Workforce | Skills

1.1 million kids who are growing up in poverty in Australia today

There's 1.1 million kids who are growing up in poverty in Australia today, The Smith Family CEO, Dr Lisa O’Brien has told a CEDA audience.

Speaking at State of the Nation, Dr O’Brien discussed creating a resilient workforce for the future, with Siemens Chief Executive, Jeff Connolly, Non-Executive Director, Lisa Paul AO PSM and CSIRO and Jobs for NSW Chair, David Thodey AO.

“They are a big part of our future workforce so we need to make sure that they have the skills that they need in this rapidly changing world,” she said.

“There is significant inequality in educational attainment in Australia.

“It puts those kids on a pathway to under achievement.

“All young people that transition from school to further study and into work, it's a massive transition.

“There are trends, deuces of global economic influences that are impacting on the labour market that are particularly affecting young people in making that transition.

“We know there are less entry-level jobs, especially low-skilled jobs, we know that those transitions from school-study-to-work, they're no longer linear and what sits alongside that is that there's an increase in part-time work and casualisation of work.

“So many young people have to go through that pathway of part-time or casual work until they finally get into a full-time job if in fact they do.

“Youth unemployment is 13.5 per cent – more than double the adult unemployment rate and that represents 650,000 young people who are either unemployed or under employed.

“If you focus on our most vulnerable young people who are growing up in disadvantaged communities across Australia…the youth unemployment rates in those communities are well into the 20s and in some communities, it's over 30 per cent.

“By age 24 if you're in the lowest quartile of socioeconomic status only 60 per cent…will have a full-time job or will be in full-time study and it compares pretty unfavourably to 83 per cent if you're in the top quartile.

“Things are tough for these kids and…it's really tough for the ones who leave school early. 

“Too many kids in our poorest communities don't finish year 12. 

“For those kids we know that puts them on a trajectory that will mean that there life outcomes are worse both in terms of employment but also their health outcomes.

“The Mitchell Institute did a study two years ago that tried to cost what the impact was on our society of every kid who doesn't finish year 12 and it's just under a million dollars for every child over the course of their lifetime - through those extra expenses of health care.

“It's an issue that we all have a part to play in and these are issues that will absolutely affect us as a society. 
“We all need to take responsibility now for how we equip all of our young people with the skills, the knowledge, the attitudes, and sort of behaviours needed if they're going to navigate this incredibly complex scenario that's ahead of them.

“A way in which we do that is by greatly increasing vocational and industry based training. We know that that's highly engaging for young people, if they've had a positive experience of vocational training or work experience it absolutely builds their aspirations and it further engages them in their learning.”

Non-Executive Director, Lisa Paul AO PSM, also discussed the role of vocational education in creating a resilient workforce. 

“I'd love to see a joined up tertiary sector – not a new idea, (but) hard to achieve – which offers students a seamless experience between vocational education and training and higher education,” she said.

“If we treat the other 4000, or so non-TAFE vocational education and training providers on a level playing field where they are regulated but allowed to flourish, we would have a more robust and efficient marketplace for vocational education.

“In particular I think we should treat TAFEs as we treat universities. Why shouldn't TAFEs to be able to control their own resources entirely, do all their hiring and firing, their own workplace relations and so on.

“Why not be governed by an independent council? Universities are set up under state legislation and audited by state auditors but receive Commonwealth funding and operate autonomously.

“TAFE could still meet community service obligations and state governments could still do localised planning for their TAFEs and the Commonwealth could manage a joined up tertiary system.

“The reason I dwell on vocational education training is that there is a lot of jobs growth in areas that require vocational education and training qualifications.” 

Siemens Chief Executive, Jeff Connolly, discussed the Industry 4.0 taskforce.

“Industry 4.0 is basically describing prospectively for the first time a revolution, the fourth Industrial Revolution. Most industrial revolutions of the past have been described after the event, and after the carnage, by historians,” he said.

“It is a societal framework and it is a framework that's actually trying to recognise that the complexity of what we've got to deal with and that all of those elements need to be working in parallel to prepare us for the future.

“What's different about this revolution is that it's enabled by huge computing power and the collection of massive amounts of data and as a revolution, it's coming on to us faster than any of the other revolutions we've had in the past and it is arguably much much more profound.

“The consequence, if I talk about what we've been discussing in Australia is that the way I grew up in the industrial world and the models that firms used and believed in are fundamentally being challenged.

“We would have for example stood back in many cases in Australia and taken finished product from educational institutions and that indeed is not sustainable going forward.

“Firms, if they want to maintain the operating environment they've enjoyed over my working lifetime, need to shoulder much more responsibility because the dislocation of workforce that's described in the fourth Industrial Revolution is much more profound than we've seen before and requires a much better organised way of transitioning those existing employees and providing the skills for the future.”

CSIRO and Jobs for NSW Chair, David Thodey AO discussed four major trends seen today: roles of corporations, fast growth companies, the impact of automation and the ageing population.

“We've seen an enormous decline in employment in corporations – this is globally,” he said.

“In New South Wales…over the last five years there was a net increase of 600,000 jobs over a five-year period roughly – 1.1 million new jobs in smaller medium business and there was half a million jobs lost in corporate Australia, and then about a hundred thousand in public sector, primarily in health.

“Fast growth companies…not all technology companies…some just very innovative companies…suddenly got on a roll and they created jobs. 

“The impact of automation…is very real but that's nothing new. Automation has been a part of what we've seen in society and history for many many years. The big change is…the jobs going into knowledge workers.

“This future of knowledge work, where will it fit? And also, what are these skills that are going to be useful in that world with all this automation? 

“The fourth trend that's very important is the ageing population…a very big part of what we need to consider as we go forward.

“While we've had enormous immigration growth, we need to make sure that we're managing this transition of mature age workers like myself, and what does that mean for retirement? What does it mean for reskilling? When do people leave the workforce and the new people come through?”