House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Skills and Training, the Hon Brendan O'Connor MP)

Chapter Two: Statement of the Problem

2.1 Apprenticeships are important to both the individual and the economy

Apprenticeships provide an important pathway to secure employment for apprentices and offer skilled labour which both employers and the Australian economy need. The challenges, however, of engaging individuals, employers and Vocational Education and Training (VET) institutions in such learning are significant. According to the Organisation for Economic Cooperation and Development (OECD), analysis of apprenticeship systems around the world shows that central to effective provision is the simple realisation that apprenticeships will only work well if they are attractive to both apprentices and employers. ^[10] Getting the cost-benefit balance right for the apprentice, employer and the Australian Government is essential for effective policy.

Australia currently has a persistent shortage of skills in many industries, a large portion of which rely on apprenticeships as the main pathway for training and entry. ^[11] The Australian Government should intervene to ensure it is building the skills that Australia's economy needs to thrive in a post COVID-19 environment. Based on analysis from the National Skills Commission (NSC), 38 per cent of skills shortages are occurring in occupations with a vocational pathway. As such maintaining a steady supply of apprentices ensures there are skilled workers ready to fill the jobs Australia needs. Encouraging Australians to develop the skills needed to meet these shortages will also allow them to train in occupations most likely to provide secure employment in the future.

The supply of skilled workers to the labour market is crucial to supporting the growth of the Australian economy and creating new jobs for Australians. The shape of the Australian labour market has changed significantly over the past 40 years, with strong growth in higher skill level jobs, non-routine jobs and services. Generally, shortages are greatest among technicians and trades workers' occupations, including electricians, carpenters, chefs, fitters and motor mechanics. These are industries in which apprenticeships are a primary pathway.

A 2004 Inquiry into skill shortages by the Senate Committee of Education, Employment, and Workplace Relations found the consequences of skill shortages can be long lasting and serious. The Committee reported 'In the short term, enterprises may suffer increased recruitment or operating costs, reduced productivity, and constraints on business development and expansion. In the longer term, they may adapt their operations to a lower skills base or occupations or industries of national importance may disappear, and the economy as a whole may follow a 'low skills equilibrium'.' ^[12]

The NSC defines skill shortages as when employers are unable to fill or have considerable difficulty filling vacancies for an occupation, or significant specialised skill needs within that occupation, at current levels of remuneration and conditions of employment, and in reasonably accessible locations. Skill shortages are caused by many different factors such as:

•

People moving out of regional areas;

•

Not enough training places for certain skilled occupations;

•

Changes in technology; and

•

Commencement of large projects in one region such as construction. ^[13]

Reforms to the apprenticeship system should seek to address the underlying reasons for skills shortages to encourage more individuals to take up apprenticeships in these areas.

For the individual, apprenticeships offer a unique model providing the opportunity to receive training while earning an income. On-the-job training facilitates an environment in which people who have not worked before can more easily transition into new industries. Apprenticeships can offer a viable path into employment for young Australians especially during periods of economic downturn and highly competitive labour markets. The OECD has found '...countries with a high share of youth in apprenticeships have lower rates of disconnected youth and youth experiencing a difficult transition to employment.' ^[14]

Before COVID-19, apprenticeship commencements were declining. Commencements fell 30 per cent between 2012 and 2019 and completion rates remained below 60 per cent. ^[15] Barriers in the apprenticeships system limit apprentices from commencing or completing their training. Many apprentices struggle with low wages and lack of support. Employers of apprentices are also affected by the system, with high up-front costs, administrative burdens and high levels of cancellations.

In a tight labour market, in which there are low unemployment rates, apprentices have more employment options. For the best return on investment, reforms should focus on completions to ensure a pipeline of skilled workers is available in the medium term.

Table 2: Skill Level Projections - five years to November 2025

2.2 There are barriers to the uptake and completion of Australian Apprenticeships

Apprentices face barriers to the uptake and completion of an apprenticeship, demonstrated by the long-term decline in the number of commencements and completions. Whilst apprenticeship commencement and completion numbers can be partially attributed to broader influences such as changing economic conditions, industry modernisation and shifts to higher education, a number of key reasons are explored below.

