"With the global economy now in choppy waters and Australia falling down the world’s performance tables, now, more than ever, governments need to work with industry to secure a long-term prosperous future for us all. The first step has to be a ground-up rebuild of our Vocational Education and Training (VET) System. This must be a national priority," Ai Group Chief Executive, Innes Willox, said today.
"It is our view that the VET system is in a less than optimal state to meet the national imperatives of delivering the skill requirements for the labour market of the future.
"Our economy and community are facing significant transformations, triggered by digital disruption, structural adjustment and demographic shifts. This has contributed to a dynamic and accelerating requirement for skills and employment. However, they are not the same as those of today and improvements are urgent and necessary for Australia to have a training system that meets both current and future needs.
"From an employer and individual perspective our training system is further bedevilled by inconsistency in both its multiple funding regimes, declining levels of funding and varying qualification arrangements between the different jurisdictions.
"Disappointing apprenticeship commencement and completion rates add further to the complex and confusing situation. Industry leadership has been eroded and the pivotal alignment of public expenditure to economic imperative and productivity improvements has been severely diluted. Confidence needs to be restored to the VET system.
"Recent research by Ai Group reveals the growing intensity of skill shortages and skill gaps. Our most recent Workforce Development Needs (2018) survey highlights 75% of employers experiencing difficulty in recruiting suitably qualified or skilled people into vacancies. The occupations most frequently reported in shortage were from the Technicians and Trades Workers occupational group, followed by Professionals, all in STEM fields. Employers listing occupations experiencing skills shortages for the first time included those with skills in business automation, big data and artificial intelligence solutions.
"The unprecedented pipeline of public investment across transport and social infrastructure will place significant pressure on government and industry to respond and also creates the opportunity for a skills legacy. Such a large program of work increases pressures on capability and capacity in both the private and public sectors.
"This infrastructure work is necessary to stimulate our softening economy and lift domestic productivity and amenity but it also carries with it pressures on particular skills which are in high demand because they are the same skills required elsewhere in the economy – such as in the mining sector.
"The state of apprenticeships and traineeships in Australia is illustrative of the problems plaguing our training system. We find ourselves dealing with 259,385 in apprentices & trainees in training in 2018 compared with 387,100 a decade ago and a high of 446,000 in 2012. This is the lowest for a decade. This drop in volume can be directly linked to a series of policy adjustments including the removal or reduction of many employer incentives.
"A significant consideration is to address the excessively complex and duplicative Commonwealth and State/Territory roles and responsibilities in the training system. The National Skills Commission is an important first step for all parties to engage with. Commitment to a roadmap for reform should be a key outcome of the current COAG process. A genuinely national training system that meets the needs of economy may finally be possible.
"Commitment to a roadmap for reform should be a key outcome of the current COAG process. A genuinely national training system that meets the needs of economy may finally be possible," Mr Willox said.
Full text of a letter from Innes Willox to the PM and state and territory leaders is at this link.
Media enquiries: Tony Melville – 0419 190 347