Towards a Net Zero Workforce: Overcoming Structural Barriers

Australian governments – national, state/territory and local – are taking seriously the transition to a “net zero” economy. This includes establishment of the new national Net Zero Authority “to ensure that the workers, industries and communities … can seize the opportunities of Australia’s net zero transformation.” We will soon see “huge public spending to kickstart a new era of green industries” that will “drive economic change”, says Treasurer Jim Chalmers. The primary driver of these new industries: clean electricity.

Skilling for a “net zero” economy has become a major discussion point with Australian industry, government, economists and non-profits. The comprehensive Jobs and Skills Australia (JSA) report, The Clean Energy Generation: workforce needs for a net zero economy (October 2023), works to define the clean energy workforce, identify critical occupations and make recommendations. The study identifies the industry workforce requirements in energy supply, energy demand, enabling clean energy workforce, carbon lifecycle, emissions-intensive sectors and transitioning sectors.

The JSA report outlines how a net zero transformation “presents an unprecedented opportunity to revitalise the Australian education and training sector”, in which “Australia can be a renewable energy superpower.” This is heady stuff.

Source: Global Australia

Three issues that need to be addressed in a net zero workforce strategy: the challenge of recruiting women; how literacy and numeracy (“foundation skills”) needs will hold us back; and structural issues in Australia’s post-secondary education system. These are not the only issues (engagement of First Nations and migrants into this workforce are also essential), but possibly the most significant barriers to be overcome.

Women in the Net Zero Workforce

Not surprisingly, almost all the 38 occupations identified in the JSA report as essential for net zero are traditionally “male” roles in engineering, transport, plumbing, electricity distribution, building, metals and machinery, agriculture, chemistry, mining and other trades. The report (p. 16) acknowledges the predominantly male characteristics of the current workforce will hold it back: “The clean energy sector cannot grow at the scale required without the participation of half of Australia’s population, but this won’t happen without addressing significant barriers that exist. Many female engineers report experiencing gender discrimination and bullying in the workplace and do not feel they have equal access to career progression opportunities, salary advancement or mentoring. The energy sector also has the third highest incidence of workplace sexual harassment, with 71% of women having experienced sexual harassment in the last 5 years.”

This is consistent with research into Australia’s vocational education and training (VET) sector. “There is no increase in the female composition of the male-dominated trade sectors over the 20 years, consistently remaining at under 2%. This continuing gender segregation is a sign that gender stereotyping of occupations remains a powerful influence on the career paths for males and females,” writes Dr Karen Struthers. “Female composition of trades in the manufacturing, automotive, electro-technology and construction industries in Australia has generally remained stagnant at under 2%…. Advocates of change have been increasing their efforts to reduce gender segregation of the trades. Yet this research indicates that action will be more effective if the low participation of women in male-dominated trades is elevated from a social issue to a social and economic problem of national significance.” (Italics are mine.)

The JSA report commences that elevation of female participation to an issue of national significance, calling for “an acknowledgement that safe workplaces are ultimately the responsibility of industry (employers and employees) to improve the sector’s culture.”

The report includes three recommendations:

1.       Ensure financial supports and incentives for women in trades are genuinely at the scale required to generate transformational change in the workforce’s composition and culture;

2.       Explore opportunities to directly support employers to attract, employ, mentor, train and cluster female trade apprentices to increase retention outcomes; and

3.       Pre-empt targeted interventions to increase women’s safe and successful participation in the clean energy workforce through: targeted recruitment drives and training programs; employer focused initiatives to promote gender representation in hiring processes and women’s independence and decision making in the workplace; support for flexible working arrangements; mandating the provision of suitable amenities for all workers; and concrete and practical programs to improve the safety, culture and appeal of the sector for women and all underrepresented groups.

These recommendations outline the beginnings of a strategy, but much more needs to be done – requiring substantial resourcing – to change the male-dominated culture of industry training, much of the VET system and the industries themselves, so that women start to feel confident and safe to participate in the traditional male-dominated trades. We will NOT achieve our net zero workforce goals without addressing these issues. It’s time for a “whole of government” and industry to make that happen.

Foundation Skills – Language, Literacy and Numeracy

The JSA report mentions foundation skills (broadly defined as language, literacy, numeracy and digital skills, abbreviated as “LLND”) but does not present strategies to address how these skills gaps hold back the development of the workforce. An estimated 3 million Australians – at least 20% of the adults – “lack the basic literacy, numeracy and digital skills to gain better jobs and participate fully in society.” For First Nations people, 40% of adults have minimal English literacy, which can rise as high as 70% in remote communities. Peak business organisations Business Council of Australia (BCA) and Australian Industry Group (AIG) have long expressed concern about workplace literacy, with AIG stating, “almost all employers experience low levels of literacy and numeracy that impact on their business.”

