Threats fly as reheated skills plan leaves west cold

WESTERN Australia has vowed to reject Julia Gillard's vocational training reforms.

Nathan Beswick

WESTERN Australia has vowed to reject Julia Gillard's vocational training reforms, declaring the federal government is reducing funds for the states and territories while forcing new conditions on them.

The threat, which signals an escalation of the federal-state stoush over funding for vocational training, could scuttle the Prime Minister's plans to negotiate a "major new skills package" at next month's meeting of the Council of Australian Governments.

It could also force the federal government to act on its own threat to allocate up to $9 billion in skills funding through industry bodies instead of the states.

After Ms Gillard yesterday announced the government's vocational training plan, which largely consisted of measures that had already been announced, West Australian Training Minister Peter Collier accused the federal government of blackmail, saying it was putting arduous conditions on a "manifestly inadequate" funding model.

"We may as well tell them to get stuffed we won't sign up to anything," Mr Collier said.

Ms Gillard yesterday urged Australians to study for an educational or vocational qualification or consign themselves to joblessness because economic changes were eliminating the need for unskilled work.

She vowed an extra 375,000 Australians would finish apprenticeships or traineeships under a $7.2bn funding deal she will propose to states and territories at COAG.

Under the largely repackaged plan, the government will work with states to lift training standards and guarantee 60,000 HECS-style loans a year. All Australians aged over 15, including mature workers seeking to retrain, would have a "national training entitlement" with up to $7800 in subsidies for each training place.

The row over the skills funding package comes after WA Australia last year refused to join the federal government's national regulator for vocational training. It also adds to a broad range of policy battles the Barnett government has had with the commonwealth, including over occupational health and safety reforms, the carbon and mining taxes and native title.

Mr Collier said yesterday WA would "hold out" on the new skills funding package in the same way it did over the regulator.

He said the Gillard proposal would shortchange WA by about $75 million over the next three years, compared with current funding arrangements. This would mean 24,000 fewer training places in a state facing a short-term labour shortfall of 76,000 workers.

The federal government announced yesterday that it had earmarked more than $840m in training funds for WA as part of a $9bn five-year national package that included $1.75bn in "additional" incentive funds. But states must agree to a raft of reforms including HECS-style loans for diploma students, a guaranteed government-supported training "entitlement" in low and mid-level courses, a "My Skills" website, a "unique student identifier" to track individuals' training, and a new "validation" system to check that people are being trained properly.

Of these proposals, only the "validation" system appears new, and the government has committed only to pilot it.

Most of the other proposals have been announced at least once before. The income-contingent loans, national entitlement and My Skills website were all announced in the May 2010 budget and reannounced last October. The $1.75bn incentive funding was announced in last year's budget, while COAG agreed in principle to a unique student identifier in December 2009.

University of Melbourne tertiary education expert Leesa Wheelahan described the proposals as "repackaging with strings attached". "The strings are tied to the national entitlement, which will not be hard because states mostly do this anyway, and income-contingent loans, which the states won't oppose because they want the opportunity to cost-shift to students," she said.

Announcing the skills package, Ms Gillard said the combined effects of the rise in the value of the Australian dollar and the emergence of middle classes in nations such as India and China meant the Australian economy was undergoing its most profound externally led change in 200 years.

While the pressure was challenging industries such as manufacturing, it would also provide opportunities that the nation must grasp by improving its human capital through better training.

Victoria said it agreed with most of the federal government's reform proposals, but Skills Minister Peter Hall said the new package, which includes more than $2.2bn for Victoria, would leave it with $60m less each year for the next three years.

Additional reporting: Julie Hare