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2012 ITAB Market Effectiveness Report

Higher Education and Skills GroupDepartment of Education and Early Childhood

Development

30 March 2012


ContentsGlossary......................................................................................................................................... i

Executive Summary....................................................................................................................... i

1 Introduction.....................................................................................................................10

2 Industry employment forecasts.......................................................................................12

3 Overview of market effectiveness....................................................................................15

4 Automotive......................................................................................................................17

5 Building and Construction................................................................................................23

6 Business Services..............................................................................................................32

7 Community Services and Health.......................................................................................40

8 Culture and Recreation....................................................................................................46

9 Electro-technology and Communications........................................................................52

10 Food Processing...............................................................................................................60

11 Forestry............................................................................................................................66

12 Furnishing.........................................................................................................................72

13 Manufacturing and Engineering.......................................................................................79

14 Primary Industries............................................................................................................87

15 Racing...............................................................................................................................94

16 Services............................................................................................................................99

17 Textiles, Clothing, Footwear and Leather.......................................................................107

18 Transport and Storage....................................................................................................114

19 Water.............................................................................................................................120

Appendix A : Industry concordance..........................................................................................124

Appendix B : Industry consultation...........................................................................................129

Appendix C : Australian Apprenticeships – National Skills Needs List, January 2010................130Limitation of our work..................................................................................................................131

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© 2012 Deloitte Access Economics Pty Ltd

ChartsChart 2.1 : Industry employment growth in Victoria – 2012 (ITAB structure)............................14

Chart 4.1 : Employment outlook – Victorian automotive industry.............................................20

Chart 4.2 : Skilled Vacancy Index – Victorian automotive industry.............................................20

Chart 5.1 : Employment outlook – Victorian building and construction industry.......................28

Chart 5.2 : Skilled Vacancy Index – Victorian building and construction industry......................28

Chart 6.1 : Employment outlook – Victorian business services industry....................................36

Chart 6.2 : Skilled Vacancy Index – Victorian business services industry....................................37

Chart 9.1 : Employment outlook – Victorian electro-technology and communications industry.. . .56

Chart 9.2 : Skilled Vacancy Index – Victorian electro-technology and communications industry.....57

Chart 11.1 : Employment outlook – Victorian forestry industry.................................................68

Chart 12.1 : Employment outlook – Victorian furnishing industry.............................................75

Chart 12.2 : Skilled Vacancy Index – Victorian furnishing industry.............................................75

Chart 13.1 : Employment outlook – Victorian manufacturing and engineering industry...........83

Chart 13.2 : Skilled Vacancy Index – Victorian manufacturing and engineering industry...........84

Chart 14.1 : Employment outlook – Victorian primary industry.................................................90

Chart 15.1 : Employment outlook – Victorian racing industry....................................................97

Chart 17.1 : Employment outlook – Victorian textile, clothing and footwear industry............111

Chart 19.1 : Employment outlook – Victorian water industry..................................................122

TablesTable 2.1 : Annual industry employment growth – Victoria (ANZSIC industry structure)...........13

Table 2.2 : Annual industry employment growth – Victoria (ITAB industry structure)...............14

Table A.1 : Concordance between ITAB industry structure and ABS ANZSIC classification......124

Deloitte Access Economics


GlossaryABBTF Australian Brick and Blocklaying Training FundABS Australian Bureau of StatisticsACCV Aged and Community Care VictoriaANZSCO Australian and New Zealand Standard Classification of OccupationsANZSIC Australian and New Zealand Standard Industry ClassificationATV Automotive Training VictoriaBICCIAB Building Industry Consultative Council Industry Advisory BodyBSV Business Skills VictoriaCBC Competency Based CompletionsCS&H ITB Community Services and Health Industry Training BoardDEEWR Department of Education, Employment and Workplace RelationsDHS Department of Human Services (Victoria)EPIC Elecro-tech., electricity supply, IT, communications and printingESI Electrical Supply IndustryITAB Industry Training Advisory BodyFurnITAC Furnishing Industry Training Advisory CommitteeMESAB Manufacturing and Engineering Skills Advisory BoardNBN National Broadband Networknec Not elsewhere classifiedOH&S Occupational health and safetyPICAC Plumbing Industry Climate Action CentrePSV Primary Skills VictoriaR&D Research and developmentRMIT Royal Melbourne Institute of TAFERPL Recognition of prior learningRTO Registered training organisationSSV Service Skills VictoriaTCF Textile, clothing and footwearTCFUA Textile Clothing & Footwear Union of AustraliaTDT Transport and Distribution Industry Training BoardTFIA Council of Textile & Fashion Industries of AustraliaVCEC Victorian Competition and Efficiency CommissionVET Vocational Education and TrainingVFITB Victorian Food Industry Training BoardVFITAB Victorian Forest and Forest Products Industry Training Advisory BoardVTG Victorian Training Guarantee



Executive SummaryThe Higher Education and Skills Group (formerly Skills Victoria), commissioned Deloitte Access Economics to work with Victorian Industry Training Advisory Bodies (ITABs) to produce the 2012 ITAB Market Effectiveness Report. The Market Effectiveness Report expands on the Industry Skill Needs Reports produced for the Higher Education and Skills Group in recent years by also incorporating ITAB intelligence on training market effectiveness, including identified market successes and failures.

The purpose of the Market Effectiveness Report is to present an overview of skill needs in the Victorian economy, including analysis of occupations in demand and experiencing critical skill shortages, and to provide a summary of market effectiveness in the Victorian market for vocational education and training. The report is designed to assist the Higher Education and Skills Group in assessing the performance of the training market, providing industry intelligence to individuals and businesses, and stimulating training demand in skill shortage areas.

This report incorporates Deloitte Access Economics’ views, along with a summary of industry intelligence gathered from the 16 Victorian ITABs. The ITAB advice was provided to Deloitte Access Economics during meetings and through other correspondence in late 2011 and early 2012. The industry advice presented in this report has also been informed by consultations held with representatives of various Victorian government agencies.

Examples of market success

In the main, examples of market success nominated by ITABs focused on the identification and closing of a gap in the training market. In many instances, this was achieved by mobilising a suitable training provider or actively encouraging industry participation in the training market.

The examples highlight the capacity to stimulate training demand and develop and tailor new training packages aimed at a specific training need. Many of the examples relate to the activities of individual ITABs. However there are also cases of industry-led responses to training provision and instances where additional government funding has assisted to meet skill needs.

Examples of market failure

The impact of thin markets was raised as a market failure by a number of ITABs. The issue results when demand for a training course is insufficient for training providers to offer it, a situation most prevalent in regional areas (often served by a single training provider).

Although the issue appears well understood throughout the training system, a universal solution is not apparent (and may not exist). The problem of thin markets has been overcome in some specific instances through more flexible training delivery and greater cooperation between industry and providers.

A further example of market failure involves training providers (particularly those which are publicly funded) not keeping up with technological changes in the industry. This issue arises because of the pace with which technology changes and the cost of purchasing and maintaining specific equipment, and can result in outdated or irrelevant training and the stifling of skill acquisition. There have been some examples of training providers

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collaborating with industry more effectively in order to access the latest equipment and provide training which is as relevant as possible.

Related to this, it was reported that employers across a number of industries have been unsatisfied with the quality of graduating students. A common complaint is that students are not ‘work ready’, generating a loss of confidence in the training system among some employers.

Key supply side issues

Key supply side issues affecting a range of industries include the following: The ageing of Australia’s population is a key concern across a number of industries,

particularly those with an older workforce demographic such as manufacturing, electro-technology and textile, clothing and footwear. Although the issue is well understood, many industries are having difficulty encouraging new entrants in order to offset a looming increase in retirement. As a result, there is concern around the implications for skill shortages in specific occupations.

There is some concern that changes to funding arrangements for the VET sector will have implications for skill needs in 2012. The changes include the reduction in the disparity between funding for TAFE and private providers, along with reductions in some industry funding weightings (with growing enrolments in specific qualifications generating a reduction in training provider funding for all qualifications within a broader industry).

Key demand side issues

Key demand side issues having a general impact on Victorian industries include the following: Broad economic conditions, including the resources boom, were cited as an important

demand side issue across a number of industries. In some sectors, Australia’s two speed economy is generating strong competition for skilled labour, with higher wages available outside Victoria. Weaker economic conditions outside the resources sector are also relevant, with soft housing conditions and weak retail sales weighing on the outlook in some industries.

A related issue is the high $A, which is also influencing the business environment for export industries and those which compete with imported products (such as food, forestry, manufacturing and services). The elevated exchange rate is also contributing to some of the variability in oil prices, which is a particular concern in the transport sector.

The changing nature of consumer demand is relevant for skill needs across industries such as food, forestry, primary industries and services. Consumers are seen as increasingly ethically responsible and time poor. As such, there is a growing need to provide services in line with consumer expectations of ethical and sustainable practices.

The rollout of the National Broadband Network will have demand implications for the electro-technology and manufacturing and engineering sectors. Once the installation is complete, the culture and recreation sector is expecting demand for media- and internet-related services to increase, underpinning a growing skill need.

Finally, industry-specific regulatory change is also expected to be an important demand side driver of skill needs in 2012. They include, for example, building and sustainability regulations in the construction sector, the national approach to qualifications in the childcare sector, and animal welfare in primary production and processing.

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Prospects for employment growth

Deloitte Access Economics expects the Victorian economy to record modest employment growth of 0.8% in 2012 – the lowest growth for a little over a decade – following the solid employment growth of 2.1% recorded in 2011. The State’s unemployment rate is projected to rise to 5.6% in 2012 from an average of 5.1% in 2011.

Applying the ANZSIC industry structure, the utilities and construction sectors are expected to record the strongest rate of employment growth in 2012, followed closely by mining and health care and social assistance. In contrast, financial and insurance services and accommodation and food services may record softer growth in 2012, while employment in professional, scientific and technical services, arts and recreation services and manufacturing is expected to fall back modestly.

The chart below shows how these projections translate into forecasts according to the ITAB industry structure. Community services and health, building and construction, and water are seen leading the way, while racing (a small industry, and therefore more subject to sampling variability) is forecast to record a recovery following a sharp dip in employment in 2011.

Chart i: Industry employment growth in Victoria – 2012 (ITAB structure)

Source: Deloitte Access Economics

The table below provides a summary of the occupations in critical shortage identified in this report. The occupations are listed by both industry title and a corresponding title according to the Australian and New Zealand Standard Classification of Occupations (ANZSCO). The table also includes the related qualifications which are required for occupations experiencing a critical skill shortage.

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-5% 0% 5% 10% 15% 20% 25% 30%

Racing

Community services and health

Building and constructionElectro-technology and communication

Water

TransportFood

Manufacturing and engineering

Primary

VictoriaCulture and recreation

Furniture

Textiles, clothing and footwear

ForestryBusiness services

Service skills

Automotive

Employment growth in 2012


Table ii: Summary of critical skill shortagesIndustry title ANZSCO classification and related qualificationAutomotiveLight vehicle mechanic Motor mechanic (general) (321211)

Certificate III in Automotive Technology (Light Vehicle)Heavy vehicle mechanic Diesel motor mechanic (321212)

Certificate III in Automotive Technology (Heavy Vehicle)Panel beater Panelbeater (324111)

Certificate III in Automotive Vehicle Body (Panel Beating)Spray painter Vehicle painter (324311)

Certificate III in Automotive Vehicle Body (Vehicle Painting)Auto electrician Automotive electrician (321111)

Certificate III in Automotive Electrical TechnologyBuilding and constructionPlant operator Earthmoving plant operator (721211)

Certificate III in Civil Construction Plant OperationsRoad construction (Asphalt) Road roller operator (721915)

Certificate III in Road Construction and MaintenanceProject manager Construction project manager (133111)

Certificate IV in Building and Construction (Building)Certificate IV in Building and Construction (Site management)Diploma of Building and Construction (Building)

Building surveyor / Building inspector Building inspector (312113)Diploma of Building SurveyingAdvanced Diploma of Building Surveying

Estimator Construction estimator (312114)Certificate IV in Building and Construction (Estimating)

Business servicesAccounting Accountant (General) (221111)

Certificate IV in AccountingDiploma of AccountingAdvanced Diploma of Accounting

Waste management drivers Recycling or rubbish collector (899611)Certificate III in Asset Maintenance (Waste management)Certificate IV in Asset Maintenance (Waste management)

Sustainability assessors Environmental manager (139912)Certificate III in Asset Maintenance (Waste management)Certificate IV in Asset Maintenance (Waste management)Certificate IV in Home Sustainability AssessmentContinued on following page

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Community services and healthAged care workers Aged or disabled carer (423111)

Certificate III – Aged careCertificate III – Home and Community CareCertificate IV – Home and Community CareCertificate IV – NursingCertificate IV – Allied Health AssistanceDiploma – Nursing for (a) new entrants and (b) existing workers

Enrolled nurses Enrolled nurse (411411)Certificate IV – NursingCertificate IV – Allied Health AssistanceDiploma – Nursing for (a) new entrants and (b) existing workers

Children’s services workers Child care worker (421111)Certificate III – Children’s ServicesDiploma – Children’s Services (Early Childhood Education and Care)Diploma – Children’s Services (Outside School Hours Care)

Child protection workers Family support worker (411713)Vocational Graduate Certificate – Community Services Practice (Statutory child protection)Certificate IV – Child, Youth and Family Intervention (Residential and out of home care)Certificate IV – Child, Youth and Family Intervention (Child protection)Certificate IV – Child, Youth and Family Intervention (Family support)Disability services workers Disabilities services officer (411712)Certificate IV – DisabilityDiploma – DisabilityAdvanced Diploma – Disability

Community care workers Community worker (411711)Certificate IV – Community Service (Alcohol and other drugs)Certificate IV – Community Service (Mental health)Diploma – Community Service (Alcohol and other drugs)Diploma – Community Service (Mental health)Diploma – Community Service (Alcohol, other drugs and mental health)Diploma – Community Service (Case management)Diploma – Community Services CoordinationAdvanced Diploma – Community Sector ManagementVocational Graduate Diploma – Community Sector ManagementVocational Graduate Certificate in Community Services Practice (Client assessment and case management)Culture and recreation

Swimming coach / Aqua instructor Swimming coach or instructor (452315)Certificate III in Aquatics

Lifeguard Lifeguard (452414)Certificate III in AquaticsContinued on following page

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Camera operator (film, television, or video) Camera operator (399512)Certificate IV in Broadcast Technology

Cinema theatre/facilities manager Cinema or theatre manager (149912)Diploma of Venues and EventsAdvanced Diploma of Venues and Events

Lighting technician Light technician (399513)Certificate III in Live Production, Theatre and EventsCertificate IV in Live Production, Theatre and EventsCertificate IV in Screen MediaCertificate IV in ElectrotechnologyDiploma of Screen and Media

Multi/New/Interactive media designer Multimedia designer (232413)Certificate IV in Interactive Digital MediaCertificate IV in Information Technology (Multimedia)Diploma of Interactive Digital Media

Multimedia specialist and web developer Multimedia specialist (261211)Certificate IV in Information Technology (Websites)Diploma of Information Technology (Websites)

Post-production media technician Production assistant (599912)Certificate IV in Screen MediaCertificate IV in ElectrotechnologyCertificate IV in Interactive Digital MediaDiploma of Screen Media

Electro-technology and communicationsCable Jointing Technical cable jointer (342212)

Certificate III in ESO Cable JointingRail Signalling Railway signal operator (712917)

Certificate IV in Rail and Tram Signal SystemsMotor Rewinding Electrician (General) (341111)

Certificate III in Electrical Motor RepairTelecommunications Cabler Cabler (Data and telecommunications) (342411)

Certificate III in TelecommunicationsCertificate III in Telecommunications Cabling

Digital Printing Small offset printer (392312)Certificate III in Printing and Graphic Arts (Digital Printing)

ESI Line worker Electrical lines worker (342211)Certificate III in ESI – Distribution

Substation Electrician Electrician (Special class) (341112)Certificate IV in ESI – Substation

Continued on following page

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Food processingNone reportedForestrySaw doctor Saw maker and repairer (323315)

Certificate III in Saw DoctorPulp and paper technician Paper and pulp mill operator (712916)

FPP10 ASCED Manufacturing Engineering and TechnologyDetailer / Estimator Forestry worker (841311)

Certificate III in Timber Truss and Frame Design and ManufacturingSilviculture and harvesting team leaders Forester (234113)Certificate III in Harvest and HaulageCertificate III in Forest Growing Management

Wood machinist Wood machinist (394213)Certificate III in Wood Machinist

Forest technicians and land managers Forester (234113)Advanced Diploma of Forest Industry Sustainability

FurnishingStained glass and lead lighting Glazier (333111)

Certificate III in GlassCabinet maker/installer Cabinetmaker (394111)

Certificate III in Cabinet MakingGlass and glazing Glazier (333111)

Certificate III in GlassFlooring installer Floor finisher (332111)

Certificate III in Flooring TechnologyUpholsterer Upholsterer (393311)

Certificate III in UpholsteryCurtin, blind and awning maker and installer Home improvement installer (821412)

Certificate III in Soft FurnishingsCertificate III in Blinds and Awnings (n/a)

Manufacturing and engineeringSheetmetal Trades Worker Sheetmetal Trades Worker (322211)

Certificate III in Engineering – Fabrication tradeAircraft Maintenance Engineer (Mechanical) Aircraft Maintenance Engineer (Mechanical) (323112)

Certificate IV in Aeroskills (Avionics, Mechanical and Structures)Aircraft Maintenance Engineer (Avionics) Aircraft Maintenance Engineer (Avionics) (323111)

Certificate IV in Aeroskills (Avionics, Mechanical and Structures)Aircraft Maintenance Engineer (Structures) Aircraft Maintenance Engineer (Structures) (323113)

Certificate IV in Aeroskills (Avionics, Mechanical and Structures)Metal machinists Metal machinist (first class) (323214)

Certificate III in Engineering – Mechanical tradeContinued on following page

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Air-conditioning and refrigeration mechanic Air-con. and refrigeration mechanic (342111)Certificate III in Engineering – Mechanical trade

Metal Fabricator (Boilermaker) Metal Fabricator (322311)Certificate III in Engineering – Fabrication trade

Metal fitters and turners Metal Fitter and Turner (323212)Certificate III in Engineering – Mechanical trade

Primary industriesArborist Arborist (362212)

Certificate III in ArboricultureDiploma of Arboriculture

Animal technician Life science technician (311413)Diploma of Animal Technology

Agronomist Agricultural scientist (234112)Diploma of Agronomy

Greenkeeper Greenkeeper (362311)Certificate III in Parks & GardensDiploma of Parks & Gardens Management

Parks and gardens worker Gardener (General) (362211)Certificate III in Sports Turf ManagementDiploma of Sports Turf Management

RacingTrack Rider Stablehand (841516)

Certificate III (Trackriding)ServicesRetail manager Retail manager (General) (142111)

Diploma of Retail ManagementVocational Graduate Certificate in Retail

Supervisory staff – Retail Retail supervisor (621511)Certificate IV in Retail Management

Chef Chef (351311)Certificate IV, Diploma and Advanced Diploma of Hospitality

Hotel manager Hotel or Motel Manager (141311)Diploma of Hospitality

Restaurant managers Cafe or Restaurant Manager (141111)Diploma of Hospitality

Wait staff Waiter (431511)Certificate III in HospitalityContinued on following page

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Textiles, clothing, footwear and leatherTextile clothing and footwear mechanic TCF mechanic (323215)

Certificate III in Engineering – TCF Mechanic

Apparel patternmakers / Graders Clothing patternmaker (393212)Diploma of Applied Fashion Design and Technology

Dressmakers / Tailors Dressmaker or tailor (393213)Certificate IV in Clothing Production

General footwear tradesperson Shoemaker (393114)Certificate III in Footwear Production

Transport and storageHeavy rigid to multi-combination drivers Truck driver (general) (733111)

Certificate II in Driving OperationsCertificate III in Driving Operations

Rail drivers Train driver (731311)Certificate IV – Transport and Logistics (Rail Operations)

Transport company manager Transport company manager (149413)Diploma of Logistics

Warehouse administrator Warehouse administrator (591116)Certificate IV in Warehousing Operations

Bus driver Bus driver (731211)Certificate III Transport & Logistics (Driving Operations)Certificate IV Logistics

Deck hand / general purpose hand Deck hand (899211)Certificate II/III in Transport & Distribution (Maritime Operations)Crane, hoist or lift operator Crane, hoist or lift operator (712111)Certificate II in StevedoringCertificate III in Stevedoring (Crane Operations)Certificate III in Stevedoring (Team Leading)Certificate IV in Stevedoring Operations

Forklift driver Forklift driver (721311)Certificate III in Warehousing Operations

WaterNone reported

Deloitte Access Economics30 March 2012

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1 IntroductionThe Higher Education and Skills Group (formerly Skills Victoria) commissioned Deloitte Access Economics to work with Victorian Industry Training Advisory Bodies (ITABs) to produce the 2012 ITAB Market Effectiveness Report. The Market Effectiveness Report expands on the Industry Skill Needs Reports produced for the Higher Education and Skills Group in recent years by also incorporating ITAB intelligence on training market effectiveness, including identified market successes and failures.

The purpose of the Market Effectiveness Report is to present an overview of skill needs in the Victorian economy, including analysis of occupations in demand and experiencing critical skill shortages, and to provide a summary of market effectiveness in the Victorian market for vocational education and training. The report is designed to assist the Higher Education and Skills Group in assessing the performance of the training market, providing industry intelligence to individuals and businesses, and stimulating training demand in skill shortage areas.

This report incorporates Deloitte Access Economics’ views, along with a summary of industry intelligence gathered from the 16 Victorian ITABs. The ITAB advice was provided to Deloitte Access Economics during meetings and through other correspondence in late 2011 and early 2012. The industry advice presented in this report has also been informed by consultations held with representatives of various Victorian government agencies.

The report is structured around sixteen chapters, each dedicated to providing advice relevant to a particular industry. These chapters include a summary of: Training market effectiveness, including examples of market success and failure; Industry change drivers and developments in 2012 and likely implications for skill needs; An industry outlook compiled by Deloitte Access Economics, including forecasts of

industry employment; ITAB and industry responses to critical skill shortages identified in the 2011 Industry

Skill Needs Report; Occupations expected to be in demand and experiencing critical skill shortages in 2012;

and, A list of qualifications required for occupations experiencing a critical skills shortage.

Where data is available, these industry chapters include data on vacancies, drawn from Skilled Vacancy Index published by the Commonwealth Department of Education, Employment and Workplace Relations (DEEWR). There are some shortcomings to using this data. For example, the index is based on the number of advertised vacancies and is not a detailed measure of unmet demand. In this report, the vacancy data is presented as an index, with the number of vacancies in 2000 set equal to 100. Due to the availability of data, in each of these charts the data for 2011 represents the average of monthly data over the ten months to October 2011.

Each industry chapter begins with a brief overview of the industry, as described in the box below.

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Coverage: The occupations covered by the industry.

Specific industry and business cycle drivers: Specific factors of particular importance to the industry and relevant economic factors.

Recent relative employment performance rating: A ranking of the industry’s employment growth performance over the three years to 2011. The ranking – rated as Low, Below Average, Average, Above Average and High – is relative to the employment performance of the other industries examined in this report.

Expected relative employment performance rating: A ranking of the industry’s expected employment growth performance over the three years from 2011.

In defining the lists of occupations in demand and experiencing critical skill shortages, ITABs were required to apply criteria developed by the Higher Education and Skills Group. The criteria are based on definitions used by Skills Australia and the Commonwealth Department of Education, Employment and Workplace Relations. The definition used to identify an occupation in demand is as follows:

An occupation is in demand when employers are unable to fill or have considerable difficulty filling vacancies for the occupation, or significant specialised skill needs within that occupation over an extended time period, at market rates of remuneration and standard conditions of employment, and in reasonably accessible locations.

Of those occupations listed as in demand, occupations were also considered to be experiencing a critical skill shortage if they met the following four criteria: Long lead time: Occupations that require skills which are highly specialised and

require extended learning and preparation time over several years. High use: Where there is a high incidence of those undertaking formal training for a

qualification subsequently taking up employment in the corresponding occupation. High risk: Occupations where the disruption caused by the skills being in short supply

imposes a significant risk to the Australian economy and/or community. High information: Where the quality of information on the occupation is adequate to

the task of assessing future demand and evaluating the first three criteria.

In addition to the industry-specific discussion and occupation lists, this report also includes broader information and commentary in two initial chapters. Chapter 2 includes forecasts of key Victorian economic indicators and employment by industry, while Chapter 3 provides a broad overview of training market effectiveness.

The forecasts in Chapter 2 have been compiled according to two industry structures: The Australian and New Zealand Standard Industry Classification (ANZSIC) published

by the Australian Bureau of Statistics (ABS). Deloitte Access Economics has included forecasts completed at the one-digit ANZSIC level.

An industry structure which is representative of the industry coverage of each ITAB.

The concordance between ANZSIC and ITAB industry structures developed by Deloitte Access Economics is included at Appendix A. We caution that this concordance will not always provide an accurate reflection of the employment base covered by each ITAB.

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2 Industry employment forecastsThe following charts and tables provide a brief snapshot of Victoria’s economy, along with Deloitte Access Economics’ economic and employment forecasts. The employment forecasts are provided for the ITAB industry structure and the ANZSIC industry structure.

There are some limitations of using the ANZSIC industry structure to assess employment prospects across ITAB industries. For example, the rise of part-time farmers means that the Victorian primary industry often provides a secondary source of income for individuals. The implication is that a count of those who identify as employed in primary industry may not fully capture the industry coverage in aggregate. Imperfect alignment between the coverage of each ITAB industry and the ANZSIC industry categories may also give rise to some discrepancies in estimating the employment coverage of some ITABs. For example, advice from ITABs suggests that 2011 employment in the furnishing and forestry industries was 20,000 and around 27,500 respectively. That compares to the respective estimates of around 14,000 and 21,000 presented in Table 2.2 below.

Moreover, the activities covered by some ITABs (particularly across creative, leisure and ‘emerging’ industries) may not be adequately captured within the ANZSIC categories for the purpose of making an accurate comparison with the coverage of the relevant ITAB.

These definitional issues cannot be fully overcome through the concordance between ANZSIC and ITAB classification structures, and should be considered when examining these forecasts.

Snapshot of the Victorian economy Gross State Product (real)

$305.6 billionGSP per capita: $54,646 (2010-11)

Population5.59 million (2010-11 est.)

Labour force3.02 millionUnemployment rate: 5.2% (December 2011)

Key merchandise trade partnersChina 19.5%, United States 11.0%, Japan 8.0%, New Zealand 5.8%, Germany 5.1% (2011)

Key forecasts

Annual % change except where noted *

History Forecast2009 2010 2011 2012 2013

Real gross state product 1.4% 2.4% 2.4% 2.1% 3.3%Dwelling investment 5.6% 6.5% 5.7% -1.8% 5.7%Private consumption 1.3% 3.6% 3.8% 3.6% 3.2%Employment 1.0% 3.8% 2.1% 0.8% 1.7%Unemployment rate * 5.7% 5.4% 5.2% 5.6% 5.7%Total population 2.2% 1.7% 1.5% 1.6% 1.5%Consumer Price Index 1.4% 3.0% 3.5% 2.4% 3.1%

Source: Deloitte Access Economics, Australian Bureau of Statistics. Note: Business investment excludes intangibles.

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Table 2.1: Annual industry employment growth – Victoria (ANZSIC industry structure)

ForecastEmployment level in 2011 2012 2013 2014

Agriculture, Forestry and Fishing 75,889 1.0% 1.6% 0.6%

Mining 11,720 5.6% 3.5% 5.4%

Manufacturing 304,264 -0.9% -0.4% -0.9% Food, Beverage and Tobacco 76,351 1.8% 2.9% 2.4% Textile, Leather, Clothing and Other 38,308 -0.2% -1.1% -2.1% Wood, Pulp and Paper 19,195 -0.9% -2.6% -0.3% Printing and Recorded Media 14,412 -1.4% 2.0% -0.8% Petroleum, Coal, Chemical and Polymers 35,234 4.8% 1.2% 0.1% Non-Metallic Minerals 11,003 1.5% -2.3% -2.8% Primary and Fabricated Metals 37,640 -6.4% -1.8% -2.0% Transport and machinery equipment 72,124 -4.2% -3.4% -3.8%

Electricity, Gas, Water and Waste 37,392 6.1% 5.0% 3.9%

Construction 263,650 6.0% 5.3% 2.2%

Wholesale Trade 113,184 3.0% -1.1% 1.4%

Retail Trade 317,896 0.1% -0.1% 0.6%

Accommodation and Food Services 179,169 -3.3% 1.4% 0.6%

Transport, Postal and Warehousing 142,538 -2.9% 3.8% 1.8%

Info. Media and Telecommunications 57,928 3.1% 1.7% 0.9%

Financial and Insurance Services 122,710 -7.6% 6.6% 1.8%

Rental, Hiring and Real Estate Services 44,952 2.4% 3.6% 1.7%

Professional, Scientific and Technical 234,125 -4.1% 3.8% 4.2%

Administrative and Support Services 107,222 4.4% 2.9% 2.6%

Public Administration and Safety 137,650 -1.4% 0.7% 1.3%

Education and Training 217,519 -0.5% 2.0% 2.5%

Health Care and Social Assistance 337,428 5.2% 3.9% 2.1%

Arts and Recreation Services 59,801 -1.6% 2.2% 1.7%

Other Services 112,680 3.3% 1.6% 1.1%Victoria 2,877,715 0.8% 1.7% 1.1%Source: Deloitte Access Economics, Australian Bureau of Statistics

As Table 2.1 shows, Deloitte Access Economics expects the Victorian economy to record modest employment growth of 0.8% in 2012 – the lowest growth for a little over a decade – following the solid employment growth of 2.1% recorded in 2011. The State’s unemployment rate is projected to rise to 5.6% in 2012.

By industry, the utilities and construction sectors are expected to record the strongest rate of employment growth in 2012, followed closely by mining and health care and social assistance. In contrast, financial and insurance services and accommodation and food services may record softer growth in 2012, while employment in professional, scientific and technical services, arts and recreation services and manufacturing is expected to fall back modestly.

