The introduction of a 50 per cent wage subsidy for employers hiring apprentices during the pandemic had a significant impact on Australia’s workforce.
The subsidy, which halved the cost of taking on an apprentice, led to around 230,000 extra apprentice commencements across the economy, according to the BuildSkills Australia workforce study.
“While labour market conditions were affected by significant policy interventions such as JobKeeper, the surge in apprentice uptake suggests that reduced employer costs had a powerful impact, even in a highly disrupted labour market,” the study said.
“The strong increase in apprenticeship commencements during the pandemic period suggests that the key constraint is not a lack of willing apprentices, but rather employers’ willingness to hire. “
Although the precise costs of the pandemic wage subsidy are not fully detailed in Federal Budget papers, the study said it appears the Australian government invested approximately $7.5 billion in the scheme, equating to an estimated $32,000 per additional apprenticeship place created.
“This is broadly consistent with unpublished modelling from the Australian Centre for Evaluation which is reported to have found the program cost between $30,000 to $50,000 per additional commencement,” the study said.
In addition to financial incentives for employers, the study recommends the development of a digital platform to streamline the end-to-end apprenticeship administration process for both employers and apprentices. It also supports payroll tax relief.
Housing Industry Association (HIA) managing director, Jocelyn Martin, said the association supports the emphasis on strengthening apprenticeships. “It’s essential now that recommendations are progressed to actions,” she said.