Address to the Australian Financial Review – Workforce Summit

I would like to begin by acknowledging the traditional custodians of the land where the summit is taking place, the Gadigal people of the Eora Nation, and pay my respects to Elders both past and present.

I extend that respect to all Aboriginal and Torres Strait Islander peoples there today.

I want to thank you for inviting me to speak today, albeit from Canberra, where we are kicking off our second sitting week for 2024, a year in which there is a lot for our government to deliver in the skills and training portfolio. 

You have asked me today to provide my perspective on the trends that are shaping the Australian workforce.

As business leaders and employers, you make a major contribution to our national productivity and are integral in developing the workforces our modern economy needs.

Our government is absolutely focused on continuing to deliver the broad and deep reforms to the VET sector we laid out when we formed government just over 18-months ago. 

While I won’t spend much time dwelling on the challenges left by our predecessors, it is important to understand the time it will take to renovate and renew our skills and training sector.

Upon election it was clear we’d inherited the worst skills crises in 50 years.

The number of people completing apprenticeships had been falling for more than a decade.

The VET sector had endured underfunding, de-regulation, loose rules of market entry, a complete lack of national cohesion and an obsession for competition at the expense of strategic collaboration.

TAFE became a punching bag for the former government. 

The skilled workforce we need for our transition to net-zero was not nurtured, or to be frank, even thought of – a legacy left by a government that spent more than two decades convincing itself that climate change was a myth. 

In the face of this neglect, and policy missteps, the sector has performed admirably.

But we can, and we must, do better, as we look towards the future. 

Upon forming government, we immediately understood the urgency of identifying the gaps in our skills and training sector, and by extension, the gaps carrying through to our labour market. 

We knew that fixing a fractured skills and training sector was vital to the health of every sector in our economy. 

Our transition to net zero for example, means we need hundreds of thousands of tradespeople, engineers, and maintenance workers. 

Our growing population means we need more carpenters, plumbers and sparkies to build the infrastructure to service them and houses to home them. 

Our ageing population means we need more care workers. 

And the digitisation of our economy means the sensitive data of Australians, businesses and governments needs to be protected. 

Our first line of defence is VET trained Cyber Security and IT experts. 

And without a high-quality VET sector, our economy suffers. 

So, we’re fixing it. 

We started by establishing Jobs and Skills Australia, an agency dedicated to making sure government, industry and training organisations have the most up-to-date picture of our nation’s workforce needs – in the short term, and the long term. 

Its governance structure entrenches a requirement that it have an industry-centric, evidence-based approach to its work. 
 
This is important because it enables strong partnerships between government, industry, unions, education and training providers, researchers, and research organisations. 
 
It is only through engagement with its tripartite partners and stakeholders that JSA can achieve what it needs to do. 
  
The work of JSA is critical to the way we approach the workforce and skills imbalances present in our economy. 
 
And resolving these imbalances and deficiencies is an economic imperative to ensure a prosperous nation. 

Key to these reforms are the 10 newly formed Jobs and Skills Councils, each representing different industries. 

These councils are industry-owned and industry-led and will inform how education and training is delivered. 

Research by the OECD has shown, overall, countries with strong connections between education institutions and industry are those that are most successful.

Our work is strengthening those ties. 

We are undertaking work on qualifications reform to improve the portability of skills and to ensure that the education and training being delivered is modern and in line with industry needs. 

The digital transformation of our economy is an area that highlights the need for qualifications to be modernised and flexible, with digitisation forging ahead, sometimes at a speed that feels relentless. 
 
And while the rapid nature of the transformation presents great opportunities, it also brings significant challenges.
 
The demand for skills associated with building, maintaining, progressing, and engaging in the digital economy continues to grow.

This requires higher levels of technical and digital skills across the labour market, for both ICT and non-ICT occupations.
 
This is why our government has set a target of 1.2 million technology-related jobs by 2030.

