7.1
Throughout the inquiry, the committee received evidence regarding the need for an appropriately skilled workforce in Northern Australia; the measures which have been implemented to facilitate the development of such a workforce; and areas for improvement. This evidence canvassed issues such as fly-in fly-out (FIFO) workers, the importance of local supply chains, migrant workers and tertiary and vocational education and training (VET).
7.2
A stable and resilient local population provides the foundation upon which programs to develop an appropriately skilled workforce relies. As such, the issue of developing and maintaining an appropriately skilled workforce necessarily encompasses issues such as the 'liveability' of Northern Australian cities and towns which includes healthcare, water security, community safety, and education. Many of these issues are also discussed in the chapter on social infrastructure. For a discussion of the value of First Nations rangers, see chapter 6 (Investment, opportunities and engagement with First Nations people, subsection On-country work).
Rates of unemployment
7.3
The issue of employment and education in Northern Australia is particularly pertinent. As at February 2021, the unemployment rate in the entirety of Western Australia was 6.0 per cent, the entirety of Queensland was 6.1 per cent, and Northern Territory’s rate was 4.9 per cent. While employment figures are not maintained for Northern Australia specifically, areas within Northern Australia have extremely high levels of unemployment that are markedly different from overall state averages.
7.4
Appearing before the committee in October 2019, Ms Glenys Schuntner, Chief Executive Officer, Regional Development Australia Townsville and North West Queensland, described the unemployment in her area:
In our region we cover 15 local government areas and about 10 of those are on CDP. Sadly, they have the highest rates of unemployment in our region. So while the population and unemployment numbers are highest in Townsville and Mount Isa, it's our communities like Palm, Burke, Doomadgee, Carpentaria and Mornington that have the highest unemployment rates, ranging from 35 per cent to 45 per cent.
7.5
The committee received evidence from stakeholders during 2019 and 2020 that also reflected higher localised unemployment rates:
In 2019, Councillor Les Walker, Deputy Mayor, Townsville City Council, described how unemployment in Townsville has remained well above the national average, sitting at 7.6 per cent, with First Nations and youth unemployment rates continuing at around 20 per cent.
In 2020, Mr Lyall (Jack) Bawden, Mayor, Carpentaria Shire and Chair, North West Queensland Regional Organisation of Councils, reported that the unemployment rate in his area persists at 30 per cent.
In 2021, Mrs Danelle Dowding, Executive Officer, Regional Development Australia Kimberley, reported that unemployment rate in the Kimberley is at 16.1 per cent. For First Nations people, the rate of workforce participation was about 27 per cent, as opposed to the non-Indegenious rate of 82 per cent.
Also in 2021, Mr Patrick Green, Chairperson, Leedal; Fitzroy Crossing Network reported an unemployment rate of 31 per cent for Derby Shire and a rate of above 30 per cent for the Fitzroy and Halls Creek areas.
7.6
The Generation One, Minderoo Foundation, in its September 2019 submission, collated data in this area and noted that Australian Bureau of Statistics employment data for the quarter ending 30 March 2019 identifies:
high pockets of unemployment in Northern Australia concurrent with high levels of Indigenous populations. Halls Creek and Derby in the Kimberley with high proportion of Indigenous people (80%and 60% respectively) top the state of WA‘s unemployment rate with 34% and 30% respectively. In the NT, the suburbs of Moulden, Gray and Berrimah all have unemployment rates of over 15% followed by Tanami, West Arnhem, Tiwi Islands, Gulf, East Arnhem, Yuendemu and Thamarrur with unemployment rates of over 10%...in Queensland with an unemployment rate of over 20%, ten of these are in Northern Queensland (Kowanyama, (59%), Yarrabah (56%), Palm Island (46%), Carpentaria (35%), Torres Strait (46%), Cape York (27%), Northern Peninsula (24%), Redland Islands (23%) and three are located in Brisbane (Woodridge, Logan and Riverview).
7.7
Given these extreme rates of unemployment and associated disadvantage, it is imperative that change takes place in the areas of employment and education.
White Paper
7.8
The Our North, Our Future: White Paper on Developing Northern Australia (the White Paper) noted that businesses in the north require an adaptable and mobile labour force with a range of skills: from engineers to fruit pickers; from welders to medical specialists and managerial staff. However, it argued that Northern Australia is hampered by localised worker shortages and high wage costs which deter investment. Retaining workers and better matching their skills will drive future growth in the north.
7.9
The White Paper explained that the northern workforce faces a number of challenges, some of which are unique to Northern Australia. For example, key industries in the north require flexible and mobile labour but are regularly faced with a shortage of workers. Some businesses close operations or reduce staffing during the wet season or as tourist numbers reduce. Others, such as in mining and agriculture, require workers to be onsite, often in difficult conditions, away from their families and without typical suburban conveniences such as shopping malls, medical facilities, services and entertainment and sporting facilities.
7.10
Further, many businesses and workers are more vulnerable to volatile economic conditions influenced by the significant number of construction projects in Northern Australia. Typically, a number of businesses relocate to new projects at the end of each construction project.
7.11
The White Paper noted that there are significant personal and financial barriers for labour to move to, and within, Northern Australia. These barriers include the financial costs of relocating including housing and occupational licensing, a (real or apparent) lack of infrastructure and services, and strong family and community ties to current locations. The White Paper stated that these barriers are a major source of high wage costs, identified as one of the top 10 constraints on investment in Australia.
7.12
The White Paper also highlighted that large globally driven resource projects have pulled labour from some areas in the north to others, which has resulted in higher wages for some local business.
7.13
The White Paper identified that economic and labour market conditions differ significantly both at regional and sub regional level across Northern Australia. The reasons for these differences are many and varied and include factors such as age, family and industry structures. For example, unemployment in Alice Springs, Darwin and Katherine is regularly under four per cent, whereas other northern areas face unemployment rates of around 40 per cent. The White Paper also noted that youth unemployment is significantly higher in Northern Australia.
7.14
The White Paper noted that local pockets of high unemployment are also found alongside large differences in incomes for communities in Northern Australia. It stated that the average earnings in some parts of the north are almost double the national average, while other areas may only earn half. The White Paper highlighted that this reflects the widely different skills and labour market conditions in different regions. For example, major resource projects have contributed to localised wage booms, but occur in proximity to remote communities with extreme rates of unemployment and other severe disadvantage.
7.15
The White Paper emphasised the need to manage the intricate connections between the attraction of workers to contribute to a stable population base in Northern Australia; the retention of skills and resident expertise when projects conclude or public funding shrinks; and the need to flexibly assist access by industry to temporary (including migrant) workforces.
7.16
Efforts to increase the population of Northern Australian communities must simultaneously support efforts to address future export growth and competitiveness agendas (agribusiness, tourism, education, resources, etc.), by identifying future skills shortages that will impede progress.
