Interview - ABC Melbourne Drive with Ali Moore

ALI MOORE, HOST: The Federal Government has announced a new, almost $13 billion, five-year funding. It’s part of a new agreement for the vocational and training sector. So, what does it mean for you, and how much of this $12.6 billion to be precise, how much of that is new money? 

Brendan O’Connor is the Skills and Training Minister. Brendan O’Connor, welcome to Drive. 

BRENDAN O'CONNOR, MINISTER FOR SKILLS AND TRAINING: Thank you Ali. 

MOORE: It’s a new five-year agreement. What’s that going to mean in practice for people who want a new skill or, I should say on the other side of the ledger, the industry who are crying out for new skills? 

O’CONNOR: Well, it’s going to mean greater opportunities for students, for workers, for businesses, as you say, that are crying out for skills that are in demand. And it’s critical for our economy. This is the first National Skills Agreement, a compact between all State and Territory Governments and the Albanese Government, but by any Federal Government for more than a decade. And what it does, it brings together the funding from both the federal and state and territory level and ensures that it’s invested strategically in areas of demand and at the same time brings much-needed reform to the VET sector, so it’s fit for purpose for a modern economy. So – 

MOORE: So, what does that mean in terms of reforms? 

O’CONNOR: Yeah, so what that means – so I’ll go to a number of the reforms that are required. We know we need to have a much more flexible VET sector so that it responds to the changing nature of the economy and labour market. Too often we see delivery of courses that are not keeping up, and we’re going to be – this will provide I think a capacity to be more effective in that regard. 

We need to make sure that there’s a greater collaboration between universities and TAFE because we are now seeing that the future jobs require conceptual knowledge and technical skills at a higher level and a greater proportion of future jobs will be like that. And that’s why we create Centres Of Excellence, bringing together the two tertiary sectors – the VET sector and universities – working hand in hand to produce skills and to provide opportunities for people to gain skills but also to acquire conceptual knowledge to work in different ways. 

We’re also going to ensure that we see the greater opportunities to enrol in higher apprenticeships. Again, just look at the energy sector, Ali. The transformation required there to get to net zero is such that if we do not provide the skills and in a way that is effective for the demand and if we don’t have the pipeline of skills which will be very significant, then we’re not going to achieve our targets. 

The care economy has massive labour and skill supply needs, and we need to make sure we do better there, too. So, this is an agreement amongst all governments, the first in a decade as I say, working with industry, working with the university sector too, to deliver the skills to our economy. 

MOORE: So, university and TAFE collaboration. I get that. When you talk about courses not keeping up, what do you actually mean, and is that something separate to just getting a greater coordination and collaboration between universities and TAFE? 

O’CONNOR: Well, it’s incidental to that issue. But there’s no doubt that because the technology changes are quicker, are more rapid today than perhaps at other times, because the labour market is transforming faster, then we have to have a more responsive – we have to have more responsive tertiary sectors to deal with that, the speed by which things change, both in terms of what skills are needed and how they’re to be delivered. 

So, that area of reform is being done, undertaken concurrently with this agreement. And the other thing, of course, that I should add alongside this agreement is the Fee-Free TAFE initiative. We’ve managed to have 215,000 Australians enrol in Fee-Free TAFE in areas of demand this year and we have a further 300,000 places. Removing cost barriers by making it fee-free, but in areas of demand, because we need to encourage people to acquire skills to ensure that they have meaningful work, well-paid jobs and a career progression and deliver the skills to our businesses and to the economy. 

So, there’s a lot of things going on in this place, but what – because there’s such goodwill and collaboration amongst governments, we can deliver this. Under the previous government they tried, but were not able to get that compact with State and Territory Governments, and I’m glad to say that we’ve arrived at that last night when it was ticked off by the National Cabinet. 

MOORE: And it seems that there’s no end of demand and hence the expansion of the Fee-Free places. 

O’CONNOR: That’s right. 

MOORE: But, of course, for every student you – well, every sort of group of students you will need a new teacher. Where are you getting your teachers from? 

O’CONNOR: Yeah, that’s right. Well, that’s part of the agreement. We’re spending millions more, well over, in excess of 100 million additional expenditure on strengthening and developing the VET workforce. We know we need more teachers and trainers. You might have heard my colleague Jason Clare, the Minister for Education, talking about investing more in teachers for all sectors of education and training. That’s the case for VET. So, the agreement that’s been struck by all governments understands the need to invest and increase teachers and trainers. As you say, without the teachers and trainers then you cannot deliver the skills. You cannot have students acquire skills that are in demand. And so that is a part of the agreement. And that’s a very significant part of the VET workforce development that’s required. 

MOORE: How many occupations do we now have that would be considered to be – or to have critical shortages? 

O’CONNOR: You know, well, the last report that was issued showed that in 12 months – and this is just before we were elected to government – the occupations on the shortage list went from 153 to 286 in that – in one year. And that really underlines the scale of the challenge, that the shortages are as broad as they are deep across all sectors of the economy. The traditional trades, the care economy, hospitality, retail – wherever you look there are shortages. And, in fact, even though we’ve put this investment in I expect to see that 286 even go up a small amount as we seek to respond to the challenge. 

