Subject: (VET Reforms)


STEVE PRICE: The Assistant Minister for Education and Training is Simon Birmingham and he’s been good enough to join us; Minister, thanks for your time.

SIMON BIRMINGHAM: Good evening Steve, Danny and Listeners

STEVE PRICE: Was it a dog’s breakfast when you got there, as young Danny described it?

SIMON BIRMINGHAM: Well, it’s certainly a pretty challenging environment, Steve. We’ve seen since 2010 a steady decline in the number of apprenticeships around Australia and especially in New South Wales where around the end of 2010 there were about 146,000 apprentices in New South Wales, at the latest count it stands closer to 98,000. So around a third of all apprenticeships in New South Wales have been lost over those years and what we’re desperately trying to do now is work on policies and strategies that can rebuild the system from the number of problems incurred during the Labor years.

DANNY BIELIK: So bear it in the budget papers, Minister, was 350,000 apprentices will be support through the apprentice’s network. Now, this is a national figure and that’s in the first year. The budgets provided up to $200,000 in 2015-16 and around 78,000 employers are expected to also receive incentive payments, can you explain that to our listeners? because I found it very difficult to find any details about these programmes.

SIMON BIRMINGHAM: Certainly, Danny. The Australian Apprenticeship Support Network is a new initiative of our government, it’s taken what was a very old and bureaucratically driven approach to supporting apprenticeships and is trying to put in place a system now where we’ll have providers at around 460 locations around Australia providing the appropriate support to help employers, attract, train and retain apprentices throughout the apprenticeship. What that means is that first and foremost they’ll provide a bit of a matching service to ensure that apprentices are the right fit for the employer, the right fit for the apprenticeship to try to help boost what are some fairly poor completion rates that sit at around 50% in terms of apprenticeships around Australia. They’ll be able to provide extra mentoring support in a number of cases and really be there to help and provide as much of the administrative and logistical and mentoring assistance to try to make it as easy as possible for employers to have an apprentice and to focus on just running their business and providing the training for that apprentice without having to worry about all the other stresses that come with it.

STEVE PRICE: I presume you’ve been out talking to employers; have they given you any feedback on what they think should happen?

SIMON BIRMINGHAM: Look, I certainly have had feedback that reflects what we’re trying to do with the support network about the bureaucracy and the hassle of having an apprentice and we’re trying to take that hassle out of…

STEVE PRICE: …That’s what I don’t understand, Minister, why it needs to be so difficult. Forever it worked and then it fell over; it can’t be that hard, can it? 

SIMON BIRMINGHAM: It shouldn’t be, but the horror stories I hear are of rooms full of boxes that are just containing paperwork ticking of the individual competencies that apparently need to be ticked off to ensure or to guarantee that somebody is learning the right things through their apprenticeship…

DANNY BIELIK: …You’re sitting here talking to employers around NSW around Australia and they’re listening right now; why should they pick up the phones tomorrow, ring one of these apprenticeship networks? What’s substantial that has changed for them, that should make them ring up tomorrow and say “I want an apprentice, I want two, I want five, I want seven of them.”?

SIMON BIRMINGHAM: Danny, we’re getting rid of the boxes of paperwork, we’ve built a new online system that should be much easier to manage, we’ve got this $200 million roughly per annum investment  in supporting employers to employ apprentices and that will come in from 1 July this year to try to make it easier for them. So I’d say to employers, particularly small businesses, who are getting such a big shot in the arm from this year’s budget, to think about reengaging with the system, to know that the government is doing all we can to try to put a better model in place that gives you more support to take somebody on in your area of trade and give them a chance. 

DANNY BIELIK: Minister, $200 million is a thumping amount of money, is that going to be provided- you talk about support and all those things- mentoring I think is fantastic, taking away the paperwork burden is absolutely fantastic, is some of that going to be paid as subsidies to wages? What is that $200 million actually mean to employers and to potential apprentices?

SIMON BIRMINGHAM: That funding is- and it is a big some of money- it is of course spread right across the country and it is about supporting those 360,000 apprentices that we have in the system and trying to take, as I say, the paperwork and the bureaucracy away from employers and make it easier for them to provide the support necessary to keep their apprentices in place. There are some other subsidies and incentives that exist; frankly, they remain as a bit of a complex maze. The support network will help employers to access the type of subsidies that are there to help them, whether it is a completion subsidy or a subsidy for someone from a particular socio-economic category or the like, but I’m also undertaking a comprehensive review of looking at all of those subsidies seeing as there are better ways to use the pot of money that we have to make sure that it is geared particularly to encourage…

STEVE PRICE: …Danny, do you find that confusing?

