[Analytics] The future of work: what Australia can learn from Singapore

Tourists ride on e-scooters along the Marina Bay in Singapore on 19 February, 2019. (AFP Photo). Sketched by the Pan Pacific Agency.

In 2019, the Australian political arena was dominated by the Federal election. Despite the bitter partisanship on display — aggravated by the bushfire crisis — Canberra has seen the beginning of a bipartisan consensus on a key policy issue: the future of work. Conrad Guimaraes specially for the East Asia Forum.

The future of work refers to the educational, training and managerial changes brought about by the adoption at scale of artificial intelligence, automation, big data and advanced robotics. Advanced economies will be at the frontlines of this transition because of their competitive markets, relatively expensive labour and skilful management.

In Australia, the two main political parties have opted to tackle the issue from different but complementary directions. On 2 October 2019, Education Minister Dan Tehan of the incumbent Liberal–National Coalition government, unveiled Performance-Based Funding (PBF) for the Commonwealth Grant Scheme, which aimed to bring competitive pressure into the tertiary education sector. Universities will now have some of their funding tied to student employment outcomes. Universities will also be expected to play a more substantive role in the education–work transition.

The coalition’s approach is very gradual, covering only AU$80 million of the AU$7 billion in funding it provides annually. Yet even this modest step has been challenged by Universities Australia, a peak industry body, on the basis that such policies have a mixed track record internationally and that ‘common metrics’ would ignore the unique circumstances of each institution.

Critics of the PBF might look at the United States’ ‘gainful employment’ regulation, which was applied until 2017 and tied a federal student loan scheme to graduate employment outcomes in certain private sector institutions. The rule could have saved taxpayers US$4.2 billion over 10 years according to one estimate by the US Department of Education. Within the context of a rapidly changing labour market, a larger-scale PBF scheme has the potential to improve outcomes for Australian students.

The opposition Labor Party, under its energetic future of work spokesperson, Shadow Minister for Innovation, Technology and the Future of Work Clare O’Neil, is approaching the issue from a skills transferability perspective. In the first of three ‘headland’ speeches, Labor leader Anthony Albanese picked the future of work as his central theme. He proposed the formation of Jobs and Skills Australia.

Modelled after independent infrastructure advisor Infrastructure Australia, the proposed institution would conduct workforce and skills analysis and forecasting, develop plans for at-risk groups such as regional miners and regularly review the adequacy of the training and vocational system. Albanese also proposed that the new institution use big data available through platforms like Seek and LinkedIn.

It’s impossible to assess the effectiveness of such a proposal. But Infrastructure Australia continues to play a critical policy role under successive governments, which indicates the value of such bodies to policymakers and industry.

Albanese specifically noted his proposal drew inspiration from Singapore’s world leading policy initiative SkillsFuture. Given how crucial the future of work is for national prosperity, it is worth reviewing what has worked in Singapore so that a more robust bipartisan approach can be developed in this policy area.

First, tripartite cooperation and agency coordination has been critical in the Singapore model. SkillsFuture’s steering body features representatives from government, trade unions and businesses. Close cooperation between manpower, economic and education agencies has also been essential. For example, the Ministry of Trade and Industry oversees Industry Transformation Maps (ITMs), a key industrial policy project. The ITMs also include a Skills Framework co-developed by SkillsFuture Singapore (the statutory board under the Ministry of Education) and Workforce Singapore (a statutory board under the Ministry of Manpower).

The frequent shifts of Australia’s skills, education, innovation and industry portfolios will need to stop. Some functions will need to be absorbed by Jobs and Skills Australia, which should be given a clear mandate to do its job.

Second, Singapore has also invested heavily in individuals through training and salary subsidies. SkillsFuture Credit provides Singaporeans aged 25 and above with an opening credit of S$500 (US$360), with periodic top-ups available. Singaporeans aged 40 and above can receive a subsidy covering up to 90 per cent of fees for selected courses, including diploma and degree courses. Over 100 Professional Conversion Programmes are offered to mid-career ‘switchers’. This allows this at-risk group to reskill and upskill and move into new occupations or sectors with improved prospects.

Most programs will see the government paying up to 70–90 per cent of salaries when the individual is hired or redeployed by a participating employer while undergoing training. This provides businesses and workers with suitable monetary incentives and safety nets to support them through a transition. By early 2019, 431,000 individuals and 12,000 enterprises had taken up training credits or subsidies, equivalent to about 18 per cent of Singapore’s local workforce. According to a survey, 8 out of 10 people found their training helped them in their work.

Finally, the future of work needs to be a national economic and social priority — with plans to match. The ITMs, for example, are just a small part of a larger nation-wide strategy, Smart Nation. This strategy aims to transform Singapore into a leading digital economy which continually reinvents itself. Smart Nation includes plans to build a digital economy, digital government and digital society.

The latter pillar of building a digital society, for example, centres on digital literacy and inclusion, which includes measures like provision of computers and tablets at subsidised rates to low-income households, while also building community resilience against ‘fake news’. The expected result is a digital-ready community, prepared to more equitably capture the opportunities of economic transformation.

SkillsFuture hasn’t been without its problems. Most notably, the agency was defrauded out of S$40 million (US$29 million) by a criminal syndicate through a series of suspicious claims. Yet this should not take away from the success it has achieved.

Australia will need to indigenise its future of work policies and Singapore’s approach provides a useful starting point for policymakers in Canberra.

Conrad Guimaraes is former executive director of the Asia-Pacific Youth Organisation.

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