Skilling fund gets Senate committee tick

A Senate committee has rubber-stamped the financing mechanism for the federal government’s $1.5 billion skills fund, brushing aside fears that the revenue source is unreliable, inadequate and “increasingly unsustainable”.

The Liberal-dominated Education and Employment Legislation Committee has recommended that the Senate pass the bill, which is designed to bankroll the Skilling Australians Fund through a levy paid by employers of skilled migrants.

The committee said the government should clarify refund arrangements for employers whose visa applications proved unsuccessful, or whose migrant workers quit without seeing out their visas. Otherwise the bill should pass unchanged, the committee said in a report released this afternoon.

The surprise package of last May’s federal budget, the SAF would bankroll the training of some 300,000 extra people. While the government has injected about $260 million from general revenue, the bulk of the money will come from the levy.

Doubts whether the levy could raise the $1.2bn required were exacerbated last month, when figures emerged showing that the number of newly granted skilled visas had plunged by more than one-third.

The concerns were articulated in a submission to the committee from the National Apprentice Employment Network. “The vocational education and training sector should never be in a position where the best it can do to ensure sustainable funding for apprentices is to encourage increased skilled migrant employment.

“That would counter the primary purpose of this fund,” the submission adds.

The committee acknowledged the “fluctuating” revenue base, but said the income would be sufficiently stable. “Should the projected revenue not be achieved, the SAF will be able to be administered in such a way that does not impact on its sustainability or effectiveness,” the report adds.

A dissenting Labor report slams the “lack of guaranteed and stable funding” and expresses scepticism over the fund’s target of 300,000 extra apprentices and trainees.

It cites Productivity Commission findings that “the VET system is a mess” and says the fund “fails to meet the challenges in VET”. It offers six recommendations including a guarantee of “adequate additional funding” if the levy does not generate enough money.

Separately, the Parliamentary Library released its analysis of the SAF legislation on Wednesday. While its report lauds the fund’s aims, it says the outcomes “will ultimately rely on implementation arrangements well outside the scope of these bills”.

“Revenue collection for the SAF generated from the proposed levy will need to be followed closely over time,” the report says.

It cites The Australian’s modelling that the levy will not raise enough funds, and notes that the government has not released its own modelling. It also notes demographer Bob Birrell’s prediction that employer sponsorship visas will decline by two-thirds, saying this would “substantially reduce incoming revenue for the SAF”.

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