Skills and Training Minister Brendan O’Connor flags reforms to reverse dismal apprenticeship retention rates

Australia’s dismal apprenticeship dropout rates that are exacerbating the nation’s chronic skills shortage will be the focus of new reforms, Skills and Training Minister Brendan O’Connor has flagged.

In an address to the National Press Club on Tuesday, Mr O’Connor stated government was currently searching for solutions to stop the nearly one in every two trade apprentices dropping out before completing their studies.

“We’re reviewing the way we deliver support to apprentices and employers,” Mr O’Connor said.

Pointing to the government’s new clean energy apprenticeships initiative, which doubled the support for apprentices, Mr O’Connor said the higher pay had encouraged greater commencements and completions across apprenticeships.

“We did that to increase the likelihood of completion and also attract people to enrol,” he said.

The minister also signalled an overhaul of the federal government’s apprenticeship support model while adding employers also needed to ensure that apprentices didn’t drop out before their studies were completed.

“If [employers] are looking to take on an apprenticeship, they have an obligation to see it through if they can … we want to provide support to them, but we don’t want them dropping the ball.”

“When the apprentice can see a line of sight between the apprenticeship and a job, it is far more likely that they’ll stick with the apprenticeship to get that job.”

The skills and training minister also criticised the former coalition government’s focus “on commencements, not on completions” which he said made retainment more challenging.

While numbers of commencements surged under the Morrison government’s $5.8bn Boosting Apprenticeship Commencements program, a more modest initiative – the Australian Apprenticeship Incentive System – has replaced it.

Rather than targeting all apprentices and trainees, the new subsidy only applies to occupations on the government’s skills priority list.

Since the culmination of Morrison-era program, apprenticeship and traineeship commencements have declined by a third, according to official data from the December quarter 2022.

Business groups and unions had previously advocated for the retention of more lucrative incentives, arguing they will essential to ensure against a drop off in skilled workers.

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