The Federal Government has more than tripled the bonus paid to employers for taking on new apprentices, in a bid to head off a looming skills shortage as the economy recovers.

 

Deputy Prime Minister and IR Minister Julia Gillard said the commencement bonus has been boosted from $1500 to $2350, and there would be a further payment of $2500 at nine months into the apprenticeship.

 

The bonus will be available for apprentices who are hired between 1 December 2009 and 28 February 2010 or until 21,000 apprentices have commenced in traditional trades hardest hit by skills shortages identified on the National Skills Needs List.

 

This includes trades like butchers, bakers, bricklayers, carpenters, electricians, hairdressers and pastry cooks.

 

 

Gillard said the new program comes as a result of the final Keep Australia Working Report released last week, which showed people starting trade apprenticeships had dropped by more than 20% during the economic downturn compared to the same time last year.

 

The Minister for Employment Participation Mark Arbib said that in the past year traditional trades apprentice starts had dropped by about 10,000.

 

‘We know that in the 1990s, apprentice commencements took a decade to bounce back to pre-recession levels,’ Senator Arbib said.

 

‘That created a skills shortage that held Australia back and we don’t want history to repeat itself.'

 

 

‘This bonus will fast-forward hiring decisions to bring apprentice numbers up to levels before the global recession. We need to prepare now for when the Australian economy recovers.’

 

The move has been welcomed by employer organisations and the ACTU.

 

Australian Constructers Association president Wal King said that in the past the construction industry has too often let its investment in training decline during downturns.

 

‘That invariably results in skills shortages that cost the economy dearly as we struggle to achieve equilibrium in the labour market during the years of recovery,’ he said.

 

 

ACTU president Sharan Burrow said the unemployment rate among 15 to 19-year-olds of 16.4% is almost three times the workforce as a whole, and there were 135,500 people in the age group looking for work in September.

 

‘High rates of youth unemployment are a problem at the best of times, but particularly in an economic downturn,’ she said.

 

‘Trade apprentice starts have dipped by 20% over the past year as a result of the downturn, and we also know that there has been a decline in the completion rate because of job cuts.’

 

‘We welcome the fact that the Rudd Government is proactively seeking to increase career opportunities for young people with this new funding.’

 

‘The funding is timed to begin at the end of the school year, when the pool of available workers swells with young people.’