In luei of the Global pandemic, labour market shortage and more recent Great Resignation, Prime Minister Anthony Albanese and Treasurer Jim Chalmers were joined by participants from all industries to discuss issues confronting the Australian economy and workforce at the recent Jobs and Skills summit. Never had there been a more pressing time for such a meeting of minds.
What were the goals?
The goals of this summit were to address the national labour shortages, generate ideas and find a common ground for the short, medium and long-term future that meets skills and economic demands.
What are the key outcomes?
The outcomes were released in a white paper on the Treasury website and fell into these areas for action:
- Building a more dynamically skilled and trained workforce
- Addressing skills shortages and enhancing the Australian migration system
- Upgrading job security and increasing wages while creating safe, fair, and productive workplaces
- Promoting equal opportunities and reducing barriers to employment
- Maximising career opportunities in all Australian industries and communities
How do these areas affect the Higher Education Industry and Employers?
Let’s start with looking at the problems at hand:
1. Shortage of skills
The pandemic certainly accelerated Australia’s need for digital transformation, however, last year prestigious economists Mark Barnaba and Jonathan McMenamin from EY noted that even before the pandemic the domestic workforce was not matched to medium and long-term demand across the economy.
2. Low completion rates
The Morrison government provided employers with subsidies to encourage more young people to take on an apprenticeship. While the incentive helped boost enrolment it didn’t help increase completion. 54% of trade apprentices started in 2017 and completed by the end of 2021. 1 in 3 drop out in the first year. This is in part to do with low salaries, social support and logistics.
What solutions have been proposed?
There are 36 outcomes from the summit, some of which sit alongside existing initiatives. Here we’ll take a quick look at some of the short and long-term outcomes of the summit:
Relaxed rules for Pensioners and Migrant workers are set to remedy immediate skills shortages. The Government endeavours to increase the permanent Migration Program planning level and allow longer stay duration for recent graduates with select degrees in certain areas to strengthen the pipeline of skilled labour in Australia. Pensioners can return to the workforce and earn higher incomes before their government benefits are reduced.
Digital and Clean Energy Industry Focus
In order to maximise career opportunities in all Australian industries and communities, there are some clear measures that include Implementing a Digital and Tech Skills Compact to deliver ‘Digital Apprenticeships’. In addition, the Government aims to deliver 1,000 digital traineeships in the Australian Public Service for women, First Nations people, older Australians, and veterans transitioning to civilian life. New Energy Apprenticeships plan to support 10,000 apprenticeships.
There is a call for greater collaboration. In a recent webinar with AVETRA, it was suggested that employer incentives would be good to introduce. Employers need to better focus on human capital. The NAEN recommends greater attention be given to mentoring new apprentices to help keep them focused and feeling supported.
VET vs University
In Germany, vocational qualifications have the same status as a university degree. But many Australians view university education as their first option. These perceptions and barriers to entry to into VET need to be addressed.
The Australian Industry Group supports the Noonan review recommendation to reposition the VET sector on an equal footing with universities. The Herald agrees that this is necessary to meet the demands of the economy.
There are many initiatives that will create a level playing field for everyone. These include the following:
- Gender equality commitment: Employers will now be required to report their gender pay gap publicly and commit to measurable targets to improve gender equality in workplace environments.
- They’re also evaluating a Closing the Gap policy partnership on the economic participation of Aboriginal and Torres Strait Islander residents.
- Improving and reviving foundation skills programs to support workers and vulnerable Australians.
Funding for the VET Sector
The Government and states and territories agreed to a $1 billion one-year National Skills Agreement that will provide additional funding for fee-free TAFE in 2023, while a longer-term agreement that drives sector reform and supports women’s workforce participation is negotiated. They will accelerate the delivery of 465,000 additional fee-free TAFE places, with 180,000 to be delivered next year, and with costs shared with the states and territories on a 50:50 basis.
Audit of Vocational Qualifications
There will be an audit of VET qualifications with duplication, lack of clarity and complexity. But it will take time and a lot of work to improve the higher education qualifications framework. Greater flexibility should be provided to allow students to study a mix of vocational and theoretical subjects as part of their qualifications. Many jobs of the future will require vocational skills.
Update the Fair Work Act
In order to address salary levels and provide stronger access to flexible working arrangements so that families can share work and caring responsibilities. In addition, proper support will be provided for employer bargaining representatives and union representatives.
The Job and Skills Summit’s plan to effectively:
- Keep unemployment low, boosting productivity and income.
- Deliver secure, well-paid jobs and stabilise sustainable wage growth.
- Expand employment opportunities for all Australians, including the most disadvantaged.
- Address skills shortages ensuring a medium and long-term view.
- Improve migration settings to support higher productivity and wages.
- Maximise jobs and opportunities in much-needed sectors including renewable energy, the digital economy and many more.
- Ensure women have equal opportunities and equal pay industry-wide.
Although long-term structural, systemic, and cultural challenges continue to present themselves and expand, the Jobs and Skills Summit has kicked off a national conversation on improving the Vocational Education and Training sector while implementing a fundamental plan to tackle the national skills shortage.
As outlined in a recent Sydney Morning Herald article, Australians can no longer afford to view vocational training as a second-class alternative to university education. Nor can the rigid framework that elevates university qualifications above those earned at TAFE continue to stand if the national vision to address skills shortages is to be achieved. In addition, they stated many jobs of the future will require vocational skills.
Skills Minister Mr O’Connor stated, “What more important thing could there be than for a worker to have the skills that are in demand.” Hence his pledge to provide high levels of funding to the VET Sector.
All of the above represents great insight and rhetoric. However, action and swift implementation are what we’re really hoping to see, sooner rather than later to repair a somewhat broken economy exacerbated by a still-lingering pandemic and enable a stronger Australia now and into the future.