Parliament House June 23, 2014

Mr FITZGIBBON (Hunter) (15:38):  I rise to support the amendment put forward by the member for Cunningham. It is welcome that all sides of the House are focused on what is a very important issue—that is, maintaining an appropriate level of skills in this country and in this economy and, on that basis, keeping us internationally competitive.

I speak on this bill with possibly more authority than most, having been an apprentice myself. I am an auto-electrician by trade and proud of it. If your car is older than about 1985, I am sure that I could still fix it for you. If it is more modern than that, then I might struggle a little bit with the new technology. I left school at 16. I did not like school all that much, I must say. I only ever wanted to do two things: a trade and to play first grade football for my hometown. These were two aspirations I achieved, I am happy to say. I was apprenticed by a wonderful couple by the name of Eryl and Marcia Lightfoot. They ran a workshop in my hometown of Cessnock, and I enjoyed the experience very much and am thankful to them to this day for that opportunity. After that, I went into my own business, which I operated with a partner, Greg Stacey, for around 10 years before going on to a less honourable trade called politics.

Ms MacTiernan:  It would appear you have a private sector background, and your hands are dirty!

Mr FITZGIBBON:  I have had my hands dirty, yes. I thank the member for Perth. I have been to TAFE and I did block release in those days, because auto-electricians were far and few between, and obviously there was not a critical mass of apprentices to hold regular TAFE courses. So we would go off to Sydney for a week at a time—I suppose five or six weeks a year. Interestingly, in my earliest days, I stayed at the Villawood detention centre. If that does not highlight some of the struggles apprentices face, particularly earlier in their time as an apprentice, nothing would. I made a few mates there and we did not stay in the Villawood detention centre too many weeks. I think we found ourselves a caravan in Bass Hill. Support from the government to pay for the accommodation for the caravan would have been welcome at the time.

Apprenticeships are a complex area. I know those on the other side of the House like to say that they place as much value on apprenticeships as they do on a university degree. I place as much value on apprentices as I do on university graduates, but I do not know what the former statement means. I will keep trying to work that one out. But I know that it is a very popular statement, because members of the government know that people out of their own community like the idea of apprenticeships unfolding in the same way as they did historically, and they would like to see the government trying to rekindle that old environment.

Times change. In my day, apprentices finished apprenticeships. I do not understand for the life of me why 20 per cent do not get beyond the first year now and some 30 per cent, as I understand it, do not get beyond the second year. Years 1 and 2 are the worst paid of all as the employer gets virtually no return for your work effort, because you simply do not have the skills to be making a high-value contribution to the business or the workforce. But when years 3 and 4 come around, you are making a substantial and technical contribution and the employer is in a position to pay you more. If the government really placed the same level of value on apprenticeships as they do on university degrees, they would not spend so much of their time trying to drive down the wages of tradesmen. That is their mantra: 'We could be more internationally competitive if we could pay our workers less, including tradesmen.' There is a contradiction in that approach, and it is one worth highlighting for this chamber.

Having said that, we are talking about ensuring our international competitiveness by making sure that we have skilled people. We will not have skilled people if we do not indicate to them that after their apprenticeship there is a reasonable salary to be earned. That is what has to be kept in mind first and foremost. The member for Swan made the point that, too often, tradesmen, after completing their apprenticeships, are poached by other employers. In my own region, and in the mining regions generally, including in Western Australia, that is typical of the mining industry. I know it is a great source of frustration for those who secure and engage those apprentices. I would dip my hat to someone who came up with a solution for that economic dilemma, because I do not see one. We must continue to do all we can to bolster the supply of tradesmen through apprenticeships. This bill takes away one initiative the former Labor government had, to encourage people into apprenticeships and to complete their apprenticeships, and replaces it with another. I am not going to get into a debate today about which is the better system. I would like to think that most out there in the community do not care much, as long as we are working together to address what is a serious problem and a challenging issue.

I am happy to acknowledge that the government has factored into its scheme a 20 per cent discount in the final year of the loan payment as an additional incentive to complete the apprenticeship. There are some aspects of the loan scheme that concern me—like very young kids being capable of raising a loan and therefore putting themselves into substantial debt for someone of that age, potentially without the authority of their parents.

