EDUCATION & TRAINING FOR THE REGIONS

Jobs for the Regions: A report on the inquiry into regional employment and unemployment
CONTENT

CHAPTER 5

EDUCATION & TRAINING FOR THE REGIONS

The importance of training in the changing employment landscape

5.1 Any considerations of regional enterprise and employment need to take account of educational and training opportunities. Australia has a long tradition of aiming at providing equal educational opportunities to those living in non-metropolitan areas. Whatever limitations may be cited of centralised school and TAFE college systems, there is no doubt of the achievement of a large measure of educational equity.

5.2 The Committee noted that in nearly all places where the issue was raised, local and regional communities were pleased with their schools and TAFE colleges. The Committee heard of many successful innovations in school-to-work transition programs, which have the potential to reduce youth unemployment. However, the Committee also found that the provision of educational services, like any other government service, was not always quick to respond to changing work opportunities and populations.

5.3 Although the Committee did not engage in a full scale investigation of educational facilities and training opportunities, it found the issue raised at various stages of its inquiry. In brief, the Committee discovered that:

Changing times and changing labour markets

5.4 Rapid technological and societal changes have had a flow-through effect on employment. Jobs have changed, and this is reflected in a strong demand for particular types of skilled labour. High rates of youth unemployment have added to the pressure to get the supply side of training right.

5.5 Whereas once there was significant demand for unskilled workers within the agriculture and manufacturing industries, there are now fewer of these jobs available. Rural regions are the last bastions of businesses using unskilled labour, but even here the demand is weak and the trend diminishing. Education and training for employment has therefore taken on an importance and urgency unknown in previous years.

5.6 In a more job competitive society people with higher levels of skill and education are moving into apprenticeships and occupations which previously had lower entry points. This pushes people of lesser skills and education down the employment ladder to compete for fewer jobs than ever before. The need for increased international competitiveness and the lesser numbers of unskilled jobs available highlights the need to develop a more highly skilled workforce.

5.7 Pressures for increased competitiveness have also necessitated the lifting of the expectations many employers have of their entry level staff. They now expect their staff to be able to attain some level of productivity from day one on the job.

5.8 The most significant declines in employment have been in manufacturing and agriculture. These have been accompanied by an increased demand for labour in the service sector areas. A recent ABS report based on 1996 census results reveals that 74 percent of the Australian workforce are now employed in service industries. [3] The trend has continued for two decades now and is expected to continue.

5.9 The following table illustrates the trends in changes to skilled occupational groups taken from the Skilled Vacancy Survey (SVS) of advertised vacancies. [4] As expected, the computing sector showed the greatest increase in demand over a ten year period, at 298 percent. The demand for chefs, another service occupation, was also markedly high, representing an increase of 195 percent over the ten-year period. The volatile changes in the construction trades are reflective of the highly cyclical nature of demand in that industry.

Percentage Change in SVS Index, Occupational Groups, to April 1998 [5]

Occupation 10 years 5 years 2 years 1 year
Professionals
Science -8.3 64.2 12.7 -13.6
Building and Engineering -23.2 93.0 -18.7 -10.0
Accountants and Auditors -11.3 139.9 -2.6 6.6
Marketing and advertising 44.2 48.5 -27.1 -13.6
Computing 298.4 334.0 79.3 104.3
Organisation and Information 62.2 136.9 21.3 11.7
Health -31.2 24.4 -10.5 -20.4
Social 16.4 75.0 36.8 0.6
Associate Professionals
Medical & Science Technical Officers 19.2 140.6 134.9 149.9
Building and Engineering Associates -40.1 105.4 -10.9 14.7
Chefs 195.1 268.1 100.4 100.4
Trades
Metal -42.2 146.2 -23.2 -3.4
Automotive -42.1 95.6 -3.2 15.9
Electrical and Electronic -26.1 193.4 4.0 12.9
Construction -26.9 305.0 262.3 129.1
Food -40.7 -2.0 -44.7 -46.9
Printing -46.5 30.4 1.0 10.5
Wood -36.7 210.9 65.7 75.8
Hairdressers 43.5 81.6 20.4 16.9
 
Professionals 23.7 120.6 16.4 15.5
Associate Professionals -20.1 195.0 39.1 87.7
Trades -26.1 141.4 20.1 25.6
Total -4.4 133.6 19.3 23.1

5.10 The table below reveals the extent of the disparity in recent employment growth in particular industry groups over a five year period. In metropolitan Australia the average contribution from the services sector was more than five times higher than the next, and coincidently most closely related sector, retail trade. By contrast, the agriculture, mining and manufacturing sectors experienced little or no growth. Similar trends were seen in non-metropolitan regions during this period.

