Politics

Apprenticeship numbers fall by 28%: What governments need to do to support SMEs

Dominic Powell /

The number of registered apprenticeships across the country fell by 28% between December 2013 and December 2015, according to statistics published this week.

Data from a Freedom of Information request by Fairfax has shown a drastic drop in apprenticeship and traineeship numbers, with the largest drops occurring in western Sydney and Melbourne.

In the same time period, the number of registered apprenticeships dropped by more than 15,000 in western Sydney and western Melbourne, regions that are home to key marginal electorates that both major political parties will be hoping to hold on to at the election this weekend.

A drop of 47% has occurred in the seat of Parramatta, in New South Wales, and a similar drop of 37% was seen in Chisholm, in Victoria, where the number of registered apprenticeships fell from 2,314 to 1,436.

Records from the National Centre for Vocational Education Research showed a 28% national decline in the number of registered apprenticeships, from 383,562 to 278,583.

The decline has be attributed to various changes and removal of policies by both sides of politics over recent years, which have made it harder for small businesses to employ new apprentices.

The Coalition government claims the decline is due to repeated cuts of employer incentive payments during the Gillard and Rudd Labor governments.

However, Labor claims the drop is due to the Coalition’s abolition of program that supported those wanting to learn a trade, including the ‘Tools for Your Trade’ (TYFT) program in 2014.

The program gave apprentices a $5500 payment, which was designed to help them purchase of expensive tools and equipment.

This was replaced by a $20,000 loan scheme, which only 40,000 apprentices have signed up for since its inception, according to Fairfax.

“Blanket measures” not working

Jenny Lambert, director of employment, education and training at the Australian Chamber of Commerce and Industry, told SmartCompany it’s a “bit of a stretch” for Labor to claim the decline in apprenticeship numbers is soley the Coalition’s problem.

“This decline is something we’ve been concerned about since the first incentive changes in 2011,” Lambert says.

“We tried to warn the government but were mostly ignored.

“The real concern now is how to re-target incentives to get employers to reconsider putting on apprentices.”

Australian Small Business and Family Enterprise Ombudsman Kate Carnell says the drop-off in apprenticeship and traineeship numbers isn’t “quite as black and white as it looks”.

“Some apprenticeships numbers haven’t dropped that much, but a lot of them have due to the reduction in support for employers from state and federal governments,” Carnell told SmartCompany.

“The downturn started when the pay rates for first and second year apprentices went up, it started to get too expensive.”

Carnell says businesses became less likely to employ first year apprentices, especially as they can be of limited value to a business while they are learning.

Carnell has been consulting with small businesses to canvass ideas for the sector and further determine what is needed from governments.

Through this consultation, she has found “profit is a bit flat” for many SMEs, and many employers are struggling to find apprentices with appropriate skill sets.

Many employers are finding new apprentices are lacking in numeracy and literacy skills, says Carnell.

“I was talking with electricians who kept telling me that things have changed a lot for electricians, its all about computers now,” Carnell says.

“Apprentices need to be able to work and understand things like environmental computers in buildings, it’s become a different trade.

“If apprentices are lacking in literacy and numeracy skills then it’s a real concern.”

Lambert believes the government needs to stop looking at “blanket measures” and focus on industry specific strategies to bolster apprenticeship numbers.

“Most of the incentive changes have been made across the board, which isn’t the right move for some industries,” Lambert says.

“In non-trade areas, there needs to be a focus on high employment volume traineeships, like hospitality and retail.”

“Targeting these industries would be a good investment.

Lambert also stresses the state and federal governments need to work together on this issue.

“The state government provides the training funding for these programs, so they both need to have a look at what needs to be done to increase employment,” she says.

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Dominic Powell

Dominic Powell is a journalist at StartupSmart and a tech and music geek. When he’s not writing, you can find him reading or browsing record shops.

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  • T.J . Antipodes

    I lost a mature aged apprentice because Sydney house prices and rents were to high.

    I had 2 first years through a training organization that did not make it past 4 and 7 months, they took up a lot of time. Thye hate the low wages, but the first years take up a lot of time. If they cannot make it through year 1, they probably wont continue.

