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Thursday, 26 June 2014
Page: 4117

Senator PAYNE (New South WalesMinister for Human Services) (16:22): I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—


Australian Apprenticeships are a critical component in ensuring the Australian economy has the skills it requires for its future competitiveness. On an individual level, apprenticeships also provide a valuable pathway into long term employment.

We know around 20 per cent of trade apprentices drop out by the end of their first year and 30 per cent by the end of the second year. Despite promising employment prospects and earning potential, many young people find the first few years of an apprenticeship financially difficult.

The Government is taking action to support Australian Apprentices when they need it most, to help them complete their apprenticeship and deliver these valuable skills to the economy. The Trade Support Loans Bill2014 introduces and underpins Trade Support Loans, to provide assistance to Australian Apprentices from 1 July 2014.

Trade Support Loans are concessional, income contingent loans, which function in a similar manner to FEE-HELP loans received by university students, and provide for up to $20,000 over four years directly to apprentices for undertaking an apprenticeship in a priority occupation or qualification.

Implementation of the Bill is estimated to have an impact on fiscal balance of $439.0 million over the forward estimates.

To encourage apprentices to complete their training, the loan amount received by an apprentice will be reduced by 20 per cent when they successfully complete. This means an apprentice who elects to receive the total $20,000 in loans will have their debt reduced by $4,000.

Trade Support Loans will be available to apprentices in occupations and qualifications on a priority list that I will determine. The priority list will include traditional trades such as electricians, plumbers and carpenters whose highly skilled occupations significantly contribute to productivity and the economy.

The Loans will be repayable at the same income thresholds as Higher Education Loans Programme loans for a university student, so apprentices do not have to repay any money until they are earning a sustainable income with repayments made through the Australian Taxation system.

Apprentices will be required to opt in to the Loans regularly, with the intention of giving them the opportunity to reassess their personal circumstances and make an informed decision about continuing to receive loans. This will reduce the risk of apprentices unintentionally accumulating large debts.

To provide support where it is needed most the loans will be paid in monthly in arrears to a total of $8,000 in the first year, $6,000 in the second, $4,000 in the third and $2,000 in the fourth year of the apprenticeship. The loans are more heavily weighted to the first two years when support is needed most. That is when apprentice wages are generally lower and the risk of withdrawal from training is highest.

Australia's future productivity and competiveness depends on a skilled and trained workforce. Learning a trade is invaluable to the individual, the community and the economy, but learning skills doesn't come cheaply. The measures in this Bill will provide the regular financial support required for apprentices to complete their training.

By implementing Trades Support Loans, this Government is actively contributing to improve the apprenticeship completion rate, currently around 50 per cent. When an apprentice does not complete, there is a substantial loss of time and financial commitment which impacts on the Australian economy of skills not delivered and reduced productivity. Ongoing support such as that provided by the Loans will help mitigate these losses to apprentices, employers and the Government.

This Bill will further the Government's commitment to delivering highly skilled individuals in priority trades where there are growing skills shortages and will deliver improved productivity and competitiveness to the Australian economy.


The Trade Support Loans (Consequential Amendments) Bill 2014 makes consequential amendments to existing principle legislation as part of the Trade Support Loans Programme.

Debate adjourned.