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Business groups call for action to rescue ailing apprenticeship system

16 March, 2017

Australia’s peak business organisations have united to call on governments to take urgent action to avert an imminent crisis in our apprenticeship system, one that risks leaving young people without pathways to work and many businesses unable to access the skills they need to grow.

The call for action has come from Australia's leading business organisations, The Australian Chamber of Commerce and Industry; The Australian Industry Group; and the Business Council of Australia.

The organisations are urging the Commonwealth Government to recommit to full funding of a new National Partnership Agreement focused on apprenticeships, enabling all governments to work together to deliver a national apprenticeship system that meets the needs of industry, young people, and workers wanting to change industries.

To turn around the ailing system, we need to make it easier for employers to hire apprentices and for aspiring apprentices to get new opportunities.

James Pearson, CEO of the Australian Chamber of Commerce and Industry, said: "A partnership agreement is the best way to get governments working together on a common agenda for apprenticeships. The Federal Government should maintain the funding in the current partnership agreement – $1.75 billion over five years – and create a genuine national system for apprenticeships."

The number of Australians undertaking apprenticeships is falling. In June 2016 there were 282,900 apprentices and trainees in training, down 45 per cent on the 515,000 in June 2012. Apprentices and trainees represent just 2.7 per cent of the total workforce, the lowest in a decade.

Jennifer Westacott, CEO of the Business Council of Australia, said: "Since 2012 there has been a 45 per cent drop in the number of apprentices in training. This represents a system on the tipping point of crisis and the stark numbers of apprentices falling away from the system make it clear that we need to improve its performance. To achieve this, governments should use the National Partnership funding to reinvigorate and modernise the system."

Apprenticeships allow people to learn work skills on the job, and uniquely gives them the chance to earn while they learn.

Innes Willox, CEO of the Australian Industry Group, said: "We want our apprenticeships system to be ready for new and emerging industries and jobs. It’s important that the system works well in serving current labour market demands, in order for it to be flexible in meeting the demands of new industries and to be able to provide for high-level apprenticeships."

We call on governments to reach a new National Partnership Agreement that has three main objectives in the administration of apprenticeships:

  1. Create a genuine national system.
  2. Increase the number of Australians starting an apprenticeship and moving into work.
  3. Remove duplication between governments and better align their programs, services and funding.

To achieve these objectives we need a national governance structure and approach to funding as well as more effective regulation, information and support, data and pathways to apprenticeships.

Once the policy settings are right we believe apprenticeships will once again provide skilled job opportunities for many people, particularly young people.

For the sake of our future, we must do better.

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Colin Spencer | Thursday, March 16, 2017, 10:15 AM
Sell the sizzle, not the steak! Think like a teenager and find an exciting career name to replace the anachronistic concept of "apprenticeship". Trades all need new trainees, but the concept must be "sold" as a career, not as an apprenticeship. Above all: New trainees must know that they will be paid a proper wage from day one. A weekly pay packet that they can be proud of, and be more willing to earn as they learn.
Hedley James | Friday, March 17, 2017, 1:01 AM
I agree with Colin that careers do still exist for technically interested individuals; particularly so when they start off with an apprenticeship in an engineering trade. My career started as a Fitter & Turner in the manufacturing industry of ship building. I then moved through various other manufacturing companies until eventually reaching General Manager level with 240 staff. At times I had 27 workshops with 40 apprentices. Those businesses have all gone now. Ship building closed at Williamstown. Massey Ferguson manufacturing went off-shore. Rockwell Axles moved most of their engineering machine shop off-shore. The various Repco manufacturing companies were lost mainly to Asia as tariff policies changed against them. My family engineering business now employs one 4th year apprentice and as we look to employing the next one, I am crunching the numbers. It will cost my business thirty thousand dollars after wages to employ the next apprentice over the four year term. That is uneconomic. There is the elephant in the room. Small engineering businesses cannot face the costs of the current apprenticeship model. I have tried, many small shops such as mine have tried, and we all say it is too costly in 2017. One possible option for us to think about is to move the training back onto business. Drop TAFE for all practical work; use E-Learning for the theory and have that run under a TAFE supervision business model only. That returns the apprentice to the business five days a week, producing chargeable hours, does the theory at home, enables a higher wage to be paid whilst breaking the economic impasse of not employing apprentices. The icing on the cake will be a return to a five year contract to offset the increasing demand that training will be all in-house and there is more to learn today. Just a thought. But understand that many small engineering shops have stopped employing apprentices. Come to think of it, that's all that's left isn't it? The big shops have gone and yes, something has to be done, or small engineering will be family and their siblings only.