Thank you for the introduction Josh. Good morning ladies and gentlemen.

Thank you for the opportunity to be here today.  As you know I am representing my friend and colleague, Anthony Albanese, the Minister for Infrastructure, Transport, Regional Development and Local Government. 

Anthony was keen to attend this summit but unfortunately ministerial commitments have prevented him from doing so.

The topic of my address is “How to build Australia’s Infrastructure amidst a skill shortage.”

These are challenges as Minister for Employment Participation, with which I am deeply concerned.  Employment services are the largest program within my portfolio responsibilities, and we are currently embarking on a process of major reform of the employment services system. 

A key priority for these reforms is to provide a far greater emphasis on addressing skill shortage areas, and on matching skilled workers to the vacancies that employers desperately need filled.  Indeed incentives for employment service providers to make sure this happens, will be a feature of the new employment services system that commences 1 July 2009.

It is essential that we invest in skills and reform employment services in this way because the issue of “skilling up” Australia is fundamental to ensuring that we have the expertise to modernise, design, build and maintain the infrastructure we sorely need.

Since coming to office just a little over 9 months ago, the Rudd Government has rolled out an ambitious nation building program which we believe will be the cornerstone of our economic prosperity in the years ahead. 

But without sufficient numbers of engineers and a range of other skilled workers, it is a passion which will be hard to sustain.

I will endeavour this morning to give you an insight into the initiatives we are taking to make sure that Australia’s skills base can support our productivity objectives.

The nitty gritty of how the Rudd Government is tackling the challenge of boosting our skills base is a whole of Government concern with the response being led by the Deputy Prime Minister, Julia Gillard, in her role as Minister for Education and Employment in partnership with myself and the  Minister for Immigration and Citizenship, Senator Chris Evans.

The Rudd Government is committed to delivering an education revolution, from high quality and accessible early childhood education to quality schooling, from training and retraining our workforce to world class higher education and research.

Before I further outline our approach to initiatives in the skills area, I want to set the scene by outlining the advances that have taken place in the nation’s infrastructure work plan.

Infrastructure development is at the heart of our macro-economic policy and we have placed infrastructure at the top of our agenda, in a way that no other Federal Government has done in living memory. 

We are working closely with state and local governments and the private sector to ensure that infrastructure investment over the coming years meet areas of greatest national priority. 

There is no doubt that our infrastructure is ageing and has been badly neglected in the past decade. 

• Australia has not kept pace with economic and social demands. 
  
• Our infrastructure deficit is huge and has been growing – the Committee for the Economic Development of Australia (CEDA) has estimated that there is a $25 billion backlog in the areas of transport, water and energy infrastructure alone. 
  
• The nation’s productivity is being severely hampered by poor infrastructure – putting pressure on inflation and interest rates. 
  
• Climate change is of course a pressing challenge and our ability to meet this challenge and adapt will depend in part on having the appropriate infrastructure.
   

Most of you will be aware that we have established Infrastructure Australia to help our nation meet the infrastructure challenge.  Infrastructure Australia is an exciting initiative with an extremely talented and professional membership.

 We see Infrastructure Australia as a key to ensuring that future investment in national infrastructure is in the best interests of the nation and not based on short term expediency. 

Led by Sir Rod Eddington as Chair, the Council includes members from both the private and public sectors.  Some of the private sector members include Mark Birrell from Infrastructure Partnerships Australia; Phil Hennessy from KPMG; Heather Ridout from the Australian Industry Group; Ross Rolfe from Babcock and Brown; and Garry Weaven from Industry Funds Management.

These people bring with them a wealth of experience, a unique set of skills, and a different perspective in the planning, funding and delivery of infrastructure projects.

Infrastructure Australia is working closely with the Council of Australian Governments’ Infrastructure Working Group and with all stakeholders to develop, among other things, a set of best practice guidelines for PPPs.

The Government wants to provide more certainty through the PPP process.  While we appreciate that no two projects are necessarily the same, it is clear that investors want some certainty and some consistency when dealing with the public sector on PPPs. 

If we have consistent ‘rules of engagement’ on basic issues such as risk and reward, there is less confusion and less need to have the lawyers involved in reviewing every line of every agreement. 

Infrastructure Australia is also working on a National Audit of major infrastructure projects and has received input from all jurisdictions. 

The National Audit is to be completed by the end of this year and an infrastructure priority list is to be submitted to COAG by March 2009. 

