courses.

108. The AMWU is deeply concerned that completion rates for traditional apprenticeships are trending downward.

109. There is little empirical evidence as to the causes for this. I t would not, however be appropriate to draw a conclusion that this is a consequence of a perceived lack of effectiveness of the ‘courses’.

The Tribunal invites comment on changes to funding, and assistance or incentive arrangements which might assist take up and completion of courses.

110. Given the high levels of labour mobility and high levels of precarious employment, funding policies, skill formation policies and training policies must be subject to a number of considerations:

• Levels of subsidies to employees do not reflect the significant additional costs involved and time involved in manufacturing, engineering and printing apprenticeships when compared to less productive low skill, low wage outcome traineeships.

• The funding for registered training organisations is based on raw student placement numbers and therefore it is much more profitable for registered training organisations to move into areas such as business services where equipment capital costs are low and teaching costs are also lower irrespective of the strategic impact or the real demand for these skill sets.

• The need for linkages between pre-apprenticeship or block institutional training and apprenticeship arrangements through credit transfer and articulation.

• Apprenticeships or Cadetships with higher level qualification outcomes need to be promoted. This could be more attractive to young people as it promises higher wage outcomes. It can also be more attractive to industry in providing more flexible workers to meet new demands of technology and work organisation.

• Reviewing the entry level wages for manufacturing, engineering and printing apprentices.

• Significant change to the incentive arrangements to adequately reflect the additional costs to employers of engineering apprenticeships and

31


training and the much greater globally competitive pressures under which they operate.

• Much closer links between incentives for research and development and incentives for training.

• Compulsory linkages between publicly funded industry assistance measures and industry commitment to the delivery of workforce development performance targets.

• Significant programmes are required to develop appropriate partnerships between schools and TAFEs to promote engineering apprenticeship commencements in schools.

• Specific programmes are required in respect of the promotion of engineering careers through professional development for teachers.

Factors affecting the take-up of VET

The Tribunal invites views on the impact pay structures and other aspects of the industrial relations system might be having on decisions to undertake training. For example:

• If competency-based training were accompanied by competency-based pay, what difference would this make to take- up and completion of VET?

• Is the shift to casualisation and part-time employment inhibiting training, and if so, how could those inhibitions be reduced or offset?

• How well is training leading to career paths, particularly in the case of New Apprenticeships?

• Has restructuring and labour flexibility let to truncation of career paths in some sectors?

• Are there ways in which work and jobs could be reorganised so as to make better use of employees’ skills and thus improve incentives?

111. The AMWU has recently won an Award variation in respect of rates of pay and progression for apprentices that is relevant in relation to the AMWU’s submissions on this question.

112. In its arguments to the Australian Industrial Relations Commission the AMWU argued:

“In an environment where job mobility, job insecurity and industry and enterprise structural change are on the rise, and skills and labour shortages are also on the rise, the attractiveness to young people of a career in a traditional trade based on nationally consistent and relevant qualifications is more important than ever:

• Important to individuals in respect of their careers, pay and security;

32


• Important to employers in respect of certainty, recruitment costs and capacity to adapt to change; and,

• Important to the economy in respect of certainty of outcomes, flexibility and adaptability.

The Australian Industry Group, in the forward to their “World Class Skills for World Class Industries – Accelerating Reforms to Vocational Education and Training”17 report make a number of assertions that appear self evident:

“World-class industries demand a world-class training system.” (p1)

“The past decade has seen unprecedented growth in the productivity of Australian industries. Over the same period of time reforms to the vocational education and training (VET) system, led by the Australian National Training Authority (ANTA) have significantly improved vocational education and training arrangements. Despite these reforms the training system remains fragmented and supply oriented.” (p1)

“Labour supply problems are being experienced in many industry sectors, but those that have heavily relied upon the traditional apprenticeship system as the major means of recruiting and skilling new entrants have experienced greater difficulties in sourcing skilled labour. The latest Ai Group survey has placed ‘the availability of skilled labour’ as the second highest issue impacting upon business.” (p1)

