Apprenticeship boost: Experts say subsidy will help with skills shortage

New Zealand needs to train people in engineering, forestry and manufacturing to meet future demands. Photo / Getty

The just-announced apprentice subsidy is the boost needed to give New Zealanders the skills needed to fill future jobs, experts say.

There are serious shortages in manufacturing, engineering, and food and beverage industries, said Fiona Kingsford, CEO of industry training organisation (ITO) Competenz.

This week the Government announced it will pay employers who take on apprentices up to $16,000 to for the first two years.

The Apprenticeship Boost scheme was allocated $380.6 million on Budget Day.

Kingsford said the subsidy would provide relief for employers and protect the jobs of workers in the early stages of their apprenticeships.

"It will also allow businesses to take on new apprentices to help combat an ongoing skills shortage and post-Covid unemployment," Kingsford said.

Kingsford said there had been a shortfall of skilled workers in manufacturing, engineering, forestry, and food and beverage for years and this was set to continue.

"We know 15,793 jobs will need to be filled in the manufacturing sector over the next five years and people with engineering fabrication skills will also be in high demand," she said.

"It is anticipated before 2025, employment in the engineering sector will demand an average of 7650 new jobs to be filled."

Kingsford said both the forestry and food and beverage sectors have significant gaps to fill, each industry needing 4662 and 11,343 new people respectively.

Education Minister Chris Hipkins said the Government wanted to help employers keep their apprentices on and give them the confidence to take on new apprentices, particularly as they fast-track new infrastructure projects.

After the Global Financial Crisis there was no support and apprentices were let go, he said.

When the economy picked up there was a serious skills shortage.

Across the 37 sectors that Competenz represents, including engineering, manufacturing, food processing and forestry, employers will be able to access the subsidy for nearly 3000 apprentices.

From August 2020 to April 2022, employers can apply for funding of up to $12,000 per apprentice in their first 12 months of training, and up to $6000 in their second 12 months.

The subsidy would also support people who wanted to retrain because they had lost employment because of Covid-19.

"There will also be a swathe of school leavers entering the job market at the end of this year and they have just been given a real boost," Kingsford said.

"An apprentice wage subsidy enables more young people to undertake on-the-job training, get paid, and gain nationally recognised qualifications."

"We also see the other end of the scale in our industries, with people in their 30s and 40s successfully taking on an apprenticeship to retrain in a new industry, which is clearly relevant in the situation we now find ourselves in."

The Ministry for Social Development will be responsible for administering the scheme.