VET & TAFE
Yet to master apprenticeship funding
The government has scrapped tool payments in favour of loans; one industry insider struggles to see the difference. John Mitchell
The media has not given much attention to the changes announced in the budget about apprenticeships, yet apprentices who complete their programs are, like university graduates, crucial to the future health of the nation. A question that may not be answered for some time is whether the novel policy announced in the Budget of supplying $ 20,000 loans for apprentices will help arrest their ongoing and alarming drop-out rate. The department of industry recently revealed that the number of apprentices and trainees in Australia fell by 13 per cent, to 392,200, last year. Whilst commencements for traditional apprenticeships such as carpentry and plumbing rose by 2.3 per cent, traineeships in other areas, such as bricklaying, child care and aged care, fell by 37 per cent. Overall, commencements fell by 26 per cent and 119,000 apprentices dropped out of their training programs.
The recent Budget papers revealed that the government expects to achieve savings of $ 914.6 million over four years by ceasing Tools For Your Trade payments from July 1. Financial assistance to help apprentices will instead be provided through the Trade Support Loans Programme.
The Tools for Your Trade payments consisted of five tax-exempt cash outlays to help apprentices with the costs of their training, tools, and other expenses associated with their programs. The amounts totalled $ 5500 over the life of the apprenticeship, and were issued as follows: $ 800 after three months; $ 1000 after 12 months; $ 1000 after 24 months; $ 1200 after 36 months; and $ 1500 upon successful completion of the apprenticeship.
In the Budget, the government announced it would replace this scheme with the Trade Support Loans Programme, establishing it with $ 439 million over five years, from 2013 – 14. The new scheme will provide those $ 20,000 loans, over a four-year apprenticeship. Trade Support Loans will be provided at concessional interest rates and capped at $ 8000 in the first year of an apprenticeship, $ 6000 in the second, $ 4000 in the third and $ 2000 in the fourth. The loans will be available to apprentices undertaking a certificate III or IV qualification that leads to an occupation on the National Skills Needs List.
Apprentices will be required to commence repaying the loans when their income exceeds a minimum repayment threshold($ 53,345 in 2014 – 15) consistent with arrangements applying to university students under HELP. Apprentices who successfully complete their training will receive a 20 per cent discount on the amount to be repaid.
MONEY NO DETERMINANT In an interview about the pros and cons of
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