“Over the next decade the Australian economy will also have to respond to and adapt to the emergence of the Chinese economy and to a lesser extent India. The burgeoning and rapid growth of both of these economies will challenge the Australian economy as a whole to work smarter and to become more knowledge intensive.” (p1)

“The combination of the impact of the growth and emergence of the powerhouse Chinese economy and the US FTA will demand the development of a highly skilled workforce and innovative industry.” (p2)

“Australia needs to take a strategic approach to acquire the world class skills we need to develop world class industries.” (p2)

These sentiments are supported in another major AiGroup report “Australia’s Skills Gap – Costly, Wasteful and Widespread”18:

“Positions for machinists, boilermakers, electricians, engineers, fitter and turners, mechanics, plant managers, process workers, sheet metal workers, welders, wood machinists and so on remain unfilled because employers cannot find applicants with the right skills, qualifications and/or experience to meet the needs of industry.” (p5)

The AiGroup, in a more recent report “Contemporary Apprenticeships for the Twenty First Century” outline the depth of the skills shortage issue confronting industry.

17 World Class Skills for World Class Industries – Accelerating Reforms to Vocational Education and Training AiGroup 2004 18 Australia’s Skills Gap – Costly, Wasteful and Widespread - AiGroup 2004

33


“After a sustained period of economic prosperity one of the urgent problems facing businesses is skills shortages. Skills shortages are now widespread and limiting productivity and profitability. In the manufacturing sector alone Ai Group research indicates that there are between 18,000 and 21,000 positions for skilled people that currently remain unfilled.” 19

Then and now – the characteristics of apprentices

When apprentices rates and wage progression provisions were determined in 1971, the characteristics of the average apprentice were very different to that which is the case today.

According to National Centre for Vocational Education Research (NCVER) data, the average age at commencement for apprentices has increased by 1.7 years over the period 1982 – 2004.20

Of significant interest in the data is the shift in the number of apprentices who commence at ages 21 or more

Table 2 - Age at Commencement

Age 1981-82 2004 1981-82 2004(count) (count) (%) (%)

15 or less 7504 2753 16.9 4.916 17650 8287 39.7 14.917 11105 11153 25.0 20.018 4583 11381 10.3 20.419 1570 6163 3.5 11.120 725 3444 1.6 6.2

21 or more 1316 12539 3.0 22.5Total 44453 55720 100.0 100.0

Average age (est) 16.6 18.3

Age 1981-82 200416 or less 56.6% 19.8%17 or more 43.4% 80.2%

19 Contemporary Apprenticeships for the Twenty First Century – AiGroup July 2005 20 NCVER 2005 - unpublished

34


Age at commencement

020406080

100

1982 2004

16 and under 17 and over

Again, according to NCVER data the number of secondary school students participating in Vocational Education and Training in Schools (VETIS) programs has increased by over 3oo % in the period 1996 – 2003.

The percentage of students studying in VETIS programs was 48.3% in 2003 with the average student spending 211 hours engaged in the program.21

Table 3 - VETIS Participation

% of students engaged in VETIS

0

20

40

60

Students (%) 34.6 38 41.3 44.3 48.3

1999 2000 2001 2002 2003

The AMWU submits that the current wage structure for apprentices no longer reflects the diversity of entry points for young persons who commence apprenticeships.

The characteristics of apprentices have changed.