Australia consistently cannot meet the requested demand for adult literacy assistance (considering much of the need is not even expressed): the Reading Writing Hotline notes that it cannot refer callers to suitable provision for 13% of calls, peaking at 48% of requests from the Northern Territory. “Australia’s skills are not keeping pace with the demands of work and life in the 21st century, and that proficiency declines with socioeconomic status,” says the Australian Parliament’s report, Don’t take it as read: Inquiry into adult literacy and its importance. To really develop this workforce, we need a strong national commitment. The Commonwealth’s current foundation skills strategies are a great start but will need strong and continued support, sustained over many years.

Structural Issues in Australia’s Post-Secondary Education System

The JSA report does not discuss the profound splits in Australian post-secondary education, which is one system with two distinct sectors – universities on one side, and VET on the other – with different funding models (VET students are generally funded at 50% of university students), different language and acronyms, and different types of providers with different business models. The great majority of higher education (university) courses are delivered by public universities, whereas the majority of VET is delivered by private for-profit companies. Although “TAFE” is sometimes used as a way to refer to VET, each year almost 75% of VET students enrol with 3500+ private for-profit providers. Although private VET companies receive only about 20% of total government funding, they do garner over half VET Student Loans funding. The result is an unbalanced system that operates on a “cost-plus” so that any innovations – such as new “net zero” training places – will need to provide major incentives to meet private VET profit margins of 30% for them to consider participating. This is NOT the way to address a major workforce development project, yet the JSA does not analyse these underlying structural issues.

Australia’s VET system is still recovering from the VET FEE-HELP scandals that plagued VET, which the Sydney Morning Herald described as “the biggest public policy scandal in Australian history: the systematic rorting of the vocational education and training system.” Australia’s VET sector carries an unfortunate legacy of poor credibility that no amount of “re-branding” and public relations can change easily: VET will remain a poor cousin to universities. The “marketisation” of VET has not, generally, resulted in higher efficiency. Although TAFEs – and where they can, not-for-profit adult and community education providers – can be relied on to respond to these “net zero” training initiatives, any reliance on thousands private VET providers to deliver such training will inevitably run into significant problems, as recent problems with international VET students have shown.

The long tail of Australian private for-profit VET scandal

Some years ago, Wired magazine editor Chris Anderson published a ground-breaking book entitled The Long Tail: How Endless Choice is Creating Unlimited Demand. In it, Anderson deftly analysed the impact of the Internet and the digital world on traditional business models.

But Anderson’s introduction of the term “the long tail” has taken on another popular meaning – how certain events continue to resonate in economics or society, long after the initial impact has disappeared.

The much-abused, now (thankfully) closed Australian Government loan scheme for vocational education and training (VET) students, VET FEE-HELP, is a prime example of how the long tail continues to affect us.

The latest manifestation of the long tail came last week, with the news that a now-closed private for-profit Australian VET provider, Unique International College, had “been fined $4.2 million after it was found to have acted unconscionably by enrolling people from remote NSW communities, including a teenager with learning conditions, into online courses costing nearly $27,000 by offering them free laptops.”

According to the Sydney Morning Herald article (31 October 2019): “In six separate cases, it was found Unique International College failed to inform the prospective students of the cost of the course they were signing up to, did not tell them they would incur a debt and did not give them copies of the agreement they had signed.”

The conduct “’involved the exploitation of an uneducated Indigenous person with no understanding of what he was agreeing to in return for a laptop which was worth substantially less than the debt which was being incurred,’ Justice Nye Perram found in his Federal Court judgment.”

The article continues: “Unique made a net after tax profit of $8.2 million in 2014 and $33.8 million in 2015, the ACCC told the court. Justice Perram found Unique acted deliberately in remote communities on a number of occasions, including Walgett in October 2014, Wagga Wagga in March 2015 and Bourke in June 2015 but ‘was ignorant’ to the fact it was contravening consumer law.”

A year and a half ago, the Sydney Morning Herald described VET FEE-HELP (logo pictured below) as “the biggest public policy scandal in Australian history: the systematic rorting of the vocational education and training system.” At times, provider profit margins reached a staggering 80% of income. All of this continues to prove how government funding of privately delivered VET is fraught with potential difficulties.

Although the VET FEE-HELP scheme finished at the end of 2016, almost three years later we are still faced with court cases that continue to uncover the abuses undertaken by for-profit education providers who found ways to rort the system of government payments.

