The Australian Government provides significant financial support to Australian Apprenticeships through the Australian Apprenticeships Incentive Program (AAIP), as well as the broader provision of funded training. In recognition of the scale of the investment in the AAIP and the critical role it can play in enhancing labour force participation and productivity at various levels, the government sought a clearer understanding of its impact on the behaviour of employers and individuals. Deloitte Access Economics was commissioned by the Department of Education, Employment and Workplace... [+] Show more
The Australian Government provides significant financial support to Australian Apprenticeships through the Australian Apprenticeships Incentive Program (AAIP), as well as the broader provision of funded training. In recognition of the scale of the investment in the AAIP and the critical role it can play in enhancing labour force participation and productivity at various levels, the government sought a clearer understanding of its impact on the behaviour of employers and individuals. Deloitte Access Economics was commissioned by the Department of Education, Employment and Workplace Relations (DEEWR) to conduct an econometric analysis of the AAIP, and to identify alternative frameworks for the AAIP, with a view to enhancing the effectiveness and efficiency of future investment.
Two primary conclusions were drawn from the econometric analysis of commencements. The first was that money matters. None of the analysed incentives were proven to have a negative effect on commencements. All the incentives offering more than $1,000 in the first year proved to have a significant, positive effect on commencements. Secondly, timing matters. Drawing from evidence revealed in the Apprentice Kickstart Bonus (AKB) and Apprentice Kickstart Extension (AKE) analysis, an incentive that affects people under the age of 20 has a much larger effect around summer than at other times of the year. This is likely to be due to the fact that the supply of potential Australian Apprentices is highest in summer when the traditional school year finishes. It is concluded that optimising the AAIP is influenced (more or less) by: (1) where the AAIP is incentivising (e.g. all occupations or only particular occupations); (2) how the AAIP is incentivising (e.g. employer or individual incentives); and (3) how much the AAIP is incentivising (e.g. how much to incentivise training levels).
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