Media Release: 16th July

The Morrison government will boost investment in skills and training to the tune of $2bn if the states and territories sign up to an overhaul of the vocational education and training sector that would create a consistent funding model and improve transparency.

With new labour force data on Thursday expected to show another increase in Australia’s unemployment rate, the prime minister will unveil a “jobtrainer” proposal he flagged with the premiers and chief ministers at last Friday’s national cabinet meeting.

Thursday’s package includes $1.5bn in new funding to expand and extend an existing wage subsidy for apprentices and trainees. Currently, that measure is available to small businesses but coverage will extend to medium-sized businesses with 199 or fewer employees who had an apprentice in place on 1 July 2020.

The “jobtrainer” component would see Canberra contribute $500m, with matching contributions from the states, for free or low-cost training programs to be delivered by public, private and not-for-profit providers to enable reskilling.

The 340,700 training places, available from September, will be geared to offer new qualifications for people who have lost their jobs in the downturn associated with the pandemic, and school leavers who will struggle to gain a foothold in a heavily disrupted labour market.

The move to boost training and reskilling comes ahead of an economic update the government will deliver next week, and its response to a review of the income supports put in place during the Covid-19 crisis.

With workers and businesses anxious about the government’s plans, Morrison and the treasurer, Josh Frydenberg, have been signalling support will stay with some adjustments.

With that statement due in a week, the Labor leader, Anthony Albanese, declared the government needed to avoid a hard snap back in September. Albanese said any overhaul of the jobkeeper wage subsidy should involve retesting businesses, better targeting of the payments, and tapering the subsidies over a longer period.

The Labor leader said the government needed to avoid a situation where “all they’ve done is shift the worst of the problem from April to October” after spending hundreds of billions on income support to cushion the economic blow of the pandemic.

The opposition leader said the economic update was overdue. “People have a right to know how bad the government expects this recession to get, how much debt has piled up, and how long it will take for unemployment to come back down again.”

In a statement issued ahead of the training announcement, Morrison said the investment was needed to “ensure more Australians have the chance to reskill or upskill to fill the jobs on the other side of this crisis”.

“Covid-19 is unprecedented but I want Australians to be ready for the sorts of jobs that will come as we build back and recover, and the jobs and skills we’ll need as we come out of the crisis are not likely to be the same as those that were lost,” the prime minister said.

The wage subsidy for apprentices and trainees covers 50% of wages, up to $7,000 per quarter, if apprentices were employed as of 1 July 2020. The program will be extended by six months to cover wages paid up to March 2021.

Persistence with subsidies comes despite the Productivity Commission in June urging the commonwealth to rethink apprenticeship subsidies and “barriers” to hiring such as minimum wages because there was “little evidence” payments to employers boosted enrolments.

The government says the short training courses through “jobtrainer” will target areas of need that will be identified by the National Skills Commission in consultation with the states. Areas likely to be covered include healthcare, transport, postal and warehousing, manufacturing, retail and wholesale trade.

Morrison has flagged the program with the premiers and chief ministers and says the response from leaders has been positive. The overhaul will involve governments signing up to a new heads of agreement that will specify reforms to the VET system, including an efficient price for skills training.

In May, Morrison blasted the current arrangements as “a funding system marred by inconsistencies and incoherence, with little accountability back to any results”. He said dysfunction in the system was prompting students “default to the university system, even if their career could be best enhanced through vocational education”.

Morrison said the current arrangements required Canberra give the states and territories $1.5bn a year in untied funding, “with no end date and no questions asked” and “no line of sight on how states use this funding”.

The Guardian

16 July 2020