Explanatory Memorandum
(Circulated by the authority of the Minister for Skills and Training, the Hon Brendan O'Connor MP)Chapter Eight: Implementation and Review
8.1 Implementation
Legislation
New primary legislation is recommended for any new incentives system to improve and simplify administration of the program and protect apprentices through strengthened accountability. Additionally, changes to the Trade Support Loans (TSL) will need to be reflected in the TSL Act and Rules.
New legislation will not be in place until after 1 July 2022. In the interim, legislative authority and operation of the new program (excluding TSL) will rest on items in the Financial Framework (Supplementary Powers) Schedule 1AB (FFSP) and robust Program Guidelines, similar to the operation of the current program.
Changes to the TSL will be implemented once proposed changes to the enabling legislation are made. The TSL is governed by the Trade Support Loans Act 2014 and two legislative instruments: the Trade Support Loans Rules 2014 and Trade Support Loans Priority List 2014.
It is anticipated that legislation will be introduced in the Spring 2022 sittings.
Program guidelines
The implementation of the Australian Apprenticeships Incentive System (AAIS) would be supported by new Program Guidelines, published on the Department's website and GrantConnect. The Program Guidelines would provide details on incentives including eligibility requirements and how to apply.
All existing employers and apprentices on the current program that commenced prior to 1 July 2022 would be grandfathered under existing arrangements.
AASN provider contracts
Implementing the new incentives model would require a variation to the Australian Apprenticeship Support Network (AASN) provider contract which commenced on 1 February 2020. The current AASN contract contains provision for delivery of a new incentives model, so the variation simply needs to insert the AAIS name into the contracts.
Strong and effective communication between the Department, AASN providers and employers/ apprentices will be required to ensure program participants are well informed regarding their potential eligibility for various payments. This is consistent with the current role of the AASN and a continuation of their current work, and a change such as this is easily accommodated by a contract variation.
In addition to delivering the new model, AASN providers would also continue to deliver the current program, as employers claiming incentives for an Australian Apprentice prior to 1 July 2022 would continue to receive payments under the old payment structure for that apprentice.
Grandfathering arrangements
To maintain simplicity and reduce overall costs, existing employers and Australian Apprentices that commenced prior to 1 July 2022 will be grandfathered under their existing arrangements. This will ensure that employers and apprentices continue to receive the support they anticipated when initiating the apprentice-employer relationship.
Stakeholder engagement
As part of implementation, consultation with key stakeholders (including the AASN) would be undertaken to manage the change process for the new incentives model. This will include consideration of IT capabilities as a result of Apprenticeships Data Management System (ADMS). Additionally, the Priority List will be carefully communicated to ensure stakeholders understand how the Priority List is updated and where to find current information.
AASN providers will continue to provide wrap-around services, helping to ensure that employers and apprentices understand what incentives they are eligible for under the new system, and have access to non-financial supports to effectively engage with the apprenticeships system.
Information technology
The new incentives framework will be delivered through the new ADMS, however the Training and Youth Internet Management System will continue to support existing incentives until the new system is fully operational. ADMS will provide a better user experience, with a strong self-service component for apprentices and employers when lodging claims.
8.2 Evaluation
The Department will evaluate the new incentives system through a combination of ongoing consultation with stakeholders through existing governance groups and surveys, qualitative research into the impact of the new model on stakeholders and quantitative analysis of administrative and longitudinal data to assess the appropriateness, effectiveness and efficiency of the new model. The evaluation will consider the new incentives against the key policy issues outlined in Chapter Two.
The new ADMS will provide more timely program data which will enable the Department to better monitor the new AAIS. The Department worked closely with a broad range of stakeholders to develop the ADMS and will continue to work with these stakeholders during the implementation of the project. The incremental approach to development provides the opportunity for the Department to regularly assess, evaluate and test the components of the new system to ensure it meets users' needs. This approach allows for early identification and mitigation of issues as they arise.
The recommended policy option is targeted towards occupations on the Australian Apprenticeships Priority List (Priority List), which has been developed to better capture skill shortages in the apprenticeship space and emerging skill shortages in health care due to COVID-19. The Priority List will be updated and evaluated annually to maintain relevance to the needs of employers. Regular updates to the Priority List will ensure that the program targets those in areas of skills need and adapts to changing market requirements.
The impact of the proposal will be reviewed at key intervals. The first checkpoint review will take place in 2023-2024 (two years after commencement), before phase two commences. As part of this review the Department will consult industry, the Vocational Education and Training sector and the National Skills Commission. This review will analyse the effect of phase one to determine whether it has led to an increase in commencements and inform next steps.
The implementation of ADMS, annual updates to the Priority List and reviews of the new AAIS will give Australian employers and apprentices access to high quality and relevant training to meet the needs of a changing economy. Reforming the Australian apprenticeships incentives system will better target government investment to support employers and apprentices meet the skills gap in Australia.