INDUSTRY CONTRIBUTION TO TOTAL EMPLOYMENT GROWTH BY STATE METROPOLITAN AND NON-METROPOLITAN AREAS, NOVEMBER 1992 TO NOVEMBER 1997

(percentage points)

INDUSTRY CONTRIBUTION TO TOTAL EMPLOYMENT GROWTH BY STATE METROPOLITAN AND NON-METROPOLITAN AREAS, NOVEMBER 1992 TO NOVEMBER 1997

Source: ABS Labour Force Survey [6]

5.11 Another change to the employment landscape that impacts upon training issues has been a trend away from full time permanent jobs towards casual and contracted labour. A recent report by the South Australian Employee Ombudsman, Mr Gary Collis, said the increased focus on casual labour had brought about job insecurity and lower working conditions. One area highlighted was the avoidance of training responsibilities by employers using contracted and casual labour. [7]

5.12 Much of the evidence given to the Committee also pointed to a decline in the numbers of apprenticeships. The restructuring of the domestic training market in Australia, undertaken by successive governments, has resulted in a fall in four-year apprenticeship numbers in recent years, mostly in traditional trade-based apprenticeships. The Committee notes, however, that the decline in traditional apprenticeships has, however, been accompanied by a substantial increase in the number of trainees in structured training. Many of these trainees are receiving training in trade-based areas, suggesting that the overall level of trade training in Australia is increasing rather than declining. [8]

5.13 A recent government initiative, introduced in 1996-97, has been the New Apprenticeships Scheme. New Apprenticeships are designed to reflect more accurately the modern labour market and the needs of business and industry, and offer a level of diversity not found under the old 3 or 4 year apprenticeship system. The Committee notes, however, that some of the evidence put to the Committee indicates some concern about the quality of training as a result of the growth in traineeships. In a public hearing in Melbourne on the GST Inquiry, representatives of Group Training Australia indicated that compared to the traditional 4-year apprenticeship, a person today would need to complete 3 or 4 successive traineeships to achieve similar skill levels. [9]

Skill shortages

5.14 Skills shortages exist even in times of high unemployment. While they have obvious short-term labour force implications, they also raise longer term training issues. The challenge is to not only seek to prevent their occurrence but also to see people trained and relocated where necessary to overcome these shortages.

5.15 One submission cited surveys of employers in the metal and engineering and the aeroskills sectors which regularly revealed serious skills shortages in areas of high unemployment. [10] A perceived decline in the numbers of traditional trade-based apprenticeships was said by many witnesses to have compounded this problem and dominated much evidence given to the Committee regarding skills shortages.

5.16 The clearest message the Committee heard in regard to skills shortages was the need for research. Many regions were aware of the need to do a detailed skills audit but lacked the human and financial resources to undertake such a project. As a representative of the Fremantle City Council told the Committee:

5.17 A skills audit would be of interest not only to job providers and seekers, but business people in their consideration of future expansion and development of new industries. It could also be used by universities and training organisations to assist them in training personnel in anticipation of future skills shortages.

Skills shortages and the labour force

5.18 In the short-term, skills shortages require the relocation of people with appropriate skills. The Committee was told of two examples where shortages resulted in workers being recruited from abroad. In Melbourne, despite its high unemployment rate, one company had to recruit first-class tool makers from Portugal. In Australia there are few tool making training courses available, and those that exist provide only limited opportunities. [12]

5.19 In the second example, a reduction in funding for universities was cited as a contributing factor to skills shortages in the mining industry. In the mid 1970's there were three institutions in Australia which taught hard rock mining and metallurgy. Within two years from the date on which the last of these closed, the skill shortage was so acute that immigration restrictions on these categories were completely lifted. [13]

5.20 The Committee heard of many other examples of skill shortages. In the Murray Valley in Victoria, for instance, they ranged from shortages of motor and diesel mechanics to dairy and horticulture workers. The success of the expanding horticulture industry was also said to be creating shortages in the service and retail sectors. Impediments to filling these vacancies included the high cost of housing in Swan Hill, overcoming workers reluctance to move away from the city, and overcoming negative perceptions of certain types of employment.

5.21 In the Murray Valley, horticulture suffered from a labour shortage because the work was considered too onerous. It was said that when many people heard the word horticulture a mental picture of picking grapes in 45 degree heat and poor living conditions came to mind. However, the variety of jobs and career paths available refuted this image. [14]

5.22 Transport was also an issue raised by witnesses as a problem that hindered the unemployed from gaining employment much beyond their immediate location. Witnesses from the Murray Valley expressed a desire for more relaxed guidelines for relocation packages to entice workers to move to areas of skills shortages. They quoted an example of a skill shortage where they were able to locate someone suitable who was willing to move to the area. At the time, DEETYA refused relocation assistance on the basis that someone must be suitable in the local area. Despite every effort, however, they had been unable to fill the vacancy locally. [15]

5.23 Under the Job Network, travel allowances for the unemployed are now available only at the job providers discretion. This does not guarantee that they will be granted assistance in looking for employment in another location.

5.24 A recent report, Australian Employment and Unemployment Patterns 1994-1996, found that 34 per cent of jobseekers were willing to move interstate for work. [16] The Committee notes recent controversy concerning the expectations of the government about labour mobility. It believes that while mobility between jobs within a geographic proximity is high, the relocation rate is much less so for obvious economic and social reasons. It recognises the value to the economy of a mobile workforce and recommends that the Commonwealth investigate strategies to facilitate the provision of structured training opportunities and the implementation of appropriate accredited training packages to alleviate skill shortages in regional areas.

