The federal Government has launched JobTrainer, a new initiative intended to help ease the increasing unemployment rate in Australia. It is aimed at improving the skills of the young workforce who unexpectedly found themselves unemployed.

The JobTrainer package has two parts.

The first part, worth A$1.5 billion, is aimed at keeping those already in apprenticeships and traineeships employed.

The second part is aimed at school leavers and those looking for work. It provides A$500 million for vocational education and training courses. That funding is conditional on matching funds from state and territory governments.

What is JobTrainer?

It is a Federal Government pledge of 2 billion dollars offering free or low-cost short and long courses to those left unemployed by coronavirus, as well as providing $1.5 billion in support to apprentice wage subsidies. This will create up to 340,700 new jobs to help school-leavers struggling in an congested work market.

The JobTrainer courses are scheduled to be available in September, and the National Skills Commission (NSC) will decide what they should cover with state feedback. Its predicated courses will apply to health care, social services, education, postal, warehousing, and retail and wholesale trade.  

Subsidising wages

The A$1.5 billion to subsidise the wages of currently employed apprentices and trainees extends a pre-existing program called Supporting Apprentices and Trainees.

It covers half the wage eligible employers pay apprentices and trainees, up to A$7,000 a quarter (A$28,000 a year). This compares to A$9,750 the Jobkeeper pays as a flat rate of A$750 a week.

But unlike JobKeeper, employers are not required to demonstrate reduced turnover to qualify.

There is a cut-off criteria according to organisation size, but it’s more generous than the scheme it extends. Previously the subsidy was only available to businesses with fewer than 20 employees. Now the limit is 200.

The federal government estimates about 90,000 businesses will use the scheme, supporting about 180,000 apprentices or trainees. The scheme is scheduled to run till March 31 2021.

Differences between subsidies and eligibility requirements for JobKeeper and JobTrainer

JobKeeperJobTrainer – Supporting Apprentices and Trainees wage subsidy
Wage subsidyA$1,500 per eligible employee per fortnight, A$9,750 a quarter (A$39,000 per year)50% wage subsidy, up to A$7,000 a quarter (A$28,000 per year)
Employer eligibilityMust meet a ‘fall in turnover’ test and be an ‘eligible’ entityIs not required to demonstrate a ‘fall in turnover’ but must have fewer than 200 employees or be re-engaging an apprentice or trainee displaced from an eligible small or medium sized business
Employee eligibilityOn March 1 2020 were a full time, part time or fixed term employee, or a long-term (over 12 months) casual employeeMust be an apprentice or trainee employed on July 1 2020

Vocational education and training

The second part of the JobTrainer announcement is expected to support an extra 340,000 free or low-cost course places from September 2020 – dependent on the states and territories matching the federal goverment’s A$500 million.

Funding will prioritise courses in areas the National Skills Commission has identified to as likely to see job growth. Examples nominated include health care and social assistance, transport, warehousing, manufacturing, retail and wholesale trade.

Many of the 340,000 training places are likely to be shorter courses, known as skills sets, which are parts of full qualifications.

These skills sets can provide students entry into new industries and also pathways to full qualifications which Australians can access through existing funding and subsidy arrangements.

Public, not-for-profit and private training organisations will all be eligible to apply for funding to provide these courses.

The vocational education and training system has suffered many problems over the past decade – including policies that resulted in widespread rorts and funding cuts.

Even with an extra $1 billion in funding, total government support is still likely to be lower than its 2012 peak.

What’s missing from JobTrainer

JobTrainer doesn’t provide any new incentives or subsidies to encourage employers to take on new apprentices or trainees.

In April and May 2020 the number of new apprentices and trainees fell 33 per cent on the same months in 2019.

The Mitchell Institute has previously highlighted how fewer apprenticeships and traineeships can have negative long term effects.

This is especially true for school leavers. About 12 per cent of all school leavers take an apprenticeship or traineeship as a pathway into the workforce.

Not making a successful transition from school to the workforce is associated with poor long-term outcomes. These include higher rates of long term unemployment, high incidences of health problems and a lifetime engagement with the workforce characterised by low pay and precarious work.

Source: SBS News

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The information provided in this article does not constitute specific advice. For further information , you should contact your professional adviser.