Aussie businesses underspend on training and skills

“We risk being left behind”: Why the $2.5 billion training gap is bad news for Aussie businesses
New research released this week by Deakin Co. and Deloitte Access Economic shows a significant gap between the investment on recruitment versus training by businesses. The research also suggests that business performance is being affected by the country’s skill shortages even though a third of Aussie workers having bachelor’s degrees.

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Where the money is: Jobs that are booming as economy falters

Our country is rapidly changing, and not for the better — but there are some jobs that are booming, even as the economy continues to dive.

Some jobs are on the way up — and others are on the way out. Picture: SuppliedSource:istock

Australia has turned into a services economy.

Our country is rapidly changing, and one of the biggest ways is that almost everyone who has got a new job recently has ended up in the services sector.

We’re a nation of hairdressers and consultants now. As the next graph shows, we’ve added over a million jobs in household services and business services while losing jobs in manufacturing and mining.

Employment growth by industry. Picture: Supplied

Employment growth by industry. Picture: SuppliedSource:Supplied

Are services sector jobs any good? We better hope so, because they’re what we are all going to be doing soon.

The shocking answer to the question is yes, they are good, mostly.

We tend to get stuck believing facts about the economy that applied 20 years ago, and we can be slow to catch up with the truth. We cling to the idea hard jobs making material things are the best jobs. But the truth is a lot of those good steady factory jobs are not that good any more. And not that steady either.

As the next graph shows, manufacturing jobs used to pay as well as jobs in a bank or a telecommunications company. Not any more. There’s a lot more money in those services sector jobs now. (These industries are some of the ones that are counted as “business services” in the chart above.)

Many service jobs are booming while others are stagnating. Picture: Supplied

Many service jobs are booming while others are stagnating. Picture: SuppliedSource:Supplied

We have this old-fashioned idea that service jobs are burger flipping, and yes, there’s entry level jobs like that, but lots of service sector jobs are doctors and nurses, lawyers and consultants.

Those are good jobs in many ways. Safe, well-paid jobs that you can do until late in life. But they are also good because it is much harder for international trade to undermine them. Chinese manufacturing may have caused the demise of a lot of Australian factories, but Chinese hospitals don’t do much to affect Australian hospitals. (That said, some people do travel to Thailand for cheap cosmetic surgery. There is some trade in medical services!)


Of course, the services economy does include some crappy jobs. Some of those household services jobs are not exactly lucrative. As the next chart shows, a career in hospitality has proved a particularly disappointing choice in the last couple of decades.

Pay growth since 1994. Picture: Supplied

Pay growth since 1994. Picture: SuppliedSource:Supplied

Education and training has also not shot ahead like some of the other services sector jobs. Healthcare and social assistance, which is one of the biggest employing industries in Australia and includes many well-paid jobs, sits just below the middle of the pack for pay growth.


The basic reason is simple: People are spending less on goods than on services. Goods industries fell from 34 per cent of the economy in 1985-86 to around 21 per cent in 2015-16. Services have taken up the slack.

Spending more on services is a good thing. It’s a sign we’re well-off as a nation. The RBA puts it like this: “As incomes rise, households typically spend more of their income on household services, such as health, education and restaurant meals, than on goods.”

That makes total sense to me. If I only had a few dollars I’d spend them on food and clothes. If I had many millions, I’d spend them on travel, advisers to tell me where to put my millions and gardeners to tend my estates.

Basically, after a while of earning more, we tend to admit we have enough stuff. In fact, if you’re aware of Japanese cleaning sensation Marie Kondo, you’ll know we actually have too much stuff. At least one delightfully polite Japanese lady has got rich by inspiring us to get rid of it. (Marie Kondo’s job, by the way, is definitely in the services sector.)

Hopefully, I’ve convinced you that not all services sector jobs are “burger flippers”. But while we are on the topic, how much money do burger flippers make?

McDonald’s pay is changing at the moment as a result of a big fight with the union, but in the first half of 2019, an 18-year old permanent employee at McDonalds would have been earning $14.56 an hour. An 18-year-old casual would have made $18.20/hour, while a 15-year-old casual would have made $10.40/hour.

These, clearly, are not high-paying jobs. But they can lead to higher-paid opportunities in the same organisation as this story shows. All the store managers, marketing gurus and financial people who work at McDonald’s HQ count as service sector employees. That’s the thing about the service sector. The bottom-end jobs are the most visible, but we shouldn’t forget the rest.

Jason Murphy is an economist. He is the author of the new book Incentivology. Continue the conversation @jasemurphy

Queensland Ag College futures still being worked through

Queenslanders will have to keep waiting to know what the transition plans for the Queensland Agricultural Training Colleges looks like.

The Department of Agriculture remains tight-lipped on the progress of the QATC transition project management office, saying only that it had met with shortlisted proponents and held group workshops in Longreach and Emerald to develop options for an operating model for each site.

“Progress in developing potential future operating models will be discussed at this month’s Local Community Stakeholder Committee meetings,” a spokesman said.

The public revisited the angst of the closure announcement when 25 QATC horses were sold above their reserve prices via AuctionsPlus at the end of August.

The highest price paid was $6100 for College Lil Bit of Chisum, a 2015 drop roan gelding registered with the Australian Quarter Horse Association, broken in but still requiring education.