At the time of the establishment of the current wages structure it would be fair to say that the majority of apprentices were:

• Likely to be aged 16 and under;

• Likely to have left school before completing the equivalent of year 10; 21 Australian Vocational Education and Training Statistics – VET in Schools 2003 NCVER

35


• Likely to be living with their parents;

• Not likely to have the expense of operating a motor vehicle or mobile

• kely to have been engaged in any form of structured vocational

Toda

;

r 11 or 12;

cle and mobile phone; and,

t of

The rates for apprentices are verapprentice

EARS

pprentice was, when it was established, the

gnificantly better than the rate for an

age. The first year apprentice rate is

phone which are considered necessities for a working person of today;and,

Not litraining at secondary school.

y the typical apprentice is:

• Likely to be aged 17 or over

• Likely to have completed yea

• More likely to be living independently;

• More likely to be operating a motor vehi

• More likely to have completed a vocational qualification or statemenattainment against a vocational qualification whilst attending secondary school.

y low. They were established at a time when s commenced at 14 or 15 years of age after completing year 9 of

schooling. Today the majority of apprentices have completed year 11 or 12 of schooling and are 17 or 18 years of age on commencement.

The National Training Wage Award was based on the average student as follows:

YEAR 10 –16 YEARS

YEAR 11- 17 YEARS

YEAR 12- 18 YEARS

YEAR 12 PLUS 1 -19 Y

YEAR 12 PLUS 2- 20 YEARS

YEAR 12 PLUS 3 – 21 YEARS

The 42% rate for the first year arate for a 15 year old.

The rate was better than the rate for the unapprenticed junior at aged 15 and 16.

The 55% rate for the second year apprentice was, when it was established, the rate for a 16 year old. The rate was siunapprenticed junior aged 16 or 17.

Today many apprentices who are more experienced and educated are paid less than junior employees of the same $100 per week less than the rate for an 18 year old worker in the metal

36


industry. 80.2% of first year apprentices are, or turn, 18 years of age during their first year of apprenticeship.

Apprentices should not be disadvantaged when compared to the rate which they would be paid if they were undertaking a traineeship at Skill Level A at a comparable age and educational level.

A Skill Level A traineeship would result in a training outcome below the apprenticeship outcome. Furthermore apprentices should never earn less than 80% of the junior rate which they would otherwise receive –the broad principle which underpinned the National Training Wage Award rates.

In many other areas of life a person has the rights and responsibilities of an adult at age 18. At minimum the AMWU submits that apprentices should receive a rate based on the adult classification rate at the same number of years out of school as they would if they were a trainee.

The AMWU submits that a wages structure conceived for 14 to 16 year olds on commencement of their apprenticeship lacks the flexibility to cater for, and attract, the best and the brightest of our youth to careers in manufacturing and engineering. “

The Tribunal invites views on the factors preventing mature workers from increasing their skills and undertaking additional training.

113. There are many factors that prevent mature and existing workers from increasing their skills and undertaking additional training, but one issue stands out above all others.

114. The existing treatment of recognition of prior learning or the recognition of current competency acts as a significant disincentive.

115. RPL is funded at a significant disadvantage to training delivery and is generally only available when an individual enrols in a full qualification. This is discriminatory and operates to prevent existing workers, whose work does not require the attainment of a full qualification from gaining recognition of their skills and further operates to reduce their confidence in the training system.

116. At a time when Australia’s demographics mean that existing workers are increasingly becoming a major source of participant in programs to meet skills shortages RPL funding must be improved.

The Tribunal invites views on the specific issues preventing more young people from undertaking education and training. It also welcomes views on:

• What the VET system can do to encourage more younger people who are currently not studying or working to do so.

37


• How we can ensure that young people in low-skilled occupations receive adequate training that will enhance their employment opportunities over their careers.

117. The responsibility for this must rest with employers. They must begin to recognise that there is a worldwide market for skilled workers. It is no longer tolerable to expect young people to sign up for inadequate pay and inappropriate conditions in an environment where demand outstrips supply.

118. Increasingly young people are voting with their feet.

119. see para 107 above

The Tribunal invites views on the factors that impact on employers’ decision to provide training. For example:

• Does the capacity to hold onto skilled staff affect this decision?

• Is the VET system offering the right services?

• Is there sufficient flexibility in the system to accommodate employers’ needs?

• Has the flexibility from the introduction of user choice increased the willingness to provide training?

• What sort of relationships between employers, training providers and funding bodies could assist the availability of trained staff into the future?

