Skills shortage solution challenged

THE SHORTAGE of appropriately skilled labour across Australian industry has emerged as a significant and increasing problem in recent years, with a number of solutions put forward on how to address the issue

THE SHORTAGE of appropriately skilled labour across Australian industry has emerged as a significant and increasing problem in recent years, with a number of solutions put forward on how to address the issue.

The Australian Industry Group, for example, recently released a strategy for address the skills crisis facing Australian industry.

The strategy, which recommends providing direct encouragement and incentives to employers to address skill shortages, sets a challenge for business to increase commitment to training and for State and Federal governments to accelerate reform to vocational education and training.

“Skill shortages together with new patterns of employment, new kinds of work and work organisation and new ideas concerning skills, knowledge and learning in industry, dramatically increase the need for further reforms to the VET system,” said Heather Ridout, chief executive of the Australian Industry Group.

“A reformed VET system, delivering the skills required by industry in a flexible responsive manner, will play a significant part in addressing skill shortages. Reforms will increase the skills of individuals and the productivity of industry.”

She said the Australian economy as a whole needs to work smarter if it’s to meet the challenges and benefit from opportunities posed by China and India and by Free Trade Agreements with countries such as the United States, Thailand and Singapore.

However the Construction, Forestry, Mining and Energy Union (CFMEU) said the strategy, which seeks further income support and wage subsidies to address declining rates of trades apprenticeships, wouldn’t solve a looming skills shortage in the building and construction industry.

While the CFMEU welcomed some of the Australian Industry Group’s proposals, it was strongly critical of any proposals relying on government funding to substitute for low wages paid by employers.

“The disincentive for young Australians stems from the scandalously low wages currently paid to building trades apprentices in the building and construction industry,” said CFMEU Construction National Secretary, John Sutton.

“A second year carpentry apprentice in Victoria, for example, is entitled to an award rate of only $302.50 per week. It is woefully inadequate,” he said.

He said Australian employers always argued for market-based solutions, rather than government expenditure and industry regulation, and pointed to the skills shortage in the building and construction industry as an example of that problem.

“Before levels of participation in trades apprenticeships can seriously improve, wages must be made responsive to skills shortages. This simply means wages must be increased,” he said.

“It’s time employers in the building and construction industry got serious about improving apprentice conditions and stopped relying on government support to ward off the skills crisis.”

He also signalled an application to the Australian Industrial Relations Commission to substantially improve apprentice wage rates in building trades awards.

“Employers cannot attract and develop world-class skills from a low wage base. The industry needs investment in wages and training, not pleas for government handouts to cure a problem of their making,” he said.

Sutton’s comments came after a recent Australian Chamber of Commerce and Industry (ACCI) survey, which found that 79 per cent of employers of all sizes are concerned about their ability to recruit employees with appropriate skills. For large employers, this figure rose to 82.5 per cent.

The survey, which took in 1,685 companies, found that the availability of suitably qualified employees has become the number one constraint on future investment decisions for the first time in 14 years.

“Improving employee skills is vital if Australia is to meet the challenge of the ageing workforce,” said Peter Hendy, chief executive of the ACCI.

“Industry badly needs a training system that is demand driven, provides incentives for training providers to better meet the needs of employers and encourages competition between and within the public and private training provider sectors.”

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