Strategic Review of the Australian Apprenticeships Incentive System

09 May 2024

The Review Team
Strategic Review of Australian Apprenticeships Incentive Scheme
Department of Employment and Workplace Relations

Via Email: apprenticeshipsreview@dewr.gov.au

Dear Madam/Sir

Strategic Review of the Australian Apprentice Incentive System

Thank you for the opportunity to contribute to the Strategic Review of the Australian Apprentice
Incentive System (the Review). This submission is from Master Plumbers Australia and New Zealand
(MPANZ).

MPANZ, through its constituent Master Plumber associations in every Australian State and Territory and New Zealand, represents tens of thousands of plumbing contractors from sole operators to medium sized plumbing businesses and large contracting firms. Across over 30,000 businesses our members install, service and maintain domestic and commercial gas, water reticulation and irrigation systems, heating and cooling, mechanical services and air conditioning systems, sanitary disposal, drainage, metal roofing, and a range of other plumbing services. MPANZ constituent associations also provide training services directly through Registered Training Organisations (RTO) and/or Group
Training Organisations (GTO); partner with or advise public TAFE providers. We therefore have a great deal of experience and expertise in skills training policy and delivery.

As well as employing thousands of people and contributing billions of dollars to the economies of
Australia and New Zealand, our members and their employees are keeping the community safe from a range of water and air borne hazards, toxins, and associated risks.

The Australian government has a $10 billion National Housing and Homelessness Plan that aims to build 1.2 million new homes over five years from 2024. The delivery of this plan will require an army of workers, including apprentices and trainees in the building and construction industry. BuildSkills, the Jobs and Skills Council for the built environment, confirmed the industry would need an additional
90,000 workers to deliver on the July 2024 quarter housing targets. The housing targets will not be able to be delivered on if there are not appropriate settings that see apprentices as a key part of the equation.

The federal government also has a $120 billion infrastructure investment program which from 1 July
2024 will have the Australian Skills Guarantee (Guarantee) apply to all Commonwealth procurements in the construction sector where the total contract value is $10 million or more. The Guarantee will mean that all major construction projects must meet an apprentice or trainee target of 10 per cent of all labour hours, with a minimum 6 per cent to be undertaken by women. The government will need industry to hire these apprentices and trainees to ensure that the workforce exists to deliver these policies.

Master Plumbers Australia and New Zealand www. MasterPlumbersANZ.com
The work our members do is also “mission critical” in terms of the energy transition and climate change adaptation more broadly. The catalytic and enabling nature of plumbing means it is arguably the most critical trade in the economy. The safety and amenity of the entire built environment, and therefore the community, is plumbing dependent. The energy transition is also reliant on plumbing, drainage and gasfitting related skills.

Plumbing is a dynamic and innovative sector, with new products, systems and technologies emerging every day. Ensuring the training sector functions effectively and delivers the contemporary skills the industry needs to lead the way in adapting to climate change is critical. To take advantage of all the innovations in water capture, storage, re-use and recycling; to transition the economy away from fossil fuels to renewables; and to achieve its housing and infrastructure targets; the economy will need a strong pipeline of skilled plumbing practitioners.

Establishing, growing, and filling that skills pipeline is critically important. Under the current training and industry frameworks, the pipeline relies on apprenticeships. In our industry the only pathway to becoming a tradesperson is an apprenticeship. In that context, and given its capacity to make a difference, we consider this Review to be both timely and highly significant.

It is significant because experience has taught us that incentives work. As we elaborate on in this submission, they make a difference. The evidence aligns with our direct experience, which is that the
“market” for apprentices in Australia is very price and cost sensitive – both on the demand and supply side. Incentives are a significant part of the cost-price construct and can therefore act as supply and demand levers within that sensitive market context. That is why we believe ensuring the key economic setting right for the apprenticeship sector and the economy now, and moving forward, is so critically important.

Our views on the importance of the incentives and how we think they should be applied, for both apprentices and employers, are outlined further in response to Term of Reference numbers 1 and 2 in the attached submission. In summary, however, our key recommendations are as follows:

• Postpone the planned reduction of incentives from 1 July 2024 for one year to allow sufficient time
for the development of the next iteration of Australian Apprenticeship Incentives
• Direct any Skills Australians Fund (SAF) levy revenue the government receives to funding more
apprenticeships and traineeships.
• Create a five-year Job Creation Incentive program at the following level:
o Standard base-level payments to all employers of apprentices should be up to $2,000 per
quarter across the first two years, for trainees up to $2,000 per quarter across the first up
to 18 months of their program.
o Targeted incentives for those areas that have been deemed in shortage by Jobs and Skills
Australia, including the plumbing industry, of an additional $2,000 payment above the
standard base payment payable to the employer.
o Completion payment of $2,500 once the apprentice or trainee completes their
qualification payable to the employer.
o An additional amount of up to $3,000 to be payable quarterly across two years to
employers of adult aged apprentices.
o A payment of $5,000 to be paid directly to the apprentice across quarterly instalments up
to 24 months, followed by a $2,500 completion payment.

