Australia will invest $2.5 billion into programs designed to boost Australians’ skills under the new ‘JobTrainer’ platform and expanded apprentice subsidy scheme.
It’s all part of a major bid to equip Australian school leavers and unemployed workers with skills required for the future of work.
The plan is backed by $500 million of commonwealth money, with the federal government hoping state governments will match that amount.
"Covid-19 is unprecedented but I want Australians to be ready for the sorts of jobs that will come as we build back and recover," Prime Minister Scott Morrison said.
"The jobs and skills we'll need as we come out of the crisis are not likely to be the same as those that were lost."
The plan, announced late on Wednesday, will also deliver $1.5 billion of funding to subsidise apprentice and trainee wages. The scheme was announced in the government’s first tranche of coronavirus stimulus measures, with Wednesday’s announcement reflecting an expansion on it.
Under the changes, businesses with up to 199 employees will be eligible for the subsidies, provided they had an apprentice from 1 July.
The subsidy will also be extended by another six months, until March 2021, allowing 91,300 businesses and 180,000 apprentices to access the 50 per cent wage subsidy.
The rest of the cash will be split between the federal and state governments to be spent on training and re-skilling people looking for work and school leavers through cheaper short courses in transport, retail, trade, post, health care, social assistance and manufacturing fields.
The skills will be chosen by the new National Skills Commission, based on predicted future demand.
The government estimates nearly 350,000 young Australians will be able to learn skills for free, or close to that, provided the states agree to the new plan.
The training places are split among the states, with NSW and Victoria receiving the most.
Number of training places
Young Aussies face 32% unemployment
The announcement comes ahead of fresh unemployment data, due out on Thursday morning.
The Australian Bureau of Statistics will release the figures after unemployment jumped to 7.1 per cent in May.
However, Treasurer Josh Frydenberg has said the real rate is higher than 13 per cent once the number of Australians working zero hours and those not looking for work is taken into account. That means around 1.7 million Australians are out of work.
But the situation is even more dire for Australia’s young people. While 16.1 per cent of Aussies between 15 and 24 were unemployed in May, experts believe the real figure is significantly higher - closer to 32 per cent.
“Arguably, the unemployment rate is not reflecting the true devastation that Covid-19 has had on Australia’s 15-24 year old workforce, given a large proportion are employed in the heavily impacted food service, retail, hospitality, and tourism sectors,” said Fidelity International cross asset specialist Anthony Doyle.
He said the skewed figures are due to JobKeeper keeping otherwise unemployed Australians in work.
And according to EY research, young Australians starting their career in 2020 will lose around $32,000 over the coming 10 years in cumulative income losses.
“A recessionary jobs market can have a disproportionate medium-term impact on those early in their career and with limited experience, through lower wage growth and fewer opportunities and flexibility,” Jo Masters and Bonnie Barker, EY economists said.
“While it might feel like Australia’s economy will bounce back once lockdown is lifted, that won’t change the impact the current recessionary job market will have on recent school or tertiary graduates,” the report found.
“That is, the class of 2020 will be adversely affected, whether Australia’s economy starts to recover this year, or later.”