A union representing plumbers received millions in government funding to set up two training centres that are now competing with public and private colleges.
The head of the Plumbing Trades Employees Union, Earl Setches, successfully lobbied state and federal Labor governments to support a "Plumbing Industry Climate Action Centre" in Victoria, which opened in 2010 to train plumbers.
The training centres, which have campuses in Brunswick, in Melbourne, and the city of the Geelong, are pitched as teaching plumbers about modern systems designed to use less water and power than older equipment.
Training is free for union members and they compete with existing public and private training colleges, where plumbing is an important source of students but expensive to run because of the advanced facilities needed for teaching.
"It did draw some business away from the TAFEs," said Andrew Williamson, the executive director of the Victorian TAFE Association.
The Gordon Institute of TAFE in Geelong, one of the city's oldest training bodies, is concerned about duplication of courses with a new Plumbing Industry Climate Action Centre that opened in the city two months ago, Mr Williamson said. The Gordon trains more than 400 plumbing apprentices a year, a spokeswoman said.
"To have a PICAC start up in their backyard – there is some nervousness about it," Mr Williamson said.
Faction swap
Mr Setches has been the union's state and federal secretary for 16 years. In 2006 he switched the union's allegiance from the Socialist Left faction to Bill Shorten, a move that helped Mr Shorten win the safe federal seat of Maribyrnong.
Mr Shorten and other members of his faction became supporters of the training centre, which is a registered charity. Mr Shorten spoke at the ceremonial opening of the Brunswick building in 2009, when he was the parliamentary secretary for disabilities, and again when it received funding from the Victorian government in 2015, when he was federal Labor leader.
"As anyone would know if you've been pressured or lobbied or cajoled or persuaded, Earl Setches is normally at the end of the phone explaining to you the benefits of this centre," Mr Shorten said when he opened the centre. "So I'm sure many of you will breathe a quiet sigh of relief that today it has arrived so that we can get back to the rest of our lives."
Then Victorian premier John Brumby appeared at three publicity events at the Brunswick centre in 2009 and 2010. Then prime minister Julia Gillard announced a $32 million green training fund there in 2011.
Mr Setches said he had convinced public servants that it would be more efficient to provide resources to his centres rather than 16 TAFE organisations in Victoria, and didn't use political connections to raise any money.
"If anything it works against us," he said. "People are wary about jobs for the boys."
The Brunswick facility received $400,000 to buy a medical gasses training unit from the US, which is used to train plumbers who work in Victorian hospitals, which Mr Setches said was more efficient than separate units in all TAFE colleges.
"The TAFEs are driven by dollars and nothing but money, not skills," he said.
The chief executives of the two big plumbing trainers, the Gordon and Holmesglen TAFE colleges, declined to be interviewed.
Funding sources
The centre and a related training fund received $4.4 million in government grants from 2008 to 2013, according to government figures. Last year the Victorian Labor government promised an additional $5 million to provide equipment for the Geelong training facility and to build one in Narre Warren, an outer Melbourne suburb.
Employers help fund the centres, which are also financed by a compulsory $25.86-a-week training levy per employee required by workplace awards and Incolink, an organisation that administers redundancy, portable sick leave and income protection insurance schemes for the commercial construction sector. Mr Setches is on the Incolink board. His union negotiated the training levy.
Labor senator Kim Carr, who directed federal government money to the centre when he was industry minister, said it was designed to offer training that wouldn't be covered by TAFEs and to advance skills in the plumbing industry.
"Why shouldn't blue-collar workers be part of the innovation agenda?" he said.
Employer bodies are represented on the board of the training centre, as is Robert Doyle, the Liberal lord mayor of Melbourne.
Training industry leaders have pushed for years for consolidation in the sector.
"We fear that up to half of the $9 billion spent on training every year is wasted," said Martin Riordan, the chief executive office of TAFE Directors Australia. "We are concerned there are up to 5000 training organisations in Australia when some countries have a few hundred."
