Chronic skills shortages in trades are the result of unsuitable and limited training pathways beyond apprenticeships.
Low wages and a lengthy, inflexible training structure deter potential workers selecting a trade, according to the Productivity Commission’s recently released Green Paper.
“Despite many reviews of VET in the past decade, few reforms have modernised learning modes, career pathways, or VET’s relationship with industry. The bias against VET is still strong, with universities seen as the default pathway, especially for high school graduates,” the report said.
The paper points out that COVID-19 has displaced thousands of workers and accelerated structural changes to the economy.
Many jobs will not return, requiring workers to reskill or upskill. “Poorly targeted subsidies have encouraged many students to enrol in courses of low value to employers and students. The mismatch between skills delivered by VET and industry needs has further contributed to poor employment outcomes,” the report said.
Even in the face of this bias, TAFE has provided a $92.5 billion benefit to the Australian economy.
A new report by the Centre for Future Work at the Australia Institute, shows TAFE has produced $84.9 billion in annual productivity benefits, including $25 billion in tax revenue.
It has also produced $6.1 billion in wages supporting 48,000 jobs and purchasing of goods and services and $1.5 billion in social benefits including lower unemployment.
The total annual costs of the TAFE system are $5.7 billion.
"Historic investment in quality TAFE education supports an ongoing flow of total economic benefits worth $92.5 billion to the Australian economy in 2019 - 16 times greater than the annual 'maintenance' costs Australia currently reinvests in the TAFE system," the report said.
Australian Education Union federal president Correna Haythorpe said the report showed TAFE had made a "huge contribution to Australia’s economic prosperity, despite years of what can only be described as policy vandalism of the vocational education sector.”
The report recommended a long-term 50 per cent wage subsidy for employed apprentices on the condition that they are still employed with their host employer one year after completion of their training program.
Business NSW has urged the federal government to offer employers a wage subsidy of up to 90 per cent of new apprentice wages (or $540 a week) for the first year of training to support apprentice commencements.
Meanwhile, TAFE NSW has joined four universities to form a new jobs taskforce based in western Sydney.
The taskforce - which includes the University of NSW, Western Sydney University, the University of Wollongong and University of Newcastle - will work together to provide rapid training and reskilling programs.