Better support for apprentices and employers Andrew Lalor June 2014

Vocational Education and Training Reform A priority to strengthen the influence and role of Industry and business in VET A need to simplify governance, reduce complexity and clarify responsibilities A focus on quality Stronger support to help apprentices complete and employers to engage Heightened role of skills to help industry adjust to new competitiveness agenda New priority for world-class skills A deliberative dialogue with all players in the sector

These priorities are framed by New drive for productivity Source: The Conference Board Total Economy Database, 2013

These priorities are framed by The imperative to lift competitiveness, facilitated by de-regulation Source: Peter Harris, Productivity Commission. Speech, “Productivity and the National Income Outlook”.

There are challenges of adjustment Proportion of all employed people in the production and services industries, 1966– 2011 Proportion of all employed people in the blue and white collar occupations, 1966– 2011 Source: Australian Workforce and Productivity Agency, July 2012 Future focus: Australia’s skills and workforce development needs A discussion paper for the 2012 National Workforce Development Strategy

Long Boom Smart Recovery Terms of Trade ShockRing of Fire Postgraduate Undergraduate Advanced diploma Cert III and IV Cert I and II Total Cert III and above Average annual change in projected demand for qualifications, employed, unemployed and not in the labour force 2011–2025 (%) There are challenges for growth Source: Deloitte Access Economics (2012) ‘Economic modelling of skills demand and supply’, output model (demand)

There are challenges for entry-level training Employment-to-population ratio, Jan 2000 to Dec 2012, indexed (Jan 2000=100)

Priorities are reflected through the Budget Industry Policy  Government is responsible for creating the right environment  De-regulation  Support entrepreneurship  Disperse technology and innovation  Responsive skills system  Driving growth in areas of competitive advantage  Growing businesses creates jobs

Priorities are reflected through the Budget Skills  Streamlined and targeted funding  Industry Skills Fund to support new areas of competitive advantage  Health and biomedical products  Mining equipment technology services  Oil and gas equipment technology and services  Advanced manufacturing  Trade Support Loans  Ongoing support for apprentices and employers  Ongoing support for training of job seekers  Skills for Education and Employment  Adult Migrant English Program

Priorities for Apprenticeship Reform  The transforming power of ‘Situated Learning’  Employers increasingly recognising the need for skilled workers  Competency is refined in a work setting  Need to minimise jobless training  The power of ‘activated’ employers

Apprenticeship Reform - Support  Improved outcomes through improved support  A national service footprint  Mentoring has proven effectiveness  31 mentoring projects  25,400 apprentices  1070 mentors  5.2 percentage point increase in retention  Strike the right balance  Financial incentives vs support

Apprenticeship Reform - Harmonisation is critical Apprenticeship/Traineeship Variation –Type and Duration Occupation/Qualification ACTNSWNTQLDSATASVICWA Food Processing Operator: Cert III – Food Processing Type – Apprenticeship (A)/Traineeship (T) TTTTTTTT Duration (months) 2418, Hairdresser: Cert III - Hairdressing Type AA AAAAA, I* Duration 4833, , Tree Surgeon (Arborist): Cert III – Arboriculture TypeATTATATT Duration4824, ,3612 * I = Industrial Trainee in WA only  National consistency needs a two pronged approach:  Address the current problem  Ensure national consistency into the future  Commonwealth and the States and Territories are working collaboratively to achieve system efficiency, flexibility and mobility

 Concessional income contingent loan of up to $20,000  For apprentices in priority areas to assist them to complete their apprenticeship  To assist with the costs of living and learning while undertaking an apprenticeship  A 20 per cent discount to the amount borrowed if the apprentice completes  Loans repaid through the tax system when their income meets the repayment threshold ($53,345 in )  Legislation is currently before Parliament for 1 July 2014 commencement Apprenticeship Reform – Trade Support Loans

DEPARTMENT OF INDUSTRY Industry House 10 Binara Street Canberra City, ACT 2601, Australia Telephone