Zali Steggall MP calls for gender equity in trade support loans

14 June 2023



I rise today to address this house on a deceptively simple yet incredibly important bill, the Trade Support Loans Amendment Bill 2023, accompanied by the student loans overseas debtor’s repayment levy bill 2023. So, what are the Trade Support Loans bills? Trade Support Loans are interest free income-based government loans that act as an incentive for people to complete their training in priority trade occupations. The loans are interest free while you are studying but then are indexed by CPI. Provided studies are successfully completed, the amount to be repayed are discounted by 20 per cent, so I will return to the question of the CPI indexing later in the speech as we know that is problematic across a number of areas.

What trades are supported in this proposal? So currently, the occupations included are limited to the traditional trade. This limitation does not serve the new economy, I would say. And does not achieve equity and certainty, and certainly does not benefit a whole range of occupations where Australia has a desperate and current identified need, so to remove current limitations the Trade Support Loans bill allows the minister, by legislative instrument, to extend the types of occupations that will be covered and enable trainees to qualify for this type of discounted loan while competing that by completing the training and studies. So what are the changes being made in their studies? This expanded list of occupations to be called the Australian apprenticeship priority list, has the potential to dramatically expand eligibility for loans to apprentices and trainees working in a very broad range of occupations, which we know are subject to skills shortages. Australia's skill shortage is the second highest in OECD countries.

We have been advised that the list will include occupations such as early childhood education, aged care, and disability care, but also will include occupations such as an old nursing, personal care assistants, therapists, dental technicians and many more. The inclusion of these occupations where current shortages exist is to be applauded. We have to recognise that traditionally, apprenticeship and traineeships have overwhelmingly been in male dominated occupations. Only a small number have been available in occupations that are more female focused. So, expanding this list to create some gender equity for young people in accessing the scheme is incredibly important. So do the changes proposed in the bill match the need? The Australian apprenticeship priority list is a real crux of the change in this legislation. Getting this list right, places a substantial and ongoing responsibility on the minister to ensure that the list is sufficiently expansive and reflective of current needs as well as anticipating future needs, and realistically it needs to remain dynamic to enable we meet future challenges. So what can we do to ensure the list becomes anticipatory rather than purely reactive? Well, getting it right requires understanding of and responding to the breadth of current needs and opportunities. Getting it right also requires anticipating what the new economy needs are going to be now and well into the future.

The February 2023 labour market update list - listed the top 20 occupations in high demand, nationally. These include a range of ICT disciplines from chefs, construction managers, retail managers, advertising and marketing professionals, physiotherapists, and gardeners, so the needs are very, very broad. The labour market update also noted that it is important to recognise that the are many, many more occupations of key significance to the economy and wellbeing of Australians. The need for additional workers in the new economy will include, for example, electricians with specialties such as heating, ventilation, and air-conditioning, and depending on what the government wants to do with our metals processing sector, metallurgists, and other trades involving the processing of critical minerals. The need for STEM qualifications tops every list.

So what are the benefits? The people and businesses for example in Warringah have been crying out for such changes. Many of my constituents have raised the challenges faced in employment. An operating and building businesses because of skills shortages and difficulty and accessing talent and workforce. This bill will benefit many businesses around Australia but also in Warringah and Warringah residents and businesses, as well as all Australians. There will be an increased number of Australians who will be able to afford occupational training. Those already in training facing hardship will be able to get discounted loans to ease that hardship. Those in training are more likely to complete their training because of the 20 per cent deduction for completing apprenticeship and traineeships, that is the incentive, the carrot to get through because currently statistics for completion are simply not good enough and we are wasting resources and training up but not getting the completion factor. There will be increased choices for careers due to the broadening of occupations supported and increasing the accessibility to those occupations. And there will be increased availability of trainees in business and industries for employment. The bill will support the new economy by encouraging sustainable an inclusive economic growth, contributing to the reduction of inequities, in particular gender inequities, and boosting workforce participation by addressing barriers for women, people with disabilities and low-income earners. Reducing significant disadvantage by abolishing the current emphasis on favoured male dominated industries, pursuing broad-based economic growth and jobs creation, and embedding positive government interventions to support inclusion and sustainable growth.

