SIMON BIRMINGHAM: Thanks so very much, Innes, thank you for having us back here at the AI group again. It’s wonderful to be here with so many people and partners in the vocational education and training sector and I particularly thank you and Megan and the team for organising and hosting this event today as well as, of course, for the continued input that you provide in to good policy making in Australia and in particularly, in my portfolio responsibilities of vocational education and training. To John Hart, the chair of my VET advisory board, and the other members of that board who are present today, Dr Subho Banerjee, the deputy secretary of the department of Education and Training and his team and Chris Robinson, the Chief commissioner of ASQA, many distinguished industry and business leaders, partners and players in vocational education and training sector, thank you all very much for turning out bright and early, as Innes said, on a Tuesday morning with a little Christmas in the air out there that ensures we are all nice and awake and alert for this presentation.

It is of course just around four months that I have been in this portfolio with ministerial responsibility for the vocational education and training sector. I am the first such dedicated minister to this sector since the Howard government. In those four months I’ve sort to consult quite widely across the sector, particularly with employers and industry groups but also of course, with training providers and all of their representative organisations. We’ve announced in that time some major reforms to VET FEE-HELP, as Innes touched on in his introduction, reforms particularly designed to protect students, tax payers and perhaps most importantly the reputation of vocational qualifications. We’ve passed laws to continue the government’s focus on lifting the red tape burden on good providers and allowing the regulator, ASQA, to focus all regulation and enforcement on those who may be doing the wrong thing in the VET sector. 

There’s no doubt that the last four months have been a steep learning curve as I’ve grappled with the range of issues inherited from Minister Macfarlane and the number of particular challenges confronting the VET sector, and I’ve seen some of the best and worst examples of good practice and bad practice around the sector. Many of you would have heard my say that my focus in this role is very much on jobs, quality and status. Ensuring that vocational education and training is linked to employment outcomes and jobs, that we have high quality in our training, that we continue to excel in a way that ensures the reputation of our training sector internationally is strong and that we lift, wherever possible, the status of vocational education and training to inspire young Australians and Australians of all ages to consider undertaking VET studies to further their employment prospects. 

Many of my announcements over the past four months have focused, in particular, on quality issues. That is, and must always remain a top priority and is at heart part of the announcement we will be making today. So too in today’s announcement is of course the importance of jobs and that link between VET and employment outcomes. Like me, many of you would have welcomed the modest improvements in last week’s employment data. The job market has been performing strongly over the first three months of this year. The unemployment rate has pleasingly been trending down and nearly 73,000 new jobs have been created. Employment increased by some 37,700 in March, while in 2014 we saw more than 200,000 new jobs created around Australia. Jobs grossed averaged some 16,700 per month in 2014, which is more than four times the average monthly jobs growth in 2013. Since the start of 2014 some 273,500 jobs have been created across Australia. Our economic prospects, despite some of the commentary, do continue to improve. The gradual return of confidence is shown in household spending which is growing at the fastest rate in almost three years along with rising retail sales for nine consecutive months. Last week, the Prime Minister reiterated our government’s vision and plan to prioritise jobs and growth. To give people choice, choice in how they live their lives through improved jobs, growth and opportunity in all areas of government policy making. 

We have of course delivered much in the first half of this term. Abolishing Labor’s failed carbon and mining taxes, cutting red tape that was costing the economy some $2.4 billion, delivering on three major free trade agreements that people said could never be done or delivered in the time frame in which we achieved them. Our government is serious about working with business to create the best possible environment for investment and employment. As the Prime Minister noted, there is strong reason for further confidence that times will continue to improve. Fuel prices have hit the lowest levels in years, interest rates are low and stable and a lower exchange rate is making our exporters and manufacturers more competitive. 