Capacity of training system to provide training required over the next 20 years

120. The delivery mechanisms for training are an issue of political will. The bigger question is one of whose interests will be served by the political decisions that made in this regard.

The Tribunal seeks views on the current flexibility of the training system.

• Which aspects of the system supports flexibility and which aspects need improvements?

• Of the aspects requiring improvement, how should these be improved?

The Tribunal seeks comments on how user choice has been implemented in NSW, including:

• What has been the impact of user choice in terms of the flexibility and responsiveness of the training system?

• What have been the impacts of competitive funding arrangements in NSW for users and providers of the VET system?

What are the implications of user choice for VET governance structures and whether they should be more decentralised to respond to a more competitive training market?

121. The strategic priorities for New South Wales are determined by the New South Wales government. User Choice policy implementation should reflect those priorities and be integrated into the strategies of the government.

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The Tribunal invites views on the level of decentralisation of the current training system, including

• • Who determines which type of training is provided?

• • Will VET be more responsive to changing patterns of demand if there is more decentralisation to allow for local initiatives within an overall policy framework determined by the State and Commonwealth governments?

122. Increasingly the environment in which skills will be deployed will require generalists with mobility and a capacity to adapt to the circumstances. The evidence clearly demonstrates that the trend in employment is towards more job mobility, both voluntary and involuntary.

123. These trends require that the development of VET products be targeted at the industry level rather than the enterprise. The delivery of VET services however, must be more finely tuned to the needs of local enterprises and their workforce, for flexible delivery, responsiveness to local conditions and engagement at the local level.

124. In relation to the issue of decentralization of the current training system, we refer you to a recent report22 released by TAFE SA as being indicative of the responses the AMWU believes that NSW TAFE and the training system generally should be making to consolidate its position in the community and in industry as the principal provider of VET services.

The Tribunal invites comments on other factors affecting the capacity and flexibility of the training system. What changes in employment conditions and any other changes might improve the flexibility of the VET system to respond to changing demands?

125. It would be grossly inappropriate to have the tail ‘wag the dog’ in the manner assumed by the question. The key to an effective vocational education and training system is that it reflects the environment into which it is to be deployed rather than attempting to make the environment suit it.

126. See para 119 above.

The Tribunal invites views on the balance between decentralisation and Commonwealth pressures for national uniformity and transferability of VET qualifications. Are the ways of reconciling these competing pressures without undue damage to either?

127. The AMWU believes that it is crucial that the training system be a strong, national system and in saying that submits that local interests are not incompatible with those of the national system. What matters is that local interests are structured into the development of training products by the use of sound industry advisory arrangements that link local, state, and national interests.

22 Report of the Review of TAFE SA Services to Manufacturing. www.tafe.sa.edu.au/employers/ files/links/final_report.pdf

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http://www.tafe.sa.edu.au/employers/%20files/links/final_report.pdf


The Tribunal seeks comments on the current funding arrangements, including:

• What effects have these funding arrangements had on the capacity and flexibility of the training system?

• Are there any areas where improvements are needed?

128. The AMWU firmly believes that the public funding of VET should be driven by an industry development and workforce planning model that provides priority funding support to those challenges that best reflect the strategic social, economic and industry priorities of the government in the interests of the NSW taxpayers.

129. That is to say that the current obsession with low level and entry level traineeships dominating the system should make way for funded training places in occupations and vocations that have the most strategic impact on the society and economy of New South Wales.

The Tribunal invites comments on impacts of the reforms over the last decade. In particular, has the shift towards an ‘industry-led system’ resulted in an over-emphasis on job-specific skills at a risk to later adaptability?

130. The AMWU respectfully submits that the shift towards an ‘industry led system’ is not responsible for the current over emphasis on job specific skills. The AMWU believes that the issue is one rather of ‘industry related skills in the context of a job or occupation’ competing with the narrow sectoral interests of those who seek public funding of ‘enterprise specific skills’ that do indeed threaten later adaptability, mobility and portability.