5.25 As the Committee heard, the availability of skilled labour is also an important consideration in the decision making process of businesses to relocate. [17] A report by the Industry Commission found 57 per cent of firms considered the supply of skilled labour to be a significant factor in relocation decisions. [18]

Skills shortages and training

5.26 In the longer term, skills shortages raise significant training issues, particularly in non-metropolitan regions. A recent Victorian Industry Training Advisory Board (ITAB) report, On the Brink of Crisis?, although written specifically for the engineering and manufacturing sectors in Victoria, captured some of the main issues concerning skills shortages and training across Australia. These included:

5.27 Metropolitan regions also suffer image problems in relation to training. In the north western suburbs of Melbourne a representative of the North West Area Consultative Committee told the Committee that some apprenticeships were said to be considered unattractive.

5.28 A number of witnesses suggested more effective marketing of some trades was required to make them more appealing to school leavers and the unemployed. People have learnt through experience that particular industries do not offer stable employment and will therefore be reluctant recruits.

5.29 Transport was also an issue that limited the ability of the unemployed to attend training courses. As with relocation assistance, the fact that travel allowances are generally now available only at the job providers discretion does not guarantee the unemployed will be granted access to training courses in other locations.

The relevance of training

5.30 The ultimate aim of either school based VET or job training schemes for the unemployed is to equip people for employment. Evidence from witnesses and from submissions has made it clear that, whatever the program, training must be relevant to local needs if job placement objectives are to be realised. This stood out as the single most important factor.

5.31 The Committee heard evidence that where labour market programs were designed specifically for local conditions the result was high job placement rates. Mr Gerard McLean from the Illawarra Area Consultative Committee informed the Committee that:

Inter-governmental and community cooperation

5.32 Making training relevant requires input from the various levels of government and local businesses in project design, and flexibility in program implementation. In evidence received by the Committee, the need for this level of cooperation was an issue that arose repeatedly.

5.33 A member of the South East Economic Development Board in South Australian quoted the close relationship between government, local community and business as the reason for its successful vocational education and training programs. They stressed the need for local government involvement in the planning stage and lamented that much `funding related to national skill shortages is totally irrelevant to regional needs…'. [25]

5.34 They also stressed that labour market training programs of a suitable duration, at least six months, which `include strong components of structured, accredited training relevant to the local work force needs, produce work ready people'. [27] Without such locally relevant courses many may slip into the long term unemployed category.

5.35 Their frustration with the lack of coordination between governments on training issues was evident.

5.36 Dr Ian Falk from the Centre for Research and Learning in Regional Australia supported this view, saying that the issue was more than governments simply providing funding. Stakeholders involvement in the planning processes for training programs was important because it would lead to better employment outcomes.

5.37 As previously noted, the availability of skilled labour can be an important factor in business relocation, and can have significant longer term effects on regional economies. The economic impact of a company moving into a region exceeds the number of jobs directly created. It includes expenditure in setting up and maintaining an office, and the multiplier effect of wages being spent within the community. As has been successfully done in Elizabeth, cooperation between governments, ACCs and local business people could facilitate the training of skilled labour specifically to entice businesses to begin or move into a region. [30] This approach has the dual effect of reducing local unemployment and being a stimulant to the local economy.

5.38 The Committee noted evidence from DEWRSB that previous labour market programs such as Jobskills, LEAP and New Work Opportunities have been cashed out and put into fees for Job Network providers with the intention that this will enable local providers to determine what training programs they run. [31] At the time, the Committee heard concerns that there is no compulsion for providers to spend money on training, that the training is limited to FLEX 3 clients, and that in many cases the providers are not locally based. Their knowledge of, and concern for, the local area may, in some instances, be questionable and unproven, whereas it was unquestionable for many formerly funded community groups. The Committee expects that a considered judgement on the training aspects of Job Network will be possible after the release of the Government's `Implementation Report on Job Network'.

5.39 The Committee acknowledges that a key objective of Job Network is to provide jobseekers with assistance which is relevant to local job opportunities. The Committee was concerned by evidence it received of an apparent reduction in training under the Job Network, especially given the importance of training in the `knowledge society'. The majority of the Committee recommends that an independent monitoring body (similar to the former Employment Services Regulatory Authority) be established to oversee the operation of Job Network, and monitor such issues as training provision, and make regular public reports.

5.40 Government senators are of the view that the monitoring of Job Network should remain the responsibility of DEWRSB, with provision for regular reports to Parliament.

School vocational education

5.41 The importance of school based VET programs is particularly pertinent in the face of changing unemployment demographics and the nature of the school population. In some areas with a high rate of long-term unemployment, the school VET program may be the only exposure some students have to a work culture. If parents and grandparents have been unemployed for most of a child's life, a VET program becomes vital in exposing that child to the world of work. Evidence to the Committee indicates that this is an increasing problem.

5.42 One witness submitted that 30 percent of their school population came from homes of first and second generation unemployed. [33] Another witness referred to the same school and estimated that the effect of their VET courses was to see an extra 300 students complete year 12 and continue on into TAFE who would otherwise have dropped out after year 10. [34] This helps to improve their chances of getting a job and breaking the inter-generational unemployment trap.

