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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2010-06-23 Daily Xml
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CONSTRUCTION INDUSTRY TRAINING FUND

The Hon. D.G.E. HOOD (15:34): The Construction Industry Training Board was established under the South Australian Construction Industry Training Fund Act 1993. Its purpose was to implement training programs within the building and construction industry. The Construction Industry Training Fund is a compulsory levy collected by the board representing some 0.25 per cent of the estimated value of any building and construction project valued over $15,000 plus GST. The levy is meant to be used primarily to subsidise the training of workers.

However, my interaction with a number of senior people in the building industry from all sectors of the building industry and construction firms—that is residential, commercial and the like—indicates to me that many of these organisations have a deep dissatisfaction with the way the fund is operating at the moment. For interest's sake I have looked back at the debates from 1993 regarding this fund when the fund was introduced. The fund, as the government noted at that time, was requested by the industry—that is, the HIA and the MBA—so I do not think it is possible to blame the government of the time as it was merely doing what the industry requested.

It was set up primarily to try to alleviate the skills shortages that were becoming apparent at that time. The minister at the time rightly noted that 'a highly skilled workforce is essential for the attraction of investors to our state.' However, the fact is that in the passage of time and since the implementation of the scheme, the scheme has not delivered what it was intended to do. The rate at which the industry is losing skilled tradespeople now greatly exceeds the rate at which new entrants are being recruited, and this leads to genuine affordability problems within the industry.

In 1993 bricklayer rates were $340 per 1,000 bricks; now they are over $900 per 1,000 bricks, and that well exceeds cost of living increases during that time. The primary reason for this, of course, is that simply the supply of bricklayers is substantially lower than it was at that time. From this perspective and for a number of other reasons, I believe the board has failed in its objective to provide for the necessary skilled workforce on our building and construction sites across the state.

During the debate the then leader of the opposition in this place, the Hon. Robert Lucas, noted several concerns regarding the compulsory nature of the levy and the effect it would have on the competitive position of some South Australian companies and, in hindsight, I think we would have to agree that—

The Hon. R.P. Wortley interjecting:

The Hon. D.G.E. HOOD: I think in this case they were right. In hindsight I think we would have to say he was right; certainly the numbers support the argument. Indeed, the Hon. Julian Stefani in 1993 also rightly, in my view, noted a concern that builders who were already providing training to their workers through their own internal schemes (apprenticeships and the like) would actually be hit twice with training costs because they were also compelled to contribute to this scheme given its compulsory nature.

In hindsight it seems apparent that the scheme has contributed to many builders and constructors finding it uneconomical to contribute to the double cost of employing apprentices and contributing to the scheme, hence the reduction in numbers. My interaction and extensive discussions with builders indicate to me that many companies are unhappy with the way the Construction Industry Training Fund operates in its current form and would like the option of directly investing into entry-level training—that is, the group apprenticeship scheme or prevocational training—as an alternative to the compulsory participation in this scheme.

Allocating levies directly into apprenticeship training rather than to 'upskilling programs' offered by the board ensures a tangible predetermined outcome. The disappearance of apprentices from home building sites over the past 25 years has had terrible consequences in our society, and they may not immediately spring to mind. There are obvious issues with affordability in the housing sector; the truth is it is simply harder to find tradespeople and the costs to acquire tradespeople are substantially higher. One implication of that is that it is more expensive to build a property in real terms—that is, allowing for cost of living increases—than it was at that time. Further, there are all the social implications of that we have seen during that time such as rising crime rates, drug use, etc. I am not saying that they are necessarily a direct result of this action but the correlation is interesting.

It is time to revisit this scheme and allow builders the option of putting their training levies directly into group apprenticeships rather than this scheme which after all is operating as a monopoly. The board was set up in 1993 with good intentions and requested by the industry at that time, but it is apparent from the debates at that time that they are not fulfilling the original intention, and clearly this needs to be looked at and changed substantially.

Time expired.

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