131. The AMWU further submits that much of what passes for VET is indeed thinly disguised industry assistance ‘tarted up’ as vocational education and training.

132. The reforms to Australia’s National Training System were an industry inspired response to a serious economic problem that has to some extent been hijacked by commercial training providers and the federal government and applied to purposes it is ill equipped to deal with.

The Tribunal seeks comments on the impacts of suggested changes and improvements.

• What are the likely implications of Commonwealth policies for future TAFE capacity,

• including the implications of Commonwealth-State agreements?

• How well placed is TAFE to meet the competitive challenges that it will be facing, including from the Commonwealth, and what changes will be necessary in that regard?

• What are the risks to the VET system if a large part of TAFE funding is contestable and many staff are part-time casuals (given that TAFE is often seen as providing the necessary reserve capacity for the VET system)?

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• What can be done to ameliorate these risks?

lation to the issue of how well TAFE is placed to meet the competitenges that it will be facing, we refer you to a recent

133. In re ive chall report23 released by

the AMWU believes that NSW

134.

h that dictates that free and open competition will deliver

136.

bmitting to the demands of the

137.

at any position the state government takes in response t

• development strategies that are geared to mature and

• tion for those engaged under Contracts of Training

ated industry and

TAFE SA as being indicative of the responsesTAFE should be making to consolidate its position in the community and in industry as the principal provider of VET services.

Commonwealth policies such as the recent COAG proposals, combined with skilled migration and ‘WorkChoices’ policies are significant threats to the capacity of TAFE.

135. TAFE as the major supplier of formal training in both New South Wales and Australia as a whole faces a direct threat from the ill considered ideology of the Commonwealtbetter results that an open and flexible system subject to reasonable regulation in the interests of the taxpayer.

The AMWU submits that New South Wales should not abrogate its responsibility to manage vocational education and training in the interests of the people of New South Wales by suCommonwealth.

Specifically in relation to the agenda being pursued by the Commonwealth through COAG, the AMWU submits that the New South Wales Government should ensure thfurther COAG activity in relation to skills and training is consistent with unequivocal support for the following:

• A single, nationally consistent training system based on industry standards

• Maintenance of an industry led system with a strong role for unions

Workforce existing workers with sound RPL processes as well as traditional youth apprenticeships

• Improved quality of training delivery and outcomes

Improved protec

• The development and implementation of an integrworkforce development strategy

23 Report of the Review of TAFE SA Services to Manufacturing. www.tafe.sa.edu.au/employers/ files/links/final_report.pdf

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• Increased employer investment in workforce development

• An improved publicly owned TAFE system

138. The AMWU calls on the NSW state Government to:

• Reject the unwarranted interference by the Commonwealth in the

rades that are not the subject of bi-partite industry support;

• without a proper tri-partite review of the

current system which involves the states, trade unions and employer

• assessment involves:

job, has been achieved; and,

iii. t the

• throu

registration in the absence of an agreed

ation.

END

constitutional rights of the states;

• Oppose any moves to introduce intermediate, lower level, or partial qualifications in the traditional t

Oppose any changes to the system for recognition of overseas migrant’s skills and qualifications

organisations;

Oppose any move to accelerate completion of apprenticeships unless the process for

i. supervision by the relevant Industry Skills Council to verify that competency, both on and off the

ii. agreement between the employer, apprentice and the RTO; and,

there is an effective appeals process in place to ensure thainterests of the parties to the Contract of Training are protected.

Consult closely with the trade unions before any agreement is reached gh COAG on changes to the apprenticeship system.

• Establish effective protections for apprentices and trainees under state legislation including;

i. independent appeals,

ii. more inspectors,

iii. no contract approval/training plan, and

iv. no approval/registration unless the Contract of Training is covered by the relevant award and is relevant and appropriate to the occupation/voc

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australian manufacturing workers' union · 2011. 7. 21. · sectors and occupations within...

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