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Table 2.2: Annual industry employment growth – Victoria (ITAB industry structure)

Forecast

Employment level in 2011 2012 2013 2014Automotive 105,359 -3.8% -2.0% -3.2%Building and construction 263,650 4.0% 5.3% 2.2%Business services 438,673 -2.7% 5.1% 3.5%Community services and health 337,428 5.1% 4.0% 3.2%Cultural and recreation 61,635 0.6% 1.4% 1.4%Electro-technology and communication 74,817 2.1% 0.2% 0.0%Food 76,351 1.7% 1.2% 1.9%Forestry 20,907 -2.0% -2.0% 0.0%Furniture 13,783 -0.8% 0.9% -1.2%Manufacturing and engineering 218,658 1.0% 0.0% -0.1%Primary 82,910 0.8% 1.6% 0.7%Racing 2,304 29.2% 16.3% 10.8%Services 638,643 -2.8% 0.4% 0.9%Textiles, clothing and footwear 19,530 -1.6% -3.1% -3.6%Transport 142,538 1.7% 4.6% 2.3%Water 11,836 2.1% 4.2% 3.5%

Source: Deloitte Access Economics, Australian Bureau of Statistics

Chart 2.1: Industry employment growth in Victoria – 2012 (ITAB structure)

Source: Deloitte Access Economics

Table 2.2 shows how these projections translate into forecasts at the ITAB level, with community services, building and construction, and water leading the way, while racing (a

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-5% 0% 5% 10% 15% 20% 25% 30%

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Primary

Victoria

Culture and recreation

Furniture

Textiles, clothing and footwear

Forestry

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Service skills

Automotive

Employment growth in 2012



small ITAB, and therefore more subject to sampling variability) is forecast to record a recovery following a sharp dip in employment in 2011, generating its strength in Chart 2.1.

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3 Overview of market effectivenessAs noted above, this report expands on the Industry Skill Needs Reports compiled for the Higher Education and Skills Group in previous years. The key additional focus is the reporting of market effectiveness – that is, instances of both market success and market failure in the Victorian vocational education and training market.

Following the implementation of a more market-based training system in the State – the Victorian Training Guarantee (VTG) – the Victorian Government has recognised the need to monitor the operational effectiveness of the system and, where necessary, appropriately intervene to address any market failure.

The inclusion of industry intelligence on market effectiveness in this report is designed to assist the Higher Education and Skills Group to more fully understand the operation of the new training system and to identify and rectify market failures as they arise.

Deloitte Access Economics has sought to gather specific examples of market success and failure from ITABs. This chapter provides some background on Deloitte Access Economics’ approach to defining market effectiveness and includes examples relevant to the training market as a whole rather than to individual industries. Industry-specific examples of market success and failure are contained within each of the sixteen industry chapters which follow.

Defining market effectiveness

Victorian Government reforms have moved the VET sector toward a demand-driven model. The establishment of the VTG means that there is no set limit to the number of places a contracted VET provider can offer in any course it is registered to provide. Individuals in Victoria can access training through the VTG at a provider of their choice, provided they meet the eligibility criteria.

Eligibility arrangements were fully implemented for all VET qualifications from 1 January 2011. To be eligible for a government funded place under the VTG, individuals must be: Under 20 years of age; or, Undertaking a foundation skill course to address low literacy and numeracy; or, Undertaking an apprenticeship or traineeship; or, Up-skilling – undertaking a higher level course than their highest existing qualification.

The reforms also mean that the training market is now fully contestable, with funding for government subsidised places available to both government and private providers who apply and are approved for funding relating to eligible students.

The expected corollary of these reforms is that if VTG-eligible individuals cannot access the training they desire, a market failure must exist. This form of market failure is examined in this report. Importantly, the effectiveness of the training market is therefore assessed within the current policy parameters set by the Victorian Government.

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Defining market success is less straightforward. It could be argued, for example, that success in the vocational education and training system simply involves an increasing rate of matriculation of students through courses over time. However such a definition provides few opportunities to explore positive training market outcomes through discrete examples.

In order to capture specific examples of market success, we have attempted to focus on instances where an increase in the quantity and/or quality of completing students has targeted a known training need or has otherwise had an identifiable positive impact. This could include, for example, cases where a skill shortage or market failure has been corrected, or where active involvement by industry participants has contributed to stimulating training demand in a particular area. This approach necessarily incorporates some examples of market intervention where it has been a positive influence in the training market.

Examples of market success

In the main, examples of market success nominated by ITABs focused on the identification and closing of a gap in the training market. In many instances, this was achieved by mobilising a suitable training provider or actively encouraging industry participation in the training market.

The examples highlight the capacity to stimulate training demand and develop and tailor new training packages aimed at a specific training need. Many of the examples relate to the activities of individual ITABs. However there are also cases of industry-led responses to training provision and instances where additional government funding has assisted to meet skill needs.

Examples of market failure

The impact of thin markets was raised as a market failure by a number of ITABs. The issue results when demand for a training course is insufficient for training providers to offer it, a situation most prevalent in regional areas (often served by a single training provider).

Although the issue appears well understood throughout the training system, a universal solution is not apparent (and may not exist). The problem of thin markets has been overcome in some specific instances through more flexible training delivery and greater cooperation between industry and providers.

A further example of market failure involves training providers (particularly those which are publicly funded) not keeping up with technological changes in the industry. This issue arises because of the pace with which technology changes and the cost of purchasing and maintaining specific equipment, and can result in outdated or irrelevant training and the stifling of skill acquisition. There have been some examples of training providers collaborating with industry more effectively in order to access the latest equipment and provide training which is as relevant as possible.

Related to this, it was reported that employers across a number of industries have been unsatisfied with the quality of graduating students. A common complaint is that students are not ‘work ready’, generating a loss of confidence in the training system among some employers.

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4 AutomotiveCoverage: Automotive (passenger motor vehicles, light commercial, truck, bus, trailer, recreational vehicles) manufacturing, retail, service and repair, and allied industry (earthmoving and construction, outdoor power equipment, recreational boating, recreational vehicles, bicycles).

Specific industry and business cycle drivers: Interest rates, tax provisions, the $A, tariff protection, Federal Government subsidies, petrol prices and the level of global capacity.

Recent relative sectoral performance rating: Below average

Expected relative sectoral performance rating: Low

Summary of ITAB advice and consultation

Market effectiveness

Automotive Training Victoria (ATV) report a mix of training market successes and failures for 2011. The examples of success demonstrate ATV and industry efforts translating into increased training in niche areas and the attraction of new entrants to the sector. The examples of market failure relate to skill needs that are emerging at a pace that the training sector cannot match.

Engine reconditioning provides a rare example of success in automotive training in recent years. This specialised skill – which applies to vehicle restoration, heavy vehicles and warranty work for manufacturers (all growing trades) – has traditionally proved a thin training market. However more recently, in cooperation with both large and small employers, around 20 students are being enrolled in the course per annum, with a mix of workplace and classroom training delivery. This level of training delivery will alleviate existing skill shortages if maintained.

Continued difficulty in recruiting apprentices led ATV to set a goal of attracting 40 school-based apprentices into the industry in 2011, utilising new technologies as the angle by which to generate interest. Working with the Victorian Chamber of Commerce and Industry, there was little difficulty in identifying suitable employers given the high demand for skills across the industry. Indeed the majority of these apprentices start at the Certificate II level in dealerships, and then move into a variety of other areas of these businesses. Additional funding from the State Government helped support this initiative.

In terms of market failures, automotive trimming remains a niche business, with corresponding low volume of highly specialised skill needs. In the existing format, training providers are currently only partly delivering the competencies required of a motor trimmer (similar issues are experienced by other parts of the automotive industry). This represents an example of the difficulties in providing external training at a trade skill level when a very limited number of individuals are engaged in the trade. Vehicle restoration businesses and the like will feel this labour constraint more acutely as they attempt to expand or face new industry entrants.

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The Victorian bicycle industry is experiencing significant growth. Coupled with the introduction of complex materials and repair techniques (such as relating to carbon fibre), this is generating a significant skill need. However, appropriate training is not available and instead the sector is said to be importing skilled workers from outside the State to meet requirements and training on the job. High-end bicycle repair is therefore an emerging gap in training delivery, though the Certificate II in Bike Maintenance remains in high demand.

ATV acknowledge further success in attracting and retaining skill to the industry will be driven by industry and its ability to inform potential new workers (and their key influencers) on prospects and careers paths available, ensuring they are relevant to what the current generation of workers is demanding. It is also a case of the industry needing to restructure such that those skills in demand are mobile across businesses (as has been seen with top line technicians working across a number of businesses within a dealer network).

Change drivers and industry developments

ATV reported a number of change drivers for 2012, similar to those identified in 2011. They cover both demand and supply side issues, and include: Continuous technological advancement in service and repair (demand side) Growing uncertainty for future vehicle manufacturing (demand and supply side) Growth in the resources sector (demand and supply side) Public training provider capacity/currency (supply side).

The strong Australian dollar, pressure on government budgets, and the shift in consumer demand for small fuel efficient vehicles and sports utility vehicles, is compounding uncertainty around the future of automotive manufacturing in Australia and Victoria. The implication is the future skill needs of the sector are unclear, the ability to recruit labour when career prospects are in doubt is limited, and the only way to minimise skill shortages is through specialised in-house training with short lead times (in production and assembly).

Technological advancements in diagnostics remains the key to the success of automotive service and repair businesses in terms of the ability to identify the problem and solution in a timely and efficient manner, with the industry now less dependent on traditional repair skills. The service and repair aspects of automotive businesses are becoming more important to business viability than vehicle retailing, given the relative margins attached to each.

While manufacturers have traditionally held diagnostic technologies in-house (by way of preserving demand for after-sales service), United States legislation is now obliging this information be made available to the broader service and repair sector, and with this movement submissions are now being made to the Commonwealth Government for similar legislation. The implication is that service and repair businesses in Victoria can now at least import this information – at cost – to ensure their continued relevance as older vehicles are scrapped from the fleet.

While public training providers are providing basic electrical-based skills training, and the Automotive Centre for Excellence in Melbourne is in particular delivering advanced training, training in general is not meeting the technological demands of the vast number of non-manufacturer-backed service and repair businesses across the state. Advice from ATV is that the quicker the latest information and technology is available for broader training consumption, the sooner there will be an increase in industry up-skilling, new industry

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entrants (particularly younger technology-minded individuals) and accordingly institutional uptake.

With the increase in the cost of vehicle repairs (both labour and capital components), and as it relates to regulation around vehicle registration, there has been a lift in the ‘economic’ write off of damaged vehicles (where the cost to repair is greater than the market value of the car). While on the one hand this reduces demand for the repair sector, this is being at least partly offset by the cases of ‘repairable write off’. This is particularly relevant in times of increased storm activity, as has been seen in 2011 and early 2012 in Victoria. The Commonwealth Government is currently conducting an inquiry (the Bradbury Inquiry) which will have implications for the persistence of this trade going forward.

Growth in the Australian resources sector remains a double-edged sword for automotive output. At one level the demand for heavy vehicle mechanics to support the mining boom is drawing new and existing light vehicle mechanics away with significantly higher wages. Indeed existing light vehicle mechanics can retrain to attain the Certificate III in Heavy Vehicle Mechanics in 2-3 months, and are happy to pay for the training out of their own pocket given the improved earnings available. Furthermore the high $A is harming vehicle exports. On the other hand truck component and assembly businesses, as well as other heavy machinery business, continue to experience strong growth in sales and service.

Industry outlook

This industry has two parts: manufacturing and retailing. The manufacturing side includes motor vehicle and motor vehicle parts manufacturers; while the retail side includes motor vehicle and motor vehicle parts retailing (and wholesaling), as well as automotive repairs and maintenance.

Australian vehicle manufacturers had a difficult start to 2011. Vehicle production in the first three months of the year was down 17% on the same period last year, with total year-to-date production (to September 2011) 10% lower compared to last year. The latest data from the Federal Chamber of Automotive Industries appear more positive. Production increased by 10% in the September quarter to the highest quarterly level since the June quarter of 2010.

A number of issues are relevant for the sector. Most notably, the strong Australian dollar continues to challenge Australian manufacturers by reducing the price of imported products. Despite a brief decline amid Europe’s economic turmoil, the $A is once again firmly above parity with the $US. The currency may well remain elevated over the medium term, but is expected to eventually retreat to longer term trend levels.

Another key issue for vehicle manufacturers going forward is carbon pricing. The start of the carbon tax on 1 July 2012 will see Australia’s 500 largest companies required to pay a fixed price of $23 for every tonne of carbon dioxide equivalent they release into the atmosphere. This will affect the automotive industry both directly, through direct obligations to purchase carbon permits, and indirectly, through higher input costs. Over time it is expected that carbon pricing will lead to further restructuring of Australia’s car industry as firms adopt ‘green’ production methods and technologies to reduce their emissions liability.

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Chart 4.1: Employment outlook – Victorian automotive industry


Vehicle retailers also struggled through 2011, though not to the extent of manufacturers. Year-to-date vehicle sales to December 2011 are 3.9% lower than the corresponding period in 2010, although vehicle sales in Victoria are faring slightly better, falling just 1.6%.

Some of that sales weakness earlier in the year was due to supply disruptions following the Japanese earthquake and tsunami. Activity did pick up over the September quarter, where vehicle sales in Victoria were 10.5% higher than in the June quarter (in seasonally adjusted terms). However, this growth was short lived, with growth falling once again in the December quarter, by 1.7%. Retailers in general are likely to struggle over the next 12 months, including in the automotive sector.

Chart 4.2: Skilled Vacancy Index – Victorian automotive industry

Source: Commonwealth Department of Education, Employment and Workplace Relations

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1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Victoria (Total) Panel beater Auto electrician Motor mechanic

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More vacancies

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The chart above shows skilled vacancies for workers in the Victorian automotive industry (as measured by DEEWR’s Skilled Vacancy Index). It shows that vacancies for auto electricians increased relatively sharply in 2011, while vacancies for motor mechanics and panel beaters declined in line with the Victorian average. The latter is seemingly at odds with the list of critical skill shortages discussed below. That may partly be explained by some of the drawbacks of the Skilled Vacancy Index, which does not indicate whether a decline in vacancies is due to weaker labour demand or stronger labour supply, or simply because employers are giving up on trying to fill vacancies.

Overall, the negatives for this sector appear likely to continue to outweigh the positives, and, after a lift in employment in 2011, employment in the sector is expected to continue a downward trend over the medium term.

Occupations in demand and critical skill shortages

Response to 2011 critical skill shortages

For the majority of automotive occupations listed as in critical skill shortage in 2011, macro and microeconomic developments have outweighed any market adjustments that ATV, in conjunction with the automotive industry, have attempted.

Indeed the resources boom continues to have a negative effect on the availability of new and existing light vehicle mechanics, heavy vehicle mechanics and automotive electricians, with the prospect of significantly higher earnings in other industries. In all three of these occupations, industry and ATV are attempting to up-skill those holding Certificate II qualifications and are advising government on the suitability of migrant workers. However, these initiatives have had little success to date in terms of alleviating what is a growing shortage.

In terms of panel beaters and vehicles painters, while not subject to competition for skilled workers with the resources sector, they continue to face difficulties in both attracting new workers and up-skilling existing workers. The difficulties relate to career paths and prospects, and the availability of appropriate training, respectively. Similar to the case of mechanics and electricians, the response from industry and the ATV has been to look at alternative sources of labour, though again with minimal success.

In contrast to the deteriorating conditions in the other five critical skill shortage occupations during 2010, the shortage in truck assembly workers is said to have been alleviated during 2011. The introduction of further automation and ‘smart’ assembly lines is reducing the labour content of the production process. Furthermore the margins in these vehicles is enabling improved earnings prospects for workers, helping to attract and retain labour.

Occupations in demand and critical skill shortages in 2012

The tables below summarise the occupations in demand and experiencing critical skill shortages in 2012. These occupation lists have been advised by ATV and have been determined following formal engagement with industry.

Overall, the number of occupations in demand is reduced from 2011, though all of these occupations are listed as experiencing a critical skill shortage.

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Occupations in demand and experiencing critical skill shortages

Occupations in demandIndustry title ANZSCO classification

Light vehicle mechanic Motor mechanic (general) (321211)Heavy vehicle mechanic Diesel motor mechanic (321212)Panel beater Panelbeater (324111)Spray painter Vehicle painter (324311)Auto electrician Automotive electrician (321111)Occupations experiencing a critical skills shortageIndustry title ANZSCO classificationLight vehicle mechanic Motor mechanic (general) (321211)Heavy vehicle mechanic Diesel motor mechanic (321212)Panel beater Panelbeater (324111)Spray painter Vehicle painter (324311)Auto electrician Automotive electrician (321111)

The table below outlines qualifications which are required for occupations experiencing a critical skills shortage.

Qualifications required for occupations experiencing critical skill shortages

Occupation (Industry title) QualificationLight vehicle mechanic Certificate III in Automotive Technology (Light Vehicle)Heavy vehicle mechanic Certificate III in Automotive Technology (Heavy Vehicle)Panel beater Certificate III in Automotive Vehicle Body (Panel Beating)Spray painter Certificate III in Automotive Vehicle Body (Vehicle Painting)Auto electrician Certificate III in Automotive Electrical Technology

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5 Building and ConstructionCoverage: Civil Operations, General Construction, Plumbing Services, Shared – Building and Construction.

Specific industry and business cycle drivers: Resource prices, demographics (particularly population growth among those aged 18-30), interest rates (particularly for housing construction), business investment.

Recent performance rating: High

Expected relative sectoral performance rating: High

Summary of ITAB advice and consultationMarket effectiveness

The Building Industry Consultative Council Industry Advisory Body (BICCIAB) reported a number of examples of training market success and failure which have occurred within the industry in recent years.

Examples of training market success centred on industry-led responses to skills demand, including the provision of equipment and other capital resources which are vital to ensure that apprentices and students are trained using the latest technology and machinery.

In particular, the establishment of the Australian Brick and Blocklaying Training Fund (ABBTF) has been a strong example of training market success in the building and construction industry. Historically, the sector has struggled to attract new apprentices into the bricklaying trade, while significant proportions of the existing workforce are ageing and do not possess formal qualifications. These challenges presented a current and growing skills issue for the sector.

The ABBTF is a national organisation founded, in part, to reverse this trend. The fund has implemented an apprenticeship scheme which is jointly funded by a levy on industry of $2 per thousand clay bricks or 10 cents per square metre of concrete masonry, and a matching contribution from manufacturers. The scheme promotes apprenticeships in the sector through a range of mechanisms, including a direct subsidy to employers for taking on an apprentice and the funding of programs in schools. The ABBTF also performs a wider role assisting skills development in the sector more broadly.

BICCIAB advises that the ABBTF has had a positive influence on apprentice numbers in Victoria. In 2003 there were six registered training organisations (RTOs) with 432 apprentices in bricklaying in Victoria. There are now 13 RTOs and over 1,000 apprentices in bricklaying.

Two other examples of training market success – the Plumbing Industry Climate Action Centre (PICAC) and the Port Melbourne Training Centre – highlight the benefits of exposing apprentices and existing workers to training opportunities using the latest technology and equipment.

PICAC is an industry-led facility providing plumbers and apprentices with broad skills, including a focus on sustainability. The success of PICAC stems from the ongoing

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involvement of industry organisations, the use of leading technology, and growing flexibility around training delivery (such as out of hours training). PICAC has also introduced training designed to meet demand in growing skill needs areas such as type A and B gas installation and servicing, and fire protection. An example is the introduction of a new Diploma in Fire Systems Design at the facility.

The Port Melbourne Training Centre is funded and run by the Construction, Forestry, Mining and Energy Union and provides training for crane drivers and related skills such as rigging, materials handling and labouring.

A significant capital investment – including the recent purchase of a new electric luffing crane from Europe – means that the facility offers the opportunity to train using new technology within a dedicated training environment.

A number of examples of failure in the training market were offered by BICCIAB. According to BICCIAB, instructors involved in the VET in Schools and School Based New Apprenticeships programs frequently are not trained or do not have trade experience in the discipline they are instructing. This problem arises from a general shortage of instructors due to relatively low pay, and can undermine the quality of the programs and result in the under preparedness of apprentices. More significantly, these training mechanisms lead students in years 10, 11 and 12 being graded as competent to the equivalent level of a second year apprentice. However, without on-site experience or access to off-site training resources at a TAFE, the individuals often struggle once they are employed. BICCIAB believes that students exiting secondary school with a Certificate II in Building and Construction are not as competent or industry-ready as those who have completed a pre-apprenticeship at a TAFE.

BICCIAB also cited the limited availability of training in some regional areas as a market failure. In particular, the advice of BICCIAB centred on the Mornington Peninsula region, where a small number of training providers have wide geographic coverage. There is strong demand for apprenticeships in the region (particularly around Dandenong), and in part the difficulty involves waiting lists. Employers have been more reluctant to take on apprentices as little residential construction activity is taking place in the area.

There is also some concern within industry regarding on-site assessments conducted by some training providers. Instances of a ‘tick and flick’ approach to on-site assessments have been noted, which does not foster improvement in the quality or competency of apprentices. This issue is not relevant for apprentice plumbers, who require more formal assessment due to licensing in the industry.


BICCIAB reported several change drivers for 2012 that were identified during consultations with industry stakeholders. They cover both demand and supply side issues, and include: The lack of major civil infrastructure projects in the pipeline (demand side) The economic cycle (demand side) Regulatory change (demand side) New materials and products (demand side) Sustainability (demand and supply side) Significant changes to VET fees and policies (supply side) Workforce employment structure (supply side) Competency based completion (supply side) The need for small business and soft skills (supply side)

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BICCIAB notes that the economic cycle is expected to be a key demand side influence for Victoria’s building and construction industry in 2012. A key component of this change driver involves a lack of major civil infrastructure projects in the pipeline in Victoria, which may mean a loss of workers to other States. This is perceived to be a larger potential problem in civil construction, where it is common for large construction firms to move workers from one project to the next, including interstate where necessary.

The concern raised by BICCIAB is the potential for long term or permanent loss of workers from the State, which would leave a gap in the skills base when the construction cycle improves. This problem could be exacerbated by the potential for employers to receive larger training subsidies and levies outside Victoria, further encouraging the workforce to shift interstate.

Other economic factors are expected to have a mixed impact on demand for skilled labour. On one hand, Federal Government stimulus programs have drawn to a close, while housing starts have dropped and construction on Victoria’s new desalination plant will be completed shortly. However, the 2011 floods in northern Victoria have generated construction demand and maintenance work is steady for businesses established in that sector. Meanwhile, renovation activity is increasing, and some commercial building activity is occurring in the Docklands area of Melbourne.

This patchwork activity across sectors highlights the need for workers to have broad skills (transferable across residential and non-residential construction projects). These broad skills are gained through the completion of an apprenticeship. However, solid construction activity and a pipeline of projects is required to encourage employers to take on apprentices and ensure ongoing skills acquisition and further growth in qualified workers across the industry.

Various instances of regulatory change are expected to occur in 2012. They include the introduction of new energy, waste and water policies by the Melbourne City Council to be applied to all new building developments; national occupational health and safety regulations; the National Construction Code; bushfire building regulations; a new six star housing rating; and the implementation of national licensing for plumbers.

Industry will need to respond rapidly to each of these changes and, where necessary, run targeted short course training for the existing workforce. These short courses may be particularly relevant around the new bushfire regulations, waste management, recycling and incorporating sustainable practices into work methods.

Although there are clear exceptions (such as PICAC), in general the industry has historically been slow to take up new systems of working, including taking advantage of the introduction of new materials and products. According to BICCIAB, this could be improved by ensuring training for new workers is undertaken using the latest technology, while also encouraging existing workers in the industry to complete short courses and seminars to stay abreast of new product developments.

Sustainability and green skills continue to be a growing focus for the industry. BICCIAB advises that awareness of sustainability issues is becoming increasingly embedded throughout the industry. Building sites are becoming ‘cleaner’ in the sense that waste is sorted and recycling has become more common. For example, BICCIAB noted that some 80% of a commercial building that is demolished is now recycled. Much of the progress in

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this area has been driven by regulatory change, including the move toward six star rated houses. The Melbourne City Council is also encouraging the retro-fitting of some 1,200 buildings in Melbourne by linking building owners with finance.

In terms of skill implications, sustainability tends to involve changes in work practices rather than new technical skills (though there are some exceptions, such as the skills offered to the plumbing industry through organisations such as PICAC). To that end, the embedding of sustainability units within all qualifications is important, while short post-trade courses would assist existing workers, as would a focus on soft skills which could help to improve, for example, the communication of sustainable alternatives to customers.

On the supply side, change drivers for the industry in 2012 include recent amendments to fees and policies in the VET sector. BICCIAB reports some concern in industry regarding the decrease in TAFE funding per student (reducing the disparity between funding for TAFE and private providers). There is a view that this will put greater pressure on TAFEs in regional areas, potentially reducing the range of qualification options available to the public. Instead, providers may focus more heavily on relatively popular courses with a more sustainable enrolment base. It may also encourage some TAFEs to undertake more on-site assessments, potentially reducing the quality and rigour of the assessment process.

BICCIAB also advises of some ongoing consequences of the introduction of the VTG. For example, BICCIAB noted that the VTG requires mature age students (older than 20 years) to pay full fees in order to complete a pre-apprenticeship if they have already completed their Year 12 education, as both are considered Certificate II level qualifications.

An increase in fees for apprentices in 2012 will also have a significant impact as many apprentices struggle financially. BICCIAB has noted that some employers will cover the cost for their apprentices.

The changing workforce employment structure in the building and construction industry also has implications for skills. The hiring of migrants on short term contracts in the industry is becoming more common. However, in some instances, the hiring of migrant workers as sub-contractors rather than employees may be occurring in a deliberate attempt to circumvent employer responsibilities. This discourages the hiring and training of apprentices to the detriment of the domestic skills base. BICCIAB noted that one potential solution would be to promote group training of apprentices, allowing the costs of taking on an apprentice to be shared among employers.

Issues around the ongoing role of Competency Based Completion (CBC) in the industry were also raised by BICCIAB as a change driver for 2012.

CBC requires training providers to have contact with the apprentice’s employer four times per year. At these contact points the employer is required to confirm the individual’s competency (as determined by the TAFE). CBC creates an opportunity for an apprentice to be signed off prior to the usual three of four year training contract. This signals an early completion for an apprentice’s training, but does not necessarily correlate with their wage progression.

As such, BICCIAB advises that the monitoring of CBC assessment and the progression of apprentices could be improved to ensure the system operates effectively and with the confidence of employers and industry.

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Finally, the need for small business skills and soft skills may help to reduce the number of small businesses failing in the industry. BICCIAB does not believe that small business skills should be taught as a unit within apprenticeships or other trade-specific qualification frameworks. However qualified workers in the industry should be encouraged to obtain these skills through post-qualification learning opportunities.

Industry outlook

The outlook for building and construction is solid, though there are a number of important challenges facing the industry at present.

Recent years have seen construction activity boosted by the Federal Government’s economic stimulus spending, primarily through non-residential building programmes such as Building the Education Revolution. Since 2010 however, as the effects of stimulus began to fade, construction activity has taken a hit. Between June 2010 and June 2011, completed building works fell by 15% Australia wide, and 7.5% in Victoria.

That overall relative outperformance in Victoria has been supported by residential construction in particular. Strong residential construction activity has been a theme of Victoria’s economy over a number of years. Indeed, while Victoria accounts for a quarter of the national population, and slightly less in terms of economic output, the State currently provides 40% of new housing starts in Australia.

However, there are a couple of important clouds on the horizon. Population growth has been a key driver of the relative strength of Victoria’s construction industry, particularly for residential construction, and growth is now slipping back. That is being driven by a number of factors, including the strength of the mining industry in States to the north and west (drawing workers away from Victoria), as well as the recent cuts to Australia’s skilled migration intake. The recent negative publicity surrounding the treatment of exchange students is also contributing to a considerable drop off in student numbers.

Some sectors of non-residential construction have also weakened. It is worth noting, for example, that approvals for office developments, traditionally one of the biggest contributors to overall non-residential construction, remain considerably weak compared to the peaks seen a few years ago.

This is contributing to a shortage of office space in the Melbourne CBD, with the Property Council of Australia predicting vacancies over the next couple years will remain low. Those low vacancies will contribute to higher rents and encourage further office development, but it may be some time before that recovery begins to take shape.

Despite these challenges, Victoria’s building and construction industry may continue to outperform growth in the rest of Australia, with residential activity remaining the key driver. The prospect of lower interest rates over the coming year may also help to support lending and provide a boost to construction over the next year.

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Chart 5.1: Employment outlook – Victorian building and construction industry


The chart below shows that skilled vacancies for tradespersons in the building and construction industry (as measured by DEEWR’s Skilled Vacancy Index) fell back slightly in 2011 in line with both the Victorian average and the historical trend over the past decade.

Chart 5.2: Skilled Vacancy Index – Victorian building and construction industry


Overall, and as the charts above show, Deloitte Access Economics expects relatively strong employment growth in Victoria’s building and construction industry over coming years, including growth of around 4% in 2012.

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Responses to critical skill shortage occupations previously identified for 2011 have been implemented with varying degrees of success. Three occupations in the building and construction industry were listed as being in critical shortage in 2011: project managers and supervisors (commercial and domestic), gas appliance service technicians, and building inspectors.

A number of responses to the shortage of project managers and supervisors are being implemented. BICCIAB is actively participating in a newly established committee of industry and training provider representatives tasked with examining ways to improve the skills of project and site managers.

Industry also recognises the need to increase the supply of skilled project managers, and the civil construction industry is promoting the Certificate IV in Building and Construction (Site management). The occupation remains in shortage. BICCIAB advises that the workforce is ageing, with retirements anticipated to add to skill shortage pressures over coming years.

Since being raised as a critical skill shortage, an increase in the training of gas appliance service technicians has occurred through PICAC. BICCIAB has been liaising with PICAC and reports that a good number of enrolments exist. Although there are still episodes of high demand (for example at peak periods such as the beginning of winter and in some regional areas), the occupation is no longer in demand at present. It does, however, remain an ongoing concern for industry.

The shortage of building inspectors remains a key concern for the industry. BICCIAB notes that it has established the Building Surveying Training Working Group in conjunction with the Building Commission. The group – which includes members from the private and municipal building surveying industry, the Building Commission, training providers and BICCIAB – met monthly through the latter half of 2011 to gather industry intelligence and has submitted a training proposal to the Victorian Government for consideration.