Many of those sold were broodmares in foal to Eskdale West Red Acres, who has won led, ridden, cutouts (24 points) and placed in open and novice drafts.

Some 81 horses, at all five levels of riding skills required to undertake a training program, remain at Emerald and Longreach for potential future use, awaiting news of the model to be adopted when the facilities are repurposed.

Remember: Queensland Agricultural Training Colleges to close

An LCSC meeting was held in Longreach on Tuesday and another was scheduled for Emerald on Wednesday, each with a shortlist of six proposals to consider.

They include a mix of education, training, research and community organisations, with considerations of commercial uses.

Remote Area Planning and Development Board chairman Rob Chandler, one of the stakeholders at Longreach, said the last thing people wanted was for cobwebs to grow.

“The QATC is still fully operational to December 6, and it’s ruled by legislation. What that comes with is a lot of process,” he said.

“To the public, I say just keep supporting the idea of a future for the colleges and hopefully there’ll be something to announce within six to eight weeks.

“We just have to march through one step at a time.”

For AgForce president Georgie Somerset, the priority was ensuring a governance structure was in place that reflected industry need in the long-term.

“I don’t think any of us is clear on what the PMO hopes to have in place by the beginning of next year,” she said.

“A lot of work is happening on what might be delivered in the immediate future but AgForce would like to see some sort of governance in place that is community and industry focused.

“We’ve seen things change in 30 years and they will change more in another 30 years – who makes sure we continue to adapt and innovate?”

Cr Chandler put it a similar way, saying RAPAD had put its hand up as soon as the closure announcement happened last December, asking to be part of a transition away from an agriculture college at Longreach, to a college for an agricultural region.

“It’s a different world today, different skill sets are needed, and lots of ideas have been floated.”

Ms Somerset was confident that by January 1, whoever was taking over would try and deliver something to make their project work.

“Hopefully the process will move smoothly enough that those wanting to start, can,” she said.

The QATC website has more information about the transition process.


People smugglers take control of Australia’s visa system

Labor’s immigration spokesperson, Kristina Keneally, has launched another onslaught against the blowout of bridging visas under the Coalition’s watch, which has been fuelled by people smugglers:

Labor senator Kristina Keneally has credited the coalition government with “stopping the boats” but warned people smugglers are now bringing in asylum seekers by plane.

Senator Keneally is going on the offensive against the Home Affairs minister over a “massive blowout” in the number of asylum seekers who arrive in Australia by air.

Almost all of them are found not to be refugees, and they are then put on two to three-year bridging visas.

There are now nearly 230,000 people on bridging visas in Australia, and there are fears many of these people are being exploited in workplaces.

“Peter Dutton has lost control of borders at our airports,” Senator Keneally told Sky News on Sunday…

“Ninety per cent of these people are found not to be refugees,” Senator Keneally said.

“But they are coming largely from Malaysia and China – they are being sent here by criminal syndicates and illegal labour hire companies.”

Senator Keneally said people were being sent off to work in “quite exploitative, sometimes slavery-like conditions” in horticulture, hospitality and sexual servitude.

Immigration experts have backed Keneally’s concerns:

Criminal syndicates are using Australia’s “broken” visa system for human trafficking that is leading to the exploitation of foreign workers who are being paid as little as $4 an hour…

“Organised crime are indeed facilitating unlawful migration on a fee-for-service basis, using methodologies from fake identity documents, to gaming Australia’s visa system,” [John Coyne, the Australian Strategic Policy Institute’s head of border security] said.

“Australia’s border security arrangements are being exploited, and individuals who have not been appropriately identified are at times entering the country”.

“The Australian black economy is indeed being supported by organised crime, who along with businesses involved, are using these methods to exploit workers, and those involved are not paying taxes and are often remitting their salaries out of the country”…

Former deputy secretary of the department of immigration and border protection Abul Rizvi said the “eye watering” blowout in bridging visa numbers indicated a “sick system”.

“The people we’re talking about are generally vulnerable people. They will have little financial resources, and they are being exploited – they’re being exploited by criminals, and they’re being exploited by unscrupulous labour hire companies”.

As shown in the next chart, bridging visas have ballooned by around 110,000 since the Coalition was elected in 2013:

Last month former High Court justice, Ian Callinan, also warned that the Administrative Appeals Tribunal (AAT) was being flooded with bogus asylum seeker application, fuelled by organised criminals:

[Former High Court justice Ian Callinan] said “almost everyone” with migration law experience had told him there were applic­ants and representatives who “game the system, well knowing there is an automatic entitlement to a bridging visa”.

The Australian Skills Quality Authority told Mr Callinan that delays had repercussions beyond the AAT. It told him it was aware that organised crimin­als were sometimes, “perhaps even regularly”, benefiting from fake vocational training prog­rams or “ghost’’ colleges…

The AAT now handles about 59,000 lodgements a year: more than half (52 per cent) are migra­tion and refugee cases…

The AAT’s caseload of migra­tion and refugee matters doubled in the two years to June 30 last year…

And this surge in bogus applications has been driven, to a significant extent, by Malaysians using dodgy agents:

The Malaysian government this week acknowledged Malaysians seeking to earn money in Australia were scamming the country’s protection visa system by the thousands each year…

Malaysian Deputy Foreign Minister Marzuki Yahya told parliament there were few disincentives for workers to try their luck because it was so cheap to apply for a protection visa.

