$9 billion overhaul for “inadequate” skills training system

Prime Minister Julia Gillard has unveiled a $9 billion package aimed at overhauling trade training and addressing skills shortages, after the current system was labelled inadequate.

According to a skills report released by Gillard today, titled Skills for all Australians, funding additional training places is no longer an adequate response to the skills shortage.

The report said all governments must work to create a training system that enables more businesses to partner with it, in order to develop their workforces.

The system also needs to give more students the basic qualification they need for a decent job in a higher-skills economy, and enable taxpayers to be assured of efficient and effective spending.

Last week, Skills Minister Chris Evans said Australia will suffer a skills shortage of nearly half a million workers if the training system is not “radically transformed”.

Senator Evans said Skills Australia has estimated that in the five years to 2015, Australia will need an extra 2.1 million workers with higher vocational education and training qualifications.

Some 1.6 million people are expected to complete a VET qualification at a Certificate III level or higher by 2015, nearly 500,000 fewer than needed.

Evans said research found that 83% of people with a Certificate III qualification or higher are employed, compared with only 57% of those who left school early.

This gap will widen if action is not taken, Evans said. At present, more than four million people in the labour market do not have a post-school qualification.

Skills shortages are already widespread across the economy. The mining sector is expected to require 36,000 additional tradespeople by 2015.

NSW alone needs an extra 320,000 trained trade or diploma-educated workers over the same period.

As a result, the Government is putting up an extra $1.75 billion for the states in a bid to overcome skills shortages, with Evans describing the initiative as a “major reform package”.

According to Evans, total funding for skills and training will come close to $9 billion over the next five years.

In return, the states and territories will have to adopt reforms such as the harmonisation of courses across Australia.

The reforms are aimed at improving the quality of courses offered by training providers such as TAFEs and colleges, and ensuring they meet the demands of business to address skills shortages.

Under the offer, NSW will receive $2.8 billion over five years, Victoria $2.2 billion, Queensland $1.8 billion, South Australia $650 million, WA $930 million, and Tasmania $200 million.

However, South Australia is the only state to indicate it is willing to sign up to the deal, which is due to start from July 1.

Evans has already warned that the Government is prepared to redirect training funding away from state coffers if they refuse to sign up to the reforms.

According to Innes Willox, Australian Industry Group executive designate, the skills package “brings a sharp focus” on reforming and lifting the performance of Australia’s skills development system. 

“Employers work in a national economy; we encourage the states and territories to embrace these important reforms, which are in the national interest,” Willox says.

The Australian Chamber of Commerce and Industry also welcomes today’s announcement.

“We are particularly pleased that there is a strong emphasis in the agenda on quality of training,” ACCI’s Jenny Lambert says.

“Employers and students alike need confidence in the system, and the training qualifications being delivered by providers are most useful if they are recognised by employers and other training providers as meeting or exceeding expectations as to the level of skills.”