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MPANZ believes that there is potential for significant harm to be imposed on our industry and the
Australian economy if the current incentive levels are dropped and if standard base incentives for employers are removed. There is a very real possibility that any reduction in apprenticeship commencements and completions could have a permanent detrimental effect on the availability of plumbers and drainers in Australia. Further, it could disenfranchise young people from being able pursue a plumbing career. Incentives are important to employers especially in the first 12 months of an apprentice’s training, which is consistently identified as the period of highest cost for employers, due to training and additional supervision needs, and the lowest level of productivity return by the new training recruit. It is important to note that employers do not use incentives to subsidise the cost of wages, rather they help reimburse employers who must reduce the jobs they can undertake to ensure they can appropriately train and supervise the apprentice.

As the Terms of Reference note, economic factors are not the only relevant drivers of behaviour in the apprentice and broader VET sector. There are a range of factors which determine whether an employer takes on an apprentice, or what motivates an individual apprentice to commence and complete an apprenticeship. Some examples of what is currently working well in the Plumbing
Industry in terms of attraction, retention, delivery models, and tailored programs for attracting apprentices from key identified community cohorts such as women and First nations Australians are described further in the attached. Please see our response to Terms of Reference 3 and 4.

Incentives alone, however, will not deliver the volume of skilled workers required. We need to cast a wider recruitment net and we would strongly support a collaborative approach between government and industry to deliver a targeted and well-designed funded promotion campaign to encourage entry into the industry. MPANZ has undertaken industry-led initiatives in this regard and encourage further discussion on this important aspect of industry recruitment.

Thank you once more the opportunity to contribute to this important public policy development process. We would welcome the opportunity to discuss our views further with the Review panel or secretariat as appropriate.

Should you wish to discuss this submission, please do not hesitate to contact Peter Daly at secretariat@masterplumbersanz.com or mobile .

Yours faithfully

Ken Gardner
Secretariat, Master Plumbers Australia and New Zealand

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Department of Employment and Workplace
Relations

Strategic Review

Australian Apprentice Incentive Scheme

Response by
Master Plumbers Australia and New Zealand

May 2024

Master Plumbers Australia and New Zealand
Context

Across Australia and New Zealand, the market conditions in which our members operate is varied,
however here are some consistent themes, or trends, which are set out below. These factors,
when considered a whole make a compelling case for more policy refinement and more
government support for the sector around apprentices, not less.

• Demand for workers with plumbing and related skills is strong and growing. There is
presently no latent supply of skilled plumbers in the economy. There are a range of recent
reports and forecasts to suggest that, if not already the case, demand for skilled workers in
key trades, like plumbing, will soon exceed the supply of those workers. For example,
BuildSkills Australia – a group tasked by the government to find solutions to the workforce
challenges facing the construction industry – reported its findings earlier this year that to meet
government housing targets alone would require a skilled workforce of 90,000 people more
than currently exists.

• The supply curve is heading in the wrong direction and a “business as usual” approach to
workforce development will not deliver the required pipeline of skilled workers. At the very
time the economy needs to be producing significantly more skilled workers, by attracting more
Australians into apprentice level training, the data seems to be trending in the wrong direction.
Sourcing plumbing specific data regarding national apprentice commencements and
completions is challenging, however data we have compiled from various state-based sources
suggests that commencements are trending down across the trade.

• The gap between the forecast demand and, what a “business as usual” approach will deliver,
in terms of skilled workers is stark and growing. To avoid the need to make politically
unpopular choices to manage the demand side of the equation (build fewer things), there is a
need to close the gap by leveraging the supply side. This can take the form of increasing
skilled migration, attracting more Australian workers into apprenticeships, or a combination
of the two. MPANZ’s strong view is that the long-term interests of the community and the
industry are best served by primarily pursuing, improving, and streamlining the Australian
apprenticeship / VET sector model, and growing the skills base of the country, rather than a
reliance of importing skills on a “just in time” basis.

