By Ron Maxwell - CEO
The employment situation in our regional and rural areas is always going to be tougher for both businesses and individuals than it is in our metropolitan areas, and this has a flow on to the local community, and even the economy as a whole.
Stimulating employment in our regional areas has been on the political agenda for some time, as has addressing the skills shortages in many of our trades – two major challenges facing the labour market in Australia today. That's why I am pleased that the Federal Government has announced a $60 million wage subsidy for apprenticeships in our regional and rural communities.
From 1stJanuary 2019, eligible businesses can receive wage subsidies of up to 75 per cent for first year, 50 per cent for second year and 25 per cent for third year apprentices, balancing out the short-term cost for employers and leading to long-term gain for us all.
It will help small business
When it comes to our traditional trades, many of the players in our regional communities are small businesses, family concerns or individual tradespeople and it can feel like an expensive exercise to take on an apprentice.
In the first year of an apprenticeship, as a young person is just learning the ropes of a new trade, productivity and, therefore, return on investment, for the employer can be lower. For a small business, this short-term cost can be crippling, even if it is for long-term gain, and can be a roadblock when it comes to taking on an apprentice.
The whole community can benefit
Local businesses are at the heart of the community in our regional areas, providing services, employing local people, and often supporting local initiatives, such as charity events or sporting teams. Helping these businesses stay strong into the future will provide support for the wider community.
I've talked before about the disastrous impacts a lack of employment opportunities can have on a community, with two of the main ones being population decline, as young people migrate to cities to find employment and, of course, long-term unemployment.
The impacts of long-term unemployment are felt at an individual, community and national level, with the costs of welfare, support services, and healthcare rising in line with unemployment rates.
And it's no different when it comes to population decline. Population decline often leads to a drop in property prices, reduction in new construction activity, the closure of local businesses as demand for services decreases, less job opportunities, and a significant decline in skills within the local community as people leave to find employment - and it can be very hard to reverse.
The subsidy will encourage small businesses in regional areas to take on an apprentice, or even additional apprentices by reducing the financial burden, creating local jobs, and even potentially addressing skills shortages in the process.
Skill shortages may be eased
Not only is the subsidy designed to stimulate local economies, it's also designed to address the skill shortages that are facing our traditional trades and small businesses are at the heart of many of these.
From carpenters and locksmiths to cooks and hairdressers, Australia needs more tradespeople and this subsidy applies directly to trades on our National Skills Needs List. Addressing the skills on this list is a top priority for the Australian government and encouraging more small businesses and tradespeople to take on apprentices is a step toward this goal.
It's part of a broader support package
Supporting and growing our apprenticeships is not just a financial issue, and while the subsidy does form an incentive for employers, it's also part of a package that employers can access when they sign on an apprentice through an Australian Apprenticeship Support Network (AASN) provider, like VERTO.
AASN providers work with employers to help them access these incentives and assist with paperwork and administration to ensure this doesn’t become a burden for time-poor business owners, but that's just the tip of the iceberg.
We connect employers with the right apprentices and provide ongoing mentoring support to help young apprentices and employers have a long and productive relationship, that ultimately, benefits the individual, the business and the wider community.
At VERTO, we welcome this financial support as another piece of the apprenticeships puzzle and look forward to working with more businesses to upskill young people in our regional and rural communities in the new year.
To find out more about how VERTO can help employer’s access incentives, click here.