Leanne Foresti is an Independents for Canberra candidate for Ginninderra.
In May 2021, fed up with the ongoing lack of support for small business in the ACT, I sent letters to the Federal and ACT Governments. In those letters I detailed how the worsening skills and labour shortages was severely impacting small businesses in the ACT, including the concrete remediation business I run with my husband.
All reports at that time blamed the COVID pandemic. However, the reality was that the skills shortages in Australia was already an ongoing issue and had been for years. COVID had merely exacerbated the issue and forced it into the collective consciousness of all Australians, as struggling businesses desperately tried to keep their heads above water.
In October 2021, the ACT Chief Minister [Andrew Barr] was quoted in local media as saying, “It’s businesses that need to step up at this point to both attract new workers by offering competitive wages, salaries and conditions and it’s businesses that need to retain their existing workforce.
“And if there are better employers in Sydney or Melbourne who pay more and who look after their staff and who value them better than the equivalent employers in Canberra, the Canberra employers will miss out.”
As a small business owner, I felt enraged reading this. It struck me that the Chief Minister was completely out of touch with the realities of running a small business in the ACT.
Our small business community has “stepped up” so many times that we’re at the point of collapsing.
Attracting and retaining staff in the ACT has consistently featured as a top priority in ACT Government policy strategy documents since well before the Chief Minister’s appointment in 2014. You can find an ACT Government strategy for attracting skilled health professionals dating back to 2006. It was confusing and frustrating to see the Chief Minister openly contradict his own party’s policies by claiming that addressing workforce shortages was a matter for businesses, not for the government.
When a region has a reduced skilled workforce, the impact on a business’s viability is significant. Businesses in the ACT have been paying unsustainably high wages to attract and retain staff for years. Many employ underqualified or inexperienced staff because there’s no other option. The qualified and skilled workers, on the other hand, have the pick of the crop when it comes to jobs, and they tend to bounce from company to company chasing the highest wage. With the current cost of living pressures, wages are now the biggest draw card for employees – and understandably so. But this has forced small businesses to compete against each other, driving up wages even further.
The Federal Government’s short-term response to address the skills and labour shortage has been to raise caps on visa numbers, and the long-term solution is to increase funding for skills and training.
The problem with the short-term solution is the skilled migration sponsorship process is a long, complex and laborious one. It’s also very expensive. On top of the nomination and application fees, businesses are charged a Skilling Australians Fund (SAF) levy. This equates to between $1,200 and $1,800 for every year that you sponsor a worker. That money is collected by the Department of Home Affairs and managed by the Department of Employment and Workplace relations. It is then divvied up like prize money amongst the state and territory governments, provided they can demonstrate that they have programs in place to increase participation rates in skills training.
The ACT has been receiving between $1.6 million to $5.7 million since the inception of the SAF in 2018. Obviously investing in programs and incentives that increase participation rates is a great thing; getting more people into apprenticeships is vital. The problem is that completion rates for apprenticeships and traineeships are sitting at just above 50 per cent. This means much of the hard-earned money that small businesses pay to the government in order to sponsor skilled migrants to fill short-term workforce gaps, is funding programs in the ACT that are not delivering the outcomes needed to secure a skilled workforce into the future.
Many Registered Training Organisations (RTOs), including CIT, are no longer delivering key trade courses in the ACT. The nearest solid plastering course, for example, is available in either Sydney or Melbourne. Earlier this year we decided to onboard two trainees for traineeships in a Certificate III in Concreting. Training contracts were drawn and signed through the ACT apprenticeship provider Sarina Russo and an RTO was locked in. Weeks later, we were informed by the RTO that, unfortunately, we were not eligible to host a trainee, as we were not an actual concreter, we only repaired it. We therefore rely on on-the-job training to upskill our workers, which impacts our productivity.
A study by the OECD found that Australian apprenticeships were rigid and depended more on duration rather than competence. The system has not kept up with changes in technology or market demand.
We need to change the way we are delivering our apprenticeships and traineeships. A deeper understanding of individual learning styles is key in developing courses in vocational education that will better engage students and improve completion rates. We should explore piloting vocational education programs where small businesses can work collaboratively with RTOs in delivering customised on-the-job training programs through a micro-credential framework. This would minimise the impacts to productivity and upskill students while they are earning a competitive wage.
Adelaide is currently piloting an undergraduate program where students are paid to attend work and study at university while receiving on-the-job training from skilled supervisors. They graduate after five years with a degree from the University of South Australia, a trade certificate, and basically a 100 per cent guarantee of a job. The ACT Government needs to take the lead in piloting solutions here in Canberra.
Half of all Australian small businesses aren’t even breaking even. One of the biggest costs in the ACT is workers’ compensation insurance, of which Canberran businesses pay the highest premiums in the nation. Add to that electricity, water, high rents, high payroll tax, regulatory costs, and the ‘Canberra tax’ contained in all operational costs. The consequence of these high costs is that local businesses cannot remain competitive if they’re competing in any way with interstate service suppliers.
Is it any wonder local small businesses are closing their doors in droves? Maybe it’s time for the ACT Government to do their fair share of the heavy lifting, because small businesses have done enough.
