Controversial proposal recommends new skills pathways outside apprenticeships

More trade qualifications should be delivered outside traditional four-year apprenticeships under a controversial Australian Productivity Commission proposal recommended to the federal government.

Training providers are in favour of the proposal, but the Australian Industry Group and unions warn that moving away from traditional workplace-based apprenticeships could threaten the quality of training.

Jayden Fleischer is a fourth-year apprentice carpenter. The Australian Productivity Commission has recommended reducing barriers to apprenticeship and non-apprenticeship pathways.Credit:Peter Rae

The Australian Productivity Commission's final report on reforming the skills training sector released on Thursday says the apprenticeship pathway "can be time consuming and act as a major barrier, particularly for mature-age workers", taking up to four years to complete.

"Competency-based wage progression allows apprentices to progress through their apprenticeship faster, and receive higher wages sooner, if they can demonstrate competency of skills earlier than the nominal time-based progression," the report says.

The Commission has also recommended the expansion of student loans for more certificate and diploma courses and says greater contestability in funding arrangements for publicly-owned TAFE providers would help governments get a better return on the $6.4 billion spent on vocational education and training (VET). A more nationally consistent approach to course subsidies and fees was also recommended.

Craig Robertson, chief executive officer for peak body TAFE Directors Australia conceded that some private providers may try to exploit the opportunity to provide trade qualifications without completion of on-the-job training. But many experienced workers could benefit from training options outside formal apprenticeships for trades including electrical, engineering and plumbing.

"There needs to be a fair pathway those people who have got the work experience but just need some new skills to become a tradesperson, but without compromising quality," he said.

"While this recommendation may have merit it is a matter for industry and unions to settle in conjunction with governments."

The Australian Industry Group backs a new national agreement to support skills training reform in Australia, but believes engineering and electrical skills still need to be delivered through workplace apprenticeships.

Ai Group's head of workforce development Megan Lilly said the Australian apprenticeship system needed to develop "critical skills to help drive the economy".

"This reform needs to be driven from a clear understanding that trade skills are best developed in the context of work, and continuing with apprenticeship-only qualifications for some trades is necessary," she said.

"We need to develop complex skills through real work application over time. This is the best guarantee for job-readiness, relevance and employability."

Ms Lilly said the VET sector has long needed a more coherent national approach that focuses upon meeting the current and future needs of employers and students.

Training sector analyst Claire Field said the commission's recommendation to expand non-apprenticeship training options for traditional trade training was likely to be resisted by a majority of employers and unions "who will worry that learners won’t learn the practical, on-the-job knowledge they need".

"As we’ve seen during COVID with training moving online and out of the classroom or workplace, some flexibility can be accommodated and make sense," she said. "This kind of option could be useful to help unemployed students enter a trade but they’d still need some time in the workplace. These kinds of recommendations have been made before and not been widely taken-up because the on-the-job component is seen as so important.”

Robin Shreeve, a former deputy director-general of TAFE NSW agreed with the commission's view that TAFE needed to be more autonomous, similar to universities, to compete with other providers for funding.

"There are limitations to what competition and marketisation can achieve," he said. "I'm a great believer in extending access but you can do that by means other than just more income contingent loans."

The Australian Education Union federal president Correna Haythorpe said the Commission's recommendation that governments should make VET funding would narrow course options for students and diminish TAFE. She said the majority of registered training organisations provide fewer than 15 courses while TAFEs provide up to 500 because of guaranteed public funding.

Employment and Skills Minister Michaelia Cash said the Productivity Commission’s final report into the National Agreement on Skills and Workforce Development (NASWD) confirms it is "no longer fit for purpose and a new national skills agreement is needed".

“This report shows that our world-class VET system can be improved with a more transparent and consistent funding model,” Minister Cash said.

“It’s clear the NASWD is overdue for a replacement, but with a major overhaul we could achieve a better return on public investment."

The federal government is negotiating a new National Skills Agreement with state and territory governments. Senator Cash said the agreement needed to ensure resources targeted the skills needed for Australia's economic recovery. A spokeswoman for Senator Cash said the Morrison Government wants to move to a more transparent and consistent funding model that is linked to the level of training activity, "so we can be confident we are funding training linked to jobs".

Treasurer Josh Frydenberg said the federal government's $7 billion investment in the VET system would help support Australia's recovery from the COVID-19 crisis and future growth.

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