Apprentice and trainee incentives to fight welfare surge
New incentives for apprentices and trainees will be included in the budget to lift completion rates and combat a concerning surge in the number of young Australians moving on to welfare payments.
New incentives for apprentices and trainees will be included in the budget to reverse plunging completion rates and combat a concerning surge in the number of young Australians moving on to welfare payments.
The Treasurer confirmed next Tuesday’s budget would include a suite of measures aimed at upskilling younger workers and keeping them in jobs, after JobSeeker and Youth Allowance (Other) recipients hit almost 900,000 at the end of March.
Amid Treasury expectations that the labour market will continue weakening across the year and likely push JobSeeker levels higher, Jim Chalmers said the budget would strengthen job pathways for Australians in priority sectors.
“We want to see people on income support for as short as possible. We want people to be working if they can, and that means we need to be part of providing the opportunities in the labour market,” Dr Chalmers told The Weekend Australian.
“We have to work out how do we incentivise apprenticeships and training and getting skilled workers (in jobs).”
The Australian this week revealed that housing would be a centrepiece of the budget to shield Labor’s pledge of 1.2 million new homes by 2029.
With builders reporting severe labour shortages, the government is moving to implement a new wage subsidy incentive model designed to keep workers attached to employers.
About 1900 tradies in Britain, Canada and other countries – who have comparable qualifications under Australian rules – will have their skills assessments streamlined in a bid to boost the construction workforce.
The budget also includes $88.8m for 20,000 Fee-Free TAFE, Vocational Education and Training and pre-apprenticeship program places.
Ahead of his third budget, Dr Chalmers said “we expect (the labour market) to soften a bit more”.
“You’re already seeing that in the hours worked and in the job ads that the labour market will soften a bit more. You can imagine a kind of deterioration in the labour market but still, much stronger than what it might have been historically with an economy which has been slowing this much,” he said.
In the lead-up to the budget, the government has announced trainee teachers, nurses and social workers will be paid up to $8307 to learn on the job in schools and hospitals. The New Energy Apprenticeships Program, giving apprentices up to $10,000 over the duration of their training, will also be expanded.
Dr Chalmers said Morrison government legislation, which during the pandemic directed wage subsidies of up to 50 per cent to employers, “was designed to dramatically decrease”. The Labor model is expected to adopt a different model that protects workers from employers who could skim from subsidies or use them for leverage.
“The legislation that (Scott) Morrison had around the apprentice incentives was designed to dramatically decrease. If you have a look at those incentives, they basically were legislated to fall to almost nothing,” he said.
“They are not ongoing at the same level that they were announced. We’ve inherited that. We have to work out how do we incentivise apprenticeships and training and getting these skilled workers in the context of that incentive going down to almost nothing.”
Treasury budget forecasts expect unemployment to rise from 3.9 to 4.5 per cent by mid-2025, as the labour market softens and hours worked are cut. Reserve Bank governor Michele Bullock and Westpac chief executive Peter King have said the unemployment rate, which the RBA predicts will reach 4.2 per cent by the end of the year, must hit around the mid-4s before rates are cut.
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