Separately, the Australian Institute of Building Surveyors has been successful in regards to a proposal to the National Workforce Development Fund, while the Building Commission has been actively promoting a career as a building inspector or surveyor at secondary schools around the State and has established a career website.


The tables below summarise the occupations in demand and experiencing critical skill shortages in 2012. These occupation lists have been advised by BICCIAB and have been determined following formal engagement with industry.

Overall, there is an increase in the number of occupations listed as in demand compared to 2011, though a relatively small proportion are also listed as experiencing a critical skill shortage. A number of the occupations listed as in demand also appear on other lists of skill shortages in the Australian and Victorian economies, including the National Skill Needs List and the Victorian skill shortage list published by the Commonwealth Department of Education, Employment and Workplace Relations. The list of occupations also correlates with the advice of the relevant national Industry Skills Council (the Construction and

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Property Services Industry Skills Council), along with the Housing Industry Association and Master Builders Association.

Occupations in demand from 2011 that are no longer included on the list include draftspeople, which has been removed due to the downturn in commercial construction activity.



Civil construction labourer Builder’s labourer (821111)Plant operator Earthmoving plant operator (721211)Road construction (Asphalt) Road roller operator (721915)

Paving plant operator (721913)Bricklayer Bricklayer (331111)Project manager Construction project manager (133111)Estimator Construction estimator (312114)Air-conditioning and mech. services plumber Air-conditioning and mech. services plumber (334112)

Project administration Program or project administrator (511112)Building surveyor / Building inspector Building inspector (312113)Bridge builder Concreter (821211)Pipe layer Drainer (334113)Sprinkler fitter and fire alarm / electronics specialist Technicians and trades workers nec (399999)Concreter Concreter (821211)Joiner (On-site installer) Joiner (331213)Fibrous plasterer (wall and ceiling lining) Fibrous plasterer (333211)Wall and floor tiler Wall and floor tiler (333411)Occupational health and safety advisor Occupational health and safety adviser (251312)Stonemason Stonemason (331112)Carpenter Carpenter (331212)Painter and decorator Painting trades worker (332211)Solid plasterer Solid plasterer (333212)Drainer Drainer (334113)Gasfitter Gasfitter (334114)Roof plumber Roof plumber (334115)Roof tiler Roof tiler (333311)Occupations experiencing a critical skills shortageIndustry title

ANZSCO classificationPlant operator Earthmoving plant operator (721211)Road construction (Asphalt) Road roller operator (721915)

Paving plant operator (721913)Project manager Construction project manager (133111)Building surveyor / Building inspector Building inspector (312113)Estimator Construction estimator (312114)

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The table below outlines qualifications which are required for occupations experiencing a critical skill shortage.


Occupation (Industry title) QualificationPlant operator Certificate III in Civil Construction Plant OperationsRoad construction (Asphalt) Certificate III in Road Construction and MaintenanceProject manager Certificate IV in Building and Construction (Building)

Certificate IV in Building and Construction (Site management)Diploma of Building and Construction (Building)

Building surveyor / Building inspector Diploma of Building SurveyingAdvanced Diploma of Building Surveying

Estimator Certificate IV in Building and Construction (Estimating)

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6 Business ServicesCoverage: Accounting, Business Administration, Business Management, Cleaning and Waste Management, Finance, Human Resources, Insurance, Legal Administration, Marketing and Sales, Real Estate, Security, Shared – Business Services.

Specific industry and business cycle drivers: Credit growth, interest rates, corporate profits (this trio affects demand across the sector), housing and commercial construction cycles (which affects demand for real estate agents and architects).

Recent relative sectoral performance rating: Above average

Expected relative sectoral performance rating: Above average



A number of examples of training market success and failure were reported by Business Skills Victoria (BSV).

Examples of training market success include six Stimulating Training Demand Projects which were funded by the Higher Education and Skills Group (formerly Skills Victoria) through 2010 and 2011. The projects – which included a targeted focus on real estate, finance and facility management along with broader customer contract and green skills – were highly successful, resulting in the placement of around 500 people in training in targeted industries.

The results exceeded training market targets for all projects and the benefits of training promotion and skills deepening in these industries are expected to be ongoing. The projects provided training for both new entrants and existing workers.

Recent work by BSV and the Royal Melbourne Institute of TAFE (RMIT) to promote qualifications in the facility management industry represents a second example of training market success. As facility management is an emerging industry, the existence of relevant qualifications is not well understood by industry or the public.

BSV and RMIT conducted promotional activities to encourage take up of the Certificate IV in Property Services (Operations) and Diploma of Property Services (Asset and Facility Management). This work included targeting employers, networking through the Facility Management Association and undertaking marketing at workshops and meetings. The project was successful in raising awareness of training pathways in facility management.

A third example of success relates to the promotion of career pathways in the electronic security industry. The electronic security industry incorporates a number of occupations, including those situated in monitoring centres and control rooms along with higher level jobs such as the installation of cabling. A number of lower skilled occupations would suit

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individuals currently outside the workforce, including university students and persons with a disability.

The industry suffers from thin markets and a lack of properly developed and documented career pathways. BSV developed occupational profiles describing jobs found in the industry and promoted two key qualifications – the Certificate III in Technical Security and the Certificate IV in Security and Risk Management. BSV has also been liaising directly with training providers and employers and has raised the awareness of the industry.

A key theme across the examples of market failure provided by BSV was the link between growing enrolments in specific qualifications and a reduction in training provider funding for broader industry qualifications (via the relevant industry weighting).

This is most apparent in relation business services, property services and finance qualifications. According to BSV, the sharp increase in business services enrolments in recent years can be attributed to the Diploma of Management, which has seen government funded enrolments rise from 267 in 2008 to 10,230 by the third quarter of 2011. Partly as a result of this increase, the relevant industry weighting for business and clerical services (which determines funding to training providers) has been reduced for 2012. In the view of BSV, this will greatly disadvantage the broader sector and result in a decline in genuine business training and the development of technical skills.

In property services, enrolments in the Certificate II and Certificate III in Security Operations roles rose from 197 in 2008 to 3,750 by the third quarter of 2011. According to BSV, this increase contributed to a reduction in the industry weighting for property services which is expected to affect other qualifications in thin markets, including those related to electronic security, pest management and facility management.

The increase in the take up of finance qualifications – including the Certificate IV in Financial Services and the Certificate IV in Financial Services (Bookkeeping) – is meeting a real industry need. However a reduction in the weighting for finance qualifications will have implications for enrolments, including in accounting, which is currently experiencing a critical skill shortage.

BSV notes that these issues could be avoided by applying relevant weightings at the course level rather than the industry level.

A related market failure identified by BSV involves the dramatic increase in enrolments in some qualifications. BSV believes that in some instances this represents an abuse of the training market, with some training providers marketing short course training directly to employers. These courses are often funded through the Victorian Training Guarantee though in some cases do not meet training hours or unit of competency requirements.

BSV believes more careful monitoring of training providers needs to occur in an effort to identify those offering sub-par training.


Advice from BSV is that the following major change drivers are expected to affect the business services industry in 2012: Globalisation (demand side)

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Environmental sustainability (demand side) Economically induced industry restructure (supply side) Ageing population (supply side)

These change drivers have been raised by BSV over a number of years, and are expected to remain relevant through 2012.

The impact of globalisation and general economic conditions is an ongoing issue for industry. With operations increasingly conducted on an international level, business services firms are reporting a growing need for individuals to be aware of the global environment for their product or service and stay up-to-date with industry developments and regulations.

In the financial services sector, that includes being across changes to Australian accounting standards, which are moving in line with international reporting standards, as well as upskilling as the regulatory environment changes (for example in relation to financial planning and insurance).

BSV advises that the changing economic conditions are having implications for skills in the real estate sector. The recent weak market performance is requiring a greater focus on marketing rather than business processes as the industry tries to counter soft demand.

The increased focus on environmental sustainability is creating skill requirements across the industry. In business services, skills and knowledge of corporate social responsibility, triple bottom line accounting and environmental social governance are required, with an emphasis on integrating these issues into the overall business performance. A related emerging skill is carbon accounting, which will become necessary with the introduction of the Federal Government’s carbon tax from 1 July 2012. Specific units in carbon accounting are already offered at Swinburne (which also offers a Diploma of Carbon Management), with other training providers are also expected to offer training in carbon accounting going forward. The carbon tax is also expected to create opportunities for auditors, financial analysts and accountants, and is expected to expand the scope of accounting professions.

Environmental sustainability is also relevant in other sectors, including waste management (where skills have shifted to waste minimisation and waste avoidance in line with broader aspects of sustainability), in real estate (with an increased focus on energy efficiency and sustainability to meet buyers’ expectations), and in facility management (where knowledge of the five star Victorian building standard and tools to present the case for green buildings are required).

The incidence of economically induced restructure continues to be present in the industry, driven by strong demand growth over time and a number of regulatory and other changes.

Small and medium enterprises account for a significant proportion of the industry allowing for relatively rapid adoption of new technology, with the use of social media beginning to emerge for advertising and other purposes.

Other examples of change in the industry cited by BSV include an overhaul of the financial planning sector by the Federal Government, including in relation to conflicts of interest, transparency, duty to clients and models of fee generation, and the Cooper review of

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superannuation. Both of these changes will have implications for industry structure and underscore the need for skills around flexible business practices and business management.

BSV also noted the deep awareness of population ageing in the industry. The workforce represents a broad cross section of the Australian population, and an increase in retirements is anticipated over coming years.

That trend may be felt more acutely in electronic security and waste management. These occupations are struggling to attract new, younger entrants into positions, possibly because of a lack of understanding regarding the industry or minimal opportunity for career progression. BSV is assisting to promote careers in both sectors in conjunction with training organisations and industry bodies such as the Australian Security Industry Advisory Association and the Waste Management Association of Australia. In regards to electronic security, BSV is also assisting the sector to promote employment opportunities generated by the National Broadband Network.

Accounting is also experiencing the effects of population ageing. With accountants already listed on the Skilled Occupation List for migration, an increase in retirements in the years ahead will further exacerbate the shortage of qualified workers.

Industry outlook

Most components of the Victorian business services industry have performed relatively strongly in recent years, despite the impact of the global financial crisis. The financial services sector is one exception, with the sector struggling in 2009 in particular, and difficulties have again been evident more recently.

Indeed, there has been some significant global consolidation in the financial services sector. In Australia this has been most visible in the absorption of a number of regional banks. In the wake of the Cooper Review, new laws have come into place governing financial transactions, and further reforms are in train.

Credit growth has returned, but it is still modest, and it has not, and likely will not, return to pre-financial crisis growth rates. That said, the finance and insurance sector is struggling to maintain profitability, and significant job losses have already occurred across some major employers. That will weigh on the employment outlook for the broader business services industry through 2012.

The property services sector has also had a tough time. Susceptibility to rising finance costs and fluctuations in asset prices saw it fare badly in the wake of the global financial crisis. However, as Australian businesses have regained confidence and financing costs have eased the sector has begun to recover. Moreover, a potential downward bias in the future direction of interest rates may also help to support further recovery in house prices, which would be a positive for this sector.

Strong rates of dwelling construction in Victoria have also been a boon for the property services sector. That growth is expected to slow somewhat over the medium term, however, due to easing population growth.

A number of other professional services sectors, such as accounting, legal services and advertising and marketing professionals have seen a reduction in demand recently. Some

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large services firms have noted low utilisation levels, and in some cases actively reduced employment.

That trend is not expected to be widespread or long lasting, with the relatively strong outlook for the Australian (and Victorian) economies expected to support business confidence and spending on professional services.

Chart 6.1: Employment outlook – Victorian business services industry


Indeed, as the chart below showing skilled vacancies for certain occupations in the Victorian business services industry suggests, vacancies for legal professionals, accountants and auditors, and marketing professionals remain low, having decreased further in 2011. Given some of the difficulties expected to face the broader industry through 2012 and the projected weaker labour demand, vacancies may fall further over the short term.

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050

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Victoria Business services


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Chart 6.2: Skilled Vacancy Index – Victorian business services industry


Overall the business services industry is comprised of many different sub-sectors. Employment in the broader industry is expected to contract in 2012, dragged down by difficulties in the financial sector in particular, before a recovery commences in 2013.



Responses to critical skill shortage occupations previously identified for 2011 are being implemented in the business services industry. Four occupations in the industry were listed as in critical shortage in 2011: accounting, waste management drivers, waste management operators and sustainability assessors.

Although higher education is the preferred pathway for the accounting profession, the VET sector can play an important role. BSV has been actively raising industry awareness during consultations and at career forums regarding VET qualifications that can lead to paraprofessional accounting roles. BSV has also been promoting cooperation between VET and higher education providers and identifying key training requirements in the industry such as around announced changes in financial planning and issues relating to carbon accounting and emissions training.

According to BSV, the contribution that can be made by VET graduates is being increasingly acknowledged by industry. The occupation remains in critical shortage and firms continue to seek suitably qualified accountants from overseas. The occupation remains on the Skilled Occupation Lists for migration.

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0

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1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011Victoria (Total) Accountants and auditors

Marketing professionals Legal professionals

Index: 2000 = 100

More vacancies

Fewer vacancies



BSV reports considerable difficulty attracting individuals to vacancies in the waste management industry. Waste management drivers remain in critical shortage despite larger employers offering relatively good wages and conditions in an effort to attract skilled workers. There is widespread recognition that the job is ‘not for everyone’, and the long lead time in training is exacerbating the shortage. Moreover, the existing workforce is ageing (BSV reports that most drivers are aged 50 or over), and the issue is expected to worsen over the medium term.

However, waste management operators are no longer listed as experiencing a critical shortage. BSV notes that there remains an issue of labour shortage, and the industry still finds it difficult to attract workers given relatively low wages. However the issue for the occupation could be characterised as a labour shortage rather than a skill shortage.

The shortage of sustainability assessors remains a concern. BSV has been raising awareness at career forums that national qualifications are now available, and has been promoting the update of the Certificate IV in Home Sustainability Assessment. A number of training providers in Victoria now offer this course, and BSV believes that despite being relatively new, the industry is gaining momentum. As the qualifications required by industry now exist, the issue is now one of promotion and broadening community understanding about the role of the industry.


The tables below list the occupations in demand and experiencing critical skill shortages in 2012. These occupation lists have been advised by BSV and have been determined following formal engagement with industry and other stakeholders.

Consistent with the similar range of issues expected to affect the industry in 2012, the list of occupations is similar to those nominated in 2011.



Accounting Accountant (General) (221111)Bookkeeping Bookkeeper (551211)Managers Corporate services manager (132111)Legal administration officers Legal secretary (521212)

Law clerk (599214)Project managers Program or project administrator (511111)Waste management drivers Recycling or rubbish collector (899611)Waste management operators Machine operators nec (711999)Sustainability assessors Environmental manager (139912)Real estate agents Real estate agent (612114)Property developers Property manager (612112)Facility managers Facilities manager (149913)Security control room and monitoring centre operators Alarm, security or surveillance monitor (442211)

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Occupations experiencing a critical skills shortageIndustry title ANZSCO classificationAccounting Accountant (General) (221111)Waste management drivers Recycling or rubbish collector (899611)Sustainability assessors Environmental manager (139912)



Occupation (Industry title) QualificationAccounting * Certificate IV in Accounting

Diploma of AccountingAdvanced Diploma of Accounting

Waste management drivers Certificate III in Asset Maintenance (Waste management)Certificate IV in Asset Maintenance (Waste management)

Sustainability assessors Certificate III in Asset Maintenance (Waste management)Certificate IV in Asset Maintenance (Waste management)Certificate IV in Home Sustainability Assessment

* A preferred pathway is higher education.

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7 Community Services and HealthCoverage: Children’s Services, Community Health, Community Support, Health Sciences and Acute Care, Medical Practitioners, OH&S Professionals, Other Health Professionals, Psychologists, Residential Aged Care and Home and Community Care, Nursing Professionals.

Specific industry and business cycle drivers: Government policy (including subsidies), ageing of the general population, the rate of retirement and/or shifts to different occupations among nurses (affects gross demand for new workers), increased consumer awareness and expectation, extent and nature of government subsidies to child care and measures to promote workforce participation among mothers (affects child care demand).

Recent relative sectoral performance rating: High




A number of examples of market effectiveness were provided by the Community Services and Health Industry Training Board (CS&H ITB). Only one example of success was provided, in relation to a training needs analysis for Aboriginal health workers. The failures, on the other hand, generally related to thin markets and training quality.

A training needs analysis was conducted with the participation of Rumbalara, an Aboriginal health and welfare organisation based in North-Eastern Victoria. The analysis focused on the training needs of Aboriginal health workers and was partially funded by the Higher Education and Skills Group (formerly Skills Victoria). The program also involved actively pursuing relevant training for the health workers involved in the study, after skills gaps had been identified.

An increase in training place numbers for children’s and aged care services can be considered an example of market success. In the area of child care, these training places are required by the industry given it will be mandatory for children’s services workers to be qualified with either a Certificate III or Diploma in Children’s Services by the end of 2013. As a result, training numbers have increased from 16,632 in 2010 to almost 22,000 in 20111, with much of this done through recognition of prior learning (RPL). However, there is a capacity constraint within the training sector to provide a sufficient number of skilled assessors.

In the aged care sector training numbers are also up, from 6,403 in 2010 to 8,327 in 2011 for the Certificate III in Aged Care and Certificate III in Aged Care Work. This results from a general demand for qualified aged care workers and an increasingly large number of Victorians ‘ageing in place’. However, the industry has reported that graduates are not

1 This represents total enrolments in the Certificate III in Children’s Services and the Diploma of Children’s Services (including the early childhood education and care and the outside school hours care specialisations).

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work-ready. This may be due to capacity constraints in the regulation of quality of training as there is such a high volume of student turnover and a large number of training providers.

An expected shortage of clinical placements for those undertaking a nursing qualification will cause significant problems for the training industry next year. Clinical placements are a core requirement for completion of nursing qualifications and a shortage will restrict completion of training. This problem has been building for a number of years, but CS&H ITB expects that there will be a peak shortfall of between 500 and 600 clinical placements for nursing students State-wide in 2012. CS&H ITB has been funded to develop a common assessment tool to assist with nursing placements (as described later in this chapter).

The CS&H ITB reported a shortage of Allied Health workers in regional Victoria. This is not specific to any particular area of the State, but is a general issue around regional Victoria. This problem is not attributed to the availability of training courses, but as a result of thin markets for employment given the relatively low population base and high degree of turnover among these workers.


CS&H ITB reported a number of change drivers for 2012 that were identified during consultations with industry stakeholders. These are supply and demand side issues associated with changes in public policy: National case-mix funding (demand side) National approach to childcare qualifications (demand side) State Government Inquiry into Child Protection (supply side) Fees and funding changes (supply side)

All jurisdictions in Australia will be moving to case-mix funding for health care, while Victoria has used this system since 1994. Case-mix funding involves the allocation of funds on the basis of how patients are coded. As such, there is a requirement for staff trained in clinical coding and health information management. It is predicted that nationally there will be a shortage of approximately 600 qualified staff over the next five years. While Victoria has a large number of suitably qualified staff already, a shortage is still expected here as some staff retire and others are lured away to other jurisdictions.

A national approach to childcare qualifications is resulting in a significant increase in the number of enrolments for training in children’s services (as discussed in the market effectiveness section above).

A State Government Inquiry into Child Protection has been conducted, with outcomes and an internal review by the Department of Human Services (DHS) to be made public. The outcomes may imply a program for reform, with the potential combination of the Certificate III and IV into a generic qualification for the healthcare sector. The idea is to move towards client-centred services with a flexible workforce that is able to move between different sub-sectors, such as child care, aged care and child protection. The proposed changes would aim to provide a broader set of skills as required by the workforce.

As a result of the proposed changes to fees and funding in 2012 in relation to the differential in funding between private and public providers, it is expected there will be a reduction in the number of courses available at public institutions. CS&H ITB reports that one TAFE provider has already decided not to offer one of their courses in 2012 as a result

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of these changes. Overall, this may lead to a reduction in the availability of training, particularly in those courses which were marginal due to low levels of demand or high costs of provision.

Industry outlookThe community services and health industry represents an essential service and is generally less affected by cycles in the broader economy. The industry’s output has been steadily increasing over the past two decades, and has rapidly increased as a share of the Victorian economy.

Employment in the Victorian community services and health industry has also been growing strongly, and now accounts for more than 300,000 workers. Over the last decade, the average annual employment growth in the industry has been almost double the Victorian rate of 2.4%.

Moreover, the outlook for the industry is also very healthy. Demographics are a key driver of growth, particularly for the health and aged care components of the industry. The growing and ageing Australian population is expected to underpin demand for health services, both through the impact of a larger demand base and the occurrence of more complex health conditions and co-morbidity.

Victoria’s population growth has eased over the past two years due to a number of factors, including the strength of the mining industry in States to the north and west (drawing workers away from Victoria), as well as the recent cuts to Australia’s skilled migration intake. The recent negative publicity surrounding the treatment of exchange students is also contributing to a considerable drop off in student numbers.

Employment outlook – Victorian community services and health industry


That said, solid population growth of around 1.5% per year is expected in Victoria, and the demographic changes are expected to increase demand for health services in general, and hospital and aged care services in particular over the longer term.

The supply side of the sector continues to face some uncertainty. The recently released Productivity Commission report, Caring for Older Australians, recommended a number of changes to the aged care sector in Australia, including in relation to skill development and the VET system, which are currently being considered by the Federal Government.

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Meanwhile, the Council of Australian Governments has recently agreed to the National Health Reform Agreement which increases Federal Government funding of the health sector in Australia while also introducing a series of reform measures.

Skilled Vacancy Index – Victorian community services and health industry


The chart above shows that skilled vacancies for some workers in the Victorian community services and health industry (as measured by DEEWR’s Skilled Vacancy Index) remained relatively steady in 2011.

Overall, employment growth in Victoria’s community services and health industry has been solid in recent years, supported by an expansion of the aged care and broader health sectors. As the charts above show, Deloitte Access Economics expects relatively strong employment growth in the industry over coming years. After growing by close to 8% in 2011, employment growth in the community services and health sector is expected to remain solid over the medium term.



A number of actions have been taken by CS&H ITB and the industry in response to critical skills shortages listed for 2011. Nonetheless, all occupations experiencing critical skills shortages in 2011 remain on the list for 2012.

In response to the critical shortage of aged care workers, Aged and Community Care Victoria (ACCV) has pursued a number of strategies. One of these involved active engagement with the training sector. After successfully obtaining funding, the ACCV undertook an aged care nurse graduate program in partnership with Monash University. This allows first and second year registered nursing graduates to take up employment with ACCV members, while at the same time being supported by a tailored education program.

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1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

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In response to the critical shortage of enrolled nurses, a common assessment tool has been developed by CS&H ITB. This tool provides a framework for assessment of placements, based on identification of common requirements for placement completion. Due to a lag in the effect on skills shortages, no impact can yet be identified. However the tool has been positively received and there are moves to roll it out nationally.

The common assessment tool facilitates completion of the qualification. It is important because existing clinical placement templates predominately service the higher education sector. VET courses have different regulatory requirements to higher education courses, resulting in greater supervisory requirements being placed on the health service provider for VET placements. The common assessment tool assists to reduce this burden and is therefore expected to help to increase clinical placement numbers.

The CS&H ITB has been working with DHS to address the skills shortage in community care workers. This involved a ‘goal-directed care planning’ project to deliver competencies to the health workforce, including home and community care workers. This project focuses on workers in Primary Care Partnerships, who can receive subsidised training in a study unit of goal-directed care. This covers a wide range of workers, including doctors, allied health workers and administrative staff. The resulting effect on health outcomes is expected to materialise in the near future.


The table below summarises those occupations cited as being in demand and those experiencing critical skill shortages in 2012, based on advice provided by CS&H ITB. These occupation lists were determined by CS&H ITB following formal engagement with industry. All occupations in demand are also considered skills shortages, and the list remains the same as in 2011.



Aged care workers Aged or disabled carer (423111)Enrolled nurses Enrolled nurse (411411)Children’s services workers Child care worker (421111)Child protection workers Family support worker (411713)

Welfare worker (272613)

Disability services workers Disabilities services officer (411712)Community care workers Community worker (411711)Occupations experiencing a critical skills shortageIndustry title ANZSCO classificationAged care workers Aged or disabled carer (423111)Enrolled nurses Enrolled nurse (411411)Children’s services workers Child care worker (421111)Child protection workers Family support worker (411713)

Welfare worker (272613)

Disability services workers Disabilities services officer (411712)Community care workers Community worker (411711)

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Occupation (Industry title) QualificationAged care workers Certificate III – Aged care

Certificate III – Home and Community CareCertificate IV – Home and Community CareCertificate IV – NursingCertificate IV – Allied Health AssistanceDiploma – Nursing for (a) new entrants and (b) existing workers

Enrolled nurses Certificate IV – NursingCertificate IV – Allied Health AssistanceDiploma – Nursing for (a) new entrants and (b) existing workers

Children’s services workers Certificate III – Children’s ServicesDiploma – Children’s Services (Early Childhood Education and Care)Diploma – Children’s Services (Outside School Hours Care)

Child protection workers Vocational Graduate Certificate – Community Services Practice (Statutory child protection)Certificate IV – Child, Youth and Family Intervention (Residential and out of home care)Certificate IV – Child, Youth and Family Intervention (Child protection)Certificate IV – Child, Youth and Family Intervention (Family support)Disability services workers Certificate IV – DisabilityDiploma – DisabilityAdvanced Diploma – Disability

Community care workers Certificate IV – Community Service (Alcohol and other drugs)Certificate IV – Community Service (Mental health)Diploma – Community Service (Alcohol and other drugs)Diploma – Community Service (Mental health)Diploma – Community Service (Alcohol, other drugs and mental health)Diploma – Community Service (Case management)Diploma – Community Services CoordinationAdvanced Diploma – Community Sector ManagementVocational Graduate Diploma – Community Sector ManagementVocational Graduate Certificate in Community Services Practice (Client assessment and case management)

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8 Culture and RecreationCoverage: Arts and Design, Entertainment, Recreation, Shared – Culture and Recreation

Specific industry and business cycle drivers: $A exchange rate, interest rates. petrol prices, extent of competition among domestic airlines, government spending (affects extent of staging of cultural events), and consumer spending.


Expected relative sectoral performance rating: Average



A number of examples of market effectiveness were provided by SkillsHub in terms of both successes and failures. The successes generally relate to increases in training in response to skill needs, while the failures relate to low take-up rates and thin markets.

The obtainment of formal qualifications in technical production for 60 staff at the Victorian Arts Centre through RPL is an example of a market success. Innovation and Business Skills Victoria and SkillsHub have been assisting the Victorian Arts Centre to access the VTG as well as funding available under the National Workforce Development funding program in order to obtain these qualifications for their staff and meet current workplace health and safety requirements.

There has been success in qualifying 30 industry professionals in a Diploma of Screen Media, customised for Screen Safety Officers, in order to meet requirements under new WorkSafe requirements for 2012. This has been done through consultations with the Media Entertainment and Arts Alliance. SkillsHub has provided advice and assistance to a New South Wales RTO that is a specialist provider in occupational health and safety for the screen industry to deliver training in Victoria. This qualification is currently being offered by only one training provider, through a combination of RPL and training. Single units are also delivered to both screen and advertising businesses in order to meet the new regulatory requirements.

Training for library technicians has increased since the skill reforms, with full demand reached for most existing courses and a new course commencing at one RTO. Library technician skills are in demand across a range of sectors, with the number of librarians increasing by 5% over the past five years. This increase in training will help to address any potential skills shortages that are largely the result of an ageing workforce.

Outdoor adventure instructors were listed as a critical skills shortage in 2011 and training in this area has increased as a result of the Home Grown outdoor recreation project. The training has focused on building skills for leadership and management positions, with a doubling of qualifications in the Certificate IV and Diploma, as well as traineeships. This could be considered a market success. However, SkillsHub reports that this increase in

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training may have been met by the entry of new providers in the market with questionable training quality and job outcomes for students. On the whole, very high quality training has been provided, though a small number of unscrupulous providers have been exploiting the training system, leading to restrictions on training despite an ongoing skill need.

There have been difficulties in securing traineeships in the area of digital interactive media, in order to meet current and expected future high levels of demand for these skills. It is reported that the level of training has increased. However, on the job training through traineeships has been difficult to secure. Under the Game Plan project the target of an additional 25 digital media graduates was not realised, but a total of 24 additional students and trainees were placed (with three of these positions being traineeships). There is a misalignment of incentives due to the regulations concerning traineeship funding and wages versus the level of qualification required by the industry for entry. SkillsHub reports that an Advanced Diploma is the entry level requirement for the industry, but this does not attract a training wage. Furthermore, employers are not eligible for the Federal traineeship incentive if they take on an Advanced Diploma trainee who has already completed a Diploma.

An initiative of SkillsHub in 2011 was to work in partnership with Swinburne University to offer free RPL of skills for 20 volunteers in the Victorian Country Football League Club. None of these volunteers took up the offer. The Skills for Growth program, which identified volunteers in other areas, has likewise not been successful in engaging volunteers to undertake formal qualifications. This may be because the volunteers perceive that a qualification is not necessary to continue their work, or an inability to link volunteering skills with other employment and training pathways.


SkillsHub reported a number of change drivers for 2012 that were identified during consultations with industry stakeholders, affecting both the demand and supply side for the cultural and recreation industries: Greater focus on preventative health (demand side) High Australian dollar (demand side) National Broadband Network (demand side) New WorkSafe regulations (supply side)

As a result of the greater focus on preventative health in Australia (arising from increasing obesity levels and related health conditions), the recreation industry is attempting to expand participation, as this is often linked to funding arrangements. In order to implement such strategies, people working in recreation require higher level management skills and specialist skills allowing them to work with people at risk. The Diploma of Fitness in the new SIS10 training package addresses the skill needs required to work with people at risk.

A high Australian dollar has negative implications for the games industry which relies heavily on exports. A large number of Victorian gaming businesses have closed down over the last 12 months as a result. People with skills in this sector, such as design, programming and production management skills, may find they are able to transfer those skills to other areas. Remaining games design businesses require skills training in intellectual property and contract management to better enable them to retain their intellectual property and profits. SkillsHub notes that new policies are being considered that are similar to the

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incentives currently on offer to the film and television industry. This will likely boost games production in the near future and a skills base will be necessary to compete internationally.

