Training Guarantee: its impact and legacy 1990-1994

In 1990, the Australian government implemented an employer training levy, the Training Guarantee scheme, that required Australian enterprises to contribute some of their income to employee training or a government fund for the development of training programs. The Training Guarantee was suspended on 1 July 1994 and abolished in 1996 after much negative publicity about its impact, particularly on small business. This two-volume evaluation report examines the effectiveness of the Training Guarantee and the reasons for its successes and failures. It also provides a comprehensive analysis of...  [+] Show more

In 1990, the Australian government implemented an employer training levy, the Training Guarantee scheme, that required Australian enterprises to contribute some of their income to employee training or a government fund for the development of training programs. The Training Guarantee was suspended on 1 July 1994 and abolished in 1996 after much negative publicity about its impact, particularly on small business. This two-volume evaluation report examines the effectiveness of the Training Guarantee and the reasons for its successes and failures. It also provides a comprehensive analysis of changes in industry-based training in Australia during the early 1990s. This is the first analysis to combine data from all four 1993-1994 Australian Bureau of Statistics (ABS) training surveys. The evaluation took place over three years and involved extensive research on training behaviour in all areas of Australian industry in order to isolate the specific contribution of the Training Guarantee to changes in training activity.

The main report details the full findings of the evaluation along with references to statistical and other sources. The summary report focuses on the findings related specifically to the impact of the Training Guarantee, the strengths and weaknesses of its design, and the processes through which it operated. The main report comprehensively describes the changes that took place during the period beginning with the identification of the need for such a levy and ending with its suspension in mid-1994. It demonstrates the contribution of the Training Guarantee to increases in training effort across a wide range of Australian enterprises during the four years of it operation. It assisted in the protection of existing training activity during the recession of the early 1990s but had little success in changing industry behaviour where there was no established training culture. The report concludes that the levy was reasonably effective in terms of the time at which it was introduced. It created widespread awareness of training as an element of business strategy and provided an opportunity for many employers to focus attention on their training strategies. From the perspective of the government, the program was found to be highly cost effective.

This report was completed before the government's decision to abolish the Training Guarantee and so does not cover developments since the implementation of that decision.