Skilling Australia

23 June 2015

The Queensland Government recently announced a new initiative aimed at increasing the number of skilled workers in Queensland.

From 1 July 2015, employers who hire Apprentices will be given a payroll tax rebate on another employed worker. Using someone on the basic wage as an example, the annual rebate of payroll tax would be about $400.00 per additional worker.

Although MIGAS welcomes Government initiatives to increase apprentice employment in Queensland, the payroll tax rebate doesn't assist small employers - who have, again, largely been overlooked in their efforts to provide skilled workers to Queensland. Payroll tax only applies to employers with taxable wages of $1.1 million a year. Small business represents the majority of employers in Australia and the strongest representation of employment of apprentices and trainees alongside Group Training Organisations such as MIGAS. MIGAS recruits, employs and supports people seeking apprenticeships and traineeships and places them with “Host Employers” who provide experiential learning (hands on experience).

However, organisations like MIGAS will have most Federal Government funding removed at 1 July 2015 and State funding across Australia has also been severely reduced.  This is surprising, given the recent research project undertaken by Social Ventures Australia and Group Training NSW & ACT, which was presented at the 2015 Skills Conference in Sydney.  The research was able to measure and provide the value of the social return on investment for businesses who utilise Group Training Organisations such as MIGAS, in managing their apprentices and trainees.

Social Return on Investment (SRI) is a form of cost benefit analysis that examines the social, economic, cultural and environmental outcomes created by an activity and the cost of investment – in this case the employment of apprentices and trainees through organisations such as MIGAS.

The research conducted by Social Ventures Australia found that almost 60,000 apprentices and trainees were hired over the last 6 years, with Host Employers investing over $164m in apprentice and trainee providers, like MIGAS. That equates to an average investment of $27.4m per annum.

So why use MIGAS as an apprentice and trainee management solution?

Four outcomes were identified as being material for Host Employers: First, Host Employers are able to take advantage of significant savings of time and money on screening, interviewing and placement of apprentices and trainees. Second, savings are made on inducting new employees and processing timesheets, payroll and entitlements. Third, savings occur in workplace health and safety and industrial relations. Finally, host employers receive a better quality apprentice.  The broader benefits to Australia are a lowering of youth unemployment, an increased pool of skilled workers and greater support for local communities.

These outcomes were measured and valued using SRI. In the 6 years 2009 to 2014 almost $280m in value was created for Host Employers by organisations like MIGAS, made up of efficiencies of $117m (the first three outcomes above) and the assessed added value of $161m from having a better quality of apprentice. At the end of the day, Host Employers taking on an apprentice through MIGAS results in a SRI ratio of 1.7:1.

So what’s the bottom line?

For every single dollar over the direct cost of employment that a Host Employer pays to MIGAS, the Host Employer receives an added $1.70 in value.

The research conducted by Social Ventures Australia and Group Training NSW & ACT makes using MIGAS a compelling argument. Compared with the $400 per week an employer would receive on the Queensland Government’s payroll tax rebate, it makes sense to trust an expert like MIGAS, to deliver apprentice and trainee solutions.

Organisations such as MIGAS and its peers came about in the 1970s specifically to create jobs and careers for skilled people. MIGAS Group CEO Philip Marwedel said, “Working with more than 1,000 host employers MIGAS has helped about 3,000 people to embark on successful skills-based careers.” That includes electricians, boilermakers, air-conditioning and diesel mechanics, arborists, fitters, carpenters and more. Mr Marwedel continued, “With almost three decades as a national employer of apprentices and trainees, I'm very pleased to say that a significant number of our host employers have been with us for most if not all of that period.”

The Commonwealth Government’s national skills shortage list highlights Australia’s need for more trades and skilled employees and the opportunities available for work for those industries. State rebates and Commonwealth government payments are not the only initiative in place to increase Australian trade opportunities - apprentices can access attractively structured trade loans of up to $20,000 to assist them to complete an apprenticeship. This provides a smart alternative to an escalating HELP debt for completing a university degree.

MIGAS works with schools throughout Australia to encourage students to consider trades and traineeships as a pathway to a satisfying and lucrative career. NSW State Manager Natasha Gomes said, “I’m constantly surprised that parents, students and teachers don’t know that successful completion of a trade can give people a career which may pay more than a university graduate receives. This is done in much the same time as a degree but without the huge HELP debt. MIGAS provides an intelligent alternative investment for their future careers”.  

If you would like more information on how you can actually earn a wage while learning a trade, or would like to take advantage of the great investment return employing an Australian Apprentice can provide to your business – Call MIGAS on 1300 4 MIGAS.

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