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Skills, Training and Workforce Growth – Construction Workforce

Cassy O'Connor MP  -  Wednesday, 8 June 2022

Tags: Housing

Ms O'CONNOR - Minister, a significant challenge in responding to the housing crisis is the limitations of the construction workforce, which we can all acknowledge. According to data from the National Centre for Vocational Education Research, commencements in construction trades workers, construction trades have increased by 105 per cent. However, cancellations and withdrawals have increased by 137.8 per cent in the same period.

In the 12 months to September 2021, there were 475 cancellations or withdrawals compared to 385 completions. This trend has been going on for some time.

Does the Government recognise it and is your Government doing anything to address the high and increasing cancellation and withdrawal rate from construction trades training?

Mr JAENSCH - You may not have been here earlier when we were talking about Tasmania's performance in the national context on apprentice and trainee indicators.

Tasmania recorded 51.7 per cent increase in commencements with private sector employees' employers during 2021 compared to 2017. There were 11 075 apprentices in training in Tasmania as of 30 September 2021 and 7800 new apprentice and trainee commencements in the 12 months to 30 September 2021. Where you are going to though is completion rates.

Tasmania does have the highest completion rates in Australia with 55.9 per cent of apprentices and trainees completing their training contract compared to 48.3 per cent nationally. What is driving that trend, even though this is clearly a nationally phenomenon, I would be happy to defer to someone who is closer to the business than I am. Anecdotally, in my industry round tables discussions, there is a lot of work around.

For some apprentices and trainees, on apprentice and trainee wages, pressure in the workforce means there are other ways for them to earn more without finishing their qualification right now. We are competing with the market for these apprentices and trainees to finish their time, with the way our apprenticeships are set up these days.

Some of the conversations raised with me are is an apprenticeship a competitive offering still in a market like this and what are our alternatives. This is some of the thinking I am keen to have more discussion happening on so we can be not so much talking about young people these days not sticking out their apprenticeship. We are in a market where they have got lots of options right now and maybe we need to be offering something more attractive to them if we are going to have them in our industries longer-term with proper skills and qualifications.

But I may ask if anyone to my left or right has any other insights that they could offer.

Ms PATERSON - I also note that there's a lot of incentives in the system at the moment, and that is driving competition for high performing employees.

Ms O'CONNOR - Minister, when we were talking earlier about start up and completion rates for people undertaking traineeships in the construction sector, I didn't hear any evidence that the Government has a strategy to grow the construction workforce and particularly the housing construction workforce. Would that be a fair assessment? There is no real strategy here, just sort of a wing and a prayer and a hope that because there's so many projects happening it will sort itself out, isn't there?

Mr JAENSCH - I think what you're looking for is the Tasmanian Building and Construction Industry Workforce Action Plan.

Ms O'CONNOR - I possibly was looking for that but I've never heard of it.

Ms WHITE - You wouldn't be alone.

Mr JAENSCH - We have that.

Ms O'CONNOR - What does it give effect to? I don't want you to read out the whole brief but what does that strategy do in terms of tangibly growing the construction workforce? Our interest is particularly in the housing construction workforce.

Mr JAENSCH - We are running this twice.

Ms WHITE - It is an excellent question. Ms O'Connor has my full support for asking that question.

Ms O'CONNOR - She's just hoping she'll get an answer this time.

Mr JAENSCH - There is a range of initiatives there. I will wait for the work on the Workforce Action Plan but I can report on a couple of things that sit alongside it. We have committed to creating our High Vis Army to support a 25 per cent boost in the building and construction sector workforce. A memorandum of understanding was signed on 16 June by Keystone Tasmania, Master Builders Tasmania, the Housing Industry Association and the Civil Contractors Federation that committed the parties to a collaborative and coordinated approach to support growth and productivity of the workforce. Overall, the High Vis Army program has committed $4 million to the Master Builders Association and $4 million to the Civil Contractors Federation to encourage more Tasmanians to pursue careers in their industries. There's also $1 million for the Housing Industry Association to increase apprenticeships by establishing a new group training organisation in Tasmania -

Ms O'CONNOR - We heard about this at last year's Estimates.

Mr JAENSCH - and we are working closely with training and workforce development provider Keystone Tasmania.

There is $1 million extra in the 2022-23 Budget for us to be opportunistic and roll out initiatives more urgently to attract the skilled workers we need and complement the work already underway through peak industry bodies.

There's also the Government's building and construction training policy which assists in opening up local training opportunities. The current policy requires that a minimum 20 per cent of total labour hours worked in government-funded building and construction projects be undertaken by apprentices or trainees where the project value is more than $250 000.

Ms O'CONNOR - That's good.

Mr JAENSCH - The Government has committed to expand the scope of the policy to civil infrastructure projects and GBEs. From 1 July this year, 10 per cent of labour hours on labour hours on civil construction projects valued at over $5 million will support workers undertaking training. The Government will also work with GBEs to develop a model that recognises the capacity and the responsibility of government businesses like TasNetworks and Hydro to be training grounds for the industry. Mr Evans will talk to you about the Tasmanian Building and Construction Industry Workforce Action Plan.

Ms O'CONNOR - See if you can do it in 60 seconds or less, Mr Evans.

CHAIR - You do have six minutes.

Mr EVANS - On our website we have the Tasmanian Building and Construction Industry Workforce Action Plan which was loaded in March 2021 and we also have the Civil Construction Industry Workforce Plan 2019-25. I could open them up and read them to you if you want.

Ms O'CONNOR - No, that's all right, now that I know they are there and where they are I will go and have a good look at them.

Mr EVANS - There are a range of them on the website, some of them across all sectors, some of them are reports, some of them need updating, but in those two particular sectors -

Mr JAENSCH - It covers attracting new people to the sector, mentoring for success and retention, growing and sustaining diversity, building business resilience and productivity, and sectoral strategic planning.

Ms O'CONNOR - Minister, I really hope you are successful in these plans and strategies so we have more workers in housing and construction. In your answer before when I talked about the drop-off rate for training, you suggested that part of the reason for the drop-off in completion of training is that young people are batting away jobs left, right and centre, when the data is really clear that over at least the last two years the employment participation rate of Tasmanians under the age of 25 has been in decline. Something is not clicking here.

Mr JAENSCH - It is an unusual market at the moment. Emerging from COVID-19, there has been a lot of investment and stimulus around, there is a boom on here, but there are also pressures nationally. This is something I want to understand a bit more. We are doing better than other states in terms of keeping people to completion, but it is still in the order of only 50-something per cent, which to me is low; it is higher than the national average, but low. I am keen to understand what else we can do to make that entry level of the industry more attractive and sticking with it more attractive for those young people.

Ms O'CONNOR - That's right.

Mr JAENSCH - Whilst our commencements of apprenticeships have increased dramatically, are apprenticeships as we have had them in the past the right model for now? Are they competitive with other options that young people have, or think they have, or is this a blip in the market where there is casual work around that is more attractive to them? Anecdotally you see a bit of that around. I am still learning about this sector but these are discussions we have been having with people in the industry who are asking the same questions.