Builders respond to long-awaited apprenticeship incentive system review

MASTER BUILDERS Australia has welcomed the release of the long-awaited Review into the Australian Apprenticeship Incentive System, a cornerstone in Australia’s recovery from the ongoing housing crisis.

Master Builders Australia CEO Denita Wawn said the review recognised the challenges faced by employers to attract and retain apprentices, particularly for small and medium enterprises (SMEs). The building and construction industry is made up of over 445,000 businesses, 98 percent of which are small in size.

“Labour shortages are currently the biggest handbrake on fixing the housing crisis,” Ms Wawn said.

“Master Builders has worked closely with Dr Iain Ross AO and Ms Lisa Paul AO PSM, who led the review, and we sincerely thank them for listening to the concerns of employers and the broader building and construction industry.” 

SMEs make up 95 percent of all businesses that hire an apprentice but only take on 60 percent of first year apprentices.

“Employing an apprentice comes at a cost,” Ms Wawn said. “Not just their wage, but the hours spent teaching them, covering their training costs, and managing the associated administration, and helping them navigate the workforce which all adds up.

“A robust incentive system must provide assurance and minimise risk. It should mean that the employer does not shoulder the entire cost burden for the 50 percent of apprentices who do not complete their studies.

“A better incentive system should free an employer to focus on training and teaching: this is especially important in the first and second years.”

Master Builders has outlined recommendations in the review that are relevant to industry employers:

• Align incentives to the government’s economic priorities and social equity objectives. Direct payments to SMEs.
• Reward employers that are doing the right thing and address the behaviour of those who are not providing an appropriate working environment for their apprentices.
• Support the use of Group Training Organisations to assist SMEs in taking on new apprentices.
• Utilise the Australian Government’s procurement policies to increase engagement of first and second year apprentices and reduce ‘apprentice poaching’ from SMEs.
• Review the apprentice data systems to make them easier for apprentices, employers and other users to use and navigate.

“Master Builders will work through the recommendations in the review and urges the Federal Government to prioritise the consultation and implementation of non-contentious recommendations as we do not have time to waste,” Ms Wawn said.

Builders applaud apprenticeship incentive boost

From July 1, 2025, eligible apprentices in the residential construction sector will receive $10,000 in incentive payments, on top of their wages under a new Key Apprentices Program.

The new payment will be staged at 6, 12, 24, 36 months and upon completion, which is something Master Builders has long called for. 

Apprentices in the building and construction industry currently receive a $5,000 payment, which is front-loaded. This payment will remain available for apprentices who are not eligible for the Key Apprentices Program and has been extended until the end of 2025.

“Australia’s building and construction industry faces the enormous task of building enough homes, commercial premises and infrastructure to meet increasing demand and a growing population,” Ms Wawn said.

“Coupled with government funding of fee free vocational education and training, there is no better time to pick up the tools and become a tradie.

“The revised staggering of payments is something Master Builders Australia has long called for, so there is a financial incentive for apprentices to complete their training.

“Around 50 percent of all apprentices do not complete their training – the new staged payments approach will hopefully see the rate of completions increase. 

“Builders would like to see this payment expanded to other areas of the building and construction industry that are also facing chronic shortages and crying out for more apprentices. Without roads, rail, sewerage and water we can’t build more homes for Aussies,” Ms Wawn said.

“We are disappointed that the high costs associated with hiring and training and apprentices has not been recognised as yet … 98 percent of businesses in building and construction are small and they are doing it tough.

“Master Builders continues to call for a robust incentive system that supports employers and minimises the risk with taking on an apprentice who may or may not complete their training.”

Last year, Master Builders released its blueprint for increasing the attraction and retention of apprentices in the industry, which can be read here.

www.masterbuilders.com.au

 

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