NSW Education Minister Adrian Piccoli. Picture: Ella
Pellegrini.Source: The Sunday Telegraph
APPRENTICES and trainees who drop out could cost Australia almost $12 billion over the
next decade, with small and regional businesses copping most of the pain, according to new
NSW modelling.
NSW Education Minister Adrian Piccoli will ask his state, territory and Commonwealth counterparts
to make apprenticeship completion a national priority at tomorrow’s training ministers’ meeting in
Melbourne.
He released new figures showing the cumulative impact of non-completion in NSW, which trains
about 30 per cent of Australia’s apprentices and trainees, would be $3.5 billion over the next decade.
Employers would incur the bulk of the costs through productivity loss, administration expenses and
other expenditure, while state and federal governments would also lose hundreds of millions of
dollars in subsidies and incentive payments.
NSW-commissioned modelling by Deloitte Access Economics has estimated the combined losses in
the state last year at over $180 million. Employers lost $124 million, the state government $33
million and the Commonwealth $26 million in payments to NSW apprentices and employers.
Mr Piccoli said the estimates were conservative because they were based on a non-completion rate
of 36 per cent.
The National Centre for Vocational Education Research has estimated the non-completion rate for
trade apprentices as 44 per cent, after allowing for people who change employers during the course
of their training.
Mr Piccoli said small and medium businesses and rural areas suffered disproportionately, partly
because they had higher drop-out rates and partly because they had more apprentices in the first
place.
He said over 80 per cent of NSW apprentices worked in enterprises with 50 employees or less.
Over 90 per cent of employers had less than four apprentices – almost two-thirds employing just one
apprentice – and 44 per cent of businesses with apprentices were outside major cities, even though
regional NSW has just 34 per cent of the state’s population.
“These employers are doing more than their fair share of apprenticeship training and bearing a
disproportionate share of the costs of non-completion,” Mr Piccoli said.
“If no action is taken over the next decade the cost to NSW employers is likely to exceed $1.2 billion.
The NSW Government would incur costs in the order of $425 million and the Commonwealth over
$260 million.”
Mr Piccoli said affordable, accessible and tailored options were needed to support apprentices “and
their overwhelmingly small and medium business employers”.
“These businesses generally don’t have a specialised human resource department or the extensive
resources larger companies have. Attention should not only be focused on changes at the national
level – we must also think locally.”
Group Training Australia CEO Jim Barron said non-completion was the “hot-button” VET policy issue
across the political spectrum.
He said there were substantial knock-on effects on top of the immediate costs to employers and
governments. “If a young person drops out of an apprenticeship they’re less likely to re-engage, [as
is] a small business person [who] has an unhappy experience with an apprentice.”
Mr Barron said governments that funded activities to address the problem – mentoring, pastoral care
and information provision, for example – would recoup the investment in improved tax receipts.
He said large-scale recruitment of apprentices without retention strategies was a false economy.
“We have record sign-ups but we don’t have record completions.”
Earlier this year Tertiary Education Minister Chris Evans said apprenticeship completion rates were
appalling. This year’s federal budget included $80 million over four years for apprenticeship
mentoring services, and $22 million over two years to advise school leavers about apprenticeships.
“Clearly that’s a down payment in restructuring apprenticeship services that commence more,
progress more and ultimately complete more,” Mr Barron said.