Where has the cash from the government’s $1.5 billion Skilling Australians apprenticeship fund gone?

Australia’s VET system needs fundamental change – here’s how it can be fixed

The Australian Chamber of Commerce and Industry says it is “unacceptable” that funds from the federal government’s Skilling Australians Fund are not flowing through to the states as planned, after the $1.5 billion commitment to apprenticeships was first outlined in the 2017 federal budget.

Small business groups have outlined training as a key priority for next month’s budget and they believe the government has not put the issue of TAFE and training front and centre.

Included in the 2017 budget, the Skilling Australians fund promised to match funding with the states to fund $1.5 billion in traineeships and apprenticeships for “high-demand” areas over the next four years.

The fund was launched with a new levy for employers that take on workers through temporary skilled migration programs, with an estimated $1.2 billion to be raised over the forward estimates to contribute to the government’s overall commitment of $1.47 billion in cash for training.

The plan was for each state to sign up to national partnership agreements with the federal government, giving them an “opportunity to develop projects for consideration by the Commonwealth”, according to the Department of Education and Training.

The federal government estimated the fund would assist an additional 300,000 apprentices, trainees and “higher level skilled Australians” over four years.

However, chief executive of the Australian Chamber, James Pearson, says that close to one year on from the pledge, no state or territory has inked a deal for using the new funds.

“It is unacceptable that, almost a year after the fund was announced, not a single agreement has been signed. At the same time, apprenticeship numbers continue to slide,” he tells SmartCompany.

In a statement to SmartCompany, the Department of Education and Training confirmed that to date, no Australian states or territories have signed up to an agreement for funding through the initiative.

“The Australian Government continues to work closely with state and territory governments on the National Partnership Agreement and possible projects that will be supported under the Fund,” a department spokesperson said. 

“Under the new agreement, each state and territory is responsible for determining the projects that are proposed to the Commonwealth for access to the Fund. Funding will be prioritised to projects in agreed target areas, including occupations in demand and industries and sectors of future growth.”

Each state funds apprenticeships and training differently, drawing on funding amounts from the federal government and from within state budgets.

However, the issue of vocational education is a hot-button one in several states, with Tasmania’s The Examiner reporting earlier this month that negotiations to sign up to the federal fund have continued for some time, while the state’s previous agreement for TAFE and training funding with the federal government has expired.

The federal government only passed the legislation required to secure the funds in February, with the Migration (Skilling Australians Fund) Charges Bill and Migration Amendment (Skilling Australians Fund) Bill passing the senate on February 15.

Pearson says the Skilling Australians Fund was supposed to address falling apprenticeship numbers across the country, but so far it has done nothing to help the situation. He is also critical of the mechanism for raising funds for the scheme, saying it has “pegged the investment in apprenticeships through the Skilling Australians Fund to the skilled migration intake”.

“Trade apprenticeship numbers are barely holding up and traineeship numbers have fallen significantly over the last six years due to policy and funding decisions made by both federal and state/territory governments,” he says.

On Wednesday, Council of Small Business Australia chief executive Peter Strong said the issue of training is critical not just for small business employers, but for workers to have the opportunity to develop and grow across their working lives.

“It’s about employees, and getting them prepared for another job in the future,” he said.

SmartCompany has contacted the departments responsible for education, training and industry in each state and territory for further comment.

Got a story about apprenticeships and training in your business? Email news@smartcompany.com.au

NOW READ: Behind the growing skills gap between jobs in Australian cities and the regions


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