Michael Sukkar MP

Supporting Apprentices Through Trade Support Loans

It gives me great pleasure to speak in support of the Trade Support Loans Bill 2014. A lot of speakers on the other side of the chamber have spoken begrudgingly about the benefits of the Trade Support Loans program. I must say that offering apprentices $20,000 over the life of a four-year apprenticeship, heavily front-ended for the first and second years of their apprenticeship, is, in my view, overwhelmingly positive. I have a lot of apprentices in my electorate. Indeed, since the budget I have visited a number of training facilities and spoken to those apprentices. The $5,500 that was provided under the Tools For Your Trade program just was not enough over a four-year period. In contrast, the $20,000 that will be provided under the Trade Support Loans program will offer for those people who need it more access to greater funding. And those that do not want to take it up do not have to. The beauty of the Trade Support Loans program will be that if you are in a trade that does not require the sort of additional support, or you do not need the additional income supplement, that the Trade Support Loans program offers, you do not need to take it up.

I think members opposite, in a sense, want the status quo. Fifty per cent of the people who commence an apprenticeship not finishing—they think that is acceptable. Increasing youth unemployment—they obviously think that is acceptable because they are offering no changes to the system that has not provided the sort of solutions that we need. But business-as-usual just was not an option in our view.

The Trade Support Loans program offers incentives for apprentices to ensure that they are provided a discount when they do complete their apprenticeship: a 20 per cent discount on the face value of the loan taken out through the trade support loan—a maximum of $4,000. Offering that kind of incentive I think is going to ensure that we head in the right direction in completion rates for apprentices. But the main point—and I think this is one of the big reasons we find apprentices unable to continue and, indeed, finish their apprenticeship—is that often you are working ridiculously long hours and you are getting up at the crack of dawn but you have peers and friends who might be working at McDonald’s or Red Rooster getting paid more than you. So it is very, very demotivating. It is very hard to continue working that hard for four years. I think that is one of the big reasons why our completion rates for apprentices have been getting worse.

The $20,000 Trade Support Loans program goes a long way to improving that situation. There is great flexibility for what the apprentices can put the $20,000 towards—$8,000 in year 1, $6,000 in year 2, $4,000 in year 3 and $2,000 in the final year. So it is heavily front-ended to the years where the wages in the apprenticeship are the lowest. We think that is going to assist apprentices to hang on in those first couple of years. We know that apprentices disproportionally drop out in those first and second years. So if we can help them get through that initial period and into years 3 and 4, we think that we can increase the completion rates for apprentices. That is what this program is all about.

The status quo is not working. Members opposite talk about the requirement to attract apprentices. Fifty per cent of people dropping out is not going to achieve that goal. It is hard enough to attract apprentices to start with. Once we get them in the door, we have to do everything we possibly can to ensure that they complete their apprenticeship. That is why I am very proud of the Trade Support Loans program. There is nothing that Trade Support Loans do not offer that Tools For Your Trade did. The net present value of $20,000 loan with the $4,000 discount is a hell of a lot more than the $5,500 from Tools For Your Trade. If it is simply a comparison between the two programs—which it should not be, but if it is—then this is a good news story and this is something that I think the parliament should be agreeing to, not in a begrudging way but actually happily telling our apprentices: ‘We value you and we want to support you as much as we support those people entering tertiary study.’

The days of having apprentices as second-class citizens are over. People who have undertaken tertiary study have been able to access concessional loans only repayable once they earned over $50,000, or thereabouts. We are offering that same opportunity to apprentices now. So this is a fantastic good news story, and I am very pleased to support it. I understand that, given that it is such good news for apprentices, many of my coalition colleagues would like to speak on this bill, so I will end my comments there.