The worst that could happen was they would be sent home at Australia’s expense…

Nazuan Apis left Malaysia in late 2016 for Australia on a three-month online tourist visa, knowing he would likely overstay his welcome to earn money doing seasonal farm work.

But it was only after meeting a Malaysian work agent while working in a vineyard in Robinvale, Mildura, that he decided to apply for a protection visa in a bid to extend his work stay.

“He told me that if I wanted to stay in Australia I should apply for a protection visa. He said he could arrange it all for me for $100″…

Fifteen of his Malaysian housemates in Mildura, mostly farm workers who had also overstayed their visas, also applied for protection through the same agent…

In reality, the scamming of Australia’s visa system comes in many guises and includes, among other things:

  • Plane arrivals making bogus claims for asylum;
  • International students undertaking bogus ‘mickey mouse’ courses in order to obtain working rights and permanent residency;
  • Undocumented migrant workers paid well below market rates, facilitated via criminal syndicates and illegal labour hire companies; and
  • Employers hiring ‘skilled’ temporary migrant workers at below market rates around the minimum salary threshold of $53,900.

Put simply, the whole immigration system has been corrupted and desperately needs root-and-branch reform.


Training the workforce of the future

The importance of science, technology, engineering and mathematics (STEM) skills were highlighted during the recent federal election. With the election over, the sector is now focussed on the opportunities ahead. Manufacturers’ Monthly reports.

While the federal Coalition government, in its 2019 budget, recognised the need for greater enrolment of young people – and, in particular, young women – into STEM courses, the industry is calling out for action to help bring the Australian workforce up to speed with the rapid transformations in the industrial sector.

In delivering his budget, Treasurer Josh Frydenburg stated that the Coalition government would increase funding for programs encouraging the participation of women and girls in STEM. The budget papers detailed a $3.4 million package to support the greater participation of girls and women in STEM.

A report conducted by the Australian government, Towards 2025: An Australian Government Strategy to Boost Women’s Workforce Participation, found that today, men account for 84 per cent of all people who hold STEM qualifications. Less than 10 per cent of all engineering graduates in Australia are female, while in information technology (IT), only one in four graduates are women.

Geoff Crittenden, CEO of Weld Australia, noted that women are needed for industry to reach its potential.

“If we are to successfully deliver all the infrastructure and defence projects for the foreseeable future, we’re going to need almost as many women welders as we have men welders. We need to stop thinking about tradesmen and thinking about tradespeople and encouraging girls to get into their high vis and get out there,” said Crittenden.

The Minister for Industry, Science and Technology, Karen Andrews, stated that “to ensure our children can compete for jobs in the coming decades, we need to build a strong Australian workforce with more science, technology, engineering and mathematics (STEM) skills”.

Jonathan Russell, national manager for public affairs at Engineers Australia concurs, arguing that STEM skills will be needed, even if what industry will look like in the future is still unclear.

“I don’t think anybody truly knows what’s going to be needed in terms of technical skills in 10, 20, 30 years. What we do know though, is that engineering skills are going to be needed no matter what the future brings,” said Russell.

The federal government has increased funding for the SAGE initiative to encourage women to take up STEM roles.

Encouraging the young
To encourage more children and young people to pursue study and a career in STEM, the federal government will increase the funding of the Science in Australia Gender Equity (SAGE) initiative. This initiative, delivered in partnership with the Australian Academy of Technology and Engineering, implements the Athena Scientific Women’s Academic Network (SWAN) model for Australia. Developed in the UK, Athena SWAN is known internationally for encouraging gender inclusive workplaces, and helped institutions attract the best talent.

“SAGE helps to facilitate a journey of continuous improvement in gender equity and diversity by shifting culture and practices and encouraging initiatives for change used by higher education and research organisations,” said Dr Wafa El-Adhami, executive director of SAGE.

With Industry 4.0 requiring manufacturing workplaces to adopt technologies such as automation, artificial intelligence (AI), the analysis of big data and the industrial internet of things (IIoT), skills learnt in STEM fields will be essential.

Head of Workforce Development at Ai Group, Megan Lilly, highlighted the need for connections between training and industry.

“There’s no doubt that we need to increase the pipeline and talent pool of STEM graduates, therefore we need more funding both in the vocational and higher education systems for STEM based qualifications and we’re also very keen to make sure they’re applied learning qualifications where possible,” said Lilly.

To increase the visibility of STEM careers, the federal government has also allocated $15.1 million to the science museum Questacon.

The expansion of programming promoting science by the Canberra- based institution will connect the ideas and processes of STEM disciplines with the young minds who will be grappling with the rapid changes forecast to affect the sector as Industry 4.0 disrupts established methods of production.

Minister Andrews said that, with this expansion, the Coalition government was making an effort to reduce the barriers preventing young Australians from accessing science.

A key issue for the future of manufacturing industry is its ability to attract talented young people, who are often drawn to other career paths, as Crittenden highlighted.

“You can pump money into STEM training, and that’s a very laudable practice, but it doesn’t really resolve the issue. The issue is, what drives young people into engineering? This is the real problem; how do we make manufacturing attractive for young people?” said Crittenden.

