Tony Abbott's Plan for Apprentices: Cuts, debt and deception

Adam's speech on the Abbott Government's Trade Support Loans Bill 2014

Before the election, you could not move without seeing the Prime Minister in a fluoro vest and a hard hat, gladhanding apprentices and workers. He said, 'An incoming coalition government will help more young Australians to start a trade, stay in a trade and finish a trade.'

What is becoming increasingly clear is that these were hollow words. Without being told that it would happen, we have seen the axe being taken to the Tools For Your Trade program, halving the program which pays for apprentices' tools, cutting the scheme from $1 billion to $476 million over four years, to be replaced with this program that we are debating in the Trade Support Loans Bill 2014 today.

I want to share an email from a fourth-year apprentice called Matthew, who said: 'The changes affect me and two other apprentices in my depot, along with thousands of other apprentices nationwide who rely on these payments. While I do not agree with the changes to apprentice funding, I am disgusted that they can change the system apprentices such as myself are halfway through.'

Another fourth-year apprentice, also called Matthew, said: 'The current Abbott government is going to rip this up without any thought of how it will affect us. Every bit of money helps, especially as I am also supporting my wife and daughter and paying a mortgage. The removal of this payment is approximately six per cent of my annual income, and I could only imagine the uproar if Tony Abbott and Joe Hockey were asked to delete six per cent of their annual income.'

This is what another apprentice, called Luke, said: 'I am grateful that I was the beneficiary of the Tools For Your Trade program throughout my apprenticeship. I used the money to buy tools like big-ticket items such as drills that cost upward of $700. Apprentices already struggle with a low income, studying and paying bills. These incentives are what attract young job seekers in the first place, without the added stress of paying loans like a tertiary student.'

Luke speaks on behalf of thousands of other apprentices round this country who have opted to go and do an apprenticeship and to work on the low wages that that entails while being you are being trained up. They have done it on the basis that they are not going to be plunged into debt. But, instead, that is exactly what this government intends to do to them.

For someone who ends up as a carpenter, with a starting salary of $40,000, you can estimate that, if they take out the full whack of the debt, it will take them 34 years to pay that off. It will be less time for someone who is in a higher paid occupation—automotive engineer, welder, plumber or electrician—but what is clear is that we are moving towards putting all the young people in this country, whether they are at university, whether they are doing an apprenticeship or whether they have the misfortune of being out of work and looking for a job, further into debt and making it harder for them to get by.

The minister and his government come in and say that it is justified to rip up the grants program and to put people further into debt, making one of the most offensive statements that has probably been uttered with respect to apprentices, saying that it is okay because they were spending the money on 'tattoos, on mag wheels for their cars, and on birthday parties'. Firstly, there is no evidence of that, not one shred of evidence has been put forward. It is disgraceful that a government minister would use their position, supposedly to speak out on behalf of apprentices—being the responsible minister—and to slur them all without any evidence.

But if that were even the government's motivation, and it is not—because the government's only motivation is to cut spending on apprenticeships and put apprentices further into debt—but if it were, you would expect some restriction in this bill on what students and apprentices, who are now going into debt, could spend the money on.

But no, there is not. For all the government cares, they can spend $20,000 on another set of mag wheels and tattoos as long as they are in debt, instead of being given a grant. The fact that this government has not thought through how this loan scheme is going to work, the fact that there are no suggested restrictions even on it so that it has to be linked to tools, for example, shows that that offensive suggestion about tattoos and mag wheels was nothing more than a distraction and an offensive slur on all apprentices so that the government can get away with its agenda. And its agenda is to cut funding to young people and, instead, to put them further into debt.

This government is not getting rid of debt. You hear a lot of talk from the Prime Minister and Treasurer saying that the government was elected to tackle debt and deficit. I will tell you what they are doing: they are not getting rid of debt; they are just shifting it away from the government that can bear it onto apprentices, students and young people who cannot.

The government also suggests that one of the reasons they want to introduce this scheme is to address the low level of completion rates amongst apprenticeships. It is admirable to want to look at why so many apprentices are not completing their apprenticeships. It is admirable to say, 'Let us give some incentives perhaps,' as this bill purports to do. However what this government has failed to take into account is that the biggest reason most apprentices do not finish their training is because they are let go by their employer. It is not because they do not want to finish; it is because their employer lets them go.

What does this new move from the government do to those people who are a year or two away from completing their training but are then let go by their employer? Those people through no fault of their own are now going to end up with a debt and without any training to perhaps get themselves into a job to repay that debt.

So people who are in that category, that we know exists—it is the single biggest reason apprentices do not complete their apprenticeship—are now going to find themselves objectively worse off, thanks to this government. They are going to find themselves not only without an apprenticeship, not only without a road to get a good job, but in addition they are going to find themselves in debt as well. Then, while they are looking for a job, they are going to have to spend six months of every year without any Newstart.

That is what this government has in store for people under 30. That is why this is another one of the bills that is part of the government's measures that will brutalise Gen Y and everyone who comes after them. It will make life incredibly difficult for anyone under 30 in this country. Part of the government's agenda, of which this bill is an example, is to make it so that for everyone under 30 in this country that you will be forced to accept any old job with any old wages and any old conditions.

It will not matter that through no fault of your own your employer sacked you and you did not finish your apprenticeship, if you do not want to live six months of the year with no income at all you had better go and take that job paying less than the minimum wage. And you do not want to complain about that because, if you complain, then you will find yourself put through the washing machine again and having to spend another six months without any income. That is the vision this government has for this country.

When we know that the most common reason for people not completing their apprenticeships is employment-related and we combine that with the fact that apprenticeship commencements are also declining, we have two choices. You can do what the government is doing, or you can do the sensible thing which is to put more money into apprentice training to boost commencements and completion rates.

It is known that a loans scheme is likely to deter students from low-income and disadvantaged backgrounds. It stands to reason. The government has been unable to confirm in the Senate estimates process or anywhere in this debate that they will not change the arrangements for this debt in the future, similar to what they have done with HECS debts. So for all we know, the debts that these apprentices are about to incur could be required in the future to be paid back even more quickly or at even higher rates of interest and, if you look at what they have done to higher education students, you could imagine that that is only a year or two away.

If we really wanted to build a sustainable and clean economy, we would be investing in our apprentices. We would not be saddling them with thousands of dollars of debt. By funding apprentice training and investing in infrastructure, we could build the skills of the future to help Australia get ahead of the curve. And rather than relying only on the private sector to train the next generation of Australian workers, the government should take a leading role in funding and supporting them so that we have a generation of workers skilled up and ready to build a clean economy.

The idea of owing Tony Abbott's government thousands of dollars in debt will just send a chill down the spine of many young people thinking of starting an apprenticeship. As we have seen with the massive changes to the HECS system, it does not matter if you have signed up for a lower interest rate, this government is going to slug you anyway.

So it is crystal clear that what this is about is not a better deal for apprentices. This is about making life worse for many, many apprentices. This is about making life grim for young people and gutting the supports that would see apprentices commence apprenticeships in greater numbers and complete them in greater numbers. It is no wonder that there have been many, many submissions on behalf of apprentices and on behalf of working people saying that debt is the wrong way to go. I urge the government to reconsider this measure, to reinstate the Tools for Your Trade programs and to treat our apprentices with respect instead of disdain.