In the lead up to the Federal Budget 2014, Workforce BluePrint has summarised its views on the potential impact on the VET and employment sectors of the recommendations from the National Commission of Audit report that may feature in the Budget.
Peculiarities in the Commission of Audit reports, the timing of the release of the reports and reading between the lines -- all provide clues as to what may happen in next Tuesday’s Federal Budget.
Wendy Perry, one of Australia’s leading workforce planners, says that in the lead up to the budget, “Decision making for the Commonwealth government is boiling down to what to keep, delete, reduce, transfer, sell, outsource or create.” This includes the recommendations in the National Commission of Audit reports and reviews being conducted by government departments, for example the VET Reform Taskforce work on reviewing the VET system.
Every now and again there is a statement that seems out of place or perhaps written by another author and these statements include:
- Good government breeds confidence.
- We must face up to the task.
- Doing nothing is not an option.
- The change we face is stark.
- There is no easy solution.
- Crises can take longer to arrive than people think, however they usually hit with great speed and severe consequences.
The majority of the report is quite formal without personal opinions. This leaves some people questioning why these statements are there. Were they edits, or are they designed to be sweeteners for the bitter pill to follow? suggests Wendy Perry, Head Workforce Planner, Workforce BluePrint.
Mostly the recommendations are about who should and will do what – Commonwealth vs. the States, individuals and the private sector – as well as new norms like expectations around the Age Pension (eligibility age increasing to around 70 by 2053).
Skeptics would point out that the release of the phase 1 and 2 reports simultaneously, on 1 May 2014 and twelve days before the budget, means that there was no opportunity for debate and discussion in parliament. Originally the phase one report was due at the end of January 2014 and Treasurer Joe Hockey granted the Commission of Audit an extension for phase one to mid-February 2014.
When you consider there are 86 recommendations in total - 64 in the Phase 1 report and 22 in Phase 2, it seems the bulk of the work would have been completed by mid-late February 2014, well before 27 March 2014 which is the last day of parliament sitting.
Over this time, the official unemployment rates according to the ABS were:
- January 2014 – 5.9%
- February 2014 – 6%
- March 2014 – 6%
- April 2014 – 5.8%
These figures provided a more positive employment outlook and made it good timing for release.
Changes to Employment Services, although probably not major, will be in line with potential new contracts from 2015 targeting specific jobseekers, reducing costs for service and utilizing technology. A fundamental shift from addressing barriers to employment, will change to incentives for work and job opportunities including relocating to higher employment areas.
“I think we’ll see consolidation of employment service providers into the future. This may include Disability Employment Services, Job Service Australia providers, Australian Apprenticeship Centres and Group Training Companies”, predicts Wendy Perry, Head Workforce Planner, Workforce BluePrint.
Industry assistance and support for export are areas that have been targeted with a view that businesses should be able to grow and develop successfully without government intervention.
Ten years out is the period for planning, so by 2024-25,
…combined growth in spending on social security, welfare, health and education is projected to contribute the most to growth in total expenses. (15 largest and fastest growing programmes, accounts for 70% to growth in spending)
Spending on an ageing population, child care fee assistance, Paid Parental Leave, job seekers and education (schools and higher education) are amongst these programs. Strangely the Commission assumed the unemployment rate would remain at around 6% and that would seem to match with a ‘Business as Usual’ scenario rather than the ‘Reform’ scenario that they are advocating.
In describing the Commission’s approach,
Structural savings in the largest and fastest growing programmes must be pursued over coming years if the Government’s fiscal target, as specified in the Terms of Reference, is to be realised.
If all National Agreements were reviewed this would include Education, Skills and Workforce Development, and Indigenous Reform. As an example, the current Skills Reform National Partnership and Project Agreement finishes on 30 June 2017.
In line with the work of the VET Reform Taskforce’s work and demonstration of the reductions of the number of government bodies such as the Australian Workforce and Productivity Agency there will be a restructure of governance in VET.
With the consolidation of bodies into the relevant Departments it highlights the capability development need for public servants to be able to engage better with stakeholders, the States, employers, businesses, industry groups and regions.
There will be significant changes to the structure, focus, workforce capacity and capability of the public service. This will include digital skills for the provision of online services and using cloud computing applications.
