Automotive Research Bulletin – January 2026
TL;DR:1 The apprenticeship ecosystem is a vital supply pipeline for trade occupations. Without a healthy functioning apprenticeship ecosystem, we risk critical skills shortages, which dampen skills utilisation and productivity outcomes. However, the ecosystem is currently facing challenges rooted in training packages, demographic trends and other cultural and financial challenges. There are actions that stakeholders can consider to support the ecosystem and enable optimal succession planning for critical roles.
This month, the Research Bulletin covers:
- What is an apprenticeship?
- What role does the Australian Apprenticeship Incentive System play in the ecosystem?
- Barriers to apprenticeships
- Training Package challenges
- Demographic and cultural challenges
- Awards system rates and comparisons to apprenticeship support payments
- Data on younger and mid-career Automotive Retail, Service, and Repair apprentices
- The way forward.
Skills shortages are most acute in trade-related occupations, with apprentices playing a critical role in addressing these gaps.2 Many trade occupations rely on apprenticeships as the primary pipeline, underscoring the importance of a strong and well-supported apprenticeship system to meet industry demand.
Apprenticeships are occupational pathways that allow individuals to learn on the job. This benefits both the employer and the employee, as the employee gains experience and the employer gains immediate on-site value and employment as part of a workforce strategy and succession planning rather than simply a training commitment.3 Apprenticeships generally take up to 4 years to complete and cover a range of skills that mix on-the-job training with formal study at an RTO.4
The long-term workforce pipeline that apprentices create is an investment by employers who can tailor training to their specific standards, in turn boosting retention within the industry. Ensuring a steady flow of tradespeople alleviates the pressure of persistent skills shortages that many trades are currently facing.
During an apprenticeship, the apprentice is training to become a qualified tradesperson; as a result, they may be paid at rates lower than those of qualified tradespeople. This can act as a disincentive for the apprentice, as they could earn relatively higher wages at occupations that do not require any formal training or apprenticeship placement. The Australian Government leverages the Apprenticeship Incentive System as a policy lever to offset the disincentive created by temporarily lower wage levels.
The Australian Apprenticeship Incentive System commenced in 2024 and provides financial support for apprenticeships in priority occupations identified on the Australian Apprentice Priority List.5,6 This ensures that financial assistance is directed toward areas of demonstrable skills demand in the Australian economy, to support workforce development and strengthen the pipeline of skilled workers.7 There are 4 types of financial benefits these apprenticeships can apply for, including;8
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Key Apprenticeship Program (KAP), which is available for apprentices working in the clean energy sector and/or the housing construction sector who can receive up to AUD $10,000 for full-time study and up to AUD $5,000 for part-time throughout their training.
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The Australian Apprentice Training Support Payment (AATSP), which provides up to AUD $5,000 for those apprentices linked to the Priority List over four payment instalments.
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Australian Apprenticeship Support Loans (AASL) are available to all apprentices and trainees in the occupations in the Priority List, providing income-contingent loans up to AUD $25,958 to help recipients meet day-to-day costs while studying.
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The Living Away from Home Allowance (LAFHA) for apprentices who had to move out to retain their apprenticeship and study, for the first three years of the apprenticeship.9
Employers of these apprentices can also receive incentives for hiring, such as the Priority Hiring Incentive, GTO Reimbursement Program and the Disability Australian Apprentice Wage Support (DAAWS). The bulk of government incentives are allocated to employers, with the aim of encouraging them to support apprentices through to the completion of their qualification.10 The Apprentice Incentive System is currently under review due to pushback from students and industry who feel that these incentives are not adequately providing the support they are intended to achieve (Figure 1).
Figure 1: Framework for the review of the Apprentice Incentive System
Source: DEWR, “Skills for Tomorrow: Shaping the Future of Australian Apprenticeships,” 2024.
Apprenticeships can face various challenges, including financial disincentives, cultural and work-life balance issues and inconsistencies in training packages.
Challenges in vocational education have been identified as deterring apprentice completions, such as training packages being overly elective-heavy, which then results in inconsistent skill sets among graduates. For example, Certificate III in Mobile Plant Technology (AUR31220) includes 9 core units out of 36. Pathway providers may have limited resources and cannot offer all electives.
