Labor announces quota for apprentices on government projects

Labor has announced it would set a target that one in 10 workers on the biggest government projects should be apprentices.

The Australian Chamber of Commerce and Industry (ACCI) welcomed elements of the package but said lowering costs of hiring, not setting quotas, was the best way to encourage businesses to offer new apprenticeships.

In Adelaide on Tuesday, Bill Shorten announced that one in 10 jobs on the top 10 priority projects funded by its $10bn infrastructure bank would be apprentices.

Labor calculates this would create 2,600 apprenticeships. This is based on Infrastructure Partnerships Australia’s estimates that the infrastructure bank would create 26,000 direct jobs.

Labor has also promised it would develop procurement rules for apprentices on infrastructure, construction and defence projects with capital expenditure over $10m to create “tens of thousands more apprenticeships”.

Other elements of the package include an apprenticeship portal to allow jobseekers to search for training and job opportunities and an apprenticeship advocate to improve the quality of training, the portability of skills, and rates of retention and completion for apprenticeships.

ACCI chief executive, James Pearson, said the Labor policy was “heartening” because Australia must arrest the decline in apprenticeships and traineeships.

Pearson said both Labor and the Coalition at federal and state level were responsible for policies which had seen apprenticeship numbers drop from 516,000 to 295,000 in just four years.

“Several initiatives in Labor’s announcement are worth considering, including better connecting job seekers to apprenticeship opportunities. But these will have only limited impact because the decline is largely the result of poor policy decisions and cost increases,” he said.

“Apprenticeship numbers in the construction industry today are near record highs, but other industry sectors have hit rock bottom.

“The best solution is for government to work with all industry sectors to build the business case for employing apprentices, rather than setting quotas and increasing red tape in a sector that is already doing fairly well in offering apprenticeships.”

Labor’s policy cites Parliamentary Budget Office costings that establishing the portal and advocate will cost $4m over four years. It said the centrepiece of the policy, apprentices on federally-funded projects, would be costless.

But at the launch of the policy, Shorten and his vocational education spokesman were asked whether the apprenticeships would cost $10m because the government offers a $4,000 incentive payment for each apprentice hired.

Bird replied: “The apprenticeship support system has always had in place an incentive payment to employers. It has never been a capped payment. It has always been based on the take-up of apprenticeships.”

“There is no intention to change the employer incentive payment.”

Shorten said: “In the last three years under the Liberal party, Australia has lost 120,000 apprenticeships.”

“We are committed to real jobs and real skills and that is why we are going to back real apprenticeships.”

Scott Ryan, the minister for vocational education and skills, said: “Labor gutted Australian apprenticeships, cutting employer incentive payments nine times between 2011 and 2013, a total of $1.2bn. In contrast, the Coalition has not cut a single incentive payment to employers of apprentices.”

He said Labor’s new policy was “yet another Labor attack on Australian business, forcing employers to clean up the mess ... created [by] their $1.2bn cuts and offering business no further support to do so”.

Ryan said the Coalition was encouraging apprenticeships through the $4,000 incentive payments to employers, trade support loans for apprentices’ living expenses and the $900m apprenticeship support network to match people to apprenticeships and improve completion rates.\

Ged Kearney, the Australian Council of Trade Unions president, said the policy showed “a real commitment from Labor to introduce thousands of full time apprenticeship positions on government and large infrastructure projects”.

Kearney said the plan was far superior to the Turnbull government’s PaTH internship plan which “offers nothing more than cheap labour to business and no ongoing job prospects for young Australians”.

“Apprenticeships have long been an integral pathway to careers in Australia and this is why the ACTU has been campaigning for the government to put back the billion dollars it cut from apprenticeships, and the $250m it has cut from the industry skills fund.”

Master Builders Australia chief executive, Wilhelm Harnisch said: “Labor’s plan for apprenticeship quotas may assist but should not be a substitute to tackling the more fundamental policy challenges in the apprenticeship system.”

According to Harnisch the more fundamental challenges in the apprenticeship system are: making apprenticeships an attractive career option, redressing the current 50% drop-out rate for apprentices and making the curriculum relevant to needs of the industry.