Getting Serious About Australian Unemployment

September 11, 2017

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:

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.)

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Community Colleges Australia Conference features focus on young people

July 8, 2017

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:

 


Increase investment in community education to tackle disadvantage and unemployment in rural Australia

March 3, 2017

Community Colleges Australia issued the following press release in late February – reproduced below.

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Australian governments should increase investment in community education to address higher levels of disadvantage and unemployment in rural and regional Australia, according to a new report from Community Colleges Australia (CCA).

The report, The Role of Community Education in Australian Regional and Rural Economic Development, finds that not-for-profit community-based vocational education and training (VET) providers play a disproportionately large role in rural and regional Australia, educating at least 10% of VET students in New South Wales and 20% in Victoria.  This makes community providers a significant national force in providing skills to non-metropolitan Australia.

Participation rates in VET courses are 50% higher in rural and regional Australia than in metropolitan areas. A much larger percentage of rural and regional VET learners also study lower level qualifications: Certificate III and below – just those qualifications that community education providers excel in, with their focus on vulnerable and disadvantaged learners.

“This report shows how community education is crucial in providing skills and in driving economic development in rural and regional Australia, and includes numerous examples of ‘bottom-up’ innovative community-based approaches. Community education providers are uniquely positioned to act as ‘passing gear’ vehicles, accelerating new ideas and helping our regions to prosper,” said Dr Don Perlgut, Chief Executive Officer of CCA.

“Yet governments have not been investing enough in community education, particularly in high need, disadvantaged rural and regional areas where youth unemployment remains stubbornly high. We have not seen any national infrastructure investment in community education since 2009 – it’s now 2017. On top of this, Australia lacks a coherent national statement on the role of community education in VET. This policy vacuum makes it difficult for community providers to operate effectively,” said Dr Perlgut.

“CCA looks forward to working collaboratively with the Australian, state and territory governments to fix these issues, and to utilise the capacity that community VET providers have to meet pressing rural and regional skills needs,” said Dr Perlgut.

The report makes a number of key recommendations, including that the Commonwealth, state and territory governments should:

  • Boost funding for community education, including providing more support for infrastructure, professional development and staff training, pilot funding programs, and community service obligation activities.
  • Utilise regional and rural community education providers to engage with vulnerable and disadvantaged Australians, particularly young people.
  • Develop a coordinated national-state-territory policy statement on the value and place of community and adult education.
  • Examine VET funding programs to ensure community providers are not disadvantaged by unnecessary regulations.
  • Collect and publish annual data on regional and rural student outcomes and provider comparisons.

The full report The Role of Community Education in Australian Regional and Rural Economic Development is available here on Community Colleges Australia’s website.

 

(image below: logging truck driving through Armidale NSW)

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Make education an investment not a commodity

January 10, 2017

My letter to the editor appeared in today’s (10 January 2017) The Sydney Morning Herald, under the title “Time to value education as investment, not commodity.”  As published by the Herald, the letter reads:

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Time to value education as investment, not commodity

The Australasian College Broadway will not be the last private for-profit vocational education and training college to close its doors (“Australasian College Broadway: Teenagers left ‘devastated’ by collapse and in thousands of dollars of debt”, January 9). We have a virtual absence of Commonwealth government policy on the future of vocational education and training (VET).

The replacement of the scandal-ridden VET FEE-HELP loans, which Australasian College Broadway relied on as virtually its sole business model, with the new VET Student Loans program, does not go to the core of the problem: an unbalanced system created by the marketisation/privatisation of VET.

Both the Australian schools sector and higher education sector are coherent compared to VET. Not coincidentally, neither of those two educational sectors have a 67 per cent private for-profit “market penetration” the way that the VET sector has (3 million of 4.5 million VET students in 2015).

It’s time to return to quality education over a so-called “efficient” private market, which turned out not to be so “efficient” after all, relying on unsustainable government subsidies. It’s time to value education as an investment and not as a commodity.

Don Perlgut, Chief Executive, Community Colleges Australia, Sydney

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Click here to view the letter online (note: you will need to scroll down the page) or view a copy of the paper edition below.

For more details of this discussion, go to the website of Community Colleges Australia.

You can also view a copy of the letter in the paper edition below:

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Putting ‘community’ back into Australian vocational education and training

May 11, 2016

My blog post entitled ““Re-inserting ‘community’ into Australian Vocational Education and Training” has just been published by Open Forum (11 May 2016).

In this article, I discuss how in the lead up to the federal election on July 2, Australian vocational education (VET) has now entered the political debate. I argue that the most cost-effective VET policy initiative is to reinvigorate the community education providers and build on their capacity.

I discuss the VET FEE-HELP loan scandals, the collapse of private for-profit vocational education colleges and how VET has entered the political debate – given a high priority by Bill Shorten (Leader of the Opposition) in his “Budget Reply” speech last week, and the recently announced Commonwealth Discussion Paper on the re-design of VET FEE-HELP.  I conclude by describing the vitality and importance of community education – particularly in regional and rural Australia, ending with a message to the politicians of all political persuasions: reinvigorating the community education providers and building on their capacity, can and will be one of the most cost-effective VET policy initiatives you can implement.