The development of the National Broadband Network continues to be a change driver for the cultural industry. Overall, there will be greater demand for skills in developing online applications, social marketing and interactive media. In particular, skills in content creation, content management and content distribution will be required across a range of industries. The Federal Government is proposing ‘Arts Ready’ traineeships to address these skills gaps in regional areas.

On the supply side, the new WorkSafe regulations will continue to have an impact across the cultural and recreation industries in 2012. This will require appropriate training of all employees and volunteers in occupational health and safety (OH&S). Development of licensed units is essential to ensure all graduates have appropriate OH&S training. To date the Music, Screen Media and Entertainment training packages have been updated with these units.

SkillsHub also reports that there is a continued shortage of fitness, aqua and community recreation instructors, particularly in regional Victoria. A key reason for this shortage is the high level of turnover within the industry. Training in fitness has increased four-fold recently, which may help to address the skills shortage. However, the industry still has concerns that, due to the high turnover rate, a large proportion of these will not stay in the industry long-term.

Industry outlook

The Victorian culture and recreation industry has accounted for a growing share of the Victorian economy over time. After an apparent dip in 2010, employment in the culture and recreation industry recovered strongly in 2011 and now represents almost 65,000 workers.

The increase in discretionary spending by households in recent years has been a key reason behind the lift in the industry’s relative strength over time. Indeed, spending on ‘luxuries’ such as recreational activities is an important driver of growth for cultural and recreational employment.

The industry will benefit from a general trend for services to account for a larger share of household spending over time. The latest Household Expenditure Survey released by the ABS shows that, Australia wide, total weekly expenditure by households rose by 38.5% over the six years to 2009-10, while spending on recreational services rose by 40.8%.

Discretionary spending by households is also expected to grow solidly over the medium term, with solid employment and wage growth both likely to underpin good gains in household income. Moreover, the prospect of lower interest rates over the coming year may also help to support spending growth, including on recreational services.

The health of the domestic and international tourism sectors is also important to growth in the culture and recreation industry. At present, some notable challenges are affecting the outlook for tourism. In particular, the elevated exchange rate is discouraging international visitors from coming to Australia and encouraging Australians to holiday overseas.

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Employment outlook – Victorian culture and recreation industry


The recent disruptions to travel services caused by industrial disputes in the aviation sector have also posed significant challenges, though some certainty in the area has now been achieved.

On the supply side, some sectors of the industry (particularly sporting activities) remain highly reliant on a volunteer workforce which poses challenges for skill acquisition and retention of workers (SkillsHub notes that this is exacerbated by the lack of a funding mechanism to address the issue of skills for volunteers, which remains a critical issue for the culture and recreation sectors).

Overall Deloitte Access Economics expects employment in the sector to remain relatively steady in 2012, with modest rates of growth over the medium term.

Occupations in demand and critical skill shortagesResponse to 2011 critical skill shortages

A number of actions have been taken by SkillsHub and the industry in response to critical skills shortages listed for 2011. Three occupations were listed as critical skills shortages for 2011 and only outdoor adventure instructors are still listed as a critical skills shortage for 2012.

As described in the market effectiveness section, skills shortages for outdoor adventure instructors have been addressed with mixed success through the Home Grown project. In addition to this program, SkillsHub has also completed a Victorian Outdoor Industry Workforce Development Strategy. Industry has almost doubled the number of traineeships available and it has met to discuss recommendations in relation to government funding cuts to recreation.

In response to the skills shortage for digital broadcast technicians, which is due to an ageing workforce and high incidence of freelancers, SkillsHub has pursued two main actions. The first of these was a project on behalf of Innovation and Business Skills Australia to address the requirements resulting from changes to OH&S regulation in the screen media industry. The second has been a long term project, Making it Reel, where SkillsHub has worked on improving vocational pathways in the industry over the last three years, with a particular emphasis on traineeships. SkillsHub reports that traineeships in the sector are now increasing.

A critical skill shortage for games designers was reported for 2011 and SkillsHub responded with a proposal to stimulate demand for training. It was successful in securing pledges by

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businesses to take on trainees. However, as a result of the high $A, a number of Victoria’s major games businesses closed down. During the project period and there was limited uptake of traineeships, with 3 traineeships secured out of a planned 10 to 15. The project led to a total of 24 out of a proposed 25 placement target with the majority of training being delivered in the classroom but tailored to specific industry needs.

Occupations in demand and critical skill shortages in 2012The table below summarises those occupations cited as being in demand and those experiencing critical skill shortages in 2012, based on advice provided by SkillsHub. These occupation lists were determined by SkillsHub following formal engagement with industry. The number of occupations in demand and the number experiencing critical skill shortages have both increased from 2011.

Occupations in demand and experiencing critical skill shortagesOccupations in demandIndustry title ANZSCO classification

Sports and recreationSwimming coach / Aqua instructor Swimming coach or instructor (452315)Lifeguard Lifeguard (452414)Sports coach / Instructor Other sports coach or instructor (452317)Fitness instructor Fitness instructor (452111)Sports development officer / Sports administrator

Sports development officer (452321)Sports administrator (139915)

Amusement, fitness and sports centre manager

Amusement centre manager (149111)

Sports umpire Sports umpire (452322)Volunteer coordinator Diversional therapist (411311)Outdoor recreation guide / Instructor Outdoor adventure instructor (452215)Outdoor recreation assistant Outdoor adventure instructor (452215)Outdoor program manager Outdoor adventure instructor (452215)Arts and cultureArts Administrator / Manager Arts administrator or manager (139911)Camera operator (film, television, or video)

Camera operator (film, television, or video) (399512)Cinema theatre/facilities manager Cinema or theatre manager (149912)Community cultural development officer Community arts worker (272611)Games developer/Animator/Special effects

Multimedia designer (232413)Illustrator Illustrator (232412)Library technician/assistant Library technician (399312)

Library assistant (599711)

Lighting technician Light technician (399513)Multi/New/Interactive media designer Multimedia designer (232413)Multimedia specialist and web developer Multimedia specialist (261211)

Web developer (261212)

Performers (Dancers) Dancer or choreographer (211112)Performers (Circus Theatre) Entertainer or variety artist (211113)Post-production media technician Production assistant (film, television, radio or stage) (599912)

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Occupations experiencing a critical skills shortage Industry title ANZSCO classification

Sports and recreation

Swimming coach / Aqua instructor Swimming coach or instructor (452315)Lifeguard Lifeguard (452414)Arts and cultureCamera operator (film, television, or video) Camera operator (film, television, or video)

(399512)Cinema theatre/facilities manager Cinema or theatre manager (149912)Lighting technician Light technician (399513)Multi/New/Interactive media designer Multimedia designer (232413)Multimedia specialist and web developer Multimedia specialist (261211)

Web developer (261212)

Post-production media technician Production assistant (film, television, radioor stage) (599912)



Occupation (Industry title) QualificationSwimming coach/ Aqua Instructor Certificate III in AquaticsLifeguard Certificate III in AquaticsCamera Operator (film, television, or video) Certificate IV in Broadcast TechnologyCinema Theatre/Facilities Manager Diploma of Venues and Events

Advanced Diploma of Venues and EventsLighting Technician Certificate III in Live Production, Theatre and Events

Certificate IV in Live Production, Theatre and EventsCertificate IV in Screen MediaCertificate IV in ElectrotechnologyDiploma of Screen and Media

Multi/New/Interactive Media Designer Certificate IV in Interactive Digital MediaCertificate IV in Information Technology (Multimedia)Diploma of Interactive Digital Media

Multimedia Specialist and Web Developer Certificate IV in Information Technology (Websites)Diploma of Information Technology (Websites)

Post Production Media Technician Certificate IV in Screen MediaCertificate IV in ElectrotechnologyCertificate IV in Interactive Digital MediaDiploma of Screen Media

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9 Electro-technology and Communications

Coverage: Communications, Electrical and Electronics, Information Technology, Printing, Gas transmission, Rail Traction, Renewable Energy.

Specific industry and business cycle drivers: Pace of technological advance (may boost demand for the sector, but may also be labour saving), extent of offshoring, the $A.

Recent performance rating: Below average




There have been several examples of market success in the electro-technology, electricity supply, IT and communications, and printing sectors over the past year.

One story which stands out has been in motor rewinding (or armature winding), which has suffered from thin markets for a number of years (enrolments have previously been less than eight per year). Additionally, industry has been reluctant to have staff away from the workplace for a significant length of time. However, an RTO was found which was prepared to offer and develop training which was able to be provided at the workplace. Crucial to the process was that a memorandum of understanding between industry and the Bendigo Regional Institute of TAFE was developed, which states that if less than 14 students were enrolled in a year, then an industry fund will pay the costs associated with running the program for a reduced number of students. This industry fund provides certainty for the RTO and industry alike, in ensuring sufficient funds are available to run the Certificate III in Electrical Motor Repair.

The success in armature winding training was a joint effort between EPIC Industry Training Board, Manufacturing and Engineering Skills Advisory Board (MESAB), industry and training providers. MESAB was involved initially in securing the funding, while the Electro-technology, Printing, Information and Communications Industry Training Board (EPIC) is now ensuring that the training continues.

There has been a higher than expected uptake of apprentices and non-apprentices to become ‘dual trade’ electrical instrumentation technicians. The target number was 50 over two years, and enrolments are currently at 94. This qualification (Certificate IV in Electrical Instrumentation) takes four years to complete, and it is hoped that graduates will ease the shortage currently being experienced by industry over coming years. This project has also increased the interest in traditional instrumentation qualifications (a Certificate III qualification), with enrolments growing from seven in 2010 to 18 in 2011.

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A program was run in 2011 to encourage employers to provide professional development for unqualified IT support employees using the Certificate III in IT (Client Support). The targeted enrolment number was 48, with 53 achieved. This increase in the number of enrolments has gone some way to alleviating the shortage for employees with IT support skills, and is the reason that IT Client Support employees do not appear in the 2012 critical shortages list. This program will continue next year, and will be assessed every two years.

Another program which was run in an attempt to boost enrolments was the Certificate IV in Electrical (aimed at up-skilling electricians) which resulted in 109 enrolments. This program resulted in strong working bonds between industrial organisations being established, which led to donations of electrical motor drive equipment from several private sector companies. Similarly EPIC liaised with industry to ease the looming shortage of instrumentation technicians. Some 94 enrolments were achieved in 2011 (consisting largely of electricians up-skilling).

The Certificate II in Asset inspection was developed during 2011, responding to the Victorian Bushfire Royal Commissions findings in relation to the need to strengthen both theoretical and practical training for asset inspectors in Victoria. This program will commence in 2012, and it is expected that several hundred existing workers will acquire this new qualification (either via RPL or the gap training process). Approximately 15-20 new entrants are expected to also undertake the qualifications every year.

Qualifications surrounding clean energy and energy efficiency are gaining momentum. Certificates II, III and IV in Renewable Energy have seen increases in enrolments in 2011. Solar energy qualifications in particular are popular, with 99 enrolments in the Certificate IV in photovoltaic cells.

Ongoing market failures in training within EPIC’s industry sectors include the problem of thin markets and training which fails to meet industry needs. The result is a poor take up of training packages, with necessary training conducted largely in house. For example during 2011 an attempt was made to enrol 50 electricians into the Certificate III in ESI – Distribution qualification, with the hope of alleviating critical shortages in this area. The Bushfire Royal Commission had noted that there was insufficient training and recruitment of line workers, and that this should be addressed. However, the program only attracted eight candidates in 2011. Employers appear to favour apprenticeships or hiring overseas trained workers instead, citing the length of time that qualified electricians would take to be able to work productively in this line of work after completing the qualification.

There are numerous courses which suffer from a lack of enrolments across the State, several of which relate to public safety, including: Certificate II in Fire Alarms Servicing Certificate III in Fire Protection Control Certificate IV in Electrical – Fire Protection Control Systems Certificate IV in Hazardous areas – Industrial control Certificate IV in Hazardous areas – Electrical

It had been expected that industry would provide a level of enrolments to make offering these courses cost effective for training providers. However this has not been the case. EPIC reports that these qualifications were developed by the ElectroComms and Energy Utilities Industry Skills Council in collaboration with industry, and that the key reason why enrolments have not been significant is the lack of a cohesive approach from training

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providers to attracting individuals. EPIC also notes that these are niche skills that are typically obtained by A-class electricians and electronics trades people who learn on the job.

In all instances there is no regulation or requirement for practitioners to undertake the training. However some, if not all, of these qualifications are likely to be required under legislation in the future, at which time there will be huge demand as existing workers undertake the qualification. However, until this occurs, it is unlikely that enrolment numbers will increase.

There is a lack of interest by industry in many other qualifications, including the gas sector (where the sector is largely not supporting nationally recognised training), the generation sector (which has largely ignored the Generation training package with the exception of the Certificate III in ESI Generation), and the electrical supply industry (particularly the Certificate IV in ESI – Power Systems and Certificate IV in ESI – Network Infrastructure). Training providers are finding it difficult to provide the training for many of these courses. However, the electrical supply industry (ESI) qualifications face limitations from both the supply and demand perspective. Training providers are unable to find teachers suitably qualified to teach the material, and training providers are only able to offer limited simulation capabilities. This is further pushing industry away from formal training, and instead undertaking training in-house.

The same is true for many printing and graphic arts qualifications, many of which are facing the additional burden of a declining industry (this includes qualifications at the Certificate III and IV level specialising in Cartons & Corrugating, Sacks and Bags, Ink Manufacture, Printing, Print Finishing and Mail House). Despite a surge in the number of parcels sent through the post due to internet shopping, the postal industry appears to prefer to train in house, rather than utilise the training packages.

There has also been a lack of interest in several other qualifications, including at the Diploma and Advanced Diploma level, suggesting that trade-based graduates are not eager to continue studying beyond the Certificate IV level. For example, while the lower level qualifications for renewable energy are being utilised, the Diploma of Renewable Energy Engineering is less popular, with only two enrolments in the qualification in 2012. This course contains more managerial content than the lower qualifications, which perhaps is the reason for the lack of interest. Another factor may be that it takes two years to complete the diploma, and industry generally regards two years of on the job training as more desirable.

Interest in the Training and Education qualification by electro-technology and telecommunications practitioners has also been low. A program was put in place in 2011 to provide eight training placements at Kangan TAFE. However five declined the offer of a position before training commenced. Remuneration is always higher for people with technical skills when they remain in the field rather than switch to a classroom, and as a result it is difficult to attract people to the teaching profession (which is ageing quickly). EPIC notes that it is now the case that some lecturers are receiving training of only 2-3 weeks before being put into the classroom.

Finally, public training providers are having difficulty keeping up with the advancements in technology and new infrastructure requirements, as well as integrating these changes into training courses – particularly in the power generation sector. This means that it is left to private providers to undertake the training (or it is not offered at all).

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Many change drivers remain similar to previous market effectiveness reports. EPIC has identified the following key change drivers for 2012: The ageing workforce (demand side) The NBN rollout (demand side) Renewable energy technology and green skills (demand side) The Regional Rail Link project (demand side) Changing regulation (demand side)

The ageing workforce continues to contribute to labour shortages as well as skill shortages. The rail sector and electrical line worker occupations in particular have an older than average workforce, and population ageing therefore tends to affect these sectors more than most. The rail industry needs to recruit between 200-300 engineers every year for the next five years to meet demand, which is not currently being met, and currently the industry needs around 200 rail signal workers to meet the shortage. Both sectors have a long lead time from training to on-the-job competency.

The National Broadband Network (NBN) rollout will have a substantial impact for workers in the industry in 2012 and for many years to come. This project will connect 90% of Australian homes and businesses to a fibre-to-the-premises broadband network. Estimates have the unmet demand nationally to be in excess of 10,000 workers, and that several hundred will be required in Victoria. However, it is unclear exactly what skills will be required for workers (for example, it is not clear whether overhead or underground skills will be required).

Currently industry is targeting basic cabling training, although it is unclear the extent to which the market will demand this. Until some certainty is provided from industry, it is unlikely that this project will significantly affect enrolment numbers (although an increase in enrolments is expected in 2012). However, once the project is fully up and running, demand for telecommunications qualifications could increase sharply. Training demand will again change once the NBN is up and running – the demand for cabling skills will be replaced by services installation, maintenance, testing and commissioning skills.

The renewable energy sector continues to drive change in the electro-technology sector – which is seeing significant growth in credentialing against qualifications. Small businesses in particular are enrolling workers in qualifications that enhance the installation and maintenance of renewable energy systems such as solar cells, hot water units, lighting efficiency and energy auditing. Enrolment numbers will increase significantly if regulations surrounding this industry change. For example in Victoria only 1% residential solar installations are inspected, and issues surround inappropriate installations are emerging. As governments legislate for a greener community, enrolments for ‘green’ qualifications will increase, which may lead to non-government funded RTOs entering the training market (currently the primary source of training in this area is government funded RTOs).

The electro-technology sector will continue to improve and update the ‘green’ components of training packages as renewable technologies continue to develop.

The Regional Rail Link project involves the construction of a major new rail line linking West Werribee with Southern Cross Station in the Melbourne CBD. Construction will take place between 2012 and 2016, and will increase demand for workers with skills in rail communications and signalling. As a result, the rail sector is currently actively seeking to

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develop more training facilities to accommodate and enhance training for signalling and train control.

Many of the thin market problems are more acute in the regional areas. Attempting to provide training to those in regional areas will result in ongoing facilitation between industry and RTOs to try to implement a solution that will see the appropriate number of people trained.

Changing regulation will create new demand. New regulations for numerous public safety qualifications, as well as in the renewable energy sector are likely over coming years (for example in solar cell installation, fire alarms servicing, fire protection control and hazardous industrial control). Any new regulations requiring qualifications would see an increase in the demand for the corresponding qualifications.

Industry outlookThis industry encompasses the provision of a number of household services, including communications and utilities such as electricity and gas transmission. Other sectors include IT, printing, rail traction (which covers Melbourne’s trams and electrified rail lines) and renewable energy. Over the long term, drivers of growth in this area include population growth, technological developments and, for renewable energy, climate change policy.

The passage of carbon tax legislation through the Federal Parliament provides a degree of certainty for business and industry around climate change policy, and should provide further incentive for new investment in renewable energy. At present, only around 5% of Victoria’s energy consumption is derived from renewable sources. That share is expected to grow notably over the next decade to ensure Victoria meets the 20% target stipulated by the Australian Government’s Renewable Energy Target. At present, wind power provides almost half of Victoria’s renewable energy output, but represents less than one-third of installed capacity.

Population growth is an important driver of demand for the industry. A larger population implies more households and therefore more connections for electricity, gas, telephone and internet services. A higher population also means greater demand for energy and transport services, leading to greater levels of investment and a higher employment base overall. Through the year to mid 2011 the Victorian population grew by 1.5%, down on the growth of more than 2.0% seen in 2009. Deloitte Access Economics expects annual population growth of around 1.5% in Victoria in the next few years.

Chart 9.1: Employment outlook – Victorian electro-technology and communications industry


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A third driver of employment demand in the electro-technology and communications industry is technological change and innovation. This is relevant for the roll out of various forms of renewable energy, but also relates to the IT, communications and electronic printing sectors, where new products help to sustain consumer demand. Those trends may result in the industry accounting for a larger share of the Victorian economy, but not necessarily a larger share of employment.

The chart below shows that skilled vacancies for electrical and electronics tradespersons (as measured by DEEWR’s Skilled Vacancy Index) fell back slightly in 2011 in line with both the Victorian average and the historical trend over the past decade.

Chart 9.2: Skilled Vacancy Index – Victorian electro-technology and communications industry


After remaining steady over much of the past decade, data from the Australian Bureau of Statistics suggests that employment in the Victorian electro-technology and communications industry fell back in 2011. Deloitte Access Economics expects employment to recover modestly in 2012 before remaining relatively steady over coming years.



There were eight critical skill shortages reported by EPIC in the 2011 report, and there has been mixed success in alleviating these shortages over 2011.

EPIC developed a project to convert 50 A-class electricians to line workers in an abridged apprenticeship of two years to help address the critical shortage of electrical line workers. As mentioned above in the market failures section, only eight places were taken up by industry. There is, however, an ongoing commitment to continue the program in 2012.

During 2011 there has been some facilitation of discussion between training providers, Metro Rail and the Electrical Trades Union in order to try to alleviate the critical shortage of electrical engineers, network controllers and track workers. An agreement has been

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reached on a training delivery strategy, with memorandums of understanding drawn up with the RTOs, and Union endorsement on training numbers.

Industry has responded to the critical shortage of telecommunications technical officers by increasing the number of workers enrolled in the Certificate III in Telecommunications and Telecommunications Cabling, although the Certificate IV and Diploma level qualifications are not seeing an increase in enrolments. Enrolments are expected to increase again in 2012 as demand due to the NBN increases.

Binder and finishers were on the critical shortage list in 2011. The occupation has, however, dropped off the list in 2012 due to a lack of demand for this qualification. Many businesses are now going to digital print, which requires a different set of skills.

Armature winding has been discussed in the market training success section above. The formation of an industry working group by EPIC resulted in employer agreement to increase apprentice numbers, and the establishment of an industry fund to make up any shortfall in the number of enrolments. This has resulted in the qualification being run in 2011.

EPIC initiated a program with Kangan TAFE for 8 training placements in the Certificate IV in Training and Assessment in an attempt to alleviate the shortage in teachers. Only three applicants commenced classes in 2011, despite marketing the training to industry, which highlights the difficulty in attracting high quality trades people into the teaching profession.

Air-conditioning and refrigeration mechanics were on the list in 2011 though have been removed from the list for 2012. Most of the existing mechanics have undertaken the training (generally one year), although many of the qualifications were obtained through RPL.

The critical shortage of cablers and telecommunications lines workers remains. Although there has been good take up of the Certificate II qualification, there remains a shortage of qualified workers in the industry.


The tables below summarise the occupations in demand and experiencing critical skill shortages in 2012. These occupation lists have been advised by EPIC, and have been determined following formal engagement with industry.

Some of the occupations listed in the 2011 report appear again on the 2012 occupations in demand list, such as electrical line workers, electrical engineers for rail, armature winders and teachers in electro-technology.

New to the lists in 2012 are cable jointers, substation electricians, digital printers and rail signallers.

Sub-station electricians generally take four years to train. Many workers already in the industry are unqualified and unlicensed, and the workforce in general is nearing retirement. The looming shortage in substation electricians saw EPIC intervene to enrol 28 people in the rail qualification, and the intention is to extend this initiative for all other substation areas, including the ESI sector, during 2012. However, these enrolments are not expected to be of sufficient quantity to alleviate the critical skill shortage.

Industry has made a strong argument to EPIC that there will be a shortage of cable jointers in the near future, due to the Victorian Government election commitments to ‘underground’ a larger rural area than was recommended by the Bushfire Royal Commission.

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It is estimated that Victoria could experience a shortage of up to 200 electrical inspectors given the outcomes of the Bushfire Royal Inquiry and increasing Solar Panel installations on houses. Many people in this line of work are contractors, who have converted from engineering or electrician trades. Training to become an electrical inspector is not long (which is why this qualification is not listed on the critical shortage list), however building interest in this occupation is expected to take some time.



Cable Jointing Technical cable jointer (342212)Telecommunications cable jointer (342412)

Rail Signalling Railway signal operator (712917)Electrical Inspectors Building inspector (312113)Armature Winding Electrician (General) (341111)ESI line worker Electrical linesworker (342211)Digital Printing Small offset printer (392312)Telecommunications Cabler Cabler (Data and telecommunications) (342411)

Instrumentation Technician Electrical engineering technician (312312)Substation Electrician Electrician (Special class) (341112)Occupations experiencing a critical skills shortage Industry title ANZSCO classification

Cable Jointing Technical cable jointer (342212)Telecommunications cable jointer (342412)

Rail Signalling Railway signal operator (712917)Motor Rewinding Electrician (General) (341111)Telecommunications Cabler Cabler (Data and telecommunications) (342411)Digital Printing Small offset printer (392312)ESI line worker Electrical lines worker (342211)Substation Electrician Electrician (Special class) (341112)



Occupation (Industry title) QualificationCable Jointing Certificate III in ESO Cable JointingRail Signalling Certificate IV in Rail and Tram Signal SystemsMotor Rewinding Certificate III in Electrical Motor RepairTelecommunications Cabler Certificate III in Telecommunications

Certificate III in Telecommunications CablingDigital Printing Certificate III in Printing and Graphic Arts (Digital Printing)ESI Lineworker Certificate III in ESI – DistributionSubstation Electrician Certificate IV in ESI – Substation

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10 Food ProcessingCoverage: Baking, Dairy, General, Meat, Milling and Confection, Wine and Other Beverages, Pharmaceuticals.

Specific industry and business cycle drivers: The $A, competition from New Zealand producers (affects the degree of imports), FSANZ regulatory burden. Trend towards more ready prepared meals/less preparation from fresh ingredients. Developments in markets which buy live Australian animal exports. Developments in Australian regulation of the live animal trade.

Recent relative sectoral performance rating: Average


Summary of ITAB advice and consultationMarket effectiveness

A number of examples of market success and failure were provided by the Victorian Food Industry Training Board (VFITB), with several successes relating to skills shortages identified for 2011. Many of these successes were in relation to industry take-up of new qualifications or units under the new training package, while examples of failure tended to relate to training quality.

The rollout of the new FDF10 training package, available since May 2011, has been seen as a success. The industry has embraced its flexibility and the new units, for example the compulsory units in sustainability and electives in competitive manufacturing. The industry and VET sector are working to deliver these units in the most useful way for the industry.

There has been an expanded delivery of training focused on productivity skills (also referred to as competitive or lean manufacturing). As mentioned in the 2011 report, these skills are important to the industry as a strong Australian dollar and competition lead to a greater need to increase productivity and decrease costs. It has traditionally been difficult for the food industry to engage in this sort of training due to the production-line nature of their business, meaning access to off-site external training is difficult. However, a number of private providers and some TAFEs have successfully expanded Competitive Manufacturing and Frontline Management training into the food processing industry by delivering training on-site.

A pilot Vocational Graduate Certificate in Food Industry Management was successfully delivered in the dairy sector, with a take-up rate of 11 people. This qualification aims to address an identified skills gap among experienced middle and senior management in the industry, improving their food processing knowledge. Delivery of the qualification was brought about as a result of discussion and collaboration between the RTO and industry. The next challenge will be to roll this out to other areas of industry, such as confection ery. This will require further collaboration between industry and RTOs.

Meat inspectors were included on the occupations in demand list in 2011 due to changes in regulations for the inspection of meat for export. This was expected to lead to strong demand for Certificates III and IV in Meat Safety. The VET sector successfully met this

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increased demand, with enrolments in the Certificate IV in Meat Safety increasing from 18 in 2008, to 52 in 2010 and 97 in 2011.

Discussions between the baking sector and the training sector saw the development of a new Certificate IV in Advanced Baking in 2009-10. This qualification is aimed at improving retention rates in the baking sector, by developing skills of experienced bakers in the areas of artisan baking and business management, clearing a more defined pathway for career progression and business success. This is a work in progress, with expected delivery of the qualification by RTOs in 2013.

A number of examples of training market failure were also identified. One of these is the elimination of trainee incentives for Certificate II in metropolitan areas from the Federal Government from May 2011. This has led to a reduction in the delivery of relevant Certificate II qualifications in metropolitan Melbourne. For example, VFITB reports that enrolments in the Certificate II in Meat Processing (Abattoirs) halved between 2010 and 2011. VFITB expects a greater impact in 2012, with reduced delivery of Certificate II in Food Processing and Certificate II in Meat Processing. This will be problematic for the industry as new workers enter the industry and require training. While it is not compulsory to have a Certificate II, the qualifications are an effective way to deliver food safety and occupational health and safety work practices, and thus meet WorkSafe approvals. As a result, food businesses may begin enrolling a smaller number of staff in Certificate III qualifications.

The developments for the new Certificate IV in Advanced Baking are a potential positive for the sector. However the current Certificate III programs that are not apprentice based for bakers and pastry cooks are not producing job-ready graduates. Employers are not prepared to take on these graduates, contributing to unmet demand for quality bakers and pastry cooks.

VFITB reported that the industry believes the training system is too complex, leading to a lack of engagement with industry. Examples of how the system is too complex include: complexity of fee structure, Federal Government incentives, RTO costs, training packages versus training plans and ways in which industry might work with RTOs. Due to the number of RTOs in competition with each other now, companies frequently receive cold calls from RTOs, creating additional confusion. There is a lack of transparency and information. This can lead to a situation where companies do not want to engage with any training provider.

There is a perception that general food training lacks quality. An example was provided of a regional food company that engaged an RTO to deliver training of Certificate II and Certificate III-level qualifications onsite to 300 staff members. The aim was to improve operator engagement and accountability for the production process. However, the company reported no discernible improvements as a result of their investment in training. The VFITB suggests that many companies perceive that RTOs, particularly private RTOs, are not providing sufficient quality of training.


A number of change drivers for 2012 were reported by VFITB. These were: Cost and time constraints for consumers (demand side) Increased consumer and retailer demand for quality and safety (demand side) Concern about animal welfare (demand side) Lower international demand and competition from imports (demand and supply side) Cost rises associated with sustainability (supply side) Adverse weather (supply side)

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A high Australian dollar has led to falling demand from overseas markets for many Australian food products. It has also led to increasing competition from imported food items, which are now relatively cheaper. These drivers have resulted in a number of local site closures. The implications for skills transpire in three main ways: staff who have lost their jobs re-skill to look for work elsewhere, some companies defer training or provide training in-house as a cost saving measure and others up-skill their staff in areas that will make them more competitive.

To the extent that companies respond by up-skilling their staff, there will be a demand for training that addresses productivity improvements. These generally relate to the improvement of process systems and a desire to improve skills of management and leadership. As a result, the industry is increasingly adopting competitive manufacturing processes, as addressed by the new flexibility in the FDF10 training package. It is also expected there will be increasing awareness and take-up of VET programs to improve management skills, in areas such as Frontline Management.

The industry is faced with continual demand for improvement in both food quality and safety, coming from both retailers and consumers. In response to this demand, the industry is tightening its standards, with the need for delivery of more short courses and full qualifications to meet compliance and regulatory requirements. As such, training will continue to be delivered at existing sites.