The decline in commencements and completions before COVID-19 economic response measures

Since 2012 and prior to the introduction of the COVID-19 response measures, apprenticeship commencements were declining, dropping 65 per cent from 376,900 in June 2012 to 133,500 in June 2020. The annual number of completions also declined, decreasing by 55 per cent from 187,600 to 84,000 completions between June 2012 and June 2020. In addition, there was a drop in the completion rate, from 59.7 per cent for apprentices who commenced in 2012, to 56.1 per cent for apprentices who commenced in 2016.

Approximately 83,000 fewer apprentices and trainees were in-training on 31 March 2021 when compared to 30 September 2013. ^[16] Movement of young people away from apprenticeships to higher education and other work with higher rates of pay may have contributed to a drop in commencements. This decline was also driven by tightened eligibility and a series of policy changes in 2012-2013 which improved the apprenticeship system's ability to address skill shortages by focusing program investment on priority occupations. While program incentives continued to be available to support new workers, support for existing workers was limited to occupations on the National Skills Needs List or priority occupation list (aged care, disability care, child care or enrolled nurses). As a result of these policy changes the greatest decline since 2012 has been in non-trade apprenticeships (often traineeships) while traditional trade in-training numbers have remained relatively steady over time.

However, since the introduction of temporary COVID-19 support measures, commencements have been on the rise. Recent National Centre for Vocational Education Research (NCVER) figures show a 59.5 per cent increase in commencements in the last 12 months when comparing June 2020 commencements to June 2021. This reflects the positive effects of the temporary Boosting Apprenticeship Commencements (BAC) incentive in supporting the pipeline of skilled workers during the COVID-19 pandemic.

Figure 2: Commencements over the past five years for apprentices and trainees ^[17]

The Supporting Apprentices and Trainees (SAT), BAC and Completing Apprenticeship Commencements (CAC) were implemented temporarily to sustain apprentice and trainee in-training numbers during the COVID-19 pandemic. The SAT launched in March 2020 at the beginning of COVID-19. The SAT wage subsidy was designed to keep apprentices and trainees connected to their employers by providing a 50 per cent wage subsidy for existing apprentices and trainees.

In addition, the 50 per cent wage subsidy provided under BAC introduced in October 2020 reversed the decline in commencement numbers and demonstrates the effectiveness of large-scale, broad Australian Government investment. The increase in commencements following the introduction of the BAC has had a positive flow on effect to in-training numbers. NCVER data shows around 341,385 apprentices and trainees were in-training as at 30 June 2021. ^[18] This in-training number is the highest since March 2014 when there were 376,215 in-training.

Barriers for the employer

Employers may be constrained by several factors when hiring an apprentice including high upfront costs, risk of non-completion, difficulty in recruitment and needing to navigate a complex system. Addressing these barriers is a priority for reform and key to encouraging more employers to hire apprentices.

Employers have cited high hiring costs, particularly upfront costs, as a key barrier to engaging employees as an apprentice. Wage costs and other expenses associated with running a business have grown substantially over the past two decades, however the total standard apprenticeship incentives available to employers have remained unchanged at around $4,000 since 1998. In 2013 the Fair Work Commission made major changes to awards for apprentices including increased wages, wage progression based on competency, an introduction of adult apprentice rates and reimbursement of course fees. While improving conditions for apprentices, this has increased the cost of hiring an apprentice for employers and further disincentivises employers from engaging with apprenticeships.

Needing to devote time to supervise and train an apprentice may also be a barrier for employers. In the early years of an apprenticeship, when supervision costs are high and the productivity, whether perceived or actual, of an apprentice is low, for some employers, the time spent supervising an apprentice is time taken away from generating income or growing the business. This is a particular consideration for small and medium sized businesses, which employ more than half of all Australian Apprentices as well as employers who have not previously engaged an apprentice. This effect can be magnified during periods of economic downturn or uncertainty.

Hiring an apprentice can be considered a risky investment. The relative costs to the employer are higher if an apprentice does not complete their apprenticeship or decides to change employers. In this case, the employer neither benefits from greater productivity in the later years of the apprenticeship nor the skilled labour. This risk of non-completion can reduce an employer's appetite to hire an apprentice. ^[19]

In 2019, over 43 per cent of employers had difficulty recruiting employees. Of these employers, the main reasons for difficulty in recruitment were limited applicants and a shortage of skilled people in the industry. ^[20] A survey of employers conducted by the Department of Jobs and Small Business in 2017 found around 30 per cent of advertised trade apprentice vacancies went unfilled. Moreover, almost half of employers advertising vacancies received more than 20 applications, yet most candidates were regarded as unsuitable. ^[21]