For those students at a later stage of their education, the 2019- 2020 budget also provided funding for 15 Innovation Games over two years. The $3.6 million in funding is earmarked to to not only go to metropolitan areas, but regional areas as well. In a statement, Andrews highlighted that the Innovation Games provide the opportunity for university students and graduates to apply the skills learnt in the STEM classroom to real world problems, for the benefit of local businesses.

Other federal government agencies, such as CSIRO, whose funding increased by $6 million in line with indexation, have continued to pursue projects to encourage young Australians to pursue a career in STEM. Generation STEM, a ten-year initiative run by the CSIRO in NSW, aims to both ensure that students have the knowledge and skills for the 21st century, and enable industry and employers to connect with the talent they need in a competitive economy. Targeting diverse and top-level students, the program hopes to attract and retain students to the STEM fields.

The domestic space industry also got a boost in the most recent federal budget. First announced in 2018 with a $300 million investment, this year the federal government increased funding by $19.5 million with a Space Infrastructure Fund. Hoping to create 30,000 jobs in this sector by 2030, the announcement of further funding in this budget provides motivation but is only the first step, according to Lilly.

“We should build the enthusiasm of young people for space, but also advanced manufacturing, digitisation and a whole range of emerging industries and occupations. We welcome the space funding, but we see it as but a beginning,” said Lilly.

Described by Frydenburg as “backing the industries of the future,” investment in the space sector will be hoped to spur investment elsewhere in high-tech manufacturing and provide demand for those who have studied in STEM fields.

A similar approach is being taken in the medical research sector. While medical research and development occurs in our higher education institutions, the federal government has set aside $254 million for the commercialisation of medical research. The application of medical research to commercial outcomes has the potential to spur investment in manufacturing processes which support medical procedures.

These proposals are not without their critics. Professor John Shine, president of the Australian Academy of Science, criticised cuts elsewhere in the budget. “It is counterintuitive to seek to produce a surplus by cutting the knowledge economy and by cutting funding to Australia’s key science and research agencies such as the Australian Research Council,” said Shine.

In addition, Professor Emma Johnston, the president of Science and Technology Australia (STA) argued that research in other fields is in need of commercialisation.

“A complementary Fund to support the translation and commercialisation of knowledge built through non-medical science research programs would amplify the economic returns that STEM brings for Australia,” Johnston said.

The federal government will continue be pressured by industry leaders to use the forecast future surpluses to further ensure that advances in STEM knowledge are applied to industry outcomes and encourage young men and women to pursue a career in STEM.

Looking forward
Industry concerns about the gap in the skills required to place Australia in a competitive position within the global economy have vindicated by research. Examining demand and supply for digital skills in Australia, a recent RMIT study found that many employers are unprepared for the digital future of work and risk being left behind.

The team of researchers from RMIT University’s College of Business, led by Associate Professor Victor Gekara, compiled the Skilling the Australian workforce for the digital economy report for the National Centre for Vocational Education Research (NCVER).

Gekara said that the changing nature of Australia’s industrial landscape, under the pressure of global competition, was leading to rapid transformation in workplaces. “Despite this reality, the adoption of digital technology across many of the organisations we studied was gradual and restricted, rather than rapid and comprehensive,” Gekara said. “This is concerning.”

Gekara explained that the lack of preparedness was usually due to cost considerations, over-reliance on the open market to prepare the workforce, or mere complacency. The report calls for a comprehensive Australian national digital skills framework, similar to the Australian Core Skills Framework for numeracy and literacy skills, as a sustainable approach to meeting demand.

“This would assist employers to identify digital skills gaps and help training providers to develop targeted training programs,” Gekara said.

The report also indicated that many employers lack confidence in the capacity of the current VET system to effectively develop the digital skills required for highly digitalised economy that is emerging. There is also industry uncertainty about what is required from in the shape of government policy intervention to ensure that digital skills in Australia were adequately developed.

The report called for government and industry to work together more closely with the VET sector to ensure the skills necessary for future workplaces are guaranteed.

“The only way to have an effective and sustainable system for developing these kinds of
skills is when you have employers committed to invest in training efforts and working closely with training providers to identify need, design programs and monitor their application under a strong relevant national policy,” Gekara said.

Recent research undertaken by Swinburne University of Technology, PwC, Siemens and the Australian Manufacturing Workers’ Union (AMWU) – as part of the Australian Industry (Ai) Group Industry 4.0 Forum agenda – has identified the ways in which manufacturing businesses and workforces must adapt to changes being wrought by Industry 4.0.

The research report, Transforming Australian Manufacturing: Preparing businesses and workplaces for Industry 4.0, emerged from the work of the Industry 4.0 Advanced Manufacturing Forum Workstream co-chaired by Swinburne’s Professor Aleksandar Subic, deputy vice-chancellor (research and development) and Andrew Dettmer, AMWU president.

Launched during National Manufacturing Week, the report provides information and advice for government, industry, unions and peak employer bodies, and education/research institutions.

Focussing on the changes being made by Industry 4.0, the report calls on industry, education, unions, peak bodies and government to collaborate to drive innovation and workforce transformation. Among its eight recommendations, the report proposes that new funding, delivery and accreditation models be created to support lifelong learning, reskilling and upskilling throughout the work lifecycle.

The report also identifies the emerging skills that the manufacturing sector requires, including in intelligent data analytics, automation systems, cyber security, and IIoT. According to the report, this will require the upskilling of existing workers for changing jobs, as well as the recruitment of new entrants to the manufacturing workforce.