I understand that hasn't been clarified, and we need to watch these things very closely.

I know that it is very difficult to administer a policy design which requires the apprentice to spend the money on certain goods or services only. I accept that but I think this is a program that will need to be watched very, very closely to ensure that the money is not misspent and that young people find themselves in debt without completing their apprenticeships—a debt which the minister describes as interest free. But it is also a debt that is indexed to the CPI and therefore grows over the term of the loan, which I think is worth pointing out.

Regions like my own are often described as insufficiently diverse. This is a topic of conversation at the moment because, as we all know in this place, the coal prices have collapsed in the case of coking coal from $320 a tonne only 18 months ago to something like $120 a tonne at the moment. When the coal price falls and mining turns downward, we feel it in the Hunter.

I remind people that we are a very diverse economy in the Hunter. In fact, mining only makes up about 10 per cent of the economy. Our biggest contributors are of course the services sector—health and education, in particular. We have very significant thoroughbred breeding, agriculture, viticulture and tourism industries. We have got new growth industries like the CSIRO Energy Centre promoting renewable energies in our region

We are struggling in manufacturing because we have difficulties with the dollar, and I congratulate HunterNet for recently organising a round table so that we could discuss how we might overcome those problems. Certainly for those employers, apprentices are an issue, apprenticeships are an issue, and we were told at that round table from a number of employers that they are employing nowhere near the number of apprentices they previously were. In their case, it is about the state of manufacturing sector but it is another reminder that we must constantly work on keeping up the supply of apprentices.

In the good old days, BHP steelworks trained thousands and thousands and thousands of apprentices—I forget the number; I know it was in the thousands every year. They not only trained apprentices for themselves but provided tradesmen t for the whole valley, including the mining industry, and they are no longer there. We need other broader policies to ensure that employers take on the responsibility of training apprentices. The coalmining industry does it to an extent, but I think they could do more.

The other point I would like to make is that we need training providers for these young people. In the Hunter Valley providers like Hunter Valley Training Company have popped up and is now very effectively and efficiently providing some of that training, but in all regional areas we need public institutions. We need a strong TAFE system that both employers and apprentices can rely on to secure the training they need to bring a young apprentice from day one on the broom through to a fully-fledged apprentice.

I do not oppose the loans scheme. I am concerned about the indebtedness for some kids. I am hopeful that the government will watch closely to ensure that it does not run out of control. I think government members have to acknowledge that you will not encourage apprentices into trades while you are telling people the best way to fix all the ills of the economy is to pay people less. More broadly, you need to have training institutions in place that kids in regional Australia can access. It is not like the capital cities where you can get a bus around the corner and find yourself a TAFE place or a place with a private training provider; sometimes the training facilities can be a long way away as was the case when I was a kid.

Governments need to focus on public institutions like TAFE, because the reality is that these will not always be viable concerns. If it is all right to subsidise loans to kids to encourage them into apprenticeships and to complete their apprenticeships, then it is all right to subsidise TAFE training courses that at the end of the day will form the basis of our skills model here in this country.

I think there is a very strong message for governments at both the state and federal level to recognise the importance of our TAFE system, the efficacy of putting public money into structures that provide outcomes like tradesmen and therefore the need to ensure that our TAFE system is adequately funded.

Again, in the second reading amendment I think the member for Cunningham made some very good points. The government made no mention of getting rid of Labor's program prior to the election so that makes this bill officially another broken promise on the part of those on the other side.

But they are in government. They say they want to bolster the supply and completion rates in apprenticeships. We certainly will not stand in their way. They believe a loans system is a better way to go. We thought that our Tools of Trade system, a cash payment to kids, for the same reason was adequately doing that job. I suppose the proof will be in the pudding. We will know in a few years time which scheme worked more effectively. We will not stand in the government's way of changing from one scheme to another and rebadging the scheme, so I suppose they can claim credit for it, if it goes well. We will be reminding them, if it goes badly. On that basis, we will not be opposing the bill in this case.

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