The difficulties in recruitment are highlighted by the NSC job vacancy index, which reached its highest level in 13 years in October 2021 (250,900 jobs advertised) - 49.2 per cent (or 82,700 job advertisements) above pre COVID-19 levels. Job advertisements climbed 7.4 per cent from October to November 2021 - 52 per cent higher than a year earlier and 44 per cent above pre-COVID-19 levels. ^[22]

During a review of Australia's VET system in 2019, employers identified complexity of incentives as a barrier, specifically describing the Australian Apprenticeships Incentives Program (AAIP) as difficult to navigate and understand. ^[23] This was supported by the Productivity Commission in 2020, which found the incentives system hard to use, especially for small and medium sized businesses that may have less capacity to navigate different programs. One employer specifically referenced having to digest and understand the AAIP Program Guidelines as a large administrative burden with the potential to be an obstacle to hiring apprentices in itself. ^[24]

Barriers for the apprentice

Low wages and the corresponding concern of not being able to meet ongoing costs of living are barriers to taking up an apprenticeship. ^[25] This is a particular constraint for longer qualifications of up to four years. This is supported by recent research by Wallis that found many apprentices struggle to balance work, study, a social life and household commitments, with 35 per cent of the apprentices surveyed finding the low level of pay challenging, especially during the first year. Apprentices who found low wages extremely challenging reported seeking food from charities, selling vehicles and relying on partner support to make ends meet. ^[26]

The National Minimum Wage ($722.60 per week) is provided by the Fair Work Act 2009 for employees not covered by an award or agreement. In 2013, the Fair Work Commission decided the salary of a first-year apprentice would be 55 per cent of a fully qualified person if they had completed year 12 (50 per cent otherwise). Annual wage data for apprentices indicates wages in the first two years of training are significantly below the average expenditure on basic goods and services by low economic resource households. For example, an apprentice hairdresser would be covered by the Hair and Beauty Industry Award, with a minimum full-time rate of $438 a week (61 per cent of the National Minimum Wage). A construction worker would be covered under the Building and Construction General On-site Award wage, with a minimum full-time rate of $537.91 a week (74 per cent of the National Minimum Wage). The Australian Bureau of Statistics (ABS) found that in 2015-16 average spending by households on basic goods and services was $846 per week. ^[27] The financial barriers to undertaking an apprenticeship are even greater for young workers and those living in regional and rural communities. Ongoing economic uncertainty resulting over the past few years has impacted the cost of living in Australia and continues to present additional financial strain on apprentices.

The impact of low wages on apprenticeship commencements and completions is compounded when the market presents higher paying alternatives. For example, an apprentice mechanic earns a lower average wage than a casual hospitality worker or labourer. Likewise, mature aged workers looking to make a career change are deterred by low apprentice wages for up to four years and the lack of flexible learning options. Research commissioned by the NSW Board of Vocational Education and Training found that in periods of sharp trade skill shortages, some apprentices were tempted to quit their training for higher wages working as non-qualified tradespersons in booming industries. ^[28]

Financial barriers lower commencement and completion rates by making apprenticeships an unappealing financial decision. This may both deter individuals from considering an apprenticeship and lower the completion rates of those who do begin. These financial barriers are strongest in the early years of an apprenticeship, where wages are at their lowest and apprentices can choose better paying alternatives such as retail or hospitality work. ^[29] This is also supported by findings from a 2020 Review of Senior Secondary Pathways, that found young people to be increasingly moving away from vocational education pathways. While apprenticeships have declined significantly over the past five years, university admissions have increased, and VET is persistently seen as a less prestigious pathway than university. ^[30]

For those who do begin an Australian Apprenticeship, many do not complete. Only 56.1 per cent of apprentices commencing in 2016 completed their apprenticeship. ^[31] While the main reasons cited for not completing an apprenticeship were leaving the job or changing career, being offered a better job and not getting on with a boss or colleagues were also prominent reasons. ^[32] Figure 3 lists the main reasons for not completing an apprenticeship across all apprenticeships.

