Address to Ai Group’s Industry Meets Canberra event

Simon Birmingham: Thanks very much, Innes, for that welcome. It’s wonderful to be with you today, to be here at the AI Group discussions, and firstly, to really pay tribute to AI Group for its long-term, policy involvement, engagement, leadership in relation to education and training matters, for being willing to stand up when it counts – Innes, Megan, the team in general – and actually speak on difficult policy issues, to take a serious approach in recognising that it doesn’t matter whether it’s an issue as important and central as education and training; an issue that also can inspire emotion and passion, we’ve got to also take a hardline, rational approach to it at times to make sure that we get good value for money and positive outcomes; and AI Group, you can always guarantee, is focussed on that in particular around the notion of workforce participation.

It’s not a couple of words that historically an education minister will endlessly talk about, but workforce participation in its different types or forms is central to the objectives of our Government, but particularly central to the place of the education and training portfolio within the Government’s broader economic growth agenda and ambitions. It’s central across each of the aspects of the portfolio. I’ve got responsibility across early education, childcare, preschools, higher education, vocational education, secondary [indistinct].

Workforce participation is a central theme right through all of those different facets of the portfolio. [Indistinct], because even in those earliest years, of course, is the establishment of the foundational skills, of the educational basis, but our support in the childcare space is also critical to the participation of many of your employees – some of you as well – and significantly, our Government’s delivered and has implemented sweeping changes to childcare and early education support across the country. They’re probably not at the forefront of your minds, but from 2 July next year the childcare system will be far better geared to targeting the greatest support – in terms of childcare subsidies – to the families who earn the least, targeting the greatest hours of support to families who work the longest hours, ensuring that we actually have a far more focussed and far more targeted and far more effective childcare regime that also, importantly, underpins and supports early education.

And through those reforms we expect and anticipate a significant lift in participation. Participation in working, training, studying, volunteering as part of the prerequisites for the childcare subsidy, but also because a better designed childcare framework will actually better enable Australian families to make decisions that suit them, to work the hours that suit them, to work the times that suit them, and to be able to access and afford childcare that enables them to make those decisions. Just one critical area where, of course, our work is helping workforce participation.

Schools. Schools, equally, not necessarily always thought of directly in a workforce participation sense, but of course, critical in terms of the preparation of school leavers for the multitude of directions in which they may go. Whether it’s in higher education, whether it’s in training and vocational education, or whether it’s straight into the workforce. But they are the directions, of course, we want school leavers to go in. Not to go and join the Centrelink queue, it’s either work, training, studying to actually go and contribute to participation [indistinct]. And our school system from the earliest years of building the foundation skills, through to the later years and building higher level skills around collaboration, resilience, capacity to work in the modern workforce, to the technical skills of the STEM sector, of course, must prepare kids for that endpoint.

Now, I was confronted with – in coming in to the education portfolio – with a debate around schools that focused almost exclusively on how much money is spent, and a debate that seems to have raged in this country for at least the last six years, with an exclusive focus on the dollars spent on schools, and seemingly little concern or analysis on how that investment is spent. What I’m pleased and hope that we’ve achieved this year through the passage of the Gonski 2.0 reforms is not just application of a fairer, more consistent, needs-based funding model. That’s pretty important, and that’s an accomplishment of which we are very proud, but I hope that we’ve also created an opening now to shift the conversation from one about how much money is spent to one of how best it’s spent. How do we get the best bang for our buck? That’s why we’ve asked David Gonski to lead what is a second panel looking at closely at the achievement and attainment of educational excellence in Australia – excellence right across the horizon. How do we move the bell curve up so that low performers improve their performance, but also so that our high achievers improve their performance? Because on many analyses we’ve been slipping at the top end of performance in our schools, as well as at the bottom end. [Indistinct] performance right across the board. We’ve identified areas where we think there’s good scope to be able to work in that regard.

We’ve already acted in terms of matters of teacher quality. Initial teacher education in Australia is seeing every university’s initial teacher education course reassessed in terms of its competencies to deliver what is needed to meet the new standards for teachers. We’re requiring all future graduates, from those initial teacher education courses to undertake literacy, numeracy tests that demonstrate they themselves are in the top 30 per cent of the Australian population for their literacy and numeracy skills. So that no more will we fear a situation where teachers entering the classroom, talking about foundation skills, can’t even do themselves so that we can have absolute confidence that not only they can teach it, that they can do.