5.43 The past decade has seen a growing recognition of the importance of vocational education and training in schools. School retention rates rose steadily through the 1980's and into the early 1990's. Secondary schools are seeing a new role for themselves in preparing students for work. Encouraging academic achievement has traditionally been the most important goal for schools. Increased retention rates have changed the nature of the school population, and the disinclination of all but a minority of students to undertake university studies has forced schools to re-examine their priorities.

5.44 Many apprenticeships which require a minimum of year 10 now expect year 12 qualifications. Although retention rates are now declining, it is likely that this reflects recent improvements in the labour market. This again, however, emphasises the importance of school to work pathways. Incorporating VET in year 10 would serve the dual purpose of making school more appealing to students who currently see it as irrelevant, thereby improving retention rates, and assisting in preparing students to be more suitable and job-ready employees.

5.45 School retention rates are traditionally lower in non-metropolitan regional areas than in the capital cities. There are also variations among the states and territories, with Western Australia and the Northern Territory showing the highest attrition rate for students beyond year 10. In Tasmania, the attrition rate for students who are geographically isolated is being addressed by the state government through programs developing stronger links between school, training and work. [35]

5.46 The Committee heard from witnesses in Swan Hill that the introduction of VET programs in years 8 to 10 will have particular impact upon the Aboriginal community. Low retention rates mean that most Aboriginal youth are prevented from participating in the programs under the provision of VET to years 11 and 12. [36]

5.47 The Committee was fortunate to encounter at Noarlunga in South Australia and at Kwinana in Western Australia two examples of innovative and successful initiatives in linking school education to the workplace. Willunga High School in South Australia conducts a very successful VET course (see box 1 below). Of their graduates last year, all but two students were successful in gaining employment or continuing to further education. [37] Their success is attributed to tailoring their courses to meet local needs and opportunities. The Kwinana example is a more ambitious concern, linking a number of secondary schools with local industry (see box 2 below).

5.48 Importantly, participation by students in VET courses does not exclude university as an option. This was a problem with past technical courses (although the new arrangements still assume only a small minority of final year students in country and regional secondary schools will have an interest in proceeding to university).

5.49 In regions of high unemployment where there are, or will be, skills shortages, priority funding could be given to vocational training to expose young people to occupations in demand and to give them some grounding and experience in those occupations. This is exactly what Willunga High School has done.

Box 1 - Case study on VET in schools: Willunga High School, Noarlunga, SA [39]

Willunga High School was faced with excessive behaviour management problems with their `time out' room bulging to the extent that they opened a second `time out' room. Low retention rates and vandalism were also a problem. The staff, with the support of the district superintendent, took some radical steps to change the relevance of education to the youth of their district with an increased focus on VET.

A senior school for Grades 10 – 12 was created and structured around an ethos that encourages students to accept more responsibility for their learning and future. The curriculum includes one compulsory unit of Work Education for SACE Stage 1 students. With a strong and locally relevant VET focus the school combines both academic and vocational education so students can experience both without limiting their options for the future. The structure of the school day has changed to three 100 minute lessons per day which allows students to attend on-the-job placements. The structure of the VET course is flexible to work around peak times in the relevant industries. The students develop a portfolio including photographs, work log books, Statements of Attainment from TAFE, resumes, and references to assist them in applying for jobs or higher education.

Students are vitally involved in the management of the school's six businesses and receive SACE accreditation for their participation. They are required to give written and verbal business reports to industry personnel at business forums.

TAFE, Retailing SA, local industries and business all have strong links to the school including input in the school's management committee and sponsorship of the school's businesses. Willunga High School is a registered training organisation for the delivery of Certificates 1, 2, and 3 in Viticulture, and they have an agreement with Retailing SA to deliver retail industry competencies. Professional development of school managers and teaching staff is given high priority with most staff being trained to the level of workplace category 2 trainers [under the former National Skills Development Program] and a continuing commitment to regular attendance at workshops to keep skills up to date. Where appropriate the teachers are released to do a six to eight week on-the-job training block.

After consultation with local businesses the school discovered employers main concern with employing young people was their communication skills and OH&S issues. The Noarlunga Health Service worked with the school to develop a workbook and resource pack for the delivery of compulsory OH&S modules and a Rural Safety Web Site was also developed. Two generic Industry Accredited Communication modules and a Basic Casualty Care first aid module are also embedded in the curriculum.

The results have been dramatic. Thirty-eight percent of 1997 graduates applied for and were successful in obtaining admission to higher education. Of the remainder, only two were unsuccessful in obtaining employment. The results are all the more remarkable given that thirty percent of the school population comes from homes of first and second generation unemployed. Grade 12 retention rates have risen to around 85-90 percent. Coincidently, behaviour management problems and vandalism are now virtually non-existent.

5.50 In this competitive era, businesses do not want to take people on who are not able to attain some level of output rather quickly. Locally appropriate VET courses therefore become vital in preparing students for local employment. The Committee heard from Mrs Wendy Beumer from the South East Economic Development Board in Noarlunga that:

5.51 The Committee believes that such an approach will also be beneficial in encouraging young people to remain in regional localities rather than heading to the city to find employment. The Commonwealth should seek to facilitate these local initiatives wherever possible.