Figure 3: Top five reasons for not completing an apprenticeship ^[33]

Barriers for women

The number of women commencing apprenticeships has been steadily increasing over time, particularly since the introduction of the BAC. However, women face a number of barriers to undertaking and successfully completing an apprenticeship, particularly in trade occupations in which there has been traditionally low take up by women compared to men (women in non-traditional trades account for seven per cent of total trade apprentices). ^[34] Workplace culture and bullying, as well as employer misconceptions about women's capabilities to perform in trades are deterrents for women considering a trade occupation. Further, women may not have considered a non-traditional trade (most trade occupations other than hairdressing) as an attractive career. Increasing visibility of these career options and providing opportunities to experience non-traditional trades, such as those in the construction industry, first-hand may inspire women to consider pursuing careers in these occupations.

Increased wrap-around supports including mentoring and opportunities to trial a trade before committing to an apprenticeship may be successful in encouraging more women to consider an apprenticeship, particularly in a non-traditional trade occupation. Options such as guaranteeing an In-Training Support place to provide targeted services such as mentoring, counselling and mediation or increasing visibility of apprenticeship pathways to school-aged girls by providing opportunities to trial a trade may also lead to increased commencements.

Barriers for youth

Data from the Australian Institute of Health and Welfare's Australia's youth report released in June 2021, shows that compared to older age groups, young people experienced higher rates of psychological distress, job loss and educational disruption due to the COVID-19 pandemic. ^[35] While the economy has begun to recover from the economic impacts of COVID-19, youth unemployment remains high.

Young apprentices may withdraw from their apprenticeship before completion for several reasons. These include poor working conditions, mental health issues, inadequate training, high travel costs and low pay. Wallis research, commissioned by the Department, shows that apprentices who received sufficient support felt more likely to complete their apprenticeship. Apprentices also identified a need for greater support for mental health and problems with their employers. More than a quarter of apprentices felt they would not receive sufficient support for mental wellbeing should they need it. Many apprentices also referred to problems relating to their boss.

The NSC has found that youth are particularly vulnerable during large economic and labour market shocks due to having fewer skills and less experience than older counterparts. While the economy is recovering from the economic impacts of COVID-19, youth unemployment remains high. The latest Australian Bureau of Statistics data from February 2022 shows the youth unemployment rate is more than double that of the overall population, at 9.3 per cent compared to 4.0 per cent. ^[36]

Ensuring reforms to the apprenticeship system work to encourage young Australians to consider an apprenticeship as a possible career pathway is a priority. Increased apprenticeship commencements and completions for this cohort will contribute to addressing skills shortages in Australia while also supporting young Australians into successful careers.

2.3 The objective of Australian Government incentives

The Australian Government's objective is to contribute to the development of a highly skilled and relevant Australian workforce that supports economic sustainability and competitiveness. Ensuring the apprenticeship incentives system is fit for purpose will contribute to achieving this goal. Reforms to the apprenticeship incentives system seek to address this objective by:

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Creating genuine opportunities for skills-based training and development of employees; and

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Encouraging people to enter skills-based training in priority occupations through an Australian Apprenticeship. ^[37]

Employer incentives and financial support provided to apprentices have long been used as mechanisms to encourage greater participation in Australian Apprenticeships. The economic rationale for existing incentives has been to encourage employers to increase the available training places by helping to offset wages and other costs. Targeting these supports to the skills Australia needs will contribute to addressing national skills shortages as well as providing career opportunities for individuals.

2.4 How much should the Australian Government intervene?

There is strong argument for Australian Government intervention in the apprenticeship system, however financial incentives to encourage employers to take on apprentices should be used with caution and should be targeted effectively. ^[38] Financial incentives provided by the Australian Government should be high enough to influence employer and apprentice behaviour, however, should also balance the overall benefit to the employer. While taking on an apprentice may incur high costs, including through supervision and training, employers can generally expect to recoup the costs of an apprentice through the skilled labour they provide as well as the prospect of retaining them after the apprenticeship is completed. This productive work, particularly in the later stages of an apprenticeship, typically compensates for employers' earlier investment into training. ^[39] This overall benefit to the employer should be kept front of mind when considering the amount of financial incentives that should be provided by the Australian Government.

2.5 The current state of Australian Government incentives

Prior to the introduction of COVID-19 economic response measures, commencement and completion rates were continuing to decline. The BAC and CAC have demonstrated that the Australian Government can play a strong role in influencing behaviour and promoting apprenticeships as an attractive pathway for both employers and employees. However, the BAC and CAC are temporary emergency response measures introduced in the face of the pandemic. At a total cost of $5.8 billion, they are not fiscally sustainable in the long-term. Action is required to ensure Australian Government incentives are fit for purpose, fiscally sustainable, continue to reduce barriers and support commencement and completion rates after these temporary measures cease.

