Five reasons training system faces an uphill battle

Emma Tran, who is an apprentice at Multiplex and enrolling with the Master Builder’s Association at TAFE.

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The Coalition wants a culture war with trades training versus university degrees. It’s politically useful and diverts attention from the obvious that it does not have a clue what to do about enduring skill shortages. Then again, neither does Labor. There are five big reasons why the training system as is cannot match skill supply to economy demand, whoever wins the election.

Last week the Coalition announced $260m for 12 Australian technical colleges in its first term. They would provide school-based apprenticeships/traineeship in Years 10 through 12, plus academic and business courses and be “the first step in transforming our education system”.

John Howard had the same sort of idea in 2004 with a promise to create federal technical colleges for Year 11 and 12 students, independent of state governments and their teacher unions. While some started, they never really got off the ground before the Rudd Labor government turned off the money five years later. The teacher ­unions never liked them and then as now when Labor says “training” the comrades mean TAFE.

The Coalition’s new colleges pitch will appeal to just about everybody who wonders why there are 200,000 humanities and social science students at university but they can’t find an electrician. The Housing Industry Association estimates we need 30 per cent more skilled workers in residential construction trades to meet demand for 1 million new homes by 2030.

And they won’t be able to find one easily for years to come. According to national planner Jobs and Skills Australia, we will need 32,000 more electricians in 2050.

Even if the Coalition plan gets up and stays there it will take a decade to begin to make a difference.

But never letting policy get in the way of a good political story, the Coalition is also having a go at universities. “We desperately need skilled workers to build more homes, and to care for our growing and ageing population … We have been pushing our kids to go to university. It has led to a lot of them getting degrees they don’t use, and debt they can’t afford to repay,” Coalition skills spokesman Sussan Ley said in January.

And it is having a crack at TAFE. The opposition opposed the Albanese government’s legislation to fund its Fee Free TAFE program by legislation, rather than budget appropriation. It passed in the last sitting week ­before parliament rose for the election, confirming $1.5bn for 500,000 places 2023-2026.

This includes 35,000 in construction courses, which is good, until the commitment is compared to the 165,000 in care and early childhood courses. Coalition senators complained that the scheme’s “ideological bent” excludes private providers, which are competitive on student and employer satisfaction and outcomes and more flexible than the lumbering state government systems, stuck with public service employment conditions. That the Australian Education Union is campaigning for Fee Free TAFE demonstrates a key constituency for the program. Ley says: “When we talk about skills it needs to be about more than just ‘TAFE’.”

But whoever is minister after the election won’t fix shortages now, or start work for the future, unless they take on five problems that stop the trades-friendly skills system the economy needs.

● The great university sales job: For a generation, higher education lobbies proclaimed their products were what people wanted and the economy needed. School teachers, generally university graduates, sold the qualification Kool-Aid and Y12 students and their families listened.

Not everybody. In 2023 there 2.3 million students in government-recognised vocational education, compared to 1 million do­ing undergraduate degrees. But a bunch of the people in training were already in the workforce and doing courses to update their qualifications, not creating careers.

While demand for university places is slowing, it will take time to restore training’s prestige. As LNP MP Terry Young said in parliament in November, “I cannot count the number of parents and young people who have felt pressured or guilted into taking on a university degree, even though university was not something they had a great interest in.”

● Delivering what the economy needs: Updating existing, let alone creating new courses and qualifications to meet industry demand is very slow and very, very complicated.

There are now 10 national industry skills councils. Build Skills does what it says, Industry Skills Australia covers transport and logistics, and so it goes, through to Service and Creative Skills, which covers everything from hairdressing to online sales.

The 10 are meant to oversight jobs demand and create and codify courses in their share of the economy. Easier announced than achieved – the time it takes to update anything is geological.

● Industry interests and state rights: Australia doesn’t have one skills taxonomy, setting out what qualifications somebody can do and how they connect to each other, we have 10. Jobs and Skills Australia is on to this, to improve “occupational mobility and align work­force capabilities with industry needs”. But it has to engage with endless interest groups such as unions and industry associations.

Plus state governments. The March budget included funding to establish national licensing for electricians. Apparently until now electric current worked differently across the country. It is the same for overall regulation of private training providers – there is a ­national agency, except in Victoria and WA, where governments insist on having their own.

● Making apprenticeships pay: Overall, half of apprentices don’t complete, for all sorts of work and personal reasons, but pay is a big one. Public subsidies for employers have always been the way to boost apprentice and trainee numbers, but when funding falls so do starts. There were 260,000 apprentices and trainees in December 2019. At the top of Covid support in June 2022 there were 428,000, but almost 100,000 fewer by the end of 2023 when the pandemic was over.

A recent review of the apprentice system for the government suggests “access to incentives will depend upon alignment with government economic priorities and social equity objectives”.

Everybody who is not a big fan of centrally planned economies will spot the flaw. And if government tried to restrict funding to GDP-growing skills, every industry association and losing lobby group would create political pain. It is an intractable problem for whoever is in power.

● Skilled work is changing: The difference between manual and so-called knowledge work is ending and the education and training systems need to keep up.

Former employment minister Brendan O’Connor explained why in 2023: “High-skilled, non-routine work, both manual and cognitive, is growing. While repetitive, routine work, both manual and cognitive, is declining.”

Some universities, generally with training divisions, get this and are establishing degree apprenticeships with industry partners, combining classes and on-the-job experience. And last month the Commonwealth Education Department announced a new qualification, the Vocational Degree, which will have the same formal status as an undergraduate course. It is a recognition of reality, that the way to improve productivity is to empower skilled workers. But it will take a while for systems to catch up. If they ever do – with the commonwealth controlling the cash and the states running the big public systems, the precedents are not great.