Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Hansard source

Member for Hunter, you are absolutely wrong on this one. You cannot cover it up. We made it very clear that we would be replacing the program.

Secondly, Ms Bird, the shadow minister, said in this debate that she did not understand how young people would be able to afford their uniforms and their tools. The reality is that this program delivers $8,000 to first year apprentices. The reality is that young people will actually be better off in their first year. It will be paid monthly in arrears and it is an opt-in process. If people do not want to engage in this loan system, they do not have to take it up and they can opt out at any six-month renewal.

We need to incentivise the completion of apprenticeships. We will achieve this by offering a 20 per cent discount to those apprentices who complete their apprenticeship. Over the full scheme that is the equivalent of a $4,000 rebate. NCVER did a survey in 2010 that found that 38.7 per cent of apprentices leaving trades did so because of the associated wages in the early years of an apprenticeship. I can reflect on that. I am a tradesman myself. I was an apprentice fitter/toolmaker. I can remember the princely sum I earned as an apprentice—admittedly this was more than one or two years ago—of $10 a week. That was pretty hard to get by on, but jobs were plentiful and opportunities were great.

Today cost-of-living pressures are a lot higher and it is arguable that wages paid to apprentices would not meet the true costs of living for those people but, as other speakers have said and many more will say—and from my experience as both an apprentice and a tradesman—most first year apprentices are a liability to the company. In the second year they are less of a liability but are still a liability because they are not generally producing a profit for the company. It is only when they get to their third and fourth years that they are assets in that they are bringing in a return to the company. Apprentices are a long-term investment by a company. We the government are prepared to co-invest in that. We will provide $20,000 through the trade support loans, with $8,000 being paid in the first year, $6,000 in the second year, $4,000 in the third year and $2,000 in the final year. This investment of taxpayers' money will deliver a real, measurable outcome.

We want to see an end to the dropout rates. I will give you some examples of the dropout rates that have been put to me. Let us look at the rates for automotive and engineering, which is ANZSCO grouping 32: in 2006, 51.5 per cent completed their apprenticeship; in 2007, 49.5 per cent; and in 2008, 50.1 per cent. For electrotechnology the completion rate was 57.6 per cent in 2006, 57.1 per cent in 2007 and 54.1 per cent in 2008. Let us look at hairdressing: the completion rate in 2006 was 37.7 per cent, in 2007 it was 38.9 per cent and in 2008 it was 37.8 per cent. That shows there is an inherent problem in the system.

Employers cannot afford to pay higher wages for first year apprentices. That is why the government needs to step in and provide support. Because it is a loan the money can be used at the discretion of the participants in this loan program. It can be used as a wage subsidy, to buy tools, to make an investment or to save up for a ute if they are a builder or the like. The reality is that we have to do something different because we have to deliver a real outcome, and that outcome will be measurable improvements in completion rates for all apprentices.

I will curtail my comments there because there are a lot of speakers. It is important that these bills go through so the program can commence on 1 July. I encourage members opposite to get behind this, to support it, particularly if they want to see completion rates in apprenticeships improved. I commend these bills to the House.

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