Budget 2022: Skills plan rests on free TAFE courses, apprenticeships re-think

The federal government’s plan to ease the lingering skills shortage has been revealed, and it includes more than $1.4 billion in funding to boost the TAFE and university sectors, expanded visa processing capacities, a brand-new renewable energy apprentice scheme, and measures encouraging pensioners to take on more work.

Employers say a lack of available talent, a consequence of Australia’s lockdown-era border closures and low unemployment rate, has hampered small businesses hoping to capitalise on growth opportunities.

Beyond the healthcare and teaching sectors, a lack of worker availability has been profoundly felt in the tech and startup scene, along with the retail, hospitality and construction industries, both of which are heavily populated by small businesses.

The Labor government’s plan to address those shortages, revealed in full in Tuesday’s 2022-2023 federal budget, hinges on a $921.7 million cash injection into the vocational education and training system.

Over five years, $871.7 million of that funding will go towards 480,000 free-free TAFE and vocational education places, focused on both industries and regions facing the worst of the skills shortage.

Around 180,000 of those will be delivered in 2023 alone, budget documents state, with those priority areas to be determined by the forthcoming National Skills Agreement.

In the university sector, $491.8 million over four years will provide Commonwealth support to 20,000 university places and enrolments in other higher education providers.

“These places are dedicated to students under-represented in higher education, including First Nations peoples, those who are the first in their family to study at university, and students from rural and remote Australia,” the documents state.

“The places are for courses in areas of skills shortage, including teaching, nursing and engineering.”

The funding is designed to bolster Australia’s workforce for the nation’s upcoming skills requirements, Education Minister Jason Clare said in a statement.

“We know that nine out of 10 jobs in the future will require tertiary qualifications – that’s why what we do in our schools,” he said.

“TAFEs and universities matters.”

More immediate support will come by way of extra funding for the Department of Home Affairs to accelerate the processing of skilled visa applications.

Visa processing bolstered

While the extended closure of Australia’s international border ended at the start of 2022, many in the tech, hospitality, and retail sectors say a lack of international talent is hampering business.

Industry pleas to expand Australia’s permanent migration intake numbers were acknowledged at the Jobs and Skills Summit in September, which saw the 2022-2023 intake numbers grow from 160,000 to 195,000.

To address the backlog of visa applications, the budget will provide the Department of Home Affairs with $42.2 million over two years to increase its visa processing capacity and “raise awareness of opportunities for high-skilled migrants in Australia’s permanent Migration Program”.

$36.1 million of that funding was revealed at the Jobs and Skills Summit, with the remainder funding an international marketing campaign targeted at would-be residents.

Focus on completed apprenticeships

Labor’s budget takes a significant detour from the Coalition’s $2.8 billion plan to subsidise apprentice wages in high-priority fields, instituting its own $95.6 million plan to support 10,000 apprentices through the New Energy program.

Eligible trainees will receive $2,000 when signing up, $2,000 per year for up to three years of training, and $2,000 on completion.

The decision to fund apprentices upon completion comes after Minister for Skills and Training Brendan O’Connor criticised existing support programs for their low completion rates.

“There is also no point in boosting the number of apprenticeships if apprentices already in the system are not properly supported and leave before they get their qualification,” O’Connor told an industry lunch in October.

“We need to fix the leaks in the bucket before we turn the tap on harder.”

Another measure to fix the apprentice system ‘leaks’ comes by way of $9.6 million in funding for tailor-made support to those picking up skills in the clean energy sector.

“This funding will support a new mentoring program to help train and support new energy apprentices, the development of fit-for-purpose training pathways, and a capacity study by Jobs and Skills Australia to evaluate Australia’s workforce needs to transition to a clean energy economy,” budget documents state.

Aged and veteran pensioners into the workforce

The budget also includes $61.9 million in funding designed to remove disincentives keeping aged and veterans pensioners from the workforce.

Industry groups including the Australian Retailers Association have called for the government to increase the amount pensioners can earn before taking a hit to their government benefits, a move they say would encourage experienced talent to pick up work in businesses facing a depleted workforce.

In the 2022-2023 federal budget, the government has made good on those calls. Over two years, the amount aged and veteran pensioners can earn before taking a hit to their pension will increase from $7,800 to $11,800, a boost of $4,000.

That one-off top up is expected to result in an extra $15 million in income tax receipts in 2023–24.