Budget 2014: Business may be forced to pick up slack of budget training cuts

Budget 2014: Business may be forced to pick up slack of budget training cuts

Business may be in for a further blow from the budget, as they potentially pick up the slack of the government’s contribution towards the cost of training.

Businesses will be required to make co-contributions towards the cost of the Abbott government’s new $476 million Industry Skills Fund, which will replace the 10 skills programs axed in Tuesday’s budget, including the Apprenticeships Incentives Program.

The amount will be determined on a sliding scale depending on the size of the enterprise.

Budget papers state the Industry Skills Fund will support the needs of small to medium enterprises which cannot be readily met by the national training system and will provide 121,500 training places in areas such as health, mining, manufacturing and defence. 

It will be implemented on January 1, 2015, and the majority of the government’s funding will come from the 2014-15 financial year.

Little more is known about how the co-contribution scheme would work and how much business should expect to pay to float the scheme.

The office of the Minister for Industry, Ian MacFarlane, was contacted, but SmartCompany did not receive a response prior to publication.

Opposition small business spokesperson Bernie Ripoll told SmartCompany industry and the opposition were still trying to make sense of the budget and did not have any additional understanding about co-contributions at this point.

“What I do understand is clear, they’ve cut funding to small business for skills and training and they’ve rebadged some old programs but with reduced funding,” says Ripoll.

“They’re obviously asking for a co-contribution from business, which will mean business will have to pay more.”

He says the abolition of current training programs will deeply affect the way small business finds quality, skilled staff.

“When we talk to small business, we find one of their biggest issues is finding quality staff and if the government doesn’t address that it will make things worse.”

Ripoll says it’s likely that small businesses will be forced to put less training in place for employees, because they simply cannot afford to.

Peter Strong from the Council of Small Business Australia told SmartCompany he hadn’t heard any details of a co-contribution scheme, but said the idea wasn’t alien to small business.

He said Tasmanian businesses currently paid around 10% toward the cost of training and many apprenticeship-based businesses were already used to contributing to skills training.

“Small business won’t react badly to having to put some money towards training, the issues will be with how much, and how much paperwork will need to be done?” says Strong.

“It’s all well and good to say you need to pay $100 towards this training, but is it going to take hours and 60 pages of paperwork to do it?”

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