• The challenge then is to produce more home-grown apprentices. Apprenticeships are a three-
way partnership between student, employer, and training provider. It is important therefore
that the regulatory and policy settings are such that all three partners in the arrangement are
suitably incentivised and that the system meets the needs of all partners. Changes made to
incentive which affect one element of this dynamic need to be considered in the context of
the whole. Making it more financially attractive to be an apprentice, for example, through say
an increase in subsidy, could lead to a positive increase in enrolments. However, if host
employers cannot be found for those potential apprentices, or the teachers are not available
to meet the demand for training, then the demand will ultimately go unmet.

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Consultation Questions

1. How the Incentive System and complementary services are performing in helping the take
up and completion of apprenticeships and traineeships.

Incentives work

There are a range of factors which drive take up and completion rates for apprentices, and attributing a weighting to the various elements is challenging. However, what we can say with confidence is that financial considerations rank high in that list of criteria for our members; and that incentives make a difference when deciding whether to take on an apprentice, or another one.

The impact incentives have on the behaviour of employers in the commencements of apprentices and trainees comes through in the data. Figure 1 below shows from 2006 onwards the impact of introducing different employer incentives and then the impact of decreasing/ceasing them has had on commencements numbers.

Apprenticeship vs Traineeship commencements June 2006-
2023 (000)
300.0

250.0

200.0

150.0

100.0

50.0

0.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Apprenticeship Traineeship

Figure 1. NCVER, Historical time series of apprenticeships and traineeships in Australia from 1963 to
2023, 2023

Looking at the blue apprentice line, we can see that there is an uptick in 2009. That is when the
Apprentice Kickstart initiative was introduced and ran from December 2009 until November 2010. It was designed to maintain the increase in commencements of young people in skills shortage traditional trade apprenticeships as the Australian economy recovered from the impact of the global financial crisis.

The curve which had been rising through 2010-11, dips again from 2012. In July 2012 the commencement incentives for existing worker apprenticeships and traineeships not on the National
Skills Needs List (NSNL) was removed.

The gradual decline in the blue curve from 2013-2020 reflects the removal through that period of several key incentive programs. For example, the commencement incentives for existing worker apprenticeships and traineeships not on the National Skills Needs List (NSNL) were removed; the wage supplement paid to adult apprentices was abolished etc.

The graph picks up sharply in 2020 and falls away again after 2022. This mirrors the introduction and subsequent removal of the Boosting Apprenticeship Commencement (BAC) Incentive which provided

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a 50 per cent wage subsidy for newly commencing apprentices and trainees. This subsidy was abolished in June 2022.

Complex policy landscape

To “shift the dial” in terms of significantly increasing apprentice numbers in key trades like plumbing, a joint effort - between construction industry stakeholders, the education and training sectors, and government - is required. Government incentives, whether in the form of employer subsidies or other cost off-sets or rebates, are a key part of the picture. Without appropriate support employers cannot, and should not be expected to, bear the cost burden of the required economy wide skills scale up.

To be most effective, incentives not only need to exist, but they also need to be set at a rate such that they are sufficient to make a difference to behaviour and/or to close gaps between apprenticeships and alternative employment options. For example, we would argue that the fact that an unskilled worker stacking supermarket shelves can earn more per week than a first or second-year plumbing apprentice, tends to make apprenticeships a less attractive option. This is particularly relevant as cost- of-living pressures increase.

Developing policy and incentives around apprenticeships is challenging and complex. In part this is because incentives vary from one jurisdiction to another. Although the VET sector is funded at a national level, how each state government expends federal VET sector funding is determine at a state level. This gives rise to a level of inconsistency in terms of subsidies. For example, in Queensland, apprentices do not pay tuition fees (approximately $7-$10K), whereas in Victoria they do. That means that potential apprentices in Queensland and Victoria face very different cost structures to pursue their chosen career.

Another element of complexity arises because different stakeholders have different perceptions of what apprentices are. Depending on your point of view, apprentices are viewed as employees or students. In our view they are both. They are a part of the workforce and a part of the broad VET sector student cohort.

Apprentices are employees, who work for a business and attend trade school part time. Like other employees, employment conditions for apprentices are provided for in the Fair Work Act 2009. Yet, unlike regular employees, apprentices are an investment in future, rather than in current productivity.
Employers invest in apprentices not because they are a high value employee now, but with a view to them being productive and generating a return on that investment in the years after the are qualified.
In this respect, apprentices have a unique place in the broader industrial relations framework.

Apprentices are employees but they are also a part of the VET sector. They are learners along with university and TAFE students. However, unlike those students, who graduate with often huge HECS debts, apprentices are paid to learn, rather than paying to learn (ATO figures show average HECS debt is $25K, with some being $50K plus).