7.17
The White Paper established the following priorities to address the need to attract and retain a skilled workforce in Northern Australia:
make it easier for businesses seeking to expand into Northern Australia to receive advice and grants that upgrade their skills under the Industry Skills Fund;
establish employment targets for First Nations Australians, reflecting local First Nations working age population, for road projects (and other relevant expenditure) funded through the White Paper;
support the Northern Territory Government to allow workers licensed from other Australian jurisdictions to have their licences more easily recognised in the Northern Territory;
reform the Remote Jobs and Communities Programme to allow participants to work in local businesses;
pursue more flexible foreign worker arrangements in high demand areas by finalising the Northern Territory Designated Area Migration Agreements (DAMA); continuing to work with Western Australia on a DAMA for the Pilbara; and inviting Queensland to propose a DAMA;
expand and streamline the Seasonal Worker Programme by reducing costs to business, increasing worker numbers and allowing more countries and industries to participate;
expand the Working Holiday Maker Visa Programme to allow participants to work for longer in high demand areas in Northern Australia, with a small number allowed a second year on their visa if they work in northern tourism and agriculture; and
establish a pilot two-year visa for up to 250 citizens of the Pacific microstates (Nauru, Tuvalu and Kiribati) for work in the north.
Government investment and policies
7.18
To support a diversified economy in Northern Australia, the Australian Government and state and territory governments have implemented a number of strategies intended to develop a sustainable and appropriately skilled workforce.
Skills programs
7.19
Two initiatives which were developed as a result of the White Paper, include the Pacific Microstates Northern Australia Worker Pilot, and the Seasonal Worker Programme. The Department of Industry, Science, Energy and Resources (DISER) argued that the Skilling Australians Fund and the Pacific Labour Scheme have also contributed to helping 'build a stronger labour pool for the north'.
7.20
DISER also noted that the Australian Government's $525 million skills package, Delivering Skills for Today and Tomorrow, is also designed to ensure that 'Australians have the right skills to get a job, build a career and to reskill and retrain over the course of their lifetime'. The Skills Package:
…takes immediate actions to support Australians everywhere to make the best choices for their careers and equip themselves with the right skills for the future. Skills needs vary across the nation and that areas such as Northern Australia face unique challenges.
7.21
The measures in the Skills Package are designed to ensure that the VET system is responsive and flexible, and does not impose a 'one size fits all' approach.
7.22
As part of the Skills Package, four pilot programs in remote communities in north Queensland, South Australia, the Northern Territory, and Western Australia will deliver tailored, flexible and locally developed training. These programs were co-designed with First Nations leaders and community members in order to meet local needs.
7.23
In 2019, DISER submitted that ten pilot Industry Training Hubs were being established in regions with high youth unemployment, including in Alice Springs and Townsville. These Hubs are intended to improve opportunities for young people through the creation of better links between local industry, employers and schools. The Commonwealth Scholarships for Young Australians program will also provide 400 VET scholarships to young people in the same ten regions, including Alice Springs and Townsville.
Measures under the Skills Package will assist students in Northern Australia to gain the skills they need to participate in the labour market, boost the ability of employers in the north to recruit and retain apprentices, improve youth employment opportunities in regions with high youth unemployment, and increase the availability of quality careers information for job seekers.
Defence industry
7.25
In February 2019, the Australian Government released the Defence Industry Skilling and STEM Strategy to implement initiatives to help Australia's defence industry to meet workforce skills requirements over the next decade. The Strategy established a National Defence Industry Skills Office (NDISO) to improve the collaboration and coordination between defence industry stakeholders, including with state and territory governments, businesses, and the education sector.
7.26
Through the Strategy the Australian Government agreed to provide $32 million from 2018-19 to 2021-22 to fund defence industry skills support through the Defence Industry Skills Flexible Funding Pool. This includes:
$4 million per year skilling support grants program administered through the Centre for Defence Industry Capability, focusing on improving accessibility for small to medium enterprises and reducing the barriers faced by defence industry in upskilling or retraining staff, and
$1.4 million per year to expand the Defence Industry Internship Program to 50 student placements per year.
7.27
These initiatives are available to eligible defence industry businesses and students in Northern Australia.
7.28
A skilled workforce is critical to the success of the National Naval Shipbuilding Enterprise. The Australian Government is working together with industry to ensure that a workforce with the right skills is available when required to meet the needs of the naval shipbuilding industry. As such, the Naval Shipbuilding College (the College) is an Australian Government initiative aimed at ensuring a coordinated, national approach to workforce development and skilling across the National Naval Shipbuilding Enterprise.
7.29
The College, funded at $62 million over three years, commenced operation in March 2018 and is working to progressively facilitate the increased capacity and capability of Australia's skilled workforce, in line with naval shipbuilders' needs as they evolve. The College is engaging closely with selected ship and submarine designers and builders, and forming strong partnerships with national education and training providers.
7.30
The College has endorsed programs of study at TAFE QLD's Cairns campus, and Charles Darwin University.
Visa programs
7.31
As noted above, the Australian Government contributes to the development of an appropriately skilled workforce in Northern Australia through the provision of visa services required to attract suitably skilled migrants to the region. Specifically the Australian Government:
… provides incentives for migrants to live and work in regional areas, and prioritises the processing of visa applications from skilled migrants wanting to work and live in regional Australia. This supports key industries—including agriculture, forestry, fisheries, tourism, hospitability, mining, construction, and disability and aged care—to attract skilled staff to Northern Australia.
7.32
Programs such as Designated Area Migration Agreements (DAMA) are designed to address the difficulties faced in recruiting and retaining Australian workers in regional areas. These agreements allow employers in regions experiencing skills and labour shortages to sponsor skilled and semi-skilled overseas workers, on the proviso that employers recruit Australian workers as a first priority. Mr Michael Willard, First Assistant Secretary, Immigration and Community Protection Policy Division, Department of Home Affairs explained:
DAMAs…sit within the broader skilled migration program, but they are very much a niche product designed to be targeted to the very specific needs of a regional area. They sit underneath a program where visas are broadly available to any employer in Australia under the broader employer sponsored program. We have a regional employer sponsored program which provides certain concessions for employers in regional areas. Underneath that sits a DAMA, where arrangements can be tailored to suit a particular area.
New visas to support regional Australia
7.33
Commencing in November 2019, three new visas became available to support migration to regional Australia, including Northern Australia. The Skilled Work Regional (Provisional) and Skilled Employer Sponsored Regional (Provisional) visas require visa holders to live and work in regional Australia. Permanent Residence visas provide a permanent pathway for Skilled Work Regional and Skilled Employer Sponsored Regional visa holders once the visa holder has met a minimum taxable income threshold and regional compliance visa conditions for three years.
Extension of Temporary Graduate Visa period
7.34
International students who complete a bachelors or higher qualification in a regional area and who reside in a regional area for the duration of their first Temporary Graduate visa (granted for periods of two to four years, depending on the study completed) will be eligible to apply for a second Temporary Graduate visa (for a period of one year).
7.35
The Department of Home Affairs stated that 'this will help share the benefits of the education industry across Northern Australia and help address regional skill shortages'.