Case in point
A large industry employer reported that pathway providers cannot deliver 8 of their required subjects, which forces the employer to fund an additional 7 units to bring apprentices in line with its national program. Different employers select different elective units within apprenticeship programs, which can result in apprentices developing uneven skill sets. When an individual completes their apprenticeship with one employer and seeks work elsewhere, these variations can create skill gaps that limit their immediate employability and longer-term mobility.
This current reality leaves room for upskilling across the industry and, therefore, limits career paths. As a potential solution, larger employers note that some units currently classified as ‘electives’ should be considered as ‘core’, as they are key to roles in the workforce, which would enable wider-scale delivery of units important to industry.11
A counter point
Pathway providers have raised concerns about qualifications being too core-heavy, or at times the content of the core units can be too broad, which challenges the delivery of training packages specifically in relation to the Automotive Electrical Technology Certificate III (AUR30320). As technology has advanced, more content has been added to the training package without being able to remove any, but needs to be delivered within the same time span. As a result, the delivery team has to make decisions about optimising delivery, focusing on various aspects of the content at the expense of other content. This variability is significantly pronounced with pathway providers having to customise their decisions on a provider and, at times, staff level.
This complexity introduces uncontrollable variations in the skills of apprentices and trainees and can adversely affect their employability and mobility outcomes. This situation demonstrates the complex balance that a training product must strike between industry needs and delivery feasibility while optimising labour market outcomes. There is no blanket solution and it must be approached on a case-by-case basis, necessitating the presence of a steward like a Jobs and Skills Council (JSC) to find and enable solutions.
Demographic factors also play a role in apprenticeship completion rates, with evidence indicating that young apprentices, those with a disability, Indigenous apprentices and individuals training in metropolitan areas are less likely to complete their qualification.12 Strong support structures are ideal for successful apprentices, such as supervising tradespeople who develop and facilitate strong relationships for mentoring with their apprentices. Such support in the early stages of the apprenticeship uplifts retention and encourages learners to stay in the trade.
This also extends to workplace culture, with recent reviews of the Incentive System highlighting that meaningful cultural change is necessary to improve apprenticeship outcomes. Bullying and lack of support in work environments have been observed to obstruct some apprenticeship outcomes, with the Apprentice and Trainee Experience and Destinations (ATED) Survey identifying a quarter of apprentices witnessing such behaviour.13
Although all automotive apprentices’ earnings increase at each stage and age, lower rates apply to younger apprentices over their whole apprenticeship. Fair Work’s Vehicle Repair, Services and Retail Award 2020 covers most industry workers, including tradespeople like mechanics, automotive technicians, panel beaters, painters, fitters and turners, welders, automotive electricians and apprentices in these trades.14 It specifies 3 minimum pay rates (Figure 2).
The award stipulates that the junior rates are applicable to anyone who commenced an apprenticeship at or below 21 years of age – even if this age is surpassed at any time during their apprenticeship.15 This means that apprentices who start an apprenticeship one day before their 21st birthday will early the under-21 rate for the entire apprenticeship, regardless of whether they age out of the group or not during their apprenticeship. In contrast, adult apprentices' higher starting point, which then increases to 86%, 89%, and 92% of the full adult rate, ensures greater parity with adults over their entire apprenticeship. This is a considerable deterrent for younger cohorts to commence apprenticeships.
Figure 2: Automotive apprentice wage rates and progression, Vehicle Repair, Services and Retail Award, 2020
Source: Adapted from Fair Work, “Vehicle Repair, Services and Retail Award [MA000089] - Fair Work Ombudsman,” 2025.
However, the minimum junior and adult apprenticeship pay rates are also overlaid with differently phased supports available through the KAP, AATSP, and LAFH as these are front-loaded to occur earlier in the apprenticeship to mitigate income-associated disincentives for younger cohorts (Figure 3).16 This can also apply to apprentices who the award classifies as ‘adults’ simply by virtue of being over 21 years of age, at a time when a greater proportion of young people live at home for longer. As such, the overarching intent and effects of these differently phased supports and pay rates may warrant further research and consideration by the Government, including whether some simply operate to offset differences in the award and what the ultimate benefits of this are.
Figure 3: Key support payment amounts and phased by quarter for a typical apprenticeship from 2020-23/417
Source: NCVER, “Apprentices and Trainees 2024: March Quarter,” 2024
Younger apprentices made up a large, but markedly decreasing, majority over each stage of apprenticeships over recent years (Figure 4). Whereas mid-career apprentices, although also seeing a decline, saw a much smaller decline (Figure 5). As mid-career apprentices were more likely to progress to completion, they could play a larger role in easing automotive trades shortages, assuming the available supports and pay rates are sufficient.
