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$1,000 TAX FREE BOOST TO TAKE HOME PAY OF APPRENTICES

The Australian Government will give all first and second year apprentices under thirty a tax free, $1,000 wage "top up", and up to $500 each year without an age restriction towards their TAFE or other training fees, to boost apprenticeship wages in trades facing a skills shortage.

In announcing a package of measures totalling $668.1 million, the Federal Minister for Vocational and Further Education, the Hon Andrew Robb AO MP said, "the first and second year of apprenticeships can be particularly tough for those entering the workforce for the first time."

"Increasing the take home pay of apprentices will mean young men and women will be better placed to pursue a career in the trades."

These two measures, which commence on 1 July 2007, are part of five major initiatives to further tackle Australia’s skills shortage, and will increase the Government’s commitment to skills training to $2.9 billion a year.

The five new measures include:

"These five new measures will attract new apprentices with higher wages and shorter apprenticeships, increase the status and availability of quality technical training in years 11 and 12 and assist the top trades people to undertake higher level technical studies," Mr Robb added.

These measures will complement existing incentives, including:

Combined with the $1.2 billion contribution to States and Territories for vocational education and training funding, and the existing twenty five Australian Technical Colleges valued at $468.2m, these measures provide a comprehensive Australian Government plan to meet Australia’s skills needs.

MIGRATION OCCUPATIONS IN DEMAND LIST

The Migration Occupations in Demand List lists those occupations and specialisations identified by the Department of Employment and Workplace Relations as being in areas of national shortage. It includes trades deemed as facing a skills shortage. The following is the current list (as at 20 September 2006), and is published on the Department of Immigration and Citizenship’s website. The Migration Occupations in Demand List is updated biannually.

Supporting Information

Why is this important?

• Attracting young people into technical and trade training is a critical to ensure that Australia has the skilled workforce to meet our future needs.
• The first and second year of apprenticeships can be particularly difficult. The Award wages for apprentices vary between different Awards but on average a first year apprentice receives about $15,000 and a second year apprentice about $19,500. With full employment and high wages available in other jobs, trade and technical training is not as attractive to young people even though the rewards available for skilled tradespeople in the long term are substantial.
• The Wage Top-Up Payment and the Apprenticeship Training Voucher are a real commitment by the Government to supporting young people when they need it most.

Who will benefit?

• Apprentices who are under 30 years of age at the time they commence their apprenticeship will be eligible for the wage top-up. Other existing measures support apprentices over 30, known as mid career apprentices.
• The Apprenticeship Training Vouchers will be available to apprentices of all ages.
• The apprentices must also be doing their apprenticeship in trade skills shortage areas. A list of those trades is attached to this media release.

What funding is the Government committing to the initiative?

• The Government will be committing $549 million over four years to the Apprenticeship Wage Top-Up measures and the Apprenticeship Training Vouchers.
• The total amount committed over four years to all the five new measures is $638 million. This amount together with the $21.4 million help for Indigenous adults in regional and remote communities and $8.7 million in new funding for National Disability Coordination Officers brings the total of all measures to $668.1 million over four years.

What have we done in the past?

• The Government has a range of initiatives to attract and support apprentices. These include:
  • Tools for your Trade, which provides a tool kit worth up to $800 to apprentices in skills needs trades at Certificate Level III or IV; and
  • The Commonwealth Trade Learning Scholarship which provides two payments of $500 (tax exempt) to eligible apprentices in a small or medium size businesses.
• The Government also provides a range of incentives to employers to help them with the costs of training their apprentices.
• A list of the measures is contained in the Media Release.

When will the initiative conclude?

• Australian Technical Colleges have been budgeted for five years from 2007-08 through to 2011-12. Help for Indigenous Adults in Regional and Remote Communities has been budgeted for four years from 2007-08 through 2010 -11. All other initiatives are ongoing measures.