Subic said that the report presents findings that include international and national best practice of workforce transformation initiatives in the advanced manufacturing sector. “In order for Australian companies to access global value chains and associated benefits within an emerging Industry 4.0 world, our businesses and government must actively encourage and support new skills development in advanced industrial digitalisation across the entire continuum, from vocational training to higher education and PhDs,” Subic said. “This requires disruptive innovation in education and training based on new models of public and private sector partnerships.”

Research indicates that skills in data analytics and IIoT are becoming increasingly necessary in manufacturing.

Getting government on board
According to STA president Emma Johnston, the re-eleciton of the Coalition government had given it a mandate to continue their work in setting a clear and strategic direction for the STEM sector.

“We encourage the new government to work with the science and research sectors to craft a formal plan and prioritise bold investment that empowers the Australian science and technology sector to secure the nation’s prosperity,” said Johnston.

“The National Science Statement in 2017 was a good first step, but we hope to see the sector provided with a strategic plan that enables it to most effectively contribute to Australia’s prosperity.”

The reappointment of Karen Andrews as federal industry, science and technology minister in the Morrison cabinet has been welcomed by sectors of Australia’s science and technology community.

Andrews was first appointed to the role in August last year after Morrison became prime minister. Morrison announced Andrews would continue in her ministerial role in the new cabinet.

“Karen Andrews will work closely with industry stakeholders to create more and better paid jobs in traditional and emerging industries, and to continue championing science, technology, engineering and mathematics as key career paths for women,” Morrison said.

Johnston welcomed the return of Karen Andrews to her portfolio, and said it was an opportunity the stability the sector had been looking for.

“Minister Andrews has engaged meaningfully with scientists and technologists for many years as co- convenor of the Parliamentary Friends of Science, and recently as minister, and STA looks forward to continuing to work with her office as we represent tens of thousands of STEM professionals,” said Johnston.

She said the Coalition had begun some important projects in government and the sector was looking to them to continue this good work.

“We saw bold investment in research infrastructure, a visionary National Science Statement, and leadership in gender equity from the Coalition government,” she said.

“Now we hope the focus turns to forming a detailed whole-of- government plan for STEM; a plan that prioritises stronger government and business investment, attractive STEM education programs, and secure employment for all STEM professionals.”

Professor John Shine said that Andrews had been strong advocate for the science, technology, engineering and mathematics (STEM) sector.

“A STEM-skilled MP in this portfolio provides the new Morrison government with a minister who has a deep understanding of the issues facing the sector,” Shine said.

“We look forward to working with Minister Andrews to implement the STEM measures announced in the Federal Budget in April budget, including $3.4 million in new funding to support women in STEM.”

After Labor’s election loss, federal Labor Senator Kim Carr announced that he would not renominate as shadow minister for innovation, industry, science and research, ending a two-decade stint on the frontbench in both government and opposition.

“For much of my time in Parliament I have been the Labor Party’s spokesperson on innovation industry, science and research. Innovation policy is critically important to the Labor movement. It is the thread that draws industry, science and research policy together,” Carr said.

“Labor will always seek to work with industry, unions and researchers to develop a 21st century industrial structure that will ensure prosperity for all Australians.

“My policy interests remain. I shall continue to advocate for the modernisation of Australian industry, and for restoring science and research policy to the centre of government,” he said.

Johnston said Carr will be remembered as a dedicated advocate for the STEM sector. “Whether it was the introduction of the Excellence in Research Australia initiative to measure the calibre of our work, the establishment and defence of the Education Investment Fund, or his dogged pursuit for transparency in Senate Estimates, Senator Carr will continue to have an enduring impact on Australian science and technology,” Johnston said.

Brendan O’Connor has been made the shadow minister for employment, industry, science, and small business, while Clare O’Neil has been appointed as the shadow minister for innovation, technology, and the future of work.

Johnston said she was pleased that the Labor opposition had given science, technology and research prominence in its shadow ministry. “Both [O’Connor and O’Neil] will bring a breadth of experience to the roles, and we hope to engage with them to discuss how to support the solutions sector to build a strong future for Australia.”


Australia’s VET system set to shape our future workforce

The Morrison Government’s renewed commitment to the Vocational Education and Training (VET) sector will make it central to shaping Australia’s workforce for the future.

Speaking at the 28th National Vocational Education and Training Research Conference today, Minister for Employment, Skills, Small and Family Business, Senator Michaelia Cash, said she would lift the profile of Australia’s VET sector and aim to make it the first choice in post-school learning for millions of Australians.

“It is a valuable career choice for many Australians and should not be seen as being something less important than a university degree,” Minister Cash said.

More than 4 million people undertook vocational education and training in 2017. At the end of last year, there were more than a quarter of a million apprentices and trainees.

“We know that people with VET qualifications are highly regarded and sought after by employers, but we need more people to choose VET as their path to success,” Minister Cash said.

“The Morrison Government already has in place a number of programs and tools designed to increase the profile of the sector and encourage more Australians to choose a VET qualification.

“These programs will be especially important because, as our economy evolves and our workforce changes, VET will be the way we train and re-train the workforce of the future.

Minister Cash also delivered a message to education providers of the VET sector that more cooperation with industry was required to create better outcomes for students.

“Employers look to vocationally trained workers because of their suitability in skills and experience. Australia’s VET system must better connect with industry, respond to community needs, and have clear, consistent funding.

