January – Subsidy cuts spur drop in new apprentices

The article below is sourced from The Australian, 28 January 2015, article written by Andrew Trounson

“Victoria has flagged an emerging crisis over the falling number of people entering apprenticeships and traineeships.

New figures reveal a collapse in the number of starts in the wake of cuts to state and federal training subsidies since 2012.

Since, costs have further shifted on to employers as award wages for apprentices have risen and government programs to help cover the costs of tools and travel have also been cut.

Figures obtained by the HES show the number of students starting state-subsidised apprenticeships and traineeships last year had halved to just 25,821 by the end of September. This compares to 55,182 for the corresponding period in 2012. The steepest decline occurred last year.

“We have inherited a major decline in the number of people starting apprenticeships and traineeships, ” Victoria’s new Skills and Training Minister, Steve Herbert, said, blaming cuts to state subsidies and TAFE-specific funding by the previous state government. He said employer confidence has also been rocked after revelations of rorting by some training companies, which are being investigated by the state regulator.

Among regional students, training commencements across all courses are down 13 per cent from a year ago at 64,858, and 25 per cent from 2012.

Major traineeship and apprenticeship provider Group Training Australia echoed Mr Herbert’s concerns. “Some employers are losing confidence in the training system,” said Gary Workman, executive director of Group Training Victoria.

While subsidy cuts were concentrated in non-trade traineeships, he said, apprenticeships were being hit by the construction downturn and higher costs on employers. He estimated that, in Victoria, employer costs for apprenticeships were up 20 per cent as the government contribution had fallen and award costs had increased.

In the May Budget, the Abbott government abolished subsidies for apprentices’ tools while introducing a HECS-style loan to help with costs, repayable once they earn more than $50,000 a year.

Tim Piper, director of the Australian Industry Group in Victoria, said Labor’s cancellation of the East West Link tunnel project would affect demand for apprentices, and he called on the government to fill the pipeline with other projects.

Victoria’s opposition spokeswoman for training, Steph Ryan, accused Labor of having “trashed” the TAFE brand in opposition.

She said the previous Liberal had doubled the regional loading for vocational education and training to 10 per cent.

The new state government has committed $320 million in additional funding for TAFE.”

This was sourced from The Australian, 28 January 2015, article written by Andrew Trounson