Trade Support Loans

The Hon. T.T. NGO (14:38): I seek leave to ask the Minister for Employment, Higher Education and Skills a question about trade support loans.

Leave granted.

The Hon. T.T. NGO: Trade support loans were introduced by the Liberal federal government, replacing the commonwealth Tools for Your Trade scheme. Obviously it is important that apprentices are supported during their training. The question to the minister is: could the minister tell the chamber the impact of trade support loans on South Australian apprentices?

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (14:38): I thank the honourable member for his most important question. The government is indeed very concerned regarding cuts that the federal Liberal government has made, particularly on apprentices and trainees. Yesterday we saw the Hon. Andrew McLachlan raise the question of the declining numbers of apprenticeships and trainees—I should say, the fall in the 2012-13 numbers that he reported on yesterday.

It is interesting; having looked more closely at the NCVER report that he referred to, I noted that the National Centre for Vocational Education and Research actually stated in the Apprentice and Trainees 2015 March Quarter Report, which is the latest one available, the following:

The substantial changes to commencement and completion numbers appear to be predominantly due to changes in Commonwealth incentive payments for existing workers—

that is, cuts to those workers—

namely the removal of the commencement incentive payment for those apprenticeships and trainees not on the National Skills Needs List. Under the changes, training needed to have commenced prior to 1 July 2012 to attract the old subsidy rate.

It is interesting how the honourable member comes into this place and reads selectively from reports. He failed to quote that section that NCVER, an independent group, has reported that the predominant reason for the decline is the cuts to federal Liberal government funds to apprentices and trainees. That's right, Mr President: the federal Liberal government cut incentive payments for apprentices and trainees and NCVER attributes it as the predominant cause for the fall in apprenticeship and trainee numbers nationally.

That is not the only cut the federal Liberal government has made. There has not been a single federal government policy introduced by the federal Liberal government that will increase apprentices and trainees; rather, they have either cut funding or reduced program expenditure when rebranding apprentice and trainee support programs. These cuts are estimated by the federal opposition to be over $2 billion—$2 billion worth of cuts to our VET system, including cutting over $1 billion from programs that support apprentices and trainees. A $1 billion cut in funding from the federal Liberal government to our apprentices and trainees.

The Liberal government cut the support for the adult Australian apprentices incentive from 1 July 2015. The incentive provided financial support of up to $13,000 during the first two years of an apprenticeship to boost the income of eligible apprentices aged 25 years and over who are being paid under the national minimum wage during their apprenticeship. The incentive provided payments to these older apprentices of up to $150 per week in the first year of their apprenticeship and $100 a week in their second year.

Adult apprentices are less likely to be living with their parents and are more likely than not supporting families of their own. All this cut does is to act to discourage older people from starting an apprenticeship, which could impact on apprenticeship numbers as well. Of course, that is particularly important to those people who have been retrenched and need to reskill and reposition themselves. This adult apprenticeship support scheme would have been a good incentive to help those retrenched older workers to go back and get a ticket. The federal Liberal government has also ceased to fund the joint group training program. This is a program—

The Hon. I.K. Hunter: Shame on them!

The Hon. G.E. GAGO: Yes, shame on them! It is an excellent program, which supported group training organisations to employ apprentices and trainees in specific trades and occupations. It is a program that was originally a joint commonwealth and state program, funded on a one-to-one basis. However, the federal Liberal government cut funding to the program for the 2014-15 year and entirely ceased funding the program in 2015-16.

The federal Liberal government made a short-sighted decision to indiscriminately withdraw federal funding, even though there is well-established data to show how successful these GTOs are. In South Australia, for instance, apprentices engaged by GTOs are 5.7 per cent (just under 6 per cent) more likely to complete their apprenticeship than those employed by a non group training organisation.

They are incredibly successful organisations, as I have said. Unlike the federal Liberal government, this government is committed to the group training model, and the state government will continue to support group training organisations by providing $1.3 million in 2015-16.

Yet another of these cuts I referred to yesterday is to the trade support loans. The Trade Support Loans replaced the Labor commonwealth government's Tools for Your Trade program where apprentices were able to access $5,500 for the costs of things like their tools, books and equipment. Instead, now, apprentices and trainees have to access a trade support loan where they potentially incur a debt of up to $20,000 which they must repay as an income contingent loan.

The Liberal government has replaced what was a grant to apprentices with a debt—as I indicated yesterday, a debt many can ill afford. It is an issue that is exceptionally concerning and it is an issue which I raised with assistant minister Birmingham at the time and one that I intend to raise with minister Hartsuyker.

This is a concerning issue, and Mr Peter Treloar MP, member for Flinders and fellow colleague of those opposite, wrote to me about this very matter. Mr Treloar wrote on behalf of his constituent Mr David Edwards of Port Lincoln. Mr Treloar stated in his letter to me that:

[Mr Edwards and] his wife have been hesitant to take on any future debt until he was settled into his work and able to make informed decisions about where his apprenticeship might take him.

Mr Treloar further wrote about the difficulties of determining this in your first year of an apprenticeship. This is the year that the apprentices first need their tools of trade. I have indicated to the federal government that they should consider reintroducing the Tools for Your Trade program. Trade support loans were never about supporting apprentices: rather, they were about cutting expenditure. It was the federal Liberal government tearing down the Tools for Your Trade program that had supported thousands of apprentices and forcing apprentices into debt. The federal Liberal government has not introduced a single policy that actually supports apprentices and trainees.