And, sadly, there is another “long tail” to this not-yet-finished story: the replacement Commonwealth Government scheme, VET Student Loans, has significantly under-spent. As TAFE Directors Australia CEO, Craig Robertson wrote on Monday of this week (4 November): “At the same time VET FEE-HELP was scrapped in favour of VET Student Loans, cutting the flow of about $1.5bn per annum in legitimate loans to something like $300m for VET Student Loans. States and territories, let alone decent providers, were left high and dry.”

(Full disclosure: I participated, as a representative of Community Colleges Australia and not-for-profit community-based VET providers, in the Australian Government’s VET Student Loans Stakeholder Reference Group as that program was being established.)

What would a next Labor Government do with Australian vocational education and training: read this book

Speculation about changes of governments in Australia even reaches international audiences. So what would a change of national government mean for Australian vocational education and training? I have been monitoring the statements of the Federal Labor Opposition and report below.

Few areas of Australian public policy are more fraught than the recent experience with vocational education and training (VET). For years, commentators have criticised the marketisation/privatisation of Australian VET. They are particularly scathing over the failings of the (now defunct) VET FEE-HELP program, which may have cost Australian taxpayers up to $7.5 billion. Even the economically dry Productivity Commission described that program as “a well-documented example of how policy can fail if governments do not ensure proper policy design along with suitable regulatory oversight.”

The failures have been compounded by consistent ability of VET funding to keep up with other education funding, as the Mitchell Institute has shown: funding has gone backwards in the last ten years, especially notable compared to funding increases in university (53% up), schools and pre-schools.

The results of funding scarcity and VET brand “trashing” continues to have a “long tail” impact: Australia’s lack of a national VET policy means that not-for-profit community providers have continued to lose out.  The recent VET FEE-HELP reforms, while necessary and welcome, are not sufficient. Despite numerous well-publicised private for-profit VET college failures, it’s not over yet: On 9^th November, the Australian Competition and Consumer Commission (ACCC) instituted Federal Court proceedings against Productivity Partners Pty Ltd, trading as Captain Cook College, alleging “systemic unconscionable conduct in breach of the Australian Consumer Law” going back to 2015, and impacting 5,500 students.

So how is VET shaping up in the Federal sphere? If you are looking to work out the Federal Labor policy on VET, the easiest way is to read the speeches of Shadow Skills Minister Senator Doug Cameron.

An interesting theme runs through Senator Cameron’s speeches: his most quoted source is Dr Phillip Toner, Honorary Senior Research Fellow in the Department of Political Economy at the University of Sydney. Senator Cameron has quoted Dr Toner three times this year: in his speech at a Federal VET Policy Forum in Melbourne on 16 July, at ACPET’s national conference in Canberra in August and at the AEU National TAFE Council meeting in Melbourne in April.

So what does Dr Toner advocate? The best way is to read his chapter, entitled “A Tale of Mandarins and Lemons: Creating the Market for Vocational Education and Training”, published in a recent book that he co-edited with Damien Cahill, Wrong Way: How Privatisation & Economic Reform Backfired (Black Books).

Toner’s article is 1 of 19 case studies of how “marketisation” has failed Australia. The other chapters deal with early childhood education, private health insurance, prisons, aged care, employment services, public sector engineering, electricity reform, labour market policy, financial deregulation, housing, the National Broadband Network, monetary policy, productivity, inequality, free trade agreements and foreign investment.

In other words, it’s the most complete handbook of what Australian governments have done to deregulate and to send services out to the “market”.

It’s not pretty reading. Here’s how Toner commences his chapter (p.59):

The creation of a ‘training market’ for public and privately funded vocational education and training (VET) is one of the most transparent failures of neoliberal public policy over the last three decades. There is a direct line connecting the early neoliberal economic arguments and pedagogy formulated by VET mandarins – those who designed and managed the VET system in the early 1990s – to its subsequent implementation. The VET market is an exemplar of the great damage inflicted when a naïve , idealised neoliberal conception of how markets work becomes the basis for public policy. Serious quality problems in the VET market arose from a misconceived analysis of both the economics of the private training market, and from the actual level of demand for quality training in large parts of the labour market. Further, the pedagogical system known as competency based training (CBT), instituted to develop competition between registered training organisations (RTOs) and flexibility in all aspects of training content and delivery has actually led to diminished quality of training and malfeasance among many RTOs, employers and students.

After an analysis of why VET matters in Australia, Toner examines the creation of the Australian training market, which has been modelled on the UK experience. He points out that TAFE (83%) and not-for-profit adult and community education providers (15%) delivered almost all publicly funded VET as late as 1996, but this fell to 49% and 6% (respectively) by 2016. The number of RTOs increased from 400 in 1995 to 1931 in 2016, the majority of them private for-profit providers.

