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In the election policy statement 'Skilling Up Australia’, the Government undertook to conduct a review of the Commonwealth New Apprenticeships Incentives Programme (NAIP), to be conducted in consultation with industry, employers, group training organisations and States and Territories. In line with the Government’s election commitment of ensuring that the programme is as targeted and as simple to communicate to employers as possible, the Commonwealth Department of Education, Science and Training (DEST) will undertake the review. In particular the review will look at the effectiveness of current incentives and examine options to streamline the programme in line with employer needs.
Stakeholders are invited to attend forums to be hold by DEST in all capital cities and several regional centres and to provide written submissions on the issues raised in this paper or on the New Apprenticeships Incentives Programme in general.
The Commonwealth has provided either subsidies or incentives to employers for provision of apprenticeships since 1973, and for traineeships since they were established in 1985. Initially assistance was provided to employers as a subsidy for certain additional costs incurred for provision of training.
The aim of the programme is to develop a more skilled Australian workforce that delivers long-term benefits for our nation and our international competitiveness, by encouraging employers, through financial incentives, to open up genuine opportunities for skills-based training of their employees.
The National Centre for Vocational Education Research (NCVER) estimates that 333,190 people were in New Apprenticeship training at 31 December 2001, and that 230,650 New Apprentices commenced in the twelve months ending 31 December 2001. Over the period 2001-2002 it is expected that employers will receive $374.7m in incentives.
New Apprenticeships Centres are contracted by the Commonwealth to administer the New Apprenticeships Incentives Programme to employers and New Apprentices.
The broad parameters for the operation of the NAIP are at Attachment 1.
In general terms this paper defines the scope of the review. The following principles are essential characteristics of any funding system, and will provide the framework for considering alternative approaches to funding the New Apprenticeships Incentives Programme.
Outcomes: the incentives programme will increase the focus on achieving defined outcomes.
Equity: financial incentives should be distributed in a fair and consistent way.
Transparency: the incentives programme should be clearly and easily understood.
Accountability: processes should be in place to ensure the integrity of the employment and training relationship and that the collection of incentives is not open to manipulation.
Simplicity: the programme should operate within the context of a broad risk management framework with the incentives funding mechanism being as simple as possible for employers and New Apprentices to understand and access. The funding mechanism should not create administrative requirements that add to the cost and complexity of administering the system.
Flexibility: the incentives programme should be flexible to allow timely responses to emerging demands.
Value for Money: the funding provided for incentives must be used in the most effective way to engage industry. This includes examining options to develop appropriate linkages between the incentives programme and other Commonwealth programmes, as well as with those of State and Territory governments.
Predictability: employers need a degree of certainty about incentives funding, for employment and training planning and decision-making.
back to topIn reviewing the system of providing incentives to employers, the following policy, administrative and financial issues arise:
Under current arrangements, the Commonwealth pays incentives to employers for commencement, progression, and completion of the New Apprenticeship. In general, eligibility depends on date of commencement, certificate level, that training has commenced and duration of the New Apprenticeship.
Submissions are to be forwarded to the Incentives Review email address, incentivesreview@dest.gov.au or in hard copy form to:
Director
Incentives Review Team
New Apprenticeships Branch
Location Code 733
Department of Education, Science and Training
GPO Box 9880
Canberra ACT 2601
The closing date for comments is 19 July 2002.
Details about the review, including the consultation schedule, can be found on the following website www.australianapprenticeships.gov.au.
Enquiries about the review can be made via email or through the Incentives review Hotline, 1800 000 674.
back to topCommonwealth incentives for employers cover three broad types: commencement incentives; progression (and recommencement) incentives; and completion (and pro rata completion) incentives. Incentives are also available to provide assistance for disabled New Apprentices, including workplace modifications and disabled apprentice wage support. In addition to these Commonwealth incentives, there may be financial incentives offered by individual States.
The actual value of a Commonwealth incentive and eligibility for a specific incentive varies depending on the date of commencement of the New Apprenticeship, the Certificate level (II, III or IV) of the New Apprenticeship, and the duration of the New Apprenticeship. Employers may receive incentive payments provided eligibility, time limits and waiting periods are satisfied and that training has commenced. Over the last ten years, additional conditions and requirements have been added to the application of the incentives regime, with the effect of increasing its complexity. Currently the following incentives and provisions apply:
The employer of a person who commences a Certificate II, III or IV will attract a commencement incentive of $1,375.
To encourage employers to maintain a commitment to training employees at higher skill levels, the government has provided an incentive at the point at which a New Apprentice moves to the Certificate III/IV level of their training. The employer of a person who progresses will attract a progression incentive of $1,375.
Recommencement incentives are aimed at encouraging employers to provide opportunities for out of trade, unemployed and transferring New Apprentices to complete their training. Subject to the restrictions and limitations applying, the employer may receive an incentive of $825.
Completion incentives of $1,650 are available (except for not-for-profit GTCs) subject to the New Apprentice successfully completing their accredited training and employment, being issued with a qualification at Certificate III or IV under the AQF, and where relevant, recognised as trades person by the state or territory.
Primary tests of eligibility apply to every existing or prospective New Apprentice in respect of whom an incentive or benefit is sought. They comprise:
A negotiated training programme must lead to a nationally recognised qualification and include both paid work and structured training.
If the New Apprentice and their employment and training arrangements satisfy the primary eligibility criteria for access to the programme, further assessment against secondary eligibility criteria is required. These include whether they are an existing worker or have prior qualifications.
Additional incentives are provided to women in non-traditional New Apprenticeships, sporting operations traineeships, traineeships in declared drought areas, and to address rural and regional skills shortages. There is also assistance paid for disabled New Apprentices, and where New Apprentices move away from home to take up a New Apprenticeship (Living Away From Home Allowance LAFHA).
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