The 2021-2022 Federal Budget is out. Treasurer Josh Frydenberg certainly lived up to the promise that this ‘pandemic budget’ would focus on job creation and skill development.
We break down what the Budget changes mean for employers, job hunters and apprentices in the coming years.
Employers – Skills reform and wage subsidies expanded
Expansion of Boosting Apprenticeship Commencements (BAC) wage subsidy
One of the most substantive announcements in this year’s budget for employers is the expansion of the BAC wage subsidy. This extension has been allocated an additional $2.7 billion up until the end of March 2022. Under the extended program, places are uncapped and businesses of any size will be able to claim the 50% wage reimbursement from the government for any new apprentice or trainee who begin their employment between October 2020 and March 2021. Employers will also be able to claim the reimbursement for 12 months from when the apprentice or trainee starts (capped at $7,000 per quarter).
For employers, this extension of the wage subsidy means they can feel more secure in hiring an apprentice or trainee. The BAC extension is a confirmation that new apprentice and trainee wages will be half supplemented by the government for a full year.
It also means that employers can engage the 2021 school leavers cohort right through the peak hiring time during the first quarter of 2022. This helps to provide an extra sense of income security to employers of incoming apprentices or trainees.
For information about your eligibility or to sign up an Australian Apprentice, contact an Australian Apprenticeship Support Network provider.
Skills reform on the horizon for industry and employers
The budget also hints at major skills reforms on the horizon, particularly around data integration and access. While the Federal Government works to negotiate the new National Skills Agreement with states and territories, they’re also looking to establish more industry-led initiatives in the sector as well. Initially, this will come in the form of 15 Skills Enterprises to be established over the next four years.
The $150 million funding across the 15 organisations will go into ensuring vocational education remains industry-led and sufficient meets market needs. While many of the details around the Skills Enterprises are yet to be confirmed, it is the largest budget item within the skills reform section of this budget.
This means it’s likely to form a substantial portion of the government’s larger push for greater collaboration between industry and government to ensure qualifications are meeting industry’s evolving needs.
Job hunters – More training opportunities
Extension of JobTrainer
The Federal Government is keen to capitalise on the early success of the JobTrainer program. The 12-month, $1 billion extension will mean that tens of thousands of people can take advantage of free or low-fee courses to help address national skills shortages. Prior to the budget announcement the program was set to expire in early September. However, it will now continue until at least September 2022. The funding includes $500 million over two years from the government to be matched by the states and territories.
Designed for those aged between 17-24 years old, the program has already seen 100,000 people go through to learn a skill and take a definitive step towards a skilled career. This extension is expected to deliver an additional 163,000 low or no fee training places, with particular emphasis on places in aged care skill needs and digital courses.
This means that young job hunters looking to move into these growth areas will be able to take advantage of these significant training opportunities over the next two years.
To find out more about JobTrainer courses, visit the MySkills website.
Assistance to vulnerable Australians
This budget is also focused on supporting vulnerable or disadvantaged young people to transition into work or education opportunities, including apprenticeships and traineeships.
The government will invest $481 million into the existing Transition to Work service, with the expansion expected to help an additional 40,000 young people find the right job or training opportunity. This investment is also supported by further wage subsidies for eligible job seekers on job active, Transition to Work and ParentsNext.
With the increase of $10,000 to employers, it’s hopeful this boost will encourage more employers to hire disadvantaged people looking for work in meaningful and skilled careers.
Other training and career opportunities
The budget also contained a number of key training measures for entrepreneurs, young job seekers and women looking to enter non-traditional careers:
- The budget has allocated over $129 million to those job seekers looking to start their own business through the New Enterprise Incentive Scheme. 12,000 places will be offered as part of New Business Assistance, along with additional places in small business focused workshops.
- The budget has also allocated 5,000 additional gateway service places and in-training support services to encourage more women to take up commencements in non-traditional trades.
- Additional funding has been allocated to virtual and physical job fairs over 12 months, helping ensure young people can have quality face-to-face time with employers and industry leaders while they hunt for the right job for them.
- Acceleration of digital skills as part of the Skills for Education and Employment (SEE) Program. The $4 million investment means over 40 projects will be able to incorporate digital literacy training as part of their package, helping more job seekers hone these vital skills.
Apprentices – Upskilling for the digital future
Digital skills focus
This budget revealed the government’s determination to help support digital apprentices and trainees. Most significantly, the budget outlined the beginnings of its Digital Workforce package. The intention of this package is to see 20,000 people either upskilled or reskilled into digital careers. The budget outlines a number of programs and pilots they intend to do this through including:
- Support through the Boosting Apprenticeship Commencements wage subsidy to employers of over 3,000 digitally-focused apprentices and trainees.
- Focus on more intensive training for foundational skills, including numeracy and literacy through the Foundation Skills for Your Future Program. The priortisation of this program means many more employed or recently unemployed people will be able to take up the opportunity to improve their numeracy, literacy and digital skills – all imperative in a growing number of apprenticeships and traineeships.
- Plans to support digital apprentices and trainees via a new Digital Skills Cadetship Trial. The $10.7 million trial is intended to help more Australians get into highly skilled digital careers, such as cyber security, advanced manufacturing, data analytics, game design and animation – all growing or emerging fields.
Further delays to incentives
The budget also indicated that the long-awaited Incentives for Australian Apprentices Program will be delayed until October 2021. Designed to support and incentivise people to enter skilled-based training, the program contains a range of payments to both employers and apprentices.
Despite the delay, disruptions should be minimal. The Additional Identified Skills Shortage payments will be extended to the end of September 2021 to ensure a smooth transition onto the new system.
More information about the Federal Budget
You can learn more about the Federal Budget by reading the full Budget Measures, the Department of Education, Skills and Employment Budget Overview and the Hon Stuart Robert MP, Minister for Employment, Workforce, Skills, Small and Family Business Media Release