"Fresh data on apprentices and trainees has reinforced a skills crisis that continues to grow in scale and consequence, partly because the Federal Government has withdrawn hundreds of millions of dollars in support for employers," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"In the Federal Budget, the Government withdrew $266 million in support for employers of apprentices, which came on top of earlier reductions announced in late 2025. As a result, thousands of employers across the country will now receive less support to employ apprentices than they have in decades.
"National Centre for Vocational Education Research (NCVER) data shows that Australia's apprenticeship system was under significant strain even before further headwinds were created by these cuts to employer incentives along with a war in the Middle East, a fuel crisis and rising inflation."
In the year to December 2025:
- Trade apprenticeship commencements were down 4.2%.
- Non-trade commencements were down 14.9%.
- Falling commencements were seen across a range of occupations including motor mechanics (down 5.7%), sheetmetal workers (down 6.1%), cabinet and furniture markers (down 9.7%), child carers (down 13.7%) and aged and disabled carers (down 11.6%).
"While there are some signs of improvement in the most recent quarter, quarterly movements can be volatile. A clear structural decline in commencements has been underway for several years in many areas where the economy is suffering its worst skills crisis and the outlook is getting worse," Mr Willox said.
"The NCVER release identifies what is behind subdued commencements: softening labour market conditions, changes to government incentives and lower employer demand.
"This echoes what Australian Industry Group has been consistently emphasising to governments across Australia, informed by deep engagement with businesses across many sectors. Employers value our apprenticeship system, but the economic realities of employing apprentices and trainees is becoming increasingly unviable.
"The official data makes clear that this issue goes well beyond isolated anecdotes. It is a national crisis that demands urgent attention.
"Given the critical role of apprenticeships in delivering the skills needed to lift productivity, deliver housing and infrastructure, build sovereign manufacturing capability and deliver high-quality services, that the Government has actively decided to make it more costly and difficult for employers to employ them is astounding.
"There is a simple fact about apprenticeships that must be understood: without an employer there is no apprenticeship. Employers have been reporting for some time that they have been reducing their intakes of apprentices and trainees, or in some cases ceasing them entirely, due to the increasing cost and complexity involved.
"State Governments also have a vitally important role to play. The situation in Victoria is particularly concerning, with commencements in the last 12 months at the lowest point in a quarter of a century. If the national situation is a crisis, the situation in Victoria is a catastrophe.
"Now more than ever, a sharp focus is needed on addressing the cost and complexity faced by employers in employing apprentices and trainees to ensure these pathways remain a cornerstone of our skills development system," Mr Willox said.
Australian Industry Group has published extensive research on the need to increase apprenticeship and traineeship commencements and the importance of employer incentives, including:
- 2025 report: Apprenticeships and traineeships: the employer perspective
- 2026 research note: Australia needs to turn around declining apprenticeship and traineeship commencements. Fast.