Consumers are also facing budget and time constraints for their food shopping and this has had a particularly strong impact on butchers, who are facing competition from supermarkets. VFITB reports that reduced profitability has led to butchers increasingly having apprentices complete on the job training rather than attending block release to a TAFE for formal theory and demonstration training components. There is growing importance for skills that value-add to meat products thereby saving time that the consumer needs to spend in the kitchen. As a result, retail butchery is focusing on improving customer relation skills.

Another driver that has had an impact on the butchery sector is community and government concern about animal welfare, following on from attention in the media last year. This has also led to demand for skills in customer relations, whereby meat retailers need to be able to talk to their customers about the provenance of their products. As a result, new training programs have been adopted and the National Meat Industry Training Advisory Council has developed new training units. This pre-empts the potential introduction of more rigorous compliance standards.

On the supply side, food producers are facing costs due to policies targeting sustainability and climate change. In particular, this is likely to transpire as higher input costs for utilities. An increased awareness of charges for power and water is leading the industry to place more emphasis on the need to reduce, re-use and recycle. This is creating a heightened awareness of the benefits from increased efficiency and the value that new sustainability units can offer. As mentioned in the assessment of market effectiveness, the industry and VET sector are working to deliver these units in the most useful way for the industry.

Recent adverse weather conditions have also had an impact on the industry. With agricultural production down, there is less agricultural stock available for processing. For example in the meat sector, farmers are focusing on rebuilding their herds which means a reduction in the amount of local meat stock for slaughter. Overall fewer staff require training and there is a reduced demand for meat-related qualifications.

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Industry outlook

The food processing industry has been experiencing a general trend towards increased consolidation and greater foreign competition for some time. In the short term, the outlook for the industry also depends on favourable weather conditions for local agricultural production and the level of the $A.

Victorian farmers have benefited from favourable seasonal conditions and good rainfall in 2010 and 2011. The rainfall that boosted Victorian crop production was also a blessing for irrigation-dependent farms in the Murray–Darling Basin. Water storages in Murray–Darling Basin dams are now just below 80% of capacity, compared with 52% as recently as a year ago. The improved conditions for Victorian agriculture are also favourable for the local food processing industry. The increased water storages in the Murray-Darling Basin will be a positive in the medium term, especially for production and processing of meat and dairy.

In some sectors of the food processing industry, input prices determined on international markets are important drivers of production costs. Most agricultural commodity prices are relatively high in historical terms. Sugar prices were pushed very high in January after Cyclone Yasi and, despite easing back more recently, remain relatively high. That is having an effect on the confectionery industry based in Victoria.

The impact of the high $A and the trend toward consolidation in the food processing industry are illustrated by recent high profile factory closures during the course of 2011 to date. These include the closure by SPC Ardmona of a manufacturing facility in northern Victoria with the loss of around 150 jobs, largely due to the impact of the $A making competing imported products cheaper and its export business uncompetitive.

Other recent announcements include HJ Heinz reducing the size of its Australian workforce by 20% or 346 jobs, and closing a tomato sauce factory at Girgarre in northern Victoria with the loss of 146 jobs, while Lion (previously National Foods) announced that it would close its Simpson and Campbellfield cheese making sites over three years, with the loss of 133 jobs.

Employment outlook – Victorian food processing industry


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Important factors behind the closures made by HJ Heinz and Lion (National Foods) appear to be a drive to consolidate operations to drive productivity improvements. In light of the structural challenges facing Victoria’s manufacturing industry, the Victorian Government asked the Victorian Competition and Efficiency Commission to complete an inquiry into Victoria’s manufacturing industry. The inquiry produced some 44 recommendations covering a broad range of issues related to the industry, including government funding and investment, innovation, regulation and taxes, and training and skills. The Victorian Government has announced that it supports (including in part or in principle) 42 of the 44 recommendations.

Skilled Vacancy Index – Victorian food processing industry


The Federal Government’s carbon tax will be introduced in 2012 and will pose further challenges for the domestic food processing industry. Food processing is not emission intensive, however the industry may be expected to see a rise in costs such as electricity, which is likely to further reduce the competitiveness of domestic producers. As such, the Federal Government will provide special assistance of up to $150 million over six years to the food processing industry through the Clean Technology — Food and Foundries Investment Program to install more energy efficient equipment.

The chart above shows skilled vacancies for workers in the food processing industry (as measured by DEEWR’s Skilled Vacancy Index). The chart shows the skilled vacancies increased for butchers and bakers in Victoria in 2011, while skilled vacancies for pastry cooks continued a longer term trend of decline. That does not necessary imply that pastry cooks are not in demand, particularly in regional areas or where some degree of consolidation of the industry may mean fewer workers are required overall, but that job vacancies remain unfilled.

Overall, and as the charts above show, Deloitte Access Economics expects employment in the industry to continue relatively steady growth of around 1.7% in 2012.

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No critical skills shortages were reported in 2011.


No critical skills shortages were reported for 2012 and the only expected occupations in demand are baker and pastry cook. This a reduction from the four occupations listed as in demand in 2011. No critical skill shortages have been reported as VFITB deemed that baker and pastry cook does not meet the specified critical shortage criteria.

It should be noted, however, that both baker and pastry cook appear on the latest Victorian skill shortage list (2010-11) published by DEEWR.



Baker and pastry cook Baker (351111)Pastry cook (351112

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11 ForestryCoverage: Forest growing and management, harvesting and haulage, sawmilling and processing, timber product manufacturing, wood panel/board production, pulp and paper manufacturing, timber merchandising.

Specific industry and business cycle drivers: the high Australian dollar, implications and application of Free Trade Agreements, climatic conditions and natural disasters, sustainability policy, tax provisions, housing construction cycle.

Recent relative sectoral performance rating: Low




The Victorian Forest and Forest Products Industry Training Advisory Board (VFITAB) report market successes and failures for 2011 in relation to both historical and emerging skill needs. The successes demonstrate an ability to identify and close a gap in the training market by mobilising a suitable training provider. Conversely the failures demonstrate the persistence of low enrolments in particular skill areas, relating to both a lack of certainty and a lack of new entrants.

The first example of training market success has been a reduction in identified training gaps among the harvest and haulage sector. VFITAB promoted and supported (with small financial incentives) training at the Certificate III level, increasing enrolments by 60, to a level more in line with what the industry requires annually (although these were mainly existing workers).

In 2011 VFITAB also supported Hancock’s Victoria plantation to up skill their workers through the completion of a Certificate III in Horticulture. The qualification was delivered by TAFE on site at Hancock’s nursery, incorporating relevant units from the ForestWorks Forest and Forest Products Training Package.

In terms of market failure, the primary example is the critical shortage of wood machinists being compounded by continued low enrolments in the Certificate III. A similar situation applies to the Certificate III in Saw Doctoring. The lack of demand to undertake training in these highly specialised fields has discouraged the traditional training provider from keeping it on scope. VFITAB is now working to create a critical mass of training across jurisdictions, to ensure the course remains available.

VFITAB has also raised the removal of training capacity from South West TAFE for the forestry industry as an example of training market failure. VFITAB notes emerging training demand exists in the region, with no capacity for the supply of relevant training places in western Victoria.

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Advice from VFITAB is that a number of largely supply side change drivers are likely to have an impact in 2012, in a similar fashion to that experienced in 2011. This includes: Regulatory change (demand and supply side) High $A and competition from overseas timber, pulp and paper (supply side) Continued restructuring of Victorian sawmills (supply side) Blue gum harvest cycle in the Victorian Green Triangle Region (supply side)

Each of these developments directly impacts the output of Victoria’s forestry sector, with corresponding implications for the volume of skills in demand in 2012.

In terms of regulatory change, the Illegal Logging Prohibition Bill 2011 will make the importation of illegally logged timber into Australia more difficult from 2012 onwards – provided the bill is passed early in the year. Due diligence requirements include certification and chain of custody, to be particularly stringently applied to timber sourced from Brazil, China, Chile and Malaysia. Not only will this increase the demand for Australian timber domestically, it will also create demand for higher order skills in the technical identification process, linking to the new Advanced Diploma in Forest Industry Sustainability.

The industry continues to struggle with a historically high $A, and the uncertainty this creates for domestic and international sales of Australian timber. Exports from developing countries are typically more attractive to price sensitive consumers in global markets, and are thereby driving a downturn in Australian sawmilling, processing and timber merchandising. This has resulted in both a reduction in new entrants to the sector as well as an increase in skilled labour transitioning out of the sector, and corresponds with the restructuring of Victorian sawmills. However, restructuring is also seeing demand for some new skills emerge, such as in technology operations in wood panel production at the recently upgraded Myrtleford plant.

Pulp and paper is experiencing a similar trend, with the added complexity of holding capital with long remaining payback periods. Given the immobility of both capital and labour involved in this production, and the fact that it is isolated in eastern Victoria for the most part, the industry is persisting with the struggle to remain viable as options for restructuring are limited. The implication is that pulp and paper production has a fixed life in Victoria, and similar to the restructuring of sawmills, government support for regional employment through structural adjustment funding will likely be required at a future point.

Harvesting of the blue gum plantation in the Victorian Green Triangle Region continues to ramp up, with a corresponding increase in demand for mechanical harvesting operators and foresters in the region. To date a range of issues have delayed production, with only 25% of the target harvest rate being achieved. As these constraints ease, labour constraints are likely to become increasingly binding – short of a dramatic uptake of Certificate III in Harvest and Haulage and Certificate IV in Forest Operations. Inhibiting this would be the lack of a training provider in Victoria (currently provided by a small private RTO in South Australia instead). VFITAB is currently working with an RTO in Victoria to create a partnership for more effective delivery.

Other advice from VFITAB includes the development of a new Advanced Diploma in Forest Industry Sustainability In collaboration with the Industry Skills Council. VFITAB is currently working to attract a training provider. Latent demand for this training exists at the middle manager level across a number of large forestry companies operating in Victoria. It is expected that this qualification will be taking enrolments in 2012 (indeed up to 20).

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VFITAB has also identified an emerging skill need in the area of ‘finger jointing’ – a new and more sustainable practise of gluing together sawmill off-cuts to create stronger timber products (and therefore new structural uses for timber). In collaboration with industry, a number of units of competency are being developed, with the concept of a standalone qualification being discussed and investigated (demand is estimated to be in the order of 40 enrolments).

Industry outlook

The Victorian forestry industry is heavily reliant on two key markets: the domestic construction industry, which is the largest user of domestically harvested sawn timber and related products; and woodchip exports, which are Australia’s biggest single forestry export by value. Victoria is unique, in the sense that most of its woodchip exports are coniferous (softwood), whereas other States are dependent on broadleaved (hardwood) woodchips.

Victoria’s sawn wood industry is relatively insulated from global trade, with only around 7% of Australia’s overall production being exported in 2008-09. This component of Victorian forestry is therefore predominately driven by movements in the construction industry, particularly residential construction.

The relatively strong residential construction activity in Victoria has been an important positive for the sawn wood industry in recent years, with growth in the State outperforming the national average. Indeed, while Victoria accounts for a quarter of the national population, and slightly less in terms of economic output, the State currently provides 40% of new housing starts in Australia.

The outlook for residential construction is more modest however, with slowing population growth expected to see construction activity ease in the medium term.

There are also challenges facing the woodchip industry. Most of Australia’s (and Victoria’s) woodchip exports are shipped to Japanese paper mills, and Australia is Japan’s largest provider of woodchips, accounting for 31% of Japanese woodchip imports in 2010-11. Victoria accounts for roughly a quarter of Australian woodchip exports.

Chart 11.1: Employment outlook – Victorian forestry industry


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Over the past few years exports to Japan have been in decline for three broad reasons: first, the high Australian dollar, which has affected all export industries; second, the ailing Japanese economy, which has driven a reduction in paper demand; and third, the increasing preference by Japanese consumers for ‘green’ woodchips.

The elevated Australian dollar is eroding the competitiveness of Australian woodchip exports against Japan’s other major woodchip suppliers – Chile (21% of imports in 2010-11), South Africa (12%) and New Zealand (12%). Although historically Japanese mills have paid a price premium for the perceived higher quality of Australian woodchips, this premium is increasingly being worn away by the strong currency.

The declining demand from Japan has forced Australian woodchip producers to seek alternative markets. Increasingly, China (including Taiwan) is becoming an alternative market for woodchips, taking 17% of Australia’s total woodchip export in 2009-10. While having an alternate market is certainly a positive, it is worth noting that exports to Japan command a significantly higher price.

A key strength for Victoria is its production of coniferous woodchips. The State accounts for around 70% of Australian coniferous chip exports and, while Japanese imports of broadleaved chips are in decline, coniferous chips appear to be on the rise. Over the past year, Japanese imports of coniferous woodchips have grown at an average monthly rate of 2%, while broadleaved imports have fallen at an average monthly rate of 2%.

This change in import composition may in part be due to Japanese consumers’ increasing distaste for woodchips sourced from old growth native forests. Given that most of Victoria’s woodchips are from coniferous plantation logs, the State is well positioned to increase its exports to Japan.

On balance, however, given the challenges ahead for the construction industry, as well as the elevated Australian dollar and broader uncertainty facing Australian woodchip exports, employment in the sector may continue a modest downward trend which has been apparent since 2006.



In collaboration with a number of industry associations, VFITAB have progressed the skills shortage agenda across each of forest technicians, forest land managers, mechanical harvest operators and frame and truss estimators and detailers – albeit to differing degrees.

Starting with forest technicians and managers, VFITAB in 2011 supported the Industry Skills Council to develop the Advanced Diploma in Forest Industry Sustainability. Industry has engaged in the development of this qualification with the motivation of increasing the communication and leadership of qualities among new and existing production managers (among other skills). It is also a signal to the industry of possible new career pathways, to improve the attraction and retainment of skilled labour.

In terms of forest land managers, VFITAB has maintained links with private farm networks and the Victorian Association of Forest Industries, in light of the emerging carbon farming initiative. The alternative pathways are for either the farmer or a contractor to perform the

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harvesting task, although there has been little success in translating the demand from either of these parties into training over the last 12 months. However, applications for the initiative are invited in the first half of 2012, in which case the latent demand from both parties is more likely to translate into enrolments.

Mechanical harvest operators are a perennial shortage, compounded by the emergence of new technologies. VFITAB are continuing to negotiate a training delivery partnership among RTOs and industry, with no Victorian provider currently in place to meet the training needs arising from this more sophisticated technology. Formalisation of a Victorian training partnership is anticipated in 2012.

In response to an ongoing shortage of qualified frame and truss estimators and detailers, new qualifications have been developed and endorsed from Certificate II through to Diploma level. VFITAB is currently working closely with the Frame and Truss Manufacturing Association to promote the uptake of the new qualifications, which are likely to be available from February onwards. Some 170+ existing workers hold the existing qualification and could potentially up skill, in conjunction with new industry-led career pathways.


VFITAB notes that sophisticated new technology calls for advanced skills, and the timber manufactured products sector has been moving towards adopting high technology production systems (such as automated machines and manufacturing lines, and computer aided design programs) requiring higher levels of computer operating skills.

Firms in the truss and frame sector use integrated information systems that allows real-time communication within the entire product cycle from product design to manufacturing, and product delivery to the end user. Information systems and digital skills are essential across the entire sector to support efficiency and competitiveness. Although the industry is currently addressing this issue it is still unknown if this is going to provide a solution to the shortage of these skills.

The tables below summarise the occupations in demand and experiencing critical skill shortages in 2012. These occupation lists have been advised by VFITAB and have been determined following formal engagement with industry.

Overall, there is an increase in the number of occupations listed as in demand compared to 2011, all of which are also listed as experiencing a critical skill shortage.



Saw doctor Saw maker and repairer (323315)Pulp and paper technician Paper and pulp mill operator (712916)Detailer / Estimator Forestry worker (841311)Silviculture and harvesting team leaders Forester (234113)Wood machinist Wood machinist (394213)Forest technicians and land managers Forester (234113)

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Occupations experiencing a critical skills shortageIndustry title ANZSCO classificationSaw doctor Saw maker and repairer (323315)Pulp and paper technician Paper and pulp mill operator (712916)Detailer / Estimator Forestry worker (841311)Silviculture and harvesting team leaders Forester (234113)Wood machinist Wood machinist (394213)Forest technicians and land managers Forester (234113)



Occupation (Industry title) QualificationSaw doctor Certificate III in Saw DoctorPulp and paper technician FPP10 ASCED Manufacturing Engineering and TechnologyDetailer / Estimator Certificate III in Timber Truss and Frame Design and ManufacturingSilviculture and harvesting team leaders Certificate III in Harvest and Haulage

Certificate III in Forest Growing Management

Wood machinist Certificate III in Wood MachinistForest technicians and land managers Advanced Diploma of Forest Industry Sustainability

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12 FurnishingCoverage: Cabinet and furniture making, furniture polishing, picture framing, glass and glazing, soft furnishings and upholstery, kitchen and bathroom manufacturing, floor covering and finishing, mattress manufacturing, toy and sporting goods manufacturing, laundry and dry cleaning.

Specific industry and business cycle drivers: the $A, sustainability policy, COAG reform agenda, housing construction cycle.


Expected relative sectoral performance rating: Below average



FurnITAC report a number of market success and failures, largely relating to those occupations that were in shortage in 2011. The examples of success demonstrate the increased uptake and therefore viability of training where endorsed by industry. The examples of failure relate to thin markets for particular training and a corresponding substitution effect.

Examples of training market successes include an increase in enrolments in the Certificate III in Picture Framing – from 5 in 2010 to 25 in 2011. Driving this improvement has been the endorsement of the training by FurnITAC in conjunction with the Picture Framing Guild, including for RPL among Guild members. A lack of new entrants to the sector remains an issue.

The Certificate III in Glass has been revised to now incorporate two qualifications: (1) stained glass and leading lighting; (2) glass and glazing. The motivation for revising the qualification was to improve enrolment figures to ensure the continued provision of the course by the existing training provider. It is hoped the new qualification will increase overall enrolments in both sectors, thereby assisting the training provider to deliver flexible training options and alleviating the additional costs incurred by regional apprentices and enterprises.

In response to a shortage in designers among the cabinet making sector, technological change and the need to formalise career pathways, the Certificate IV in Applied Design, Kitchens, Bathrooms and Interior Spaces has been developed. There were difficulties in identifying a suitable training provider, with a public provider requiring a minimum 20 enrolments for on-campus training only and at a specified commencement date. In response to this, FurnITAC identified a private RTO who could offer flexible (workplace-based) training delivery and linked them with the Cabinet Makers Association. FurnITAC endorsement supported the recognition of the course as an accredited traineeship, meaning eligible enterprises will be able to access Commonwealth and VTG funding to support course uptake.

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In terms of training market failures, thin markets continue to impact soft furnishings, mattress and base making and blinds and awnings, resulting in the non-delivery of these apprenticeships in Victoria. Instead the uptake of non-industry-specific Certificate III traineeships is increasingly prevalent, which only partly meet industry skill needs and further reduce the likelihood of industry specific training being viable in the future. This situation is compounding the competitiveness issues these businesses face, particularly as new technologies emerge.

Furthermore, VET in Schools and full-time pre-apprenticeship courses are causing some concern among industry as to the varying delivery standards. Indeed crediting 12 months of pre-apprenticeship training is said in many cases to be at odds with the productivity of the apprentice and the award wage. That is, the industry would argue pre-apprentices are at best half as productive as a 1-year apprentice from a non-school-based pathway, and as such should not be paid an equivalent wage. As such there have been calls to reduce the credit duration to 6 months and this has been accepted, implying the impact of this issue should diminish going forward.


FurnITAC reported a small number of change drivers for 2012, covering somewhat similar demand and supply side developments to those impacting the industry in 2011: Technological developments (demand side) Shift in the model of training delivery (demand side) Regulatory change (demand and supply side) Economic conditions and trade patterns (supply side)

Accordingly, while macroeconomic factors are dictating the prosperity of the industry overall, a number of microeconomic factors around technology and training delivery have emerged through 2011-12 with implications for the future of specific sectors.

In terms of regulatory developments reducing employment opportunities in the industry, the ‘Chain of Custody’ import regulation appears to be having less of an impact than initially intended. Illegally logged timber is suspected to be classified by country of origin rather than country of harvest, and thereby still making it into the country. Further there remains a lack of knowledge among retailers of ethical and ecologically sustainable production practices, and minimum quality standards among imported products remain voluntary.

On the other hand, and while initially set to take effect in 2012, the Council of Australian Governments initiated national licensing of ‘building related trades’ has been pushed back to 2013-14, thereby providing more time for those working in cabinet making and flooring to attain their respective Certificate III and meet the licensing and accreditation requirements. A spike in demand for RPL is anticipated once the timing for the reforms has been confirmed.

For the most part, Australian furnishings continue to compete on quality rather than price. However, with economic conditions declining consumers are typically less willing to pay the difference. In order to remain viable, Australian furnishing manufacturers need to: invest in new equipment to reduce production costs (including energy use); ensure mandatory minimum standards are in place on imported product quality; and empower retailers to raise awareness among consumers of illegally logged and/or

inferior products.

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However, the many small businesses that characterise the industry cannot affect these changes, painting an uncertain future for employment and training in the sector, particularly among the most vulnerable furniture making and upholstery sectors.

The continued sophistication of cabinet making – through the use of new computer aided design and computer numerically controlled technologies – sustains the demand for new training and apprentices in the sector. Similarly demand for training in blinds and awnings continues and indeed compounds with strong growth in industry output and the introduction of new technologies. However the lack of a training provider in Victoria is leading to a level of unmet demand in this sector.

The take-up of higher order qualifications among existing industry workers remains low – attributed to the perception that the training system is overly complex and time consuming. Continued improvement in technical, management, marketing and finance skills remain a priority for the sector. Further workplace training by RTOs is expected to encourage the greater uptake of this training. Indeed as has been previously pushed-for by industry, a split in the delivery of training – whereby TAFE delivers the theory off-site, while simulated machinery training is delivered by an appropriate provider on-site – has emerged through the support of public funding and structural change within TAFE.

Industry outlook

Like in many sub-sectors of Victoria’s manufacturing industry, employment in the furnishing industry has been declining over the past decade. That trend is due to a myriad of challenges facing manufacturing as a whole, as well as furnishing specifically. Indeed, while solid employment growth over the coming year is expected to underpin income growth in the State, a number of important challenges are likely to continue to hurt employment growth in the furnishing industry.

The housing cycle is a key driver of demand for furnishings. However, over the past year, house prices Australia-wide have fallen modestly. Sales volumes have also declined, and rental yields remain modest despite rents rising at a modest pace.

The slump is evident in housing construction as well. Housing approvals are down by more than one third compared with a year ago (to levels last seen in early 2009), and that pipeline of decline has yet to be fully reflected in housing construction commencements. That will have flow on effects for the furnishing industry: new home building and newly renovated homes open up spending on furniture, fittings, carpets, curtains and the like. A slowdown in housing is therefore likely to produce a slowdown in demand for furnishings.

An analysis of longer term spending trends points to further challenges, with spending on furnishings by Australian households failing to keep pace with rising incomes over time. For example, the Household Expenditure Survey published by the Australian Bureau of Statistics showed that the average household’s expenditure on furniture and floor coverings declining by 2% from 2003-04 to 2009-10. Over the same period, the average household’s weekly expenditure on all goods and services rose by 38.5%.

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Chart 12.1: Employment outlook – Victorian furnishing industry


In part, the decline in spending on furnishings reflects price deflation. Price deflation has been the result of rising imports of furnishings from lower cost producers overseas, technological improvements and, in recent years, the rise of the $A making imported furnishings even cheaper.

A further challenge facing the industry is the easing in the rate of population growth in Victoria over the last year, which dipped back to less than 1.5% through the year to mid 2011, down from more than 2.2% just two years earlier.

Chart 12.2: Skilled Vacancy Index – Victorian furnishing industry


Domestic producers will also face additional challenges from importers of furniture and components made more competitive by the continuing strength of the $A. Imports of furniture for the purpose of consumption were $2.7 billion in 2010-11, having increased by more than 27% over the past five years.

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The chart above shows that skilled vacancies for tradespersons in the furnishing industry (as measured by DEEWR’s Skilled Vacancy Index) generally fell back slightly in 2011 in line with both the Victorian average and the historical trend over the past decade.

Overall, and as the charts above show, Deloitte Access Economics expects the challenges facing the furnishing industry to continue to weigh on employment prospects over the medium term.



Working in partnership with industry, FurnITAC have made some inroads to alleviating critical skill shortages among glaziers, cabinet makers/installers, and flooring finishers in 2011, with further traction expected in 2012 as a critical mass of enrolments is built. However, upholstery continues to decline and is close to collapse in terms of training delivery.

FurnITAC has increased its involvement in school-based cabinet making career initiatives, in an effort to boost both commencement and completions rates of apprenticeships to a level that is on par with other building related trades. At the same time industry is increasing its involvement in educating schools and the community more broadly on advancements in technologies and career paths within the sector (supported by a new Certificate IV in Cabinet Making which is expected to attract 50 enrolments in 2012). However, there is still some way to go to reducing this skill shortage.

By way of alleviating critical shortfalls in glass and glazing tradespersons, and in light of the persistence of only one Victorian training provider, FurnITAC supported the redevelopment of the glass and glazing qualification to incorporate both the glass and glazing and stained glass and lead lighting qualifications into the Certificate III in Glass. It is anticipated that this will improve the viability of the course to ensure its sustainability and an increase in work-place training.

In terms of flooring finishers, an aging workforce with little formal training is slowly being addressed by increasing new apprentice enrolments (although the completion rate has declined). Industry has identified the need to provide a more supportive structure to its apprentices, in terms of mentoring and moving away from the traditional multiple supervisor arrangement. In response the Flooring Association is encouraging members to undertake training from the training and education package to better equip for a mentoring role.

Finally, upholstery remains in critical and declining circumstances, with only seven reported enrolments in 2011. Course costs exceed revenue at this point, putting the future of the qualification at serious risk. Competition from imported products continues to force the closure of small upholstery businesses and compounds the difficultly of attracting new entrants. Attempted partnerships with similar skilled sectors also experiencing thin training markets have had mixed success due to varying employability at the end of these courses.


FurnITAC notes that the furnishing sector is generally struggling to meet the demand for qualified tradespeople, and that this gradual reduction in enrolments has resulted in a decreased availability of industry specific training. Where there is still a wide variety of training providers available, such as cabinet making and furniture making, the number of

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candidates seeking to enter into these trade pathways has significantly reduced. This reduction in student enrolments will ultimately jeopardise the future availability of training. Moreover, as the workforce ages it is expected the ratio of qualified and experienced tradespeople exiting the industry compared with newly qualified tradespeople entering will only rise.

FurnITAC also notes that many other sectors have no industry specific training available to them or, if there is a training provider, access is limited. An example of this is the glass and glazing sector. Although this sector experiences consistent enrolments, in Victoria there is only one training provider. As this RTO is metropolitan based and only offers classroom based training, it creates extra pressure on regional enterprises and their apprentices in terms of attendance. FurnITAC suspects that many potential enrolments are lost to other (non industry-specific) training pathways or there is no training undertaken at all.

The occupations listed below are all trade pathways and as such the lead time for an individual to reach full aptitude is lengthy. This issue continues to escalate as the average employee age increases and training provider options decline.

The tables below summarise the occupations in demand and experiencing critical skill shortages in 2012. These occupation lists have been advised by FurnITAC and have been determined following formal engagement with industry.

Overall, there is a decrease in the number of occupations listed as in demand compared to 2011, though a higher proportion are listed as experiencing a critical skill shortage.



Stained glass and lead lighting Glazier (333111)Cabinet maker/installer Cabinetmaker (394111)Furniture maker Cabinetmaker (394111)

Furniture Finisher (394211)

Glass and glazing Glazier (333111)Designers (furniture and cabinet) Industrial designer (232312)Flooring installer Floor finisher (332111)Upholsterer Upholsterer (393311)Curtin, blind and awning maker and installer Home improvement installer (821412)Picture framer Picture framer (394212)Occupations experiencing a critical skills shortageIndustry title ANZSCO classificationStained glass and lead lighting Glazier (333111)Cabinet maker/installer Cabinetmaker (394111)Glass and glazing Glazier (333111)Flooring installer Floor finisher (332111)Upholsterer Upholsterer (393311)Curtin, blind and awning maker and installer Home improvement installer (821412)


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Occupation (Industry title) QualificationStained glass and lead lighting Certificate III in GlassCabinet maker/installer Certificate III in Cabinet MakingGlass and glazing Certificate III in GlassFlooring installer Certificate III in Flooring TechnologyUpholsterer Certificate III in UpholsteryCurtin, blind and awning maker and installer Certificate III in Soft Furnishings

Certificate III in Blinds and Awnings (n/a)

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13 Manufacturing and EngineeringCoverage: Aerospace, Engineering (Fabrication trades), Engineering (Mechanical trades), Engineering (Other), Mining, Shared – Metals and Engineering, Automotive components, Chemical, Hydrocarbon and Oils, Non-metallic Mineral Products, Plastics, Rubber and Cables.

Specific industry and business cycle drivers: Carbon trading schemes in Australia and worldwide, the exchange rate, oil prices, raw material prices.





MESAB reports various examples of market success and failure in relation to training in the manufacturing and engineering sector.

The Skills for Growth program (focusing on small and medium sized businesses) has proved a success in the manufacturing sector, achieving higher than anticipated results. The results for manufacturing are revealing – in the first quarter of 2011, 15.5% of the businesses participating in Skills for Growth were in the manufacturing sector. This percentage is significantly higher than the number of manufacturing businesses eligible for the program, which is around 8.3%. More than 4,400 training placements have been made in manufacturing businesses which represents 28.6% of all program placements into accredited training.2

This indicates the potential for increasing training for people in the manufacturing sector. Many employees need up-skilling or training as businesses consolidate and employees take on additional work roles. However, the training needs to be developed in a flexible way to accommodate on the job training.

One success story which stands out – and which was also noted in this report with respect to electro-technology – has been in motor rewinding (or armature winding), which has suffered the thin market problem for a number of years (enrolments have previously been less than eight a year). Additionally, industry has been reluctant to have staff away from the workplace for a significant length of time. However, an RTO was found who was prepared to offer and develop training which was able to be provided at the workplace. Crucial to the process was that an memorandum of understanding between industry and the Bendigo Regional Institute of TAFE was developed, which says that if less than 14 students are enrolled in a year, then an industry fund will pay the costs associated with running the program for a reduced number of students. This industry fund provides certainty for the RTO and industry alike, in ensuring sufficient funds are available to run the Certificate III in Electrical Motor Repair.