Vocational education and training is of course central to Australia’s economic growth, to our business productivity and to employment outcomes. Securing a more skilled labour force for our nation’s future is one of the four pillars of our government’s industry, innovation and competitiveness agenda. The guiding principle of this agenda is to capitalise on Australia’s strengths. To do this we must have businesses and workers equipped with the skills they need to seize new opportunities. To look to the future with confidence and to determine their own path and they must be ready to adapt to changing economic circumstances. Our VET reform agenda has been directed at helping businesses, employers and their employees to do just that. As Innes acknowledged, we’ve introduced the new Industry Skills Fund complimented by youth pilot employment schemes to test new ways to support employers to achieve and acquire the training they need to support their employment prospects, to grow employment in their businesses and to get young unemployed people off the dole queues and in to jobs. We’ve introduced trade support loans to give more help to apprentices without costing employers more, and some 20,000 people have signed up to those trade support loans already. We will shortly, very shortly I trust, announce the successful tender for the new Australian apprenticeship support network, which will cut paper work and provide more support for both employers and apprentices from the recruitment stage through retention and completion of apprenticeships. 

We’ve established the industry led, VET advisory board and reformed other structures in the vocational education and training sector to simplify it and to give it a sharper, more employer oriented approach. We want to put employers and industry at the centre of the VET system that has been, is and will and remain our greatest focus because we know it is employers, not governments, who are best placed to decide what skills they need in their employees to innovate and to boost productivity and competitiveness in their own businesses. We know that it is employers that put their savings, their homes, their finances and their ideas at risk to create more jobs by establishing and growing their businesses and while employers bear costs while businesses fail to grow, so do employees who cannot get higher wages, individuals who cannot get work and society with higher unemployment, a higher welfare burden and a waste of the productive years of its unemployed citizens. Putting industry at the centre of vocational education and training helps to ensure that training delivers the skills employees need for the jobs of today and tomorrow. It gives students better opportunities to get a job or a better job and it gives employers confidence that the training system itself is capable of meeting their needs. This is something that I know everyone in this room is helping us to achieve and while our training system is well regarded, both at home and overseas, with millions of participants and tens of thousands of employers accessing VET there is always more that we can do. 

We need to ensure our training system keeps pace with the needs of today, is of the highest quality, leads to real jobs and meets the needs of Australian businesses for highly skilled workers. While some 40% of school leavers go straight on to university, most do not. Around 20% of school leavers go in to some form of VET immediately with many more participating throughout their lives. In 2013 while 1.3 million people studied at Australian universities, 3 million Australians participated in some form of vocational education and training. These high participation levels constitute both a vote of confidence and a reminder of our responsibility that the time, effort and money going in to vocational education and training all need to be well spent. 

During the last four months, as I indicated earlier, I visited both large and small employers, listened to apprentices, trainees and employees. Overwhelmingly, the feedback around our training system has been positive. We have a great training system, as those in this room know, one that is acknowledged around the world. But almost everyone agrees there is scope for improvement. One of those areas for improvement and one that I know everyone here will be particularly interested in, is boosting the quality and relevance of qualifications so they do meet the businesses, employers and our economy. Today I’m pleased to announce a new model for the development and management of training packages that places industry at the heart of the process of developing their content. This new approach will make sure the training system moves with the times and works with businesses to skill Australian workers. With this new model, industry will drive the training package process so skills standards and competencies align with modern Australian workplaces and the needs of their current and future employees. To borrow a phrase, a phrase used in a few political campaigns, employers should decide what training packages, qualifications and competencies are needed and the circumstances in which they are best delivered. 

We also need to secure greater cross-industry skills standards that recognise that many core skills are common across industries. According to feedback, we need to simplify training packages for students, employers and training providers. Our new training package model will give employers, the training sector, graduates and the public the best training outcomes at the best possible price and quality. I do want to acknowledge in outlining this new model firstly, that industry skills councils have played a role in expanding the reach of VET in Australia and overseas. They’ve helped to promote the value of nationally consistent training across all industry sectors and this is a solid foundation that we want to build up on as we move towards the future. Stakeholders have generally agreed that while key elements of the current arrangements should remain, improvements are also needed. We need to elevate industry involvement from one of consultation to one very clearly of leadership. There’s a need for training packages to be responsive and adaptive to rapid changes in the global markets or technology, but equally there is a need for training packages to offer stability where change only occurs because industry needs that change, rather than it changes for changes sake. 