Toner discusses the scale of the quality problem (“significant”), and examines the specific economic and pedagogical conditions in the training market that explain the scale and scope of poor quality and malfeasance. Minimal investment is needed, inadequate standards for teaching qualification and teaching resources and the low barriers for RTOs to enter are all exploited by opportunistic providers.

Toner concludes (p. 78) that:

The training market has followed the classic trajectory of neoliberal public policy: ebullient expectations quickly followed by disappointment leading to incessant and expensive – through largely futile – bureaucratic tinkering resulting in intensified regulation and altered incentives…. The time remaining to effect a rescue of the public VET system is rapidly diminishing

Further reading

“Social Service Futures: Marketization and regulation of vocational education and training”, by Professor Valerie Braithwaite, The Power to Persuade, 23 May 2016.

“Marketisation of VET: The New South Wales response 1990s–2017”, by Robin Shreeve and Joanna Palser, Centre for the Study of Higher Education, University of Melbourne, 16 July 2018.

“New figures quantify the extent of the TAFE disaster”, by Professor Leesa Wheelahan, 23 June 2018.

Competition Policy and Human Services: Where Theory Meets Practice, by Rhonda L Smith & Alexandra Merrett, commissioned and edited by the Australian Council of Social Service (ACOSS) and CHOICE, September 2018.

(This article originally appeared on the website of Community Colleges Australia on 12 November 2018.)

(image above: cover of Wrong Way: How Privatisation and Economic Reform Backfired, Black Books, 2018)

It’s a mystery

Why does the Australian Government Department of Education and Training refuse to recognise not-for-profit adult and community education providers? That question continues to mystify me, in the same way the Geoffrey Rush’s character in the 1998 film Shakespeare in Love repeatedly proclaims, “It’s a mystery.”

Read my opinion piece on the Community Colleges Australia website.

Federal Labor’s commitment to Australian vocational education and training

The Labor Shadow Minister for Skills Senator Doug Cameron has re-stated Labor’s commitment to Australia’s community education providers. In a speech last Friday – 13 April 2018 – to the AEU National TAFE Council, Senator Doug Cameron said:

The current vocational education and training system is flawed and it needs to be fixed – but the problems in VET are a manifestation of deeper ideological trends that have shaped policy development in Australia for far too long. Inequality is growing. Trickle-down economics – and relying on the good agencies of rich corporations to share wealth – always a delusion – has now been comprehensively discredited.

It is my view that the rise in inequality has been exacerbated by the misuse and misapplication of competition policy – the slavish adherence to increasing competition, privatisation and outsourcing has done considerable damage. In 1996 98% of students receiving publicly funded VET were in TAFE (with 83%) or not-for-profit community education providers (with 15%) but, by 2016 this had fallen to 52% and 6% respectively.

That is why Labor have already announced we will return the $637 million the coalition stripped from VET in the last budget and why we have committed that at least two thirds of all government funding for vocational education will go to TAFE. The balance will go to not-for-profit community educators and only the very best of the private providers with demonstrable links to specific industry requirements.

My comments in my capacity as CEO of Community Colleges Australia (CCA):

I am pleased to hear that Shadow Minister for Skills Senator Cameron has re-committed Federal Labor to supporting Australia’s community education providers.

When Senator Cameron spoke to the CCA conference in July 2017, he said similar things. We are pleased that Labor has maintained its commitment to Australia’s community education sector, as an important complement to the VET anchor institution of TAFE.

Senator Cameron’s analysis is consistent with CCA’s own interpretation of VET policy and recent history. We are keen that all sides of politics recognise the important role of Australia’s community providers in building our nation, and commit to proper funding of our sector. It’s no longer acceptable that community providers receive the crumbs from the table.

The challenge for the current government and the Assistant Skills Minister is to elaborate on a vision that is also compelling. Erasing the much-based VET FEE-HELP program, replacing it with VET Student Loans, was a great start – but not nearly sufficient. Announcing the Skilling Australians Fund is an interesting innovation. Unfortunately neither one of these programs have much resonance or relevance to Australia’s important community education sector.

Excerpts from Senator Cameron’s Speech to the CCA Conference in July 2017

The following are excerpts from Senator Cameron’s speech presented at the CCA national conference in Melbourne on 26 July 2017:

Community Colleges and the people who work in them, excel at assisting disadvantaged learners. You work with individuals to achieve goals they had thought were beyond their reach – providing critical literacy and numeracy skills and assisting them to gain important foundation life and employment skills.

