Speech to launch "Skills for All Australians", Canberra
MON 19 MARCH 2012
Australia stands at the cross roads.
We’ve witnessed a shift in our economic interests from America and Europe to Asia in a single generation.
We’re seeing shares of employment and activity move towards services and high tech production
We’re seeing our dollar rise to sustained high levels due to our commodity exports and confidence in our currency and bonds.
It is a major structural realignment of our economy; an externally-led change as big as any we have seen in 200 years.
Like the 1980s, it is a time to choose.
To chart a conscious and deliberate pathway to sustained prosperity, or face the alternative of mediocre growth or even decline.
In the early 2000s, the mining boom gave us a moment of complacency.
But the post-GFC world has made it clear we cannot cruise along any more.
The world of easy money and easy choices that prevailed until 2008 is gone and won’t be coming back.
We are in an era of deleveraging.
An era of savings, surpluses and balance-sheet repair.
An era of falling tax revenues and tough fiscal choices.
An era when the baby boomers have begun to retire.
This is a more austere and demanding world where only the resilient and the nimble will prosper.
Growth will not come easily.
Every percentage point of GDP will be hard-won.
Yes there is opportunity in the mining boom and in the relentless rise of Asia’s middle class.
But we can only take advantage of those opportunities if we renew the productivity drive that made us so successful in the 80s and 90s.
The high road.
So that people buying our products and services don’t ask how much they are but how good they are.
Taking us into the league of countries like Germany, Sweden, Singapore and Israel where high value, high quality is a way of life.
Let’s be clear, though, on what productivity means.
It doesn’t mean taking a few dollars out of workers’ pockets or eroding protections that bring them dignity and security.
And it doesn’t mean hard-working employees working even harder.
In a mature, sophisticated economy like ours, the biggest single source of productivity will come from only one place: capital deepening.
Physical capital – the infrastructure and equipment that enables us to achieve more.
Like unleashing the power of broadband through the NBN.
Completing the duplication of the Pacific Highway.
Upgrading our national freight rail network.
Unclogging our cities through massive new transport infrastructure like the Regional Rail line in Melbourne.
And we’re working towards linking the rapidly expanding resources sector in New South Wales to Port Kembla via the long-deferred Maldon to Dumbarton freight line.
It’s a huge agenda, and no government has done more in these areas since Federation than ours.
The other part of the picture is human capital – in other words, people and skills.
Nothing is more important to Australia’s future economic success than skills development.
Skills are the lifeblood of a modern economy and the key to a more prosperous future.
Skills are central to ensuring that we have the workforce needed to deliver the innovative, high quality products and services that will power our economy this century.
Economic modelling by KPMG Econotech shows that the Government’s skills targets could lift Australia’s GDP by up to 2.6 per cent each year between 2025 and 2040.
It would boost employment by 1.2 per cent over the same period.
For individuals, achieving recognised qualifications is one of the best ways to secure a job and earn a decent wage.
In a changing economy, skills also build resilience.
They provide workers with the flexibility to change jobs, apply skills in different contexts and go on learning.
They enable employees to manage the demands of new systems and new technologies.
As our economy continues to change, having the right skills, and the ability to apply those skills in the right settings,
will be critical.
A few moments ago I used the phrase “human capital”.
It’s a dry economic term but what we are really talking about is liberating the creative capacity of individuals.
Giving them the opportunity to change their lives for the better.
Whether it’s a kid in the suburbs who has no other social or economic advantages.
An older worker looking to change fields or overcome the challenge of redundancy.
Or perhaps a single mum wanting to return to the workforce.
In the past it was easy for students to leave Year 9 and 10 without further qualifications due to the abundance of unskilled jobs or career pathways that didn’t require formal skills.
But now, and increasingly in the future, individuals without qualifications will simply be forced to compete for a diminishing pool of low-skill, low wage jobs, or else face the demoralising prospect of unemployment.
That’s not the future I want for any Australian.
I want a future where Australians have the opportunity to get new skills and a new opportunity to create a better life for themselves and their families.
That’s why I refer to the power of education as being transformative.
Transformative for individuals and transformative for society.
To date, this government has covered a huge amount of ground in early childhood, schools and university education.
In universities, we’ve moved to a demand-driven system that has already resulted in 150,000 extra university places.
More than 40 per cent of young women now have a bachelors degree or higher, achieving a large part of our target more than a decade ahead of schedule.
