Vocational training leaders fear new subsidy at risk of being rorted

Vocational education and training leaders are concerned that a new scheme to support 100,000 trainees and apprentices risks being rorted by some employers and training organisations that use traineeships to subsidise existing employees.

The Boosting Apprenticeships Commencements scheme announced in the federal budget will provide a wage subsidy worth 50 per cent of salaries for new apprentices and is worth at least $1 billion.

There are fears that vocational traineeships and apprenticeships will be open to rorting.
There are fears that vocational traineeships and apprenticeships will be open to rorting.Credit:Paul Bradbury

Dianne Dayhew, chief executive officer of the National Apprentice Employment Network said it broadly welcomed the wage subsidy scheme, “particularly for new entry-level workers, school leavers and those who may be in unstable, low-skilled work and have the opportunity to upskill”.

“However, we are concerned that there could be some unscrupulous employers who may exploit the scheme by pushing existing workers into quick, poor quality training to attract the subsidy,” she said.


“This means the 100,000 available places in the program could be quickly swamped by existing workers who are not being given genuine apprenticeship or traineeship opportunities.

“It also means young people seeking employment through traineeships or apprenticeships will miss out, and the main intent of the scheme to employ new trainees and apprentices could be overtaken by those who are already in a job.”

The Australian Industry Group’s head of workforce development Megan Lilly said it was “incredibly important that wage subsidies are directed towards new entrants, especially young people if they are genuine apprenticeships and traineeships”.

TAFE Directors Australia chief executive officer Craig Robertson said he expected the 100,000 new places “to be taken up in quick time”.

He said employers would be attracted to the wage support and formal training the scheme provided and might use the financial incentives to upskill existing workers. He said traineeships were laudable but the quality of training needed to be monitored.

“The question is whether the scheme will grow unchecked,” he said. “The only proviso on this universal scheme is that the training contract is formally approved by the state training authority.

“States and territories generally accept contracts of training if regulatory conditions are met, so they are unlikely to moderate growth in any way.”

The wage subsidy scheme will provide up to 100,000 places from October 5 until September 30 next year. Employers will receive up to $7000 a quarter or $28,000 a year.

Mr Robertson said apprenticeships were more structured and less susceptible to manipulation than traineeships.

“Traineeships are less rigorous as they have less training content because they are for services and they run for between 12 to 18 months,” he said. “There is also anecdotal feedback that many trainees do not realise they are formally enrolled in training.”

Trainees were also paid a discounted wage on the basis that they were not fully skilled for the job.

A spokesman for the federal Minister of Employment and Skills Michaelia Cash said employers would not be able to claim the subsidy for their existing apprentices.

“The subsidy is granted once employers have signed up a new trainee or apprentice that will undertake accredited training approved by the relevant state or territory authority,” he said.

“Anyone found to be trying to game the system will not be eligible for any support.

“This program will be supported by ongoing compliance activity to ensure the support is going to genuinely new apprentices.”

Labor’s education spokeswoman Tanya Plibersek said she was not confident the scheme would not be “rorted”.

Peter Hurley, an education policy fellow at Victoria University’s Mitchell Institute said it was less likely that higher skilled apprenticeships would be rorted than lower skill traineeships. He said it was not clear whether the new incentives would lead to unintended consequences.

“However, problems with incentives have definitely occurred in the past, particularly with existing workers and in qualifications in retail and hospitality,” he said.

“Monitoring the uptake of the incentives and possibly introducing caps in certain areas if required, such as traineeships in retail and hospitality, might help minimise the risk of the program being abused.”

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Source: Thanks smh.com