“The previous government oversaw changes to apprenticeship policy and cuts in employer incentives that led to huge drops in the numbers of young people starting an apprenticeship.” - Australian Chamber of Commerce and Industry, media release, October 30.

The Australian Chamber of Commerce and Industry has blamed the former government for a fall in the number of young people starting an apprenticeship.

The decline has been labelled in The Australian as “the disappearing trainee” – a legacy of the Labor government linked to its decision to remove employer incentives.

So are Australian apprentices really disappearing?

Disappearing act

There are two types of Australian apprentices. There are those who are learning the skills listed on the National Skills Needs List – like plumbers, hairdressers and electricians – and those who aren’t.

The National Skills Needs List identifies the areas that are experiencing a national skills shortage.

In October 2012, the Labor government reduced the employer incentives for part-time apprentices in non-skills shortage areas. But in August 2013, Labor removed the financial incentives to non-skills shortage apprenticeships entirely.

This meant there were no longer incentives for apprenticeships in retail positions in food, clothing, information technology, horticulture, printing and for dental assistants.

The thinking was that these areas did not need incentives for formal apprenticeships because, by and large, on the job training would suffice.

Facts and figures

The last two years have seen a drop overall in the number of new apprenticeships. But there has been barely any drop in the traditional trade apprenticeships with skill shortages.

Using figures from the National Centre for Vocational Education and Research (NCVER), in the first nine months of 2012, there was a reduction in apprenticeships overall from 263,500 to 185,300 in the same period in 2013.

As the first chart below shows, the number of new apprentices dropped by 30% this year when combining the total trade and non-trade apprenticeship figures.

But the drop in “trade” apprentices was not nearly as severe. In fact, it was not severe at all when comparing 2012 to 2013.

New apprenticeships, trade and non-trade broken down by month for the year to date 2013 and for 2012. NCVER

The trade apprentice commencement figures show a decline of a mere 1,900 commencements in the first three quarters of 2013 (71,700), when compared with the first three quarters of 2012 (73,600).

In 2012, the total number of traditional trade apprentice commencements was 95,600. If the December quarter for this year sees another 23,900 traditional trade apprentice commencements, which is feasible, then there will be no downturn in traditional trades.

This graph also shows that the number of apprentices from non-traditional trades – the ones Labor’s changes targeted – were on the decline before the first policy shift in 2012. This tells us that the government’s actions are unlikely to be the sole reason behind the decline in these types of apprenticeships.

Youth and apprenticeships

The focus on young people being associated with apprenticeships is a recurring but inaccurate view. The majority of all apprentices (50.27%) were aged 25 years or older in 2012 according to NCVER data.

A little under half are classified as youth. The 2013 figures are not available but this trend is not unusual.

So young school leavers were not particularly affected by the overall downturn in apprenticeships, any more than those over 25 were.

The proportion of apprenticeship commencements by age group. NCVER/Author

Verdict

Under Labor’s watch, there has been a drop in apprentice commencements but only for non-trade apprenticeships. These were on the decline before the employer incentives were withdrawn by Labor, while traditional trade apprentice commencements have remained steady.

Review

This article is helpful and a fair examination of the evidence. The report of the Expert Panel into Apprenticeships for the 21st Century provides the research behind the policy shift discussed. - John Buchanan.