Attracting skilled migrants to regional areas
7.36
The Australian Government has introduced a range of initiatives to attract skilled migrants to regional areas, including Northern Australia. This includes expanding the use of DAMAs, supporting enhanced visa processing for regional areas, and enhancing regional outreach to support regional employers' access to skilled migrant workers. Working in regional Australia also increases the points awarded under the Skilled Migration Points Tests, which is intended to encourage skilled migrants to move to regional Australia.
7.37
The Department of Home Affairs works with the Northern Territory Department of Trade, Business and Innovation; the Cairns Chamber of Commerce; the Office of Northern Australia; DISER; and the Commonwealth Department of Education, Skills and Employment to ensure that these initiatives remain tailored to the needs of Northern Australia.
7.38
The Department of Home Affairs executed two five year DAMAs in Northern Australia to provide flexibility and agreed concessions to access overseas workers to fill skilled and semi-skilled labour needs. These DAMAs are the Northern Territory DAMA executed in December 2018, and the Far North Queensland DAMA in April 2019. Mr Willard, Home Affairs, stated:
Within the two DAMAs, we've seen that the Northern Territory currently has 80 labour agreements in effect; that means 80 employers have signed up to the DAMA and are able to sponsor visa holders under that arrangement. The Far North Queensland DAMA has five labour agreements currently in effect.
7.39
Additional incentives for temporary visa holders in the Working Holiday Maker program are designed to encourage such visa holders to stay longer by working in Northern Australia. These include the optional extension of the six-month limit on working for any one employer to 12 months for high-demand industries across Northern Australia, and the introduction of a third year visa for Working and Holiday visa holders who undertake six months work in tourism, agriculture, forestry, fisheries or hospitality in Northern Australia whilst on their second visa.
7.40
These initiatives are intended to help employers retain trained and experienced employees for longer. In July 2019, the option of a third visa was introduced for second Work and Holiday visa holders who complete six months of work in the same specified industries in Northern Australia.
Impact of COVID-19 on migrant programs
7.41
The committee received evidence that COVID-19 and the associated closure of borders has had a major impact on migration programs. In June 2020, the Department of Home Affairs provided the committee with an overview of this evidence.
7.42
Mr Willard, Department of Home Affairs, advised that following the introduction of travel restrictions, there was a 'drop-off in applications' under the Working Holiday Maker program. Mr Willard estimated that there had been a 20 per cent reduction in applications. In addition, Mr Willard also noted a reduction of less than 5 per cent in employer-sponsored permanent and skilled visa applications.
7.43
Mr Willard explained that in relation to the Seasonal Worker and Pacific Labour Schemes, there had been a reduction of approximately 10 per cent in year-on-year comparisons since the introduction of travel restrictions.
7.44
Mr Willard further explained that the Australian Government had introduced measures to allow temporary visa holders to remain working in critical sectors. Mr Willard stated:
One of those sectors was agriculture. In particular, for those sectors, a pathway was made available for those seasonal workers who were in Australia to extend their stay and continue to work in the agricultural sector. We're talking about 7½ thousand people in that context who were able to extend their stay beyond the normal stay period for a seasonal worker and continue to work in the agricultural sector. I mention that because it somewhat offsets the impact of no workers being able to enter for a period of time since the travel restrictions came into effect.
7.45
It was explained that these changes were, in part, a response to industry concerns regarding the difficulty in finding labour in regional and Northern Australia.
7.46
Mr Willard also informed the committee that changes were made to allow student visa holders to work for longer hours:
Normally, student visa holders are limited to working 40 hours a fortnight, but, in the circumstances of COVID, there was a concession provided that allowed student visa holders working in health, disability, aged care and nursing, and also medicine, to work longer. That short-term response was put in place in, I think, early April.
7.47
By December 2020, decreases in visas being lodged and granted continued. In the six months from 1 July to 31 December 2020, as compared with the same period in 2019, for the Working Holiday Maker program there was:
A total of 20,939 Working Holiday Maker (WHM) (subclass 417 and subclass 462) visas granted, an 80 per cent decrease from 104,795;
a 99.5 per cent decrease in first Working Holiday (subclass 417) visa grants from 70,193 to 348;
a 24.1 per cent decrease in second Working Holiday (subclass 417) visa grants from 15,851 to 12,035;
a 99.5 per cent decrease in first Work and Holiday (subclass 462) visa grants from 15,342 to 83; and
a 5.4 per cent increase in second Work and Holiday (subclass 462) visa grants from 3,409 to 3,594.
7.48
This was accompanied by an overall decline of Working Holiday Visa holders in Australia, with a 64.9 per cent decrease in the number of visa holders in Australia from 141,142 in 31 December 2019 to 49,542 in 31 December 2020.
7.49
For skilled temporary workers (subclass 457), there was likewise a 36.4 per cent decline in the number of applicants in the 2020-21 period (13,070 applicants), as compared to the 2019-20 period (20,530 applicants).
7.50
Information on the Temporary Work (International Relations) visa (subclass 403), which includes the Seasonal Worker and Pacific Labour Schemes, is not maintained online in a comparable way to other programs. Additionally, the impact of the COVID-19 pandemic on international students is discussed in the education section of the report.
JobKeeper
7.51
In response to the COVID-19 pandemic, the Federal Government introduced the JobKeeper subsidy, which was announced on 30 March 2020 and ran until 28 March 2021. The subsidy initially gave businesses and not-for-profit organisations $1,500 per fortnight per employee to assist in paying wages. From 28 September 2020 to 3 January 2021, the payment rate was stepped down to $1,200 per fortnight for eligible employees working 20 hours a week or more and $750 for employees working less than 20 hours a week. From 4 January 2021 to the completion of the program, the rate again decreased to $1,000 per fortnight for eligible employees working 20 hours a week or more and $650 for employees working less than 20 hours a week.
7.52
DISER provided figures to the committee regarding the uptake of JobKeeper in Northern Australia. DISER only provided numbers for April and May 2020, but indicated that applications for JobKeeper in northern Australia totalled 31,778 at that time (4,649 in Northern Territory, 25,224 in Queensland, and 1,905 in Western Australia). The highest amount of uptake in Northern Australia was in the health care and social assistance, retail, and construction sectors.
7.53
In August 2020, Ms Linda Lee, General Manager, Office of Northern Australia, Northern Australia and Major Projects Division, Department of Industry, Science, Energy and Resources, stated that nearly 32,000 businesses in north Australia have benefited through that program and that more than 100,000 individuals were part of the JobSeeker program.
7.54
Witnesses in the inquiry expressed anxiety about what would occur to businesses when the JobKeeper subsidy ended entirely. Mr Gareth Phillips, Chief Executive Officer, Association of Marine Park Tourism Operators, described how his industry viewed the situation:
The operators are talking about the two cliffs when this bubble holiday period ends and then also the cliff when JobKeeper winds back. Already banks are starting to call on the deferred loans and the sting is in the tail of that. A lot of our operators have that optimism where they are hoping they can try and put some money in the bank or recoup something to see them as far through as possible, and then we'll continue to lobby for what can be done—is there is there an extension of the JobKeeper or some similar scheme?
