Working together to restore a world class VET system

17 November 2016

This is a joint statement by the Australian Chamber, Australian Industry Group, and the Business Council of Australia.

Australia’s vocational education and training system was once the envy of the world. State and federal governments worked in partnership with industry to ensure the system delivered the skill outcomes sought by employers. The system as a whole was led by industry.

But in recent years employers and industry groups have become concerned that the VET system is deteriorating and that recent attempts at reform have failed to impact on some core issues.

The VET system should prepare workers for the economy of the future, and enable Australian businesses to be globally competitive. VET needs to deliver a pipeline of skilled workers, act as a pathway for young people to enter the workforce and help workers to upgrade their skills or change jobs.

On Friday, federal, state and territory skills ministers will come together at the COAG Industry and Skills Council Meeting in Darwin. They have an opportunity to restore VET to its former world-leading position by recommitting to some basics and agreeing to work with industry on a reform path that addresses future challenges.

The first issue that needs to be addressed is the erosion over the past decade of industry’s leadership of the VET sector. It is time to return leadership of the VET sector to a partnership between industry and government.

The next issue that needs urgent attention is apprenticeships and traineeships, a cornerstone of industry-led skills development. Apprenticeships do better than higher education when it comes to employment outcomes: more than 90 per cent of trades apprentices find work after completion.

In 2012, 446,000 Australians were undertaking an apprenticeship. By March 2016, this number had dropped to 286,500, the lowest for over a decade. This decline has coincided with unacceptably high youth unemployment and skills shortages in many fields. For example, 61 per cent of trades and technician occupations are now experiencing shortages.

Clearly the apprenticeships system is not working as it should. It is swamped with duplication and inefficiency due to federal and state overlaps in responsibilities and approaches. Policy and funding decisions by both levels of government – including massive reductions in employer incentives and wage subsidies by the Federal Government in 2011 and 2012 – have also had a profound impact.

Recent attempts to harmonise state and territory apprenticeship systems and to fix the blurred lines of responsibility are merely tinkering around the edges. Despite some recent welcome programs in some states, the overall impact on apprenticeship policy and outcomes has been limited. Meanwhile the numbers continue to fall.

Government needs to strongly commit to a national approach to VET. The states and territories should not lose control of their apprenticeship systems but instead all governments should work with industry to identify a path forward. If we get this right it will re-energise apprenticeships and traineeships.

Ministers should also address industry’s concerns about the agendas of different governments in the design of training packages, which are central to the VET system. Training packages have at their core occupational standards, which are defined and updated by industry. These skill standards need to remain central to VET, and industry does not support any move away from this approach. Ministers should take note.

Industry recognises that change to training package design is needed, but this change agenda should be agreed by industry as well as governments. The solutions developed together will strengthen skill standards and better address literacy and numeracy skills as well as higher-level skills. These are essential to help people adapt to the rapidly changing world of work.

If COAG ministers can on Friday agree to these first steps in a comprehensive and cooperative reform agenda, it will ensure our young people, workers and businesses will reap the benefits of a world-leading vocational education and training system. We know that excellence can exist in VET and we join with the ministers in the celebration of the best of it tonight at the Australian Training Awards. We just want to see that excellence long continue.


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