Incentives should be targeted and meaningful

From an employer perspective, meaningful incentives would mean establishing significant wage subsidies to encourage employers to take on an apprentice. These subsidies are critically important, particularly in the first two years of an apprenticeship, when an apprentice is in the least productive period of their employment/training cycle.

In many cases employing an apprentice represents a significant cost to employers, in that they cannot extract an economic return from that apprentice which is equal to or greater than the cost of employing them. The Victorian Chamber of Commerce and Industry (VCCI) found in a March 2023

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survey that the primary challenge or expense hindering businesses from engaging apprentices is the amount of time required for supervision. According to the VCCI survey, employers estimate that, excluding wages and fees, an apprentice incurs an average cost to the business of $14,773 in the first year, $8,340 in the second year, $7,341 in the third year, and $3,129 in the fourth year (Victorian
Chamber of Commerce and Industry, Business Voice Survey: March 2024).

Incentives offset the additional cost to employers above that of a normal employee, as employing an apprentice or trainee incurs additional costs based on the training and supervision required. Training fees can amount to thousands of dollars each year to employers, and potentially higher if there are no or reduced subsidies from the states and territories. This means the employer must entirely fund the deficit from their own pocket. There are also costs associated with releasing the apprentice to attend off-the-job training which can be up to two months a year for the first two years. There also needs to be a dedicated supervisor assigned to oversee the apprentice development, which can result in decreased work productivity of up to 50 per cent in the first year but ensures a high level of supervision is maintained to provide a safe working environment for the apprentice.

In terms of the quantum of subsidy, MPANZ’s view is that government support for employers, especially in the high forecast demand (and economically and environmentally) sectors like plumbing, should be set at no less than 30% in wage subsidy, with a potentially higher rate applicable across the first two years.

We also support the reinstatement of the fixed monetary completion incentives (in the order of $2500) to employers; and extend the support currently available to apprentices in priority occupations of up to $5000, to assist in the completion of their training to all endorsed apprentices and traineeships.
Employer rebates for businesses which employ workers from identified target cohorts (women, older workers, workers from a CALD background, First Nations Australians etc) should be eligible for additional rebates or incentives.

In the context of balanced support for apprentices and employers, we would also support the broader adoption of the Queensland tuition fee rebate model. We would also support any other measures which addressed cost pressures faced by existing and potential apprentices.

2. The effect that cost-of-living pressures is having on apprentices and trainees.

An apprenticeship is a three-way partnership between apprentice, employer, and training provider.
The cost-of-living crunch has, and continues to impact, all three.

Apprentices

The extent to which rising costs of food, housing, energy, petrol, transport, insurance, and so on is acting as a “blocker” to apprenticeship commencements or completions is hard to say with certainty.
However, it is reasonable to assume that apprentices experiencing food, housing or energy insecurity are less likely to succeed. And, as costs increase, and it becomes harder for students to afford to attend training, attendance, and therefore outcomes, will be impacted.

Employers

Steep rises in operating costs in such as insurance and energy have hit our member contractors hard in recent years. These increases, coming hard off the back of a very challenging COVID period, means that for many employers in the sector, operating margins are very tight. For some employers, these upward shifts in their costs can be the difference between deciding to take on a new apprentice or

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not. The new cost structures in the sector may mean that carrying the cost of an unproductive apprentice for a couple of years is no longer viable business option.

Cost pressures also directly impact employers, which in turn impacts apprentice numbers. The cost of taking on an apprentice, in actual dollars in wages, the opportunity cost of supervision as well as the productivity impact of a new learner, mean that for employers the costs can outweigh the benefits. A longer-term solution needs to be addressed through further investment in incentives and other policies that are effective in reversing the decline in apprenticeship commencements. This is where additional incentives for employers to employ apprentices from identified priority cohorts could be adopted to great effect. Additional support for employers for the time an apprentice is in training at their RTO should also be considered.

Training providers

Although not a direct cost of living effect on apprentices and trainees, a key relevant consideration is the fact that increasing costs also impact training delivery capability. This is a particularly relevant consideration for organisations like MPANZ which play a key role in advocating for, partnering in and delivering industry led training. The costs of delivering training, in terms of facilities, energy, and trainers has increased significantly. Trainers are becoming harder to source and recruit. The differential between what practitioners can earn in industry versus what they can earn as trainers is also wide, and acts as a brake on efforts to recruit experienced trainers. A program of incentives (for individuals or for RTO’s) could help play a role in bridging that gap and making it more attractive for experienced practitioners to down tools and take up training.

