GLASS PYRAMID ‘EXCLUSIVE’ SEALED SECTION CONTENT

We have heard a lot over the last few months about the HECS system and $100,000 degrees.  While that debate has been very important it has overshadowed the urgent need for reform of the model we use for trade training.

A TECS – Trade Education Contribution Scheme – would address, what we have never really come to grips with – an effective replacement for the long standing, but now thoroughly defunct, traditional master indentured apprentice model.  Plus it would be relatively simple to implement.

The traditional master apprentice model of trade training was only viable with a system of indentured labour to ensure that the master’s investment was worthwhile. In return for being trained the apprentice would contract to provide labour to the master for a fixed period.

As the enthusiasm for indentured employment waned it was hard for a Master Tradie to justify the investment in training an employee who could leave as soon as their level of training allowed them to attract employment offers from employers who had not incurred the cost of training.  Further, the low wages for apprentices, reflecting their lack of valuable skills and the cost of their ongoing training, meant that commencing apprenticeships was also unpopular with young people.

The solutions that have been attempted to date –  external training through TAFE fused to a modified master apprentice model has not been successful and we now find ourselves in the position that we lack skilled tradespeople in many trades and we have many young people desperate for an opportunity to learn a trade and no openings available.

The TECS system would work as follows

Masters who demonstrate they have the skills and ability to teach get accredited as Master Teaching Tradie. They are paid an amount by the govt for taking on and teaching an apprentice. A portion of the amount paid to the Master is debited against the apprentices TECS account.  This is no different to the way a university students HECS account is debited with an amount that reflects a portion of the cost of paying for lecturers, tutors, labs etc.

Why should a university lecturer get paid by the government for teaching but a Master Tradie be expected to extract their fee from the apprentice?

Why should an apprentice be expected to pay for their education up front while their white collar cousins get to defer the cost of their education to when they are earning decent dough?

The apprentice is paid an apprentice wage by the teaching master that reflects their limited worth as a partially skilled tradesman, the amount naturally rises as the apprenticeship proceeds and the value of the apprentice to the employer increases. If the Master Tradie is ‘dreaming’ and underpays, the apprentice can find a new Master Tradie to continue their training at a market rate.  This ensures that the Master only pays an employee what they are worth at the time.  Without a contract of indenture a Master Tradie currently has no certainty that time and money invested on training will be recovered.  No surprise that few Master Tradies are keen on taking on the responsibility and cost of training apprentices – even if they would like to pass on their skills.

The apprentice also gets a payment from the govt to encourage young people to accept the lower pay of apprentice positions. This ‘make up pay’ will allow those undertaking apprenticeships to receive a combined income that is attractive.  Again a portion of this additional payment is debited to their TECS account.

At the end of the apprenticeship as their income reaches the TECS repayment thresholds they start to repay the amounts debited to their TECS account.

To the extent that it is considered desirable for apprentices to also attend courses at TAFE they can continue to do so with a portion of the cost debited to their TECS account.

Oh and in case you are wondering – this is not an opportunity for the banks to create more debt bondage.  All TECS accounts are to be run along the same lines as the HECS accounts.

Advantages

• Masters are paid to provide training to apprentices. Only true Master Tradespeople need apply and they get paid for passing on their skills to a new generation.
• Masters only have to pay the apprentice what they are worth as a semi skilled employee and thus are not discouraged from taking on apprentices.
• Apprentices will find it easier to find apprenticeships
• Apprentices will receive a combined income (wages + TECS supplement) that is attractive while they progress through their training.
• Apprentices will only start to repay their TECS as their incomes rises as they become a skilled and qualified tradesman.

TECS also avoids the problem of some current proposals that argue that the ‘solution’ is to force apprentices to accept even lower wages as a method of inducing a master to train them. Those solutions are a clumsy method of dealing with the end of the tradition of master apprentice indentured labour.

It is about time that the HECS model was extended to where it is really needed – the trades. Too many kids end up at Uni studying something they are not interested in because finding good trade training opportunities is too difficult.

All other Glass Pyramid recommendations for managing the economy to reverse the private bank loving, debt driven, ponzinomic, manufacturing destroying model of economic management in Australia still apply.