‘Worse than the GFC’: Apprentices hit hard in COVID-19 recession

The skills shortage crisis is predicted to be six times worse than the GFC, with more than 100,000 apprentices and trainees set to go across the country this year alone.

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Exclusive: An entire generation of apprentices will be wiped out after the COVID-19 crisis with new data revealing more than 100,000 apprentices and trainees are set to go across the country this year alone.

The skills shortage crisis is predicted to be six times worse than the GFC, according to new industry data.

The dire new numbers come on top of the 140,000 apprentices and trainees that have been lost in the past seven years and will hamper the anticipated Federal Government’s stimulus renovation package, which is expected to focus on residential construction and renovations.

The blow will mostly be felt by school leavers, who make up a large portion of the starting apprenticeships every year, with experts concerned about the long term impact on youth unemployment as well as worsening skills shortages.

The skills shortage crisis is predicted to be six times worse than the GFC.

The new real time modelling from the National Australian Apprenticeship Association (NAAA) is ahead of the Federal Government’s own official data, which has a six month lag, and is based on numbers from NAAA’s membership, who deal with every apprentice and trainee in the country.

CEO of NAAA Ben Bardon said the COVID-19 recession would be six times worse than the GFC economic crisis and that falling numbers of apprentices meant to start their careers will quickly be followed by an enormous drop in the numbers of apprentices in training.

Their modelling shows a 44,360 reduction in apprentices who were set to start their jobs, together with an expected loss of apprentices already working, will see likely 80,100 fewer apprentices by December 2020, or more than 100,000 in a worst-case scenario.

“Over the last six weeks commencements are down 40 per cent which means our most likely scenario is for a 28 per cent reduction across the whole year,” Mr Bardon said.

“Things will get very bad very fast unless strong action is taken to support commencement activity.

“Recessions always do have a disproportionate impact on apprenticeship numbers. The data is particularly worrying for the school leavers for this year – without support those young people are going to have much more competition than in a normal school year.”

Falling numbers of apprentices meant to start their careers will quickly be followed by an enormous drop in the numbers of apprentices in training.

Many of the short term impacts have been felt in the service industries immediately affected by the shutdown, like hairdressers, beauty salons and tourism.

But construction is expected to follow soon as pipeline starts to dry up and a further apprentice crisis will soon make it even harder to find a tradie.

“You’ve got to keep the flow going otherwise you won’t have the skills in 2023, 2024, 2025 and those stimulus measures and infrastructure projects are going to require skilled labour,” Mr Bardon said, adding the outlook for residential construction will be further impacted by rising unemployment and plummeting overseas net migration.

Using NAAA modelling and recent ABS data, the federal opposition expect the loss could translate to a more than 30 per cent loss of apprentices in NSW, 26 per cent in Victoria, 20 per cent in Queensland, more than 10 per cent in Western Australia, nearly seven per cent in South Australia, two per cent in Tasmania, 1.68 per cent in the ACT and .97 per cent in Northern Territory.

Opposition skills spokeswoman Tanya Plibersek said there has been $3 billion cut from TAFE and training and widespread skills shortages.

“If Scott Morrison doesn’t act now, another 100,000 apprentices and trainees will be gone by the end of this year. That’s a disaster for jobs and our economy,” she said.

“We will need tradies to help Australia recover after coronavirus, so the federal government needs to step up and help save apprentices.”

There are still substantial shortages in bricklaying, ceramic tiling, plastering and roofing.

CEO Roby Sharon-Zipser of hipages said they noted a high demand in particular for plumbers, electricians, handymen and airconditioning technicians, as well as fireplace experts, appliance repairs, locksmiths and pool maintenance people.

“With the population rising and the commencement of tradie apprenticeships on the decrease, it is critical for the Government to provide incentives that appeal to the future generation of Australia’s tradies. We need to bring the tradie-versus-homeowner ratio into better balance, to help drive greater economic success for the sector,” he said.

The Housing Industry Association’s (HIA) recent data shows there are still substantial shortages in bricklaying, ceramic tiling, plastering and roofing and, despite some cooling in demand, prices still increased across the board by 2.4 per cent in the last quarter.

The NAAA are calling on the federal government to improve real time data reporting, expand in training places to support all recently suspended and cancelled apprentices, extend gateway places to all school leavers seeking apprenticeships or traineeships and create an apprenticeship program that provides a $500 per week wage subsidy for the first year of a new entrant trade apprenticeship or traineeship.

Minister Employment Michaelia Cash responded to the NAAA request saying

$1.3 billion will be provided to ensure up to 70,000 small businesses can keep around 117,000 apprentices and trainees across the country in work and training.