3. How the Apprenticeships System can best support high quality apprenticeships and
traineeships, including the roles of government support, workplace conditions and culture,
and employers.

Training quality and currency

The Consultation Question references training quality. Quality can be a subjective matter is some settings, however in our Industry, quality of training is all important and has particular significance.

The Plumbing Industry (Industry) operates on a licencing model underpinned by competency.
Plumbing work is regulated work throughout Australia. That is, it is work which requires a licence, issued by the relevant government authority.

Occupational licencing schemes for the industry vary across Australian jurisdictions, but core to all the schemes is that a minimum of Certificate III level is required before a practitioner is eligible to be licensed or registered in a particular class of work (e.g. roofing, water plumbing, drainage, mechancial services, gasfitting, fire protection). Additional, specialised training is often required for eligibility in many licencing specialist licence classes – for example, Thermostatic Mixing Valves and Medical Gas.

This is because, for plumbing work, to properly install, service and maintain a contemporary system, whether it be water reuse, heating, cooling, etc, a practitioner needs to know how the system works in its entirety. Plumbing systems are a series of interlocking components and connections, each dependent on the other for the system to be effective. That is why the Certificate III level qualification obtained under an Australian Apprenticeship Agreement represents the build-up of layered and inter- connected components of knowledge, competency and experience that has a value greater than the sum of all its component parts.

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Quality and consistency of training is particularly important in high-risk trades like plumbing. Plumbing work is, by its nature, extremely high risk. Well-functioning and effective plumbing and systems are the community’s first, and often only, line of defence against a range of hazards and risks.
Professionally installed and maintained systems keep the public safe from a range of diseases, such as legionella, cholera, typhoid and toxic and volatile substances like gas and carbon monoxide.

The health of the community, the amenity of the built environment, and our collective ability to manage water and use energy efficiently, are all inextricably linked to, and dependent upon, high quality, safe and reliable plumbing, and related systems. The primary way to ensure the safety of plumbing systems is to ensure the competence of those who install and maintain, service and test these systems. This is the key reason occupational licencing/registration exists in the industry, and those licencing arrangements are dependent upon consistently high-quality Certificate III level training and beyond.

Better data will make for more effective policy

For many parts of the economy, apprentice non-completions are a key part of the challenge. That is not the case for plumbing, which (like the other key licensed trade- electrical) has a track record of high (80-90 per cent plus) rates of apprentice Certificate 3 completions.

Sourcing and citing definitive and credible trade level data about apprentice commencements and completions is challenging. Data reported at a national level, such as National Centre for Vocational
Educational Research (NCVER) is not currently analysed and reported to that granular level as a matter of course for all industries. Adding to the challenge is that in the current system if the apprenticeship contract is cancelled (for example in some jurisdictions when an apprentice moves from one employer to another but continues the apprenticeship), or otherwise changes their apprenticeship, it may be counted as a non-completion.

The current completion reflects the number of signed contracts between the employer and apprentice.
This can skew the completion data because where an apprentice changes employer it is counted as a non-completion, even though the apprenticeship continues. In our current tight job market apprentices are moving employer often for financial reasons but remaining in their training and signing new apprenticeship contracts. This can be done better in our view. For example, the Unique Student
Identification (USI) number should either be tracked, or a better system should be developed to properly track completion rates.

Department of Workplace Relations and Employment has access to this information and could assist in providing more accurate data to the relevant bodies. Similarly, removing some of the barriers which prevent some state and territory regulators correlating USI with their own registration databases would assist in understanding the transition of completing apprentices to qualified plumbers, with the benefit of being able to better identify those who may be working illegally as qualified but unregistered practitioners.

Keys to succuss

Industry’s success, in terms of completion rates and employment outcomes for students is attributable to several key factors:

• Strong focus on providing mentoring and support to all students throughout their learning journey
in all programs. This includes learning support in the specific coursework requirements and
extends to special programs for students around mental health, drug and alcohol awareness and
other coping and life skills support.

