The future of a struggling apprenticeships sector could see Australia accelerate towards a 'devastating skills cliff', if the government does not intervene with help beyond September.
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In a report addressing the impact of COVID-19 on apprenticeships, findings predicted a 36 per cent drop in new intakes heading into 2021, if the government did nothing.
This could mean 54,000 potential apprentices joining a "lost to COVID" cohort that could impact school leavers beyond 2020.
The report, called Skilling Australia for a better future: Supporting apprenticeships through COVID-19, was produced by Business NSW and warns that if apprenticeships don't get the help required, there would be a lasting impact to business viability and future jobs.
Business NSW chief executive officer Stephen Cartwright said the impact of the COVID-19 pandemic has been particularly severe on apprentices as it came at a time when numbers were already low or had stagnated compared to historic levels.
"The potential of losing a third of this year's apprentice cohort will have impacts on the health of the economy for years to come, especially when combined with the reduction of skilled labour coming to Australia from overseas," Mr Cartwright said in the report.
"This is not something that can be fixed in five years time when we suddenly realise the scale of the problem.
"Without intervention, there will be significant impact on apprentice numbers for the foreseeable future. Fewer young people will gain skills and employment, and businesses will be unable to grow due to widespread skills shortages," Mr Cartwright said.
Prior to the COVID-19 pandemic, over 250,000 apprentices were in-training across Australia with the shared ambition of gaining the requisite skills needed to secure ongoing employment in their chosen field.
Last year more than 150,000 Australians started an apprenticeship with an expectation to complete it and become valuable skilled employees, however, many first and second year apprentices have bore the brunt of the pandemic's impact through suspension or even cancellation of their roles.
The report states the Supporting Apprentices and Trainees (SAT) and JobKeeper programs announced at the start of the pandemic have been crucial in propping up many apprenticeships at risk of suspension.
But the report forecasts find up to 20 per cent of apprenticeships could be cancelled after the government funding dries up from September 30.
The worst-case, but entirely possible, scenario could see 30 to 40 per cent of in-training apprentices lose employment before the end of 2020 if there's no significant recovery in the economy or the extension of wage support.
Business NSW says governments must take a long-term view to training to support economic recovery post-COVID.
"To support the economy to rebound, employers will need access to skilled labour and people will need access to training opportunities," its report states.
There are also fears of the impact on rising youth unemployment rates.
Should apprenticeship positions die off, Business NSW predicts a decline in the state's social well-being and an increase to government costs.
"Apprenticeships improve the state's social well-being. They are a valuable source of job opportunities for young people entering the workforce and a means for older workers to upgrade their skills.
"Without additional support, there will be an increase in youth unemployment rates, with far fewer young people reaching their full skills capacity or simply not engaging with the workforce."
Business NSW has made recommendations to the Morrison Government and outlined the need for a wage subsidy for new apprentices; extensions to existing wage support programs beyond September; group training organisation subsidies to help encourage training; and the delivery of a more structured national, industry-led pre-apprenticeship program.
"Too often pre-apprenticeship programs are unable to deliver outcomes for students because they are developed and delivered without shared expectations and without industry engagement," Business NSW says in the report.
"The pandemic offers an opportunity for the Commonwealth Government to address this failing. An industry-supported nationally consistent pre-apprenticeship program would deliver a pathway into apprenticeships for many young people currently at risk of disengaging from the workforce."