Call for failed past policies

Simon Cowan

21 May 2020 | IDEAS@THECENTRE

As we get nearer to all major coronavirus restrictions being lifted, again we are seeing calls to reduce our migration intake, cutting off the supply of foreign skilled labour and forcing businesses to deliver training and reskilling opportunities to Australian workers as a way of boosting economic recovery.

It’s worth unpacking the generic terms ‘skills’ and ‘training’ because it is nowhere near as simple as glib calls would make you believe.

First, a lot of the more generic ‘training’ delivered to the unemployed is useless, serving only to enrich training providers. Subsidising it further, or making it compulsory, will only result in a proliferation of dodgy providers and scams — as it did in the vocational education sector.

Second, workers are not blank boxes into which skills can be installed like a computer program. The assumption that they can be trained up quickly and easily is wildly optimistic. Many lack the aptitude or interest for available jobs.

An even bigger issue comes from the difference between a certificate denoting supposed skills in an area and experience proving real competence. Training may deliver the former, yet it is overwhelmingly the latter that is needed.

The simple fact is that if there was a benefit to business in delivering a certain type of training, they would be doing so already. If they aren’t, it is because the costs outweigh the benefits.

Proponents of this ‘Australia first’ solution like ‘boosting manufacturing’ or ‘investing in skills and training’ know this; they are calling for businesses to shoulder the cost of developing skills AND experience.

In many industries, this was how it used to work. Large businesses, often government-run, heavily unionised enterprises, would take far more apprentices, trainees or graduates than they needed. They would train them up and see them filter out into the broader workforce.

This was only a viable model when market competition was severely restricted. In a global market, with ever-increasing complexity of skills, this is a losing proposition for business. It will also make Australian companies less competitive internationally. Ultimately, this costs jobs.

This is really a call for a return to the failed policies of the past. Proponents want to disempower consumers and individuals and instead give that power back to government, unions and business.

That ‘cure’ may well be worse than the disease.

This is an edited excerpt of an opinion piece published in the Canberra Times as As we edge towards post-COVID life, Australia’s economic choices remain the same

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