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• Addional training around foundaon skills like literacy and numeracy. One of the barriers to
success to be overcome relates to foundaon skills. Some apprences commence their
apprenceship already facing literacy and numeracy issues. Others have a lack of digital and
related competency and literacy. Industry dedicates me and resources to assisng students in
that category and has developed a program, to be pilot tested next year, aimed at improving the
digital literacy of students.
• Retraining and upskilling to ensure that required skills are maintained and evolved over time for
the existing workforce, thus meeting the needs to industry. Currently there are over 90,000
plumbers throughout Australia. About 70 per cent of those plumbers are aged over 35 years.
(Australian Government Labour Market Insights 2021) With the evolving regulatory environment,
rapid changes in technology add additional pressure for individuals to access and complete training
to have current skills. An example of this is the evolution of heat pumps as part of the hot water
industry. The vast majority registered plumbers (over 70%) completed their training before heat
pumps existed or were included in the apprenticeship training model. In some jurisdictions
industry has developed specific units of training for heat pumps and related systems in partnership
with the local regulator.
A dynamic and future-focused sector requires a modern approach to training

The nature of the work of the plumbing sector is changing rapidly. New energy sources (hydrogen), new systems, new combinations of refrigeration/mechanical services and water plumbing which are emerging all the time require new training approaches. Water use, re-use and recycling is going to be key to adapting to climate change and plumbing and related training needs to be right up to date.

And, as renewable energy increases its share of the energy generation mix at the expense of coal and gas, the nature of the work of plumbers and gasfitters is also changing. Solar / heat pumps for hot water services are replacing gas fired hot water systems, and reverse cycle air conditioners are replacing gas heating and cooling systems. Currency of training has never been more important.
Neither the economy nor the environment can afford to have a shortfall of skilled practitioners capable of taking advantage of these new energy and water efficient products.

Somewhat paradoxically then, the plumbing sector is becoming more broad and more specialised at the same time. The training package for plumbing which underpins the apprenticeship model – CPC
32143 Certificate III in Plumbing is designed to be deliberately broad and to expose apprentices to the six main streams of plumbing work – water, sanitary, drainage, mechanical services, roofing and gas.
The extent to which that approach, which was conceived of decades ago, remains fit for purpose and sufficiently flexible for the contemporary Australian economy is a valid question, and one which
MPANZ would like to see explored.

As outlined above, the Certificate III level competency-based training model is a key part of the industry’s structure. It underpins occupational licencing, and by extension the safety of the community and the built environment. It is a model which has served the industry and community well for decades; and has produced hundreds of thousands of plumbers with well-rounded plumbing skill sets.
We are not advocating for a change to that broad model.

However, that does not mean the existing model is without problems or that cannot be revised and modernised to meet changing circumstances. For example, the current broad training package, which requires apprentices to be competent across multiple streams of plumbing work, has both positive and challenging elements to it for apprentices and employers respectively. On the one hand apprentices receive a level of training across the broad spectrum of plumbing work, which is a good thing for them in terms of their understanding of plumbing systems, and in terms of their long-term employability and job mobility.

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In many plumbing scenarios, having an understanding of how a system works in its entirety, and interfaces with other building services, is a key aspect to doing the job safely. In this respect, the breadth offered by the current apprentice model is key.

However, this is not always the case. Many plumbing contractors as they progress in their careers and seek competitive advantages in the market work within a narrower scope, and might do for example, only perform drainage, or roofing, or gas. A misalignment can occur where the scope of work of host employers, many of whom operate highly specialised businesses, is narrow, and focussed on just one or two streams of work. For those employers, having an employee (apprentice) undertaking training in areas where he or she is not going to be productive for the host employer can be problematic and can act as a disincentive for employers to host apprentices.

A broader review of apprenticeships

MPANZ is strongly supportive of the Certificate III apprenticeship model for training plumbers and the benefits of the broad-based qualification provides to ensure resilience and redundancy of critical skills across our industry. Notwithstanding this, we believe there would be significant merit and value in a more comprehensive review of apprenticeships (beyond incentives). Our view is that the dynamism in the sector, the cost and time pressures facing employers and apprentices, the trend towards more specialised plumbing businesses, are valid reasons to review the effectiveness, efficiency, and utility of the current apprenticeship model.

That is why we think a valuable follow-on piece or adjunct to this work on the incentives, would be a review of the apprenticeship model as it applies to key identified critical trades like plumbing, with a view to making to ensuring we have a modern and contemporary training model in place for the modern plumbing sector and construction industry more broadly.

4. If the current system is creating a training environment encouraging women, First Nations
people, people with disability and people in regional, rural, and remote communities into
apprenticeships and traineeships.

Casting a wider recruitment net

Attracting more students, apprentices, and workers to plumbing and construction trades more generally is challenging. Broadly speaking, career paths in the sector, especially emerging “new energy” jobs are not well defined, and knowledge and awareness of career opportunities is not as high as it could be.