7.55
Mr Kevin Byrne, President, Cairns Tourism Industry Association, described how the impact on the tourism sector could be particularly dire:
I'd like to go one step further: there's going to be a day of reckoning for the tourism industry here, which is fast approaching, at the end of the school holiday period. That's it, unless the period runs into Chinese New Year. That's not going to happen anytime soon. That's the first day of reckoning. The other day of reckoning is: how long do you keep these artificial stimuli going in the economy?
7.56
Councillor Bob Manning, OAM, Mayor, Cairns Regional Council, explained how JobKeeper was ending at a particularly difficult time for tourism businesses:
…the position of council regarding the tourism industry and the tourism bodies is that JobKeeper needs to be carried through, maybe to June or beyond June next year. Nobody is too sure. Once we get to the end of January and we step into February, we generally step over a cliff. From February through to June, there's very little activity. We used to get international activity, which had lower numbers but higher spend, which was helpful for a business to remain operational and even profitable. What could happen here is that we get to February and find out that we're going into a big black hole and we remain there until possibly May or June. We could start to lift out of that with the beginnings of our normal winter activity. If that were the case, a number of operators would not get through that. JobKeeper has really been what's kept a lot of people involved in the industry—maybe not at a profitable level.
7.57
However, JobKeeper did ultimately cease on 28 March 2021. While the committee's tabling date has meant that it is unable to look into the ongoing impact of the loss of JobKeeper in Northern Australia over the upcoming months, it anticipates that other inquiries—such as those undertaken by the Senate Select Committee on COVID-19—will examine this matter further.
Sources of labour
7.58
Submitters highlighted several issues in relation to difficulties sourcing labour in Northern Australia, and wide support was offered for programs for skilled migration.
7.59
The Northern Territory Farmers Association (NT Farmers) explained to the committee that all sectors of their industry are reliant on the availability of skilled, semi-skilled and unskilled staff for casual and permanent roles. However, due to the often remote employment locations and the sometime harsh environmental conditions in which staff are required to work, the sector faces significant challenges in accessing and retaining staff. NT Farmers observed that these challenges are often most pronounced during peak operational periods such as harvests.
7.60
Similarly, AgForce Queensland Farmers (AgForce) explained that the agricultural 'labour force is ageing, there are fewer young people entering agriculture and drought and other competing industries have had a significant impact on the amount of labour available'.
7.61
NT Farmers explained that staff shortages have a range of negative consequences on individual businesses and the broader industry, and can threaten the successful harvesting of an entire year's investment in crops.
7.62
For this reason, NT Farmers advocated for policy settings which mitigate an over-dependence on the one source of casual harvest labour, for example, working holiday makers. NT Farmers concluded that 'the development of an agriculture specific visa would be beneficial for the sector.
7.63
AgForce also offered its support for initiatives which increase migration and the flow of workers to Northern Australia:
Programs such as the Seasonal Worker Program, expansions to the Working Holiday Makers Visa Program and the development and finalisation of a Designated Area Migration Agreement for Far North Queensland, are strong initiatives that help direct workers to where they are needed in the agricultural industry and Northern Australia more widely. AgForce supports the intention behind programs such as the Pacific Microstates Northern Australia Worker Pilot but, recommends that the program be expanded, as participating workers were primarily directed toward hospitality.
7.64
Mr Burke, Chief Executive Officer, Northern Territory Farmers Association, offered his support for the Seasonal Worker Program. Mr Burke described it as an 'outstanding success'. Mr Burke stated:
Now we're in the second year. Organisations like almonds and mangoes are having the same workers come back from the same country for a second year and they're actually now investing in upskilling some of those seasonal workers with things like forklift tickets and the like. So I think that program has been an outstanding success.
7.65
The Northern Territory Seafood Council also stated that 'there are issues impacting on migration options to address skills shortages in the aquaculture industry'. It stated that there are inconsistent definitions and interpretations in the regulatory regime, and that employment pathways have been hindered by issues relating to the permanent residency pathway for certain occupations.
7.66
Similarly, Mr Nick Trompf, Executive Chairman, Advance Cairns, told the committee that there are a number of issues with DAMAs which are impacting the ability for businesses to recruit required staff. Mr Trompf stated that there is a view:
… that the volume of roles is not enough. There are different types of roles that they would like to see qualify for DAMA that don't currently qualify…Given the stresses on workforce and some of the growth areas that are emerging, the designated area migration agreement could be one of the key opportunities to unlock some of that growth opportunity, if it can be tweaked.
7.67
However, other submitters had concerns about programs that imported out-of-state and out-of-country workers into Northern Australia, instead favouring the development of local workforces. The Australian Manufacturing Workers' Union (Queensland and Northern Territory) described how developing local workforces should be given priority:
In order to deliver the government’s broader Northern Australia agenda, priority should be given to projects that will expand local supply chains and deliver long-term, secure and skilled jobs as this is in the best interests of Northern Australian communities and their developing economies.
Fly-in-fly-out workers
7.68
A range of submitters provided evidence regarding the use of FIFO workers in Northern Australia, and the effects of this type of workforce on northern communities. For example, Regional Development Australia Pilbara (RDA Pilbara) stated that:
There has been considerable debate on the issue of FIFO workers in recent years. RDA Pilbara fully supports initiatives that enhance residential communities, while recognising that under certain circumstances (construction, maintenance shutdown etc) FIFO is the logical business choice.
7.69
The Indigenous Reference Group to the Ministerial Forum on Northern Development (IRG) noted that a large number of private and public sector organisations still rely on FIFO workers despite historical incentives intended to encourage workers to relocate to regions. It submitted:
…historical incentives such as the Remote Area Taxation and Payment Scheme have largely failed to adequately incentivise worker relocation, with a large number of private and public sector organisations across Northern Australia still significantly dependent on Fly-In-Fly-Out (FIFO) human resources strategies to fulfil workforce requirements with respect to both manpower and access to specific skill-sets.
7.70
RDA Pilbara highlighted that the workforce in the Pilbara is primarily reliant on the resource sector, with a small population of only 61,483 and approximately 64,000 jobs. It explained that the number of FIFO workers fluctuates 'in line with the fortunes of the resources sector and its business cycle'. RDA Pilbara stated that with greater certainty for small and medium enterprises the number of employees would rise, and that this would improve the socio-economic wellbeing of the population.
7.71
The Shop, Distributive and Allied Employees' Association (SDA) described the 'embrace' of FIFO jobs as 'an alarming trend' that all levels of government must address. It acknowledged that FIFO jobs are at times 'unavoidable across Australia's north' but that 'the proliferation of FIFO workers in major centres' was a cause for concern. The SDA explained that FIFO employment arrangements in the Northern Territory exist much more broadly beyond the resource sector, including in construction, government administration and defence, agriculture , forestry and fishing, and manufacturing.
7.72
The SDA expressed its concern regarding the extent to which employment in the Northern Territory has been driven by FIFO workers. It explained that SDA members are largely local residents working in jobs which are reliant on consumer spending in that location. As such, the proliferation of high-income FIFO jobs in Northern Australia results in less money being spent locally, impacting on job security for local SDA workers.