And with the growth in the VET sector, Minister Cash said there was always room for improvements.

“The sector still bears some of the scars of Labor’s mismanagement of bad student loans, underfunded courses, quality issues and the diminishing of TAFE.

“It is this Government’s promise to continue the hard work of reforming the sector, providing better quality courses, and better outcomes for trainees and employers.”

The Australian Government’s $525 million Delivering Skills for Today and Tomorrow package announced in the April Budget will also ensure that the sector can help supply Australia’s future workforce.

The package provides every Australian with the opportunity to grow the skills needed to succeed in an evolving workforce and, concurrently offers employers a pipeline of qualified workers they need to grow and prosper.

Minister Cash said the package reflects the Morrison Government’s commitment to growing the number of new apprenticeships.

“Under our landmark skills package, up to 80,000 additional apprenticeships will be created over the next five years in priority skill shortage areas, assisted by new apprenticeship incentives. Youth unemployment will be targeted with an offering of 400 scholarships in regional Australia to the value of $8 million.

“The Government is committed to creating more than 1.25 million jobs over the next five years and I’m confident that more and more of the people filling these positions will be coming to employers through the VET system,” Minister Cash said.

/Public Release. View in full here.

Ghana now 81st member of WorldSkills

Matthew Opoku Prempeh   EducMatthew Opoku Prempeh, Education Minister

Ghana has joined the rest of the world to compete on the job market in terms of skills following its approval as the 81st member of WorldSkills International.

The West African nation was one of six countries to take part in the first WorldSkills Africa Competition in Kigali last year, winning five medals in the Rwandan capital, including gold for Cooking, and silver in Hairdressing and Electrical Wiring.

It was introduced to the WorldSkills movement following a UNESCO conference in China and confirmed its intention to join after visiting WorldSkills Abu Dhabi 2017.

A statement posted on the website of WorldSkills International says “Ghana joins in time for WorldSkills Kazan 2019, and will also be taking part in its first General Assembly in Russia”.

It becomes the seventh African country to join WorldSkills and the first from West Africa.

Speaking recently, Dr Fred Kyel Asamoah, the Executive Director of Ghana’s Council for Technical and Vocational Education and Training (COTVET), said “The country’s aim is to be a center of excellence for technical and vocational education and training.”

“Our membership at the WorldSkills International will mean that we will be competing with all the youth in the world about the latest or current skills that is in the world so that we don’t just fall behind,” he said.

“Being a member of WorldSkills means that Ghana will be competing not only within Ghana or Africa but competitive on the job market as far as the world is concerned.”

With a population of around 30 million, Ghana is a West African country with roots that go back to the Middle Ages and the 17th Century Ashanti empire.

Formally known as the Gold Coast it declared independence from Britain in 1957, and is now a member of the African Union, the Non-Aligned Movement and the Commonwealth of Nations.

It is the world’s second largest producer of cocoa, with substantial reserves of oil and gold. The country also developed Africa’s first mobile phone network in 1992. Over 95 per cent of Ghana’s children attend school, one of the highest rates in Africa.

“We are delighted to welcome Ghana as the 81st Member of WorldSkills and look forward to their participation in WorldSkills Kazan 2019,” said Simon Bartley, WorldSkills President. “This is another important milestone in the expansion of our global mission to bring the power of skills to young people across the world, and in particular to Africa and the developing world through our Vision 2025.”

Familiar faces in new Australian gov’t ministry

A week after the government’s surprise re-election, Australian international educators have received further continuity after the announcement that all but one position overseeing the country’s education sectors remain unchanged.

Familiar faces around Canberra, after ministerial positions overseeing education remain largely unchanged. Photo: Unsplash.Familiar faces around Canberra, after ministerial positions overseeing education remain largely unchanged. Photo: Unsplash.

Announced by prime minister Scott Morrison, the new cabinet sees Dan Tehan retain the education portfolio and Michaelia Cash remain as employment and skills minister, a move welcomed by the higher and vocational education sectors.

“The coming three years presents Australia with a real opportunity”

“We see continuity as paramount in what are turbulent geopolitical times when it has never been more important to ensure policy stability in the areas of defence, trade and education,” said chief executive of the Group of EightVicki Thomson.

“All portfolios the Go8 contributes to by way of research, international engagement and educating the future workforce required to underpin our national economy.”

The focus will likely remain the same for both educators and the government

The only change in terms of education, Steve Irons was announced as assistant minister for vocational education, training and apprenticeships within the employment and skills portfolio. He replaced Karen Andrews, who retained her science and technology portfolio.

“The coming three years presents Australia with a real opportunity to

restructure the tertiary education system so that there is greater integration between the higher education, vocational education, training and skills sectors,” said Troy Williams, chief executive of Independent Tertiary Education Council Australia.

“Quality is very much front and centre of ITECA’s culture and that of our members; however, it’s clear that there is a significant degree of regulatory overreach that’s doing little to support quality student outcomes.”

With ministerial positions overseeing education remaining consistent, the focus of the past eighteen months will also likely remain the same for both educators and the government in the near future.

Ongoing government directives have seen an increased focus on regional education, including boosting the number of international students outside of metropolitan areas, as well as concerns around English proficiency.

