“The latest apprenticeship and traineeship data shows Australia’s pipeline of skills into critical industries continues to shrink,” said Innes Willox, Chief Executive of the national industry association, Australian Industry Group.
“The National Centre for Vocational Education Research reports that in the 12 months to March 2026, trade apprenticeship commencements fell by 1.1%, marking the fourth consecutive annual decline. Non-trade commencements fell by 13.4% to record lows.
“Completion numbers are currently high, but this reflects the flow-through of a temporary surge in commencements several years ago driven by significant pandemic-era incentives. While welcome, this will not last.
“The real measure of the health of our skills pipeline is the number of people entering the system on an ongoing basis. On that measure, the outlook is deeply concerning.
“From January 2026, employer incentives in industries outside clean energy and housing construction were reduced. Australian Industry Group warned these changes would undermine training activity in critical sectors, and these impacts are now beginning to emerge in the official data.
“In the manufacturing industry, trade apprenticeship commencements for the first quarter of 2026, traditionally the peak recruitment period, fell to the lowest level since 2020. These are the welders, fitters and sheet metal workers that will be essential to delivering a Future Made in Australia and our defence ambitions.
“In Healthcare and Social Assistance, non-trade commencements in the first quarter fell to the lowest level since 2021. This includes the child carers, aged care workers and personal care workers already in significant shortage and essential to meeting growing care demand.
“For many employers in the care sector, offering traineeships as a skills development pathway is now simply unviable. This is despite these earn-while-you-learn pathways being one of the most effective ways to build workforce capability in this sector, for both employers and individuals.
“Commencements increased modestly in some construction and energy-related occupations prioritised under current incentive settings, demonstrating the critical importance of these incentives as a long-standing part of Australia’s apprenticeship and traineeship system. We need to see these increases continue and ensure other industries are not left behind.
“What’s most concerning is that the worst is still to come. Hundreds of millions of dollars in employer incentives were cut in the May Budget, on top of previous reductions, and the impacts will not be reflected in these figures for some time.
“The manufacturing and healthcare & social assistance industries are likely to be among the hardest hit, and commencements are already dire.
“Employers consistently tell us that they want to employ more apprentices and trainees, but increasing cost and complexity is forcing them to reduce their intakes, or cease them entirely.
“Urgent action is needed from Federal and State Governments to turn around declining commencements. This requires policy settings that support, rather than inhibit, employers to provide apprenticeship and traineeship opportunities at scale.
“Australia cannot solve its skills shortages while shrinking the very pipeline that produces our skilled workers,” Mr Willox said.
