New funding will see apprentices in high-demand industries given up to $5000 in cash for the first two years of their training. 

The recent federal Budget includes money for a two-year program forming the first stage of the Australian Apprenticeships Incentive System, which will replace the government’s 50 per cent wage subsidy scheme.

Treasurer Josh Frydenberg says there is a “historic opportunity to get young Australians into skilled, secure and well-paid jobs”.

The  $2.4 billion incentive scheme is targeting the nation’s skills shortages, offering trainees in sought-after trades a $1,250 payment every six months from July for the first two years of their apprenticeship in priority skills areas.

Their employers will be able to access a 10 per cent wage subsidy, which drops to 5 per cent in the third year.

The first stage of the new Australian Apprenticeships Incentive System replaces the generous 50 per cent wage subsidy scheme that the federal government claims created a record 220,000 trade apprenticeships during the COVID-19 pandemic.

Treasurer Josh Frydenberg says the new wage subsidies will put up to $15,000 into the pockets of employers who take on apprentices.

Mr Frydenberg also announced a separate but related $120 tax deduction for every $100 spent by small businesses on training employees. Additionally, employers can apply for a $3500 hiring incentive when they take on apprentices in non-demand occupations. 

The Labor shadow government has frequently accused the Morrison government of sitting by while a skills crisis emerges. The opposition says it will fund 465,000 fee-free TAFE places in areas of skills shortages if it wins government in May.