Skills Australia Amendment (Australian Workforce and Productivity Agency) Bill 2012 [Provisions]


Skills Australia Amendment (Australian Workforce and Productivity Agency) Bill 2012 [Provisions]

Reference

1.1        On 22 March 2012, the Senate referred the provisions of the Skills Australia Amendment (Australian Workforce and Productivity Agency) Bill 2012 (the bill) to the Education, Employment and Workplace Relations Legislation Committee for inquiry and report by 8 May 2012.[1]

Purpose of the Bill

1.2        The bill seeks to amend the Skills Australia Act 2008 (the Act) to replace Skills Australia with a new agency, the Australian Workforce and Productivity Agency (AWPA). This will enable the government to meet its 2011 Budget commitment to transition Skills Australia to AWPA from 1 July 2012.

1.3        The bill sets out two key functions for AWPA: to provide the government with independent advice on workforce skills and workforce development needs, and to provide advice on the allocation of Commonwealth funding. In providing this advice, AWPA would identify training priorities, helping to increase workforce participation, improve productivity and competitiveness, identify and address skills shortages and promote the development of a high skilled workforce.[2]

Conduct of the inquiry

1.4        The committee advertised the inquiry on its website and in The Australian, calling for submissions by 12 April 2012.

1.5        The committee contacted a number of organisations inviting submissions to the inquiry. Submissions were received from ten individuals and organisations, as listed at Appendix 1.

1.6        The committee did not hold a hearing for this inquiry.

1.7        Submissions received were in favour of the bill and most outlined the advantages and benefits presented by this legislation.[3] The committee did not receive any submissions arguing against the passage of this bill.

Background

1.8        This bill follows a number of government announcements stemming from recommendations by industry bodies and Skills Australia, which in 2010 called for a 'fundamental overhaul in the way the nation approaches and supports workforce development – at a national, industry and enterprise level.'[4]

1.9        Following extensive consultation, in 2011 the government announced the Building Australia's Future Workforce package, a suite of measures designed to build the workforce. The announcement included a $3 billion investment over six years in order to provide industry with access to the skilled workforce needed to support economic growth and transformation.[5]

1.10      Building Australia's Future Workforce provided the framework for the government's bolstered skills and workforce participation agenda, which aims to:

  • put industry at the centre of National Training System;
  • modernise the apprenticeship system;
  • increase investment in skills to support increased workforce participation; and
  • reform the National Training System so that it responds more effectively to the skills needs of the Australian economy.[6]

1.11      This bill must be seen in the context of significant domestic and global challenges which may affect the Australian economy now and in the future. Although the domestic economic outlook remains largely positive, the international environment is uncertain, and Australia must enact policies which will assist those sectors which are not benefiting from the overseas demand for commodities.[7]

1.12      To achieve this end, and to maintain competitiveness and improve efficiency and productivity, Australia must ensure that the supply and development of skills matches the needs of industry.[8] As put by the Australian Manufacturing Workers Union:

The Australian economy is in a state of transition that will require it to adapt to a range of emerging tensions including the move to a lower carbon economy, a higher Australian dollar and rising economies in China and India to name a few. There will need to be a skills and workforce development response if we are to manage the transitions successfully.[9]

How is AWPA different from Skills Australia?

1.13      The committee heard that the new Australian Workforce and Planning Agency (AWPA) would build on the existing strengths of Skills Australia, collaborating with industry associations, skills councils, unions and employers to deliver a balanced approach which meets business needs across sectors and regions. The bill retains Skills Australia's governance structure and legislative framework.[10]

1.14      Broadly, AWPA would work to improve long-term workforce planning and development in order to address skills and labour shortages. The new agency would give industry a stronger voice and ensure the delivery of required skills 'in the right place at the right time.'[11]

1.15      The Skills Australia (Australian Workforce and Productivity Agency) Bill 2012 (the bill) seeks to expand the size of AWPA compared to the size of the current agency, Skills Australia. This reflects the focus on an industry-led approach to skills development.

Additional resourcing

1.16      As part of its 2011 Budget, the government announced that AWPA would be allocated $25 million in funding for three years from 1 July 2012. This allocation was announced to support AWPA's new functions, as well as the functions already carried out by Skills Australia, which are to be expanded.[12]

1.17      The distribution of the funding will be decided by the AWPA board to assist in:

  • the preparation of sectoral and regional workforce development plans;
  • the monitoring and review of outcomes for and the development and preparation of expert advice on the NWDF [National Workforce Development Fund];
  • the implementation of a national skills audit, surveys and data analysis;
  • an expanded role in industry and state and territory government consultation (for example through the creation of a range of industry committees which may consist of unions and employers, through public industry forums and workshops, and regional stakeholder forums);
  • the establishment of a national dissemination forum for industry workforce solutions and best practice initiatives to improve managerial capability and productivity at the enterprise level.[13]

Key provisions

1.18      The bill has three parts, covering its main amendments, consequential amendments and transitional provisions.

1.19      The key provisions of the bill seek to amend the Act so that:

i. The name of 'Skills Australia' is removed from the Act, and replaced throughout with the name of the new body, the 'Australian Workforce and Productivity Agency'. This would reflect the Government's decision to transition the existing Skills Australia body to the AWPA.

