Coalition’s apprentice loan scheme doesn’t go far enough, small business advocates say

The Coalition’s HECS-style apprenticeship support scheme announced on the weekend will be a positive for both employers and workers, but experts are unhappy the announcement hasn’t gone far enough.

Industry leaders say the apprenticeship scheme in general needs to be retooled to fix completion rates, and any focus on a singular element – such as wages – won’t work by itself.

The announcement caps some recent activity surrounding apprentices, with the government recently announcing it would halve the current amount given to employers for apprentices who finish their training.

Last week the Fair Work Commission also boosted apprentice wages.

Jenny Lambert, director of employment and training at the Australian Chamber of Commerce and Industry, told SmartCompany while the announcement is welcome, it won’t help completion rates.

“It’s good for apprentices, employers and the economy…but it hasn’t gone far enough to address employers’ costs,” she says.

The new scheme, which will cost $80 million according to the Coalition, will provide a total of $20,000 for apprentices to buy tools and equipment over the duration of their training.

“Australian apprenticeship completion rates are far too low – one in two apprentices do not complete their apprenticeship,” the party said in a statement.

The $20,000 is split into yearly instalments, with $8000 in the first year. The repayments will be made per the same HECS thresholds, and a 20% discount will be applied to those who actually complete the full apprenticeship.

The system is essentially a system designed to increase wages – lack of income is often cited as a main reason for not completing apprenticeships.

TAFE Directors Australia chief executive Martin Riordan told the AAP there is a risk of a skills shortage if the economy recovers and apprentices are not catered for.

But Lambert says the Coalition – and Labor – needs to investigate more sustainable methods to ensure the long-term stability of apprenticeships.

“Firstly, research shows it’s not clear cut that wages are the main issue with regard to completions, and while it may have an impact for some, it won’t necessarily result in a major increase.

“If this does have any impact on completions, it’s good for apprentices, employers and the economy…but it hasn’t gone far enough.”

Meanwhile, Peter Strong, the executive director of the Council of Small Business of Australia, told SmartCompany the announcement is a win for small businesses.

“It’s good for employers, because it means you don’t necessarily have to buy tools for your apprentices, but it also means they’re not using shared tools, and so on.

“It may take pressure off employers to feel they need to buy specific purchases. It all comes back to confidence, really.”

The Greens have opposed the move, with leader Christine Milne accusing the Coalition of privatising vocational training.