You give young people, alienated from formal schooling, a second chance at education. Your colleges also offer quality, vocationally-focused training and education to people seeking to start work, return to work, change jobs or keep their job. Community-based education is a critical launching point for disadvantaged learners into further education and into work; particularly in regional and rural communities where the support is especially valuable and needed.

Importantly, adult and community education institutions build and sustain local communities by bringing people together through their shared interests; by forging partnerships with other local organisations; and tailoring courses from the community and for the communities they serve.

In a world where inequality, fragmentation and isolation are growing, the work community educators undertake – creating and sustaining local connections; nurturing resilient, engaged and involved citizens; and smoothing transitions into work and further learning – is of enormous value. The socially, politically and economically engaged communities you foster are the foundations upon which strong democracies are built.

More extracts from Senator Cameron’s speech on 13 April 2018

The evidence shows that the training market in Australia has led to:

• an overall decline in the outcomes for students – the latest official annual survey of VET students taken in mid-2017 found that of students who graduated during 2016 and were employed, just 30% were in an occupation group related to their training
• a decline in quality– the government’s own regulator has called the training market “a race to bottom” – which has placed enormous pressure on providers like TAFE working to maintain quality
• the proliferation of wasteful and rigid bureaucratic processes – that have seen the development of 17,000 units of competence and 1,400 different qualifications, many of which remain unused
• dissatisfied employers continuing to complain of skill shortages and gaps – despite being given the authority to lead the system
• cherry-picking and rent seeking by for-profit providers
• insufficient investment in infrastructure and in teacher qualifications and resources
• money wasted on marketing, promotion and advertising
• the development of a market for low quality courses
• and, at its very worst, the defrauding and exploitation of citizens trying to improve their lives through gaining education and qualifications.

The commodification of education is summed up by the words of a capital investment adviser spruiking the money-making benefits of education:

“Education is a beautiful business when it works. Fat fees, hefty annual increases, recurring income and high switching costs are just a few traits of high-performing education providers. Investors who have understood the sector’s potential have done exceptionally well…The sector has excellent long-term potential. Not-for-profit education providers…look like sitting ducks as technology eventually reshapes the sector.” (Tony Featherstone, “Top Performing Education Stocks”, 17 March 2014).

About this post

This post is an adaptation of a news item on the Community Colleges Australia website on 13 April 2018; I am re-posting and expanding it here in order to extend the message.

Australian VET policy just got a lot more complicated

Australia’s vocational education and training (VET) policy discussion space has just become a lot more intense with the announcement by the Federal Australian Labor Party of a national inquiry.

On 23 February, Deputy ALP Leader (and Shadow Education Minister) Tanya Plibersek announced a “shake up of TAFE and uni”, stating that “Labor wants prospective students to see TAFE and uni as equally attractive study options.” She also announced, “a once in generation National Inquiry into Post-Secondary Education that will look at every aspect of the vocational and higher education systems, to ensure they can best respond to the needs of Australia’s economy and society.”

The inquiry is to be “ready to go in the first 100 days of a Labor Government.” Labor followed the announcement up by inviting submissions on the scope and terms of reference for the inquiry, which is to be conducted within the existing resources of the Australian Government Department of Education and Training.

The Labor announcement – which received extensive coverage in the press (The Guardian, Australian Financial Review and The Australian. Ross Gittins in The Sydney Morning Herald (28 February) pointed out that there is a long history to the current state of VET stuff ups, recommending that the Turnbull Government should simply join Labor’s call for an inquiry. He notes that the problem goes way back to mistakes by then education minister Julia Gillard), “made worse by state governments of both colours.” While a university demand-funded system went into place, Ross Gittins writes:

TAFE was being hit by sharp cuts in federal funding … and subjected to the disastrous VET experiment…. Parts of the states’ union-dominated TAFE systems had become outdated and inflexible …. Rather than reform TAFE directly, however, someone … got the bright idea of forcing TAFE to shape up by exposing it to cleansing competition from private providers.

The feds extended to the VET sector a version of the uni system of deferred loans to cover tuition fees. State governments happily played their part in this cost-saving magic…. The result was to attract a host of fly-by-night rip-off merchants …. Eventually … the present government overreacted. Now it’s much harder to get federal help with TAFE fees than uni fees.

Far too little is being done to get TAFE training properly back in business after most of the for-profit providers have faded into the night…. Last year’s budget established an (inadequate) Skilling Australians Fund.

The Labor announcement follows on the October 2017 release of a report by the Business Council of Australia (BCA) entitled Future-Proof: Protecting Australians Through Education and Skills.

