A leading trade training agency says the $1.6 billion Budget package to boost apprenticeships and industry training is "incredible".

"I've never seen anything like this in my career," Building and Construction Industry Training Organisation chief executive Warwick Quinn said.

Apprenticeships and vocational courses in "critical industries" will be made free over the next two years for everyone - not just for those eligible for the fees-free tertiary study scheme.

Training fees have been scrapped for apprentices like Dan Andresen, pictured (left) with his boss Ross Faulkner last year. Photo / File
Training fees have been scrapped for apprentices like Dan Andresen, pictured (left) with his boss Ross Faulkner last year. Photo / File

Which industries are critical are yet to be defined, but Education Minister Chris Hipkins said: "It will include courses linked to industry skills needs, in building and construction, agriculture, and manufacturing, and also vocational courses like community health, counselling and care work. The fund will be available from July 1, 2020."

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Quinn said only a third of new apprentices in building and construction currently qualify for free fees because they had never done any previous tertiary study.

The other two-thirds, who now pay fees of about $1750 in the first year and $750 to $800 in subsequent years because they have done previous tertiary courses, will now not pay anything from July 1.

Trades courses in polytechnics, which are being merged into a national NZ Institute of Skills and Technology (NZIST), will also be free for all students - not just those who would have qualified for the fees-free scheme.

The free training scheme has been allocated $320 million over four years - $80m a year.

Another $412m over four years - $103m a year - has been allocated to "support for employers to retain and keep training their apprentices".

Quinn has not yet seen any details of what kind of support will be provided, but Australia has brought in a wage subsidy which covers 50 per cent of wages paid to apprentices and trainees from January to September, plus $7000 for each apprentice every quarter for employers.

Quinn said the initiatives would help to keep apprenticeships going when the house-building industry took an expected hit from people losing jobs and income because of the Covid-19 pandemic.

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"Seventy to 80 per cent of apprentices are in residential," he said.

"Because existing house prices are predicted to fall, construction will be similarly affected. It happens in every recession. The next 12 to 18 months or so will be quite tough."

New housing consents were running at 38,000 a year just before the lockdown, the highest for 40 years, but Quinn said that might drop by 20 to 30 per cent in the coming recession.

He said another Budget initiative, building 8000 new social housing units over the next few years, would help to offset this decline.

The Budget also includes $276m over four years to set up Workplace Development Councils, which will take over the job of setting qualifications from the existing industry training organisations.

Quinn said media reports indicated that the new councils would now be set up by the end of this year, two years sooner than previously planned.

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He also welcomed an extra 1000 places in trades academies in schools.