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Printing Industries Association of Australia Apprenticeship Summit

Rydges Sydney Airport Sydney

16 September 2014

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Good morning everyone. It’s a pleasure to be with you today and I thank Bill [Healey] for inviting me to open this summit. We live in a world where text and visual communication has become an indispensable part of everyday life. In that world, our capacity to build knowledge is in part dependent on professional reproduction of text and images. So is our ability to make informed choices about what we buy, from an enormous array of products and services on offer. This places the printing industries in a unique position to influence and shape our social and economic lives. The Australian Government values your industries’ contribution to a modern and prosperous Australia. We understand how vital it is for you to improve the productivity of your workforce and the competitiveness of your businesses. Like you, we believe apprentices have an important role to play in increasing productivity, so this summit is a great initiative. It’s a chance to share ideas on how we can boost apprentice numbers in an industry that supports our modern way of life.

I am very much aware of a number of issues that you’ve identified as priorities for your industries, including:

  • building a strong economy for print businesses to succeed
  • accessing cost-effective energy, and
  • developing a skilled and innovative workforce.

Last week marked twelve months since the Coalition Government came to office. In that period, we’ve taken action in a number of areas that will assist you with the issues on your minds. First, building a strong economy. The Government has made budget repair an overriding priority because it is pivotal to making our economy strong and resilient. We’ve taken steps to fix the budget; steps that will help us repay our debt, create a surplus and build confidence in the economy. This will benefit your industries. In fact, it will benefit everyone, every business and every industry in Australia. I know the Budget argy bargy continues in Parliament. That is the nature of a democratic system. In fact, we’ve already seen most of our Budget measures passed. We are determined to get the remaining legislation passed as well. Building a strong economy will also depend on how government makes it easier for business to operate and grow. Our open-for-business policy means government will not get in the way of business.  It’s why we’ve declared war on red tape.

We’ve set about getting rid of rules and regulations that stifle business growth and pre-empt any such burdens in the future. This way, you’ll have more time to focus on your core tasks of printing, rather than wasting your time on needless paperwork. Our goal is to cut the cost of red tape by $1 billion every year. Regarding access to cost-effective energy, help is on its way. We’ve taken immediate action to put downward pressure on business operating costs, including the cost of energy. We’ve abolished the carbon tax. We are reviewing the Renewable Energy Target to make sure it is operating efficiently and effectively.

This government does support renewable energy, but we want to try to use renewable energy in ways that don’t needlessly increase power prices. And we’re working with our state colleagues to ensure consumers are the focus of all energy market reforms. Checks and balances are in place to ensure that consumers benefit from the repeal of the carbon tax.  Electricity retailers must pass on all of their cost savings directly or indirectly attributable to the carbon tax repeal to customers. The ACCC will monitor these savings to see whether they’ve been passed on to customers and take action where required.  Finally, developing a skilled and innovative workforce, a subject that coincides with the main focus of my discussion today. You are interested in knowing what the Government is doing to reform the VET system and how apprenticeships fit in.

Before I take that subject up, I want to put things in perspective. The skill sets for many jobs are changing. Across Australia, industries are looking for employees with the higher skills needed to meet their changing business needs. If the training system fails to link training to skills in demand on the labour market, business and graduates become the losers.  Last week the ABC reported the interesting story of how bush mechanics deal with vehicle breakdowns in the outback. Bush mechanics are saying four-wheel drive vehicles are becoming too high-tech. If something goes wrong in a remote area, they cannot fix them. In the past, they would examine a car, identify what is wrong and improvise a replacement part that can fix it. Not anymore. A computer is now required to be plugged into a broken car to tell a mechanic what the problem is. In the absence of such facilities in the bush, cars need to be towed to the nearest major city to be fixed. It illustrates the transformation occurring in the skills space.

Similarly, we’ve seen your industry move from woodblock printing to movable-type printing to conventional printing. Now it is the era of digital printing and 3D printing. These changes are part of a broader transformation that is taking place in Australian industry and in the economy. It is a transformation best exemplified in manufacturing. What we see today in that sector is in transition from traditional heavy manufacturing to a greater focus on professional services and advanced or high-tech manufacturing. Our training system must keep pace with these changes that are affecting the skills needs of Australian business. I welcome your efforts to build the skills and capabilities of businesses in your industries through the Future Print initiative. I’m pleased the Government is supporting this project and I am keen to see it deliver the intended outcomes. We’ve heard a lot lately about the need to overhaul our training system.