DANNY BIELIK: Minister, I’m sorry, I think you’re heading down the right track here but I think listeners- I’m dying to hear from listeners- I can see the boards already lighting up with callers wanting to say it, I can tell you what they’re going to ask, Minister, they’re going to ask “What does that mean for me? I’ve got to go in to business tomorrow and I’ve got to go and open my chicken shop” “I’ve got to go and lay those bricks” “I’ve got to fix those windows” “I’ve got to go and put plumbing in to that brand new block of apartments” “What does that actually mean for me? What’s going to encourage me? Less paperwork may not actually get me out of bed in the morning, what is it that used to attract me to apprentices, that is now going to attract me again to apprentices?”

SIMON BIRMINGHAM: Look, Danny we’ve got to keep working on this, I don’t think we can turn around the problems of the extra costs that have been piled on overnight, but I think this support network makes a big, big difference and it will provide very practical support to employers and ensure that it is easier for them to take on an apprentice. There’s financial support to around 80,000 employers through some of these incentive programmes, but I do want to make that simpler and easier for people to understand.

DANNY BIELIK: Minister, how will we be able to measure if these changes have actually made a positive effect because the number of apprentices is flattening out now, it may have even started to increase a little bit, how will we actually know? How will we be able to measure whether this $200 million, whether getting rid of this red tape has actually made a positive effect in apprenticeship numbers?

SIMON BIRMINGHAM: Well the first test I want to have is actually making sure that we’re improving the completion rate. As I said earlier, completion rates themselves only sit at around 50% so that is a lot of wasted time and effort from both employers and apprentices where you’re not getting the ideal outcome, the optimum outcome which is a skilled tradesperson at the end of the apprenticeship. So, lifting completion rates is something I would like to see us achieve and again a steady growth back in completion rates from that 50% level. Ultimately, yes, we want to start to rebuild apprenticeships and traineeships back to the types of levels we had under the Howard government that have been in such a steady decline since then and particularly through the later years of the Labor government…Get confidence back, support small businesses- like Joe Hockey delivered in the budget- and yes, try to address and make sure that the incentives are going to the employers where it will make a difference, not where it’s just giving the employers some money for somebody they would have employed anyway.

STEVE PRICE: This is a very broad question, as a country have we lost our focus on that aspect of the workforce where we concentrate at our schools, and I’ve got two girls finishing high school in the next two years, where we’re desperately trying to get people in to university, but we’re not identifying in our education system, it doesn’t seem to me, those people who don’t want to go to university, who actually want a trade and want a path in to those trades and it seems that career advisors at schools are not even bothering or caring about…

DANNY BIELIK: …I can confirm that, Steve…

STEVE PRICE: …I know, Minister, that I’m generalising there, but that’s the impression I get.

SIMON BIRMINGHAM: Steve, I think you’re raising a really valid point and it’s one that I raised with state Ministers about a week ago when I had my first meeting with the state Skills Ministers and it really does worry me that the status of vocational education, the status of apprenticeships is not given the regard it should in schools. The truth is that many apprentices, when they complete and are a skilled tradesperson, will earn more than many university graduates. In fact, in terms of small business owners or business owners generally around Australia, more business owners in Australia have a vocational education qualification than have a university degree. So, if you want to be your own boss, if you want to be an entrepreneur and run your own business in this country, the stats tell us you’re better off doing an apprenticeship or that type of activity than necessarily going to uni.

DANNY BIELIK: Minister, we know that 6 months out from a course, the statistics from the National Centre for Vocational Education Research show that the starting salary of someone 6 months out from completing a Certificate IV or a Diploma qualification actually exceeds that of someone who graduates with a Bachelor qualification. Now, nobody apart from us here on the courses and careers show ever talk about that sort of thing. 

SIMON BIRMINGHAM: Well it is and there is that aspect and even when it just comes to the apprenticeship themselves, of course an apprenticeship means you’re getting paid while you learn, nobody pays anybody to go to university. You get paid on the job, for your studies as part of an apprenticeship, now perhaps there are some concerns about those wage rates and I hear that from employers that FairWork Australia has passed some of those wage rises on…

DANNY BIELIK: …What can be done about it? I mean that bothers employers…

SIMON BIRMINGHAM: It does bother employers and it’s something Eric Abets and I have talked about. We’re looking to see just what the impact which flows through this year from the FairWork Australia division is as to whether it drives down or drives away more employers and how we can address that. Of course, unfortunately in many ways when you start talking about those costs, the only turn around becomes well can the government dip in more money and really what I have to do first and foremost is look at the money that is there to start with and see whether it’s being used as effectively as possible and that’s why I’m having a look at the incentive payments we’ve got and trying to ensure they’re geared towards smaller businesses so that we get extra businesses participating in the apprenticeship system, not just money going to those who would probably do so anyway.

STEVE PRICE: Minister, thanks for your time, appreciate it very much.