Sydney
The National Panel for Economic Reform (the Panel) held its second meeting today in Sydney. The Panel brings together leaders from the Government, business community, union movement and community sector to develop, agree and champion reforms which will drive long-term productivity growth, while also improving equity, participation and reducing disadvantage.
The Prime Minister and representatives from the Business Council of Australia, the Australian Council of Trade Unions, the Australian Industry Group, the Australian Chamber of Commerce and Industry, the Council of Small Business of Australia and the Australian Council of Social Service participated in the meeting. Given his role as the Government's primary economic minister, the Deputy Prime Minister and Treasurer, as a permanent invitee, also participated in the meeting. As the skills and education system and innovative and productive workplaces were a focus of the meeting, the Minister for Tertiary Education, Skills, Science and Research and the Minister for Higher Education and Skills also joined the meeting. The Minister for Employment and Workplace Relations was ill and sent his apologies.
Ford Australia's Announcement of 23 May 2013
The Prime Minister noted Ford Australia's announcement that it will cease manufacturing in Australia from 2016. The Panel discussed the economic conditions that are making manufacturing challenging in Australia including the high Australian Dollar and intense international competition.
The Panel agreed that it is important that Australia has a strong manufacturing base, including providing opportunities for smaller manufacturers to be part of larger supply chains. The Panel also agreed that it is important that policies which encourage Australian business, including manufacturers, to be more internationally competitive continue to be pursued.
The Prime Minister also informed the meeting that she supported ACTU's request for a strategic discussion on the future of Australia's automotive industry, and will therefore convene a meeting built around the Prime Minister's Taskforce on Manufacturing. Minister Emerson, as acting Industry Minister will speak with key stakeholders shortly to formalise an agenda for the meeting and commission the necessary work from officials.
Australia's Current Economic Conditions and Fiscal Outlook
The Treasurer briefed the Panel on the economic and fiscal outlook, consistent with the 2013-14 Budget.
The Panel noted that Australia's economic outlook remains favourable, with the Australian economy expected to outperform most of the developed world over the next two years. The Panel also noted the transition underway in the economy towards non-resource drivers of growth. Conditions are expected to remain uneven across the economy, with the transition underway occurring alongside ongoing pressure from the sustained high Australian dollarand continued household caution around debt accumulation.
While the fundamentals of the Australian economy remain strong, the sustained high dollar and weaker corporate profitability have contributed to significant revenue write downs across the forward estimates. The Panel noted the implications of revenue write downs for fiscal settings, and the need to support jobs and growth while making room for critical investments and maintaining strong public finances over the medium term.
Skills measures in the 2013-14 Budget
The Panel welcomed the 2013-14 Budget announcements ‘Alternative Pathways to the Trades' program and the ‘Skills Connect Fund'. These initiatives aligned well with proposals developed by the Panel's Working Group for consideration at the meeting.
Through the Alternative Pathways to the Trades measure the Australian Government will provide funding of $68.8 million over 4 years to pilot alternative pathways to trade training. The pilot will test approaches to training which are competency-based and will combine flexible approaches to on and off the job training.
The Australian Government recognises that the model needs to be developed with industry, unions and training providers and the Panel has agreed to work together on the implementation details of the proposal. The Panel will consider the detailed implementation plan at its next meeting.
While the Panel noted that flexible arrangements could play an important role in meeting Australia's skills needs, the existing Australian apprenticeship system is, and will remain, the key path to trade qualifications. Importantly, these employment arrangements combine work integrated learning with off the job training.
The Government has also announced that it will invest $45 million in a new Skills Connect Fund as a single entry point for enterprises seeking to access Government funding for training their workforces. It was agreed that the Panel through its Working Group would work with officials in refining the priority, scope and operation of the fund.
Human capital
Following on from its first meeting, the Panel continued its discussions about potential improvements to Australia's education and training systems and the way skills are used in the workplace. These discussions focused on four areas: foundation skills, the vocational training and education (VET) sector, skills for disadvantaged Australians, and innovative and productive workplaces. The Panel considered the policy context and trends, current initiatives and possible policy options for each area.
From these deliberations, in addition to the further work on the 2013-14 Budget measures, the Panel agreed to further develop proposals in the following key areas, with a view to continuing its deliberations on this topic at future meetings.
* Foundation skills: proposals will focus on improving the foundation skills of Australians - identifying those who need help, removing the stigma associated with seeking help, and supporting workers (and their employers) to improve their skills.
* Future VET reform: the Panel will further consider how, in the future, vocational skills are developed across the education and training system, including making the most of the considerable investment in VET in Schools, facilitating better pathways for entry into vocational training, as well as increasing interconnection between the current VET system and higher education.
* Skills for disadvantaged Australians: proposals will focus on expanding targeted support for early childhood learning and development, supporting young people to make successful transitions from school to further education and training, and work. The Panel will also consider specific proposals for collaboration between business, the community sector and government to help the long term unemployed, Indigenous Australian and other disadvantaged groups into real jobs, appropriately supported by services and training. These will build on the idea outlined in Opportunity for All (a joint publication by the BCA, ACOSS and ACTU) which sought to a new approach to employment services, including by having job seekers connect early with employers who can offer a pathway towards secure employment, as well as through more tailored support services to give individual Australians the best chance of making a successful transition to work.
* Productive and innovative workplaces: the Panel will explore specific proposals for governments, industry bodies and unions to provide information, leadership and support to organisations by raising the awareness and promoting changing culture in workplaces and providing support to implement High Performing Workplace best practice.
Next Topic
Reflecting that the Panel's role is to consider reforms which will drive long-term productivity growth and that infrastructure is a cornerstone of our competitive and productive economy, the Panel agreed that its next topic would be infrastructure. The Panel agreed that it could consider ways to: improve the productivity of existing infrastructure; improve planning and governance processes; reduce project costs; encourage more innovative means of funding and financing infrastructure projects; and improve transport around cities.
State and Territory Engagement
State and Territory governments have important responsibilities and expertise in areas the Panel will continue to explore. The Panel agreed it was timely for the Prime Minister to invite representatives from the States to join relevant Panel discussions. Initially, this will focus on the ‘Alternative Pathways to the Trades' and the ‘Skills Connect Fund' Budget measures. The States' input on infrastructure - the Panel's next topic - will also be sought given their knowledge and expertise in this area.
Next Meeting
The Panel will hold its next meeting on 1 July 2013.