There are clear reasons for this:

  • The current system is not working as well as it should.
  • The system is fractured and groaning under the weight of excessive red tape.
  • The anecdotal evidence is backed by sobering statistics.

Employer satisfaction with accredited VET system dropped from 84 to 78 per cent in the two years to 2013. That period saw fewer employers using the VET system—from 56 to 52 per cent. The system is plagued by excessive churn and waste. Only some 36 per cent of the students who started their study in 2012 may finish their qualification. That is what the National Centre for Vocational Education Research is telling us. Simply put, the system is not keeping pace with changes in industry. Earlier I mentioned how your industries had changed over time, including the arrival of cutting-edge technologies like 3D printing. We’ve heard concerns about 3D printing and other new technologies not being included in training packages. Compare that to the overkill we see elsewhere, for example in manufacturing, metal and engineering, where training packages have been updated nine times in three years.

A clear case of excessive churn that is simply not sustainable. The simple fact is that the VET system is not working. It is failing in its fundamental purpose of linking skilled workers with jobs. A key reason for this is that industry is not adequately engaged in deciding on the type of training offered and how it is offered. The Government’s reform will put industry in the driver’s seat. It will give industry a greater say in the type of training that is delivered and the outcomes of training. There will be no more training for training’s sake. Over the past week or so, the Prime Minister and the Minister for Industry have been talking VET. It is a language they understand well because those with a stake in the VET system have told the Government so much about how they feel about the system. They announced the most far reaching reforms to the VET system in decades, unveiling a package of reforms that elevate trades and vocational education to the centre of our economy. One that re-orients VET towards its primary goal of ensuring Australian workers have the skills that industry needs. The reform package will see the introduction of a new Australian Apprenticeship Support Network.

It will replace the existing model of apprenticeship centres, which have become bogged down in a quagmire of paperwork. The new network model will be smarter and outcomes driven, with a focus on providing the skills industry needs. Again, industry will be in the driver’s seat, deciding the direction of training to ensure our apprentices are job ready. It is an investment of $200 million each year in order to help lift apprenticeship completion rates. A competitive tender process will be run later this year, followed by an announcement of the successful tenderers in early 2015. I encourage both current and prospective providers to tender. The reform package will also see the trial of two pilot programs—a scholarship and a pathways programme.

They will extend the opportunities for acquiring a skill to more young Australians, in particular those in rural and remote areas and those disengaged from education and training. The first pilot, the Training for Employment Scholarship program, will help employers in regional areas with high youth unemployment provide job-specific training for new employees. Small businesses can access wholly funded government training that is tailored to the training needs of their business. The second pilot, a new Youth Employment Pathways program, will help young Australians in regional areas return to school, start a VET course or move into the workforce.

This is about putting them on a path to their chosen career. The investment in these pilots gives a boost to the $476 million Industry Skills Fund, which would be expanded to a total of $500 million to cater for the pilots.

The Industry Skills Fund, which starts on 1 January 2015, will assist businesses in up-skilling and re-skilling their workforces. This will enable businesses to better position themselves to take up growth opportunities in a rapidly changing economy. The fund will deliver 200,000 targeted training places and training support services over four years. The Government is determined to reduce the regulatory burden and cost pressures on training providers. We’ve already taken action to address the churn in the system. From 1 July 2015, providers no longer have to apply—and pay a fee—to the training regulator, the Australian Skills Quality Authority, to update their scope of registration for a new qualification deemed equivalent to one already on scope. ASQA has already removed the requirement for all existing providers to be subject to a financial viability assessment as part of the re-registration process.

Last week the Minister announced further measures to cut the regulatory burden under the new reform package. Providers will be rewarded for upholding the standards as part of a move towards an ‘earned-autonomy’ regulatory system. Generally, ASQA will delegate the power for training providers to make decisions about changing the scope of their registration. This will apply to training providers who have consistently shown the highest of standards and regulatory compliance.