2 Australian Industry Group – unpublished data.

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The success in armature winding training was a joint effort between MESAB, EPIC Industry Training Board, industry and training providers. MESAB was involved initially in securing the funding, while EPIC is now ensuring that the training continues.

There have been difficulties for some time regarding training of people in welding skills. While there is plenty of demand for this type of training, formal training has provided little flexibility because it is predominantly attendance based. The training runs for 10-12 weeks, and requires around four hours of attendance in each of those weeks. Employers are unwilling to let employees off work for this length of time, while employees seem unwilling to undertake the training at night school due to family commitments. However, in 2011 MESAB acted as a broker between a welding, pipe and mechanical services firm (who had a need to upgrade existing welding tradespersons to Certificate IV due to the complexity and technical nature of new projects) and an RTO to facilitate training on site by a resident subject expert. The training was completed with an examination off-site. MESAB is hopeful that this flexible training arrangement will be able to be provided to other companies (and in different regions) as a means to alleviate critical skills shortages in this area.

While there has been a 20% increase in reported enrolments overall in Victoria in occupations experiencing a shortage3, there has been a decline by 2-3% in manufacturing and mechanical workers over the same time. Additionally, while there has been an increase generally in the number of apprenticeship enrolments over the last five years, enrolments in engineering apprenticeships are still trending downwards. This highlights the problems in both attracting students to the courses, and finding training providers to deliver the training in a format that is suitable for industry, which is an ongoing market failure in the training space.

Recently a national recruitment agency endeavoured to run a series of government-funded engineering pre-vocational access programs in Colac and Ballarat. However there was not enough interest from job seekers for the program. It is unlikely that this will be offered again in 2012, unless it can be demonstrated that there is greater interest from school leavers and job seekers.

Although MESAB has not been able to make a positive determination, it is likely that boatbuilding apprentice training will cease in Victoria in 2012. Victoria University is the sole provider and has advised employers that apprenticeship training in 2012 is in doubt. The boatbuilding industry employs around fifteen new apprentices each year, presenting a problem of thin markets. The training is also expensive to deliver, which is why the program is likely to be cut.

Indeed this has been the response across the board from public TAFE providers that deliver qualifications with low student numbers and high cost of delivery, including foundry, patternmaking, aerospace, watchmaking, fabrication at Hawthorn (Swinburne) and welding (at Victoria University Melton, RMIT and potentially at Ballarat University – Horsham this year). For the same reason that public training providers are not offering the courses, private providers are not taking them up. This is leading to the situation where people wanting the training in Victoria have to look interstate (or overseas) in order to access it.

When formal training is not available, people are being trained on the job instead, which can be quite specific, and not transferrable to another workplace. This means that people no longer have a formal qualification to take to the labour market when looking for a new

3 Victorian Training Market Quarterly report Q3 2011 p34-35.

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job, and it also makes it more difficult for employers seeking new workers, as they are unable to find people with a formal qualification.

Interest in the Training and Assessment qualification by manufacturing and engineering tradespeople has also been low. In some sectors, there may only be one teacher in Victoria able to undertake the training. Given the ageing nature of the workforce, and manufacturing and engineering teachers specifically, there is an urgent need to train people in the necessary skills to deliver the training in the future.

There is a common complaint from manufacturing enterprises that training providers are not meeting their needs. This is true for both the way in which training is delivered, and also the content being delivered. As mentioned earlier, most training has a requirement for a certain number of contact hours, which is often unable to be met by employers who need the person at the workplace. Additionally, there is often a disconnect between the skills an employer requires, and the content provided during the training (which could be due to issues such as not keeping up with advancements in technology and new infrastructure requirements).


MESAB has reported that very little has changed from 2011 in terms of key change drivers and industry developments. The key change drivers identified are: New market regulation (demand side) High Australian dollar (demand side) Declining share of research and development funding (demand side) NBN rollout (demand side) The emissions trading scheme (supply and demand side) The ongoing mining boom (supply side) The ageing workforce (supply side)

Additionally, MESAB has reported concern from industry regarding apprenticeships. Engineering apprenticeships are undertaken on the competency based progression and completion system, and the engineering industry is covered by the only Federal award that has a progression payment requirement. That is, as an apprentice completes 25% of their training, they are entitled to a pay increase.

MESAB’s view is that the way in which competency based progression and completion has been implemented in Victoria aligns with the traditional TAFE training timeframe of the past (that is, three years of off-job training). Without the distinction between the traditional three years of off-job training and four years of on-job training with the employer, employers are now faced with a three year apprenticeship. That is driving many employers to reconsider taking on an apprentice, preferring to train in-house instead.

This is augmenting the problem of other employers being unable to find suitable candidates for apprenticeships (that is, students who have completed a pre-apprenticeship). Addressing the problems surrounding a lack of apprentices will be an ongoing focus for MESAB and industry over 2012.

The mining boom continues to be an ongoing problem for this sector. It is reported that BHP is looking for around 5,000 workers in South Australia in 2012 for work on Olympic

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Dam, which will attract a range of tradespeople, including fitters, boilermakers and engineering tradespeople. This will occur at a time where many Victorian employers are already having difficulty filling vacancies for these trades, as these industries are unable to compete with wages in the resources sector. MESAB will attempt to encourage a greater number of apprenticeships in skill shortage trades in an attempt to address the problem.

The emissions trading scheme is expected to drive change in the manufacturing and engineering industries, including requiring existing employees to have new skills such as auditing and the ability to use new technology to reduce emissions. These changes will require changes to training packages (although all qualifications currently have a core unit focussing on sustainability) to incorporate these new requirements as they occur.

There appears to be a shift underway of increasing demand to up-skill employees. The higher skills required are usually those that increase flexibility, and provide a greater means to adapt to change. For example, there has been an increase to up-skill workers to Certificate III and IV in process manufacturing. While this shift is not yet predominant, there is a general feeling that, given the extremely competitive nature of the manufacturing market, up-skilling (including skills in lean manufacturing and other ‘green’ skills) of employees is required in order to survive in the market. Advice gathered by MESAB suggests that there may be an increase in the number of people undertaking the Certificate IV in competitive manufacturing and Certificate III in process manufacturing over the next couple of years.

Aviation may have new licensing requirements in 2012. Training packages are already in place, although some units will need to be changed in order to meet the new requirements. It is anticipated that most current workers will complete the training in 2012, which will mean a large influx of people being trained. However, these won’t be new certificates being undertaken, but a few units to meet licensing requirements.

The ageing aviation workforce however, will mean that more qualified workers are needed. For example the average age of a licensed aircraft maintenance engineer is 58, indicating that retirements will pick up from here. Apprenticeships take four years, and employers are already finding it difficult to find qualified workers. The ageing manufacturing workforce is presenting an ongoing problem. However industry is attempting to overcome these difficulties by attracting younger people, particularly women. In order to achieve this, there have been attempts to redesign jobs to make them less physical, and to create more flexible work rosters.

The high Australian dollar continues to squeeze manufacturing companies in Victoria, particularly those manufacturing low tech, labour intensive products. However, there have been some success stories with small companies venturing into internet marketing of their products. This creates the need for more innovative and adventurous skills development, which is difficult to meet, usually because these small companies do not have the resources to undertake training.

Broadband is making it increasingly easier for small businesses to market their products worldwide, and increased file size capability means that businesses can compete anywhere in the world. In particular, design work utilises broadband to communicate new designs (especially when it comes to prototyping), and it is hoped that there is increasing exports in this area in the future.

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The declining share of research and development (R&D) in Victoria is an ongoing problem for Victoria’s manufacturing sector. R&D uses a great deal of manufacturing and a decline in this spending contributes to further relative decline in VET trained R&D workers, which impacts ultimately on the manufacturing sector. Unless there is an increase in the amount of R&D conducted in Victoria, this will put further pressure on a sector already in decline.

Industry outlook

The manufacturing and engineering industry is comprised of a number of varied sub-sectors. For the broader manufacturing sector, output has been declining as a share of the State economy over time. That relative decline is part of a trend evident in most advanced economies, including other Australian States.

An important driver of that trend has been stronger competition in manufacturing from emerging economies. Important cyclical drivers are also relevant, including the high value of the $A and relatively high interest rates. The mining sub-sector (included within the coverage of this ITAB) has a brighter outlook, driven by the resources boom, though concerns remain over the longer term future of brown coal.

The Victorian mining sector comprises of coal, oil and gas, and base metals and minerals. The story of Australia’s resources boom is well known, and although Victoria’s mining sector is relatively small, it is also likely to experience above average performance over the short term.

Victoria’s oil and gas sector will be an important driver of the outlook. Around 80% of eastern Australia’s known gas reserves (and potentially significant undiscovered reserves) are contained within the waters between Victoria and Tasmania. The Kipper Tuna Turrum Project is a multi-billion dollar project currently under development in the Bass Straight which aims to further develop natural gas supplies in the Kipper, Tuna and Turrum oil and gas reservoirs. The project is expected to be completed in 2012-13.

Chart 13.1: Employment outlook – Victorian manufacturing and engineering industry


While natural gas is regarded as a relatively clean energy source, Victoria has traditionally relied heavily on high-emission brown coal for its electricity generation due to significant deposits around the State. The introduction of a carbon tax by the Federal Government in 2012 will have a significant impact on the industry.

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The metal manufacturing sector is downstream from the mining industry and, like mining, tends to follow the global demand cycle. As such, the metal manufacturing sector should continue to benefit from a slow recovery in advanced economies, and solid growth in emerging economies.

The Federal Government’s carbon price will significantly impact the metal manufacturing sector, since activities such as aluminium production are highly emission intensive and trade exposed. For this reason, these activities within the sector will be eligible for assistance under the Federal Government’s Jobs and Competitiveness compensation package.

The plastics and chemicals sector has been in decline for several years, largely due to competitive pressures from Asia. A low level of investment in Australian plastics and chemicals plants has also been evident. At present, the high level of the $A is posing additional challenges. On a brighter note, favourable seasonal conditions have resulted in stronger agricultural production, which may result in an increase in demand for chemical fertilisers. Finally, as with metal manufacturing, the introduction of carbon pricing in 2012 creates uncertainty for the sector. Overall, the long term decline for the plastics and chemicals sector, and the difficulties posed by the $A and carbon pricing suggest that the outlook for the sector is not strong.

Chart 13.2: Skilled Vacancy Index – Victorian manufacturing and engineering industry


The chart above shows relatively few skilled vacancies for tradespersons in the manufacturing and engineering industry (as measured by DEEWR’s Skilled Vacancy Index). In part that may reflect ongoing consolidation in the industry over time, with specialist skills still in high demand, as discussed in the following section. Given that the index tracks the number of advertisements, the results may also reflect a trend for some employers to withdraw from advertising after repeatedly failing to fill vacancies. Overall, Deloitte Access Economics expects employment in Victoria’s manufacturing and engineering industry to

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remain relatively flat over coming years with the strong outlook for mining offsetting an expected weaker performance across manufacturing.


There were eight occupations identified in the 2011 report as experiencing a critical skills shortage. Locksmiths and jewellers have not been included in the 2012 list. However, this is not due to a large surge in numbers of people gaining the relevant qualifications, but due to a fall off in demand for these occupations.

Web promotions were run by MESAB to try to increase interest in undertaking the qualifications for aircraft maintenance engineers, jewellers, fabrication tradespersons, air-conditioning and refrigeration mechanics and sheet metal trades workers. In the case of aircraft maintenance engineers, GippsAero trained 17 apprentices on the job to alleviate their need for employees with these qualifications.

The tables below detail the occupations in demand and in critical shortage in the manufacturing and engineering sector. Those listed as in demand generally reflect occupations for which industry finds it difficult to fill positions and where apprentice numbers are insufficient.


Aircraft Maintenance Engineer (Mechanical) Aircraft Maintenance Engineer (Mechanical) (323112)Aircraft Maintenance Engineer (Avionics) Aircraft Maintenance Engineer (Avionics) (323111)Aircraft Maintenance Engineer (Structures) Aircraft Maintenance Engineer (Structures) (323113)Civil Engineering Draftsman Civil Engineering Draftsperson (312211)Engineering Manager Engineering Manager (133211)Mechanical Engineer Mechanical Engineer (233512)Mechanical Engineering Draftsman Mechanical Engineering Draftsperson (312511)Metal Fabricator (Boilermaker) Metal Fabricator (322311)Mining Engineer Mining Engineer (excluding Petroleum) (233611)Production Manager (Mining) Production Manager (Mining) (133512)Production or Plant Engineer Production or Plant Engineer (233513)Sheetmetal Trades Worker Sheetmetal Trades Worker (322211)Ship’s (Marine) Engineer Ship’s Engineer (231212)Welder (First Class) Welder (First Class) (322313)Engineering Technologist Engineering Technologist (233914)Air-conditioning and refrigeration mechanic Air-conditioning and refrigeration mechanic (342111)Metal Machinist Metal machinist (First Class) (323214)Metal Fitters and turners Metal Fitter and Turner (323212)Occupations experiencing a critical skills shortageIndustry title

ANZSCO classificationSheetmetal Trades Worker Sheetmetal Trades Worker (322211)Aircraft Maintenance Engineer (Mechanical) Aircraft Maintenance Engineer (Mechanical) (323112)Aircraft Maintenance Engineer (Avionics) Aircraft Maintenance Engineer (Avionics) (323111)

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Aircraft Maintenance Engineer (Structures) Aircraft Maintenance Engineer (Structures) (323113)Metal machinists Metal machinist (first class) (323214)Air-conditioning and refrigeration mechanic Air-conditioning and refrigeration mechanic (342111)Metal Fabricator (Boilermaker) Metal Fabricator (322311)Metal fitters and turners Metal Fitter and Turner (323212)

The table below outlines qualifications which are required for occupations experiencing a critical skills shortage. Note that some occupations have the same certificate listed for different occupations. Different occupations would complete different units within the same certificates in order to specialise in their field.

Qualifications required for occupations experiencing critical skill shortagesOccupation (Industry title) QualificationSheet metal trades workers Certificate III in Engineering – Fabrication tradeAircraft maintenance engineers Certificate IV in Aeroskills (Avionics, Mechanical and Structures)Metal machinists Certificate III in Engineering – Mechanical tradeAir-conditioning and refrigeration mechanic

Certificate III in Engineering – Mechanical tradeFabrication tradesperson Certificate III in Engineering – Fabrication tradeMetal fitters and turners Certificate III in Engineering – Mechanical trade

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14 Primary IndustriesCoverage: Agriculture, production horticulture, amenity horticulture, conservation and land management, animal care and management, seafood and aquaculture.

Specific industry and business cycle drivers: climate change, water security and pricing, environmental policy, the $A.

Recent relative sectoral performance rating: Below average




Primary Skills Victoria (PSV) has reported a number of examples of market success, and some ongoing market failures centred on the quality of training in particular areas. The examples of success demonstrate an increased uptake of training in otherwise thin markets (in a number of cases through the financial support of industry).

In collaboration with the Nursery and Garden Institute of Victoria, PSV supported recruitment and retention as part of the industry cadetship program in wholesale nursery. In particular PSV have reinforced the engagement between industry and the principle RTO, to develop a training strategy that supports mentoring, retention, credibility and quality. This otherwise thin market is now providing continuous prevocational training to 20 cadets per annum, and advanced standing into an apprenticeship, as part of a new industry workforce development plan.

With the funding and support of the Australian Wool Industry, PSV has been working with secondary schools, RTOs and industry to develop training opportunities throughout rural and regional Victoria (in the form of shearing schools). These schools introduce young people to career opportunities and vocational training, and provide prevocational training that can be credited against a Certificate II/III in Shearing. In line with these efforts (and the revival of the wool/prime lamb market) enrolments in shearing have increased from 69 to 123 in 2011.

Across a range of other areas of skill shortage, strong increases in the uptake of training have been observed in 2011. This includes: Advanced Diploma of Rural Business Management; Certificate III in Agriculture (Horse Breeding); Certificate III in Rural Business; Certificate IV in Agriculture; Certificate IV in Sustainable Environmental Practises; Diploma of Production Horticulture; Certificate IV in Arboriculture.

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The view of PSV is that in many cases this is driven by RPL more so than additional skilling. A notable exception is arboriculture which has involved up-skilling in line with improved industry engagement.

In terms of training market failures, PSV continues to voice concern around the quality and integrity of training, particularly in terms of RPL in specific industry sectors, and VET teaching qualifications as it relates to pedagogy and industry currency. This includes the translation of the VCE to a Certificate II, thereby side-stepping industry specific foundational skills.


PSV have reported a number of industry change drivers for 2012, many of which compound from 2011. They include: Biosecurity awareness and regulation (demand side) Advancements in farming systems (demand side) Consumer demand for amenity horticulture and landscaping (demand side) Increasing public land conservation task (demand side) Growth of the Victorian biotechnology sector (demand side) Rationalisation of Victorian farms (demand and supply side) Carbon farming initiative commencement (demand and supply side) Developments in production horticulture (demand and supply side)

Local and global agendas and market movements are creating new opportunities for up-skilling in primary industries, while consolidating some lower-level historical training.

The on-going rationalisation of Victorian farms into larger corporate/investment structures, in order to generate economies of scale and scope and thereby remain competitive, is changing the pattern of demand for on-farm skills. Indeed there is an increased demand for professionally trained farm managers with a range of production and operational skills (particularly resource management), with training at the Certificate IV and Diploma level required to develop these (most likely up-skilling existing workers).

At the same time, issues around water security remain pertinent in the Murray Darling Basin and continue to result in the sale of farms under the Federal Government’s Rural Readjustment Scheme. As farm buy-backs reduce the demand for traditional on-farm skills, they also create the need to re-skill that labour. Furthermore the reduced water security forces change in irrigated farming practise among those who remain on the land, as it relates to monitoring and maintaining water quality, thereby generating training demand in the design and management of more sophisticated farming/irrigation systems.

With the high $A and other trade developments increasing the volume of imports to Australia, the subsequent quarantine/biosecurity risks are putting the quality of both Australian and imported produce in jeopardy. Outbreaks of pests and diseases threaten production and demand higher order skills in pest and disease management in response, including skills to detect, contain and control. The sophistication of these techniques implies training at the Certificate IV and Diploma level is required – though this training currently sits within agricultural departments and must be brought into the training system to allow better dissemination.

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Increasing demand for amenity horticulture and landscaping across Victoria (particularly inner city and new residential areas) is driving demand for new and more abundant skills. The industry response has been to support increased wholesale nursery apprenticeships. To ensure consumer demands are met, increased training in new urban irrigation systems, drought and disease tolerant plant species, landscape design (and project management) and retail nursery – at the Certificate III to Diploma levels – will also be required.

Conversely, increased pressure has been placed on areas of Victoria’s production horticulture sector, due largely to competition from overseas production. Farm closures and the loss of skills and expertise in more marginal regions exacerbate already thin demand for new training. This is to the detriment of those producers that remain in operation, who are under increased pressure to up-skill to attain greater production efficiencies, particularly as it relates to irrigation systems, specialist crop production, equipment and agri-tourism (which requires Diploma level qualifications).

In terms of managing Victoria’s natural resources, structural change in the Murray Darling Basin continues to place pressure on monitoring and maintaining the health of the river environment (enabled by the Diploma of Sustainable Water and Catchment Management and some lower order skills at the Certificate III/IV level). At the same time, policy commitments to reduce fire risk across the state again place increased demands on public land managers to both train and recruit skilled labour (at the Certificate III/IV level).

The Carbon Farming Initiative commences in 2012. The implication of this initiative is the need to consider the allocation of farming land to long-term forestry and subsequently the modification of farming practises. A level of skill in species selection, establishment, maintenance, management and carbon accounting will be required within the industry (with the rest contracted in). Indeed this is likely to result in the creation of a new occupation that may sit across the primary and forestry industry sectors – with Diploma level training likely to be the starting point.

Following from this, advancements in farming systems therefore relate not only to the changing size and structure of farms, but also the potential benefits of greater environmental efficiencies and sustainability. Carbon sequestration, waste reduction and bio-fuel production each provide avenues to reduce production costs and/or increase revenues, to the benefit of farming viability. Flexible training delivery will be required to ensure the uptake among existing farmers, and will need to be sufficiently grounded in the application of emerging technologies. This would also be supported through increased agronomists.

Finally, in terms of Victoria positioning itself as a global biotechnology hub, a major barrier to this is the availability of animal technologists. Breeding and management of laboratory animals (in animal houses attached to human health research institutes) requires training at the Diploma level. It is hoped that improved opportunities for students to undertake work placement as part of their training will go some way to addressing this, as well as the up-skilling of existing Certificate III holders.

Industry outlook

Over many decades, employment in the primary sector has been declining as a share of total employment. This reflects structural factors including an increase in the share of consumer expenditure that has gone to services, strong productivity growth in Australian

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agriculture, declining prices of some agricultural commodities relative to other products, moderation of government support and a reduction in trade protection. However, the short term outlook is not necessarily one of decline. Key drivers over the short term include weather conditions, commodity prices, and the $A.

Victorian farmers enjoyed a bumper crop in 2010-11. Seasonal conditions have once again been favourable in 2011, with good winter rainfall improving yield prospects for the winter crop. As a result, the short term outlook for Victorian crop production remains positive, with ABARES forecasting Victorian crop production to again above average in 2011-12.

The rainfall that boosted crop production was also a blessing for irrigation-dependent farms in the Murray–Darling Basin. Water storages in Murray–Darling Basin dams are now just below 80% of capacity, compared with 52% a year ago. For the first time since 2002-03, all northern Victorian systems received an allocation at the opening announcement on 1 July. This is a major positive for northern Victoria’s dairy industry, which has been struggling with water shortages for a number of years.

Agricultural commodity prices have increased since 2009-10, supporting the earnings of agricultural producers. The increase in agricultural commodity prices in 2010-11 has been broad based, with the prices of major crops such as wheat, barley and canola rising, while dairy prices remain relatively high. Prices received for livestock have also increased in 2010-11. ABARES is forecasting agricultural prices to remain at an elevated level through 2011-12.

Chart 14.1: Employment outlook – Victorian primary industry


However, the elevated $A has partially diminished the return to Australian farmers from rising $US commodity prices. Looking ahead, $A movements will continue to be an important driver of returns for the industry. In the short term, Deloitte Access Economics expects the $A to remain well supported by high resource prices and Australia’s relatively higher interest rates compared with other developed economies. Looking further forward, however, the $A is projected to decline closer toward its longer term average.

Finally, the Federal Government has now confirmed that its carbon pricing scheme, which will be introduced in 2012, will not include agricultural emissions. As a result, there will be no requirement for farmers to pay for emissions from livestock or fertiliser use. Moreover, the carbon price will not apply to off-road fuel use by the agriculture, forestry and fishing

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industry. Despite these assistance measures, there will be extra costs imposed by the impact of the carbon price on some goods and services that are consumed by farmers and other producers in primary industry, notably electricity costs.

In addition, the Federal Government will be spending around $1.5 billion over the next six years on initiatives that aim to reduce the emissions of the agricultural sector. The Carbon Farming Initiative will allow farmers and land managers to earn credits for activities such as revegetation, savannah fire management, and reductions in emissions from livestock and fertiliser. Credits may then be sold to other businesses wanting to offset their own carbon emissions. Meanwhile, the Biodiversity Fund initiative will provide funding for landholders to undertake projects that establish, restore, protect or manage biodiverse carbon stores, while the Carbon Farming Futures initiative will support research and development and other activities that will assist farmers and landholders to reduce emissions and store carbon.

Overall, after a fall in primary industry employment4 in 2011, employment is generally expected to remain relatively steady in the industry over the medium term.



In response to the three most critical skill shortages faced by the Victorian primary sector in 2011 – animal technicians, arborists and agronomists – PSV has worked with industry to formulate what are hoped to be long-term solutions. The solutions have centred on the formalisation of new qualifications and career pathways, where industry has ownership over the outcomes and PSV is the facilitator.

For animal technicians, having identified the skills required in collaboration with the Walter and Eliza Hall Institute, PSV facilitated an in-house training relationship with Box Hill TAFE (at the Diploma level). It is ultimately hoped that the program will take up to 40 enrolments per year, in order to better satisfy industry demand.

In terms of arborists, consultation with industry associations has resulted in industry-agreed skill requirements, along with industry support of arboriculture as a licensed trade to improve career pathways and industry skill retention. Accordingly the take-up of up-skilling at the Certificate IV level was high in 2011, and will need to remain at 60-80 enrolments per annum to ensure demand is met (and translates to increased enrolments at the Diploma level).

Agronomists, who are supporting the on-going structural change in agriculture and the application of new farming technologies and techniques, have benefited from the State registration of the Diploma of Agronomy. Enrolments in the course are growing steadily, despite the overlap with the higher education system, with 50-60 enrolments required per annum to satisfy current levels of demand.

4 For the purpose of employment forecasts, primary industries are defined across numerous ANZSIC categories, the largest of which is sheep, beef cattle and grain farming, followed by dairy cattle farming. This classification does not include the forestry sector. Note that concordance issues between ANZSIC industry classifications and ITAB industry coverage is particularly relevant in the Primary sector. Imperfect alignment between the two industry classifications and a rising tendency for the primary sector to provide a secondary source of income for individuals means that a concordance from the ANZSIC industry employment data is likely to understate the number of persons employed in the sector.

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The tables below summarise the occupations in demand and experiencing critical skill shortages in 2012. These occupation lists have been advised by PSV and have been determined following formal engagement with industry.

Overall, similar occupations are listed as in demand compared to 2011, though a greater proportion is listed as experiencing a critical skill shortage. The inclusion of greenkeepers and parks and gardens workers on the list of occupations in demand relates in part to the increased demand for horticulture and landscaping across Victoria discussed earlier, along with changes in climate and increased bushfire risk around the State.



Arborist Arborist (362212)Vegetable grower/farm worker Vegetable grower (121221)

Vegetable farm worker (841214)

Nursery worker Nurseryperson (362411)Gardener Gardener (general) (362211)Greenkeeper Greenkeeper (362311)Grain/oilseed/pasture grower Grain, oilseed or pasture grower (121214)Agricultural / horticultural mobile plant operator Agricultural mobile plant operator (721111)Pig farmer Pig farmer (121318)Dairy farmer Dairy cattle farmer (121313)Mixed livestock farm worker Mixed livestock farm worker (841513)Sheep farmer Sheep farmer (121322)Aquaculture farmer Aquaculture farmer (121111)Aquaculture worker Aquaculture worker (841111)Animal technician Life science technician (311413)Agronomist Agricultural consultant (234111)Parks and gardens worker Gardener (General) (362211)Biosecurity officer Quarantine officer (311313)Occupations experiencing a critical skills shortageIndustry title

ANZSCO classificationArborist Arborist (362212)Animal technician Life science technician (311413)Agronomist Agricultural scientist (234112)Greenkeeper Greenkeeper (362311)Parks and gardens worker Gardener (General) (362211)


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Occupation (Industry title) QualificationArborist Certificate III in Arboriculture

Diploma of Arboriculture

Animal technician Diploma of Animal TechnologyAgronomist Diploma of AgronomyParks and gardens worker Certificate III in Parks & Gardens

Diploma of Parks & Gardens ManagementGreenkeeper Certificate III in Sports Turf Management

Diploma of Sports Turf Management

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15 RacingCoverage: Racing – including harness and greyhound racing

Specific industry and business cycle drivers: rate of baby boomer retirement (more people to spend more time at the track and increased opportunity to be involved in racing pursuits) and, over the longer term, differential demand by age (the potential for individuals to become more active bettors as they age).





The view of Racing Victoria is that, in general, the training required by industry has been met by the training providers. However this is largely due to additional funding provided by Racing Victoria or due to mandatory requirements for training in order to gain a license.

For example, in 2009 the Racing Victoria Board approved funding of $400,000 over two years to support the mandatory training of stable employees to ensure that participants had the necessary skills and knowledge to perform duties efficiently and safely. From August 2011 all stable employees have been required to complete this training to be registered and Integrity Services ensures that compliance is being monitored by relevant participants across the industry.

Over the two years, 2,768 participants have undertaken and completed the required training with a range of providers. This initiative has established a minimum standard for new entrants and upskilled the existing workforce.

Additional benefits of the mandatory training has been that a number of participants have undertaken full Certificate II and III courses as opposed to just the two compulsory units, either at their own initiation, or at the suggestion of their employer, industry body or training organisation. Also, the training helped to identify literacy and numeracy problems (particularly among older workers), who were reluctant to undertake training. Racing Victoria worked directly with these people, assisting them to complete any paperwork and further helping them through the process.

A 2010 pilot program designed to address the shortage in track riders was delivered over 2011. The track rider program continues to be delivered in partnership with South West TAFE (Glenormiston), and is also supported through a Federal funding grant received with assistance from Agrifood Skills Australia.

The program has run camps at the intermediate and advanced level. Industry placements are generally made following competency at the advanced camps. However, some placements have been made following intermediate camps. All ten students from the January 2011 advanced camp are employed as track riders. Six of the eight students from

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the January 2012 advanced camp are employed, while one is in the process of being placed and one is undertaking further development.

It is anticipated that there will be approximately 48 students participating in the camps in 2012. This will go some way to alleviating the track rider shortage, although it is thought that even if all 48 students graduate in 2012, track riders will remain in demand in 2013.

While there are many examples of successes in the training market, none of them would have eventuated without some intervention, usually in the form of additional funding or in the form or mandatory training. This is often due to the higher cost of running an equine based unit (as opposed to, for example, an OH&S or business unit).

The racing industry is suffering from an undersupply of instructors and trainers. There is a strong need for instructors given the volume of mandatory training within the industry. However, RTOs often have difficulty finding instructors and trainers who are able to deliver the required content at high standard. The implication for RTOs is that they can’t offer courses for as many people, or can’t offer courses as often as is demanded.

The problem of thin markets also emerges, for example in relation to steward training. There are very few stewards in the industry, and so the demand for training is often only for one or two people. A course is currently being run by the University of Ballarat across all three codes and Racing Victoria is working collaboratively to develop alternative training, including online, that can be delivered to small groups or individuals.


Racing Victoria reported several change drivers for 2012 that have been identified during consultations with stakeholders. They are: Ongoing training due to mandatory OH&S requirements (demand side) The new license agreement with TABCORP (demand side) A lack of new workers into the industry (supply side) Emerging shortage of qualified teachers of equine units (supply side)

Racing Victoria now requires certain OH&S training in its suite of mandatory training units. This means the move towards the national harmonisation OH&S will not affect the Victorian Racing industry as it may other industries (as the proposed changes are already part of the training package). However, mandatory training will continue to affect training demand. In particular, the demand for traineeships, Certificate II and III should remain high.

