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Innovation Business Skills Australia by XB7Ul9



IBSA welcomes the opportunity to respond to the Expert Panel’s report A shared responsibility:
Apprenticeships for the 21st Century.

IBSA commends the report’s vision for a future system that supports high quality employment and training
both in the traditional trades and non-trade vocations.

Overall, we view the recommendations as a positive step forward in addressing the issues facing Australia’s
apprenticeship and traineeship system and the right direction to meet the related skills challenges in our
economy. However, we note that the eligibility for government supported places of an increasing number of
older apprentices as well as people seeking apprenticeship with higher level qualifications may present a
future national challenge.

We agree that the themes highlighted in the report - the model of skills formation, the leadership and
sustainability of the system and the interaction with awards and workplace relations - capture the essential
elements for the reform directions.


In its role as an Industry Skills Council, IBSA undertakes an annual environment scan for its six industries:
Business Services, Cultural & Creative, Education & Training, Financial Services, Information &
Communications Technology, and Printing & Graphic Arts.

In representing these industries, IBSA recognises that a vibrant and innovative society is driven by a balanced
contribution from the economic, social and cultural and creative dimensions of our nation.

The environment scan engages with industry stakeholders and utilises statistical data on each of these
industries, their training arrangements and workforce participation. Through this process, skill needs and
workforce development priorities are identified for Australia’s innovation and business industries. The training
packages are refined to meet the needs of industry and we identify investment priorities for Australia’s VET

The 2011 IBSA environment scan notes that around 305,000 students undertake Vocational Education and
Training programs from IBSA Training Packages and that the Business Services Training Package is the most
highly used of all national Training Packages with a 13% increase in usage over 2009-2010.

IBSA’s apprenticeships are mostly in the Printing industry with some states also implementing a number of
Telecommunications qualifications as apprenticeships. The vast bulk of employment based training for IBSA
industries is under the traineeships. The data indicate that there is a massive training effort across IBSA
industries at the Certificate II level, totaling over two million trainees over the five years between 2005 and
2010. These are in the main, Certificate II in the business stream, qualifications which provide basic, generic
skills for the administration workforce suggesting that a qualification at this level covers industry’s job skills
needs for entry level, retraining on-the-job and older returning-to-work trainees. The numbers also include
the entry level, retraining and older trainees’ skilling in the financial, information technology and cultural and
creative industries.

The following tables show apprenticeships and traineeships undertaken in the IBSA industries across age levels
between 2005-2010:

IBSA industries’ apprenticeships and traineeships at Certificate II level1
19 years and under              20 to 24 years        25 to 44 years       45 and over   Total
635,218                         508,820               734,445              274,382       2,152,865

In comparison with other industry areas, IBSA industries rank third after those in the Transport and Logistics
and Services Industries. In the 19 years and under age group, the Services Industries have nearly three times
higher numbers than IBSA industries which are second highest ranking. In the 20 to 24 years age group, the
Services industries are nearly double IBSA and in the 25 to 44 years group, Services falls just behind Transport
and Logistics which has nearly 1 million apprentices and trainees. In the mature age group Transport and
Logistics leads with over half a million, then Services followed by IBSA.

IBSA industries’ apprenticeships and traineeships at Certificate III level 2
19 years and under              20 to 24 years        25 to 44 years       45 and over   Total
33,346                          45,356                33,781               5,282         117,765

The picture changes significantly at the Certificate III level. Here the traditional trades which include
Manufacturing and Construction and Property Services lead over Services Industries which totals well over one
million but is only half of Manufacturing which is over two and a half million. IBSA industries across all age
groups are significantly higher than five other trades and non-trades areas, but well behind more traditional
trades in Agrifoods, Construction and Property Services, Electrotechnology and Energy, Manufacturing, and
Services (Hospitality). IBSA industry trainees at this level start to specialise for higher skill requirements in
specific areas of administration (including legal and medical), sales, customer contact, finance, cultural and
creative industries, IT and telecommunications.

At the Certificate IV or Diploma level, IBSA industry traineeships provide critical leadership and supervision
training in specific areas such as frontline management and leadership roles.


Australia’s economy is now service based, with service industries accounting for around 80 percent of total
gross added value. This contribution is up by more than 20 percent of contribution two decades ago.

1   NCVER Traineeships and Apprenticeships Collection, 2005-2010, March 2011

2   NCVER Traineeships and Apprenticeships Collection, 2005-2010, March 2011
Business Services contribution to the economy makes it the largest industry in Australia with total national
income of approximately $100 billion. It has been one of the fastest growing service industries in recent years,
benefitting from long term trends towards the outsourcing of business functions such as accounting,
marketing, customer response and contact and IT support throughout other industries such as manufacturing.

