Budget 2020: $1.2 billion wage subsidy program for apprentices and trainees

Michaelia Cash

Minister for Employment Michaelia Cash at a press conference at Parliament House in Canberra, on Thursday, May 14, 2020. Source: AAP/Mick Tsikas.

The federal government says it wants to help Australian businesses hire 100,000 new apprentices and trainees, and will spend an additional $1.2 billion on wage subsidies in this area.

Prime Minister Scott Morrison and Small and Family Business Minister Michaelia Cash announced the new budget measure on Sunday, just days before the government is due to hand down its much-anticipated budget.

Under the new wage subsidy program, businesses that hire a new Australian apprentice or trainee will qualify for a 50% wage subsidy.

The ‘Boosting Apprenticeship Commencements’ subsidies are effective from today, October 5, and will be available to businesses of all sizes, in all industries and locations, until a cap of 100,000 is reached.

Employers will be able to receive subsidies for 50% of the wages of a new or recommencing apprentice or trainee to the value of $7,000 a quarter, for the period until September 30, 2021.

The program builds on a similar wage subsidy scheme, first announced in March and then extended in July, that supported employers who already had apprentices or trainees working for them.

“The Australian government has already invested significantly to ensure that apprentices are retained where possible and supported to re-engage if they lose their job,” Cash said in a statement.

“During this pandemic, the federal government has been focused on supporting and creating jobs, as well as identifying the skills we need in the economic rebuild,” Morrison said in a statement.

“Already, 760,000 jobs that were either lost or reduced to zero hours, as the COVID crisis hit, have come back into our economy.

“We want to continue to recover what has been lost and get young people into work.”

Employer groups welcome funding boost

Business groups welcomed the announcement of the new subsidy program on Sunday, with the Australian Chamber of Commerce and Industry (ACCI) saying it was pleasing to see the program will be available to businesses of all sizes.

“This is the right prescription to restore the health of the apprenticeship system, given the considerable wage subsidy investment already made in apprentice retention,” said ACCI chief executive James Pearson in a statement.

“It comes at the right time, when restrictions are being eased, and will encourage businesses looking to take on more people to take on apprentices.”

Pearson said the new program will “tip the balance in favour for many employers to make the commitment to developing the skills for the future”, given apprenticeships require long-term investments.

“This move to breathe more life into the highly valuable apprenticeship model comes at a critical time,” Pearson added.

“It is particularly pleasing to see the subsidy provided to businesses of all sizes which was a key ask in ACCI’s pre-budget submission to the federal government. It simplifies the subsidy and reflects the value of new job opportunities across the economy.”

However, while also welcoming the new program, Megan Lilly, head of workforce development for peak employer association AI Group, told The New Daily there is a risk that women could miss out on the majority of this government support.

Women have been disproportionately affected by the pandemic, and account for only 24.4% of the more than 270,000 Australians in training, according to data from the National Centre for Vocational Education Research.

Lilly said the government must be “vigilant” to ensure some of this $1.2 billion in support goes to women.

“We don’t want only gendered opportunities. That won’t be a good outcome,” she said.

“But particularly, with a lot of infrastructure projects, or anything where there’s a lot of public money, there’s the opportunity to put [gender] targets in there.

“Certainly, I’m aware of some infrastructure projects that are taking on very significant numbers of women in roles that were traditionally male trades.”

More information about the subsidies is available here.

NOW READ: Skill shortage warnings as apprenticeship commencements fall to 1990s levels

NOW READ: Businesses snap up $500 million in apprentice subsidies as COVID-19 sees commencements tank

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