Explanatory Memorandum
(Circulated by the authority of the Minister for Skills and Training, the Hon Brendan O'Connor MP)Attachment E: Costing Assumptions
Methodology
The regulatory burden estimates have been calculated separately for transitional and ongoing impacts.
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- The ongoing component relates to changes in the regulatory burden that will be experienced in respect of future cohorts of apprentices.
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- The transitional component includes temporary regulatory costs/savings: associated with an adjustment to the proposed arrangements such as decreased number of apprentices who are no longer eligible for the proposed incentives; associated with existing apprentices who are eligible to transition to the proposed arrangement; and measures with a temporary, rather than ongoing, lifespan.
The estimates include compliance related costs imposed on businesses and apprentices. They do not include costs that constitute workforce planning or that arise under the employment arrangement arising under an apprenticeship, such as the time spent in training and support.
Data underpinning the estimates has been drawn from the models used to cost the proposed arrangements, departmental apprenticeships data and estimates of the time likely to be spent/saved relative to the existing policy setting (introduction of the Australian Apprenticeships Incentives System from 1 July 2022).
The estimates do not include impacts on AASN providers, as they are a government contracted service engaged to support both the employer and apprentice to enter and undertake an apprenticeship, and to understand and avail themselves of their entitlements under the prevailing apprenticeship incentives scheme. AASNs operate in a manner that alleviates much of the compliance burden on employers and apprentices.
Table 15: Activities
| Proposal | Impacted Group | Activities |
| New incentive structure | Employers & Apprentices |
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| Prior qualifications | Apprentices | Removal of evidentiary requirement for affected apprentices. |
Differences in Regulatory Burdens
The compliance cost impacts of the elements that are common to the existing AAIP and the Reform proposals are measured in an equivalent manner. The compliance costs differ under two stages of the reform (1 July 2022 to 30 June 2024 and 1 July 2024 onwards), for the equivalent proposal, due to the different number of apprentices impacted by the proposal. The number of apprentices impacted is influenced by the commencement and retention response effects modelled under the reform policy settings.