By Ron Maxwell - CEO
As the post-COVID recession starts to bite, many businesses remain reliant on Job Keeper to retain their employees or even continue trading. Amongst the at-risk jobs are around 54,000 Australian apprenticeships – a critical employment mechanism, putting young people on a pathway to a long-term career. And the consequences, if apprenticeships are lost on this scale, will be felt by us all.
As Job Keeper starts to wind down, I welcome last week's announcement of the $2 billion JobTrainer package, which includes a $1.5 billion extension to the Supporting Apprentices and Trainees (SAT) program. This package will help both employers and apprentices continue to look to the future and build the skills we need to navigate economic recovery.
There are 116,500 businesses across Australia that employ apprentices and trainees, many of them the small and family-owned businesses that are at the heart of our communities. It is critical that we continue to support these businesses and our apprentices, and here are just some of the reasons why.
Youth unemployment a risk
Apprenticeships are a key youth employment mechanism, and with youth unemployment across the country sitting at 16.4 per cent, and as high as 21 per cent in some local government areas, it's critical we keep this avenue open to help young people build lifelong careers.
There are so many negative consequences of long-term unemployment; from the individual impacts such as mental health issues and loss of confidence to the economic ones, such as increased welfare and health costs. In fact, even before COVID-19, Australia's high rates of youth unemployment were estimated to cost $15.9 billion in lost GDP each year, and $7.2 billion in health care and other costs associated to the mental health impact.
We want to give our youth the opportunity to build a lifelong career pathway, and apprenticeships are a great way to do this. Today's apprentices are often the next generation of business owners. If we see a drop in apprenticeships today, there is no doubting we will all feel the impact tomorrow.
Skills shortages may be exacerbated
Many of our key industries are already facing skills shortages and failing to stabilise apprenticeships now will only exacerbate this issue.
With so many new infrastructure projects on the horizon that could give our economy a much-needed boost, we need qualified workers to deliver on them. In the wake of COVID-19, it's also easy to forget that many regions are still in the process of rebuilding from bushfires and floods, and skills shortages are becoming increasingly obvious.
In Bateman's Bay, on the NSW South Coast, an area that was heavily impacted by the January bushfires, I know of a family who cannot find a plumber or electrician to repair damage caused by a burst pipe in their roof. For some months now, they have been living in alternative accommodation as their property is uninhabitable. This is just one story, and no doubt there are many like this out there. Imagine what this could look like in a few short years if we had 54,000 apprenticeships go by the wayside in 2020.
And we may not feel the full weight of this for some time to come. Most apprenticeships are three to four years in duration, so we can expect the impact of any shortage now to be felt well into the next decade.
We will all bear the brunt
Our trades are, in many ways, the backbone of the Australian economy. Industries like construction, which are worth billions to the economy each year, need qualified workers to continue delivering at a time when our economy needs it the most. If we look to history, we can see that in the 1992 recession, apprenticeship numbers dropped by 25%, leading to a raft of shortages and economic impacts.
As we enter economic recovery, it's going to be all hands-on-deck as we try to reduce unemployment and find new opportunities for over one million unemployed Australians and some 250,000 students who will leave school in 2020.
Apprenticeships will play a key role in not only providing employment today but building lifelong careers in industries that will support our economy into the future. It's critical that we support apprentices and employers to keep our regions open for business.
There are resources out there to help
If you are considering becoming an apprentice, there are many great resources out there that can help you navigate today's tough job market, such as VERTO's CareerGate. A free, online tool, CareerGate helps you find an apprenticeship that matches your skills and interests and even helps you find vacancies in your local area.