Training Does Not Create Jobs: A Strong Industry Does

Geoff Crittenden | Chief Executive Officer, Weld Australia

Prime Minister Scott Morrison’s newly announced JobMaker solution addresses just one aspect of a much broader problem.

Weld Australia has called on the Prime Minister to not only invest in our exceptionally under-funded and outdated VET system, but to: inject capital into Australia’s advanced manufacturing industry and place greater emphasis on local procurement decisions so that all these highly skilled young people actually have jobs to go to; and encourage more young people into the VET system through an innovative, energetic STEM program in primary and secondary schools.

Training does not create jobs, it creates highly skilled people – regardless of how much funding the government pumps into the VET sector. A number of other measures must be applied to return Australian industry to a position of strength, so that it is ready to employ these skilled people.

Inject Capital into Australia’s Advanced Manufacturing Industry

JobMaker assumes that Australian industry is already strong, and that there will be plenty of jobs available for all these newly trained and qualified people once the VET system is overhauled.

The problem is this: to create jobs, we must have strong, advanced industry in which the Government is prepared to invest.

Business investment and innovation encourages the creation of strong and lasting companies, and the creation of new and better jobs, which together support a strong national company.

Of all manufacturing companies in Australia, 87% are classified as small-to-medium enterprises (SMEs) that employ 1 to 19 staff. The majority of these businesses are funded via cash flow and an overdraft facility secured by property (normally the family home). These companies are simply not in a position to invest in their own business, which would strengthen the industry from within.

Business owners can only invest if they can see a consistent pipeline of work ahead to service any debt and take on new employees. A strong pipeline of work can only be secured if State and Federal Governments increase local content in all procurement decisions.

The problem is, successive State and Federal Governments have continued to off-shore manufacturing work that the local industry is more than equipped to handle. Take, for example, rail industry projects. As recently as 10 years ago, most rail vehicles were designed and manufactured here in Australia. Not anymore.

The $2.43 billion contract for the new Intercity train fleet was sent off-shore by the New South Wales Government. Sydney’s Waratah trains have only 20% local content. Queensland’s new trains were fabricated in India, failed to meet Australian Standards for accessibility, and are now undergoing significant rework. And, while Victoria’s Metro Trains are manufactured locally, all the fabrication work is completed in China.

And let’s not forget about the big corporates. Many, if not all, of the major mining companies off-shore their fabrication work. It was not so long ago that BHP awarded more than 20,000 tonnes of structural steel work for its $4.7 billion South Flank project to an off-shore manufacturer.

We need a commitment from State and Federal Governments to increase levels of local content for all procurement decisions. We need the big corporates, like BHP, to award local contracts to local companies. Local companies will then be in a position in invest in their own businesses, creating new and better jobs.

In addition, to ensure that the industry can grow, it is essential that SMEs have much greater access to capital for investment and cash flow.

Australian Superannuation Funds have $3 trillion under management. Approximately 25% ($750 billion) of this is invested in Australian shares. Based on a break-up of the top 100 ASX listed companies, on average, $60 billion is invested in industrial shares. Therefore, best case, 2% of the nation’s retirement savings is invested in manufacturing. This is less than half that invested in consumer goods.

Surely there is an investment model that would better benefit the economy, creating more jobs in the process?

Encourage More Young People into the VET System via an Innovative, Energetic STEM Program

Equally, there is no point in investing in the VET sector if young people aren’t interested in going to TAFE. We need a vibrant STEM program implemented across schools nationally so that children and parents alike understand the opportunities available—the future of employment in industries like welding is not hard, dirty work carried out in a dark workshop, it’s focused on IT and programming skills, using robots and co-bots, and implementing Industry 4.0 concepts.

The latest OECD Program for International Student Assessment (PISA) results show a long-term decline in maths and science skills for Australian students. In 2018, Australian 15 year-olds, performed more than a year below those in 2003 in maths and a year worse in science than those in 2006.

There is no question that STEM education and careers advice must be improved. Students of all ages—and their parents—need to be excited by the opportunities available in careers like welding.

But industry cannot continue to rely on Government to solve the problem. Industry and schools need to work together to develop and deliver STEM programs that engage, excite and attract students. Industry must be willing to contribute to improving school curriculum, providing hands-on work experience to local students, and offering tours of their facilities to both students, and their parents.

It is vital that industry plays a role in Australia’s education system. Business owners must gain a better, more in-depth understanding of how the next generation of workers thinks. This way, business owners will be able to engage with the next generation. Young people must understand exactly what welding is all about, so that welding becomes a viable career choice. Schools need a better understanding of the skills that industry needs so that they can better prepare students for the jobs of the future, and industry needs to understand the challenges the education system is facing and lend assistance, where possible.

Invest In Australia’s Exceptionally Under-Funded, Outdated VET System

There is an overwhelming imperative to invest in Australia’s exceptionally under-funded and outdated VET system.

Australia’s TAFE institutes were once the backbone of Australia’s vocational education sector. They were stable, well-funded, trusted, and publicly accountable. They provided a comprehensive range of courses, oversaw apprenticeships, and created innovative curricula and teaching methods.

However, successive State and Federal Governments have, over time, slashed funding to TAFE. And, under one of the most ridiculous policy experiments ever undertaken by Australian governments—the marketised delivery system—TAFE is now forced to compete with private providers for student dollars. Under the marketised delivery system, TAFEs must provide a full range of courses across all campuses.

In comparison, private providers are allowed to cherry-pick courses, offering only the most profitable products possible, delivered only on those campuses where they’re assured of strong demand. Not only that, private providers do not face the strict government oversight borne out by TAFEs, and can entice students via a range of incentives.

Given the chronic lack of funding, job cuts, and the dismal failed policy experiment of marketised delivery, TAFEs simply have not had the capacity or capability to upgrade or modernise courses and curricula, or to develop new qualifications designed to capitalise on the emerging needs of advanced manufacturing.

The TAFE welding course and curriculum has not been updated or revised since 1995. It bears no relation to what is actually required by industry. The course still devotes time and energy to oxy-acetylene welding, which industry has not used for about 20 years.

TAFE has been required to teach courses such as fabrication, in which the welding modules are of varying degrees of complexity, and are usually optional. This has not produced welders that are skilled or qualified to the levels needed by industry, especially within the defence sector. Young welding apprentices enter the workforce without the requisite skills or knowledge. Generally speaking, TAFE graduates cannot read a welding procedure, set up a welding machine, or weld according to Australian Standards. It is a disgrace.

Australia’s TAFE system requires a shift in thinking and a focus on the skills that will be essential to the future of industry. Skills focused on advancements such as automation, robotics, artificial intelligence and advanced manufacturing processes.

TAFEs must look to cutting-edge technology to transform welder training from boring theory and text books into high-quality interactive experiences that capture the imagination. This introduction of state-of-the-art training technology must be coupled with an in-depth review of the TAFE welding curriculum that meets industry demand—not one that is bogged down by the traditional conflict between the unions and industry groups.

Our young people need to acquire complex, high order technical knowledge and skills. They need robust, deep and transferrable qualifications that provide a strong base for life-long learning and skill development.