“When both the ACTU and the BCA – not exactly happy bed-fellows – agree that an inquiry is welcome and overdue, you know that important something is going on,” said Dr Don Perlgut, CEO of Community Colleges Australia (CCA).

“CCA welcomes this attention being paid to the problems of Australian VET. We have been saying for some time that Australia’s lack of a national VET policy is a recipe for disaster,” said Dr Perlgut.

“The problem we see with both the BCA report and Labor’s announcement is that neither of them acknowledge Australia’s community education sector. In 2016, some 378,000 people studied VET with community providers; that’s a full 9 percent of the national total that year,” said Dr Perlgut.

“Both Labor and the BCA have the right idea – Australian VET is in crisis and will not self-correct – but neither of them see the whole picture. CCA believes in the centrality of TAFE to Australia’s VET system, but the complementarity of the not-for-profit community sector is a part of the answer. Our sector has the flexibility, capacity and integrity to do more and expand its role, especially for the most vulnerable and disadvantaged workers and potential workers.

“At CCA’s Annual Conference in Melbourne last July, Senator Cameron – Labor’s Skills spokesperson – acknowledged the importance of the community VET sector. This needs to be incorporated into Labor’s proposed inquiry’s terms of reference,” said Dr Perlgut.

(The item above was originally published in the “news” section of Community Colleges Australia. View the original item here.)

New Report Highlights Contribution to Regional Economic Development by Community Education Providers

I have written a report for Community Colleges Australia (CCA) that highlights how NSW community education providers contribute to the state’s regional and rural economic development. The report concludes that the not-for-profit community education sector constitutes a major economic development resource that has been under-utilised by state, Commonwealth and local governments.

The report highlights three needed changes:

• reducing barriers to participation in government-funded economic development projects;
• including not-for-profit community education providers in multi-sector regional economic development planning activities; and
• increasing the capacity of community education providers themselves to participate in economic development through improved facilities and better access to training.

The report reviews challenges facing the regional NSW economy and the delivery of regional and rural VET, analyses the scope of activities and economic impact of community providers, and includes recommendations that span NSW and Commonwealth regional development programs. The report utilises the results from a survey of all regional and rural community education providers, a forum held at Byron Community College’s Mullumbimby campus and consultations with stakeholders.

CCA has found innovative ways that our members can add to NSW regional economic development. These include training under-utilised older workers, collaborating with Aboriginal land councils, expanding business incubators, encouraging entrepreneurship and social enterprises, leveraging philanthropy and extending the same opportunities to Western Sydney.

Read the Executive Summary and Recommendations here.

Read the full report (PDF) here.

Getting Serious About Australian Unemployment

Is the Australian Government giving up on reducing unemployment

It’s time to get serious about reducing Australia’s unemployment rate. We need a national training policy that gets Australians to work.

Those were the words that came to me when I read Stephen Koukoulas’ article, “Australia has given up on solving unemployment”, (The New Daily, 17 August 2017).

“It is a sad state of affairs to realise that the current crop of Australian policy-makers have effectively given up on reducing unemployment. Treasury reckons that the lowest the unemployment rate can go without there being a wages and inflation breakout is around 5.25 per cent,” Koukoulas writes.

“The Reserve Bank of Australia notes something similar, forecasting that even when the economy is growing strongly at an above-trend pace, the unemployment rate will hover between 5 and 6 per cent,” he continues.

Australian unemployment remains persistently high

Australian Bureau of Statistics (ABS) July 2017 figures show unemployment in Australia at 5.6%, an official figure of 728,100 people: “Enough to fill the Melbourne Cricket Ground about seven times,” Koukoulas writes.

Koukoulas analyses Australian Treasury and Reserve Bank of Australia (RBA) reports, and concludes that, “Australia will never see fewer than about 700,000 people unemployed – no matter what kind of improvement we see.”

He’s not the only one outlining that prospect. Trading Economics, a New York City company that analyses 196 countries, including “official sources of historical data for more than 20 million economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices”, also predicts that Australia’s unemployment rate in 2020 – 3 years from now – will be … 5.6%. That’s correct, no change at all.

Koukoulas compares Australia internationally: “It seems to be a peculiarly Australian issue. In the US, the unemployment rate is 4.3%, in the UK it is 4.5%, in Japan it is 2.8% while in Germany, the unemployment rate is 3.9%. It is clear the government has given up on reducing unemployment.”

