The Federal Government’s $2.5 billion dollar investment in skills training announced today caps off a number of assistance packages unveiled in recent months aimed at safeguarding the futures of thousands of apprentices and trainees. The package is also aimed at reskilling hundreds of thousands of out-of-work Australians who have lost their job as a result of the COVID-19 pandemic.
As part of the Federal Government’s announcement, a new national agreement has been proposed linking skills funding to emerging job opportunities. This makes good sense. Unveiled in Canberra today, in the wake of a record 20-year-high unemployment rate, the investment in skills training comes at a very welcome time in this health and economic crisis.
Victoria’s reintroduction of stage three restrictions confirms that, as a nation, we aren’t out of the woods yet – and the numbers tell a similar story for the VET sector. Since 1 March 2020, more than 20,000 apprenticeships and traineeships have been cancelled or postponed, and sign-ups in the week commencing 30 June were below 2,000 – compared to more than 3,000 in the same week last year.
While we do not yet have the stability for a genuine and sustained recovery, or the inherent confidence needed to underpin a major recruitment drive, knowing what is available to businesses is key to ensuring we do not lose a generation of apprentices and trainees.
In this article, I break down what is at risk in the sector and point to a few of the federal and state packages and incentives that are in place to mitigate that risk.
What have we got to lose?
It’s certainly not overstating it, what we have to lose is potentially Australia’s next generation of skilled workers.
The National Australian Apprenticeships Association’s (NAAA) modelling predicts that if there was to be a 77,600 reduction in commencements over the 20/21 financial year, in-training levels would drop by 147,400 by June 30, 2021 – a substantial COVID-19 casualty.
There are a number of contributing factors to the steep decline in apprentice and trainee numbers. The ongoing impact of lockdowns has had a significant impact. We have witnessed many businesses reorganising their affairs to prepare for the full impact of a COVID-19 induced recession which, for many, has meant reducing their workforce to skeleton crews to stay afloat. Other businesses are holding off on new commencements until they start operating profitability again.
At the same time, like the wider economy, our industry is preparing for a potential cessation of JobKeeper payments, and those who have been invisibly “stood down” becoming visible in cancellation numbers.
Apprentice and trainee numbers “falling off a cliff”, as it were, would fundamentally debase the Australian economy of a significant skills foundation. This would not only hamper economic recovery in the short-term but reduce the future competitiveness of the Australian labour market and economy internationally.
What is keeping us on track?
Prime Minister Scott Morrison and Minister for Employment, Skills, Small and Family Business, the Hon. Michaelia Cash, today announced the JobTrainer package, which will aim to deliver more than 340,000 training places across Australia for school-leavers, or people who have lost employment due to COVID-19. The package will include the delivery of free short courses in high priority areas facing potential skills shortages or high demand; so far the Government has indicated this may include healthcare and social assistance, transport, postal and warehousing, manufacturing, retail trade and wholesale trade. The Federal Government have committed $500 million so far, expecting states and territories who choose to sign up to match the figure through split contributions.
Supporting Apprentices and Trainees
When the severity of the pandemic first became apparent, the Federal Government moved quickly to introduce the Supporting Apprentices and Trainees (SAT) wage subsidy and today announced a further $1.5 billion will be invested in the program. The SAT dictates that small businesses who retain existing apprentices and trainees receive a 50 per cent subsidy, and employers of any size who re-engage an apprentice or trainee that has been displaced from a small business will similarly attract a subsidy.
So far, more than 74,000 payments have been made, through the SAT wage subsidy, to employers supporting the retention of apprentices and trainees in small businesses. Our teams have been working around the clock to ensure employers can put this subsidy in place to secure the future of their apprentices.
Delivering Skills for Today and Tomorrow
The Federal Government announced a $585 million skills package on 1 July 2020, Delivering Skills for Today and Tomorrow. The package aims to centre VET as a pathway of choice for school leavers and career changers and was released in response to required reform identified in the Expert review of Australia’s vocational education and training system.
Apprenticeship and Traineeship Re-engagement Incentive
The Western Australian Government recently announced it will provide $6,000 in financial support for employers who take on a displaced apprentice, and $3,000 for taking on a displaced trainee. The Apprenticeship and Traineeship Re-engagement Incentive is aimed at helping employers maintain a pipeline of skilled workers during COVID-19 recovery.
What is the opportunity for employers?
Leveraging the financial stimulus available, individual businesses have an opportunity to positively impact the economy by supporting young people in developing their skills. This, in turn, will increase the capability and capacity of a business to remain competitive and build economic resilience, undoubtedly making them more productive and, in turn, competitive.
As the only national Apprenticeship Network Provider, MEGT is poised to support employers source and engage apprentices or trainees for their business, interpret the state-specific VET environments, and navigate what Federal structures are available as we collectively pursue economic recovery. Without doubt, the retention of apprentices and trainees is a crucial component of our country’s economic recovery. Without the next generation of youth and talent the pain of the pandemic may well last even longer.
ANP General Manager