There are broad issues associated with VET sector training generally (including but not specific to plumbing training) which can act as “barriers” to student uptake. Often cited in this context are things like apprentice pay rates, taxation incentives/rebates for employers and the availability of and access to training (particularly for regional or remote students). Where the Australian Government could act through the budget to remove these barriers, through student or employer subsidies or by funding more training delivery, we strongly encourage them to do so.

For example, consideration could be given to whether the existing training funding model could be adjusted to encourage workers to transition into plumbing and other identified critical trades and skill sets. Currently, the training subsidy models are designed with upskilling students in mind, as opposed to workers seeking new skills. That is, under current arrangements, once a person has obtained a qualification at a level, they will only be subsidised for an increase in qualification level, not to switch career paths. Existing training subsidies are geared around full qualifications, not skill sets or individual

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units of competency. So, for example, a qualified gasfitter seeking to transition to refrigeration work would not be funded to undertake the additional units required to meet the licencing requirements for refrigeration.

Removing blockers

There are also, at least for some sections of the community, cultural barriers. The trades and jobs which comprise the broadly defined energy sector are traditionally and heavily male dominated.
Whilst we do not know the extent to which this acts as a barrier for women as much today as it did even a decade ago, we recognise that there is great scope and opportunity to grow female participation rates in the sector.

For other groups in the community, the barriers are less about gender and more about a lack of history or family background in this type of work. For many trades in the construction sector, including plumbing, participation in the sector is often multi-generational. People, traditionally and mainly men, have followed a father, brother, uncle, or friend into trades like plumbing and electrical. For many parts of the community, particularly newly arrived migrant communities, that pathway does not exist, and its absence can act as a barrier to even contemplating a career in the energy sector or related trades. We note that for some highly in-demand occupations licensed such as plumbing, the immigration assessment system poses significant cost, ‘red-tape’ and assessment availability barriers which effectively prevent any meaningful access to the Australian plumbing industry for those wishing to participate; and this will be exacerbated if plumbing (ANZSCO) occupations do not remain on the priority list.

Broadening the appeal of apprentice training

In terms of attraction strategies, MPANZ believes there is significant scope to market and promote plumbing and other in-demand trades, including to secondary school students. It is vitally important that school students (irrespective of gender, socio economic or cultural background) are informed about the opportunities in these growth areas and understand their pathway options into VET training and a career in a key, in-demand sector, or trade. In this context there is scope to better leverage the potential of VET for secondary students (VETSS) for example, as a promotion and attraction mechanism. Industry would strongly welcome the opportunity to work with all relevant government agencies with a view to developing targeted programs to boost industry engagement with the VETSS program.

One of the challenges with attracting students into trades is the length of the commitment (four years).
A student who is unsure of their career direction may be reluctant to commit for such a significant period. We would encourage the Department to consider whether there is an opportunity to develop targeted programs aimed at familiarising prospective apprentices with what is involved, from foundational skills right through to advanced learning. This could be general or foundational introduction to basic principles of multiple trades, which would inform student career choices. It could serve as a “try before you buy” step and provide a recognised credential to students. We would advocate for career guidance counsellors and officers to also engage in specific awareness programs.

Women in plumbing

Industry actively to seeks ways to, for example, recruit more women into the traditionally male dominated sector, to provide more opportunity to First Nations Australians, and to bring training and opportunity to parts of the economy particularly affected by the current transition away from manufacturing.

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To attract women into the industry, it is vitally important to ensure that women can work and learn in a safe, welcoming, and supportive environment. Often, it is the informal connections between apprentices and those with experience in the trade, that make the difference in terms of providing support, encouragement, and a level of safety from anyone seeking to give the female apprentices a hard time on site. Just as a young male apprentice often learns from - and is supported by their father, brother, friend and so on - so it can be for young women.

Women currently make up only about one per cent of working plumbers in Australia. However, that is slowly changing, with a growing number of young women in training. As an industry, we are focussing hard on attracting recruiting and retaining people from non-traditional sources. The industry led model allows industry to develop specific, tailored programs to drive targeted recruitment.

Women in Plumbing is an initiative of Master Plumbers and Plumbing Apprenticeships Victoria (PAV) that supports female students, apprentices, and plumbers at every step of their journey, including providing paid pre-apprenticeships, direct entry to Plumbing Apprenticeships Victoria (Master
Plumbers Group Training Organisation) and an array of networking, mentoring, training, and social opportunities.

This program has success in addressing the general lack of understanding about what a plumbing career can offer and a lack of exposure to successful female role models in the industry. Women in
Plumbing Program seeks to breakdown the myths and stereotypes and help develop a network of female plumbers to show you how it all works and examples of what a career in Plumbing could be.

