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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2015-07-01 Daily Xml
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WorkReady

The Hon. D.G.E. HOOD (14:35): I seek leave to make a brief explanation before asking the Minister for Employment, Higher Education and Skills a question regarding the government's WorkReady program.

Leave granted.

The Hon. D.G.E. HOOD: Under WorkReady, the government now wishes to allocate 90 per cent of the 51,000 new subsidised training places to TAFE, which I am advised will create major unemployment in the private training sector and most likely result in business closures. This is of significant concern when you consider that our current unemployment rate is the highest recorded in the last 14 years and, indeed, the highest in the nation.

Key stakeholders have commented on the effect of the government's not consulting with both the VET providers and registered training organisations prior to the announcement of the new allocation of subsidised training places. This should have occurred, given that these providers are significantly affected by this reform, in their view, and it does not seem unreasonable.

There have been reports that the policy not only creates a loss of work for private sector providers but also severely limits student choice of subjects and locations for study. Under WorkReady, training programs are estimated to cost approximately 2½ times that of private sector training. Moreover, it has also been suggested that the policy goes against the state's obligation under the National Agreement for Skills and Workforce Development. My questions to the minister are:

1. When was the WorkReady program first proposed, and was a decision to reallocate the majority of government funded training places to TAFE initiated by the minister or on advice of the department, or both?

2. Is the government concerned about the reported potential loss of $65 million in federal funding, and what are they doing to ensure all obligations under the national agreement are met?

3. What consultation has the government undertaken on this issue of training, and when will the government consult the private training sector in accordance with their request?

4. How does the government respond to the reports that courses through TAFE SA will cost significantly more compared to existing private sector providers?

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) (14:37): I thank the member for his important questions. I have answered all of these questions before in this place several times but, nevertheless, I am happy to go over it all again. I have answered all those questions in detail previously. I have outlined in this place that, in fact, we are not cutting training. Currently, this year, we are subsidising 80,000 training positions, and for 2015-16 we plan to subsidise 81,000 training positions. So, in fact, this government—

The Hon. R.L. Brokenshire interjecting:

The PRESIDENT: Will the Hon. Mr Brokenshire allow the minister to finish her answer?

The Hon. G.E. GAGO: The reason they keep asking the same questions over and over is that they don't listen to the answers, sir. We are not cutting training at all. There are 81,000 subsidised training positions, so that is slightly more than this year, and the funding is still more than the pre-Skills for All funding level.

As I have explained in this place many times before, this government provided significant additional once-off funds in relation to Skills for All over the past three years or so, and that was to enable us to achieve 100,000 additional training positions. Those additional funds were extremely successful. Not only was it a record once-off level of funding but we had record levels of participation and record completions and we achieved our 100,000 additional training places—in fact, we exceeded that—and we have since spent all of those funds. Our level of funding is contracting, given that we have spent all of that additional once-off funding.

The industry, when those once-off funds were made available, expanded. Those businesses expanded to take advantage of that once-off money. Businesses grew and new RTOs came into the marketplace, as I said, to take advantage of that once-off funding. Those moneys are spent and they are now contracting, and they need to contract back to a more sustainable level of activity.

I have also talked in this place about the issue of the very high levels of current enrolees, or the pipeline effect. Again, because of that additional level of record-level of activity in relation to meeting our targets, we have unprecedented levels of enrolments currently in the system. That means that just under 40 per cent of government subsidised training funds needs to go into the current enrolees, because we have committed to honour those enrolments and we have committed to honour them at the same rate of subsidisation as when they first signed or enrolled. That meant that particularly for 2015-16 we were faced with very high levels of funding; $100 million of the funds for 2015-16 will need to go into just maintaining those people who are already currently enrolled. So that gave us, for 2015-16, limited funding for new enrolments.

In terms of when we discovered these figures, as reports came through these facts unfolded themselves and we realised that we were going to be very limited to the new enrolment subsidised funds. In relation to that, I have indicated that I put TAFE SA on notice. I indicated to them that it was unsustainable for them to continue to be subsidised at 2½ times the rate of the privates, so I put them on notice and said that by 2018-19—because we are phasing WorkReady in over four years—they have to be on dollar-for-dollar parity with the privates. So it will be a truly open market place with the potential for greater levels of contestability, and that will advantage the privates. But to get to that position, TAFE indicated that they needed assistance or some additional support, particularly during 2015-16, to enable them to make the reforms they need to be able to deliver that dollar-for-dollar parity for commercial training activity in TAFE.

When we were presented with that information, it was clear that unfortunately for 2015-16 a large proportion of the new enrolment funds needed to go to TAFE to support them to be able to transition through reforms to become more competitive. Thus we have the unfortunate position that we have for 2015-16. It is an interim position. Each year that goes past, there should be relief for the privates as the pipeline empties out and we are able to reinvest those funds into the new enrolment contestable fund bucket. Also, TAFE will commence its reforms straightaway and so benefits and efficiencies from that should feed into the system as well.

The privates have a very difficult year in 2015-16. I am meeting with as many of them as I possibly can and we are working with them to identify opportunities where they may be able to engage in training activity. Each training provider is a different business and, therefore, we are trying to work through their individual business positions.

There will be 5,000 new places for the privates. For the privates, we will be subsidising funds for 16,000 places for private RTOs, subsidising training places for 16,000 that are already in the pipeline. There are also the Jobs First Subsidised Training List funds that privates can access and there is also the Jobs First employment fund of about $7.5 million, and I have increased those funds for 2015-16 so that they may have access to that. Of course, the privates also have access to fee-for-service which is unlimited, so too are apprenticeships that have training contracts. They are unlimited, so they will be subsidised in an unlimited way. So, there are some opportunities there, and I know that means different things for the different private RTOs but, as I said, we are working with the individual RTOs to try to identify every opportunity for each of those businesses.

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