ii. The established body of Skills Australia would continue in existence as the AWPA, retaining the successful advisory board model reflected in the Act;

iii. The object of the Act would be broadened to allow the AWPA to provide the Government with advice on the 'allocation of Commonwealth funding'. This change would allow the AWPA to provide advice to the Government on the direction and priorities for Government skills and workforce development funding;

iv. The functions of the body would be broadened with the addition of new functions to allow the AWPA to provide the Government with advice in relation to:

a. Improving the productivity of the Australian workforce;

b. The allocation of Commonwealth funding, including the National Workforce Development Fund to address Australia's workforce skills, workforce development and workforce productivity needs;

c. The assessment of research relating to improving the productivity of the Australian workforce; and

d. The analysis of funding available to address Australia's workforce skills, workforce development and workforce productivity needs.

v. The constitution of the body would change to expand the total membership of seven for the current Skills Australia board to a total membership of ten for the new AWPA board. Membership would include the chair of the board. This would allow for the inclusion of additional industry and union representatives, and reflect the expanded role and agenda of the AWPA from 1 July 2012;

vi. The selection criteria for appointments to the body would be expanded to include the additional criterion of experience in employee representation. Employer representation is already effectively represented in the Act under the criterion 'experience in industry';

vii. To mark the end of Skills Australia and the commencement of the AWPA, a transitional provision in the Bill would terminate the appointment of current members of the Skills Australia board on the date of commencement of the amendments, allowing for the appointment of new AWPA board members from 1 July 2012;

viii. To mark the end of Skills Australia and the commencement of the AWPA, a transitional provision in the Bill would terminate all existing Skills Australia committees, so that existing Skills Australia committees cease upon the commencement of the amendments.[14]

Support for the bill and the agency

1.20      Support for this legislation was strong among submitters, particularly for the establishment of AWPA. The submission of Manufacturing Skills Australia (MSA) was typical of this sentiment:

The proposed role for the new Agency, with its expanded membership, should greatly assist in dealing with the critical workforce and skills needs in those parts of our economy where growth is booming as well as those where there is a decline in either demand or productivity.[15]

1.21      Restaurant and Catering Australia (R&CA) felt that the emphasis on productivity in AWPA's title drew appropriate attention to the economic outcomes produced by workforce development, while  the Australian Chamber of Commerce and Industry (ACCI) echoed these views:

ACCI supports the broadening of the role of what is currently Skills Australia to reflect the need for skills to be seen in the context of workforce planning and development.[16]

1.22      The New South Wales Department of Education and Communities highlighted the potential value in ensuring that any overlap is avoided between AWPA and other bodies, such as the Productivity Commission, and stressed the importance of the new agency working closely with states and territories and using existing networks and expertise.

1.23      The Department of Industry, Innovation, Science, Research and Tertiary Education (DIISRTE) pointed out that AWPA will ensure it does not duplicate the role of any other agency, but will instead 'work strategically with these organisations to build on the work and outcomes they produce, and collaborate in areas of policy alignment.'[17]

1.24      The potential for a duplication of training effort was also raised by the Queensland Department of Education, Training and Employment, which emphasised the importance of ensuring that the 'fundamental elements of Australia's national training system are maintained and balanced.'[18] The department highlighted the role states and territories play through investment in skills and training, and stated that:

...[A] unique strength of our national training system is that co-funded training delivery is administered primarily by states and territories. This arrangement supports a cohesive national system and targets the available funding efficiently to complementary local, state and national objectives...A far more effective system would be for the funds to be allocated to the States, with clear performance benchmarks on how the funds  were to be invested to support an industry led system.[19]

1.25      This was not the view of other submitters, however. Broadly, other submissions praised the legislative approach taken and stressed the importance of establishing 'a national agency that has a direct focus on workplace productivity through vocational education.'[20]

AWPA membership

1.26      The committee noted submitters' views on AWPA membership. The Australian Council for Private Education and Training, for example, highlighted the importance of the training sector being represented in AWPA's membership.[21]

1.27      R&CA and ACCI both suggested that clause 10 of the Bill be amended to include reference to 'the representation of employers', as the bill currently does not define 'industry'. Both ACCI and R&CA supported the passage of the bill.[22]

1.28      The committee notes that  the bill would provide for membership of AWPA  to include individuals with experience, between them, in:

  • academia;
  • the  provision of education or training;
  • economics;
  • industry; and
  • the representation of employees.[23]

1.29      The committee is therefore satisfied that employer representation is appropriately included in the bill under the 'experience in industry' criterion.

Conclusion

1.30      The committee noted strong support for the bill, and is satisfied that no amendments to the proposed legislation are required.

1.31      The committee is of the view that the bill would improve national workforce productivity by strengthening the government's partnership with industry and enhancing the strategic response to workforce development needs across the country.

Recommendation 1

1.32      The committee recommends that the bill be passed.

Acknowledgement

1.33      The committee thanks those organisations and individuals who contributed to this inquiry by preparing written submissions.

 

Senator Gavin Marshall
Chair

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