One of the principles in the phase 1 report is “Do not deliver services if others are better placed to do it” and for VET this seems to also include state and territory governments.
A key view of the Commission is that there are examples of spending overlap between the Commonwealth and the States and,
…where the Commonwealth provides tied funding to the States to deliver specific outcomes or policies.
Whilst the Commission recommends policy and funding responsibility be transferred to the States for school education, does this line up with the Commonwealth wanting to have more of have a say and control over Australia’s education system? For Higher Education the thrust is to shift the costs to students in a more competitive open market.
Looking at other programmes and funding, the Commission states that, “…vocational education and training has traditionally been a State responsibility.”
Wendy Perry highlights, “That statement is just untrue as the Commonwealth has always been involved in national VET policy, regulation, products (Training Packages) and funding. There have been many more programmes and initiatives than what is outlined in the report that the Commonwealth has provided funding for.”
In the recommendation on VET the report states,
The Commission considers the Commonwealth should pass full responsibility for vocational education and training to the States with some requirements for national reporting and quality assurance. Recent reforms to achieve demand driven training should continue to be pursued by the States, along with improvements in mutual recognition of occupational licensing between States.
“For VET programs and funding, if all responsibilities were transferred to the States for national employers or those working across multiple jurisdictions the red tape would be worse not better” says Wendy Perry, Head Workforce Planner, Workforce BluePrint.
States are continuing reforms albeit all with their own take on what’s needed when in reality many of the VET initiatives are similar or a copy of others.
“A review of what is working well and what needs improvement could identify outcomes and/or programmes that could be implemented by some or all states and territories, learning rom each other and providing some consistency around good practice”, Wendy recommends.
With a focus on implications for employment, skills, Vocational Education and Training, and youth, there are the bones of potential policy and programmes that may be announced in the budget. There is an overarching theme in the Commission of Audit report,
“If you are not re-thinking the way that you are approaching business in Australia and managing your workforce , then it is being re-thought for you”, says Wendy Perry, Head Workforce Planner, Workforce BluePrint.
Consolidation of Indigenous expenditure and savings, “…could be redirected to a new voucher programme for accredited early childhood learning, schools, vocational training and universities for Indigenous children and youth.”
“I believe the Commonwealth needs to develop a purpose statement for the VET sector that supports a vision for Australia’s workforce into the future. A public investment framework would identify economic outcomes, industry, regional and motivational priorities as a way of determining areas for investment.
‘Adding to productive capacity’ is described as something that governments should do, …but how can the Government influence the quality and productivity of the labour force if they don’t have enough influence over education, employment, vocational education and training?” asks Wendy Perry, Head Workforce Planner, Workforce BluePrint.
The workforce implications from recommendations, that are likely to influence the budget include:
- Restructuring job roles to accommodate workers as they age
- Implementing flexible work and phased retirement from early 60’s to 70
- Designing a national frameworks for public investment with priorities
- Managing major changes in the 2017-18 financial year
- Shifting industry assistance to areas of structural change
- Targeting youth, indigenous and mature people for programmes
As the Federal Budget unfolds on Tuesday night, watch for the commission’s recommendations, implemented in full or part or not at all, and reflected in programmes that are created or those that are deleted.
Workforce BluePrint will hold a post-Budget webinar to discuss the potential impact and workforce implications - to book: http://workforceplanningtools.com.au/products-page/vocational-education-and-training-sector/federal-budget-2014-analysis-webinar/
Ph: +61 8 8387 9800 l Mobile: +61 (0)416 150 491 l Fax: +61 8 8387 9820
Wendy Perry and Associates (WPAA) was established in 2002 as a Vocational and Educational and Training (VET) specialist with Workforce BluePrint (a division of the company) launched in 2006. The company provides workforce development and planning, VET and contact centre consultancy, and small business support services in addition to projects completed for Commonwealth, State/Territory and local governments.
Workforce BluePrint provides Workforce Development and Planning Services for Clusters, Community Development, Firms, Industry Development, Major Projects, Networks, Organisations, Regional, Rural and Remote Development, Small and Medium Sizes Enterprises (SME), Small Business Health Checks, Supply Chain and Value Chains.
Wendy A Perry, Head Workforce Planner
M: +61 416 150 491