Equally, we’re requiring, in terms of those undertaking teacher training for primary school years, the introduction of subject specialisation, so that our primary schools across the country will get more specialist English teachers, maths teachers, science teachers into those environments to provide a higher level of support across the school community. Not that of course every primary school student is going to have specialist teachers for each subject. But that within those schools they’ll be able to access at least specialist support when and where it is needed.

Those types of basic reforms, we’re hoping to build upon by David Gonski’s work, looking and analysing the work we’ve initiated around the teaching of phonics in the early years. It’s complemented though, by working as part of the National Innovation and Science Agenda, which has established a raft of new initiatives over the last couple of years, particularly focussed on STEM skills that Innes referenced before, and guaranteeing that students have a higher level of exposure to training, in areas like coding, through Code Club, through new challenges. Just the other week, I was with the VC of the University of Sydney, Michael Spence, as we launched a program, part of the Innovation and Science Agenda, where they are developing coding challenges that will be rolled out to around 200,000 year five students right across Australia, as part of an ongoing process and to better engage them with technology in their early years and in a very practical hands-on way.

Of course, the post-school environment is one where the policy work is partly still a work in progress. Innes referenced the VET FEE-HELP reforms and yes we’re very pleased as a government to have ended that failed Labor scheme that sadly did so much damage to the reputation of the VET sector and does make – does make implementation of some policies that much harder today because of some of the scepticism and doubt about some of the behaviour that occurred then and the need to really have tough firm regulation to prevent any repeat of that type of rorting.

But we’ve put in place a replacement – the replacement model VET Student Loans is tracking pretty well. Importantly, we’re making a big transition in the VET space, from historically just handing chunks of money over to states as part of national partnership agreements around vocational education to now, under the new Skilling Australians Fund, establishing a new process with clear benchmarks that are really targeted and focussed around apprenticeships. Not just apprenticeships, as we’ve always defined them though, looking at inclusion of pre-apprenticeships and higher level apprenticeships as part of a comprehensive suite, but requiring that the states will have to tip in matching funding to access that fund; that they’re paid on outcomes; that we have clear targets of 300,000 additional engagements in the apprenticeship cycle across that spectrum, as part of the apprenticeship model. Because we know that apprenticeship numbers have dropped dramatically in Australia since subsidies were wound back in 2012. We’re not in a budgetary position to come along and allow hundreds of millions, billions of bucks back into huge new subsidies. But we are absolutely in the position where we can work with the states, but make sure we actually hold the states to account for once in terms of actually accessing money and guaranteeing that it’s supporting new apprenticeship programs, that’s exactly what we get for it rather than just more money being funnelled off simply to prop up inefficiencies in the state public services.

In the higher education space, we’ll shortly seek to legislate our higher education reforms. Now in part, they’re about addressing financial sustainability in the higher education system. We’ve seen phenomenal growth in expenditure of higher education. I’ve referenced rivers of gold flowing to some of our universities. Some of them don’t seem to like that reference terribly much. But the truth is the growth in revenues that they’ve experienced in the period since 2009 has been phenomenal, growing at a rate far, far faster than the economy, than inflation and pretty much many other services anywhere across Australia.

Yes, that’s been coupled with huge growth in student numbers. So in one way, their funding has just kept up with that student number growth, except for the fact that on most measures it’s exceeded that. On a per student basis, there’s been even faster growth in many areas. Our universities are seeing that they’ve got more funding per student, record numbers of students, surely some capacity to apply some economies of scale, some efficiencies out of that. But we’re not asking for much. In fact, all we’re asking for is a slight slowing in the trajectory of growth over the next few years. The types of reforms in terms of university funding, student fees that we’re putting forward will simply see growth and funding to universities slow to about 23 per cent growth in their teaching and learning funding over the next four years.

