Budget Review 2022–23 Index
Dr Hazel Ferguson
The Government continues its focus
on apprentice support in the 2022–23 Budget, with $1.3 billion over 5 years
from 2021–22 provided to extend wage
subsidies, provide additional in-training
support, and introduce a new Australian
Apprenticeships Incentive System (AAIS) in place
of current arrangements from 1 July 2022 (Budget measures:
budget paper no. 2: 2022–23, pp. 76–77).
A central element of the
Government’s response to the COVID-19 pandemic in skills training was the
introduction of two apprentice wage subsidies:
Trends in apprenticeship numbers (Figure 1), suggest the
wage subsidies have contributed to a substantial turnaround in the number of
apprentices in training. The latest
data from the National Centre for Vocational Education Research, for September 2021, shows 352,020 apprentices and trainees
in-training—an increase of 33.2% from September 2020. However, this data also
shows early signs that increased uptake may be resulting in increasing
cancellations and withdrawals, with these reaching 25,205 in September 2021, up
by 51.9% compared with 2020.
Figure 1 Apprentices in training, trade and non-trade
occupations, September quarter, 2002–2021
Centre for Vocational Education Research, VOCSTATS, extracted 30 March 2022.
New BAC enrolments were scheduled
to cease at the end of March 2022. On
27 March, the Government announced that the
program would be extended to the end of the 2021–22 financial year. Budget paper no.
2 (p. 77) provides $365.3 million for
this purpose, and for support beyond the year of commencement through Completing
Apprenticeship Commencements (CAC).
to the Department
of Education, Skills and Employment (DESE), if an apprentice is engaged before 30 June 2022,
the employer will be able to access:
a 50% wage subsidy, up to $7,000 per quarter, for 12 months through BAC
a 10% wage subsidy, up to a maximum of $1,500 per quarter, for the second year
of the apprenticeship, through CAC
wage subsidy, up to $750 per quarter, for the third year of the apprenticeship,
also through CAC.
Australian Apprenticeships Incentive System
Wage subsidies were introduced to a system of existing
apprenticeship incentives provided through the Australian
Apprenticeships Incentives Program (AAIP), which has been in
place since 2006. The AAIP provides a range of incentive payments to
support training in Priority Occupations (Aged Care, Child Care, Disability
Care Workers and Enrolled Nurses) and occupations on the National
Skills Needs List. A variety of different payments are provided through the
AAIP, including employer payments for commencement, retention, recommencement,
In 2019, the Strengthening skills
expert review of Australia’s vocational education and training system
(the Joyce Review, p. 78) observed that the AAIP has been ‘subject to multiple
changes to the eligibility criteria and the incentives amounts, particularly
for existing workers in 2012 and 2013’ (the marked effect of these changes is
evident in Figure 1, especially in relation to non-trade occupations). The
Joyce Review found that the complexity of the AAIP can act as a barrier for
apprentices and employers and recommended revamping and simplifying
apprenticeship incentives to increase their attractiveness to employers and
Government’s response, delivered in the 2019–20 Budget, provided funding
for this purpose.
However, with the onset of the COVID-19
pandemic, the July 2020 Economic
and fiscal update (July Update, pp. 119–120)
announced that the introduction of new incentive arrangements would be delayed,
and planned changes have still not been implemented.
This Budget announces that from 1
July 2022, a new Australian
Apprenticeships Incentive System (AAIS) will commence in place of the wage
subsidies and the AAIP, replacing changes to apprentice incentives previously
announced in response to the Joyce Review. In place of the National Skills
Needs List and Priority Occupations, the AAIP will be based on a new Australian
Apprenticeships Priority List (the Priority List) which includes Technician
and Trade Workers and Community and Personal Service Workers occupations assessed
by the National Skills Commission
as being in national skills shortage.
According to the Australian
Government’s Australian Apprenticeships website, introduction of the AAIS
will take place in two phases:
1, which will run from 1 July 2022 to 30 June 2024, will provide support via:
incentives of $3,500 for employers of apprentices in non-priority occupations
subsidies of 10% for first and second year apprentices (up to $1,500 per
quarter) and 5% for third year apprentices (up to $750 per quarter) for employers
of apprentices in occupations on the Priority List (with additional subsidies
available for employers in rural and remote areas)
- a direct
payment of up to $5,000 over 2 years for apprentices in occupations on the
2, which will run from 1 July 2024, will provide support for occupations on the
Priority List only, in the form of:
hiring incentive of up to $4,000 for employers
new Australian Apprentices Training Support Payment of up to $3,000 for
administered through Australian
Apprenticeship Support Network providers.
In order to align
eligibility for the Trade
Support Loans (to be renamed Australian Apprenticeship Support Loans) with
the new arrangements, the Trade Support Loans
Act 2014 will need to be amended to ensure all apprentices in
occupations on the Priority List are eligible (Australian
Apprenticeships Incentive Reform fact sheet and Education,
skills and employment portfolio budget statements (PBS) 2022–23, p. 13).
Additional support for apprentices
A small amount of funding is also committed
in the Budget to provide additional support for apprentices during their
- As part of the major package of changes to incentives, $2.8 million is
provided for an additional 2,500 in-training support places in 2022–23 for 15
part of the Women’s
budget statement (p. 44) $38.6 million over 4 years from 2022–23 is provided
for additional support for women who commence an apprenticeship in a trade
occupation on the Priority List. Gateway support services and in-training
support places will be guaranteed for these women in non-traditional trades.
Stakeholder response and concluding
This Budget grapples with the dual challenges of maintaining
recent momentum in apprenticeship uptake, while providing sufficient support to
ensure those who enter the system can complete their training.
Apprentice Employment Network has welcomed the extension of the BAC wage
subsidy, and supplementation of this incentive with the CAC program in the
second and third year of an eligible apprenticeship, stating this ‘will help
address possible drop-outs after the first 12 months’.
However, the Australian
Chamber of Commerce and Industry has pointed to possible challenges
transitioning to the AAIS, as the less-generous wage subsidies make taking on
an apprentice less cost effective for employers than in recent years.
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