A significant change driver for the Victorian racing industry in 2012 will be the new licence agreement that has just been negotiated with TABCORP spanning 12 years. This agreement provides some certainty for the industry, and resolves many issues which were unforseen when the previous agreement was signed in 1994 (including internet wagers) and also covers the structure of how racing will operate with various wagering groups.

This change means that there is now a greater need for people working in the racing industry to have certain business skills. While there are some business units currently available in the training packages as electives, most students undertaking training prefer to undertake the units which have an equine focus. Racing Victoria is considering making some of the business unit compulsory (some of which will need content review), although it is recognised that this is a longer term solution. In the shorter term, some additional

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business units are likely to be required to be undertaken for new entrants before a person can be registered or licensed with Racing Victoria. In both the short and long term, the fact that these units will become a requirement in order to work in the industry means that the demand for these units will increase until the current stock of workers has undertaken the training.

An ageing workforce and lack of new entrants continues to be a point of focus for the industry. While there has been some success in attracting people to undertake both track rider and stablehand training, more people are needed in order to fill shortages. Many programs aimed at attracting people to the industry have continued over 2011. However additional programs have also commenced which will continue in 2012. For example the thoroughbred education program is focusing on secondary schools and careers counsellors to try to attract a greater number of school leavers. Racing Victoria also subsidises apprenticeships for both jockeys and farriers in order to attract people to these programs.

The availability of trainers to undertake the required training is also emerging as a problem for this industry. Finding people suitable to train others at the required standard is becoming difficult. Ideally trainers need pony club, racing and education skills or experience in order to be able to deliver appropriate content to students, however most people with the requisite equine experience have little interest in teaching. Racing Victoria is advising and encouraging people to undertake the training and assessment qualification in order to expand their skills and experience. With an ageing workforce in an industry where a large proportion of the work is manual, it is hoped that more people will begin to show an interest in the training and assessment course.

Industry outlook

The outlook for the Victorian racing industry depends to a large extent on the share of household spending being devoted to entertainment and recreation, as well as the popularity of racing relative to other entertainment and betting alternatives

To that end, there are a number of key positives for the racing industry over the medium to long term. In particular, the ageing of the Australian population is leading to an increasing number of retirees – a traditional base for gambling given their relatively large resources of money and leisure time. Strong income growth and high levels of household wealth will also help to underpin spending on gambling and recreational activities.

However, there are also a number of challenges for racing in Victoria. In particular, recent years have seen increased competition from various other sports in the gambling market, while the rise of online betting and betting using smart phone devices may also be reducing demand from punters to attend race meetings. Those trends are turning money away from racing, and risk generating an ongoing funding challenge for the industry.

The ongoing controversy surrounding jumps racing in Victoria is also an important challenge in the short term. Recent incidents during jumps racing events threaten the future of the sport and therefore another source of funding for the industry.

A further development for the industry in the short term will be the restructure of Victoria’s gambling industry, which was first announced in 2008 and is due to commence in 2012. That restructure has resulted in Tabcorp Wagering being awarded the new 12-year Wagering and Betting Licence which will take effect from August 2012. In 2009-10,

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wagering turnover in Victoria was almost $4.5 billion, with some $322 million of that provided to the Victorian racing industry.

Chart 15.1: Employment outlook – Victorian racing industry


Recent data from the Australian Bureau of Statistics (shown in the charts above) suggest a considerable fall in employment in the Victorian racing industry in 2011. That trend is also evident at the national level, but is more pronounced in the Victorian data. Employment data from the ABS can be subject to volatility and inaccuracy (particularly in regards to smaller industries such as racing), though there does appear that an unwinding of recent employment gains to some degree has taken place in the industry.

Should the apparent fall in employment through 2011 be accurate, Deloitte Access Economics would expect a rebound in jobs in 2012.



Track riders were the only occupation identified in the 2011 report as experiencing a critical skills shortage. Programs were developed to try to attract workers, which included a thoroughbred education program targeted at secondary school students to try to capture secondary school leavers, and sending talent scouts to pony clubs to identify people with an interest in becoming a track rider. The Track Rider Talent Identification Camp also continued in 2011, where three camps were delivered for 35 riders. Retention of those completing the training was good, with 90% now employed in the racing industry. Effort has also been made to retain current workers, including recognising track riders in the Thoroughbred Employee Awards, and through memberships to relevant industry organisations and bodies.


There are three occupations listed as being in demand in the racing industry. Track riders and stable hands were listed in the 2011 report, while track maintenance managers are a new addition to the 2012 MER report.

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Track maintenance managers are becoming increasingly difficult to find, particularly with the required green skills (including artificial surfaces and water management). Competition from other industries (primarily other sporting clubs such as golf) where wages are often higher is resulting in a shortage of workers with these skills. Racing Victoria is currently trying to ascertain from industry how many are required, and exactly what skill sets are required, so that an appropriate response can be formulated in 2012.

Despite the effort that has been put into filling the shortage of track riders, this occupation remains on the critical skill shortages list for 2012. A track rider is able to ride 6 horses comfortably. However due to the shortage riders are currently riding in excess of 10 horses a day, leading to a greater chance of accidents occurring.

The table below lists the occupations in demand and their ANZSCO classifications.



Track Rider Stablehand (841516)Stablehand Stablehand (841516)Track maintenance managers Greenkeeper (362311)Occupations experiencing a critical skills shortageIndustry title ANZSCO classificationTrack Rider Stablehand (841516)



Occupation (Industry title) QualificationTrack Rider Certificate III (Trackriding)

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16 Services Coverage: Cookery, Hospitality, Holiday parks, Tourism, Hospitality and events, Beauty Services, Floristry, Funeral, Hairdressing, Other Personal Services, Retail and Wholesale.

Specific industry and business cycle drivers: Population growth, ageing population, overseas tourist arrivals, $A, petrol prices, interest rates, employment growth and consumer confidence.





A number of examples of market effectiveness were provided by Service Skills Victoria (SSV) in terms of both success and failure. The successes generally relate to the development or take-up of training while the failures relate to thin markets and training quality.

One example of success is in relation to the development of a suite of qualifications in the new training package. These include: Vocational Graduate Certificate in Hairdressing Diploma of Salon Management Vocational Graduate Certificate in Retail Leadership Vocational Graduate Certificate in Intensive Pulsed Light and Laser Reduction

Each of these relates to a part of the services industry that often experiences problems with retention. These qualifications help to address that issue by providing a clearer pathway for career progression. Each also addresses specific needs in the market. For example, the Vocational Graduate Certificate in Intensive Pulsed Light and Laser Reduction previously did not exist and training was generally provided by the vendor.

The Retail Excellence in Victoria project provides an example of a successful collaboration between the industry and training sectors. The program funds a position to work with both employers and training providers to help meet industry’s needs. It also includes a mentoring program for people involved in training, to help improve outcomes and completion rates. This has seen increased enrolments in existing qualifications, such as the Certificate IV in Retail and the Diploma in Retail Management.

On the other hand, qualifications in the Retail sector are experiencing difficulties due to adverse incentives created by the Federal Government’s traineeship incentive. The Diploma of Business (Management) is considered a traineeship under this system, whereas the Diploma of Retail Management is not. Even though the latter is better tailored to the retail sector, employers are enrolling their staff in the former in order to take advantage of the government’s incentive.

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The view of SSV is that the recent change to a demand driven system, resulting in an increase of funding to private providers, has exacerbated existing issues in the delivery of training. The main issue of quality training delivery and outcomes is long term and systemic, and SSV has been drawing this to the government’s attention for several years. The success of educating and training of the Victorian workforce cannot be measured solely through an increase in enrolments.

For example, the hairdressing industry has reported that training is not of a high enough standard to produce job ready graduates. While enrolments have increased, quality outcomes have not, and have therefore produced even more graduates that are not employable. Indeed, Certificate II graduates in hairdressing do not have sufficient skills to operate effectively in the market place. Employers prefer to recruit straight into the Certificate III qualification and complement the training with in-house training programs to address the deficiencies of training delivery. Employers in this sector are requesting that the Certificate II become a traineeship and the preferred pre-apprenticeship model to address the current shortcomings of the qualification. This change would provide the student with the ability to develop their skills and gain experience within the workplace which will increase employment on completion of their studies.

Another area of concern is the delivery of RPL. SSV believes RTOs are over-delivering RPL at the expense of delivering training. One method of addressing these issues is by increasing the auditing of training providers to ensure quality standards are being met in training delivery and assessment. SSV is implementing a new accreditation program, The Right Way, to assist RTOs in providing quality facilities, trainers and assessors. SSV believes that this program will help to address the current quality issues that are being experienced by industry. Another benefit of the program is the development of a database of quality providers which will facilitate more successful outcomes for industry.

Related to this is a complaint by industry that institutionalised training does not lead to the level of competence required in a commercial setting. Institutionalised training is generally completed in a simulated commercial environment, focusing on technical skills. While this produces technically competent graduates, employers complain they are not ‘job-ready’ as they find it difficult to perform under a stressful commercial setting. SSV acknowledged that complete training on the job does not produce the desired outcomes either. The solution therefore may be to continue to provide a combination of both types of training, with more reference to the workplace. This will also require greater collaboration of industry, which would need to make places available for the requisite work placements.

One notable example of failure is an ongoing concern, and relates to the thin market for training in skills for work in cemeteries and crematoria. According to the Crematoria Trust, there are 150 individuals in Victoria requiring training in a Certificate III in Grave Digging, but there is no RTO available to provide this training. Overall, this is an industry with low staff turnover so there is not continual demand for the training. Furthermore, delivery of the course requires expensive equipment. As such, it is not viable for RTOs to run this course. In response, the industry is employing consultants from the mining industry to deliver informal training.


SSV reported a number of change drivers for 2012 that were identified during consultations with industry stakeholders. Most relate to demand side issues, with only a few supply side issues present:

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Unstable global economy and changing consumer spend (demand side) Strong Australian dollar (demand side) Social media and changing technology (demand side) Increasing competition locally (demand side) Lifestyle changes (demand side) Ageing population (demand side) Continued immigration (demand side) Demand for tourism-related services (demand side) Focus on sustainability (demand and supply side) OH&S harmonisation (supply side) Workforce development, recruitment and retention (supply side)

As a result of the fragile outlook for the global economy, businesses are restructuring their workforces and consumers are decreasing their discretionary spend. There has been an increasing number of business failures and remaining businesses are attempting to cut their staff costs through more casual workforce and reduced investment in training. As such there is reduced demand for training. The need for skill development still exists, but fewer businesses have the capacity to invest.

A strong Australian dollar has an adverse effect on the local tourism sector, as travel to Australia becomes relatively more expensive for the international market and travel abroad becomes relatively cheaper for the Australian market. The industry has responded to this challenge by increasing their focus on domestic marketing, with approaches such as the Victorian Events Industry Strategy and the Victorian Tourism Workforce Development Plan. If successful, this will require further training of the tourism workforce. At the moment, the tourism sector relies on a casual and itinerant workforce, meaning the focus of training will be on foundation skills provided by qualifications such as Certificates I and II in Hospitality and Tourism.

Changing technology and the rise of social media mean that industry must be aware of multi-channelling to target their customers. An example of the application of new technology is the ability to read quick response barcodes using smart-phones, allowing customers to scan a product’s code to obtain more information about that product. This implies a need for skills in smart phone technologies and web management, and in areas such as e-marketing and e-commerce. In areas such as hairdressing, tourism and hospitality, businesses are starting to implement online booking systems. Qualifications such as the Diploma of Salon Management, the Certificate IV in Hospitality and the Diploma of Hospitality address these skill needs.

Local retailers are facing increasing competition from international retailers entering the local market, both as shopfronts (such as Zara and Topshop) and through their presence in online retailing. In response, domestic retailers are improving their customer experience in terms of store interiors and customer service. This requires skills development and training in higher order customer service skills, such as those provided in Certificates III and IV in Retail. In order to better compete with international online retail, Australian businesses are incorporating online shopping in their business model, as a complement to their shopfront retail. This requires development of high level management skills, as provided in qualifications such as the Diploma of Retail Management.

Lifestyle changes and an ageing population were change drivers in 2011 and are expected to continue to be an influence in an environment increasingly focused on wellbeing. This is

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driving demand for training within the spa and beauty sector. New occupational roles include wellness coaches, aroma therapists, mediation therapists, positive psychologists and dermal therapists. It is expected this will lead to increased demand for training in the Diploma of Beauty Therapy, the Diploma of Salon Management and the Vocational Graduate Certificate in Intense Pulsed Light and Laser Hair Reduction.

The ageing population is leading to increased demand basic for health support services that can be offered in pharmacies, and growth in the requirement for crypts and mausoleums. The former requires the up-skilling of community pharmacy staff and the health electives in the community pharmacy training package have been revised accordingly (indeed, the pharmaceutical industry is increasingly providing a number of medical services such as blood pressure and blood glucose monitoring and wound management services). The latter requires more people trained with the skills required to construct crypts and mausoleums.

Continued immigration and a multicultural society mean that the services industry must be more aware of, and better able to accommodate, cultural sensitivities. This may result in niche providers who are able to adopt their practices to cater to different cultural needs, with an ensuing need to include training on how to respond to different cultural beliefs in relevant qualifications. This is a broad issue relevant to a wide range of sectors within the services industry.

For example, the change driver is relevant in the tourism sector. Indeed, Tourism Victoria is undertaking a series of related policy initiatives aimed at skills and training in the industry. For example, a new China Strategy will be launched in early 2012 aimed at marketing Victoria to a targeted Chinese audience and building industry readiness for an increase in visitor numbers.

The understanding of the Chinese market within the industry is less developed than for other markets. The China Strategy will help to build the knowledge within the Victorian tourism industry and will include strategies to increase cultural awareness and other industry needs. Tourism Victoria aims to help develop both skilled and unskilled labour which is tailored to the Chinese market.

In spite of some conflicting trends in recent times (a strong Australian dollar and reduced discretionary spending), the demand for tourism-related services has remained solid. Melbourne successfully maintains a year-round calendar of events to attract tourists to the city, with events such as the Australian Open tennis tournament and Grand Prix in warmer months and significant exhibitions in cooler months. This puts pressure on the restaurant and hotel sectors. Hotels have had difficulties employing managers for some time, as it is difficult to up-skill staff in their own sector. Similarly, higher end restaurants are having difficulty employing wait staff with a high skill level, commenting that it is even harder to find good wait staff than it is to find chefs. The high Australian dollar is also encouraging more Victorians to holiday overseas, underpinning demand for international travel consultants.

A focus on sustainability in the media and by consumers has two major implications for the services industry: to incorporate sustainable and more efficient practices into their business model and to communicate these practices to their customers. This implies a need to up-skill staff in sustainable business practices and ‘green’ methods. Units on sustainability are now embedded in all qualifications, meaning these skills will be delivered to those undertaking full qualifications.

A final important change driver for 2012 is the harmonisation of OH&S regulation. According to SSV, this will require employers to implement systems and processes in order

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to adhere to a stricter regulatory environment, leading to demand for higher level management skills. It will also require training in foundation skills such as literacy and numeracy for some junior staff so that changes can be properly communicated. SSV states that structured, targeted industry training will be required across all levels of staff to ensure business keeps pace with an evolving regulatory environment.

More generally, there remains an issue of attracting and retaining skilled labour, leading to ongoing workforce development issues. Negative perceptions of career prospects within many sectors of the broader services industry remain, and industry continues actively promote career pathways and qualifications in an effort to overcome these views.

Industry outlookThe services industry represents a wide range of sub-industries 5, and has recorded a relatively steady share of Victorian employment over the past two decades.

The retail sector is a key component of the Victorian services industry. Despite some upheaval in the wake of the global financial crisis, Victorian retail has performed more strongly than the national average. That said, recent retail growth in Victoria has been centred in a few key sectors – food retailing, cafes and restaurants, and other retailing.

Although population growth is expected to weaken further, solid employment and wage gains should provide a good base for income growth going forward. In turn, retail spending is expected to recover to solid rates of growth in the medium term.

Further ahead, the structure of the retail environment is likely to change significantly over the next decade, with the arrival of new players and changes in the focus of existing retailers both likely.

Additionally, the Australian market has already demonstrated potential for overseas supermarkets to provide greater competition in the domestic market, and the impact of online (and direct import) shopping is expected to carve out an increasing share of overall retail spending. That increase in competition and expansion of services may not be supportive of overall retail employment.

Meanwhile, the Victorian tourism market looks set to record over one million international visitors in 2011 for the third year running. That said, the broad outlook for tourism is weighed down by the strength of the $A at present.

Despite a brief decline amidst global economic turmoil, the $A is once again firmly above parity with the $US. The currency is likely to remain elevated over the medium term, but is expected to eventually retreat to longer term trend levels. In the short term that is hurting the industry by discouraging international visitors from coming to Australia, but also by encouraging Australians to holiday overseas rather than domestically.

5 For the purpose of employment forecasts, the services industry is defined to comprise a range of ANZSIC categories, the largest of which are accommodation and food services, and supermarket and grocery stores. Tourism activity, which is included in this ITAB, does not have its own ANZSIC category. However, most tourism trade is captured through ANZSIC categories such as accommodation and travel agency services.

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Employment outlook – Victorian services industry


Looking to broader measures of tourism, room nights occupied have been stronger in Victoria than the national average, and this trend is expected to continue over the medium term. Melbourne’s role as a business centre and the unofficial cultural capital of Australia may be helping to support tourism flows, while regular events such as the Melbourne Cup, Australian Open tennis and golf tournaments, and the Grand Prix provide an important demand base.

Taking a longer view, it remains the case that the growing middle class in developing economies represent a key market for the tourism sector for the future. Victoria should be well positioned to take advantage of this trend, and may also be able to record a recovery in higher education services for international students, which would also support broader activity across the services industry.

In the short term, however, the high $A and a weak retail environment may cause a further modest fall in employment in the industry in 2012, before a return to growth in 2013.



There were three occupations listed as experiencing critical shortages in 2011: chefs, retail store managers and restaurant managers.

Industry response to the ongoing shortage of chefs has been to recruit international chefs. This has been an ongoing problem for some time, and industry is requesting a reinstatement of chefs on relevant occupation lists at the Federal level. SSV has informed the State Government of this shortage.

SSV has actively promoted a retail management program to industry, which combines a Certificate IV and Diploma of Retail Management with a mentor program, in an attempt to alleviate the shortage of retail store managers. The retail industry is increasingly aware that further training is needed, and the uptake of training is slowly increasing. Some retailers have commenced participation in the mentoring program.

The shortage in restaurant managers continues to be dealt with by industry filling the positions with unqualified staff. SSV believes the solution is to customise the Retail

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Excellence in Victoria project (noted in the discussion of examples of market success above) for the hospitality sector. However additional resources would be required to undertake this project.


The table below summarises those occupations cited as being in demand and those experiencing critical skill shortages in 2012, based on advice provided by SSV. These occupation lists were determined by SSV following formal engagement with industry. Overall, there is an increase in the number of occupations listed as in demand and as critical skill shortages compared to 2011.



Hairdresser Hairdresser (391111)Beauty therapist Beauty therapist (451111)Pharmacy assistant Pharmacy sales assistant (621411)Dispensary assistant Pharmacy technician (311215)Florist Florist (362111)Spa therapist Beauty therapist (451111)Cook Cook (351411)Housekeeper Commercial Housekeeper (811411)International travel consultant Travel consultant (451612)Retail manager Retail manager (General) (142111)Supervisory staff – Retail Retail supervisor (621511)Chef Chef (351311)Hotel manager Hotel or Motel Manager (141311)Restaurant manager Cafe or Restaurant Manager (141111)Wait staff Waiter (431511)Occupations experiencing a critical skills shortageIndustry title ANZSCO classificationRetail manager Retail manager (General) (142111)Supervisory staff – Retail Retail supervisor (621511)Chef Chef (351311)Hotel manager Hotel or Motel Manager (141311)Restaurant managers Cafe or Restaurant Manager (141111)Wait staff Waiter (431511)


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Occupation (Industry title) QualificationRetail managers Diploma of Retail Management

Vocational Graduate Certificate in RetailSupervisory staff – retail Certificate IV in Retail ManagementChefs Certificate IV, Diploma and Advanced Diploma of HospitalityHotel managers Diploma of HospitalityRestaurant managers Diploma of HospitalityWait staff Certificate III in Hospitality

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17 Textiles, Clothing, Footwear and LeatherCoverage: Clothing, Footwear, Leather, Shared – TCF&L, Textiles.

Specific industry and business cycle drivers: Lowered tariff protection, import competition, $A, new trade agreements, interest rates, employment growth, wage growth, tax cuts.





Various examples of training market effectiveness were reported by the Council of Textile & Fashion Industries of Australia (TFIA) and the Textile Clothing & Footwear Union of Australia (TCFUA).

Examples of training market success include the Stimulate Training Demand Project which was funded by the Higher Education and Skillls Group (formally Skills Victoria) over 2010 and 2011. This program enrolled approximately 40 participants in Certificate II and Certificate III qualifications in Textile Production and Clothing Production. The program targeted existing non-qualified workers who were able to gain a qualification with a combination of RPL and gap training. The program was also successful in marketing traineeships to a number of businesses which resulted in 22 commencements.

A number of other programs funded by the Higher Education and Skillls Group were cited as examples of training market success. These were principally run through the International Fibre Centre in collaboration with a training provider. The International Fibre Centre is based in Geelong and is the only organisation in Australia providing funding for skills development specifically for the textiles and fibre industry. It funds training opportunities related to three programs – innovative industry program, sustainable industry program and the value chain program. The programs focused on a wide range of skills, including those related to sustainability, lean manufacturing and competitive practices, along with industry-specific equipment and process training.

A third example of training market success offered by TFIA and TCFUA is the implementation of a workplace language and literacy program. This program was conducted by TCFUA to increase the foundation skills of the workforce. TFIA and TCFUA note feedback from employers and participants acknowledging the benefits of these classes in improving communication and team skills in the work environment.

Market failures identified by TFIA and TCFUA included the lack of availability of the Certificate III in Engineering – TCF Mechanic. At present, although one training provider

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lists this qualification on its scope, there are no enrolments in Victoria. There is strong industry demand for the skills provided by this qualification and a related occupation, textile, clothing and footwear (TCF) mechanic, has been listed as in critical shortage for a number of years.

According to TFIA and TCFUA, there has been a clear shift by training providers to offer a broader engineering qualification rather than this specialist course. This trend does not align with increasing demand from industry for the specific skill sets associated with operating sophisticated TCF manufacturing machinery. Apprentices undertaking the broader engineering qualification have also expressed concern regarding the mismatch between the skills provided by the course and those needed in the workplace.

The Certificate III in Engineering – TCF Mechanic is critical to the TCF industry, and not having individuals with the skills to run and maintain machinery can have the potential to close a business. However, TFIA and TCFUA recognise that encouraging people to enrol is difficult, in part because of a lack of availability of the qualification. This, in turn, reduces the incentive for training providers to offer the more specific TCF qualification because viable apprentice enrolments cannot be established.

The second market failure identified by TFIA and TCFUA relates to the role of RPL in the training market. The TCF industry is characterised by a skilled workforce that lacks formal qualifications. As such, from an employee perspective there is clearly a role for RPL to formally build and recognise skills. However, some instances of poorly monitored RPL processes and over credentialing has undermined industry confidence in RPL.

As with some other industries, there is also a view within the TCF industry that the equipment and facilities used by training providers are not adequately keeping pace with changes in technology. As a result, a number of companies send their workers overseas to learn how to operate and maintain machinery and equipment, while training within Australia is often undertaken by the equipment manufacturer. There are, however, some exceptions, most notably the TCF training centre at Kangan Institute known as The Hub.


Advice from TFIA and TCFUA is that the following major change drivers are expected to affect the industry in 2012: Government policies and compliance (demand side) Globalisation and competition (supply side and demand side) Sustainable work practices (supply side) Technological changes (supply side) Ageing workforce (supply side) Skill shortages and gaps (supply side)

These same change drivers were also relevant in 2011, suggesting a consistent set of challenges and opportunities are facing the industry.

The industry continues to benefit from a broad range of government contracts. Increasingly, those contracts require compliance with regulations, including around labour market conditions and employment standards. Moreover, there is also a growing recognition of the need to incorporate ethical and sustainable production processes, and

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the number of business seeking accreditation with Ethical Clothing Australia is increasing. Ethical Clothing Australia requires firms to trace through their supply chain to confirm that all levels of workers (including subcontractors and outworkers) are receiving adequate pay and all required entitlements.

The training needs resulting from this change driver relate to employees’ understanding of regulations and ethical business practices, and units of competency covering these topics are already present in existing qualifications. However a significant proportion of workers in the TCF manufacturing workforce do not possess formal qualifications and these skills may be best provided through targeted short course training programs.

Globalisation and international competition are ongoing challenges for the industry. The 2010 reduction in import tariffs on TCF products (from 17.5% to 10% on clothing and from 10% to 5% on textiles and footwear), combined with the elevated $A, is continuing to squeeze profit margins in the industry and erode competitiveness.

These economic conditions have implications for skills and training. Low profitability in the industry tends to discourage employers from actively participating in the training market,, including taking on an apprentice or providing formal training for employees.

Conversely, however, it also increases the need for employees to possess a broad range of skills. For example, as the industry moves to become more efficient, knowledge of lead manufacturing and other business production techniques will be increasingly valuable. Units of competency covering these skills are already provided as part of the Certificate IV, Diploma and Advanced Diploma of Competitive Manufacturing and the Certificate III in Clothing Production.

The rise of online retailing is also relevant for the TCF manufacturing industry. Online retailing requires a different manufacturing model, with an emphasis on speed to market and a concentration on producing individual items rather than lines by colour and size. These changes all require skills in business planning and the flexibility to meet changing customer needs.

The importance of sustainability and green production techniques is growing within the industry. The workforce requires the skills to implement and encourage sustainable practices and the understanding of how a focus on sustainability can influence a company’s bottom line. In some sectors, sustainability is a requirement to meet customer requirements. For example, carpet manufacturers’ products which are certified under the Environment Certification Scheme can contribute to a building’s green star rating.

TFIA and TCFUA report a reasonable take up of qualifications such as the Diploma of Sustainability, which can be contextualised to meet the needs of specific enterprises within the industry.

Technological changes in manufacturing and production techniques are tending to favour large businesses with the resources to invest in new equipment and machinery. Examples include the growing use of computer aided design, digital textile printers and seamless knitwear machines. While the use of this technology can reduce demand for labour within the industry, the workforce which is utilised requires a strong understanding of the technology and training in the use of a wide range of equipment.

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As with a number of other industries, TCF is challenged by an ageing workforce. TFIA and TCFUA report anecdotal evidence that over 72% of the industry workforce is aged over 35, with the loss to industry as these workers retire expected to be particularly crucial in the area of tailoring and other specialised sewing techniques used in niche clothing production. The use of these experienced workers as mentors for younger staff is important for the retainment of skills in the industry. TFIA and TCFUA suggest that apprenticeships in clothing production could be offered to individuals currently working in the industry informally in an effort to rebuild the skill base.

Skill shortages and gaps in the industry remain a challenge. These shortages are most apparent at the management level, with a large number of firms operating without a formal business plan and management staff lacking an understanding about business basics. These skill gaps extend to areas of regulatory compliance, triple-bottom-line accounting and other management responsibilities, and could be reduced through greater uptake of qualifications such as the Diploma and Advanced Diploma of Management.

Industry outlook

The manufacturing industry in Victoria has declined as a share of the economy over the past two decades. Although there has been varied growth within the sub-industries of manufacturing during that period, the textile, clothing and footwear industry has been particularly vulnerable, and the level of employment has been falling back as a result.

The decline of the textiles, clothing and footwear industry over the longer term reflects structural factors. One of the most important drivers has been the intense competition that local producers face from low-cost imported products from overseas, particularly in Asia. While the broader manufacturing industry also faces challenges from global competition, the challenges are more acute for textiles, clothing and footwear due to its labour intensive nature, with low-wage countries such as China having a significant competitive advantage. Moreover, as protectionist measures such as tariffs have declined, domestic producers have become increasingly exposed to competition from abroad.

Consumer trends are also posing a challenge for the industry, with Australian consumers choosing to spend more of their growing incomes on goods and services that are not clothing and footwear. Despite overall spending on clothing and footwear growing over time, clothing and footwear has been making up a declining share of total consumer spending.

Recently the textiles, clothing and footwear industry has also been battling cyclical factors, particularly higher interest rates and the historically high level of the $A. Moreover, at the retail end, Australian clothing retailers and department stores have experienced weak sales over the past year in an environment of consumer caution. The strength of Australia’s mining sector suggests that the challenges posed by the high $A may be ongoing for some time.

The high $A has also increased the visibility of online retail sales. While the volume of clothing and footwear purchased online by Australian consumers from overseas websites is likely to be relatively low at present, the share of online spending in overall retail sales appears to be growing rapidly, and this may represent another adverse trend for domestic textile, clothing, and footwear producers over the longer term.

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Chart 17.1: Employment outlook – Victorian textile, clothing and footwear industry


In light of the structural challenges facing Victoria’s manufacturing industry, the Victorian Government asked the Victorian Competition and Efficiency Commission (VCEC) to complete an inquiry into Victoria’s manufacturing industry. The VCEC’s draft report recommended against the introduction of new protectionist measures for the manufacturing industry, and recommended that existing measures that continue to exist such as local content provisions in procurement policies be removed. While the Victorian Government is yet to respond to the VCEC’s recommendations, the current low levels of protection and assistance for the textile, clothing, and footwear industry are likely to remain in place.

The Federal Government’s carbon tax will be introduced in 2012 and may pose challenges for domestic textile, clothing, and footwear producers. Textile, clothing and footwear production is not an emissions intensive activity and therefore will not benefit from large levels of assistance. Domestic textile, clothing, and footwear producers are expected to see a rise in costs such as electricity, however, which will further erode competitiveness.

There will be better news for the sector from improved income growth in Australia over time. While retail is currently in a slump, Deloitte Access Economics expects a recovery to take hold over time as income growth translates into a higher rate of retail spending, which should lift sales for all suppliers.