The new system of managing training packages will allow us to achieve these priorities. Under the new model, we will retain and elevate to a clear leadership role, the bodies generally known through ISCs as industry reference committees. These industry reference committees will be comprised of active members representing their relevant industry sectors, who sit at the centre of managing and making decisions about training package needs. To gather industry intelligence on training policy, to lead development of industry based training products and to ensure training products are updated when and as needed for the needs of their relevant industry bodies. These industry reference committees will be supported by skills service organisations. These organisations will be governed by professional boards with demonstrated independence and strategic and professional skills. They will be established through an open, competitive grants process. They will need to prove that they have the support of the industry sectors that they are seeking to represent to carry out this task throughout the life of their contract. They need to have the capacity to work with the industry sectors who they are facilitating work for and industry will be given the capacity to move between SSOs if they don’t get the support that they need. There will be real funding at risk for these organisations contracted by the government to boost their efficiency, to protect industry, to ensure they are responsive to industry and to taxpayers. We will select organisations that are best placed to deliver real results for the industries they are servicing and I want to emphasise that that is the relationship we expect to have in place, but the skills service organisations will be servicing the industry reference committees, servicing them in the needs identified by those industry reference committees. The industry reference committees will be tasked and charged with identifying what training packages require development, when they require amendment, how they require amendment and will be supported through those processes by the skills service organisations. This process will overall be overseen and coordinated by the COAG sanctioned Australian Industry and Skills Council. This body, established by the skills ministers around Australia is industry led, represents all states and territories and will work with the industry reference committees to prioritise training product developments and updates across industries and to quality assure the outcomes to ensure any changes deliver what industry needs and wants. The AISC will facilitate the cooperation and continued support of all jurisdictions in delivering our national training system and making sure it is focused squarely on industry needs, employer needs and ensuring Australian workers are highly skilled and job ready. 

I will announce the final composition of the Australian Industry and Skills Committee very shortly. This new contestable model, we anticipate being fully operational by the first of January 2016. In the meantime, full transitional arrangements will be in place including to continue the work of ISCs in updating the training packages to the new standards by December of this year. While there is agreement that reform to the management of training packages is central to moving towards the future, it of course, is not the only step. We received around 450 submissions to the industry engagement in training package development towards a contestable model and to the review of training packages and accredited courses discussion papers and heard feedback from more than 1,000 people who participated in the consultations, webinars and LinkedIn forums. These consultations identified the need for reform not just to who manages training packages, but to their content and style. We’ve heard some industries require more flexibility within their training package qualifications, to allow graduates to move within and between industries. Other industries have highly regulated and specific requirements of their VET graduates. We’ve heard that the content of training packages needs to be simplified in some cases to be more accessible to employers and training providers. Today there are more than 1,600 industry defined vocational qualifications and more than 17,800 individual units of competency. Managing this huge number of qualifications and ensuring consistency and quality is a significant task. The feedback that the government has received is that there are just too many qualifications and units, many of which aren’t being used. There are calls for redundant qualifications to be removed from the system and for industry to be a central part of informing this process. Feedback has also reinforced the need to get right, the balance between both foundation and specialised skills in training packages to better meet the needs of both industry and students. All of this feedback will inform the development of concrete reform options and next steps in terms of the content of training package and reform thereof which I’ll be discussing with my state and territory ministerial colleagues when I bring them together for the first ministerial council since I’ve been in this portfolio next month. 

Overall, I am confident that there has never been a better time to be a student of vocational education and training or a business looking for skilled workers. Commonwealth government continues to invest around $6 billion per anum in support for vocational education and training either to the states, through our own direct subsidies or initiatives or via income contingent student loans. We are determined to move away from the trend that has been noted by the NCVER which found that employers have increasing concerns about the ability of the VET system to keep up and meet their needs. We’re taking action now to address those trends and those concerns by giving employers the confidence that they can access world class skills that meet the needs of their Australian businesses now and in to the future. We’ve shown the clear importance that we place on vocational education as part of our governments focus on jobs and families. We’ve taken steps to ensure and to underpin the quality of the training that students should expect to receive and we’re taking steps now to ensure the job relevance of the training that students should expect to receive and employers should expect to be able to access. 

I’m determined to ensure that our training system remains one of the best in the world, remains something that other places around the world seek to compliment, seek to build up on, seek to copy in some instances. I look forward to working with all of you through this reform process, I thank you all for your input in to it to date, I thank you for the continued input you will have through the contracting process that Subho and the department will undertake and I look forward, Innes, to taking questions for a little while and I understand there’s an opportunity for other discussion for key players after this morning’s gathering. Thank you once again for coming out and I look forward to working with you all.