Here's What Bill Shorten's Youth Unemployment Plan Could Mean For You

Here's our hypothetical case study. Let's call him "Bill".

Labor leader Bill Shorten has made a number of announcements this week aimed at helping young people into work or education.

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If elected, Shorten says Labor will bring back the "tools for your trade" grant for apprentices, establish 10 new institutes where people who don't have the marks to get into uni can undertake bridging courses, and introduce a free 20-week TAFE course for young unemployed people.

What would this mean for young people?

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For a case study, let's look at "Bill".

He's 17, has just finished high school and is trying to decide whether he should start an apprenticeship or go to uni.

If Bill decides to become an apprentice, he would be able to get the "tools for your trade" grant that was axed in the 2014 Abbott/Hockey Budget.

Mick Tsikas / AAPIMAGE

From 1 July 2017, students starting an apprenticeship would be eligible for a total of $3,000 throughout their training. It won't be a lump sump, instead it would be paid in increments throughout the four-year course.

But it isn't as much money as Labor's previous "tools for your trade" grant.

Under the Rudd/Gillard government, apprentices were eligible for $5,500.

Those grants were scrapped by then prime minister Tony Abbott in 2014 and replaced with a "trade support loan" of $20,000 over four years.

Labor hopes that by bringing back the grant (and scrapping the loan), it will ease the 25% drop in apprentices in the past year, and the huge dropout numbers.

Australian apprentices earn between 55 and 90% of a standard wage while they are training, meaning a first year construction apprentice might take home base pay of as little as $420 a week. That's well below minimum wage of $656.90.

Bill Shorten says it would be "nice" to pay apprentices more money, but he can't because the "Liberals have made such a dreadful hash of this economy in the last three years that the money isn’t simply there".

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But a report from the National Centre for Vocational Education and Research suggests the drop off in apprenticeship completion numbers started under the Labor government, not the Coalition.

They blame the apprentice drop-off on Labor's $1.2 billion cuts to employer incentives between 2011 and 2013.

Vocational education and skills minister Scott Ryan agrees.

"Due to Labor’s unprecedented cuts to apprentices and their employers, 25% fewer apprentices commenced training between 2012 and 2013. This drop, the biggest ever on record, continues to affect the number of apprentices in training today."

Ryan says numbers have improved under the Coalition government, with more people starting a plumbing apprenticeship in 2015 than in any of the last nine years.

“In 2015, the number of apprentices starting in construction trades increased by 20%, this includes a 12.3% increase in apprentices starting as bricklayers, carpenters and joiners,” Ryan said.

So Bill decides he wants to keep studying, but doesn't have the grades to get into a university degree. So he needs to do a bridging course.

Mick Tsikas / AAPIMAGE

Labor is pledging $430 million to create 10 new hybrid higher education training centres which will be a mix between high school, TAFE and university.

Called "Commonwealth Institutes of Higher Education", the institutes will bridge the gap for people who want to continue studying or training after high school but aren't academically up to scratch.

Each site will offer courses tailored to the local industry, with a focus on hands-on learning, and students will leave with an industry-recognised qualification.

Potential sites for the institutes include Petrie in Queensland, northern Melbourne, and Frankston and Pakenham in outer Melbourne.

Applicants won't have to have completed year 12 to enrol, but are expected to go on to study a bachelor degree at university or an apprenticeship after completing the bridging course.

Labor hopes the Commonwealth institutes will stop students enrolling in private colleges.

This comes on top of Labor's announcement earlier in the week that young people who have been unemployed for six months or more will be given the option to sign up to a free 20-week TAFE course that Labor hopes will ease their transition into apprenticeships.

Labor has also set a target for Commonwealth funded projects to hire more apprentices.

One in 10 jobs on federally funded infrastructure projects would be filled by Australian apprentices under a Labor government, with the aim to create 2600 new apprenticeship places for young people.

Unfortunately for Bill, TAFEs worry they won't be able to run these courses unless they get an increase to their annual funding.

"We need to ensure that TAFE is guaranteed at least 70% of vocational education training funding so it can remain at the centre of our vocational education system," Australian Education Union federal TAFE secretary Pat Forward said.

Currently more than $1.5 billion of government vocational education funding goes to private colleges. Forward wants both Labor and Liberal to redirect that funding to TAFES.

Bill Shorten wouldn't commit to a dollar amount of funding for TAFE under a Labor government, but said on Thursday, "there is no doubt in my mind that a government I lead will spend the vast bulk of our vocational education spending backing TAFE".