Federal budget 2021: Training and industry groups call for long-term apprenticeship support

Industry groups hope the 2021 federal budget will focus on a more long-term solution to skill shortages.

Training organisations are calling for long-term investment in apprentices rather than another sign-up sugar hit through wage subsidies when the federal budget is unveiled on Tuesday.

While last year’s commitment to pay half the wages of new apprentices and trainees for their first 12 months encouraged employers to boost headcounts, industry experts warn the impact may be short lived, with some employers dropping workers once the subsidy ends or borders reopen allowing skilled overseas workers back in.

Gary Workman, chief executive of group training organisation (GTO) industry body Apprenticeship Employment Network (AEN), said the Boosting Apprenticeship Commencements wage subsidy was a good initiative for 2020 but the future challenge was to “bring employers back” to the apprentice system long term.

AEN’s Gary Workman said the wage subsidy made sense last year but now it was time to focus on structural reform. Picture: Supplied

He suggested more funding for GTOs, which hire apprentices then place them with host employers, meaning a single business does not have to commit to a full four years.

“Wage subsidies are good in the short term, they give a spike in commencements, but we found after the GFC that a lot of employers moved to a more casualised work arrangement for staff,” he said.

“They want a model that is the least risk for their business … but that doesn’t help with skill shortages or help people get a qualification.

“The GTO model was introduced for this issue.”

Mr Workman said employers were using the subsidy for “cheap labour” rather than to build the skilled labour force needed in the future.

“After the GFC (global financial crisis in 2007), we used wage subsidies to bring people back to the system but when they reduced employers went back to skilled labour and youth unemployment didn’t recover as it should have,” he said.

“We want to try to stop that this time around.

“The government might just throw more money at wage subsidies but it’s not providing the structural reform.”

There are more than 500 careers that start with an apprenticeship or traineeship. Picture: iStock

AEN is also calling for a stronger school-based apprenticeship program and career advice that promotes the 500-plus vocational qualifications available; as well as real-time data collection showing apprentice and trainee commencements, completions and cancellations to better inform industry groups and public policy.

“The data the government collects is always six months retrospect so the September quarter for 2020 has only just been released,” Mr Workman said.

“With COVID, it was hard to tell what was happening on the ground.”

Latest figures from the National Centre for Vocational Education Research showed apprentice and trainee commencements in the September quarter were down 23 per cent year on year.

The wage subsidy was introduced in October and, anecdotally, provided a boost.

WPC Group general manager Andrew Sezonov said they were fielding 60 per cent more employer inquiries than in pre-pandemic times.

“Smart employers are lining up to ensure they don’t miss out,” he said.

Tom Emeleus hopes the government will focus on encouraging employers to take on mature-age apprentices. Picture: AAP IMAGE / Angelo Velardo

National Electrical and Communications Association (NECA) Training reported 184 new first-year apprentices since the subsidy was introduced – about 30 per cent more than the GTO had previously anticipated.

General manager Tom Emeleus said in this budget he would like to see more government support for mature age apprentices and women in trades.

“There continues to be a big barrier for anyone over 21 to get into apprenticeships,” he said. “That particularly disadvantages women as a lot are discouraged from taking on trades then don’t realise until perhaps they tried something else that it is what they want to do.”

National Apprentice Employment Network chief executive Dianne Dayhew hoped the budget would extend the wage subsidies beyond their current September expiry but did not expect mass apprentice cancellations if it did not – especially among employers supported by GTOs.

“Most employers make a commitment and believe in the value of training so we think if they are taking on apprentices and trainees, they would much prefer to keep the person they have invested in with their business,” she said.

Originally published as Federal budget 2021: Training and industry groups call for long-term apprenticeship support