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How Bill Shorten paid $1.75bn to reduce apprenticeships

Friday, 02 February 2018

How Bill Shorten paid $1.75bn to reduce apprenticeships

The sustained downfall in opportunities for young people wanting to learn a trade was sealed under Labor, says James Mathias.

Bill Shorten visited Meadowbank TAFE, in Sydney, in November to blame Malcolm Turnbull for losing 150,000 apprenticeships.

What he didn’t say was that the apprenticeships were lost under a partnership agreement signed with the states by Julia Gillard’s government while he was minister for employment. The agreement locked the incoming coalition government into giving money to the states but not holding them to account for creating work for young Australians.

Moreover, the figure lost under the agreement was more than 150,000. In fact, it was 245,000. For this monumental failure, the federal government gave the states $1.75 billion, supposedly for TAFE colleges, over five years, ending June 30 last year.

On the day the partnership was signed, there were 515,000 apprentices in training. When it expired last year, this figure had been reduced to 270,000. In other words, the Labor party negotiated a deal to pay the states and territories to reduce the number of Australian apprentices by 245,000.

The greatest loss was in the first year, 2012, in which 110,000 apprenticeships were lost. This was the largest decline in Australian history. As mentioned, it occurred while Shorten was minister for employment.

How did this happen? One key reason is that the agreement stipulated targets for new apprenticeships for each state and territory but also included a clause allowing for failure in “circumstances beyond the state’s control”. This enabled them to keep the money while not meeting their initial commitments.

In last year’s budget, Assistant Minister for Vocational Education and Skills Karen Andrews announced the Skilling Australians Fund, which seeks to create 300,000 apprentices over the next four years.

Unlike Shorten’s agreement, this fund will require the states and territories to match the Commonwealth’s contribution towards agreed projects that must meet strict criteria. It does not make allowances for “circumstances beyond the state’s control”. If they don’t make their targets, they don’t get paid.

It also addresses the massive cost shifting that occurred in the past by requiring states to set and maintain a budget benchmark; penalties are incurred if they fail to comply. The states, however, are dragging out the negotiations.

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