The Financial Services industry is as important to Australia’s economy as the Mining sector, the industry
traditionally associated with Australia’s economic wellbeing, and its performance also delivers growth in
related sectors such as communications, property and business services.

The other IBSA industries which are growing in the economy are the Information and Communications
Technologies industries which account for an estimated revenue of around $82 billion across five major
sectors – IT services, systems integration and software support, Internet services and telecommunications,
software development, distribution of software and hardware and manufacture of ICT products and
components. While convergence between the telecommunications, entertainment, printing & graphic arts
and IT industries has enabled new product development and stimulated the provision of new services, the key
areas of industry impact are in financial and business services.

IBSA data on Apprenticeships and Traineeships

While prioritising Government investment to priority industries is an important objective, an analysis that
emphasises volume can overlook the importance of small-volume niche training to specific industries.

Traineeship training is of two types – high volume in business and financial services and small volume, niche
training in areas such as the cultural and creative industries where, for example, small numbers of highly
skilled operators are trained in broadcasting and are critical to that industry.

There are specific qualifications even in the high volume areas that are recognised for their critical impact
across businesses and organisations, for example Certificate IV in Frontline Management, which, has around
73,000 trainees annually and is a vital qualification for the development of supervision, leadership and
management skills. The next level of leadership and management skill development is the Diploma of
Management with approximately 3,500 trainees annually, quite significant numbers.

It is of note that the importance of traineeships to the Finance Industry, while not as significant in numbers as
Business Services, skills the feeder group to the more advanced financial skills required by the industry.


IBSA is keen to have more people undertake skills training to equip them to access the new opportunities
arising from the convergence of industries and occupations. We note that the data show apprenticeship and
traineeship commencement activity has grown thanks to the Australian Government’s investment in training.

IBSA stakeholders have serious concerns that traineeships in the business services areas have been
undervalued. The IBSA industry environment scans indicate that skills needs have been reported in a number
of key areas such as general business administration and occupations associated with the telecommunications
sector and the NBN build and implementation, as well as in a number of financial services areas. NCVER data
indicate that traineeships most affected by the proposed changes to eligibility in IBSA industries would be key
business areas such as administration, customer contact and frontline management. IBSA stakeholders argue
that these and other business, finance and technology traineeships provide important entry pathways and
build vital relationships between employers and new workforce entrants.

A core function of the Australians Apprenticeship system has been preparing people for entry to the
workforce or for reskilling into an alternative industry; this function will be seriously affected with the
redefinition of eligibility for Australian Apprenticeships employer incentives. The base skilling function of the
apprenticeship and traineeship system, whether in trades or other areas, is critical in providing stable, reliable
employment-based skills outcomes for both employers and individual trainees whatever the completion rate.
In addition, it is worth noting that the lack of certification may not necessarily equate to incomplete
competency achievement. A strong jobs market may also mean that significant numbers of commencements
drop out or they may be promoted.

Moreover, the importance of the Australian Apprenticeships Employer Incentives to supporting small and
large enterprises to systematise and align the skilling of their new, base level employees should not be
underestimated. The possible impact of the proposed eligibility criteria could well be a reduction in entry level
workforce skilling with significant effects likely to be felt a number of years out. This effect would be broad
and across all industries that use business and financial services skills and training, and to a lesser extent but
with increasing importance to the introduction of the Australian Government’s National Broadband Network,
information technology skills.

A specific example would be the high volume Customer Contact skilling, primarily focused on delivering call
centre skills, with about 25,000 people annually formalising their skills at Certificate II or III levels, used
extensively across all industries, particularly financial and information technology businesses as well as in the
service areas of government departments.

The same effect applies to core business administration skills with nearly 50,000 people annually undertaking
traineeships across all industries.

Enterprises would not be able to support the same level of systematic training without the range of supports
currently provided by governments. One result is likely to be the reduction of upskilling of people in post
traineeship leadership roles. Large enterprises believe that the traineeships provide a range of skilling
pathways – attractive to both employers and workers. They believe that if the proposed changes are
implemented, a number of key groups would be adversely affected, including school-based trainees, other
disadvantaged groups, mature workers considering retention in the workforce, women and indigenous
workforce entrants. Their concern is also heightened about a negative effect on regional employment and
skilling opportunities.

Early indications from IBSA’s Enterprise Based Productivity Places Program are that the demand for
telecommunications skills, while not historically high, is also going to peak around implementation of the
Australian Government’s National Broadband Network. Exclusion of traineeships in this area may make it
difficult for the Australian Government to achieve its policy objectives.

