Home Insiders & Advisers News 2020 Federal Budget: What it means for Australian Apprenticeships

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2020 Federal Budget: What it means for Australian Apprenticeships

Treasurer Josh Frydenberg handed down the Australian Budget on Tuesday 6 October. This delayed budget was highly anticipated due to the expectation it would re-energise the economy post-COVID-19.

The key announcement related to Australian Apprenticeships, 'Boosting Apprenticeship Commencements' was announced prior to budget night. But there was much more to the budget that will affect the broader Australian Apprenticeships industry. Here we break down some of the key announcements and how they may affect apprenticeships and traineeships.

Apprenticeship Specific Initiatives

For more information about Australian Apprenticeship, VET or other education and employment measures, take a look at the Department of Education, Skills and Employment budget breakdown.

Boosting Apprenticeship Commencements

Designed to encourage employers to take on more apprentices and trainees, this wage subsidy compliments the existing Supporting Apprentices and Trainees wage subsidy. With 100,000 places up for grabs, we expect employers to start recruiting apprentices and trainees sooner rather than later to take advantage of the 50% wage (up to $7000 per quarter) on offer.

You can read more about the Boosting Apprenticeship Commencements wage subsidy, and what it means for employers and job seekers, here.

Incentives for Australian Apprenticeships Program

Changes to the Australian Apprenticeships incentives program, originally planned to be released on 1 July 2020, has been further pushed back to 1 July 2021. Originally moved to January next year due to the effects of COVID-19, this further change is aimed to minimise disruption to the Australian Apprenticeships sector during the first stage of the economic recovery. The current incentives program continues to apply until the new program is rolled out mid-2021.

National Skills Priority List for Apprenticeships

$1.7 million has been allocated to the development of a single National Skills Priority List for Apprenticeships, which will replace the current three skills shortage lists. The development of this list will be based on best practice skills shortage methodology. This will fall under the responsibility of the National Skills Commission, which is already working in the area of skills shortages as part of the JobTrainer package.

Additional Identified Skills Shortage (AISS) Payment

The highly successful AISS wage subsidy was expanded in the July 2020 Economic and Fiscal Update, with an additional $66.7 million in the budget for this measure. 

Apprenticeships Data Management System

The budget has assigned $91.6 million to build a new Apprenticeships Data Management System, for use by the Australian Apprenticeships Support Network and the administration of apprenticeships. This will replace the aging TYIMS package, and make administration of apprenticeships easier for organisations across the sector.

Advanced Apprenticeship-Style STEM Courses for Women

A new program, planned for commencement in 2021, aims to increase the number of women in STEM careers. 500 women will undertake apprenticeship-style Advanced Diploma courses and work in an industry-sponsored roles. While these apprenticeship-style places may not be formal Australian Apprenticeships, it is positive to see the model being adapted to meet specific needs of different cohorts and industries.

Measures to support job creation

Much of the focus of the 2020/21 budget was on job creation. Although many of these initiatives are not specifically related to Australian Apprenticeships, job creation across a range of different industries often leads to increases in apprentice and trainee positions. These are some of the key areas of job creation from the budget, including the JobMaker program.

JobMaker

There are a large number of different initiatives that sit under the umbrella of JobMaker, however these are all designed to assist with the post-COVID-19 economic recovery by creating jobs. In general, this means making it easier for businesses to undertake their core work, to find skilled workers or to upskill workers, and to increase productivity. The ultimate role of JobMaker is the create jobs, which means convincing employers to take on more staff.

Ease of Business for Agriculture Exporters

An aspect of the JobMaker package, the aim of improving the ease of business for agriculture exporters is to increase productivity. As part of this measure the government will modernise "the ICT systems and business processes that support the improved delivery of export regulatory services to agricultural exporters", as well as "improve the financial sustainability of export certification services". Each of these measures will assist agriculture businesses in their recovery from bushfires, drought and COVID-19. The agriculture sector is a large employer of Australian Apprentices, so we would expect these enhanced business practices to lead to further jobs in this industry.

Energy-related measures

Measures around energy affordability and reliability, and investment in new energy technologies, will have a direct effect on the skills needs in the energy industry. Many of the projects include infrastructure or building components, and support other sectors including construction and agriculture.

Shovel-ready Infrastructure Projects

This budget outlines a number of large infrastructure projects in each state and territory, including  a range of transport infrastructure spends that have been announced. This spend is a key part of the Government's JobMaker package.

Infrastructure projects often take on apprentices and trainees across a range of trade and non-trade areas, particularly in States where large projects have apprenticeship quotas.

“We will draw on local businesses to stimulate local economies through these projects,” the Deputy Prime Minister said.

Modern Manufacturing Strategy

This strategy aims to build competitiveness, scale and resilience in the Australian Manufacturing sector. The focus is on six priority areas: resources technology & critical minerals processing; food & beverages; medical products; recycling & clean energy; defence; and space.

The $1.5 billion assigned to the projects under this strategy will assist in jobs creation across the sector, with the aim to build a long-standing sector capable of supporting Australian jobs. Many roles in this industry can be undertaken as Australian Apprenticeships or through the VET sector, so job creation in this industry will flow on to creating new roles for apprentices and trainees.

Aged Care and Health Care Projects

Budget measures in the area of aging and aged care focus on enhancing existing systems, with few new projects announced. With the ongoing Royal Commission into Aged Care Quality and Safety, it is unlikely the government would make any changes until the final report is released.

One key area of spending is an additional $1.6 billion towards home care packages, which will provide an additional 23,000 packages over 4 years.

In acknowledgement that this and other packages will require additional skilled staff, the Boosting the Local Care Workforce program has been broadened and extended, as has the NDIS Jobs and Market Fund communications campaign. Australian Apprenticeships are a fantastic supported pathway into these industries, and should be considered as a means to fill entry-level roles.

Education-related budget measures

Literacy and Numeracy Programs

An expansion of the Skills for Education and Employment program will allow more Australians to be supported with their foundational language, literacy and numeracy skills. In addition to expanding the program, a scoping project will be undertaken to "inform development of a new national framework for foundational skills."

Additional funding for the Foundation Skills for Your Future program will enable further development of teaching resources, and delivery of teaching for online language, literacy, numeracy and digital skills. The pilot of this program in remote communities has been extended to 30 June 2023, an additional 12 months.

Boost for Skills Training with Fringe Benefits Tax Exemption

In the past, employers who put staff through training not related to their specific role needed to pay Fringe Benefits Tax (FBT). This meant that employers couldn't train up staff from one area of their business into new roles elsewhere without paying FBT.

The government has now removed FBT for retraining or upskilling, although there are some exemptions. This allows employers to reskills or upskills their current staff into new roles, or to assist those staff to move into new careers elsewhere.

Although this measure doesn't specifically relate to current apprentices or trainees, whose training does relate to their role, it means that staff with existing VET qualifications, including those achieved through an Australian Apprenticeship, can now gain further training without the concern of FBT.