Second Reading

Resumed from 9 May.

HON ALISON XAMON (North Metropolitan) [12.46 pm]: I only began my contribution to the second reading debate on the Pay-roll Tax Assessment Amendment (Exemption For Trainees) Bill 2018, so for members’ interest I will rehash briefly some of what I said. I acknowledge that there was a general consensus about the need for ongoing training, particularly that it is important we ensure there is ongoing training for employees in order for them to be able to address changes in the way the work is performed, and industry disruption. It is also necessary because people may need to undertake career changes and it enables people to undertake career progression. It is obviously important to enable people to undertake promotional opportunities and it is quite critical that we ensure employees keep their skills and knowledge current. As I have said, this bill highlights the critical question of who pays for this, because it costs money. We have very clearly seen that successive federal governments have been slowly turning their backs on training. It was noted in the briefing provided by the government that nearly half the federal funding has been removed from the training system over the last decade or so. That is usually dressed up in the language of opening it up to the market, but in reality it has effectively resulted in a sustained attempt to degrade a system that in the past was one of the best in the world and ensured equity. I will have a bit more to say about that later.

The current national partnership agreement that the federal government is attempting to get the states to sign up to is for a dramatic drop in funding. We are talking about around $54 million over the forward estimates. Also, it appallingly places a limit on how those funds can be spent. With the requirements to co-fund, this agreement would severely restrict Western Australia’s ability to pay for the rest of the training that we know we need to undertake in this state. It is effectively going to cost us 23 000 training places a year. Much to my deep concern, it also restricts the ability of the state to support funding in areas of critical need and emerging critical need. We already know that there are serious concerns about meeting workforce requirements in the future, particularly in aged care and health. We also know, from a workforce development perspective, that we are looking at a significant deficit to ensure that we have the staff available to make the National Disability Insurance Scheme work. These training places would inevitably come out of TAFE. The national partnership agreement is effectively trying to get the states to sign up to exactly the opposite of what we want and, importantly, is the opposite of what is best for the community. Effectively, this bill is an attempt to backfill some of that funding, which is an insidious situation that the state has been put in. During this financial year, while the relevant legislation has been held up in the federal Parliament, backfilling has been possible due to the previous drops in training demand, which, by the way, is largely speculated to be because of the unaffordability of TAFE. This is an emergency measure only and will not work as training demand swings upwards.

We already know that the state has very limited levers to pull when it comes to raising revenue. I believe that no party, if we had the money available to us, likes payroll tax and wants to see payroll tax. In fact, as my colleague Hon Diane Evers has pointed out, it is Greens’ policy to not have any payroll tax at all. The reality is that if this bill does not pass, there is a very real risk that we will lose a huge number of training places. This loss will most affect those students who are not as lucky as others to already be in employment and earning over $100 000. I also note, given the nature of the federal legislation, that the amount of money that would be made available to the state if we did sign up, remains unknown and is highly likely to be unstable from year to year. That is a disgraceful way to treat the training sector. I am appalled that the federal government would put Western Australia in this position. It is completely failing to listen to the very clear advice that is coming from our state about our areas of need. It is even worse because all the states are in the same position as us. The funding model and the national partnership agreement need to meet the training needs of the states. What we have been presented with right now is guaranteed to fail. We already know that the states and industry understand what their training needs are. As I have said in this place before and as I will continue to say, the state is far better placed to deliver training services than the commonwealth. Far too often, as in so many other areas, the commonwealth is simply too far removed to know what we need within Western Australia.

This bill effectively refocuses the payroll tax exemption on new employees. It is incentivising the training of new employees who are earning around or below the average Western Australian wage. The expectation is that this is most likely to mean training at lower Australian qualifications framework levels for new entrants into the workforce. The courses cost less to deliver, they provide new employees with the tools to ensure that they can perform within the workforce and they assist in creating job security and also, importantly, desirable industry skills. These will be great outcomes for those individuals and also for those businesses and more generally for our society. Helping new employees get a solid grip on the employment and education ladder should be a fundamental priority for all of us. It is most certainly a priority for me.

Employees who are new to an employer but not new to the workforce would also be eligible for the exemption. Employers are still incentivised to employ and train people who change careers and also people who are re-entering the workforce. There are many good reasons to train existing employees. I briefly mentioned some of those in my opening remarks. Additionally, it is one of the ways that we can ensure that we retain employees. As has already been said during this debate, I want to reiterate that there is nothing in the bill that prevents employers from providing training for their existing staff or from accessing subsidised places to train their existing staff. As was well articulated by Hon Colin de Grussa, there are good reasons to do that. It makes good business sense to undertake that anyway. It is in the interests of industry to do that. All it means is that they will not get a tax exemption because they will be pursuing good business sense.

I also note that in a number of white-collar industries, ongoing training is required to maintain certification. I am one of those people. Yet we do not seem to blink twice at this category of workers paying for training out of their own pocket. If I wish to remain certified as a lawyer, I am expected to pay a minimum of $1 000 a year in continuing professional development in addition to insurance and my legal practice certificate. There is certainly no guarantee that white-collar workers will be earning over $100 000. We also do not think twice about those people who are in the growing gig economy who have to pay their own fees and receive no incentives. A subsidised place is the only support they receive towards any form of training fees.

I had a quick look at one suite of qualifications that are popular for payroll exemption traineeships, specifically the competitive systems and practices qualifications—certificate III through to the advanced diploma. These qualifications are generally about business practice optimisation. Again, during this debate, we have too often spoken about employee-funded training as if it is a huge favour that employers are doing for employees and that without the exemption, there is no reason to train employees or if we want to really start to go over the top, from the Chamber of Commerce and Industry of Western Australia’s perspective, apparently there is no reason to even retain employees. The reality is that it is in the interests of businesses, as I have already said, for this type of training to be undertaken. In my experience, the decision about training is generally a collaborative exercise with employers and employees working together to identify the skills a business needs and the employee generally wants to gain a more efficient, effective and often happier workplace as a result of undertaking training. Training and qualifications such as these are already a huge benefit to businesses, regardless of whether additional benefit is gained through payroll tax exemption. Additionally, the state government has identified these particular courses as being subsidised as general industry training courses. That does not necessarily mean that these courses can be done through TAFE. This particular suite of courses is not currently delivered by any Western Australian TAFE college.

Madam President, I seek leave to continue my remarks at a later stage of today’s sitting.

Leave granted.

Debate adjourned until a later stage of the sitting, on motion by Hon Martin Pritchard.

Sitting suspended from 1.00 to 2.00 pm


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