Infrastructure Australia recently released discussion papers calling for community input into nation building projects and how public private partnerships could be used to optimise investment in public infrastructure.

I would encourage anyone here who is interested in making a submission to do so.

Submissions are due to Infrastructure Australia by 15 October. 

 In the May Budget, we took another important step towards addressing our infrastructure challenges with the announcement of the establishment of the Building Australia Fund (BAF).

In essence, the BAF will finance critical national transport and communications infrastructure such as road, rail, ports and broadband. 

Allocations from the Fund will be guided by Infrastructure Australia's national audit and infrastructure priority list.

In the words of Minister Albanese: “Infrastructure Australia provides the way and the Building Australia Fund the means”.

I am pleased to report that we are also moving steadily towards establishing Australia’s first truly integrated national Transport Policy.

A policy which encompasses air, road, rail and sea transport priorities.

Development of the national aviation policy statement, a White Paper, will guide the industry’s growth over the next decade and beyond.  Its development is well underway.

Based on the feedback generated by the Issues Paper circulated earlier this year, the Government will release a Green Paper later this year outlining possible policy directions, settings and reforms providing yet another opportunity for public input.

Following this second round of consultation, the Government will release a White Paper by the middle of next year, addressing each of the key short, medium and long term challenges identified.

In the road, rail and maritime sectors, the Australian Transport Council, or ATC, which comprises State and Territory Ministers as well at the Commonwealth, has agreed to work on proposals including:

• a single national system for the regulation, registration and licensing of heavy vehicles;
• a national rail safety regulator and a national rail safety investigator; and
• a single national approach to maritime legislation.
  

We are committed to working towards a seamless national transport market.  

I want now to turn to my earlier statement about Australia’s skill base. As I said in my introduction:  The issue of “skilling” Australia is fundamental to ensuring that we have the expertise to modernise, design, build and maintain the infrastructure we sorely need.

But what needs to be more widely understood is that Australia’s current skills crisis comes in the context of an increasingly competitive global market for skilled workers, as well as long-term demographic shifts that will impact on the supply of labour.

The factors that are driving the demand for skills in Australia, including the resources boom, are also impacting on those countries which compete with us for skills.

The economic development of India and China will increasingly see those countries attracting back its skilled citizens – and even skilled Australian workers.

We now live in a global economy with individuals behaving more and more like global citizens, moving where the work is in an increasingly borderless world. For instance, last year around 70,000 people left Australia permanently and a further 100,000 people left for at least 12 months to work overseas. These figures are likely to increase.

However, it is a two way street.

Many of the overseas skilled workers that Australian employers are seeking to attract may not be looking to migrate permanently, as they traditionally have. They may come for a few years, but will then move on to another career opportunity in another country.

While investing in the education and training of Australians is crucial, it will only go part of the way to meeting Australia's immediate skilled labour shortages.

That is why in this year’s Budget we announced that an additional 31,000 places would be added to the 2008-09 Migration Program.

We have also allocated nearly $20 million to improve processing and compliance of the temporary skilled migration program. This will restore integrity and public confidence in the 457 visa scheme.

While the issue of skilled migration is important in addressing Australia’s skills shortage, particularly in the short term, the first priority of the Rudd Government is equipping our own workforce, our own people, to meet the skill requirements of industry.

As part of the Budget, the Treasurer announced that the Government is making a $19.3 billion investment in education and training to ensure we continue to provide employment and training opportunities for Australians.

As part of the Skilling Australia for the Future initiative, the Budget outlined the Government's commitment to invest $1.9 billion over five years to fund up to 630,000 new training places, 238,000 of these places being for job seekers and those not currently in the workforce which in my view are currently a large, untapped resource.

The training is being undertaken in an industry driven system, ensuring that that we develop the skills that industry needs and that training is more responsive to the needs of enterprises and individuals.

The take up of these extra training places has been terrific. The training places became available at the beginning of April and in a little over five months more than 3,000 people have already completed their training.

Included in the 630,000 new training places available, up to 85,000 are earmarked for apprenticeships. This is a significant figure and bodes well for our skills pool.

In fact, the latest figures from the National Centre for Vocational Education Research shows as at the September 2007 quarter there were 418,800 Australian Apprentices in training.

When we add in the new places that we have made available we are starting to make a real difference.

