VET & TAFE
the tools payments, a leading VET industry insider who has extensive involvement with apprentices observed that, as an incentive, the payments were an“ imperfect sort of mechanism” and the jury was still out on“ how much impact they had on encouraging additional numbers to begin and on boosting retention rates. I think the impact of it is still up for debate.”
However, he acknowledged that some, if not many, apprentices liked the tools funding.“ Clearly it was very well received by a proportion of apprentices and they probably did use it to supplement their wage and to buy tools,” the insider said.“ But in other respects, I’ m sure it was purely a wage subsidy, so I think it was not a surprise when it was announced in the Budget that it was going to go.”
The interviewee was not disappointed to see the cessation of the trade tools fund and looked forward to the establishment of a comprehensive framework for attracting and retaining apprentices.
“ Like a lot of people in the VET sector, I’ m looking for a comprehensive set of cohesive policy settings that are going to encourage the right candidates to take up an apprenticeship, to progress it and to complete it. I think if we focus on one particular aspect of the apprentice pathway [ like trade tool subsidies ] then we lose track of that.”
He says the new loan scheme probably isn’ t the comprehensive answer either:“ It’ ll suit some people but it won’ t work for others. For those who are either considering joining the apprenticeship system or who are in it already, they’ ll have to sit down and weigh up whether they are in a position to repay the dollars or whether they’ re just going to say‘ Well OK, it’ s something that I don’ t want to do’.
“ I think it’ s very hard to say with any certainty that loans or incentives in and of themselves are going to fundamentally affect the decision-making of potential apprentices or existing apprentices. I’ ve never seen any evidence of money itself being the determining factor in either starting an apprenticeship or finishing one.”
WHY SUBSIDISE APPRENTICE WAGES? The next question for the insider was whether the government was just experimenting by ending the trade tools funding and suddenly introducing loans. In response, he said he was comfortable with the abolition of the tools funding because it was a large expense and had not lowered the non-completion rate, nationally.
“ It is their right [ to change policies ] and clearly they believe from their perspective that the $ 1 billion [ annual ] expenditure on apprentices’ tools wasn’ t contributing to the overall stock of good clients starting, progressing or finishing, so they probably thought,‘ Well, is it the best way of using taxpayers’ funds?’ I think the evidence [ for their policy change, and justifying the cessation of trade tools funding ] is the completion rate over the last 15 years. They are now looking at something like 45 per cent [ non-completion ] in total.”
He reiterated that if governments had been using the trade tools funding to top up an apprentice’ s income, then the ongoing low completion rate suggested the tools subsidy was yet another program that wasn’ t working. He also believed that the“ substantial” increase in wages for apprentices in their first few years, starting in January this year, as approved by the Fair Work Commission, made other wage subsidies less justifiable.
“ Over many years, both sides of politics kept on adding to the incentive tree [ around apprenticeships ] and it got to the point where it was an extraordinary amount of money. Yes, I’ m sure the trade tools fund helped to supplement low wages of apprentices, but if incentives are all about complementing low wages, if those low wages are now being dealt with courtesy of the Fair Work Commission, why are we continuing to pay incentives? I suspect this government is saying that the need for the incentives is no longer there because Fair Work Commission has catered for this.”
TRUSTING THE GOVERNMENT He accepted that the increase in apprentice wages had shifted a burden onto employers, but he was prepared to give the government another 12 months to implement a full set of policies.
“ My gut feeling is that if you look back from July 1 next year, 2015, all sorts of funding regimes will have coalesced and we’ ll know a lot more than we do now as to what this minister and department have planned, not only for the funding of employers taking apprentices but for the actual provision of services to both employers and apprentices and trainees. What we saw in the Budget was probably only the first of many steps to be announced.”
The insider rejected the view that the announcement of a loan scheme for apprentices was a piecemeal gesture and an example of policymaking not well thought through. Instead, he believed that minister Ian Macfarlane and the department of industry needed to be trusted:“ We need to give them every chance to come up with something comprehensive. It’ s easy to criticise, but I just think it’ s too early to criticise because I believe there’ s still a lot more [ policy ] to come.
“ I think it’ s up to all of us in this game to ensure that the issues around apprenticeships are given as much airing as possible. It’ s not good to just lay down policies defined by dollars; the policies have to be coherent and they’ ve got to be fought for and they’ ve got to last; they’ ve got to have a shelf life longer than 12 months.”
If the instinct of the industry insider is correct, and in 12 months the government has implemented a coherent set of policies to ensure higher rates of attraction and retention of apprentices, it will be in contrast with the many failed and abandoned policies of the previous decade or two.
If his hopes are realised, the new loans to apprentices will be uncontroversial, apprentice commencement and completion rates will be higher and employers will be employing more apprentices. Time will tell whether his instincts were correct, his hopes realistic and his trust in government well placed. ■
Dr John Mitchell is a VET researcher and analyst. See jma. com. au
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