Coronavirus Australia: Scott Morrison’s $2.5bn package to rescue young workers

Scott Morrison has thrown a lifeline to save apprentices, reskill those who have lost their jobs and create a post-COVID workforce.

Scott Morrison has thrown a lifeline to the nation’s youngest workers, with a $2.5bn package to save apprentices, reskill those who have lost their jobs during the pandemic and create a post-COVID workforce.

In a bid to shore up the nation’s future workforce ahead of the first COVID-19 budget update next week, wage subsidies will be ­extended for a further 100,000 ­apprentices until March 2021.

Another 340,000 young and laid-off workers will be retraining and reskilling, with the government acknowledging that jobs lost during the economic shutdown may be lost forever.

Under pressure from lobby groups over extending the $70bn JobKeeper program, the Prime Minister has offered to extend subsidies to the country’s most vulnerable workers under a new “JobTrainer” program.

In a fundamental rewriting of the vocational and education training system before next week’s mini-budget, the states will also be offered a $500m carrot to sign up to a major reform of the sector. This will be matched by a further $500m from the states and terri­tories, which are believed to have informally agreed to the package at national cabinet last week.

In March, the government announced a $1.3bn scheme to subsidise 50 per cent of apprentice wages to keep the most critical ­future workers in touch with ­employers. The program supported 47,000 employers in a bid to retain 81,000 apprentices in work.

The new funding will seek to expand that support to an estimated 90,000 businesses employing 180,000 apprentices through an extra $1.5bn over six months until April 2021.

“JobTrainer will ensure more Australians have the chance to re-skill or upskill to fill the jobs on the other side of this crisis,” the Prime Minister said.

“COVID-19 is unprecedented but I want Australians to be ready for the sorts of jobs that will come as we build back and recover.

“The jobs and skills we’ll need as we come out of the crisis are not likely to be the same as those that were lost.”

The new package will maintain the annual funding agreement but offer a further $500m if the states and territories sign up to a heads of agreement to drive through ­funda­mental reform. This will ­involve the states agreeing to a new funding model, based on the health system’s activity funding model, which would mandate that funding be directed to specific skills needs.

In a landmark speech in May flagging a major post-COVID ­reform agenda, Mr Morrison said the commonwealth would no longer stump up the $1.5bn in ­annual VET funding agreed to by the 2012 Labor government unless the states agreed to tie the funds more directly to skills needs.

The state and territory governments have already agreed through the national cabinet that a shake-up is required in response to the global pandemic.

The package will apply to skills and training across the VET spectrum and include manufacturing, healthcare workers, transport, warehouse, retail and wholesale trade sectors.

The National Skills Commission will undertake an assessment of skills needs by sector to ­determine a funding model based on the current health system’s ­activity-based model.

This would direct commonwealth funding to defined skills needs as proposed by industry sectors and ­businesses.

In his headland address in May, Mr Morrison flagged a major reform to skills funding, warning that it was failing under the existing model and needed to be adapted to a post-COVID world.

“The commonwealth has no line of sight on how states use this funding,” he said at the time.

“The agreement has also been ineffective in maintaining state investment in these schemes; VET funding across all jurisdictions, with the exception of Tasmania, has fallen by 25 per cent on average over the past decade in real terms, on a working-age per capita basis.

“I’ve made very clear to premiers and chief ministers that my government would be prepared to invest more, but throwing more money into a bad system does not get you results.”

Employment, Skills, Small and Family Business Minister ­Michaelia Cash said the JobTrainer package would form a vital part of the national recovery efforts.

“Our nation has faced many challenges, and it is critical that we keep our apprentices in jobs and help those looking for work,” Senator Cash said.

“This package will be essential as the economy rebuilds so that people looking for work can re-skill and upskill for in-demand jobs, provide school leavers with a pathway into their careers, and ensure businesses are able to get the skilled workers they need.”