Bills

Construction Industry Training Fund (Application of Fund) Amendment Bill

Introduction and First Reading

The Hon. J.A.W. GARDNER (Morialta—Deputy Leader of the Opposition) (10:35): Obtained leave and introduced a bill for an act to amend the Construction Industry Training Fund Act 1993. Read a first time.

Second Reading

The Hon. J.A.W. GARDNER (Morialta—Deputy Leader of the Opposition) (10:35): I move:

That this bill be now read a second time.

Skills shortages are the bane of a wide range of industry sectors at the moment and it is well established that the construction sector is one of our most important as we face a dual skills and housing crisis. The opposition has been listening to the people of South Australia. We have been listening to community, businesses and other stakeholders and working dutifully to assist in offering solutions to these challenges.

This bill is one such suggestion that has come about as a result of consultation with stakeholders and observation and analysis of the challenges at hand. This bill is supported by stakeholders whom we have already consulted, and I am pleased to now present it to the parliament in the hope that it might attract bipartisan support over the summer and pass into law in February.

Let us look at what those stakeholders have said. Master Builders South Australia estimates that by November 2026, South Australia needs an additional 31,149 people to meet demand, including 14,685 tradespersons. Master Builders has said:

We believe that the Construction Industry Training Board has an important role to play in addressing the ongoing skills shortage.

The Construction Industry Board is funded by building and construction industry employers. Our longstanding position is that as much money as possible collected from the training levy should go to directly funding construction workers training. Whilst CITB may have many reasonable expenses that don't fit this definition, we think it is logical that as much money as possible set aside for industry training goes to that purpose.

Master Builders SA strongly supports as much money as possible being allocated to not just course funding, but employee incentives such as driving lessons, tool allowances and completion bonuses. It is becoming more and more difficult each year to attract young people to our industry.

South Australia has a massive infrastructure pipeline. We need to grow our workforce to keep up with demand, and so Master Builders SA would like to see as much of the CITB levy as possible directed to the training that is so badly needed.

The other significant stakeholder in the space of representing industry in the building sector, in building houses, is of course the Housing Industry Association. Their comment is:

Given the unprecedented demand for skilled construction workers, it's imperative that the maximum amount of funds available be directed to training and this includes to regional and rural areas.

This bill proposes two simple measures which will contribute to achieving the goals just described by the MBA and the HIA and supported by other industry groups with which the opposition has engaged, and will come at no additional cost to government, industry or taxpayers.

The first measure is to require that a minimum of 75 per cent of the revenue accumulated by the CITB be spent on training activities—a simple proposition. Businesses in the construction sector contribute tens of millions of dollars to the Construction Industry Training Fund every year for the purposes of supporting the training of their workforce; however, in recent months, we have increasingly heard frustrations from businesses and industry that insufficient priority is being given to this core duty.

The requirement for 75 per cent of revenue to be spent on training activities takes into account current activity. It is proposed as an eminently reasonable floor, below which the board should not sink. The only time in recent years that it has not been achieved was during the 2020-21 COVID year, an extraordinary year, when there were in fact legal impediments to all sorts of activities in society established under the emergency management framework, which of course would supersede this act, as it did so many others.

In that year, training spend increased, but not as much as the government support to keep businesses afloat. The percentage there is not a relevant one, because of course it included inputs that were never designed for that purpose. However, the typical year could be summarised in the 2021-22 year, when 85 per cent of revenue was spent on training: $25.954 million income and $22.149 million on training claims and apprentice incentives.

The following year that dropped, however. Income increased, but the training claims and apprentice incentives did not increase by anywhere near as much. It dropped to 78 per cent. We do not want to see that trend continue. This bill will help, instead, to ensure that industry and business money is spent on the purpose for which it is intended.

Noting that our skills shortages are particularly acute in rural and regional areas, this bill proposes that the minister be able to set a prescribed minimum percentage of revenue (from within that 75 per cent) that must be spent in regional South Australia. A specific percentage allocation for this is not identified in the bill, as we believe that it is within the ken of government and a minister acting in good faith to develop a credible, sufficiently ambitious figure that takes into account prevailing conditions, negotiated between industry, regional representatives, the training sector, the CITB and the minister themselves.

This aspect of the bill will, however, require them to do so. It will prioritise those conversations that need to be had about how we can better support our rural and regional areas. We trust that parties acting in good faith will be able to see growth delivered in regional training outcomes as a result of this mechanism, and ideally we could see this percentage grow over several years, as ministers have the opportunity to require of the sector that stretched ambition.

I note that commencement figures overall for construction trades workers have dropped since Labor came to power, from 1,565 in the year leading up to the election, down to 1,280 in the year leading up to March 2024, the most recent NCVER data that we have. It is an 18 per cent drop. The good news, I suppose you could say, if we were to have some, is that this is only an 18 per cent drop compared to some other industry sectors which have suffered more catastrophic declines: defence and hospitality, just to name two. However, each time the government talks about their response, which is to talk about the fractional improvements we have had in completion rates, they never acknowledge that these increases go nowhere close to replacing the radical drops in commencements.

The broader problem, though, is that this 18 per cent drop in commencements has come at the same time as radical skill shortages in the sector, with businesses also finding it increasingly difficult to attract skilled migrants to work in the sector as well. The MBA estimate I cited earlier, that by November 2026 we will need an additional 31,000 people to meet demand, including 14,685 tradespersons, is backed up by figures I shared last sitting week with the parliament from BuildSkills Australia's analysis, showing they believe the shortfall will grow to more than 47,000 by 2035 under current settings.

This bill is by no means the only mechanism that is required to address these challenging systemic issues and it is by no means the last that the opposition will have to say about these issues with our constructive suggestions and our optimistic alternative plan that we will be putting to the people of South Australia, but we do believe that it will make a contribution to the effort, and I commend it to the house.

Debate adjourned on motion of Mr Odenwalder.