7.73
The Queensland Council of Unions (QCU) was stronger in its criticism of FIFO arrangements, describing them as 'one of the greatest threats to public and private investment in infrastructure and its associated economic development in regional Australia'. It stated that 'this would also appear to be the case in Northern Australia'. The QCU also noted that 'FIFO has extended to employment and industries beyond its traditional use'.
7.74
Mrs Adrienne Rourke, General Manager, Resource Industry Network, described her 'frustration' regarding the number of FIFO workers in Mackay. Mrs Rourke stated:
There is still a significant amount of fly-in fly-out, though. One of the frustrations, as someone who does have to travel to Brisbane or other capital cities for work, is the number of fly-in fly-out people on our flights from Mackay. I just wish I could encourage them to move to Mackay. We want more people living here and spending their income here rather than taking the money that they've made from our region back to wherever it is they reside. We'd like them to be living here in our region.
7.75
The Town of Port Hedland (TPH) noted that the Queensland Government has passed legislation designed to regulate the use of FIFO workforces, and ensure that regional communities enjoy the benefits of local projects. It submitted:
The Queensland government has taken responsible steps to embed strong communities in statute with enactment of the Strong and Sustainable Communities Resource Act 2017. The Act applies to large resource projects within 125 kilometres of a nearby regional community and it prevents 'operational' large resource projects from having a 100 percent FIFO workforce; discrimination against locals when recruiting and terminating workers; prioritises recruitment from local and regional communities, then recruitment of workers who will relocate and live in nearby communities; and makes social impact assessments mandatory. The Act also establishes an oversight of the Act and complaint handling mechanism through a position of Coordinator General.
7.76
In addition, Economic Development Queensland released the Non-Resident Worker Accommodation guidelines in 2015 for:
…planners and resource companies to ensure the quality of accommodation developments for workers; improve built form; manage duplicate infrastructure in townships; address demands on town facility and services; contribute financially to the town; and locate developments so as not to impact on adjoining uses.
7.77
The TPH noted that while the Western Australian Government has been 'applauded for introducing the Western Australian Jobs Act 2017, which embeds buy local in government supply contracts, this does not apply to mining companies'. The TPH submitted:
While it is acknowledged that it is important not to constrain competition, it would be economically beneficial for government to negotiate local supply chain opportunities as part of licensing agreements with mining companies.
7.78
The TPH was also critical that the Australian Jobs Act 2013 only broadly defines 'local' as 'Australian Businesses'. The TPH stated, however, that there are opportunities for improvement:
There may be opportunity; however, for the federal government to embedding policy related to Australian Industry Participation Plans, mandatory for projects over $500 million, the requirement for proportionate reliance (where feasible and competitive) on town supply chain opportunities.
7.79
The TPH concluded by recommending that the Australian Government consider reviewing the policy for Australian Industry Participation Plans with a view to facilitating industry agreement for proportionate use of local supply chains and workers at the regional and town level. It also recommended Queensland's statutory and policy frameworks should be explored to determine broader application across Northern Australia.
Fringe Benefits Tax
7.80
Witnesses called for changes to be made to current tax arrangements – namely Fringe Benefit Tax (FBT) and remote area allowances to reduce the number of FIFO workers being employed. For example, Mr Paul Everingham, Chief Executive Officer, Chamber of Minerals and Energy of Western Australia, stated:
The introduction of FBT meant the incentive was taken away from the employer to provide company housing—housing often being the most expensive component of your personal expense if you try to live in Northern Australia, because the cost of land and the cost of building is so high in north Western Australia—as an incentive. So we definitely support reform in that area.
7.81
Similarly, the Australian Labor Party Mt Isa Branch stated that FIFO, encouraged by the imposition of FBT on company provided housing, has been the principal reason for the depopulation of mining and mineral processing regions.
7.82
The TPH noted that while one of the targets of the Northern Australia White Paper is a substantial population growth by 2035, this is 'constrained by the continued use of FIFO, favoured by mining companies due to federal tax incentives which discourage residential settlement'. The TPH highlighted that in 2018, it was estimated that 63 per cent of Western Australia's workforce were FIFO.
7.83
The Australian Labor Party Mt Isa Branch also recommended that criteria for Tax Zone Rebates be amended to ensure that only permanent residents residing continuously in an area be eligible for rebates. It submitted:
Removing the benefits now enjoyed by fly-in fly-out workers residing in populous cities and increasing benefits to residents in remote communities is an attempt to properly compensate for the disadvantages of remote location, and also to encourage more permanent residents to settle in remote Australia. This paper has indicated that these minimum proposals require little or no additional cost to revenue.
7.84
Similarly, the Port Hedland Community Progress Association submitted that 'to foster permanent growth we require the current taxation system be adjusted to support permanent population development'.
Access to employment opportunities
7.85
Submitters such as the Torres Shire Council highlighted the urgent need for employment opportunities particularly for the large number of 'well-educated young people' residing in northern communities.
7.86
Councillor Les Walker, Deputy Mayor, Townsville City Council observed that in Townsville:
Both Indigenous and youth unemployment rates are unacceptably high at around 20 per cent. It needs to be strongly noted that that is very, very high. The population remains relatively static, with the five-year average annual growth of just 0.8 per cent.
7.87
Mrs Danelle Dowding, Executive Officer, Regional Development Australia Kimberley, also highlighted the difficulty in the Kimberley of retaining and attracting an appropriately skilled workforce despite significantly high unemployment rates. Mrs Dowding stated:
One of the greatest challenges that we continue to face is the retention and attraction of an appropriately skilled workforce, despite the fact that our unemployment rate is 16 per cent—up four per cent over the past four years, compared to the relatively stable national average. In a region with high unemployment, and despite the substantial funding and effort to employ more local people, there continues to be this shortage of labour and a reliance on visa workers in several key industries.
7.88
The Torres Shire Council highlighted that both First Nations and non-First Nations residents in the Torres Shire Local Government Area (LGA) out-perform the rest of Queensland in terms of obtaining both year 12 qualifications, and non-school qualifications. Despite this, twice the number of people who are most disadvantaged reside in the Torres Shire LGA compared to the rest of Queensland.
7.89
The Torres Shire Council stated that these statistics demonstrate weaknesses in current government strategies which have resulted in 'an intelligent reserve army of labour unable to be gainfully employed'. The Torres Shire Council stated that this situation has arisen for to the following reasons:
there has been an historical disjuncture between training and skill development and sustainable employment, perfectly exemplified by industry skill based programs being subsidised so long as some sort of employment results (such as casual engagement);
strategies aimed at skill development have many times lacked Indigenous agency;
overcrowding of employment placement agencies whether government or non-government, has diluted focus and resulted in enormous amount of effort and resources being directed towards attraction to their agencies and not to sustainable employment; and
the focus of government support has more often than not been premised on a policy construction of First Nations peoples as a supply of labour rather than from the perspective of First nations peoples being business owners and providers of employment.