To ensure that the education and training funds are well directed, we have allocated greater funding for Industry Skills Councils. We have also established Skills Australia, a new, statutory, vocational educational and training leadership body.

Skills Australia will work with the Nations employers and provide the Government with independent, high quality advice to assist us in targeting government investment in training to meet skills shortages.

I think we can take a pretty good guess at saying that for example, the mining and construction sectors are likely to be prime candidates.

We have also created an $11 billion Education Investment Fund to transform higher education and vocational education training.

The key priorities of the EIF will be capital expenditure and renewal and refurbishment in universities and vocational institutions as well as in research facilities and major research institutions.

In relation to my own portfolio - it is essential that employment services perform better if we are genuinely to make the most of the available workforce and to tackle the skills crisis confronting many industries.  Many of you may not be familiar with the precise role of employment services – put simply; they are the services for getting those people not currently in work – into work.  Inevitably however, this task is complex as many job seekers have both vocational and non-vocational barriers between them and a job.

17 years of economic growth has transformed the job prospects of thousands of Australians but, for many others’s the employment outlook has grown more and more bleak.

Ten years ago, the unemployment rate was 7.7 per cent. While it has now come down to 4.3 per cent, a significantly higher proportion of job seekers today are disadvantaged and long-term unemployed. 

Yet in 1997 one in ten job-seekers was in long-term receipt of unemployed benefits.  Today it is nearly one in four. 

And also against this background, Australia is looking at a shortfall of up to 240 000 workers by 2016.  That’s why employment services must do more that they have in the past 10 years, to get back those who have fallen out of the job market altogether, and to deliver to employers more of the skilled workers they so desperately need.

Whilst in the last 10 years the proportion of long term unemployed and skill shortages grew and grew, the previous Government did not adjust its policy settings.

The new employment services system proposed by the Rudd Government addresses these issues in a range of ways. I will recap on the key features.

First and foremost - A tailored Employment Pathway Plan will enable provider and job seeker to agree on the best combination of skills development, work experience and personal support to help the job seeker to find employment.

The $6 million Employer Broker Fund will enable industries will skill shortages to undertake specific projects to address skill shortages and to fill the vacancies that employers so desperately need to fill.

And, for the first time, employment service providers will be required to engage actively with employers, and they will have financial incentives in-built to deliver on employer needs.

Providers will also have more opportunities to ensure that job seekers are genuinely skilled up to meet skill shortages. Our commitment to boost the skills and productive capacity of the workforce will be supported by $880 million over five years for 238, 000 training places for people returning to the workforce, including job seekers. These places provide a great additional resource for employment service providers to get those currently out of the labour force, in to work.

The Government along similar lines is also reviewing the Disability Employment Services and are undertaking a National Mental Health and Disability Employment Strategy.

According to the HILDA Survey we have over 400,000 people with disability that want to work and are not working. This simply is not good enough.

There were many reasons why the Rudd Government was elected last November. But underlying the decisions of millions of Australians was a mood for change. People were looking for something more. They were looking for socially and economically responsible leadership with a clear vision and direction for the future.

Nothing demonstrates this more than the Prime Minister’s recently announced groundbreaking partnership with Andrew Forrest to get 50 000 Indigenous Australians into work through the Australian Employment Covenant.  This follows the apology to the stolen generations at the first possible opportunity, and action to close the gap in health, education and employment. 

And I note with interest that Rod Eddington also see a role for indigenous workers in the context of meeting skill shortages in the roll out of major infrastructure projects and I look forward to working with him closely on this matter.

Before I close today, I would like to say that I am conscious that I have given you only a snapshot of the Rudd Government’s strategies to address the skills shortage.

Some of you may have attended the Australia 2020 Summit and may even have taken part in the group which discussed the productivity agenda – that is, education, skills, training, science and innovation.

That group was chaired by Julia Gillard and Warwick Smith.

In their final report the group agreed that Australia needs to focus on three priority themes. These are:

• Equip all Australians with the capacity to contribute and innovate through an education and training system that leads the world in excellence and inclusion.
• Deploy Australia’s human capital effectively and fairly including by overcoming barriers that lock individuals and communities out of real opportunities. AND
• Connect through collaborations in education, business, research and innovation.
  

I assure you that the Rudd government has taken these recommendations on board and we will be continuing the momentum.

I would like to thank you once again for this opportunity to speak to you this morning.

I trust that you will have many useful discussions and I wish you well with the remainder of the program.

Thank you.