Over the longer term the enormity of the challenges facing the industry means that output and employment are likely to continue trending down over time.



TFIA and TCFUA report that a number of responses to critical skill shortages identified for 2011 have taken place. Four occupations were listed as in critical shortage in 2011: textile, clothing and footwear mechanic; apparel patternmaker / grader; dressmaker / tailor; and general footwear tradesperson.

The view of TFIA and TCFUA is that the shortage of textile, clothing and footwear mechanics is compounded by the lack of availability of the Certificate III in Engineering –

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TCF Mechanic. As such, much of the work done through 2011 to try to alleviate this shortage has been directed at promoting this qualification within industry and to training organisations. As noted above in the discussion of market failures, at present only one training provider lists this course on their scope of qualifications.

TFIA and TCFUA have encouraged training providers, particularly TAFEs, to offer this course rather than a more general engineering apprenticeship, and have encouraged industry to write to training providers and the Victorian Government. TFIA and TCFUA believe that take up of this course would go some way to addressing the current skill shortage.

According to TFIA and TCFUA, it takes approximately five years experience in order to acquire the skills to be a quality apparel patternmaker. This long lead time is exacerbating the skill shortage in this occupation, and industry continue to report that they are eager to take on adequately trained patternmakers but find it difficult to source skilled labour. The occupation is fundamental in the industry because of the technical knowledge of garment construction that is provided by patternmakers.

TFIA and TCFUA are working with training providers to provide specialist programs in patternmaking for existing workers. These programs are being pitched at the diploma level, and are designed to enhance the skills of qualified but inexperienced workers already operating within the industry.

The current shortage of dressmakers and tailors is most prevalent in regional areas. There is a strong industry presence in regional areas of Victoria, and experienced workers have been difficult to source. TFIA and TCFUA noted that in an effort to meet labour requirements, some large companies are choosing to take on people who have gained experience as hobby sewers and are providing non-accredited training to them on site.

In an effort to lift the volume of skilled workers and ensure consistent training and skills across the industry, TFIA and TCFUA have been promoting the Certificate III in Clothing Production as a qualification that would help to alleviate the skill shortage. However budget constraints and the challenges of production targets and a weak retail market have discouraged industry from taking on apprentices.

The need for general footwear tradespersons is growing, and TFIA and TCFUA expect demand to lift further over time. There has been some uptake of training related to this occupation, especially in relation to medical grade footwear. Some of that increase may be attributed to the response of the industry training body, which consulted directly with footwear specialists in an effort to increase the number of training instructors and build relationships between industry and training providers.


The tables below summarises the occupations in demand and experiencing critical skill shortages in 2012. These occupation lists have been advised by TFIA and TCFUA, and have been determined following formal engagement with industry.

Consistent with the common themes and issues expected to affect the industry in 2012, the occupations listed below are the same as those which were nominated for 2011.

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Skilled apparel machinists Sewing machinist (711611)Leather goods makers Leather goods maker (393112)Textile clothing and footwear mechanic Textile, clothing and footwear mechanic (323215)Apparel cutters Apparel cutter (393211)Apparel patternmakers / Graders Clothing patternmaker (393212)Dressmakers / Tailors Dressmaker or tailor (393213)Canvas goods maker Canvas goods fabricator (393111)General footwear tradesperson Footwear factory worker (839915)

Occupations experiencing a critical skills shortageIndustry title ANZSCO classificationTextile clothing and footwear mechanic Textile, clothing and footwear mechanic (323215)Apparel patternmakers / Graders Clothing patternmaker (393212)Dressmakers / Tailors Dressmaker or tailor (393213)General footwear tradesperson Shoemaker (393114)



Occupation (Industry title) QualificationTextile Clothing and Footwear Mechanic Certificate III in Engineering – TCF Mechanic *Apparel Patternmakers / Graders Diploma of Applied Fashion Design and Technology **Dressmakers / Tailors Certificate IV in Clothing Production †General Footwear tradesperson Certificate III in Footwear Production *

* Training can be undertaken through 3 year apprenticeship.** Training can be undertaken through 4 year apprenticeship. On the job training is very beneficial.† Training can be undertaken through 4 year apprenticeship. On the job training with a tailor is preferable.

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18 Transport and StorageCoverage: Road, rail, aviation and marine (transport), and storage and distribution.

Specific industry and business cycle drivers: Trade (particularly retail, mining, agriculture, manufacturing), fuel prices, population growth, infrastructure policy/provision.





The Transport and Distribution Industry Training Board (TDT) report a number of cases of market success and failure. The examples of success demonstrate TDT working with public and private RTOs to create opportunities for new entrants to the transport and logistics sector, as well as new opportunities for existing workers to up-skill in areas of skill shortage. The examples of failure link back to the geographic spread, the volume of small enterprises and the license accumulation (rather than skill accumulation) that characterise the industry.

A recent success has been the Logistics Cadetship Program, involving collaboration between Kangan TAFE, Goulburn Ovens TAFE and industry, and aimed at recruiting high school graduates into the industry. The cadetship program involves employment in the sector (typically in non-road transport businesses) coupled with a Certificate IV in Logistics in the first year and the Diploma of Logistics in the second year.

The program is attracting around 15 cadets per year, with 65-70 cadets having been through the program over the last 3 years, and boasting a 90% completion rate and 70% rate of retention in the industry. The success of the model has led to emulation by other Australian transport associations. The continued growth of the program is limited by the volume of transport businesses willing to take on cadets.

TDT, working with TAFE and private RTOs, continues to identify and undertake projects involving the development of new training for the industry. The focus is presently at the Certificate III level, and in road transport and warehousing. Implications of technological development for transport operations are at the core of this new training, and will be translated into new courses up to Diploma level in the near term.

In conjunction with training providers and RPL experts, TDT has been testing the viability of delivering the Diploma of Logistics to existing workers in thin regional markets. For instance, TDT has identified 12 individuals ready to enrol in the course. However delivery of the training is not feasible at present due to the sparse distribution of these individuals across the state. TDT is proposing an RTO consortium to overcome these geographical barriers.

Finally, TDT and Bus Vic are progressing the concept of a customised Diploma of Logistics to better suit the bus sector, to the point where there is now a national agreement

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between industry and the Transport & Logistics Industry Skills Council to develop an all new Diploma specific to the sector. The qualification will include planning, human resources and finance competencies, as well as understanding of how to operate under regulatory frameworks. It is hoped that at the same time as up-skilling existing workers it will also attract new younger entrants to the industry.

In terms of market failures, the central point remains the disconnect between training and experience. This mismatch between what the training system is delivering – in particular cases – and the minimum competency the industry requires is translating into a stockpiling of qualified yet unemployable labour. This trend remains acute in the road transport and to a lesser extent maritime sector, where work-based training faces significant barriers (for instance insurance or available vessels). The solution is said to be a combination of a change in the way training is delivered, and a change in industry employment practises (for instance greater proportion of casual labour, job-sharing and increased attraction of female participants).

The other key challenge for TDT remains how to deliver training into small regional transport businesses, in a region where only one person may require training. Attracting and retaining qualified and experienced trainers also presents an ongoing challenge for both public and private RTOs, particularly in growth areas of advanced road, rail and warehousing training.


TDT reported several change drivers for 2012 that were identified during consultations with industry stakeholders. They cover both demand and supply side issues, and include: Growing freight task and resulting need to further optimise operations (demand side) Regulatory developments – Carbon Tax and national regulatory bodies (demand side) Fluctuations in the price of fuel (demand side) Workforce development planning in rail (demand and supply side) Technology developments in road transportation (demand and supply side)

As Victorian production and population grows, the freight task faces a corresponding increase. However, this growth is inhibited by a shortage of skilled labour in key areas. For instance in distribution centres, where operations are already lean and there is little opportunity to further substitute capital for labour at this point. As such there is a need to increase labour productivity, and optimise operations in light of emerging economic, demographic and regulatory trends. The obvious implication is the need for up-skilling at mainstay operator level, across all transport and logistics industry sectors.

The recent Inquiry into Skills Shortages in the Rail Industry in Victoria has assessed the skills base and seen the creation of new workforce development plans for various occupations. In light of the increased development and maintenance of rail infrastructure in Victoria, coupled with increased regulation and more complex contractual arrangements, the Inquiry identified a need for new skills and competencies. Delivery of the Certificates II/III/IV in Rail Infrastructure and Rail Operations, as part of the new TLI10 Version 2 training package, will go at least part-way to addressing these emerging shortages.

B-triples present an opportunity to dramatically increase the productivity of road transport, reducing the labour to capital ratio, and as such have been trialled for 3 years on limited routes in Victoria. Technology in these vehicles – in terms of accident avoidance and fuel efficiency – suggests welfare gains are to be had where they are replacing conventional 22-

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wheel configurations. If the trial is successful, it will simultaneously reduce the skill shortage in terms of reducing the number of drivers required, while also increasing the shortage to the extent that existing drivers need to be up-skilled in driving operations to better suit these vehicles.

The road transport sector has an exemption from the Carbon Tax until July 2014, which has, in some parts of the industry, prompted a ‘wait and see’ approach to adjusting operations. In others parts, however, it is creating a level of demand for new operational and compliance management training. While the demand is building only slowly at this point, and will inevitably need to be structured around recording, reporting and payment details as they apply to the sector, it is anticipated that the competencies would be provided at the Diploma level. The tax will commence on July 2012 for the rail sector, although is anticipated to have little effect on operations.

The other major regulatory development set to impact the road, rail and maritime sectors in Victoria is the creation of three national regulatory bodies to cover each of these respective sectors from January 2013. As a major undertaking in the harmonisation of regulation across the states and territories, it is expected this development will reduce reporting burden (duplication) for national operators. The implication for training is a potential realignment of reporting and recording arrangements, as taught at the Certificate III to Diploma levels.

Growing fluctuations in fuel pricing is leading to additional pressure on road transport businesses to manage this expense and remain viable (particularly where using fixed price contracts). For instance, the industry benchmark is that every 1 cent rise in the price of fuel adds $1,000 to the annual fuel bill of a typical heavy vehicle. This signals a need for higher order skills to off-set the impact on operations. Currently no such risk management or contingency training is available. Indeed technical training in operational and financial planning, contract negotiation and risk management (at and above the Diploma of Logistics level) is required in response.

Industry outlookThe transport and storage industry remains highly cyclical, tending to exaggerate economic activity in the wider economy. The industry has remained a relatively steady share of the Victorian economy over the past two decades.

The outlook for the goods transport sector is partly driven by projected growth in retail trade. Although retail trade has underperformed recently, there are signs of recovery led by solid employment and wage growth, and the prospect of lower interest rates over the coming year. Moreover, the rise in online shopping has also helped to underpin solid growth in freight.

The outlook for passenger transport and transportation services is less positive, with the sector facing a number of challenges at present. They are led by issues across the broader tourism industry, including the elevated exchange rate which is dampening demand from international visitors and encouraging Australians to holiday overseas.

In the longer term, the likely persistence of high fuel prices will continue to hurt the sector, and, while fuel used by heavy vehicles is exempt from the carbon tax until 2014, it will have an effect on costs in the sector going forward.

Other industry-specific issues are also relevant. The recent disruptions to travel services caused by industrial disputes in the aviation sector have posed notable challenges for the sector, though some certainty in the area has now been achieved.

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There are a large number of transport infrastructure projects underway in Victoria at present, including at least fifteen current and planned works on freeways and highways around the State. In addition, a number of arterial roads are set for upgrades, in part funded by Federal economic stimulus spending.

Employment outlook – Victorian transport and storage industry


Despite an array of negative influences, the transport industry recorded a solid recovery in 2011 following a fall in employment in 2010. Employment growth in the industry is expected to remain steady over the medium term.



The two transport and logistics occupations in critical skill shortage in Victoria in 2011 were heavy combination and multi combination drivers as well as train drivers. While qualification uptake in these areas has increased significantly since 2008, it is failing to alleviate the skills shortage in any meaningful way, at least in road transport.

In terms of heavy combination and multi combination drivers, industry continues to report driver shortages as an ongoing impediment to business growth. In response TDT has been promoting the continued development and uptake of the qualifications, for instance the Certificate IV in Driving Operations (under the new TLI10 Version 2) which is aimed at multi-combination vehicles. Furthermore an accredited driver’s license trial is currently being negotiated between relevant industry and regulatory bodies, by way of reducing the long lead time to reaching the minimum standards.

For train drivers, TDT continues to collaborate with the Transport & Logistics Industry Skills Council and Victorian industry on the development of driver qualifications, and continues to assist interstate training providers to deliver these qualifications into Victoria (given the lack of a Victorian provider). Industry continues with its twice yearly driver recruitment program, and is having relative success with this, although driver shortages remain a perennial issue. As a result, train drivers have been listed as experiencing a critical shortage again in 2012. However, the view of TDT is that there are suitable and willing candidates, and recruitment is not a significant problem. Rather, the issue appears to be a lack of willingness to develop and fund the required labour force.

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The tables below summarise the occupations in demand and experiencing critical skill shortages in 2012. These occupation lists have been advised by TDT and have been determined following formal engagement with industry. The inclusion of the transport manager and warehouse administrator occupations relate to the higher order management skills requirements of the industry mentioned above. In 2011, TDT noted that stevedores were in demand in the industry. In this report, crane and lift operators and forklift drivers have been included instead to provide some additional specificity around the skills required.

The inclusion of deck hands is driven by a critical need to support offshore oil and gas activity in Victorian waters.

Overall, there is an increase in the number of occupations listed as in demand compared to 2011, and a greater proportion of these are also listed as experiencing a critical skill shortage.


Heavy rigid to multi-combination drivers Truck driver (general) (733111)Tanker driver (733114)

Rail drivers Train driver (731311)Tram driver (731312)

Environmental and compliance managers Environmental manager (139912)Logistics managers Supply and distribution manager (133611)Operations managers Transport company manager (149413)Transport company manager Transport company manager (149413)Warehouse administrator Warehouse administrator (591116)Bus drivers Bus driver (731211)Deck hand / general purpose hand Deck hand (899211)Crane, hoist or lift operator Crane, hoist or lift operator (712111)Forklift driver Forklift driver (721311)Occupations experiencing a critical skills shortageIndustry title ANZSCO classificationHeavy rigid to multi-combination drivers Truck driver (general) (733111)

Tanker driver (733114)Rail drivers Train driver (731311)

Tram driver (731312)

Transport company manager Transport company manager (149413)Warehouse administrator Warehouse administrator (591116)Bus driver Bus driver (731211)Deck hand / general purpose hand Deck hand (899211)Crane, hoist or lift operator Crane, hoist or lift operator (712111)Forklift driver Forklift driver (721311)

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Occupation (Industry title) QualificationHeavy rigid to multi-combination drivers Certificate II in Driving Operations

Certificate III in Driving OperationsRail drivers Certificate IV – Transport and Logistics (Rail Operations)Transport company manager Diploma of LogisticsWarehouse administrator Certificate IV in Warehousing OperationsBus driver Certificate III Transport & Logistics (Driving Operations)

Certificate IV Logistics

Deck hand / general purpose hand Certificate II/III in Transport & Distribution (Maritime Operations)Crane, hoist or lift operator Certificate II in Stevedoring

Certificate III in Stevedoring (Crane Operations)Certificate III in Stevedoring (Team Leading)Certificate IV in Stevedoring Operations

Forklift driver Certificate III in Warehousing Operations

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19 WaterCoverage: Operation of water and wastewater facilities such as dams, pipelines, water treatment facilities, wastewater collection systems, wastewater treatment plants.

Specific industry and business cycle drivers: Government regulation, population growth, drought, climate change, housing cycle.

Recent relative sectoral performance rating: High




The Victorian Water Industry Association advised that the training market has been generally successful in delivering training to the water industry. Industry is now at the operational level it should be (indeed Victoria is now leading in terms of the number of people with operation qualifications), with many employees having now completed a Certificate III qualification over the last five years.

Industry is now advising it would like to select some of these employees to undertake a Certificate IV, indicating that the training has been valued by industry, and they see the benefit in undertaking further training for their employees.

The process for gaining national endorsement for the Diploma and Advanced Diploma courses in Engineering Technology (developed by City West Water) has been slower than expected. However it is expected that the national endorsement will take place mid 2012. This training package will mean that functions normally undertaken by engineers (with tertiary qualifications) will now be able to be performed by graduates of the Diploma and Advanced Diploma. This is expected to help reduce the shortage of Civil Engineers somewhat.

Training provided by RTOs generally fulfils the broad industry needs. There is much more flexibility in training provision so that industry can mix and match units to suit their needs. This results in industry being more willing to undertake the training.

Thin market issues continue to be a problem in this industry, resulting in some training not being undertaken. However, these problems are being at least partly addressed by the new national training resources, as well as a new training provider coming on-stream (the Cranbourne campus of Chisholm TAFE), which will be a national water training centre.


Four main change drivers have been identified for the Water industry. They are:

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The desalination plant (demand side) The introduction of intelligent water meters (demand side) Change in climate conditions from dry to wet (supply and demand side) The National Harmonisation regulations (supply side)

The change in climate conditions from dry to wet is an emerging change driver for this industry, and also means there will be ongoing training in resulting green skills. Too much water presents an entirely new set of problems for a sector which had faced the problem of not enough water for many years. These include establishing emergency procedures if there is flooding, protocols to determine when there needs to be releases from dams, as well as safety concerns (for example if a dam is empty for a period of time there may be structural damage to the dam when it fills). The emerging skills required are for operators who work around dams with training in emergency procedures and operations of dams in emergency situations (primarily engineers).

The Victorian Water Industry Association believes that current changes in the climate would seem to indicate that this kind of extreme weather will continue into the future, and the industry response from the dam working group is that the training is required. The current training package outlines the skills required, but there probably needs to be some further development of a training package suitable for these particular skills which will continue to be in demand.

Other green skills in this industry continue to be developed – for example units around catchment management (which relate to the protection of rivers and habitat) are currently electives in training packages, and consideration is being given to whether more of this information needs to be delivered in mandatory units. There may be the need to consider adding further units which cover training in broader environmental issues – such as whether or not an area needs to be flooded periodically, and what the criteria for such a situation would be.

The national harmonisation project continues to be a source of change for the industry. While Victoria will not be implementing the new national rules from 1 January 2012 (and it is not yet clear when the changes will be implemented) it is assumed that they will be brought in at some stage. This will require some changes to the OH&S units within the training packages. However it is not thought that there will be any changes to the skills required. (For example, the changes will require operators to know the national standard for the height you are allowed to work at before different safety measures are required.)

The construction of the desalination plant continues, although it has been hampered because the site has been to wet for construction work. With the change from dry to wet, there is no longer a pressing need for its completion. However once it is completed the plant will need to be in operation in order for the plant to be maintained in working order. Estimates are that the number of operational staff required is around 30-50. The subject of who will train those people is still under discussions. (The WA experience was that they flew in overseas experts rather than train people in Australia). However, with the new water training centre in Chisholm TAFE, it may be that training is able to be provided through this campus. Teachers with the required expertise to conduct the training may prove to be the problem, in which case the training would most likely be conducted in-house.

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While intelligent water systems are only in the early stages of uptake, they are likely to be a large driver of change in the industry in the future. The installation of these meters will fall under the Water ITAB, and the installers will require training to undertake this job. Meter replacement can be dangerous (for example in older houses the earth is often placed on the water pipes, which would result in electrocution), and the training packages are still at the policy development stage.

Industry outlook

Water, along with gas and electricity, is an essential service. As such, demand does not fluctuate substantially during economic cycles. Rather, long term influences such as population growth underpin steadily rising demand for water over time.

Around Australia, water prices have risen sharply in recent years. In part, that reflects the need by water utilities to undertake new investment in order to secure steady water supplies during periods of inconsistent rain and drought. That price growth has been stronger in Victoria than elsewhere. Indeed, according to the Australian Bureau of Statistics, between early 2007 and mid 2011, the price of water and sewerage services in Melbourne increased by more than 70%, compared to a 54% increase on average around Australia.

The level of investment in water in the State is quite strong. A funding arrangement for the second stage of the Northern Victoria Irrigation Renewal Project has been agreed to by the Australian and Victorian governments, which will see work on that project continue until around 2018, while other long term projects such as the $688 million open channel to pipeline conversion in the Wimmera Mallee region of Victoria continue.

Work on the new $5.7 billion desalination plant in Gippsland’s Wonthaggi region was due to be finalised at the end of 2011 however the project is now expected to wrap up closer to the contracted completion date of mid 2012. The project will see up to 200 billion litres of water per year supplied to Melbourne, Geelong and regional communities.

Chart 19.1: Employment outlook – Victorian water industry


The lack of rain over the past decade, and moves to revive the Murray Darling Basin, have been the key drivers of investment in water in Victoria. Although a strong La Nina event

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through 2010 and into 2011 generated substantial rainfall and extensive flooding around the State, the trend toward more irregular falls are expected to continue.

The charts above show employment forecasts for the water supply, sewerage and drainage services component of the utilities industry in Victoria. Although somewhat volatile, employment in the industry has been trending up over the last decade. Data from the Australian Bureau of Statistics suggests that strong growth continued in 2011, possibly due to the finalisation of construction at the new desalination plant site. After employment growth of almost 40% in the industry over the last two years, Deloitte Access Economics expects some consolidation in 2012, with employment projected to level off in line with the timing for the completion of the desalination plant.



There were no critical shortages identified in 2011 list for the Water industry.


Two occupations have been identified as experiencing high demand presently – civil engineers and water and waste water treatment plant operators. However, the demand is largely in regional areas where it is difficult to attract people. An additional problem in attracting civil engineers is that pay scales are regulated, and do not allow any flexibility to pay the engineers at a higher rate of pay. Around 20-30 additional civil engineers are estimated to be required in the regional areas.

Victoria has the new best practice framework for water treatment, which was a Victorian initiative brought in over the last year. While the training is not mandatory, it is expected that all water authorities will put their employees through the new training. The result of the new framework is that, in the short term, water authorities do not have enough operators to operate at the required level. The training required is a Certificate III or IV in water industry operations (water treatment), depending on the treatment process at the plant. The number of people estimated to require this training is around 40, and it is expected that this training will occur in 2012.

The encouragement of individuals to take up the Certificate IV in training so that current workers are able to teach in RTOs has seen an initial group of 15 people complete this qualification, with a second group planned.

The tables below summarise the occupations in demand for 2012, and identify the ANZSCO classification for each occupation.



Civil engineers* Civil Engineer (233211)Water and Waste Water Treatment Plant Operators* Waste Water or Water Plant Operator (712921)* Note: Relates to regional areas only.

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Appendix A: Industry concordanceTable A.1: Concordance between ITAB industry structure and ABS ANZSIC classification

ITAB Industry ANZSIC Industry

Automotive Motor Vehicle and Motor Vehicle Part Manufacturing

Other Transport Equipment Manufacturing

Motor Vehicle and Motor Vehicle Parts Wholesaling

Motor Vehicle Retailing

Motor Vehicle Parts and Tyre Retailing

Automotive Repair and Maintenance

Building and construction

Residential Building Construction

Non-Residential Building Construction

Heavy and Civil Engineering Construction

Land Development and Site Preparation Services

Building Structure Services

Building Installation Services

Building Completion Services

Other Construction Services

Business services

Waste Collection Services

Waste Treatment, Disposal and Remediation Services

Central Banking

Depository Financial Intermediation

Non-Depository Financing

Financial Asset Investing

Life Insurance

Health and General Insurance

Superannuation Funds

Auxiliary Finance and Investment Services

Auxiliary Insurance Services

Motor Vehicle and Transport Equipment Rental and Hiring

Farm Animal and Bloodstock Leasing

Other Goods and Equipment Rental and Hiring

Non-Financial Intangible Assets (Except Copyrights) Leasing

Property Operators

125




Real Estate Services

Scientific Research Services

Legal and Accounting Services

Advertising Services

Market Research and Statistical Services

Management and Related Consulting Services

Other Professional, Scientific and Technical Services

Computer System Design and Related Services

Employment Services

Other Administrative Services

Building Cleaning, Pest Control and Gardening Services

Packaging Services

Community services & health

Hospitals

Medical Services

Pathology and Diagnostic Imaging Services

Allied Health Services

Other Health Care Services

Residential Care Services

Child Care Services

Other Social Assistance Services

Cultural & recreation

Motion Picture and Video Activities

Sound Recording and Music Publishing

Radio Broadcasting

Television Broadcasting

Libraries and Archives

Museum Operation

Creative and Performing Arts Activities

Sports and Physical Recreation Activities

Amusement and Other Recreation Activities

Electro-technology & communication

Printing and Printing Support Services

Reproduction of Recorded Media

Electricity Generation

Electricity Transmission

Electricity Distribution

On Selling Electricity and Electricity Market Operation

Gas Supply

126




Newspaper, Periodical, Book and Directory Publishing

Software Publishing

Internet Publishing and Broadcasting

Telecommunications Services

Internet Service Providers and Web Search Portals

Data Processing, Web Hosting and Electronic Information Storage Services Other Information Services

Food

Food, Beverage and Tobacco Product Manufacturing

Forestry

Forestry and Logging

Forestry Support Services

Log Sawmilling and Timber Dressing

Other Wood Product Manufacturing

Pulp, Paper and Paperboard Manufacturing

Converted Paper Product Manufacturing

Furniture

Furniture Manufacturing


Mining

Other Manufacturing

Petroleum, Coal, Chemical, Polymer and Rubber Product Manufacturing Non-Metallic Mineral Product Manufacturing

Primary Metal and Fabricated Metal Product Manufacturing

Professional and Scientific Equipment Manufacturing

Computer and Electronic Equipment Manufacturing

Electrical Equipment Manufacturing

Domestic Appliance Manufacturing

Pump, Compressor, Heating and Ventilation Equipment Manufacturing

Specialised Machinery and Equipment Manufacturing

Other Machinery and Equipment Manufacturing

Architectural, Engineering and Technical Services

Machinery and Equipment Repair and Maintenance

Primary industry

Nursery and Floriculture Production

Mushroom and Vegetable Growing

Fruit and Tree Nut Growing

Sheep, Beef Cattle and Grain Farming

Other Crop Growing

127




Dairy Cattle Farming

Poultry Farming

Deer Farming

Other Livestock Farming

Aquaculture

Fishing

Hunting and Trapping

Agriculture and Fishing Support Services

Parks and Gardens Operations

Veterinary Services

Racing

Horse and Dog Racing Activities

Service Industries Agricultural Product Wholesaling

Mineral, Metal and Chemical Wholesaling

Timber and Hardware Goods Wholesaling

Specialised Industrial Machinery and Equipment Wholesaling

Other Machinery and Equipment Wholesaling

Grocery, Liquor and Tobacco Product Wholesaling

Textile, Clothing and Footwear Wholesaling

Pharmaceutical and Toiletry Goods Wholesaling

Furniture, Floor Covering and Other Goods Wholesaling

Commission-Based Wholesaling Motor Vehicle Parts and Tyre Retailing

Fuel Retailing

Supermarket and Grocery Stores

Specialised Food Retailing

Furniture, Floor Coverings, Houseware and Textile Goods Retailing

Electrical and Electronic Goods Retailing

Hardware, Building and Garden Supplies Retailing

Recreational Goods Retailing

Clothing, Footwear and Personal Accessory Retailing

Department Store Retailing

Pharmaceutical and Other Store-Based Retailing

Non-Store Retailing

Retail Commission-Based Buying and/or Selling

Accommodation and Food Services

Travel Agency and Tour Arrangement Services

Gambling Activities

128




Personal Care Services

Funeral, Crematorium and Cemetery Services

Other Personal Services

Textile, clothing & footwear

Textile Manufacturing

Leather Tanning, Fur Dressing and Leather Product Manufacturing

Textile Product Manufacturing

Knitted Product Manufacturing

Clothing and Footwear Manufacturing

Transport and storage

Transport, Postal and Warehousing

Water

Water Supply, Sewerage and Drainage Services

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Appendix B: Industry consultationThis appendix has been provided to the Higher Education and Skills Group in confidence.

130



Appendix C: Australian Apprenticeships – National Skills Needs List, January 2010This regularly updated list includes trades which are experiencing persistent skills shortage on a national level, based on DEEWR labour market research. The Federal Government offers incentives for employers to take on apprentices in these fields, as well as benefits for the apprentices themselves. These include the Support for Adult Australian Apprentices payment, Tools For Your Trade payment, Rural and Regional Skills Shortage incentive and the Securing Australian Apprenticeships initiative.

The trades included on the January 2010 list are shown in the table below, grouped by each ITAB.

ITAB Trades neededAutomotive Automotive electrician, Panel beater, Motor mechanic, Vehicle body

maker, Vehicle painter, Vehicle trimmerBuilding and construction Bricklayer, Carpenter, Carpenter and joiner, Drainer, Fibrous

plasterer, Gasfitter, General plumber, Mechanical services and air-conditioning plumber, Painter and decorator, Roof plumber, Roof slater and tiler, Solid plasterer, Stonemason, Wall and floor tiler

Business services n/aCommunity services and health n/aCulture and recreation n/aElectro-tech and Comm. Binder and finisher, Communications Linesperson, Electrical

powerline tradesperson, Electrician (Special class), Electronic equipment tradesperson, General Communications Tradesperson, Printing Machinist, Screen printer

Food processing Baker, Butcher (including smallgoods producers), Pastry cookForestry Wood machinist (A-grade)Furnishing Floor finisher, Furniture finisher, Furniture upholsterer, Picture framerManufacturing and engineering Aircraft maintenance engineer (Avionics), Aircraft maintenance

engineer (Mechanical), Boat builder and repairer, Electronic equipment tradesperson, Fitter, Flat glass tradesperson, Locksmith, Metal fabricator, Optical mechanic, Pressure welder, Refrigeration and air-conditioning mechanic, Sheetmetal worker (First class), Toolmaker, Welder (First class)

Primary Tree surgeon, Landscape gardenerRacing n/aServices Cook, HairdresserTCF n/aTransport and storage n/aWater n/aSource: www.australianapprenticeships.gov.au

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http://www.australianapprenticeships.gov.au/

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This report is prepared solely for the use of the Higher Education and Skills Group of the Victorian Department of Education and Early Childhood Development. This report is not intended to and should not be used or relied upon by anyone else and we accept no duty of care to any other person or entity. The report has been prepared for the purpose of presenting analysis on training market effectiveness and skill needs in Victoria. You should not refer to or use our name or the advice for any other purpose.

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