As the economy continues to strengthen and move from recovery into expansion, it is important to address near and long-term workforce challenges that can disrupt business operations, trade and mobility. There are five main challenges to overcome to support reform of the AAIP:

1.

Incentives should be targeted to address skill shortages in priority occupations to ensure a steady pipeline of skilled workers and minimise the risk of future workforce shortages;

2.

Costs remain high and are increasing, for both the employer and the apprentice;

3.

Incentives do not adequately target the decision maker. Recent research shows the apprentice makes most decisions throughout the apprenticeship, yet most incentives target the employer;

4.

The complexity of the incentives system is hard for employers and apprentices to navigate and understand; and

5.

Non-financial support is needed, such as job matching and mentoring, with evidence highlighting the positive impact non-financial support can have on apprenticeship completion rates.

1. Incentives should be targeted to address skill shortages

There is significant capacity in the domestic Australian labour market for people to upskill. As of October 2021, 707,000 people are unemployed (similar to pre-COVID-19 numbers) and a further 1.3 million people are underemployed. There are also barriers in the market which can prevent jobseekers finding jobs, including skills and geographical mismatches.

The NSC highlights longer-term challenges, forecasting that over the next five years employment is projected to grow by around one million jobs with more than nine in 10 new jobs created projected to need a post-school qualification. ^[40] With 38 per cent of skills shortages in occupations with a vocational pathway, Australian Government investment in apprenticeship incentives must encourage individuals to take up opportunities in the jobs Australia needs.

The Australian Apprenticeships Priority List (Priority List) has been developed to better identify areas of skill shortages with a clear apprenticeship pathway, including emerging skill shortages in health care due to COVID-19. Going forward, the Priority List will consolidate and replace the current National Skills Needs List (NSNL), the Priority Occupations list and the AISS payment list. The Priority List will help facilitate access to high quality and relevant training to meet the requirements of the jobs that emerge through the next decade and beyond to support the further growth and prosperity of Australia.

The Priority List comprises 77 Technician and Trade Worker and Community and Personal Service Worker occupations identified as in shortage by the NSC. These occupations represent approximately 60 per cent of apprentices in-training. ^[41] The NSC publishes the Skills Priority List (SPL) annually to inform broader sector reforms including training funding, skilled migration and apprenticeship incentives. The SPL provides a current labour market rating and a future demand rating for occupations nationally, with current labour market ratings also available at a state and territory level. According to this list, over 150 occupations face current skills shortages nationally and nearly 40 per cent of technical and trade occupations are listed as being in skills shortage.

The Priority List is based on the SPL and includes all occupations that meet the following criteria:

•

Assessed by the NSC as being in shortage; and

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Classified by the Australian Bureau of Statistics Australian and New Zealand Standard Classification of Occupations (ANZSCO) as either Technicians and Trades Workers (ANZSCO Major Group 3) or Community and Personal Service Workers (ANZSCO Major Group 4).

The Priority List will be updated annually, based on the NSC's annual SPL.

Previously, to be eligible for some incentives offered under the AAIP, the apprenticeship qualification needed to be listed on the NSNL or be a Priority Occupation. The NSNL was introduced in 2007 and identified occupations that were deemed to be in national skill shortage. However, it was not representative of skill shortages in occupations for which an apprenticeship is an entry pathway to the occupation. The infrequency in which the NSNL was updated (the last update was in 2011) and the criteria that defined the scope of the NSNL had an impact on this. This issue also contributed to Australian Government incentives being provided to occupations not in skills shortage.

What is a priority and non-priority occupation?

The Priority List, based on the work of the NSC as described in the previous section, sets out occupations that will be incentivised as priority occupations under each of the proposed options. The top five occupations by commencements for the 12 months to June 2021 is shown in Table 3 below.

Table 3: Top five occupations for priority and non-priority occupations by commencements for the 12 months to 30 June 2021 ^[42]

2. Incentives should respond to high and increasing costs

In 2020, the Productivity Commission undertook a review of the National Skills and Workforce Development Agreement which found that employer incentives now account for less than two per cent of the full costs of hiring and training a trade apprentice. ^[43]

The timing of when incentives are paid can reduce or exacerbate the cost barrier. Research has found delayed incentive payments have a negative impact on commencement rates for small and medium sized businesses. This was demonstrated when movement of the $1,500 commencement incentive in July 2012 from three to six months after commencement negatively impacted small and medium business apprenticeship commencements with almost 18 per cent fewer apprenticeship commencements.

