Release type: Speech


Speech to the AI Group Industry Meets Canberra


The Hon Brendan O'Connor MP
Minister for Skills and Training

I’d like to acknowledge the Ngunnawal people on whose land we meet today and pay my respects to their elders past and present.  

Thank you for the invitation and for the opportunity to speak with you directly today about our agenda for VET, and what it means for the business sector.

As you’re here today to discuss key issues confronting businesses in Australia, I’m sure there will be many robust conversations throughout the day.

One thing we can all agree on is that one of the biggest challenges facing business today is the skills gap.

The National Skills Commission’s 2022 Skills Priority List shows occupations with skills shortages have almost doubled in the past year.

This will come as no surprise to you – you’re the ones who are out there trying to recruit in the tightest labour market in decades.

And despite there being more work available, some workers are struggling to land a job because there is a mismatch between available training and skills needed in the labour market.

For Government, it is imperative that we identify and work with industry to supply the skills that are in demand now and in the future.

This week I will table a National Skills Commission report in the parliament which outlines our current, emerging and future skills needs.

I have been working closely with Skills Ministers from all states and territories to finalise a jointly funded Skills Agreement that will support access to 180,000 fee-free TAFE and vocational education training places from January next year.

The focus of this initiative is on priority areas including those identified by the NSC’s report.

The report also identifies that with the transition to a net zero carbon and green economy there will be increased demand for current skills along with a growing need for new skills and new jobs.

As we move to a clean energy economy and a more sustainable future, we will need a workforce with the requisite skills to ensure this structural transformation.

That is why we are committing over $100 million for Skilling the Clean Energy Workforce as a key component of our Powering Australia Plan, commencing with $62 million in this Budget.

This plan will deliver 10,000 New Energy Apprenticeships with additional in-training support and a new mentoring program.

We are also extending direct financial support for all New Energy Apprentices throughout the entire time of their apprenticeship, making sustaining their employment more viable.

Getting someone to commence an apprenticeship is only half the battle.

We know that completion rates have been steadily declining over the last decade.

In 2012, more than 57,000 Australians completed a trade apprenticeship. By 2021, that number had dropped by more than 20,000.

We also know that completion rates will likely get worse before they get better due to the pandemic stimulus measures that focussed on commencements.

These measures were right for the time, and focused on keeping people in work.

But low completion rates is a trend we’ve been seeing for some time.

A trend compounded by the tight labour market, where it is often more financially attractive to get a job elsewhere, than to finish a VET qualification.  

It will take some time to arrest this trend, but we need to do better at supporting apprentices to ensure completion.

I am committed to a better future for apprentices and trainees.
Which is why I am undertaking broad stakeholder engagement with a view to improving quality, completion rates and ensuring the skills required match the needs of our economy. 

Since we formed government, we have hit the ground running, because we are aware of the urgency of the skills gaps facing us.

The very first piece of legislation introduced by the Government was Jobs and Skills Australia, an independent body that will plan workforce needs by more precisely anticipating skill shortages across the nation and providing independent advice on current and emerging skills market needs.  

As you know, the bill has successfully passed the parliament meaning we can get to work establishing its functions, developing this strategic body to advise on skills shortages.

As part of that work, the Albanese Government will provide $1.9 million for JSA to commission a workforce capacity study on Australia’s clean energy workforce. It will provide the critical evidence and insights needed to support workforce planning, policy development and program design, needed to build a strong and vibrant Clean Energy sector.

All the data and real world experience shows that we must better match training with skills shortages we are facing now and we anticipate in the future.

That is why we are working to ensure industry has a stronger, more strategic voice and a broader role in how our VET system delivers stronger outcomes.

This means a commitment to tripartite leadership, bringing together employers and unions to work in partnership with governments and the VET and higher education sectors.

But crucial to the success of everything I’ve outlined, is ensuring the building blocks, the foundation skills are in place.

According to the OECD, more than 3 million Australians lack the fundamental skills required to participate in training.

These are skills such as basic literacy and numeracy. It directly affects businesses, which is why it was disappointing to discover at Senate Estimates that almost half a billion dollars was cut by the former government in relation to foundation skills.

The Albanese Government is undertaking a comprehensive review of our foundation skills programs, coordinated through the advisory group of which the Australian Industry Group is a member.

In addition to this work, we are providing $12 million and will task Jobs and Skills Australia to undertake a National Study on Adult Literacy, Numeracy, and Digital Literacy.

The Government has a big task, made more challenging by the decade of policy neglect of the previous government.

But our core business is to create opportunities for Australians to prosper.

Since being elected in May, we have brought together business, governments, unions and the community sector to work out new ways of tapping the considerable talents of Australian workers.

And we will continue to engage in this way.

I recognise and appreciate our shared interest in bringing the best out of our VET sector, and I look forward to working with you to deliver first-class skills and opportunities Australian workers and businesses need and deserve.