7.90
Generation One, an initiative of the Minderoo Foundation also stated that while there has been significant investment in training, a supply driven approach to training and work readiness has resulted in 'many Indigenous people being trained with an ever-increasing list of certificates to add to their CVs but no regular employment history'.
7.91
Similarly, the IRG noted an absence of sector and regional workforce planning for current and future work opportunities, and that this is coordinated with localised delivery of training and education. The IRG stated that this has resulted in an First Nations population that does not have capacity to engage in the workforce or to compete with a transient workforce.
7.92
Witnesses also highlighted the reliance on projects for employment opportunities which creates a 'feast or famine' situation where opportunities are sporadic. For example, Generation One explained that demand for employment in Northern Australia can be low or at the very best variable, with a heavy reliance on social services (through the government and non-government sector) and short-term infrastructure projects, such as roads, engineering and seasonal agriculture. Mining also plays an important part in some parts of Northern Australia, but the distribution of projects is inconsistent across the north.
7.93
This also creates issues in ensuring that there is an adequately skilled workforce ready for future projects. For example, Mr Neil Lethlean, Regional Economic Development Manager, Capricorn Enterprise stated:
I'd like to talk about the skilled workforce that's confronting our region and is a fairly major issue for our region currently and for the next five years. We're working significantly with seven major projects in our region. It's either feast of famine, regrettably, in regional Australia, and we're feeding off that feast at the moment. The downside of that is that we could be up to 3,000 skilled workers short, probably at the peak time of around 2021 through to 2023, when all of these projects are at major workforce stage. Recruiting a skilled workforce to the regions is a very difficult task, and we're looking at strategies to achieve that, whether it's upskilling regional capacity or bringing new capacity to our regions.
7.94
Similarly, the Australian Manufacturing Workers' Union (QLD and NT) noted that regional workers, particularly in Northern Australia, are vulnerable to unplanned economic transition. For example, a significant proportion of Northern and Western Queensland's heavy industrial capacity is reliant on the coal industry for ongoing work, and therefore vulnerable to the winding down of the thermal coal industry. It noted that 'most workers in this sector are highly skilled and are capable of adapting their existing skills' however, it is crucial that assistance be provided to develop and sustain regional vocational training capabilities. The Australian Manufacturing Workers' Union (QLD and NT) recommended 'ongoing funding to support the delivery of contemporary skills that meet the emerging needs of Northern Australia'.
Childcare
7.95
The committee notes that affordable and accessible childcare is an absolute necessity for many Australians to fully access employment and education opportunities. The Town of Port Headland submitted that it was short 300 childcare placements. The East Kimberley Chamber of Commerce and Industry likewise noted the ongoing issues with accessing childcare in the area.
7.96
Mr Vernon Lawrence, Chief Executive Officer, Shire of Wyndham East Kimberley, told the committee that a lack of childcare was impacting the ability to attract workers to his region:
Our ability to attract and retain skilled workers is severely hampered by liveability issues in the region. These issues are a barrier to economic development in the region. Apart from the high air transport costs, the lack of adequate childcare places and access to fast broadband and mobile services are extremely concerning. For child care, for instance, at any one time the waiting list at one of our centres ranges from between 80 and 100 places. As an example, the shire recently lost two of its employees, who resigned and left the region as they were unable to secure childcare services.
7.97
Furthermore, the ability to attract childcare workers to the region to increase facilities in this area was limited by the lack of available housing for childcare workers to live in. Regarding the training of locals to fill this role, Mr Lawrence noted that appropriate courses had only recently been introduced at the local TAFE.
Education
7.98
Submitters argued that the development of an appropriately skilled workforce 'requires a greater focus on education'. This includes 'education infrastructure, support to stay and succeed in school, pathways to training, employment and career opportunities and partnerships with education providers'.
Educational outcomes and attainment
7.99
There is a growing body of research commissioned by both government and private agencies which indicates that regional areas of Australia, including across Northern Australia, do not achieve the same educational outcomes and attainment as metropolitan areas of Australia. CQUniversity explained that educational disparities can be identified from a very young age with the Australian Curriculum, Assessment and Reporting Authority's National Report for 2017 identifying that students from major metropolitan areas consistently outperform students from regional and remote areas, across all National Assessment Program Literacy and Numeracy (NAPLAN) achievement domains.
7.100
These differences in educational attainment and outcomes continue throughout the educational system. Studies in 2015 found that while 34.6 per cent of 20–24 year olds in Australia's cities were enrolled in tertiary study, only between 12.5–12.7 per cent of 20–24 year olds in regional Australia were enrolled in similar programs. Students from regional backgrounds were also found to face greater challenges in completing tertiary study with only 69.8 per cent of students from regional areas, and 59.5 per cent of students from remote areas completing bachelor level studies commenced. By comparison, 75 per cent of students from metropolitan areas completed their studies. CQUniversity submitted that:
These lower completion rates correspond with the lower rates of educational attainment realised by regional and remote students through primary and secondary education; and demonstrates the need to better prepare and support regional and remote students for tertiary study.
7.101
The committee received evidence that many of these educational trends are apparent in Northern Australia. For example, Australian Census Data (2016) indicates that only 50.7 per cent of all persons in Central and Northern Queensland had completed years 11 or 12, compared to 60.6 per cent of persons in the balance of Queensland. In addition, surveys conducted by Education Queensland in 2015 found that while 48.3 per cent of high school graduates in Brisbane enrol in university at the completion of year 12, only 29.6 per cent of school-leavers from regional Queensland, and 16.4 per cent of school-leavers from rural Queensland do so.
7.102
CQUniversity stated that 'these differences in educational attainment have significant economic consequences for regional communities, and for Australia as a whole'. Similarly Business Foundations, a national not-for profit business advisory and training organisation based in Western Australia submitted:
Our experience is that there is a deficit in functional literacy and numeracy that needs to be addressed, particularly in the post-school age adult cohort who may have slipped through the educational cracks.
7.103
Research on the economic impact of regional disparities in educational attainment in Australia suggests that addressing such disparities could improve Australia's Gross Domestic Product by 3.3 per cent or $56 billion.
7.104
In addition, it is estimated that the fiscal and social cost of people not engaged in full-time work or study by the age of 24 is approximately $412,000 per person. Many of these costs fall directly on the local community.
7.105
CQUniversity highlighted that the 2019 Next Step Survey conducted by the Queensland Government identified that 37.7 per cent of school leavers from regional Queensland were not engaged in tertiary study or full-time work. As such, the economic consequences for Central and Northern Queensland are significant.
Access to higher education
7.106
The ability to access higher education institutions also has a significant impact on regional communities. For example, admissions data from 2015 indicated that while 92 per cent of school-leavers proceeding to university in Brisbane were able to enrol at a local institution, only 35 per cent of Mackay school-leavers enrolling in university were able to do so. The remaining students from Mackay largely chose to move to Brisbane, resulting in more than 300 individuals moving away from their local community. CQUniversity stated:
The social cost to regional communities of having their "best and brightest" leave the community each year is considerable, as is the financial burden to families in supporting those students for the duration of their study.
