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In 2004, 394,000 people were undertaking an apprenticeship in Australia, 130,000 of them in a traditional trade, representing a significant investment by industry, individuals and government. While the current apprenticeship arrangements have many strengths, the weaknesses are increasingly becoming apparent as the old skills development model is applied to the contemporary world of work. This document is the Australian Industry Group's (Ai Group's) apprenticeship policy. Its aim is to bring the apprenticeship system into the 21st century to meet the complex skill development needs of industry, both now and into the future and to maximise the return on investment for all of the participants. To achieve a flexible and contemporary apprenticeship system, the following five actions are proposed: (1) reforms to employment arrangements and industrial awards; (2) a national set of regulatory and licensing frameworks to underpin the apprenticeship system; (3) a review of the funding models; (4) a review of the Commonwealth incentive arrangements; and (5) improved delivery.