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Tuesday, 12 March 2013
Page: 1498

Senator THORP (Tasmania) (19:09): As we all very well know, apprentices are the lifeblood of so many vital sectors in Australia. Not only do apprenticeships offer important career paths to hundreds of thousands of people, but they contribute significantly to building a national skill base for the future. This government has done some great work to support apprenticeships. Recent announcements of extra incentives for employers to take on apprentices in skill shortage areas as well as funding for hundreds of new industry based mentors will both make an incredible difference. But there are still some significant opportunities for doing better, particularly if we want to improve retention and completion rates of our apprentices.

I believe the greatest stumbling block to attracting and retaining apprentices at the moment is the low pay rates that are on offer across a range of jobs and industries. The reality for many apprentices is that they would be better off financially if they downed tools and took up a job making burgers at a burger chain or stacking shelves at a supermarket. In some industries, apprentices are working for little over $6 an hour before penalty rates. When they are offering pay that is so low, it is not surprising that employers can find it hard to attract quality candidates and even harder to retain the ones they do have through to completion. This is why I stand today in support of the joint union submission to Fair Work Australia for better wages for apprentices.

Last year a national survey of over 400 apprentices undertaken by the Australian Manufacturing Workers Union found many were paid less than the minimum wage of $589.30. This is barely above the poverty line and leaves little room to pay for essential daily living costs. It is not surprising then that so many make the difficult decision to drop out. If you cannot afford to pay rent and bills and maintain a car or pay for transport, an apprenticeship simply becomes unviable. In fact, figures from the National Centre for Vocational Educational Research show that up to 48 per cent of apprentices drop out before finishing, and that is an extraordinary waste. The AMWU survey finding reflected this reality, with a full two-thirds of surveyed apprentices saying they have considered dropping out because of low wages. In doing so, they are forced to give up potential career fulfilment, and the opportunities that a greater skill set will offer, just to get by.

Not only is this an unfortunate situation for the thousands of apprentices who may not have made this choice if wages were just a bit higher, but it also means wasted money for the employers who invested in the apprenticeship. Apprentice wages also need to reflect the reality that many are starting their apprenticeships later in life. The traditional model of a young person who still lives at home and takes up an apprenticeship when they leave school at 15 is no longer the norm. Instead, apprentices are increasingly older and they have all the expenses of adult life including cars, mortgages and kids to pay for. By paying apprentices a fair living wage, we can make these career paths more attractive and limit dropout rates. In doing so, we will also be helping to build a more effective apprenticeship system that supports national competitiveness by ensuring an ongoing supply of skilled workers. This is so important if we are to protect against the damaging impacts of skill shortages that can so easily stifle growth and productivity.

A fair pay system will make apprenticeships a more attractive option and reduce the likelihood that employers will need to look offshore to find the skilled workers they need. As you know, Madam Acting Deputy President Stephens, this is quite a topical issue at the moment. As a result, we are more likely to attract and retain quality candidates and ensure that more jobs are filled by Australian workers. I strongly support the call for better wages for apprentices.