Big Money: Small businesses need more incentives for apprenticeships, not less

On Monday, I wrote about the government cutback that no one noticed.

Unlike the deferral of the cap on self-education tax deductions for working professionals, the axing of incentive payments to employers who have trainees finish their apprenticeships under their guidance has aroused little outcry.

That’s a pity, because Australia’s vocational training system is already in crisis.

One in two apprenticeships drop out before they finish – a figure that hasn’t budged in 20 years.

Another thing that hasn’t budged is the total number of apprentices in the system, even as Australia’s population and economy increased during the mining boom.

There are, broadly speaking, two main reasons why the system isn’t doing as well as it should.

Firstly, it’s just too bewildering to employers. Secondly, it pays too little to apprentices and trainees, who earn only slightly more than they would if they went on Newstart.

Industry bodies like the Ai Group are begging for action on the first problem. Unions are working on the second. But so far, neither of them are having much luck. And the fact that the government can so casually cut an incentive payment designed to get employers to help trainees stick it out doesn’t bode well for how well the message is cutting through.

In today’s highly specialised economy, there are fewer and fewer job opportunities for those without some form of higher education. Meanwhile, Australia’s economy is crying out for technically skilled workers.

This means we should be getting as many of our young people into trades as possible.

Cutting incentive payments to the sector doesn’t help.