We are well on track to achieve our target of 40 per cent of people aged 25 to 34 holding a bachelors degree or higher by 2025, with more children from poorer families getting a chance.
We’re making sure that all Australian children have the opportunity to reap the rewards of a quality early childhood education through universal access to preschool.
In schools, we’ve put in place My School, we’re devolving power to local school principals and communities, and boosting teacher quality.
We’re introducing the National Curriculum and charting a pathway to a better way of funding schools through the Gonski review.
The next wave of reform must be in the area of skills.
This is the missing piece of the puzzle.
Since 2008, our nation has been committed to ambitious targets for skilling Australians:
- Doubling the number of qualification completions at diploma and advanced diploma levels
- Halving the proportion of Australians of working age without a Certificate III qualification or higher by 2020, and
- Increasing the proportion of young Australians aged 20 to 24 attaining Year 12 or Certificate II to 90 per cent by 2015.
Already we have 460,000 doing a trade apprenticeship or a traineeship – with more people studying a trade than ever before in Australia’s history.
But we need to go further to make our training goals a reality.
So today I am pleased to announce a new major package of reforms.
A skills blueprint to meet the demands of the Asian Century.
A plan to help Australians gets jobs, learn new skills to get better jobs and to build a more competitive business environment.
Friends, the package I launch today is a plan for better, more timely access to training places.
But also better quality training.
Fairer funding of training.
More flexible and innovative delivery of training.
It is a plan that is mindful of the central place that TAFE plays in our training system and indeed in our national imagination.
Our TAFEs are essential public institutions that have a presence in every region and collectively deliver 80 per cent of VET training.
TAFE is known for its sophisticated technical education
and its ability to reach those in our community who are marginalised.
Our plan encompasses TAFE and all of vocational education, and it starts with this simple proposition: skills are no longer an optional extra but a necessity.
In the new economy we are creating, few Australians can or should be left to embark on their working lives without skills and qualifications.
The economy needs it; our vision for a fairer nation demands it.
Today 4.1 million working Australians do not have the skills necessary for entry to the key growth sectors of our economy.
These workers earn up to $10,000 a year less than their more skilled peers.
They have an employment rate of less than 60 per cent.
And they get locked out of new opportunities because demand for jobs with high-level skills is running at 2.5 times the rate of unskilled jobs.
Put simply, they are less likely to have a job.
Think of it this way.
The jobs of the future are jobs that require skills:
Advanced manufacturing, taking us up the value-chain.
Mining, building and construction.
Financial and property services.
Child care, aged and disability care.
Nursing and allied health.
New media, culture and design.
These are the growth areas of today and tomorrow, and every single one of them requires skills.
So our plan begins with measures to increase the accessibility of training places in the community.
As a result of our reform plan, every working age Australian will be entitled to a taxpayer-funded training place to obtain a qualification up to and including Certificate III, including language and literacy courses.
Any one from Year 10 to retirement age will be able to obtain one of these places.
This is our National Training Entitlement for every Australian.
Why Certificate III?
Because research tells us this is the threshold qualification that really makes a difference.
It’s the qualification that provides a noticeable boost to income.
The first qualification that begins admitting holders into the professions like child care or aged care.
But friends, we know this development on its own is not enough.
Many more Australians will aspire to higher qualifications and they deserve every encouragement to do so.
But the upfront costs can deter many in our community, especially those from modest circumstances.
So today I can announce a new plan to bring to our vocational sector the benefits that interest-free deferred loans have long brought to university participation.
Think of it as being like HECS for Skills.
At last, VET diploma students will get the same rights that university students have had for years:
- No upfront fees
- Access to an interest-free loan to pay for their study
- Only having to pay that loan back once their income reaches a certain level.
Remember university students have enjoyed the benefits of HECS for 23 years.
With these reforms, VET will no longer be the poor relation.
More opportunities to train, funded more fairly.
That’s what is on offer today.
But we know these measures on their own are not enough.
We can’t pour extra money and extra places into a patchy and inflexible system.
So we also need a focus on quality and a focus on transparency.
Already we’ve established the Australian Skills Quality Authority to promote higher standards amongst the nation’s 5000 training organisations.
The Commonwealth is also moving to review and improve these standards through the National Skills Standards Council.
But we need to go further.
To this end, our reform package includes a number of measures designed to support the delivery of high quality VET training.