They will no longer have to seek permission from ASQA to make changes to their registration. Providers that fall into this category will soon be invited to apply for the delegation. However, ASQA will deal with any clear cases of breaches of the standards according to the law. And let me make clear—there’s no room for lowering the standards. Cutting red tape is not about poor quality or abuse of the training system. That is why we also have rogue training brokers in our sight. We are determined to flesh them out. RTOs are now responsible for the conduct of any brokers subcontracted by them under the new standards. This means ASQA will be able to take regulatory action against an RTO using a broker that breaches these standards. Now I want to talk about training packages, which determine skills outcomes, the type of skills industries like yours can expect to get when students graduate from the system.

Industry has been clear about the type of skills and training businesses would like to have ready access to. These are skills mainly used in industries in which Australia has a competitive advantage—agribusiness, energy, mining technology, medical technology and advanced manufacturing. If Australia is to have an edge over its competitors in the global marketplace, not only must we focus on industries where we have proven strengths, we must also ensure our workforce is equipped with the skill sets needed in those industries. To make the training system more effective in matching skilled workers with the jobs that industry needs, industry will have a stronger role in defining the content of training. We have identified that one way to do this is to move to a more contestable model for developing and maintaining training packages, as announced by the Minister recently.

This will happen at the end of the current contract period with the twelve Industry Skills Councils. There’ll be opportunity for all stakeholders, including the current Industry Skills Councils, to tender under this new model. Our approach to ensuring the system is fit for purpose will be transparent and methodological. A full review of training products will be carried out and stakeholders will be consulted fully on the processes we currently have and how we can find new ways for the future. We are also working with our state and territory colleagues to deliver reforms agreed by the COAG Industry and Skills Council.

A new industry-led committee being established under the Ministerial Council will help us to deliver our agenda to give industry a greater voice in training content. Work to introduce new standards for training providers from January is also far advanced. It is important the standards are clear about what is required of providers and there needs to be more information available to providers about what compliance looks like. Under the new standards, providers will be required not only to engage with industry, but to demonstrate how industry has informed their training and assessment. There’s a common thread running through all that I’ve said today, and that is, the absolute necessity to meet the needs of industry. But there’s an underlying message here as well, and that is, keeping our economy strong so we can sustain our prosperity. So ultimately, the Government’s VET reforms are about us—they are about the future of our children, not just industry.

If Australian industry is competitive, businesses will be able to create more job opportunities for our young people. They will be able to take on more apprentices and put them on the path towards fulfilling careers. I remain grateful for the opportunity I had in my teenage years to complete trade training as an apprentice fitter and toolmaker. It changed my life for the better and I’d like to see more young Australians get the support they need to start and finish an apprenticeship. The new apprenticeship support service I spoke about earlier will provide the necessary support to both apprentices and their employers. The service will include entry-level screening to ensure apprentices are suitably matched to an employer and training course, as well as individual case management and mentoring. We are keen to see more young people not only get into an apprenticeship but also finish it and this service will do just that. It will offer targeted and meaningful support when it is most needed.

It complements the Trade Support Loans announced in this year’s Budget, putting apprentices and trainees on a similar footing to university students. These loans help apprentices to complete their qualifications by providing support for their day-to-day living expenses. They will be crucial for people especially in the early years of their apprenticeship when the risk of dropping out is highest. Apprentices who finish their training will be eligible for a 20 per cent discount on their loan. This is another positive step forward towards boosting Australia’s rather low apprenticeship completion rates. It’s encouraging to know that completion rates for printing trades workers are above the national average. I commend your efforts to further improve trade apprenticeships through the Future Print project.

Ladies and gentlemen, we are on the cusp of a new era in the history of Australia’s vocational education and training system. This has come about for a good reason. The Australian economy is changing. The way industry does its business is also changing. Our training system will also have to come along, failing which, our industries will struggle to catch up in global competitiveness. The reforms I have outlined today will give a much-needed shot in the arm for a more responsive VET system. They will create a new streamlined and effective system to replace the unwieldy and overly bureaucratic system that has become bogged down in red tape. They will ensure Australians who take up an apprenticeship are as proud of their choice of career path as those who choose to go to university. But this work is still work in progress. More remains to be done. We will continue to find more effective ways to give industry a greater role in training matters. The recent appointment of a five-member Vocational Education and Training Advisory Board will add to our knowledge about how best we can reform Australia’s VET sector. We will continue to work with all stakeholders. We will listen to you and your concerns because we have to get it right. And I am confident we will get it right, with your support. Thank you.

Media contacts: Mr Baldwin's office 02 6277 4200