Federal Budget 2022: How apprentice tradies can pocket $5k cash

Apprentices and the businesses that take them on will receive generous cash payments as the government tries to entice people into priority areas.

In demand apprentices will bank a $5000 cash payment but a generous wage subsidy for their bosses will be steadily trimmed as the government rejigs its support for the trades sector.

Small medium-sized businesses will also be provided with a bonus tax deduction for training workers while a $2.2b ideas factory will have a key focus in developing a new generation of manufacturers.

The government will invest $2.8b over five years from 2021-22 to boost apprentice numbers, upskill those already in industry and reduce drop out rates.

It is also offering an extra $3.7b to state and territory governments to fund a new national skills agreement which aims to create a further 800,000 training places.

A new $2.4b Australian Apprenticeships Incentives System will provide a $5,000 payment to new apprentices working in priority areas such as construction and carpentry.

The government has offered cash incentives to lure people into priority sectors.

It will be paid in $1,250 instalments every six months for the first two years of an apprenticeship.

A separate wage subsidy for their bosses will cover 10 per cent of a first- and second-year apprentice wage and 5 per cent of a third-year’s wage, providing up to $15,000 in support.

Construction and carpentry apprentices can pocket $5000.

A new apprenticeships priority list will outline the roles which will attract the subsidy and be updated annually.

Employers of apprentices in nonpriority occupations will receive a $3,500 hiring incentive.

Another $38.6m will be provided to encourage more women to undertake non-traditional apprenticeships while $49.5m will be spent to boost the aged-care workforce by 15,000 people.

The cash bonus and wage subsidy will run from July to July 2024 when government support will be cut to provide priority apprentices with a $3000 bonus and their bosses a $4000 hiring incentive.

Treasurer Josh Frydenberg hopes to boost the economy via trades.

The new system will replace the current scheme – to end in June – which provides employers with a 50 per cent wage subsidy worth up to $28,000 a year for a first-year apprentice.

The system has been enthusiastically backed by major employer groups who credit it with spurring a boom in apprentice numbers, reversing a worrying eight-year decline.

In other key training measures, businesses with annual turnover less than $50 million will be able to claim a new bonus 20 per cent tax deduction for the cost of external training courses delivered to their employees.

There are also attractive subsidies available to employers. Picture: Zak Simmonds

The break will allow a business which has spent $100 on training to claim a $120 tax deduction, up to a cap of $100,000.

It is expected to provide around $550m in tax relief to business covering 7.8m workers.

A $2.2b federal fund will work to transform big ideas at universities into successful global businesses, with a $1.6b “economic accelerator” to back ventures in sectors including clean energy, medical supplies and defence.

Originally published as Federal Budget 2022: How apprentice tradies can pocket $5k cash