5.52 The Committee commends the work of the Australian Student Traineeship Foundation (ASTF), established in 1994 to support the development of vocational programs for secondary students which incorporate structured workplace learning. School-industry programs were surveyed by the Australian Council of Education Research in 1996 and were found to be more extensively provided by schools in country towns and regional cities than in metropolitan cities. In New South Wales, 46 per cent of participating students were from outside the Sydney metropolitan area. In Queensland the country participation rate was 64 per cent.

5.53 The school-industry program gives students 28 days in the workplace over a year and is in all respects a more fulfilling program than the traditional `work experience' week. The early success story was the experience of Junee High School in NSW where the program was initiated as a result of the dramatic reduction in the local State Rail workforce. There were two distinct outcomes from this program. The first was a marked improvement in the year 11-12 retention rate, an equally marked improvement in civic and community pride and a more positive attitude to life and to work. The second outcome was the enthusiastic participation of local business and a demonstration that the local community was able to provide pathways into real employment opportunities. Participants in school industry programs include chambers of commerce, group training companies, and community and industry organisations, most of which provide some level of formal assistance to the scheme. [41]

Box 2 - Case study on VET in Schools: Kwinana Industries Council

The Kwinana Industries Council, a grouping of 30 firms operating around Kwinana, was founded in the early 1990s to handle local environmental problems. Since then the Council has also become involved in area planning and employment issues. The Excellence in Education Compact, set up by the Council comprises eight secondary schools and has links, through the schools, with the local campus of the South Metropolitan College of TAFE.

Eighteen different programs are offered across the eight participating schools, providing varying levels of workplace participation. The vocational program in the schools is outcomes or competency-based, centred on a core curriculum (with no options) and linked to local industry. Twenty per cent of the total course consists of structured workplace learning, which may be taken in blocks. There are also combined courses offering more choice of subjects. School-based traineeships under the Compact have been the first to be implemented in Australia. This involves students spending 55 per cent of their time at school and another 10 per cent at TAFE. Paid employment may substitute for structured workplace learning. This scheme has attracted around $250,000 from the Australian Student Traineeship Foundation to cover administrative costs, in addition to funding from the Council.

The Principal of Hamilton Senior High School, Mrs Lee Moore, informed the Committee that the new Compact meant that students who had not previously had the opportunity to go directly to TAFE or to find employment at the end of their schooling, could now do so. [42] It was important for many students to have the protection of a supportive school environment as part of their transition from school to work. This was only possible where school staff were prepared to undertake VET training and where schools were prepared to put their own funds toward making a success of the program. The performance indicators were plain to see. At Hamilton Senior High School there was a 70-80 per cent success rate for students on these programs. In addition the retention rate had improved, with something like 80 percent continuing from year 10, and 90 per cent continuing from year 11 to year 12. Kwinana Senior High School had improved its retention rate from 15 per cent to just over 70 per cent over three years, with 70 per cent of their senior students participating in the vocational programs. [43]

From the point of view of local businesses, the program was also highly effective. It was now possible for firms to advertise locally, rather that around the metropolitan area, to fill vacancies. Companies like Alcoa were said to be more than happy with the local candidates for job vacancies. The Chairman of the Excellence in Education Compact, and Training and Development Consultant with Alcoa, Mr Michael Keep, told the Committee that the firm employed 900 at the alumina refinery, and that there were currently 27 apprentices, an additional 10 school-based apprentices and around 100 young people coming through each year `from the local area that we influence.' [44]

5.54 The Committee commends the growth in programs aimed at boosting the importance of VET in schools. It notes, however, that even the far more ambitious schemes of some Australian secondary schools are not as far reaching as some foreign schemes.

5.55 In 1982 Boston public schools pioneered the idea of a `compact' or agreement with employers, universities and unions, the aim of which was to establish a continuous dialogue and support mechanism between schools and employers. The schools undertook to improve academic standards in exchange for improved employment opportunities and higher education. The compact is considered by many observers to have been an important factor in sustaining a relatively low rate of youth unemployment in Boston over the past decade. [45]

5.56 In France, the Law of 20 December 1993 brought an almost revolutionary change to education and regional development, being the most important law passed to that date to bring to an end centuries of traditional state central control. The effects were felt in vocational training to the extent that entirely new networks of expertise and interaction between educational institutions and local enterprises had to be developed. By 1994 more than 40 per cent of schools across France co-operate with local enterprises, many of those having up to 200 employees. Studies indicate that as many as 50 per cent of firms requiring skills in industrial mechanics and automation have benefited materially (that is, in terms of productivity) from co-operation with this program. The study has also revealed that the more intense the professionalism in these partnerships, the more successful they are. [46]

TAFE – the key to job creation

5.57 The Committee's wide terms of reference did not allow it to inquire into the connection between regional employment and the effectiveness of training offered at TAFE colleges. There will be scope for this in any future VET inquiry. In the meantime the Committee is encouraged by a statement which it heard from a witness at its Kwinana hearings which summed up the position of the South East Metropolitan College of TAFE on workforce training:

