Financial support recently announced by the Government will provide employers with more certainty that their apprentices will finish their training and provide skills back to the trade sector in the future
Trading up – the Budget’s big commitment to apprenticeships
Budget 2020 committed $1.6 billion to trade and apprenticeship training, the biggest investment ever and one welcomed by the entire trade sector.
Included is $320 million under the Targeted Training and Apprenticeship Fund (TTAF), giving all apprentices in specific industries access to free training
for two-and-a-half years starting on 1 July. This gives each apprentice an extra $45 to $55 every week – around $2800 a year – which is a significant
amount for anyone starting a career.
The $1.6 billion also covers a $380 million apprenticeship subsidy, paying businesses employing apprentices $1000 a month for each apprentice in their first year, and $500 in their second year. This will last for 20 months starting in August.
Both tranches of support provide host businesses with more certainty that their apprentices will finish their training and provide skills back to the trade sector in the future.
Apprenticeship Training Trust chief executive Helen Stephens: “Maintaining and supporting trade training is vital – it is a long-term investment in people and the businesses they support”
We spoke to Helen Stephens, chief executive of Apprenticeship Training Trust (ATT), an employer of over 350 apprentices in plumbing, gasfitting, drainlaying and electrical. We talked about the announcement’s timing, its significance and what this means in the era of Covid-19.
Q: Was this announcement the result of the pandemic or a longer-term need?
HS: This news is very important for the trades, and while it came amidst uncertainty, it reflects a longer-term need, and one the NZ Group Training Alliance has been talking to the Government about for some time. The NZGTA comprises a number of national organisations that manage the employment of apprentices in the trades, and also place them with host businesses for the duration of their apprenticeship.
Historically, there’s been a mismatch between the support given to university students compared to apprentices – but I believe this is changing. Often trade training has played second fiddle to the university career route. One reason has been apprentices working alongside learning, and a view that they don’t need the same level of financial support as a full-time university student. However, the cost of living is the same for both – and uni students also work to fund their studies.
The apprenticeship subsidy gives hosts businesses help in the first two years when the apprentice requires more training.
Q: What’s the significance of this news?
HS: For many apprentices this is a lifeline to continue, while for others it will make their apprenticeship more manageable – it depends on the individual and their circumstances. It will help bring stability to host businesses as extra financial help means an apprentice is more likely to stay working and qualify.
With it taking three to five years to complete an apprenticeship, many question their decision during this time simply because of finances – of those giving up, 50% leave because of money concerns. This is emphasised by most completing an apprenticeship in their 20s – formative years when people are getting established in life. They are often enticed by better-paying immediate options, despite the long-term prospects of a trade skill.
This news makes the trades more attractive as a long-term career choice and an option to gain a skill as the basis to earn a living for years to come.
Q: How important is this investment in a time of economic uncertainty?
HS: There’s been a lot of discussion about investing in training when there’s uncertainty. However, we need to take a long-term view. Apprentices starting now will not be fully qualified until 2024/25 and will have a career of 30–40 years. New Zealand is a growing country and we need houses and infrastructure, and the qualified tradespeople to maintain them. There was a shortfall of skills before Covid-19 and this hasn’t changed.
The prospects for current apprentices remain good in the long term, with opportunities to be involved in a huge range of different-scale projects with varied complexity, from being on the tools to project management and running a business employing others. Training is at the heart of this.
My feeling is that whatever the economic environment, maintaining and supporting trade training is vital. It is a long-term investment in people and the businesses they support.
Q: Will the TTAF encourage a wider range of people to pursue an apprenticeship?
HS: This is already happening as other sectors come under pressure and jobs are lost. The age profile of prospective apprentices is rising now, with more applicants in their mid to late twenties and early thirties.
This is a good thing as it brings more age diversity and will attract different people from different backgrounds. Host businesses often say they like apprentices with some life experience.
Q: How would you summarise the importance of the TTAF and the apprenticeship subsidy?
HS: Statistics New Zealand estimates our population could grow by 10% by 2025, with predictions as high as 7.9 million by 2068. A consistent focus on trades training and host business support is vital so we can maintain a strong level of skills and develop trade leaders of the future. We can only be successful as a complete trade sector if we continuously support skills.
ATT is the largest employer of plumbing apprentices in New Zealand, along with a growing number in electrical, and we are delighted that the Government has recognised the importance of investing in trades training. This provides long-term, valuable support to the trade sector as a whole, as well as encouraging Kiwis to take up the opportunity to develop a skill and enjoy a rewarding and challenging career.