We are also working on delivering digital foundation skills to anyone who wants that training, free of charge, because to participate in society in 2024 people need digital literacy. 

We have an ageing population who need care, and people with disabilities who are finally getting access to the care they deserve – through the NDIS. 

But we need a skilled care workforce large enough to provide this care. 
 
Last year’s Intergenerational Report projected the care and support sector could grow from around 8 per cent of GDP today to around 15 per cent over the next 4 decades. 
 
Our care workforce will need to double, and the VET sector will play a leading role in making sure that happens.  
 
Another big demand on our VET sector, and the tertiary education system, will be reaching our government’s net-zero emissions target by 2050. 

The first Jobs and Skills Australia capacity study, the Clean Energy Generation report, released late last year, highlighted the most critical occupations that will form the clean energy workforce are found within trades, technical occupations, and engineering professionals.

The study identified 38 essential occupations if we are to establish the human capital required to mitigate the effects of climate change. 

Those jobs are plumbers, electricians, air conditioning and refrigeration mechanics, and mining engineers.

In recognition of that, we are supporting 10,000 New Energy Apprenticeships through grants of $10,000 and implementing a New Energy Skills Program to develop fit-for-purpose training pathways for new energy industry jobs, in partnership with states and territories, employers and unions. 

It is estimated that over the next few years, nine out of 10 future jobs will require post-school qualifications, and about half of those jobs will require VET qualifications. 

The VET sector is responsible for skilling and upskilling millions of learners, and it is a pathway that gives Australians more mobility into getting the jobs they want. 

There are many reasons people struggle during year 11 and 12. Family circumstances, poor mental health or an aptitude that’s not suited to traditional school education. 

VET gives those people options.

VET provides pathways through education and training to enter highly paid and secure jobs. 

It can be a stepping stone for those wanting to study a bachelor’s degree but did not achieve the required ATAR. 

The VET sector should be an engine room of opportunity and an essential tool in modernising Australia’s economy and society and driving national prosperity.

As a government, we inherited a sector that fell short of that.

Our nation’s economic, social, and environmental agenda – our government’s agenda – cannot be achieved without a major systemic change to the way we educate and train our people.

Last year we landed a landmark $30 billion five-year National Skills Agreement, the first of its kind in more than a decade. 

The agreement brings Commonwealth, State and Territory Governments together to transform the VET sector. 
 
My colleague Education Minister Jason Clare and I are improving the connections between the VET and higher education sectors.

Greater alignment and collaboration between the two sectors has been an important focus of the work being undertaken through the Australian Universities Accord.

To ensure an economy that is productive, secure, clean, sustainable, and rewarding for all Australians, we must move beyond a binary choice between VET and higher education.

Whether it is our national, economic, or environmental security, we are going to need to ensure the VET and higher education sectors work together. 

This approach is exemplified by the creation of nationally networked Centres of Excellence which will bring TAFEs, industry, and universities together. 

They will help deliver a skilled workforce for strategically important industries to meet national challenges. 

Up to six centres will be fast-tracked this year to address skills needs in the shift to net zero, the care and support sector, and in digital and IT. 

The TAFE Centres of Excellence will work on higher apprenticeships, including at the bachelor’s degree equivalent level, which will support parity of esteem between the VET and Higher Education sectors and promote the importance of skills and skills-focused qualifications in the Australian Qualifications Framework.

For too long, we have held onto an idea that the head and the hands need to be separate. 

That practical skills and conceptual knowledge, somehow, are not complementary. 

TAFE Centres of Excellence will be key to fostering closer engagement between the two tertiary sectors. 

Our skills and training sector is vital for the future of our economy, a time where the labour market is rapidly changing.

The sector should bring together employers, unions, educators and state and territory governments, working towards a common goal with the federal government. 

As a government we have already passed some important milestones.

It is important, however, that we continue to evaluate the quality of education and training in order to respond to a fast-changing economy. 

Thank you.