This program helps ensure that prospective apprentices as well as parents and careers teachers are clear about the journey into Plumbing and how women of all ages and experiences can get involved and hear from other women who have entered the career and been successful in doing so. A key advantage of the Program is that women can continue straight into an apprenticeship with Plumbing
Apprenticeships Victoria, Master Plumbers Group Training Organisation. Master Plumbers,
Apprenticeships Victoria, and Plumbing Apprenticeships Victoria, then fully support the apprentice with dedicated field officers, mentors and ongoing training and experience with host employers.

Government is also playing a role in some jurisdictions with direct support for women in the new energy specialities in plumbing. For example, Solar Victoria has partnered with Master Plumbers to deliver the Solar Victoria Apprenticeships for Women program to grow female participation in
Victoria’s clean energy workforce.

There are a myriad of other good ideas and tailored initiatives – at various stages of development - aimed at boosting female participation in trades-based apprentice training and employment, which
Industry supports. These include:

• Direct financial support - funding for women that are over 25 to take on an apprenticeship in
a non-traditional trade including matching support for employers.
• Continuing the Boosting Apprenticeship Commencements (BAC) – with a potential role for
state governments to help fund employers to take on female apprentices.
• Leveraging existing links to employers who put on apprentices. They could do a targeted
educational campaign providing employers with relevant policy tool kits and the like and
asking them to register their interest in taking on female apprentices. They could also run entry
level training (Jobtrainer) targeting females and then match them to these employers.
• Conduct and maintain/update a gender needs analysis.
• Create and embed a “women in construction” mentoring program.
• Develop and potentially mandate a male allies program.

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First Nations Australians, have, and will continue to be, a target of industry recruitment efforts. The industry has designed programs to deliver tailored training in a way, and at times, which meets the needs of First Nations students with various degrees of success.

Apprenticeships are highly regarded in the first nations community an encouraging greater numbers of First Nations peoples to undertake an apprenticeship would provide many benefits for the community. Indigenous students, however, have a lower completion rate than non-Indigenous students. There is a need for greater partnerships between industry, government and Indigenous communities to assist the apprenticeship journey. Further research is required to understand the reasons for these differences. We note the establishment of Jobs and Skills Australia, Jobs and Skills
Centres and recent changes to AASN providers, all of which may prove a fertile source of new information and analysis of workforce trends for future policy development.

5. How the Incentive System can be aligned with the priorities in the 2023 Employment White
Paper and the Australian Government’s broader economic objectives.

A key component of addressing the skills crisis in Australia is the federal government promoting and enhancing the reputation of undertaking an apprenticeship or traineeship in Australia. While incentives play a key role in increasing apprentice and trainee numbers, there are a variety of non- monetary additional areas that should be improved. It is crucial to prioritise solutions aimed at enhancing the appeal of apprenticeships to prospective candidates.

Pre-Commencement Career Advice

There is a consensus across the plumbing industry that more needs to be done to promote apprenticeships as a favourable career option for both high school students and job seekers. MPANZ advocates the need for greater promotion, although any promotion needs to be concurrent with action on improving the business case for employers.

We recommend that the government work with industry to better promote apprenticeship pathways as a high value employment opportunity to both parents and school students. There needs to be improved information to career advisers in schools about the benefit of an apprenticeship linked to the career education strategy. Fewer young people are choosing an apprenticeship as their primary option because of fewer schools and career advisors promoting apprenticeships as preferred pathways. For example, there could be programs that allow for industry representatives to visit local high schools to provide presentations on careers.

In 2018, an additional method the UK government introduced to promote trades was a new law which makes it compulsory for students in secondary school to interact with vocational education providers.
The law requires high schools to host at least six encounters with a provider of approved technical education qualifications or apprenticeships over the course of a student’s time in secondary school.40
If a secondary school is found to have not provided these interactions, they risk being served with a legal directive which can include a fine from government. Australia could implement something similar, requiring all schools to host one session a year from year 8-11 with local community trade representatives.

Prior to signing a contract, an apprentice should be presented with a clear mapped-out path with the requirements of their training and their career opportunities when they have finalised. This will aid the apprentice in understanding what they have signed up to complete.

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Any promotional campaign needs to reflect that apprenticeships are much more than a training pathway for just high school students, by acknowledging that many employers actively seek older apprentices. There is room for a greater engagement with existing workers and unemployed
Australians to encourage them to undertake and complete an apprenticeship.

While there is a national effort already underway in promoting apprenticeships with websites, champions and other channels for promotion, there is an opportunity for a more coordinated campaign to promote apprenticeships and traineeships.

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