The apprenticeship system within the Australian construction industry is in a state of crisis, according to a report prepared for the nation’s peak building union.

Written by University of Sydney Department of Political Economy Honorary Senior Research Fellow Phillip Toner for the Construction, Forestry, Mining and Energy Union (CFMEU), the Weakened foundations: The crisis in apprenticeships and training in the Australian construction industry report  warns that the nation’s building sector faces emerging skills shortages.

The report states that the number of new apprentices starting out has slumped by 28 per cent over the past three years, while the ratio of apprentices to tradespeople is at its lowest level since 2003, at 12.4 per cent.

Toner says the problem has a number of causes, including public sector cuts to TAFE funding and structural changes which were seeing increasing numbers of self-employed people and very small firms operating within the industry along with an increasing push toward ‘short-termism’.

Toner says TAFE funding cuts of 33 per cent over the past decade had led to a 25 per cent reduction in class teaching time and a decline in training quality, which he said had also been worsened by a push toward higher proportions of the reduced funding to private operators, many of whom he said delivered poor quality training.

In addition, the government had also sought to shift the cost of training onto students through fee increases and replacement of the Tools For Your Trade Scheme with a less generous scheme of income contingent loans.

Moreover, Toner says, the withdrawal of the public sector as a major funder of construction work (the public funded share of construction work has fallen from 36 per cent in 1987 to 19 per cent now) and increasing reliance upon global capital markets to fund projects has driven ‘short-termism’ within the industry, has weakened the government’s traditional role in setting standards on training, health and safety and apprentices, and precipitated ‘risk-shifting’ toward smaller firms and self-employed contractors, many of whom were less likely to take on apprentices or invest in expensive equipment or research.

“Major ‘risk shifting’ in the industry has resulted in a proliferation of small firms and self-employed contractors” Toner said. “Such arrangements can be used to cut wages, other benefits, and workplace safety.”

“Yet this ’low road’ to profitability is constraining productivity and innovation in the industry. Small firms are less likely to take on apprentices, or invest in expensive equipment and research. And it contributes to the ‘chaos of the construction site’ where managing a large number of contractors, especially to improve quality and efficiency, is difficult.”

The report follows an overhaul of funding arrangements for apprentice support in this year’s Federal Budget, which saw a net of around $1 billion over four years slashed from skills programs overall through the scrapping of the Tools For Your Trade Program and 10 other programs that dealt with areas such as apprentice mentoring and English language proficiency in favour of a new program of apprentice support loans and the establishment of a new Industry Skills Fund.

That brought a mixed response from industry groups, who raised concerns about the abolition of what they saw as important programs such as the Workforce English Language program as well as the restrictive and narrow focus of the new fund.

Toner takes particular aim at the reduction in TAFE funding cuts and teaching hours, which in New South Wales has seen the number of class time hours students are being given from 36 weeks per year (one day per week) to 30 and which he says has led to employment of teachers with inadequate qualifications and experience as well as insufficient teaching materials and equipment.

He says this impacts the quality of training and volume of knowledge and skills that can be imparted during the course of an apprenticeship and limits the capacity of off-the-job training to introduce students to important areas of construction practice to which they are not commonly exposed in the course of their work.

“It is generally accepted that it is highly desirable that more of society’s resources be devoted to critical activities such as education and training,” Toner concluded. “It is unclear why VET is being treated in such a radically different manner to school education and the universities.”