We put forward the following comments in relation to the recommendations:

1. Establishment of a National Custodian to oversee reform that will ensure Australia has a high quality
   Australian Apprenticeships system that:
    responds to the needs of the economy
    supports nationally consistent standards for employment and training of apprentices and trainees
    focuses on retention and completion of apprentices and trainees
    supports high quality skill development to ensure all apprentices and trainees have well rounded and
       highly respected skills required by the economy.
IBSA supports the recommendation, agrees that the current system is complex and that the systems across
the states and territories need to be aligned, truly national and focused on quality. The initial taskforce
proposed led by an independent chair and having a representative from each state and territory government,
a union and an employer group is a positive model. The reform agenda of such a body would need to be
highly focused and time limited in order not to simply become yet another body in an already crowded

2. Enhance the quality and effectiveness of the Australian Apprenticeships system by clarifying the roles and
   consolidating the number of stakeholders in the system, ensuring that services are provided by the most
   appropriate provider, duplication of service delivery is reduced and administrative processes are

IBSA supports the recommendation and suggest that the National Custodian be tasked with this role also,
working with governments, industry, unions and other key stakeholders.

3. Establish a formal accreditation process for the pre-qualification and training of all employers of
   apprentices and trainees to ensure a nationally consistent minimum standard of high quality employment
   and training is provided. We also support the establishment of an Excellence in Employment Scheme to
   recognise and reward those employers who have consistently demonstrated their commitment to
   excellence in training apprentices and trainees.
This is a contentious recommendation and needs to take into account a number of factors. Firstly, we note
that an accreditation process has the potential to alienate small business and as a consequence reduce
apprentice / trainee numbers. IBSA emphasises that low completion rates are not always as a result of a
breakdown in employer–apprentice relationships but occur for a variety of reasons. Retaining the number of
employers willing to take on apprentices or trainees is imperative; imposing substantial additional
bureaucracy on employers could result in a reduction in the pool of available employers interested in training.

Moreover, we have concerns that the process may be overly bureaucratic and not add the desired value. This
could be a serious issue in larger and more geographically dispersed States and could also result in impeding
the employment of young people.

Further, IBSA notes the overlap with the role of the Australian Apprenticeship Centres which actively educate
employers about their responsibilities and their dealings with RTOs. We would not support duplication of
existing awards and recognition schemes. The establishment of another excellence recognition program
needs to be considered taking into account the many programs that already exist.

4. Establish structured support for employers to provide high quality employment and workforce
   development experiences for eligible apprentices and trainees. The focus of Australian Government
   support should be on assisting employers to provide high quality on-the-job and off-the-job training
   through support services such as mentoring and pastoral care.
IBSA supports the recommendation but is concerned with the definition of ‘eligibility’ consistent with the
introduction to this response. There may need to be some consideration of how a broader service may work
with employers who prefer to employ directly rather than through Group Training organisations.

5.   Redirect current Australian Government employer incentives to provide structured support services to
     eligible apprentices and trainees and their employers in occupations that are priorities for the Australian
     economy. While a wide range of occupations should be trained through apprenticeship and traineeship
     pathways, Australian Government support should focus on occupations that have tangible and enduring
     value for the economy – both in the traditional trades and the newer forms of apprenticeships and
     traineeships, such as community services, health services and information technology.

IBSA is concerned that Recommendation 5 will have a major impact on industry access to business services
skills that are required and used across all industries and businesses. IBSA has concerns in relation to the
definition of ‘eligibility’.

It should be noted that the majority of incentive payments are paid on completion which strongly favours
traineeships over apprenticeship based on the duration of each. However the compliance demands are now
more onerous on employers and to introduce a new eligibility system would clearly disadvantage some critical

Apprenticeships and traineeships are particularly important in building the base skills in entry level
workforces, skills that are transferable and increase employability for the individual along with reliability for
the business. We are concerned that proposed changes to eligibility for Australian Government employer
incentives would be very negative for these functional business skills in non-trade areas of Australian

IBSA is concerned that the proposed structure for eligibility for the Australian Apprenticeships system rests on
the Specialised Occupations List that has been formulated for assessment of migration transferability. We
believe that the Specialised Occupations List is not the appropriate list for the purpose of assessing entry and
post entry industry skills needs particularly in the non-traditional trades’ areas that underpin the Australian
innovation economy. Specifically highlighted in the list of ineligible occupations are IBSA industries’ clerical
and administrative workers, occupations that cut across all industries.

In addition, the report notes that females are the highest percentage of the non-trades workers. The
proposed change would therefore have a significant impact on female participation in the workforce,
including women returning to the workforce who heavily utilise the Certificate III in Business.

IBSA would like to see more detail around the proposed solution “to mitigate by implementing strategies to
assist females to enter non-traditional apprenticeships and traineeships.” Raising the status of
apprenticeships as a valued career choice for females has been an ongoing objective for at least two decades
with only very modest success to this point. IBSA industries provide valuable, non-traditional trade choices for
both males and females which will boost participation and pathways development for the individuals,
businesses and the economy.

