Skills for All

The Hon. J.M.A. LENSINK (16:23): I move:

1. That a select committee of the Legislative Council be established to inquire into and report on—

(a) the extent to which the objectives and goals of the South Australian government’s Skills for All program, specifically in relation to employment and productivity growth in South Australia as outlined in the 2011 Skills for All white Paper, have been met;

(b) the impact of the Skills for All program and associated funding and policy changes on the financial and operational capacity of TAFE SA to deliver training and employment programs in South Australia, particularly in regional South Australia;

(c) the impact of the implementation and operation of the Skills for All program on the capacity, transparency, efficiency and viability of the South Australian training market, including on registered training operators;

(d) the full financial impact, including long-term financial viability, of the introduction and ongoing operation of the Skills for All Program on the South Australian budget and government agencies;

(e) the extent to which the current and anticipated future training and employment needs of South Australian businesses, including regional South Australian industry, were met by the Skills for All program;

(f) the manner and extent to which South Australian industry has been consulted in relation to the funding and training priorities under Skills for All;

(g) the efficiency and effectiveness of the South Australian apprenticeship and traineeship arrangements since the introduction of Skills for All;

(h) the extent to which the Skills for All program complements or duplicates initiatives and programs undertaken by commonwealth government and non-government training and employment programs, particularly in regional South Australia;

(i) an assessment of key principles and operational arrangements that must be taken into account in designing and implementing the Work Ready program; and

(j) any other relevant matter.

2. That standing order 389 be so far suspended as to enable the Chairperson of the committee to have a deliberative vote only.

3. That this council permits the select committee to authorise the disclosure or publication, as it thinks fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

4. That standing order 396 be suspended to enable strangers to be admitted when the select committee is examining witnesses unless the committee otherwise resolves, but they shall be excluded when the committee is deliberating.

Before I get into the content of the terms of reference, before anybody seeks to complain about another select committee, can I just advise that this matter was taken to the Economic and Finance Committee of the parliament but the government used its numbers to vote it down. Unfortunately, when these matters deserve to be examined properly, we fall back to relying on the Legislative Council—thank goodness for the Legislative Council, I hear the people of South Australia say—to see whether this matter can be examined properly. There are a number of terms of reference, which is reflective of the fact that this particular program has been handled very poorly indeed.

By way of background, in 2011, the then Rann Labor government announced that it would reform the way in which the state's vocational education and training (VET) sector would be funded and managed. There was a Skills for All white paper, which outlined the reforms and time frames for introducing them, with the objectives to be as follows: increasing the number of South Australians with post-school qualifications and the level of those qualifications; increasing the participation rates in the workforce, so the supply of labour to industry; improving labour utilisation and the hours of work for those currently under-employed, and; ultimately improving labour productivity.

The full implementation of Skills for All started in July 2012 and has been a financial disaster ever since. Advice from external sources, whether they be the Australian Council for Private Education and Training or others, regarding the need to adopt a gradual implementation of reforms and the financial risk of not introducing income and course eligibility restrictions on the availability of government subsidies for training were largely ignored. The department then known as DFEEST, which is now DSD, budget for Skills for All has been overblown several times and has required substantial course capping and eligibility restrictions to be made to bring the budget back under control, and there have been several examples of people who have been disadvantaged through that process on talkback radio.

Of even greater concern is the adverse impact of these changes on training providers, students and South Australian small businesses, with ongoing uncertainty regarding Skills for All funding and subsidy arrangements, which seemed to change on an almost month by month basis from 2012 onwards. This funding crisis has created poor management of the program and has also seen a detrimental impact on the staff and funding budget of TAFE SA, which will see its staff numbers fall from 2,609 employees in 2012 to 1,795 in 2017-18.

TAFE has traditionally played a lead role in providing training and employment support services to disadvantaged South Australians, including those from Aboriginal and non-English speaking backgrounds, people with disabilities and regional South Australians. In some industries and regions, TAFE SA is the main provider of training, with more than 80 per cent of the market share. Regions with very high market shares for TAFE include the Far North (including the APY lands), the Fleurieu Peninsula and Kangaroo Island.

In launching the Skills for All program the government stated that a detailed independent evaluation would be undertaken and published by December 2013, to ensure that timely changes would be made to the program as required. However, an independent evaluation undertaken by ACIL Allen Consulting was not started until late 2014 and released just recently on 1 April 2015. This review found a number of deficiencies in the implementation and operation of the program and that the program has failed to meet several of its key objectives. These include:

1. The proportion of VET graduates with a job-related benefit has declined across Australia since 2005, more so in South Australia than in other jurisdictions. A table from that report (the ACIL Allen Consulting report), figure 27, entitled, 'Job-related benefits from training,' clearly demonstrates that the proportion of graduates reporting a job-related benefit since the introduction of Skills for All has shown a significant decrease since this program started for all certificate levels other than diploma or higher.

2. Little evidence of increased employment or productivity outcomes associated with the implementation of the Skills for All program.

3. Just 30.5 per cent of those enrolled in a Skills for All course completed it in 2013, and of those graduates only 70 per cent found a job-related benefit.

4. Concern that the increased availability of publicly-funded subsidies for VET training under Skills for All had had a detrimental effect on the existing fee-for-service training market. This has resulted in a so-named 'substitution effect' in some training sectors whereby publicly-funded training replaced privately-funded training rather than increasing the overall training places.

5. After accounting for population growth, Indigenous participation in VET has actually decreased over the period that Skills for All has been in place.

6. While there has been growth in VET participation across South Australia since the introduction of Skills for All, regional VET participation has grown at a rate half that of metropolitan Adelaide despite high unemployment rates in regional South Australia.

7. There is concern among stakeholders that Skills for All-funded VET activity has not always targeted areas with the greatest industry need or employment opportunities.

8. There is evidence of school-aged students delaying enrolment in VET until they are 16 in order to qualify for Skills for All funding.

9. Stakeholders express concern regarding inappropriate course delivery methods.

One of the major failings of the ACIL Allen evaluation of Skills for All is its failure to analyse or make reference to the financial aspects of the program, which is one of the most serious concerns among stakeholders about it, and its long-term impact on the future viability of state government training and employment programs in TAFE SA in particular. Without this informed and independent assessment of the full costs of implementing and delivering Skills for All, it is simply impossible to make an informed evaluation of whether the South Australian taxpayer has received value for money for hundreds of millions of dollars that have been invested since 2012.

Overall, Skills for All has failed in its primary objective which is to upskill South Australians to increase employment, productivity and economic growth in our state. There has been almost zero employment growth in South Australia since 2010. In February 2015, South Australia had the depressing statistic of the highest unemployment rate in Australia, and unemployment in regional South Australia is at its highest level for 14 years. At 21.8 per cent, youth unemployment is another depressing South Australian statistic, among the highest in Australia.

The Skills for All evaluation was delivered 18 months late, has highlighted a number of problems, and the government is yet to announce any details in relation to the Work Ready program, so there is no confidence within this sector that what has been promised will indeed be delivered. For that reason, I commend the motion to the house and advise that I will seek a vote on this within the coming sitting weeks and will welcome the participation of interested members of the Legislative Council.

Debate adjourned on motion of Hon. J.M. Gazzola.