Economy

Stop cutting apprenticeships, industry groups tell politicians

Myriam Robin /

Australia’s leading industry groups have called on the federal government and opposition to halt a flow of policies that have led to a dramatic decline in the number of apprenticeships being commenced.

Apprenticeship commencements are at their lowest level since 1999, and the situation is being compounded by a series of ad hoc, poorly explained policy changes that have reduced the incentives to employers and cut the wages of training providers, the head of the Australian Council for Private Education and Training, Claire Field, tells SmartCompany.

At a crisis meeting yesterday, the peak body for private and not-for-profit training providers, along with the Australian Chamber of Commerce and Industry, TAFE Directors Australia, the National Association of Apprenticeship Centres and the Industry Skills Councils issued a joint statement calling on political parties to change a series of cuts to the sector that have made the training system less appealing to employers and more difficult for apprentices.

“Since the 2011-12 budget, right up until the Friday before the election when the Treasurer announced further cuts, there have been major reductions in the government’s support to employers to assist them in meeting the costs of taking on apprentices,” Field says.

“We’re concerned about two things.

“Firstly, these cuts appear to be very ad hoc. There isn’t a policy statement where you can see a clear direction from the government on apprenticeship funding.

“The second issue is that the Prime Minister keeps talking of transitioning from a mining boom to other growth areas of employment. But the government is simultaneously narrowing the funding for apprenticeships into more traditional areas, and away from newer ones like retail, tourism, finance and business.

“The government hopes these industries will grow, yet it’s massively taking away their support.”

Jenny Lambert, the ACCI director of education, employment and training, adds that state governments have also cut funding in recent years.

“The Victorian government changes are the most obvious. Most recently, they’ve dramatically cut the hourly fee they pay to training providers to deliver courses in a range of sectors, including hospitality and retail. And that’s really impacted.

“There has been an inconsistent approach by the states. Each state has done their own thing with relation to how they fund training.”

One in two apprentices in Australia do not complete their training, at great cost to their employer and themselves, while the number of apprenticeship commencements remained steady for a decade despite skills shortages, before the most recent drop.

Numerous government reports and industry groups have highlighted the system as being in crisis, but government policy in recent years has generally been to reduce or narrow funding for the sector.

This is bad for both Australia’s businesses and the long-term unemployed, Lambert says.

“In some industries, doing an apprenticeship is the only way you can become licensed. But apprenticeships need to stay broad because many people who find it hard to get work find there’s no better mechanism than to have work experience combined with the training.

“History tells us that providing unemployed people with one training course after another, with no job tied to that, doesn’t work. What they need is experience.”

Apprenticeships and traineeships aren’t as politically important as issues like school and university funding, but they’re just as important to Australia’s future, Field says.

“Many of us have children at school, and we’re very focused on school funding. Obviously our universities are an important part of the education system. But the training sector has always been the poor cousin.

“It doesn’t help that it’s jointly funded by the Commonwealth and the states. It’s not sexy, but it’s crucial to productivity.

“While there have been some modest announcements by the government in this election campaign around skills, they don’t as yet go anywhere near the amount that was withdrawn. Just days before the election announcement, $240 million was withdrawn from apprenticeship incentives.

“Trade centres in schools, which the Prime Minister announced the other day, only take young people so far. What they really need is training opportunities for them while they’re at work.”

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Myriam Robin

Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.

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