Similarly, lower wages remain an obstacle to many individuals considering undertaking an apprenticeship and current Australian Apprenticeship incentives are not sufficient to meet the costs of living. Incentives should be designed to minimise the negative impact of low apprentice wages for apprentices.

3. Incentives should focus on the decision maker

Recent research by the Productivity Commission found that if governments want to increase the overall number of apprentices, policy design should aim to increase both commencements and completions. This is supported by significant research and analysis undertaken over the previous decade indicating incentives are best directed at the party responsible for decision-making.

While employers are critical to the supply of apprenticeship positions, the apprentice is responsible for both the decision to undertake an apprenticeship and then to complete it. 80 per cent of cancellations are initiated by apprentices. ^[44]

Financial barriers for apprentices are a clear impediment to both commencement and completion rates, with low wages and better paying alternatives making apprenticeships a less appealing pathway. Analysis undertaken by the Department demonstrates making periodic payments directly to apprentices over the life of the apprenticeship supports higher completion rates. ^[45] Regular payments over the life of an apprenticeship, as opposed to a lump sum paid on completion or commencement, have been effective in supporting retention and completion rates. For example, apprentices in receipt of regular payments under Trade Support Loans (TSL) or Living Away From Home Allowance (LAFHA) are more likely to complete their apprenticeship. Receipt of LAFHA has been shown to increase the probability of completing by 7.6 per cent for trade apprentices, and 13.7 per cent for non-trade apprenticeships. ^[46]

As a result, it is critical to provide financial incentives for apprentices to influence behavioural change to achieve an overall shift in apprenticeship outcomes towards higher commencements and completions.

4. Incentives should be easy to navigate and understand

The AAIP and its predecessors have been subject to regular adjustments in response to economic cycles and changes in policy over several years. These changes have resulted in a complex framework. There are over 30 different payments available under the AAIP and eligibility for individual incentives depends on a wide range of factors. The SAT, BAC and CAC have further complicated incentives in an already intricate system.

Reviews by the Productivity Commission and others suggest many of these changes before the COVID-19 economic response measures, have not sustained positive apprenticeship outcomes. Furthermore, many of the trade occupations that feature on the skills shortage lists have been experiencing skills shortages for decades despite incentive payments. The cumulative effect of these changes over time has been to complicate the incentives framework for both employers and apprentices. Industry groups, employers and apprentices have repeatedly raised concerns that the existing AAIP is overly complex, difficult to navigate and this complexity can act as a deterrent to applying for assistance. For example, the previous and concurrent qualifications criteria are overly complex and delay the sign-up of apprentices. Following his review of Australia's VET system, including industry consultation, the Honourable Steven Joyce recommended 'A simpler, more streamlined apprentice incentives program would provide better and more easily understood support to employers and their apprentices and trainees.' ^[47]

5. Non-financial support should be provided

Non-financial support for employers and apprentices both in the lead up to commencement and during the apprenticeship can be critical to achieving successful completions. Research shows that both apprentices and employers value non-financial support, including mentoring, mediation, job-matching the apprentice to the employer and assisting the employer to find the right person for the job.

The Australian Apprenticeship Support Network (AASN) providers are contracted to provide a range of universal services to support apprentices throughout their apprenticeships, from signup to completion. In order to determine which apprentices need more intensive support, AASNs are required to assess which apprentices are at risk of not completing and in need of further or ongoing support. Departmental data as at 28 February 2022 shows Australian Apprentices that received ITS services delivered by the AASN were:

•

8.7 per cent more likely to complete their apprenticeship;

•

10.7 per cent less likely to cancel or withdraw;

•

9.8 per cent more likely to be retained; and

•

42.3 per cent more likely to resume from suspension. ^[48]

The Productivity Commission supports these results finding that apprenticeship support services such as mentoring and pastoral care can help apprentices overcome some of the challenges they may face in the workplace with evidence suggesting that these services are generally effective at increasing completion rates. Continuing to provide ITS places will ensure AASN providers can continue to support apprentices through to completion.