Australia’s construction industry is battling a major recruitment blockage as declining apprentice numbers have left industry leaders fearing the worst for the nation’s skilled workforce.
The Victorian Chamber of Commerce and Industry (VCCI), the state’s top not-for-profit business organisation, sounded the alarm last week after recently released figures revealed a 38 per cent drop in apprenticeship and traineeship commencements in 2024-25 compared to the previous year.
With the inflow of critical trades like plumbing and carpentry running dry, industry experts are concerned the figures could worsen the state’s housing and skilled worker crisis.
These skilled professions are the foundations of the home construction sector and are seen as essential to meeting housing targets and supporting Australia’s $524 billion infrastructure boom.
Meanwhile, small trade firms are struggling to meet demand without apprenticeships to replace an ageing (and soon-to-be-retiring) workforce, leaving SMEs bearing the brunt of the downturn.
“The skilled workforce crisis is here, and it must be addressed,” Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra said.
“The decline of apprenticeship starters from last year to now is significant and a massive concern.”
“The 38 per cent year-on-year reduction is more than worrying, as apprenticeships are crucial to ensure our workforce meets our growth needs.”
Financial Incentives to unclog tradie pipeline
The VCCI has called for a financial lifeline to unclog the pipeline of new talent, proposing the reintroduction of withdrawn employer incentives to help construction firms support the costs of training apprentices.
Research from VCCI found nearly 40 per cent of firms would require $12,000 or more incentives to bring on new apprentices.
“Our members have been clear: the financial costs are significant, and incentives are essential,” Guerra said.
“There is no doubt the withdrawal of incentives to businesses to take on apprentices is impacting.”
“The Victorian Chamber urges the Government to address this issue with a robust incentive scheme to support businesses, particularly small and medium-sized enterprises, in taking on apprentices.”
Tiered approach to rebuild Apprenticeships
To tackle this, VCCI has proposed a tiered financial incentive scheme designed to shore up business confidence and rebuild apprenticeship numbers.
“A $15,000 incentive for small businesses and scaled support for medium and large businesses will help secure the future of our workforce,” Guerra said.
“These investments are not just necessary; they’re urgent.”
Small businesses: Would receive up to $15,000 per apprentice, disbursed over the apprenticeship period.
This includes an upfront lump sum of 35 per cent at commencement, 25 per cent at the end of the first year, 25 per cent at completion, and five per cent annually in years two to four.
Medium businesses: Could access $10,000 to $12,000 per apprentice, similarly structured to support long-term growth.
Large businesses: Would benefit from project-specific funding, enabling them to bolster apprenticeship opportunities within their supply chains.