But, the opportunity for more is there, so what else should the government be addressing? This bill is a critical step and encourage the government to expand and extend its support to the new economy by providing benefits that are far-reaching and will enable Australia to prosper into the future. We should be able to address our fall in global innovation index to 25th. In 2018 we were 17th, we are now 25th. Through the expanded emphasis on expanding the broadest range as possible. Innovation will play a huge role in the future of the Australian economy. Equipping and up-skilling new and existing workers for future jobs with STEM skills will be a key enabler for Australia to embrace new economy opportunities. Important contributions to the workplace and the economy flow from those who are re-entering the workforce after an extended absence. It is easy for them to be overlooked. They will not only need the financial support possible under this Trade Support Loans bill, they are also crying out for a simplified training pathway to facilitate their return to work, including more tailored training offerings which more accurately take into account their earlier training and their incredible wealth on-the-job experience, and this is where gender equity plays a huge role as we know that there is a huge amount of women who, through care and responsibilities, left the workforce, wanting to return to the workforce and to paid employment, but they are limited by the access to retraining and the difficulty of those training pathways.

Now, we have to talk about indexation, and it is a really critical issue. CPI is applied to all student loans including loans under this Trade Support Loans bill. There has been concerning increase in student debt over the past two years because of the above target-inflation, and hence above average indexation. So we have gone from 3.9 per cent last year and we are seeing 7.1% this year. The rises creating great consternation among younger generations who are facing higher cost of study, higher levels of debt and now the debt is growing faster at rates faster than they can possibly pay it down. This year the increase will rise faster than the average home loan and nearly double the rate of wages growth. So while I hope that this year is an anomaly what I think it has shown is that the system is not quite right and it is time for the government to look at that. We can't afford to put additional burden on younger generations already struggling with cost living in a house of crisis.

Graduates in the 20 to 29 age group will take the brunt of this CPI increase, and they are increasingly rising by an average of some $2069 on the median debt of $29,000 - a bit over $29,000 from study. So with an increasing number of jobs requiring further education and training into the future, we must be seeking ways to reduce the fear of a debt burden on our younger generations and older Australian seeking to retrain and re-enter the workforce. Alternative solutions need to be considered to relieve this burden. One potential mitigation would be to consider changing the indexation rate to be the lower rate of either the Consumer Price Index or the Reserve Bank of Australia's official cashrate over the year. So to give an example of what this will do this year, it will mean indexation will be approximately 2.66% rather than the planned 7.1%. Alternatively, the government could also consider linking the wage price index, so indexation would be linked to price index, which is as it is done in the UK for example. That would create a link between the ability to repay and increase of debt.

So if the government considers further incentives around education it must consider the disincentives that exist in the system to study and to address the fear of the debt burden incurred by those training, whether it be through tertiary education or apprenticeship and traineeships. That fear of that debt burden is real, it is a very prominent part of the decision-making and we must, in this place, and I urge the government, to do more to address that fear and concern, and deal with the debts incurred and how they will exacerbate future cost-of-living pressures for young Australians. I believe the statistics are that we currently have about four people working in Australia in the system for everyone person that doesn't work. In 20 years I think it is anticipated we will be changing the ratio to about two people working for every one person not working, so that says that our system needs to adapt and change and we must incentivise that training and participation in the workforce.

So I commend the government on the Trade Support Loans Amendment Bill and I will support this legislation, but I encourage the government to be dogged in pursuing innovation and innovative solutions to address training and workforce issues, as I have highlighted and to maximise workforce potential and contribution in our emerging new economy. Do not just look to immigration as a way of solving jobs and skill shortages, because that creates a whole range of other problems when it comes to infrastructure and housing and other accidents. First we should be making sure we are maximising utilisation and  participation of Australians here which means addressing gender and equity issues and the opportunity for training and access to paid employment, so I urge the government to consider further action.