The Regional Universities Network welcomed Tehan’s reappointment, with chair Helen Bartlett saying the organisation looked forward to the future implementation of the National Regional, Rural and Remote Education Strategy.

Universities Australia, which has been combatting successive funding cuts within the university sector, meanwhile pledged to continue to work towards increasing access to higher education, and reminded Tehan of his comments that it was “the great enabler”.

Employer incentives may not be the most cost-effective or fair way of boosting apprenticeship number

The Coalition has promised to create 80,000 new apprenticeships in areas of skills shortages if it wins the election. Most skilled trades (such as motor mechanics, panel beaters, carpenters, automotive electricians, plumbers, hairdressers) have recently been in shortage.

The Coalition aims to reduce the shortages through doubling employer incentive payments, making cash payments to apprentices and creating training hubs in regional areas and other areas of need.

Labor said it would pay upfront fees for 100,000 TAFE places. Labor has also said it would provide incentives for employers and apprentices for an additional 150,000 apprentices.

It’s clear trade apprentices and associated skills shortages are a central concern of both parties. But it’s not clear providing incentives is the best way to handle the issue, as history shows government incentives to employers have made little difference to the (mostly male) trade apprenticeship numbers.

Difference between apprentice and trainee

In considering the policies of both parties, it’s important to understand the differences between longer-term trade apprenticeships and shorter-term traineeships.

An apprentice, in the narrow use of the word, is contracted in a tradesuch as that of an electrician, carpenter, chef or hairdresser. An apprenticeship can take up to four years to complete. Trade apprentices make up a small proportion of the vocational education and training sector – around 14% of all government funded vocational students.

Many of the main trades frequently appear on the skills shortage list. Shortages are seen to inhibit productivity in industries and the broader economy.

Traineeships were established in the late 1980s to provide apprentice-type training for young people in non-trade occupations such as sales and clerical, and many of the care occupations including disability and aged care.

The aim was to provide options, particularly for early school leavers, which combine work experience and learning on the job. It was hoped this would enhance early school leavers’ job prospects and add to the stock of skills in the economy.

Traineeships usually take one to two years to complete, much shorter than trade apprenticeships.

History of incentives

From the 1970s, the federal government had been providing financial incentives to employers of trade apprentices. The states also provided assistance. From the mid-1990s the federal government extended incentives to trainees, existing workers and to part-time and older workers.

Together with the introduction of a low training wage for trainees, the incentives led to a rapid expansion in the numbers of trainees in the late 1990s and to new training modes including fully on-the-job training. There was a sharp increase in the number of training organisations as employers were allowed to choose a private or public provider for off-the-job training (often one day a week).

Traineeships are different from apprenticeships, and are usually in non-trades such as clerical occupations. from

1999 review into the system found some firms were using traineeships as a source of wage subsidies and, in many instances, provided little training to the trainees. For some, the skills acquired were not valued by employers over general work experience obtained during the traineeship. And the issue continued into the next decade.

In 2011, an expert panel noted Australia was the only country that paid government incentives, on a large scale, to employers of apprentices and trainees. The panel reported research that showed incentives paid to employers for the shorter traineeships represented a significant part of the wage costs (in some cases about 20%) and contributed to the large increase in trainee numbers.

For the longer, and more costly, training of trade apprentices, government payments to employers represented a much smaller proportion of the wage and training costs. And so, the incentives had only a marginal effect on the numbers of trade apprentices employed.

The expert panel suggested the government would be better to confine its payments to programs that added value to the economy, such as those in community services, health and information technology.

The panel also recommended the government not give funds directly as incentives to employers. Instead, both employers and government would pay into an employer contribution scheme. Employers who met benchmarks such as a strong induction process and effective mentoring would have their contribution rebated, either in part or in full.

These recommendations were particularly aimed at the non-completion rates of apprentices – on average less than half complete their apprenticeships with their first employer. The most common reason given is dissatisfaction with the employment experience including difficulties with employers or colleagues.

Drop in trainee numbers

The government at the time didn’t take up the recommendation of an employer contribution scheme. It retained incentives for apprenticeships in trades on the national skills needs list such as construction and telecommunications, and for traineeships in priority occupations in aged care, childcare, disability care and nursing.

It abolished incentives for existing workers in other traineeships. Together with cuts in state subsidies to the providers of off-the-job training in some courses, these changes led to a large fall in traineeship numbers.

For example, by 2018, traineeships in clerical and sales had fallen by more than 70% from 2012. Older and female workers were most affected.

But the numbers of starting apprenticeships in trades in the last ten years in the largest three groups – construction trades, automotive and engineering, and electrotechnology and telecommunications – is virtually unchanged. And a fall in automotive was offset by increases in the others.

These results were largely in keeping with intentions of the expert panel in 2011.

A male dominated industry

Trade apprenticeships are male dominated. In 2018, 65,000 males started trade apprenticeships compared to 9,000 females. And females bore the larger share of the reduction in traineeships since 2012. It seems unlikely many of the women who missed out on traineeships are among the entrants to higher education where women form the majority of undergraduates.

The available research shows electrotechnology and telecommunications trades and construction trades graduates are relatively well paid, while hairdressers are the worst paid.

Trade apprentices are already the best-supported VET students during training. They can access trade support loans of up to $20,000 over four years – with a 20% discount of the debt on completion. Apprentices can receive allowances for living away from home, and the government provides support for adult apprentices as well as rural and regional skills shortage incentives.

