Apprenticeship numbers fall by 28%: What governments need to do to support SMEs

The number of registered apprenticeships across the country fell by 28% between December 2013 and December 2015, according to statistics published this week.

Data from a Freedom of Information request by Fairfax has shown a drastic drop in apprenticeship and traineeship numbers, with the largest drops occurring in western Sydney and Melbourne.

In the same time period, the number of registered apprenticeships dropped by more than 15,000 in western Sydney and western Melbourne, regions that are home to key marginal electorates that both major political parties will be hoping to hold on to at the election this weekend.

A drop of 47% has occurred in the seat of Parramatta, in New South Wales, and a similar drop of 37% was seen in Chisholm, in Victoria, where the number of registered apprenticeships fell from 2,314 to 1,436.

Records from the National Centre for Vocational Education Research showed a 28% national decline in the number of registered apprenticeships, from 383,562 to 278,583.

The decline has be attributed to various changes and removal of policies by both sides of politics over recent years, which have made it harder for small businesses to employ new apprentices.

The Coalition government claims the decline is due to repeated cuts of employer incentive payments during the Gillard and Rudd Labor governments.

However, Labor claims the drop is due to the Coalition’s abolition of program that supported those wanting to learn a trade, including the ‘Tools for Your Trade’ (TYFT) program in 2014.

The program gave apprentices a $5500 payment, which was designed to help them purchase of expensive tools and equipment.

This was replaced by a $20,000 loan scheme, which only 40,000 apprentices have signed up for since its inception, according to Fairfax.

“Blanket measures” not working

Jenny Lambert, director of employment, education and training at the Australian Chamber of Commerce and Industry, told SmartCompany it’s a “bit of a stretch” for Labor to claim the decline in apprenticeship numbers is soley the Coalition’s problem.

“This decline is something we’ve been concerned about since the first incentive changes in 2011,” Lambert says.

“We tried to warn the government but were mostly ignored.

“The real concern now is how to re-target incentives to get employers to reconsider putting on apprentices.”

Australian Small Business and Family Enterprise Ombudsman Kate Carnell says the drop-off in apprenticeship and traineeship numbers isn’t “quite as black and white as it looks”.

“Some apprenticeships numbers haven’t dropped that much, but a lot of them have due to the reduction in support for employers from state and federal governments,” Carnell told SmartCompany.

“The downturn started when the pay rates for first and second year apprentices went up, it started to get too expensive.”

Carnell says businesses became less likely to employ first year apprentices, especially as they can be of limited value to a business while they are learning.

Carnell has been consulting with small businesses to canvass ideas for the sector and further determine what is needed from governments.

Through this consultation, she has found “profit is a bit flat” for many SMEs, and many employers are struggling to find apprentices with appropriate skill sets.

Many employers are finding new apprentices are lacking in numeracy and literacy skills, says Carnell.

“I was talking with electricians who kept telling me that things have changed a lot for electricians, its all about computers now,” Carnell says.

“Apprentices need to be able to work and understand things like environmental computers in buildings, it’s become a different trade.

“If apprentices are lacking in literacy and numeracy skills then it’s a real concern.”

Lambert believes the government needs to stop looking at “blanket measures” and focus on industry specific strategies to bolster apprenticeship numbers.

“Most of the incentive changes have been made across the board, which isn’t the right move for some industries,” Lambert says.

“In non-trade areas, there needs to be a focus on high employment volume traineeships, like hospitality and retail.”

“Targeting these industries would be a good investment.

Lambert also stresses the state and federal governments need to work together on this issue.

“The state government provides the training funding for these programs, so they both need to have a look at what needs to be done to increase employment,” she says.