5.58 The Committee was impressed by the apparently high level of involvement in regional planning bodies by TAFE senior managers in Western Australia. Both the South and South East Metropolitan Colleges of TAFE worked closely with their respective ACCs. The Committee was given a view of the TAFE perspective on the connection with schools which indicated how important this link is becoming in Western Australia. A high school is to be co-located with the South Metro TAFE campus at Mandurah. The Coastal Area ACC also runs a Building Bridges Committee, a TAFE initiative to develop support links between TAFE and school managers so that course and career advice is more widely disseminated in the community. This link will assume greater importance as both TAFE colleges and schools grapple with the problem of motivating reluctant returnees to the classroom in light of changed guidelines to the common youth allowance. [48]

5.59 The Committee also heard evidence from representatives of the TAFE sector in South Australia. It heard that the Onkaparinga Institute of TAFE also conducts a locally focused VET program and achieves an approximately 70 percent employment placement for its graduates. [49] The Spencer Institute of TAFE in South Australia has recorded a 70-80 percent achievement rate in their graduates finding employment. It was explained to the Committee that one key to this success rate was program flexibility.

5.60 This evidence also highlighted the frustration often felt by agencies dealing with bureaucratic restrictions in seeking to expand into new locally relevant areas. Funds may be tied to a specific service delivery, when the changes to the market within that period may dictate re-allocating those funds to achieve the best job placement outcomes. Changing training emphasis will, in some instances, require a higher capital investment to establish suitable training centres, equipment and courses. All training providers need to have flexibility to change courses with the market and access to adequate funds to equip them to do so.

5.61 The submission from the Spencer Institute of TAFE makes for salutary reading in the light of evidence provided by TAFE college managers in the Perth environs. Based on Port Augusta, Spencer TAFE bears its share of the burden of the region, which has been seriously affected by production downturns, and the questionable future of industry in Spencer Gulf towns. In contrast to the optimistic spirit the Committee found along the coastal strip south from Fremantle to Rockingham, the impression gained in the Spencer Gulf towns was of communities in a state of near depression. Regional TAFE colleges are disadvantaged by the absence of investment in local industries which might require skilled labour. Costs of training are also high because of telecommunication and transport charges. The VET in schools program, strongly supported by the TAFE, was hampered in Port Augusta by the shortage of appropriately trained staff in the secondary schools and by inadequate funding from the schools to pay for TAFE services now that it was required to cover costs. [51]

5.62 Collaborative partnerships may be very successful in regions whose economies have both depth and diversity, and TAFE colleges have leading roles to play in regional development. This becomes difficult when TAFE colleges, and sometimes universities, find themselves in depressed regions managing almost on their own. Educational leadership and community leadership become almost synonymous. Governments should do more to assist this process.

5.63 The Committee recommends that additional funding support for TAFE providers be negotiated with the states to improve the provision of flexible, structured training opportunities to meet changing local market requirements.

Training in small and medium sized businesses

5.64 The Committee discovered that in many centres the majority of small businesses did not have a training ethos. In Northern Tasmania, for example, a representative of the Tasmanian Employment Advisory Council informed the Committee that approximately 60 per cent of small businesses had never employed an apprentice or trainee. [52]

5.65 The significance of this is realised when you consider, as one submission pointed out, that some regional economies are almost totally dependant upon small and medium sized business enterprises (SMEs). [53] The Committee heard from Dr Ian Falk that on average in Australia, small businesses comprise 70 per cent of rural business. Many of these people hold unpleasant memories of formal education and therefore have an anti-training mentality. [54] To overcome this, vocational and adult education needs to be actively promoted as distinctly different to `school' and more relevant to small and medium sized business.

5.66 The Committee heard evidence in several regions that the success of their economy was built on, and stabilised by, small or medium sized business. One submission quoted ABS data stating that small business contributed 57 per cent to total job generation in the period June 1995 to June 1996. [55] Given the value to the community of successful small business, the Committee considers that small businesses should be encouraged, and given incentives, to undertake training to assist them to grow and succeed. One witness from the Ballarat Area Consultative Committee suggested that the provision of training regarding human resource management and also in relation to unfair dismissal laws would liberate many businesses to expand. [56]

5.67 The Committee notes an interesting policy that has been implemented in Modena Italy which assists small and medium business with information on, and training of employees in, the latest technologies. The Democentre, was established to monitor innovation and promote the diffusion of state-of-the-art technologies to Modenese firms. One method they have adopted is to purchase new technologies and organise demonstrations to highlight their benefits. This information service clearly reduces the risk to small firms associated with upgrading to new technologies. In addition, the Democentre has become involved in the provision of training following the regional government's decision in 1995 to tender out European funds for training. Their involvement has included the development of a new post-graduate university course in car engineering. This is highly valuable in an area dominated by prestigious carmakers like Ferrari. This is a good example of an attempt to developed training around the local economy's competitive advantage. [57]

Barriers to apprenticeships and trainees

5.68 The Committee found that there were several main issues hindering SMEs from taking on apprentices and trainees. These were :

5.69 A recent DEETYA publication, Labour Market for Apprentices, found that, while on average employers and group training companies had seven suitable applicants for each available apprenticeship, nearly seventy per cent of all applicants were unsuitable. Just over half of the applicants were rated as unsuitable due to poor attitude or presentation. Some VET school programs are now addressing this problem. Literacy and numeracy skills were found to be the second biggest obstacle to employment. The DEETYA study also found that `employer expectations of apprenticeship quality had increased over the past three years, although most felt that employers had realistic expectations'. [58]

5.70 The Committee is pleased to note that the first three of these issues are already receiving attention through government policy. The increased government support for VET in schools is helping address the first two issues. The emergence of group training companies has made some headway into alleviating the third barrier.

