A Skilled Nation Needs More Than Gonski


In Wayne Swan’s Budget speech, the Treasurer talked about a “skilled workforce”. Tony Abbott replied that “people who can work, should work”. In addressing jobs from their different ideological positions, both speeches contain the same false assumption about what matters when it comes to employment. Even a cursory look at the statistics shows that any national vision for a skilled workforce must include the higher education, vocational education and training sectors.

The 2011 census data shows that of the 10 million Australians in paid employment, 5.9 million had non-school qualifications (degrees, diplomas, or certificates) as their highest level of education. The majority of the workforce did not rely solely on their school education to obtain a job. This inference is borne out when examining the figures for those looking for work. Of the 600,000 people who were unemployed and looking for work, only 246,000 had non-school qualifications. This is a much lower proportion (41 per cent) than amongst the employed (59 per cent), indicating that those with only school education have a harder time finding work.

Swan talked about “a highly skilled, educated and productive workforce”, but mostly he linked this to the increased school funding that is part of implementing the Gonski reforms. Universities did get a mention, but not the cuts to their funding. TAFEs and the Vocational Education and Training (VET) sector were not spoken of at all. (Of course you could argue that VET is primarily a state responsibility, but this ignores the fact that federal money makes up a quarter of VET funding and that the federal government has substantial influence on the sector.) So, for the majority of the future workforce, Swan’s budget only tells half the story and cuts or ignores the other half.

Abbott has spent even less time than Swan talking about employment, and understands even less about the workforce. His solution relies heavily on work-for-the-dole schemes and increased incentives to work. It’s an approach that he has advocated for years, and described most succinctly in his 2011 budget reply speech: “I’m all in favour of training but first things first: the best training is on-the-job”. This assumes that it's possible to get a job without training.

Data from the census and job vacancies reports indicates that over 350,000 low-skilled job seekers compete for around 70,000 jobs. This means that for every low-skilled worker who can find employment, four will not. Under these conditions, many will not be able to avoid long-term unemployment. This makes incentives meaningless, and turns work-for-the-dole simply into government subsidised free labour for the private sector.

Both of these approaches ignore the pressing need to encourage as many Australians as possible to undertake tertiary or vocational education. This is a significant issue; the census data shows that the number of job seekers with only school qualifications is around a fifth the size of the total number of higher education and VET students. So a substantial increase in capacity is required. However, this year Universities are facing a cut of $900 million at the federal level, working against Labor’s prior trend of increasing funding to higher education. And the VET sector is suffering large cuts at the state level (a total of over $600 million in Victoria, NSW, and Queensland).

The potential benefits of a more skilled, more employable, population are difficult to quantify in total, but are no doubt large. The benefit to the individual obviously means increased income, but perhaps more importantly, the increased self-confidence that comes with employment has a range of positive psychological and health influences. For the economy, skill shortages are alleviated, allowing greater productivity. And a higher skilled economy is generally more productive and delivers higher wages, reducing welfare costs and increasing the tax take, allowing more money to be invested in infrastructure or other nation-building projects. As a society we benefit from a more informed and engaged population, making for stronger communities and a healthier democracy.

Abbott's glib dismissal of education and training is woefully inadequate to deal with the realities we face and runs the risk of missing out on substantial benefits. Wayne Swan was right to make skills a major theme of his Budget speech, but he has only considered half the picture. High quality schooling and work experience are clearly critically important, but for the majority they are not sufficient. Swan argues that “we'll only win the economic race in the Asian Century if we win the education race”. You won’t win any races if you only run part of them. Higher education and VET cannot be left out of our plans for skilled workforce.

For further details see the CPD report Doing less with less.

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