The federal government's apprenticeship wage subsidy scheme could help to address looming skills shortages in Tasmania by encouraging businesses sitting on the fence to take on more apprentices, industry leader Ray Mostogl says.
The scheme involves the government paying 50 per cent of new apprentice wages for the coming 12 months, capped at 100,000.
Mr Mostogl - chief executive of employment and education business KEEN Partners - said companies had been reluctant to take on apprentices due to uncertainty in the economy, but the subsidy should be enough to tip many over the edge.
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"They're trying to work out what's happening in the economy and are on the tipping point of 'give it another month', but this plan could tip a number of those into the 'let's do it' category," he said.
"If it's only for 12 months, it is difficult to predict what the market will be like in 12 months. We've also got to be careful that this isn't seen as cheap labour.
"There's evidence that with various free TAFE schemes, when it starts you get a rush of people who aren't necessarily there for the right reasons."
Mr Mostogl said if the subsidy stopped in 12 months, it would be left to group training organisations to find more work for apprentices let go by their employer which was relying on the subsidy.
He said that, before COVID, Tasmania had a requirement for 10,000 new jobs required above the normal retirement pipeline, with most demand in areas such as renewable energy.
The scheme is in addition to the JobTrainer fund, announced in July, which provides a 50 per cent wage subsidy for existing apprentices, and funding to assist school leavers and those looking for work to enter training.
The latest announcement was welcomed by the Australian Chamber of Commerce and Industry and the Housing Industry Association, which saw it as essential in ensuring a continued supply of skilled tradespeople for the economic recovery.
Tradeswomen Australia also saw it as a positive in encouraging more female apprentices in male-dominated industries.