JobTrainer’s $1bn boost to hire apprentices

As the end of JobKeeper looms, wage subsisides will be rolled out to protect the out of work from an imminent jobs cliff

Elizabeth Hastings (18) a trainee with carpenter Darren Gregory working in the background of Darren Gregory Interiors at Fremantle. Picture: Colin Murty / The Australian

More than $1bn in new wage subsidies for up to 70,000 more apprentices will be rolled out to protect the out of work from an imminent jobs cliff, as the Morrison government prepares to extend a further lifeline to employers for the hiring of new trainees.

With the generous JobKeeper wage subsidy due to end this month, an existing 50 per cent wage subsidy for trainees that has run in parallel from October will now be uncapped and extended for another year.

The expansion of the Boosting Apprenticeship Commencements — which has already met its initial cap of 100,000 places — comes as cabinet’s expenditure review committee prepares this week to sign off on billions of dollars more in targeted assistance packages to ­replace JobKeeper in high unemployment regions, as well as the aviation and tourism sectors.

The government said the extension of the trainee wage subsidies would shift to a demand-driven model that is estimated to almost double the existing program with an extra 70,000 new apprentice and trainee places.

While the bulk of the places are expected to be contracts for young workers, about 20 per cent of the current crop engaged over-35s who are taking on new skills.

The bulk of the traineeships and apprenticeships have been dominated by the construction services sector, food and beverages, administration, building construction and repair and maintenance skills.

Scott Morrison said “training and skills were at the core of the government’s response to the economic challenges faced by the COVID-19 recession”.

“Creating jobs, generating economic opportunities and boosting the skills of workers right across Australia are at the heart of our national economic recovery plan, as we build back from the COVID-19 recession,” he said.

“Last week’s national accounts showed the comeback of the Australian economy is under way. However, many businesses still need support and it’s important our apprentices and trainees get opportunities to boost their skills and stay employed.

“With 100,000 new apprenticeship positions already snapped up, it highlights the confidence businesses have in the future of the Australian economy.”

The extended program will apply for employers who sign up new apprentices and trainees before September 30 and will run to October 2022.

Minister for Employment, Skills, Small and Family Business Michaelia Cash said the program was essential for creating new jobs, with Treasury and the Reserve Bank both predicting a short-term rise in unemployment following the end of JobKeeper.

The initial apprenticeship package, announced as part of the $4bn JobTrainer COVID-19 response to ensure a post-pandemic skilled workforce, was directed at encouraging struggling firms to keep on their apprentices and trainees to avoid deepening the crisis for younger Australians.

“Growing our skills pipeline is an incredibly important part of helping our economic recovery,” Senator Cash said.

“The Boosting Apprenticeships Commencement program has to date assisted almost 40,000 businesses to take on a new Australian apprentice or trainee.

“This initiative has supported the creation of more than 8000 bricklayers, 6000 electricians, and almost 11,000 people in retail and hospitality work.

“By expanding this wage subsidy for another 12 months, we will be helping businesses to create even more jobs, further supporting our national economic recovery plan for Australia.”

The wage subsidy is set at 50 per cent of the salary of a new apprentice and was valued at about $1bn based on an uptake over the year of 100,000 younger workers. The industry was sceptical at the time, but the scheme was fully subscribed within five months.

Perth carpenter Darren Gregory said he would not have been able to hire an apprentice without the subsidies, and the extended support would make him consider hiring more.

“I can now think about adding a third or fourth-year apprentice who’s closer to being a tradesman with the subsidy,” he said. “Times are really tough, so the subsidy and our new apprentice really rebooted the business. We’ve able to take larger jobs on — it’s all about growing the business.”

In a speech to be delivered on Tuesday on the national economic recovery, the Prime Minister will say that although the labour market is strengthening, there are still people looking for work and wanting to upskill.

“We have never forgotten them,” Mr Morrison will say.

“At the outset of the pandemic, we made keeping apprentices in their jobs one of our first priorities.

“In addition to JobKeeper, our (apprentices program) has successfully kept over 122,000 apprentices on the tools. They would likely have been the first to go.

“Such a loss would have been devastating for our economy, as years of training would have been lost and possibly never recovered.”