Choices in the 2007 Federal Election

The Lamp begins a series of features exploring key issues for nurses in this year’s federal election. This month we look at education and the consequences of the lack of investment in our TAFEs and universities.

Lack of foresight behind skills shortage

Workforce planning requires vision and foresight, attributes that have been sadly lacking in Australia over the past 10 years as our desperate skills shortage shows.

A doubling of investment in Vocational and Educational Training (VET) would add $1 billion a year to the Australian economy in 2010, rising to an additional $2.5 billion by 2025, according to new economic modelling by Access Economics.  This extra investment would also generate 90,000 extra jobs in 2010, rising to 860,000 in 2025.

Access Economics’ analysis is contained in a new report released by the ACTU, which paints a damning picture of federal government neglect in the VET sector since it came to office 11 years ago.

The ACTU says the lack of investment in VET is the primary cause of the severe skills shortages impacting on the economy. Australia’s skills shortage has become critical across a diverse spectrum of sectors from mining to nursing.

Nursing is one of the worst affected sectors. Australia faces a potential national shortfall of 40,000 nurses by 2010.

According to the Australian Industry Group, Australia will need 270,000 more skilled workers over the next 10 years. Most of these workers will have to be trained at TAFE colleges, yet over 300,000 people have been turned away from TAFE colleges since 1998.

The neglect of VET training has already impacted on the Australian economy. In 2004, the ACTU estimated that under-investment in traditional apprenticeships would cost the Australian economy almost $9 billion by 2014.

The benefits of investment in vocational education and training

The ACTU says the case for increased investment in VET is compelling:

  • People obtaining a VET qualification tend to earn up to 20% more than people who finish education at Year 12.
  • It is critical to getting the unemployed, mature age workers, welfare recipients and women back into the workforce.
  • Australian governments would benefit through reduced expenditure on welfare and increased taxation receipts.

The federal government’s failure to recognise the economic importance of training and education and its neglect of these sectors is puzzling as it is well on the radar of key advisers such as the Productivity Commission and Treasury, which effectively back the ACTU’s key findings.

The Chairman of the Productivity Commission, Gary Banks, has identified the best opportunities for improving productivity as ‘getting the best out of Australia’s social infrastructure – health, aged care and other community services’ and ‘raising the performance and accessibility of our education and training systems – primary, secondary and tertiary – particularly given the importance in deepening Australia’s human capital, on which innovation and economic growth will increasingly depend.’

‘Those with higher levels of education are generally more employable and are able to earn higher wages than those without,’ reports the Treasury.

Another informed commentator, The Sydney Morning Herald economist Ross Gittens, was scathing of the Howard government’s inactivity on training and education after the release of the budget.

‘All the greater pity that the Howard government has only in this budget ended a decade of neglect of education at every level. This is not a government that is big on foresight,’ he said.

The Labor Party has flagged that training and education will be a key pillar of its vision for government, promising what they call an ‘education revolution’.

Kevin Rudd has said his main aim is to make Australia ‘the best educated country, the most skilled economy and the best trained workforce in the world.’

Labor promises to back this up with adequate funding.

Shadow Treasurer Wayne Swan said, ‘Education will be our main spending priority. This is the area we haven’t been investing in and we run the risk of being left behind if we don’t.’

2007 federal election: Our choices on education and VET

The Howard government’s track record: a decade of neglect

The past 11 years have seen a serious decline in federal government support for education and training:

  • The proportion of Australian adults with at least upper secondary education is now below the OECD average.
  • Australia ranks near the bottom of the OECD in terms of the annual growth rate of graduates with science and engineering degrees.
  • Our national investment in early childhood education is well below the OECD average.
  • Since 1998, more than 300,000 people have been turned away from TAFE.
  • Since 2001, almost 150,000 eligible applicants have been turned away from our universities.
  • Since 1995, Australia is the only OECD country to cut public investment in tertiary education (by 7%). The average increase in public investment by other OECD countries since 1995 was 48%.

The Labor alternative

  • Labor is promising what it says will be an ‘education revolution’ – a sustained investment in early childhood education, schools, TAFEs, universities and research as well as programs for mature-age workers.
  • Labor says education needs to be seen as an economic investment and not just social expenditure claiming there is a strong link between investment in education and higher productivity growth.
  • Labor says this investment in education is necessary to turn around what it calls Australia’s woeful productivity performance, which has dropped, relative to the US economy, from 85% to 79% between 1998 and 2005.