7.107
AgForce noted that the closure of the largest provider of agriculture training in Northern Australia, the Queensland Agricultural Training Colleges (QATC), as well as a number of private providers such as the Northern Skills Alliance in Cairns has left a shortage of agricultural training capacity in Northern Australia.
7.108
CQUniversity also explained that studies have found that a significant number of students who move away from their regional communities fail to return. As a result, regional businesses have to pay a premium to attract graduates (not necessarily from local communities) to fill vacancies.
7.109
CQUniversity recommended that:
To fully develop Northern Australia's potential, it is recommended the Australian Government better recognise the educational challenges that exist in Northern Australia and develop policy and funding mechanisms that specifically address those challenges.
Focus on education and the skills shortage
7.110
Submitters made a range of suggestions regarding the types of education and training which should be facilitated in Northern Australia to best develop an appropriately skilled workforce. For example, Business Foundations suggested that:
Innovative approaches are required and a focus on taskbased job skills and VET learning is perhaps more important than a university focus to meet the jobs that are currently available in Northern Australia.
7.111
This was echoed by Mr John Hine who submitted that 'a significant rebuilding of Australia's VET system seems warranted. That Australia has to import people with such core skills as welders and motor mechanics from overseas seems a national failure'. Similarly, Dr John Martin, Research and Policy Officer, Queensland Council of Unions, called for the restoration of funding to the TAFE system. Dr Martin stated that:
…the amount of funding that has been taken out of TAFE, out of vocational education, which, according to this, has seen a decline of 21.3 per cent from its peak in 2012, it appears, with the skill shortages…that there is this attitude that we will rely upon skilled migrants rather than making our own skilled workers, which obviously is not a good thing for the Australian workforce.
7.112
This decline in take-up of apprenticeships and traineeships has continued since Dr Martin gave his evidence in March 2020. The National Centre for Vocational Education Research released its data for the September 2020 quarter, found that nationally there was a 23 per cent decline in commencements and a 17.2 per cent decrease in completions. In the 12 months to 30 September 2020, when compared with the 12 months ending 30 September 2019, commencements decreased by 18.8 per cent and completions decreased by 9.8 per cent.
7.113
While the National Centre for Vocational Education Research does not break down data into the Northern Australia area, it does provide statistics for states. Regarding apprenticeships and traineeships, it found that:
in Western Australia, there were 14,845 commencements (down 13.6 per cent from 2019) and 8,955 completions (down 16.9 per cent from 2019);
in Queensland, there were 30,580 commencements (down 18 per cent from 2019) and 20,120 completions (down 10.3 per cent from 2019); and
in the Northern Territory, there were 1,665 commencements (down 28.4 per cent from 2019) and 1,015 completions (down 6.1 per cent from 2019).
7.114
Data on apprenticeships and traineeships from across Queensland show a clear decline, as is illustrated in Table 7.1.
Table 7.1: Queensland apprenticeships and traineeships
|
|
|
|
|
|
|
QLD overall
|
88,549
|
55,502
|
-33,047
|
-37.32%
|
|
Central and West QLD
|
7,886
|
4,876
|
-3,010
|
-38.17%
|
|
North QLD
|
17,837
|
11,638
|
-6,199
|
-34.75%
|
Source: Department of Education, Skills and Employment Data - received 18 December 2020 (September 2020 quarter)
7.115
Wilmar Sugar Australia Limited argued that the Australian Government should offer support for programs which encourage the uptake of trade qualifications by school leavers. It stated:
We recommend the Federal Government work with Queensland education agencies (especially TAFE) and industries such as the sugar industry to grow the job pool and the skilled workforce in the north, ensuring the training and development infrastructure and services that will support all industries.
7.116
Ms Patricia O'Callaghan, Chief Executive Officer, Townsville Enterprise Limited, explained that while Townsville's unemployment rate was the lowest it had been in five years, youth unemployment remained high. Ms O'Callaghan also noted that despite the high rate of youth unemployment there also exists a skills shortage in a range of sectors including professional services, mining industries, and health care. This is a perverse outcome and shows a clear failure of training and employment policy.
7.117
AgForce highlighted the impact of 'brain drain' on maintaining a population in Northern Australia and offered its support for initiatives such as post-graduate scholarships offered by the Cooperative Research Centre for Developing Northern Australia (CRCNA). AgForce suggested that such 'initiatives could be expanded by industry-targeted skilling for workers through subsidies from the Office of Northern Australia in agricultural higher education programs or ag colleges'. Ms O'Callaghan, Townsville Enterprise Limited, also noted the 'brain drain' from regional areas. Ms O'Callaghan stated:
There is a romance around cities. We do see our younger people leaving not just to study but to have a career path outside of our northern areas. I don't think anyone would discount our youth travelling and enjoying the experiences of different regions around the country, but we also want them to come back, or we would like them to stay in the first place, and to do that we do need to provide career pathways for them; we need to provide jobs for the future.
7.118
Regional Development Australia Far North Queensland and Torres Strait (RDAFNQTS) advised that unemployment is statistically far higher in the regions than in capital cities, and that 'this indicates the existence of an unengaged, unskilled labour source'. RDAFNQTS suggested that the introduction of a National Trades Initiative could provide access to trades and skills training, particularly for school leavers not undertaking tertiary education. The RDAFNQRS suggested that under such a scheme, participants could receive the same stepped wage rate as an apprentice, which would replace unemployment benefits or alternative government payments.
7.119
Regional Development Australia Townsville and North West Queensland (RDATNWQ) submitted that in order to 'drive the future of our region, we need to put a strong emphasis on the future skills needed by industry and businesses'. It noted that:
Technological advances and opportunities associated with innovation, not only in the IT and online environment but across all industries, need to be captured and encouraged in the North to ensure we diversify and provide pathways for future industries, businesses and jobs. Investment into skills, infrastructure and communities will enhance the north's ability to access, leverage and develop these new opportunities.
7.120
As such, RDATNWQ suggested that there needs to be an increased focus on science, technology, engineering and maths (STEM) skills. It explained:
While a focus on skilling our existing workforce in STEM related work is important, we should also focus on the future workforce and provide children across our region opportunities to access STEM related learning. With a focus on increasing their access to STEM learning opportunities, we could see an increased take up of STEM appropriate tertiary and vocational education and therefore be preparing the appropriately skilled workforce for the future.
International students
7.121
The committee received evidence regarding both the positive economic impact international students have on the regions in which they study; and that many international students contribute to the regions in which they studied by choosing to live and work there upon graduation.
7.122
The International Tertiary Education Council Australia (ITECA) noted the Department of Education, Skills and Employment's 2019 report entitled International students studying in regional areas which found that three of the top five regional centres for international student enrolments were in Northern Australia. These were:
Darwin (at number two) with 2,625 students;
Cairns (at number three) with 2,745 students; and
Townsville (at number five) with 1,860 students.
7.123
ITECA submitted that in 2017, the contribution to the economy from each individual international student studying with an independent VET provider was $28,051. It explained that:
There is no reason to believe that the economic contribution would be substantially different at a regional level or for students in higher education. This highlights the substantial benefit that Northern Australia seeks to gain by raising its international student numbers.