5.71 While confidence in the economy is a big picture problem beyond the focus of this chapter, one aspect of business confidence of growing importance, is the length of contracts and, to a lesser extent, funding of training programs. As the trend towards outsourcing continues, the length of contracts becomes a more integral determinant of business confidence. The Committee was informed by a representative of the South East Economic Development Board that short contract periods create uncertainty that affects decisions made by SMEs. [59] Similarly, if funding is restored for wage subsidies for on-the-job training, the funding should be of at least six months duration to give businesses confidence to take on disadvantaged jobseekers.

5.72 Another disincentive to business taking on trainees is the constant changes to government programs. A member of the Tasmanian Employment Advisory Council told the Committee that:

5.73 One submission raised concerns over current moves to review or privatise employment support and vocational education and training services. Any diminishing of these services at a regional level could adversely affect the implementation of VET reforms such as streamlining of apprentice recruitment and the introduction of industry-based flexible training programs, which were dependent upon a responsive and customer focussed administrative system. [61]

5.74 It was drawn to the Committee's attention that some businesses took on few apprentices and the load of responsibility for training apprentices was being borne unevenly. Several witnesses suggested that businesses taking on apprentices should receive some sort of tax cut or further financial incentive as reward, particularly in areas of skills shortage.

5.75 In the past large companies, councils and former government owned utilities were dependable sources for producing large numbers of apprentices. A witness from the Australian Centre for Industrial Relations Research and Training in Parramatta drew the Committee's attention to one major reason why this practice has been almost discontinued:

5.76 Whereas once many businesses had a sense of social or community responsibility to train apprentices, that is now being overshadowed by the national competition policy and increasing pressures to be globally competitive. It would appear that a minimised focus on training is an inevitable result of the government's policy of moving to a market competition model. In light of this, and recognising that a skilled workforce is a positive externality that everyone wants and no one wants to pay for, it was suggested that the Commonwealth introduce a requirement that business spend a certain amount on training, similar to the former Training Guarantee Levy.

5.77 A national industrial recruitment company recently completed an apprenticeship survey. The survey results revealed that 25 percent of businesses surveyed nation-wide hoped to employ more apprentices over the next five years. Almost one third of firms said financial incentive would entice them to employ more apprentices. Catalyst Recruitment's Managing Director, George Zammit, said :

5.78 The Committee notes the evidence given above in regard to training incentives. It recommends that the Commonwealth evaluate the use of training incentives in meeting the needs of regional industries for increased structured training opportunities in categories of high employment growth. Such incentives should:

 

Footnotes

[1] Mr Dick Adams MP, Hansard, Launceston, 16 June 1998, pp. 509-10

[2] Mr John Pierpoint, Hansard, Elizabeth, 28 April 1998, p. 109

[3] Australian Bureau of Statistics, Australia in Profile – a regional analysis, Canberra, 1998, p. 42

[4] For more details on the SVS see Department of Employment, Education, Training and Youth Affairs, Skills in Australia – trends and shortages, Canberra, 1998, pp. 10-11

[5] ibid., p. 23

[6] As quoted in Submission No. 106, Department of Employment, Education, Training and Youth Affairs, vol. 7, p. 92

[7] Office of the Employee Ombudsman, Annual Report 1997-98, Adelaide, 1998, pp. 3-9

[8] National Centre for Vocational Education Research, Vocational Education and Training in Australia, 1999, available from http://www.ncver.edu.au/statistics/aats/series8597/

[9] Mr Geoffrey Fader, Hansard: GST and A New Tax System, Melbourne, 3 March 1999, p. 693

[10] Submission No. 79, Manufacturing, Engineering and Related Services Industry Training Advisory Body, vol. 4, p. 8

[11] Mr Imants Kins, Hansard, Kwinana, 17 August 1998, p. 1353

[12] Mr Dominic Andreacchio, Melbourne North West Area Consultative Committee, Hansard, Melbourne, 7 May 1998, pp. 369-373

[13] Mr Peter Black, Mayor, Broken Hill City Council, Hansard, Broken Hill, 30 April 1998, p. 248

[14] Mr Gary Tepper, Swan Hill Rural City Council, Hansard, Ballarat, 17 June 1998, pp. 652-8

[15] Mr Geoffrey Carson, Murray Mallee Training Company, Hansard, Ballarat, 17 June 1998, p. 658

[16] Australian Bureau of Statistics, Australian Employment and Unemployment Patterns 1994-1996, Canberra, 1998, p. 37