Unemployment hits the most vulnerable and most disadvantaged in Australian society

What Koukoulas does not detail are the social, economic, regional and generational costs of persistent unemployment. This is how the Australian Parliament’s Standing Committee on Employment, Education and Workplace Relations describes the consequences of unemployment:

Unemployment is a major life event. It can have a devastating impact on people’s lives. It affects not just the unemployed person but also family members and the wider community. The impact of unemployment can be long-lasting. As unemployment becomes more long-term, its impact becomes more far reaching, often affecting living standards in retirement. The loss of income by the parents can damage the prospects of the next generation.

Unemployment disproportionately impacts Australia’s most disadvantaged groups: young people, Indigenous Australians, rural and regional residents and people with disabilities.

Young people (generally ages 15 to 24) in Australia had an official unemployment rate (July 2017) of 12.9%, more than double the national rate of 5.6%. According to Dr Patrick Carvalho:

– The damaging effects of youth unemployment can persist into adulthood, with different intensity and longevity depending on the length of the unemployment period and on individual conditions such as education levels and socioeconomic background.

– There is no minimal or safe threshold regarding the length of early unemployment experience…. the longer a person is unemployed, the longer the perversive effects are likely to last.

– Such negative long-term consequences of early jobless spells are commonly referred to in the literature as the “scarring effects”. (p. 19, Youth Unemployment in Australia, Centre for Independent Studies, November 2015)

Youth unemployment impacts are not felt uniformly, with the national figure masking high concentrations in many locations, especially regional and rural Australia: unemployment rates of 28.4% in outback Queensland, 21.8% in NSW Hunter Valley (outside Newcastle), 20.5% in Cairns, 19.6% in southeast Tasmania, 19.5% in mid north coast New South Wales, 19.4% in mid north South Australia and 18.4% in south eastern New South Wales. (Source: “Australia’s Youth Unemployment Hotspots: Snapshot”, The Brotherhood of St Laurence, March 2016.)

The growing youth under-employment – those who wish to work more than they do – now at 18% (February 2017), “is the highest in the 40 years since the count officially began,” according to the Brotherhood of St Laurence’s “Generation Stalled” Report. Add the two figures together – unemployment and under-employment – and you get a staggering 31%, almost one-third, of young Australians who are “underutilised”. Surely this “underutilisation rate” will be much higher – possibly 50% or more – in many regional locations. Are we in danger of allowing a sub-generation of unemployed and underemployed young people to “fall through the cracks”, with long-term life consequences for them, their families, their communities and our country?

It’s not just young people:

• Aboriginal and Torres Strait Islander Australians consistently have unemployment rates more than 20%.
• Australians with a disability have almost double the rate of unemployment as people without a disability, participate in the workforce at less than two-thirds the rate of the general population, take 50% longer to find work and experience systematic discrimination in the workplace.
• While “unemployment rates in non-metropolitan Australia are similar to those in the capital cities, … rural and regional labour markets are volatile, with extremely high unemployment in particular locales” and great variations. Some of the worst hit are vulnerable young people in regional locations. Wage rates are much lower, and rural and regional poverty is greater. Economically, Australia continues to experience a “two-stage” economy: Sydney and Melbourne and the rest.

It’s time for a national training policy that targets reducing unemployment

Australian unemployment should be below 5%, not drifting towards 6%. “In addition to the obvious social benefits of having a highly skilled population, maximising training and educational attainment should be an uncontroversial policy aim,” Koukoulas says.

Koukoulas believes that the Australian “unemployment rate is being skewed by a number of longer-run structural factors,”, including an “education and training system mean that those who are unemployed do not have the requisite skills for the modern Australia economy.” Australia is “heavily reliant on imported skilled workers who arrive here via the 457 visa program,” he writes.

“Yet the government imposes cuts to trades training, is underfunding school education, ramping up university fees and forcing those who get a degree to pay for it more quickly,” he continues.

It’s not too late to invest in Australian training. Australia is endowed with extraordinary natural resources, extensive wealth, dynamic and hardworking people. We have one of the most welcoming societies in the world and are the “most successful immigrant nation on Earth”, according to demographer Bernard Salt.

Despite years of vocational education and training (VET) policy chopping and changing by governments of all political stripes, we have still maintained the framework of an internationally recognised and admired training system.

We have the capacity. We have the skills to make it happen. What we need now is the will and the focus. The desire to place training at the TOP of the national policy agenda, not an “also ran” issue.

Australia’s Community VET sector

Australia’s community education VET sector can and will do its part to address unemployment. The year 2016 saw a rise of the community sector’s VET students to 9% of the national total.  The community education sector does very well at ensuring unemployed people can be lifted into employment: according to the NCVER, in 2016 community education providers topped all categories (TAFE, private for-profit, university), with almost half (48.9%) of graduates employed at the end of the training that had not been employed prior to commencing their study.