    Education is stuffed. I worked with a European technician this year for 2.5 weeks and there education and training levels this backward country for dead. Thye actually have courses for machine builders where people do mechanical and electrical. Plus they can do in high school than we allow here.

    We are backward in this area with old thinking and paradigms.

  • Ange

    We usually employ a new automotive apprentice every 18 months. We haven’t had to employ a new apprentice since 2013 for several reasons: There has been a downturn in the economy and profits are flat, fully qualified tradespeople are returning from the mines because of the mining downturn and our turnover of qualified technicians has lowered. Those who would often leave once qualified seem to be staying, maybe for job security reasons and also because they are not being lured elsewhere with higher wage offers. TFYT payments of $5,500 were made direct to Apprentices and would have no bearing on an employer’s decision to hire as claimed by Labor. If you want to increase apprenticeship numbers then we need a strong economy. We need more business investment with better and fairer conditions for operating a business in Australia (ie get rid of red tape and green tape) and let business focus their energy on growing and employing people. It’s all about business confidence. Actually, I’m pretty sure that’s what Gina Rhinehart said.

  • Teresa

    Apprenticeships should be the same as if they were going to school or university. No pay for attending school or an allowance like university. Treat businesses who take on apprentices or trainees as an education Institute.

  • Ben Jones

    generation whine think that they are entiltled to at least 50k a year the moment they leave school. they don’t look 4-5yrs down the track when they will be on good money as a tradie. as a result they look elsewhere for work or drop out in first year. I think some realise that they can bypass the whole system as well…..work as a labourer which pays close to a tradie wage then go to the govts other solution for solving trade shortages. you pay organisations like qualify me who boast 100% success , do a few tests they give you papers then go to fair trading and bingo, youre a tradie. in 10yrs there will be a huge number of defective buildings around.

  • haydn

    Whilst I agree with some of the comments, in Queensland, the root cause of the lack of apprenticeships here has been the closure – or just about – of many of the local TAFE’s. The commercial ventures that allegedly provide ‘apprenticeships’ don’t really do so and many come out arguably fully qualified and yet haven’t had a good, basic background provided in the trade. Many firms hire these ‘apprentices’ as a source of cheap labour. The sooner we return to the old days of indenturing apprentices and making firms keep them on rather than having the ability to fire them when they get to year 3 and start to cost more must stop. I know of 5 youngsters that have had this occur to them and it’s heartbreaking to see them having to start again in another trade because no one wants to take on a Year 3 apprentice.

  • Leesa

    Families and schools have a blanket opinion that university is the best and most viable option for young people to eventually get a job. This is a cultural problem. Higher Education for every type of learner creates pressure, confusion then ultimately a high drop out rate from uni in the first months. Some young people are suited to trades but are trying for uni for the wrong reasons. Trades are looked upon in this country as the lesser option and too often the disengaged students are veered towards trades and apprenticeships by frustrated careers teachers. Employers are disillusioned with the lack of soft skills young people show for this type of work and training. Employers have the work and opportunities it is the young people who are either not interested or are dramatically lacking in life skills. The TFYT incentive that went to the apprentice has been replaced by a loan scheme and provides no real supplement to a low wage. The adult apprenticeship age was reduced from 25 to 21 and employers are resistant around employing anyone over 21 because it costs them too much in wages for someone who is nowhere near productive for a couple of years. The whole system needs to be seriously looked at. Yes they are doing something right in Germany and Switzerland around training and apprenticeships but mostly the parents in those countries are proud and happy if their son or daughter heads in this direction. In Australia we would rather untold pressure at Secondary School an average $60,000 HECS debt and unemployment at the end of it.

  • Justin Tyme

    Following WW2, the same problem faced us. Government workshops were developed and we had adequacy of tradesmen. The rise of collective bargaining/ Union power forced Government to close these training grounds and send the work to private enterprise. We we find we need to do this again, very soon, as Union power is sending jobs and associated trade training of apprentices offshore. Unemployment will rapidly rise as Government is paralysed by the dysfunctional senate and undermanned Government. I don’t like to be a doomsayers but that’s where all,is pointing! I have been sadly 100% accurate with these indication over the past 2+ years. I hope I’m wrong this time.