But we are in the tightest – we’ve got the most significant skills shortage in five decades and we need to deal with that. Now, part of that is obviously skilled migration, but for the Albanese Government a focus on education and training in areas of demand for local students and workers is the priority and must be the focus if we’re going to make sure that we can build our sovereign capability, you know, respond to the demographic changes that are leading to greater needs in the care economy, making sure that we enliven manufacturing, transform the energy sector and, of course, cater for the IT demands which are across all sectors of the economy. 

So, there’s so much to do and the fact that we now have all governments working together is something that has not happened in such a way for, as I say, a decade. 

MOORE: You’re listening to the federal Minister for Skills and Training, Brendan O’Connor, and we’re talking about a new five-year funding agreement for the vocational training sector. Just a quick text, Brendan O’Connor, what’s the completion rate of Fee-Free TAFE courses? Interesting question. Do you know? 

O’CONNOR: Well, the courses have only commenced this year, so the – 

MOORE: Well, they’ve been going in Victoria for longer than that, haven’t they? 

O’CONNOR: They’ve been going along in Victoria, and it has depended upon the areas of demand. But even – let’s just talk about completion rates first and foremost. Completion rates are too low in the apprenticeship space and traineeship space. At 55 per cent, that’s the average completion rate of apprenticeships, regardless of whether it’s fee or Fee-Free. That is too low. That means we need to do far better at making sure that people are supported to – firstly, are attracted to areas of demand but then are supported through the life of their traineeship or apprenticeship. 

MOORE: What is it? I mean, is it because they’re not inspired? Because they’re not engaged, or is it because – 

O’CONNOR: It’s a combination of things, Ali. Firstly, you can imagine when things – people are struggling to make ends meet in some areas. Cost of living pressures are acute. That’s why we’re removing the fees so people have access to these areas that are in demand. But people often find it hard to live on apprenticeship or traineeship wages and there are jobs out there. We’ve got a tight labour market which means there are employment opportunities, even if they are at relatively low skilled work. People sometimes have to, you know, have to make a decision to re-enter the labour market because they can’t afford to live on apprenticeship wages. So, we have to look at ways we can improve opportunities, provide better support. 

MOORE: But you can’t do that as part of this, can you? 

O’CONNOR: No, but – well, we can by removing fees. So, you think about cost-of-living pressures. If a student is considering taking up an apprenticeship wage but needs to enrol in a course and we remove $10,000 off that course, that increases the likelihood that they can cope with the cost-of-living pressures that come with learning and having to potentially, you know, have a low wage or a traineeship or apprenticeship. So, there are benefits for Fee Free, and one of the biggest benefits is removing the cost barriers and making it that bit easier for trainees and apprentices to continue in their study by not having to, you know, find the money – in some cases in excess of $10,000 – to pay for the courses. 

MOORE: In the – in our – I mean, you’re the national minister, but in the context of Victoria where we have had Fee-Free TAFE what difference is this going to make though, because the – you know, not having to pay that bill has already been a reality for many people. 

O’CONNOR: Look, this is a broader remit. The scale of this is more significant. As I said, 180,000, you know, we’re getting close – with the extra 300,000 and given that we’ve exceeded the 180,000 and it’s now at 215,000, we’re really talking about courses that could allow half a million Australians enrol. And the courses are targeted to areas of demand. 

And I have to say, I want to pay tribute to the Victorian Government taking the initiative to remove the fees, to remove the barriers so that people were enrolling and acquiring skills. We need to do this, not just for those students or those workers; we need to do it for businesses that are crying out for some of these skills that are in great demand. And we need it for our economy. 

Look, you know, if we don’t have the skills, we can’t deliver the national goals we have – you know, looking after older Australians, transforming the energy sector. These things can’t happen without a skilled workforce. 

MOORE: Well, there’s a – I’ve got a couple of texts here about issues that are connected to trying to get work, and one, for example, Marie in Geelong – and I know that it’s a state issue – but she says, “My daughter’s a teacher. She wants work, but she can’t get a school to employ her as full-time; it’s all contract by term. So, when it’s the end of the year, the term break, she’s got no income until the new school year.” I mean, issues like that – and I accept that education is a state-based responsibility – but, you know, when you’re looking at shortages, you have to also look at things like that, don’t you? 

O’CONNOR: You do. And that’s why when I look at, for example, the development of the VET workforce, we’re looking at issues around precarious employment as well. And whilst you say, you’re right, the states run the school systems, the fact is many of – most of these teachers are on federal awards, and the Albanese Government has been looking at the rotation of teachers, you know, on these sort of fixed-term agreements with a view to reducing the capacity to continue to churn people through those agreements. That is not fair. It leads to people leaving the profession. It’s harder to attract people. 

So, there are these things that are happening incidental to this – my announcement today. But it’s been led by the Albanese Government, working with states and territories, to make it easier for teachers not only to stay in the system but obviously want to be there and be treated properly. I mean, it is the noble profession. It does deserve the respect and it deserves decent wages and conditions commensurate with their skills and responsibility. And we need to elevate the status of it through these means, so I sympathise from your listener whose talked about her daughter’s difficulties maintaining work. I don’t think it’s fair to have people indefinitely on fixed-term contracts. And I know that’s something we’re looking to attend to. 

MOORE: Brendan O’Connor, thank you so much for talking to Drive. 

O’CONNOR: Not at all, Ali. 

MOORE: Brendan O’Connor there, Federal Minister for Skills and Training.