We address the needs of vulnerable and disadvantaged people, and we over-perform in regional and rural Australia, where VET is most needed and valued.

(Note: This post was originally published by Community Colleges Australia on 11 September 2017. View the original version here.)

Paul Wellstone remembered

My tribute to the late Senator Paul Wellstone has been published on the official Wellstone website. This tribute is an updated version of what I wrote in 2002 in the Australian Jewish News, and re-printed on this blog in 2009.

On 20 July 2017 here in Sydney, I made a presentation at a Economics Society of Australia conference (“Economics for Better Lives”) on Australian inequality and vocational education and training. I dedicated my presentation to Paul Wellstone.

“We should never separate the lives we live from the words we speak. To me, the most important goal is to live a life consistent with the values I hold dear and to act on what I believe in.” – Paul Wellstone, The Conscience of a Liberal: Reclaiming the Compassionate Agenda, University of Minnesota Press, Minneapolis, 2001, p. ix

Two photos of Paul below: his official Senate photo, and teaching as a young man (roughly the time I met him):

Community Colleges Australia Conference features focus on young people

The education and training challenges and opportunities of young people features highly at Community Colleges Australia’s annual conference in Melbourne, 25 to 27 July.

As the CEO of Community Colleges Australia (CCA), I am proud of how we have constructed a comprehensive program stream for those interested in building better opportunities and pathways for Australia’s young people.

The conference recognises the vital importance that education plays in young people’s lives. Because of the strong community links and not-for-profit status of community education providers, the sector plays an essential role in ensuring that investment in Australian skills is both meaningful and properly targeted to young Australian learners and the communities most in need.

The young people program sessions include:

• an expert panel discussing the growing phenomenon of secondary schools hosted by adult and community education providers;
• the changing world of work, and what it means for Australia’s young people;
• detailed examinations of the transition from school to training, further education and work;
• how to re-engage disengaged young people in education, training and study;
• An international focus, with speakers from USA, New Zealand and Malaysia providing a wider perspective on community education; and
• the first-ever “Community Education Student of the Year” Awards, to be delivered at the Gala Dinner at the Windsor Hotel, featuring Aboriginal tennis coach Anzac Leidig, who will help present the awards.

The conference speakers talking on young people include:

• “The workforce of tomorrow demands a new mindset”, by Bronwyn Lee, Deputy CEO of the Foundation for Young Australians (FYA), who will draw on FYA’s research on the New Work Order;
• “Building the Financial Capability of Indigenous Young People in the Northern Territory”, by (my former colleague) Duncan Poulson, Northern Territory Regional Commissioner, Australian Securities and Investments Commission (ASIC) – drawing on ASIC’s MoneySmart financial literacy expertise, a project that I worked on for almost two and a half years;
• “Education and Regional Development: A view from American Community Colleges”, by Dr Roberta Teahen, Associate Provost, Ferris State University, Michigan USA, & Dr Laurie Chesley, Executive Vice President for Academic and Student Affairs & Provost, Grand Rapids Community College. Michigan (Grand Rapids is a unique small city in central Michigan, one of the parts of the USA that narrowly “flipped” by voting for Donald J Trump in the last US election);
• “The Brotherhood of St Laurence Study on Young People in the Private VET Sector”, by Kira Clarke, Lecturer in Education Policy, Centre for Vocational & Education Policy, Graduate School of Education, University of Melbourne;
• “Powering up the work of Flexible Learning Providers through strategic partnerships and networks”, by Louisa Ellum, Chair, Youth Affairs Council of Victoria & Chief Executive, International Specialised Skills Institute (ISS Institute);
• “Empowering Positive Post-School Transitions”, by Nicholas Johns, Johns Consulting & ISS Institute Fellow;
• “Learning with Passion for Purpose and Direction”, by Mana Forbes, Maori Elder, Hamilton, New Zealand, Tai Wanaga High School;
• “Disengaged youth and community colleges – the perfect fit”, by Wendy Ratcliffe, WEA Foundation Manager and co-founder of WEA Hunter’s Alesco Senior College;
• “Australian Apprenticeships: one pathway to a better future”, by Peta Skujins, Research and Content Officer, Australian Apprenticeships and Traineeships Information Service (formerly with NCVER); and
• “Youth and Alternative Pathways – the Advance Story”, a report from Steve Wright, CEO, Advance Community College (Rosebud VIC).

The full program is now available here.

All speaker biographies are available here.

You can register for the conference here.

I would love to see you there. Our conference logo is below: