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Budget skills scheme could lead to cut in funding, say unions Budget skills scheme could lead to cut in funding, say unions
(about 2 hours later)
Labor and the unions have warned that a $1.5bn skills fund based on visa fees could lead to a shortfall in money to train Australian workers.Labor and the unions have warned that a $1.5bn skills fund based on visa fees could lead to a shortfall in money to train Australian workers.
Tuesday’s budget included a plan to raise $1.2bn from new upfront visa fees for employers hiring foreign workers on temporary skilled work and permanent work visas.Tuesday’s budget included a plan to raise $1.2bn from new upfront visa fees for employers hiring foreign workers on temporary skilled work and permanent work visas.
The fees will go into a $1.5bn Skilling Australians Fund to pay for up to 300,000 apprenticeships or traineeships in high-demand sectors and industries relying on skilled foreign workers.The fees will go into a $1.5bn Skilling Australians Fund to pay for up to 300,000 apprenticeships or traineeships in high-demand sectors and industries relying on skilled foreign workers.
The new fund replaces the national partnership agreement with the states on skills reform. The states will have to match commonwealth funding to access the new fund.The new fund replaces the national partnership agreement with the states on skills reform. The states will have to match commonwealth funding to access the new fund.
In a speech to an industry breakfast on Wednesday, the federal assistant skills minister, Karen Andrews, said the fund’s structure will be negotiated by the federal government and starts from 2 June when she will meet her state counterparts.In a speech to an industry breakfast on Wednesday, the federal assistant skills minister, Karen Andrews, said the fund’s structure will be negotiated by the federal government and starts from 2 June when she will meet her state counterparts.
But the Australian Council of Trade Unions president, Ged Kearney, said the danger of linking the new fund to visa fees was that the number of migrants applying for visas could fall, reducing funding.But the Australian Council of Trade Unions president, Ged Kearney, said the danger of linking the new fund to visa fees was that the number of migrants applying for visas could fall, reducing funding.
“Nothing proves the proposal to use visa fees to pay for skills training is greater than the money previously raised by the payroll tax levy,” he said. “Nothing proves the proposal to use visa fees to pay for skills training is greater than the money previously raised by the payroll tax levy,” she said.
“So this could in fact be a net reduction. Regardless, it does nothing to address the government’s previous cuts to vocational training and apprenticeships.”“So this could in fact be a net reduction. Regardless, it does nothing to address the government’s previous cuts to vocational training and apprenticeships.”
The Victorian training and skills minister, Gayle Tierney, added her criticism, saying it was “extremely disappointing” that the details of the new scheme “will need to be agreed to just weeks before the current agreement expires”.The Victorian training and skills minister, Gayle Tierney, added her criticism, saying it was “extremely disappointing” that the details of the new scheme “will need to be agreed to just weeks before the current agreement expires”.
“We have very little information about what Malcolm Turnbull is proposing, despite calling for a meeting with the federal government about this for months.“We have very little information about what Malcolm Turnbull is proposing, despite calling for a meeting with the federal government about this for months.
“Victoria stands to lose around $40m next financial year compared to what we are getting this financial year under the current agreement.”“Victoria stands to lose around $40m next financial year compared to what we are getting this financial year under the current agreement.”
But New South Wales skills minister, John Barilaro, welcomed the new fund, which he said would be worth $471m for his state over four years.But New South Wales skills minister, John Barilaro, welcomed the new fund, which he said would be worth $471m for his state over four years.
“The fund has been initiated and will be administered by the commonwealth government and until further details are available about the operation of the scheme it would be inappropriate for the NSW government to speculate [about it],” he said.“The fund has been initiated and will be administered by the commonwealth government and until further details are available about the operation of the scheme it would be inappropriate for the NSW government to speculate [about it],” he said.
Andrews said the new fund would support state and territory-led projects to create apprenticeships.Andrews said the new fund would support state and territory-led projects to create apprenticeships.
Budget papers suggest this will include binding agreements with the federal government promising to create a specific number of apprenticeships and traineeships in return for funds, and include providing data to monitor progress.Budget papers suggest this will include binding agreements with the federal government promising to create a specific number of apprenticeships and traineeships in return for funds, and include providing data to monitor progress.
Labor is concerned the new scheme will spend $350m in its first year compared with the $527m spent in the last year of the old scheme.Labor is concerned the new scheme will spend $350m in its first year compared with the $527m spent in the last year of the old scheme.
Andrews said the new fund’s $1.5bn commitment over four years is an increase of about $70m compared with the previous agreement which delivered, on average, $350m a year despite being backloaded to give higher funding in its final years.Andrews said the new fund’s $1.5bn commitment over four years is an increase of about $70m compared with the previous agreement which delivered, on average, $350m a year despite being backloaded to give higher funding in its final years.
The Australian Chamber of Commerce and Industry (Acci) director of employment, education and training, Jenny Lambert, said it was concerned that the levy from new visa fees was “excessive” and would harm businesses’ ability to get skilled workers when they need them.The Australian Chamber of Commerce and Industry (Acci) director of employment, education and training, Jenny Lambert, said it was concerned that the levy from new visa fees was “excessive” and would harm businesses’ ability to get skilled workers when they need them.
Universities, the health system, IT companies, tourism operators and regional businesses would be particularly hard hit by the fees, she said.Universities, the health system, IT companies, tourism operators and regional businesses would be particularly hard hit by the fees, she said.
Lambert said ACCI was “very pleased to see the fund will focus on apprenticeships”, which have declined from 516,000 people in apprenticeships five years ago to 295,000 now.Lambert said ACCI was “very pleased to see the fund will focus on apprenticeships”, which have declined from 516,000 people in apprenticeships five years ago to 295,000 now.
She said it was important for employers to be consulted in the design of the fund because it was employer-funded.She said it was important for employers to be consulted in the design of the fund because it was employer-funded.
Lambert said there was already high demand for apprenticeships, and non-trade traineeships – including in sectors such as retail – would suit school leavers and unemployed people.Lambert said there was already high demand for apprenticeships, and non-trade traineeships – including in sectors such as retail – would suit school leavers and unemployed people.
Lambert said given the size of the new training levy and existing fees, the scheme may not raise as much revenue as treasury expected. She said there was a “risk” the levy would fall short of estimates, although it appeared treasury has anticipated some decrease in the takeup of foreign workers as a result of the tax.Lambert said given the size of the new training levy and existing fees, the scheme may not raise as much revenue as treasury expected. She said there was a “risk” the levy would fall short of estimates, although it appeared treasury has anticipated some decrease in the takeup of foreign workers as a result of the tax.
The Labor skills spokesman, Doug Cameron, said skills should be “properly funded” without the government relying on a fund drawn from visa fees.The Labor skills spokesman, Doug Cameron, said skills should be “properly funded” without the government relying on a fund drawn from visa fees.
Cameron queried what role state technical and further education colleges would have and whether the 300,000 apprenticeships would be additional to the number currently entering training.Cameron queried what role state technical and further education colleges would have and whether the 300,000 apprenticeships would be additional to the number currently entering training.
“I’m also concerned if they do what John Howard did – which is give money to McDonald’s for employing people as burger-flippers, the quality [of traineeships] declines. It’s a serious issue – we’ve been down that road before.”“I’m also concerned if they do what John Howard did – which is give money to McDonald’s for employing people as burger-flippers, the quality [of traineeships] declines. It’s a serious issue – we’ve been down that road before.”
A spokesman for Andrews said TAFE would play an important role in training, and the fund would pay for Australian apprentices at certificates three and four levels, a detail that is not included in the budget papers.A spokesman for Andrews said TAFE would play an important role in training, and the fund would pay for Australian apprentices at certificates three and four levels, a detail that is not included in the budget papers.
He said the fund would prioritise growth and emerging industries including health and ageing, engineering, manufacturing, agriculture, digital technologies and building and construction.He said the fund would prioritise growth and emerging industries including health and ageing, engineering, manufacturing, agriculture, digital technologies and building and construction.