7.124
ITECA noted that the Northern Territory Government has undertaken significant work to develop international education in order to diversify the territory's economy. The 2021-24 Northern Territory International Education and Training Strategy seeks to position the region as a destination of choice for international students. The measures established under the strategy, including the establishment of StudyNT, were developed in consultation with ITECA and its members in the independent tertiary education sector. Similarly, the Queensland Government has proactively sought to attract international students to study in the north of the state. For example, programs such as Study Townsville and Study Cairns contribute to attracting international students to these cities.
7.125
ITECA stated that while there is certainly a role for the Australian Government to lead a reinvigorated national strategy for international education, the 'excellent work of the Northern Territory and Queensland Governments needs to be both recognised and supported in future approaches'. It stated:
ITECA notes the high degree of engagement and support that both the Northern Territory Government and the Queensland Government afford. As these jurisdictions introduce and monitor programs to support the current and future generations of workers, there is a clear commitment to empowering independent tertiary education providers so that they can deliver education, training and skills to international students studying across Northern Australia.
7.126
Though ITECA was supportive of the 2019 announcement by the Australian Government that the Destination Australia Program would provide 4,720 scholarships of up to $15,000 a year for domestic and international students to study at a regional provider of tertiary or VET education, it also raised a number of concerns. ITECA explained that in encouraging international students to study in regional areas, consideration should also be given to ensuring enhanced and appropriate support networks are available to students. It noted that while these networks are strong in metropolitan areas, such networks do not always exist in regional areas. ITECA submitted:
It is unfair to overseas students to place them in a locale without the support to help them adapt to challenges in being away from home, and often in a different culture, for sustained periods of time.
7.127
Charles Darwin University favourably noted the progress of DAMAs in Northern Australia, particularly the introduction of the Temporary Graduate visa with an extra year of post-study work rights for international students who graduate from a regional campus and maintain ongoing residence in regional areas while holding their first Temporary Graduate (subclass 485) visa. It stated that this initiative has:
…had a positive impact on workforce growth in the region and will be a strong attractor for international student enrolment growth. This could be extended to 5 years' post-graduation working visas with a pathway to permanent residency.
Impact of COVID-19 on the university sector
7.128
The COVID-19 pandemic, and associated international border closures, has had an unprecedented impact on the international student program in Australia. In the 2020-21 program year to December 2020, there were 133,139 student visa applications lodged, which is a decrease of 41.3 per cent compared with the same period in the previous program year. Additionally, visa applications lodged by applicants outside Australia in the 2020-21 program year to 31 December 2020 decreased by 65.3 per cent to 43,292 lodgements, as compared with the same period in the previous program year.
7.129
In terms of visas granted, there were 120,962 student visas granted in the 2020‑21 program year to 31 December 2020, a decrease of 39.8 per cent compared with the same period in the previous program year. The Department of Home Affairs reported how this impact varied across sectors:
All sectors experienced a decrease in visa grants in the 2020-21 program year to 31 December 2020 with a decrease of 24.6 per cent in the VET Sector, 32.5 per cent in the Higher Education Sector, 82.2 per cent in the ELICOS [English Language Intensive Courses for Overseas Students] sector and 27.9 per cent in the Postgraduate Research Sector when compared with the previous program year.
7.130
During this time, the Department of Home Affairs put measures in place to assist student visit holders who are currently in Australia:
The grant rate for applicants in Australia was 99.9 per cent in the 1 October 2020 to 31 December 2020 quarter. As a result of COVID-19 when travel restrictions became widely in force and flight availability was restricted, adverse decisions relating to Student visa applicants lodging from within Australia were deprioritised. This is reflected in the high grant rate for this period for applications lodged within Australia.
7.131
The Australian Government has provided some support to the university sector, which has faced substantial challenges during the COVID-19 pandemic. This support included, the Higher Education Relief Package, announced on 12 April 2020, which:
increased flexibility in use of Commonwealth Grant Scheme (CGS) funding across designated and non-designated places;
created new short online courses; and
offered some regulatory fee relief.
7.132
However, the significant loss of international students' revenues has meant that Australian universities still suffered economic substantial losses. Universities Australia reported to the Senate Select Committee on COVID‑19 that, as no university was eligible for JobKeeper despite a revenue shortfall of $3.1 billion to $4.8 billion in 2020, job losses of 4,729 staff were announced.
7.133
The Regional Universities Network noted that the Higher Education Support Package did not provide hardship support for domestic and international students who were currently in Australia, who may have lost their jobs due to the COVID‑19 pandemic and did not qualify for other government assistance, nor did the program assist universities in coping with the loss of international student revenue. The Regional Universities Network cited modelling that suggested that Australia's universities were facing a cumulative loss of between $10 to $19 billion from 2020-23 because of the collapse in international student revenue.
7.134
James Cook University submitted to the Senate Select Committee on COVID‑19 that the university was continuing to face ongoing challenges from the pandemic:
We are now working hard to ensure that our operations are financially sustainable going into the economic conditions forecast over 2021 – 2025. This is difficult as the impact of fewer students in 2020 will ‘pipeline’ into 2021, 2022 and will not wash out of the system until 2023. That said, our academics and professional and technical staff are looking to ensure we are offering the right educational opportunities and support at the right time and in the right way. Participation in higher education in northern Queensland is lower than state and national averages – and now more than ever we need to find new ways to lift and regenerate the region’s capability.
7.135
The Regional Universities Network—which includes Charles Sturt University, CQUniversity, Federation University Australia, Southern Cross University, University of New England, University of Southern Queensland, and University of the Sunshine Coast—likewise submitted that its members have been impacted by the decline in international student numbers, the transition to online delivery, higher attrition rates for students and lower re-enrolment rates.
7.136
James Cook University further noted the ongoing importance of regional universities to their local areas and communities:
Finally, the Australian Government has an important role to play in ensuring universities, particularly in regional areas, serve as anchor institutions that stabilise and regenerate regional economies through direct and indirect employment. We cannot afford to lose the highly skilled academic, research, and professional and technical staff that we need to fulfil our missions in the communities we serve or diminish our capacity to support our broader community.
7.137
The Regional Universities Network made recommendations relating to areas where the Australian Government could provide assistance to regional universities that would assist the universities to weather the crisis and to support their employees and communities:
Regional loading provides additional funding to universities with regional campuses to assist them meet the higher costs associated with those campuses. A doubling of the current funding level of around $74 m per annum would greatly assist regional universities to manage the impact of COVID19, particularly in retaining staff in regional locations.
Implementation of the recommendations and actions from the 2019 National Regional, Rural and Remote Tertiary Education Strategy would help support regional industry and boost economic development, including targeting our research expertise and capability to align with areas of need in our communities.
7.138
The committee notes that, at the time of writing, the Senate Select Committee on COVID-19 is yet to table its final report. While the committee notes that the Senate Select Committee on COVID-19 will examine this matter further, it highlights the importance of regional universities to Northern Australian economies and encourages the Federal Government to provide targeted support to universities in regional areas.