More support needed to better skill Australia By Heather Ridout, Chief Executive, Australian Industry Group

More support needed to better

On taking offi ce in 2007, the Australian Government under Prime Minister Rudd outlined plans for an unprecedented infrastructure program to prepare the Australian economy for growth over the next 40 years.

The government moved quickly to establish Infrastructure Australia’s Advisory Council, consisting of commonwealth, state and private sector representation. Infrastructure Australia produced its fi rst national infrastructure audit in December 2008. After a priority list was established (May 2009), the government committed to a record national investment of $36 billion in roads, railways and ports. Anthony Albanese, the Minister for Infrastructure, is very pleased with progress to date. He says that the current government has spent more on rail in 12 months than the previous government spent in 12 years. “We have established everything that we committed to in the Nation Building Program and more because we got the structure right in the fi rst place. “Infrastructure Australia applied a rigorous methodology to assess and prioritise projects. Prior to this, the development of infrastructure and investment was not approached in a coordinated and exacting manner,” says Mr Albanese. Government priorities are to deal with the clogged and outdated railways, roads and ports that pose a very real threat to growth and productivity. Road traffi c congestion alone cost the economy approximately $9.4 billion in 2005, and according to the Federal Government’s ‘State of Australian Cities 2010’ report, this fi gure is projected to rise to $20.4 billion by 2020. Port congestion is so chronic that in some places more than 50 ships can be waiting to dock. At one stage in November 2009 there was a vessel queue of 76 ships waiting to enter the coking coal export terminal at Dalrymple Bay in Far North Australia’s structural skills shortage is one of the big constraints on our future growth.

skill Australia

By Heather Ridout - Chief Executive, Australian Industry Group

While skill shortages were less evident during the global economic and fi nancial crisis, as we start to see a return to growth it’s clear that the shortages were just below the surface.

Our research has found that companies are anticipating skills shortages across a range of occupations for 2010. The most prominent are technicians and trades workers (28%), across the manufacturing, construction and services sectors. Engineers along with construction managers (15%) are also expected to be in short supply.

Our survey Skilling Business in Tough Times, in partnership with Deloitte, has given us a better understanding of employment and training trends as we emerge from the downturn.

We found that business has learnt the lessons of past recessions and is doing all possible to retain staff for better times ahead.

However, there have been and will continue to be cuts to training budgets during 2010/11. While it has been more about trimming than slashing these resources, it will still affect the strength of our skilled workforce.

Of particular concern is the expected drop in apprentices in training and uptake of new apprentices.

As a short-term measure, and in response to calls for action from Ai Group and other industry bodies, the federal government in December introduced the Apprentice Kickstart Bonus, which offered additional fi nancial incentives to employers who hire a new apprentice in a traditional trade. We are calling on the Federal Government to extend this important program and to invest in additional policies that will help employers address their skills and training needs.

Australia’s structural skills shortage is one of the big constraints on our future growth. This is especially important given the number of major construction, defence and infrastructure projects on the horizon.

Immigration also has a big part to play and Ai Group welcomes the recent changes to the skilled migration program. Putting greater emphasis on a demand-driven system that better matches the needs of business will help ease the skills pressure. It will also help in the longer term to address the demographic pressures of our ageing population.

We support the abolition of the broad Migration Occupations in Demand List (MODL), which had given priority to prospective migrants with occupations on that list and in doing so, had created a bias towards lower skilled migrants. It will be replaced by a more targeted Skilled Occupation List (SOL).

Engaging Skills Australia in the development of the SOL to create a targeted skills list will enable skills in need to be identifi ed in a more fl exible and timely way and with a broader workforce development approach.

The greater emphasis on employer sponsored migrants, as part of the reform, will also help fi ll the skills gap. While training our own workforce is absolutely critical, it alone will not be suffi cient to meet our skills requirements and permanent and temporary immigration programs will remain an important part of the skills solution.

Note: Heather Ridout is a member of Skills Australia.