[17] Mr David Thompson, Jobs Australia Ltd, Hansard, Melbourne, 7 May 1998, pp. 378-9; see also Mr John Pierpoint, Nastec Solutions, Hansard, Elizabeth, 28 April 1998, pp. 109-10, referred to above

[18] Industry Commission, Impediments to Regional Industry Adjustment, 1993, p. 48, as quoted in Jobs in our Regions – building on the small business base, The Council of Small Business Organisations and the Department of Transport and Regional Development, Canberra 1997, p. 85

[19] Engineering Skills Training Board (Vic), On the Brink of Crisis?, vol. 1, Melbourne, 1998, pp. 4-10

[20] Mr Dominic Andreacchio, Hansard, Melbourne, 7 May 1998, pp. 369-70

[21] Mrs Bawani Graham, Moreland City Council, Hansard, Melbourne, 7 May 1998, p. 394

[22] The Hon. Barry Pullen MP, Hansard, Melbourne, 7 May 1998, p. 476

[23] Ms Gabrielle Gelly, Lakes and Wilderness Tourism, Hansard, Bairnsdale, 4 May 1998, p. 322

[24] Mr Gerard McLean, Hansard, Nowra, 18 June 1998, p. 810

[25] Mrs Wendy Beumer, Hansard, Noarlunga, 28 April 1998, p. 47

[26] ibid.

[27] ibid.

[28] ibid., p. 53

[29] Dr Ian Faulk, Hansard, Launceston, 16 June 1998, p. 499

[30] See Mr John Pierpoint, Hansard, Elizabeth, 28 April 1998, pp. 109-10, referred to above

[31] Mr Ian Campbell, DEWRSB, Hansard, Canberra, 18 December 1998, p. 1531

[32] Professor Kenyon, South Metropolitan Perth Regional Employment Organisation, Hansard, Perth, 18 August 1998, p. 1416

[33] Mrs Elizabeth Schneyder, Willunga High School, Hansard, Noarlunga, 28 April 1998, p. 23

[34] Mr Alan Brougham, Onkaparinga Institute of TAFE, Hansard, Noarlunga, 28 April 1998, p. 59

[35] MCEETYA, National Report on Schooling in Australia: 1996, Curriculum Corporation, Carlton, pp. 62-3

[36] Mr Geoffrey Carson, Murray Mallee Training Company Ltd, Hansard, Ballarat, 17 June 1998, p. 656

[37] Mrs Elizabeth Schneyder, Willunga High School, Hansard, Noarlunga, 28 April 1998, p. 24

[38] ibid., p. 17

[39] ibid., pp. 16-28 and also Submission No. 38, Willunga High School, vol. 2, pp. 23-30

[40] Mrs Wendy Beumer, Hansard, Noarlunga, 28 April 1998, p. 49

[41] Submission No. 172, Australian Student Traineeship Foundation, vol. 7, pp. 242-3

[42] Mrs Lee Moore, Hansard, Kwinana, 17 August 1998, p. 1317

[43] Mr Graeme Harvey, Hansard, Kwinana, 17 August 1998, p. 1321

[44] Mr Michael Keep, Hansard, Kwinana, 17 August 1998, p. 1326

[45] OECD, Regional Competitiveness and Skills, 1997, p. 77

[46] ibid., p. 92

[47] Mr Geoffrey Gale, Hansard, Kwinana, 17 August 1998, p. 1397

[48] Mr Ron Innis, Hansard, Kwinana, 17 August 1998, pp. 1391-2

[49] Mr Alan Brougham, Hansard, Noarlunga, 28 April 1998, p. 59

[50] Mr Robert Kimber, Hansard, Port Augusta, 29 April 1998, p. 170

[51] Submission No. 159, Spencer Institute of TAFE, vol. 6, p. 312

[52] Mrs Sheryl Thomas, Hansard, Launceston, 16 June 1998, pp. 490-1

[53] Submission No. 192, Community Employment Council, vol. 8, p. 286

[54] Dr Ian Falk, Hansard, Launceston, 16 June 1998, pp. 496-7

[55] Submission No. 205, Business Horizons, vol. 9, p. 277

[56] Mr Mark Lynch, Hansard, Ballarat, 17 June 1998, p. 614

[57] OECD, Regional Competitiveness and Skills, 1997, p. ?

[58] Department of Employment, Education, Training and Youth Affairs, Labour Market for Apprentices, Canberra, 1998, p. 1

[59] Mrs Wendy Beumer, Hansard, Noarlunga, 28 April 1998, p. 48

[60] Mrs Sheryl Thomas, Hansard, Launceston, 16 June 1998, p. 492

[61] Submission No. 79, Manufacturing, Engineering and Related Services Industry Training Advisory Body, vol. 4, p. 5

[62] Mr Jeffrey Bothe, Hansard, Ballarat, 17 June 1998, p. 667

[63] Mr John Buchanan, Hansard, Parramatta, 23 July 1998, pp. 1026-7

[64] Mr John Buchanan, and Dr John Spierings, Hansard, Parramatta, 23 July 1998, p. 1027

[65] Mr George Zammit, Catalyst Recruitment media release and apprenticeship survey results, 13 December 1998