Wouldn’t you all be pretty happy in your businesses if you had confidence that over the next four years you were going to see 23 per cent growth in your revenue streams? Universities don’t seem quite so happy and chuffed about that. They were unquestionably happy a couple of years ago at the notion that student fees could be deregulated and go wherever it is that universities want to charge them. Now they quibble about a steady increase of 1.8 per cent or thereabouts a year for just a few years. Nonetheless we’re determined to push on because we think that achieving a position that is fairer for the taxpayer, for those in the vocational sector or elsewhere, who don’t go to university and where there’s a fair balance between private benefit and public benefit, private fees and public contribution around university finance.

We think also we should hold our universities a little more to account. Universities enjoy great autonomy in Australia. The autonomy to enrol as many students as they want in whatever disciplines they want. We’re proposing that there should be some element of their funding held in a performance pool. A performance pool where we can consider – are they making enrolment decisions and processes in the best interests of students and the economy? Are they giving students the appropriate support to successfully progress and complete their career- their studies with minimal levels of attrition or non-completion. Ultimately, are their graduates getting jobs, getting jobs that lead to them paying back their student loans under one of the world’s most generous student loan schemes? These are not unreasonable measures if universities want to maintain the level of autonomy they have to be able to enrol students, numbers in courses as they determine, but they should also be held somewhat more accountable for the outcomes around those students.

We’ve not come in heavy handed in that. We’ve said the performance measure is something that we will develop gradually, that after all, universities house the best and brightest minds in the country so we want to invite them to help us develop exactly the metrics and how it’s implemented so that they can have confidence that they can work within that framework.

Importantly, we heeded calls from industry in relation to a couple of the other areas of university reform. We focussed particularly in regard to how it is that the universities are supported when students undertake work placement as part of their program. Previously, essentially there was no incentive for universities and almost a disincentive for universities to integrate work placement and work studies as part of a degree program because they didn’t receive any funding or support for the student whilst they were engaged in those work placements and studies. Never mind the fact that the university might have actually gone to some effort to coordinate that, or organise that and ensure that it comes with minimal hassle for employer who engages. Well, happily now, under our reforms, unis will have an incentive there for them to be able to pursue that type of integrated work learning as part of studies.

We’re also looking to try to make the university offering more flexible so it’s not just about unlimited three and four year degrees, but encouraging universities to have more flexibility in the shorter one or two year associate degree or diploma, advanced diploma, sub-bachelor degree-type space – but with some strict conditionality – conditionality that those courses must have been developed with some partnership with industry. University of Tasmania has a great one that it’s already worked up in agri-business, a two year associate degree, significant work integrated learning components embedded in it, developed very closely with agricultural sector in Tasmania. It’s the type of thing we want to try to encourage the unis to think about. So that not all students need to be shoehorned into longer term degrees, so that there’s more flexibility and indeed, of course, a greater focus in terms of those courses delivering workforce participation as part of their [indistinct].

So across the spectrum our focus is very much around how the education and training system prepares young people for the future. Prepares them for a future where we don’t necessarily know what the jobs will be and that those jobs will change quite dramatically in years to come. But importantly, also prepares them for a future of workforce participation.
And in closing, just last week I was at Cecil Andrews College, a high school in Perth. One of a number of P-TECH pilot sites around the country where we are developing, rolling out a model and really trying to partner schools with industry, industry where there are jobs in local communities that kids should be thinking about, exposing them to different types of jobs. I pay tribute to Thales, who are one of the partners at the Cecil Andrews school, who are dedicating some of their time, energy and resources to mentoring students, to giving better exposure to different types of career pathways, particularly in the STEM disciplines that might be available for those students.

Actually engaging strongly between schools and industry is a critical part. P-TECH we see as a good model because we hope that it’s one following the pilot years that can be replicated around the country at low or no cost to taxpayers. Yes, it requires some goodwill from you – business leaders; but what you get back from it is confidence that you can have a better flow of skilled employees in the future, who in their earliest years of study, whilst at school in those formative years have actually thought about the type of pathways available to them.

And I was thrilled to see so many businesses like Thales engaging with that one school. Thrilled to see students who from a very low socio-economic area, often who don’t have great role models in the workforce in their lives actually getting to see the benefits of workforce participation and different opportunities available to them, and that of course is something we want to expand in the future.

So thank you for those of you who are helping to help us achieve the type of education outcomes we want. And I hope that in the future we can build an environment where many more of you are encouraged to do so too. Thanks very much.