The Federal Budget has done little to allay growing concerns over skill shortages and youth unemployment. Both will continue to climb after funding cuts to critical apprenticeship programs.

The Tools For Your Trade program, which provided $5500 over the course of an apprenticeship to assist with training and tool costs, will cease from 1 July. The government has also abolished the Australian Apprenticeships Access Program which provides pre-vocational training and support for vulnerable job seekers experiencing barriers when trying to enter skilled employment.

The decision to stop funding these vital programs is a major concern for us and for other group training organisations across Australia. A total of ten skills and training programs are to be abolished in the Budget. In their place will be a new Industry Skills Fund, targeting health and biomedical products; mining, oil and gas equipment technology and services; and advanced manufacturing, including defence and aerospace. While details are yet to be unveiled, at least these industries are in the Hunter and may provide future opportunities.

For almost 15 years, the now scrapped employee incentives have played a part in addressing financial disadvantage and helping many young people to remain in their apprenticeships.  While the Fair Work Commission decision last year to increase apprentice wages helped apprentices, the increase was taken on by employers who are already doing it tough.

With debate heating up over solving the Hunter’s low youth employment rates, it’s possible the answer for improving our future could be found in our history. The current jobless rate among those aged 15 to 19 in the Newcastle district stands at 32.6 per cent, or 6.3 per cent above the NSW average*.

Lack of training is one of the reasons given for the low unemployment rates – if young people do not have some form of training post-school, their employment options are severely limited. To skill the local youth and take aim at the region’s rising youth unemployment rates, we need two crucial elements.

Firstly, we need willing and able young workers keen to take up training options including apprenticeships or traineeships in a range of areas where we know skill shortages exist. This is an element we have in abundance. In recent years when advertising highly-sought after jobs, it has not been unusual for HVTC to receive more than 1000 applications for a single job. Each time, that’s 999 young Hunter locals who miss out and must continue on their search.

Secondly, creating the demand and opportunity for training our youth means increasing business and industry confidence and capacity to provide training and employment opportunities. The fact we have such high youth unemployment in a country with well-documented skills shortages, is what seems to have everyone scratching their collective head.

The slowdown in economic conditions with resultant job shedding, particularly in the Hunter, has certainly played a key part.

Missing from the budget are incentives aimed at encouraging business and industry to take on apprentices and trainees. Part of the answer is to ensure Government support is directed to training that links straight to employment outcomes. This requires skills training to be tailored to meet business and industry’s changing employment needs for now and the future.

Another part of the solution to improving demand could be as simple as looking back 30 years, to when and why Australia’s Group Training model was first developed.

Group Training was established in the early 1980s by industry leaders in partnership with unions and government to address concerns about emerging skill shortages and the then high youth unemployment rates. Sound familiar?

Group Training Organisations (GTOs), such as HVTC, recruit and employ apprentices and then place them with one or more host employers for the duration of their skills training, easing the employment burden on individual businesses and preparing the way for real employment outcomes.

With Australia, and the Hunter in particular, facing a similar scenario today why can’t Group Training once again be an integral part of the solution?

Australia’s Group Training network encompasses around 150 group training organisations that provide young people with direct links to employment and skills training. These organisations are largely not-for-profit based and collectively, employ around 35,000 apprentices and trainees and have connections with more than 100,000 businesses.

The budget message is that we all have to make sacrifices, but skills training and supporting employers to take on trainees and apprentices, needs to be a national economic priority as it plays a fundamental role in ensuring we have a skilled workforce for the future, and that our young people are part of it.

The move to cut important apprenticeship support programs is combined with a raft of decisions that will directly affect young people, including the ‘earning or learning’ policy for those under the age of 30.

A small win at least for apprentices is the government’s plans to introduce the Trade Support Loans program allowing apprentices to access loans to pay for tools and training costs. Those apprentices lucky to have employment will get a 20 per cent discount off their loan if they complete their qualification.

We are already faced with a growing youth unemployment issue and a wide range of national skills shortages. We fear that the decisions made in the Federal Budget may further fuel the fire.

* Labour force figures from the federal Department of Employment.