6. Reinforce the need for a shared responsibility for the Australian Apprenticeships system by establishing an
   Employer Contribution Scheme in which employer contributions will be matched by the Australian
   Government. Employers who meet defined benchmarks for training and support of eligible apprentices and
   trainees would have their contribution rebated, either in part or in full.
IBSA understands that this recommendation is not supported by the Minister.

7. Facilitate a cooperative and flexible approach by governments and industry bodies to allow for the
   continuation of both training and employment of apprentices and trainees during periods of economic
   downturn. Early intervention should be a key element of this approach. Support for a range of measures to
   be in place until economic recovery occurs could include:
    reduction of work hours offset by additional training
    increased off-the-job training
    placement with other employers within the industry
    increased mentoring and support.
IBSA supports the recommendation; counter-cyclical measures will ensure labour flow.
8. Formally regulate the quality of VET in Schools within the VET system to enhance the consistency and
   quality of training across all jurisdictions and to recognise the potential of VET in Schools as a pathway into
   an apprenticeship or traineeship.

IBSA supports the recommendation and suggests that the new Australian Skills Quality Authority is the
appropriate body to undertake this. IBSA notes that VET in Schools and apprenticeship/traineeship pathways
are sometimes incorrectly viewed as having the ‘same outcome’. While this is a definitional issue, it has
implications for State funding.

9. Increase national consistency in preparatory training by directing the National Quality Council to develop
   definitions for pre-apprenticeship and pre-vocational training.
IBSA supports the recommendation.

10. Provide additional support for apprentices and trainees who face specific challenges, such as:
     Indigenous Australians
     disability
     located in regional or remote Australia
     having poor language, literacy and numeracy skills.
    Australian Government support will be provided to these apprentices, trainees and their employers to
    assist in overcoming barriers to participation and completion of their apprenticeship or traineeship.
    Support will be through the provision of tailored structured support services and the continuation of some
    current Australian Government employer incentives.
IBSA supports the recommendations around improving the preparation for apprenticeship candidates and
providing support for foundation skills and flexible opportunities for those with special needs to help develop
careers in remote or regional areas. However, the report is deficient in assessing the success or otherwise of
existing arrangements and what sort of increase in benefit a marginal increase in support would provide.

The report acknowledges the variability of return on Australian Government investment in training and
recommends that eligibility for financial support and investment in apprenticeships and traineeships should be
linked to high priority areas for the Australian economy and linked to equity objectives. While IBSA agrees
that traditional trades are a high priority, we wish to emphasise that business, financial, information
technology and associated services play a critical role in Australia’s economy and support enterprises across all

11. Implement a strategy to raise the status of apprenticeships and traineeships including promotion as a
    valued career choice for both males and females. This should be led by the Australian Government, in
    consultation with state and territory governments, industry bodies and unions. The National Custodian,
    when established will lead the ongoing effort to raise the status of apprentices and trainees.

IBSA supports the recommendation. We note, however, that a significant measure of status is engagement
and that enhancing engagement has the effect of improving status. IBSA looks forward to a strategy that
rationalises current activities such as media campaigns, advertising, State and Territory and National Training
Awards programs etc to enhance the status of apprenticeships and trainees.

12. Promote a culture of competency based progression in apprenticeships and traineeships, in partnership
    with industry bodies and employers. Additionally, a greater acceptance and achievement of competency-
    based wage and training progression should be supported by all stakeholders.
IBSA supports the recommendation.

13. Improve the implementation of Recognition of Prior Learning and Recognition of Current Competence and
    support provisions for such recognition in modern awards to ensure that flexibility and mobility are
IBSA supports the recommendation.

14. Support a review of apprenticeship and traineeship provisions, wages and conditions by Fair Work
    Australia, considering:
     the removal of barriers to competency based wage progression in modern awards
     apprentice and trainee award pay compared to going rates of pay
     age, diversity and circumstances of commencing apprentices and trainees
     allowances (travel, tools, clothing, course fees)
     cost to apprentices and trainees of participation in an Australian Apprenticeship
     part-time and school-based arrangements
     recognition of pre-apprenticeship and pre-vocational programs
     supervision ratios for apprentices and trainees.
IBSA supports the recommendation and believes that Fair Work Australia will address any sensitive issues
around payments.

IBSA believes that there is a critical nexus between entry level skilling and better future industry employment.
While industry uses different parts of the training system for different purposes, the systemic support for
apprenticeships and traineeships in business, financial and information technology services continues to
support the Australian Government in achieving its skills, productivity and workforce participation targets.

We commend the Expert Panel for its recommendations to address, simplify and improve issues within the
system to help support employers and individuals succeed in their skilling and productivity outcomes.

We wish to highlight the crucial role of the broad services industries in the innovation and business economy
and encourage the panel to reconsider the criteria for eligibility for structured support.

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