Employment of apprentices and their mentoring is assisted by the Australian Apprenticeship Support Network, at an annual cost of nearly A$200 million.

State governments also provide additional support for employers and apprentices. For instance, Queensland has a program including schemesaimed at the unemployed. Western Australia has announced the provision of employer incentives in its 2019 budget. NSW has abolished tuition fees for apprenticeships.

Extra government incentives to improve apprenticeship numbers do not seem to be the most effective, or equitable, policy. The next government must undertake a comprehensive review of incentives and all other forms of apprenticeship assistance.

The review should revisit the advice of the 2011 expert panel and ideally, should be conducted in the context of a review all tertiary funding (similar to what Labor is proposing).

China helps to build skills worldwide

Editor’s note: This year marks the 70th anniversary of the founding of the People’s Republic of China. This is part of a series looking at significant developments in various fields as China increases its interaction with the world.

Thai student Kapak Waiyarith slowly lowered the toylike contraption on her palm into the cardboard maze, setting its sensor lights flashing and wheels in motion.

The whirring device – part of an international “micromouse” robotics competition – crashed into a partition of the labyrinth less than three seconds later, after moving just a fraction of the distance covered by Chinese competitors’ similar devices.

“It’s hard to keep up, but learning and improving from the experience is more important,” said Kapak, 24.

The student from Phranakhon Rajabhat University in Bangkok was among those taking part in the competition in North China’s Tianjin municipality last week, when participants raced miniature autonomous robots to map out and complete the maze.

The event at the Tianjin Bohai Vocational Technical College marked a high point in Kapak’s two months of artificial intelligence and robotics training in the city, where she acquired crucial skills to equip her for the global marketplace.

Kapak is among an increasing number of recipients worldwide of skills transfer under China’s Luban Workshop vocational education program.

The workshops are named after Chinese craftsman and inventor Lu Ban of the Spring and Autumn Period (770-476 BC), who was revered as the embodiment of professional and technical excellence.

Since the launch of the first Luban Workshop overseas center three years ago at Ayutthaya Technical College in Thailand, the program, led by Tianjin municipal authorities under the guidance of the Ministry of Education, has spread to educational institutions in the East and West.

At least eight program workshops have been established in Asia, Africa and Europe, with skills training and certification involving more than 4,000 people in nearly 20 fields, including transportation, mechanics and new energy, according to Tianjin education authorities.

The workshops, whose topics range from electromechanical integration in Cambodia and photovoltaic applications in India to railway operations in East Africa’s Djibouti and culinary courses in Britain, also align with the Belt and Road Initiative’s focus on global cooperation in economic and social development, they said.

The training sessions adopt a practical, innovation-oriented approach to learning.

At an international forum at the Tianjin Vocational Institute on Friday, when attendants took stock of the program’s achievements against the backdrop of the 70th anniversary of the founding of the People’s Republic of China, Lyu Jingquan, deputy director of the Tianjin Education Commission, said the training sessions form a “Chinese brand of vocational education” offering the best of the country’s technical expertise.

“One of the main reasons behind the rapid development of the Chinese economy is its vocational education and training,” he said.

“On that basis, we will share our best qualities and results with the countries and our partners for shared progress.”

Jose Pedro Magalhaes Lucas, who is in charge of the Luban Workshop at the Polytechnic Institute of Setubal in Portugal, said, “The benefits of the program have been enormous”. Since late last year, the institute’s workshop students have been trained in areas such as electrical automation, advanced manufacturing and artificial intelligence.

“Our teachers have also been given the opportunity to develop more research capabilities and access to equipment, helping to develop our supervision systems for industry. Then there is the interaction between students and teachers fromboth countries, fueling international and cultural experience,” said the engineering professor, who specializes in electronics and automation.

Portuguese student Hugo Frazao, 22, has participated twice in the workshop program in Tianjin, for about a week each time, and also has had opportunities to hone his automation and instrumentation skills through competitions.

“With this program, you can apply what you’ve learned through the laboratories and innovate. You can become very good at what you do. You communicate with each other, make improvements and it’s very good for our skills and the industry.”

Similarly, at Thailand’s Ayutthaya Technical College, those taking part in railway operations training have participated in skills competitions as part of their vocational education.

College Director Jarun Youbrum said Thai authorities “place a lot of emphasis on Luban Workshop cooperation and greatly value it”. Many exchanges have also been conducted under the program, with representatives from other countries observing and learning from the sessions, he said.

“Every year, we have on average more than 100 recipients of Chinese funding support for education, making it one of the largest and most significant educational sources of its kind for us and helping to raise the profile of our college,” Jarun said.

“Moving forward, we would like to focus on our own teaching competencies for our educators to better receive and learn Chinese capabilities,” he said.

“We need to use this China-Thailand cooperation platform to help Thai vocational education move toward internationalization.”

Luban Workshop organizers said the training will continue to cultivate technical talent to power growth in countries participating in Belt and Road infrastructure and development projects, with at least 14 more centers in the works worldwide.

Zoon Ahmed Khan, a Pakistani research fellow at the Belt and Road Strategy Institute of Tsinghua University, said vocational training is a key aspect of infrastructure projects under the China-Pakistan Economic Corridor plan. “Cooperation with Luban is significant. It’s not just timely, it’s very visionary. It’s a very successful model.”