We will work with the States and Territories to ensure the qualifications delivered by the VET sector are independently assessed over the next two years.
The Commonwealth will require all jurisdictions to ensure only quality providers with an established record can access public funding.
And we will require the States and Territories to set out a plan for navigating their TAFE systems through these reforms so that the important role of public providers is maintained.
It is in everyone’s interests that TAFE remains at the centre of our VET system.
There’s one final piece of the picture and that is the role of students, especially the information and support they receive.
We’ve seen how My School and My Hospital are helping to bring choice and transparency to school education and hospital care.
The VET sector trains 1.8 million students a year, so it merits the same open and accountable approach.
Under the government’s reforms, we will establish a single website, My Skills, so people can have vital information on training courses and training providers.
Over time, the My Skills website will provide individuals and employers with real time information on things like course options, employment outcomes, audit reports and fees.
We want business and individuals to have ready access to information that will allow them to choose the training organisation that best suits their needs.
We also recognise that such a big and diverse sector can be hard for students to navigate.
So we will introduce a Unique Student Identifier, a single ID number that will enable students to track the skills and qualifications they have achieved.
It will bring all their training history together in a single, portable record making moving courses or providers easier.
It was also make it simpler for them to obtain recognition of prior training and skills when they enrol in a new course.
Lastly, we will be asking the States and Territories to do more when it comes to student retention and learning outcomes.
We want to re-set the benchmark of achievement in training.
A test of this reform will be not just how many students sign up for training – but how many complete.
At the moment only 30 per cent of students, on average, complete a VET course.
That is an enormous waste of public funds, a big loss of potential skills, and a human tragedy as well.
With better approaches to training content and delivery, teaching quality and student support, I believe we can vastly increase the completion of VET qualifications.
Indeed we are negotiating measures with the States and Territories to ensure that around 375,000 additional students will complete their qualification over the next five years.
Friends, these are Australian Government proposals that come with the endorsement of my Cabinet and my own lifelong commitment to the importance of education.
But the truth is the States and Territories remain the majority funder for VET training and share a profound interest in delivering quality outcomes.
So these are reforms requiring the support and endorsement of the whole Federation.
Accordingly, I will be presenting these proposals to my fellow First Ministers at the COAG meeting on April 13.
I present them in a spirit of bipartisanship and goodwill.
They are proposals designed in the national interest and I look forward to having a fruitful conversation with my State and Territory colleagues.
In approaching the COAG table, I won’t come empty handed.
On behalf of the Commonwealth, I will offer the States and Territories $7.2 billion over five years to underpin Australia’s training system.
In addition, we have another $1.75 billion to support and drive these new reforms.
To which will be added funds unlocked by VET FEE-HELP, potentially amounting to $155 million each year, which will help underwrite the National Training Entitlement.
Together these measures almost double the level of funding the Government inherited in 2007.
So it can be fairly said that our nation’s long neglect of vocational education is at an end.
A huge new piece of the Government’s plans for the nation’s future falls into place today.
We have ambitious goals and they are necessarily bold:
To make every school a great school.
To make every university a great university.
To skill every Australian who can and wants to be skilled.
To ensure no employer creates a job without someone qualified and equipped to fill it.
No longer will personal means or a lack of training opportunities be a barrier or an excuse.
We will have a supply of training places sufficient to meet the needs and opportunities of the future.
Training underpinned by quality, flexibility and transparency.
This skills package is a huge breakthrough for business and employees as we shape the new economy.
It sits alongside our reforms in clean energy, broadband and tax redesign as the building blocks to equip our nation for the challenges ahead.
It’s also a satisfying moment on my own journey in public life, so let me conclude with this reflection.
I am honoured to lead a movement that was founded in 1891 – Australia’s oldest political tradition.
It was begun by a group of workers and small businessmen who laid out a simple 16-point plan as their first platform.
One of those items was a commitment to “Free, compulsory, and technical education, higher as well as elementary, to be extended to all alike.”
Universal schooling was achieved quickly in the final decades of the 19th century.
But in university and VET, it’s taken more than a century to achieve this promise.
Only now, under this government since 2007, is broad access to university and high-level vocational education – free at the point of use and driven by demand – being delivered and assured
They are reforms that will shape and sustain our nation for decades to come.
Reforms that position us to be winners in the Asian Century.
A race our nation cannot afford to lose.