Source: NCVER, “Apprentices and Trainees 2024: March Quarter,” 2024
Note: While commencements, completions, and cancelations can be totalled.
Our analysis highlights disparities in the awards system and available supports that may not sufficiently incentivise junior and mid-career apprentice completions. For junior apprentices, lower pay rates and their rigid application, which is not comparable to adults until their fourth year, appear to correlate with high cancellations. These are increasingly outstripping completions, even after incentives such as the KAP, AATSP, and LAFHA taper off. Similarly, while mid-career apprentices benefit from the adult pay rates and demonstrate higher completions, cancellations have also outstripped their completions, particularly since 2022. As far fewer mid-career apprentices also commence, this may point to a wider issue or inadequacy across the award and available supports, which simultaneously disincentivises them from beginning, and junior apprentices from ultimately completing AUR apprenticeships.
Overall, our findings suggest that the awards system and available supports may not be sufficient to mitigate financial barriers that discourage apprenticeships at key stages and over time. Ultimately, disincentives or the lack of adequate incentives for the apprenticeship stream undermines the success of the apprenticeship stream as a key enabler of workforce succession planning and ensuring skills shortages stay low. Better aligned incentive levers for apprentices will reduce critical shortages, boost skills utilisation and productivity outcomes.
People, skills, and partnerships
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Support the review of the Incentive System to improve outcomes for both apprentices and employers
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Target support for at-risk cohorts, including females, disabled individuals, Indigenous people and younger apprentices
For industry
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Strengthen supervision and mentoring to improve early-stage retention
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Invest in mentoring programs to foster a better work culture
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Partner with RTOs to improve the delivery of key units and reduce inconsistencies in training
For government
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Update Priority List and Incentive System
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Address barriers for small, medium and remote businesses and RTOs
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Reassess the structure, timing and interaction of existing support payments to reduce complexity and improve equity between junior and adult apprentices
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Align the determination of core units in concert with industry in order to optimise the utility of training for industry
Research
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Evaluate the delivery of missing units and training package structure for smaller RTOs
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Investigate opportunities to scale mid-career apprenticeships, such as entry barriers and appropriate pay scales
2 AUSMASA, “Automotive Research Bulletin - October 2025 | Mining and Automotive Skills Alliance” October 2025.
3 Frontline Human Resources, “Why Hire an Apprentice? The ROI for Employers - Frontline Human Resources,” September 22, 2025.
4 Apprenticeships Victoria, “What Is an Apprenticeship or Traineeship?” September 10, 2024.
5 Australian Government, “Australian Apprenticeships Incentive System,” 2025. The Priority List is informed by evaluations from Jobs and Skills Australia's Occupation Shortage List and analysis from the Australian Bureau of Statistics to determine which occupations are eligible for government incentives.
6 The Priority List is currently under review as the incentive system does not align with Australia's economic priorities, social equity objectives or accurately support employers or apprentices. The framework for the review includes awareness, experience, participation [and transition to address the issues raised with the current structure. Incentives for businesses and employers have been found to be biased, favouring larger businesses and not directly supporting medium- and small-sized businesses, as well as apprentice commencements and completions falling over the past decade. The existing classification framework for identifying ‘priority skills and occupations' limits the system's ability to target and develop the workforce capabilities required by industry.
7 Australian Government, “Australian Apprenticeships Incentive System,” 2025.
8 Australian Government, “Australian Apprenticeships Incentive System,” 2025.
9 The payment is $120 per week for the first 12 months of study commencement, decreasing to $90 per week for the second year, and $45 per week for the third year.
10 NCVER, “Traditional trade apprenticeships: training activity, employer incentives and international practice,” 2020.
11 For Automotive Electricians, some in industry consider that AURETH101, AURETH102, AURETH011, AURETR013, AURETR014, and AURETR116 should be shifted to being ‘core’, alongside the following AURHTQ102, AURHTQ103, AURHTZ101, AURTTE104, AURETH101, AURETH102 units for Mobile Plant Technicians.
12 NCVER, “Issues in Apprenticeships and Traineeships -a Research Synthesis,” 2021.
13 NCVER, “Issues in Apprenticeships and Traineeships -a Research Synthesis,” 2021.
14 Fair Work, “Vehicle Repair, Services and Retail Award [MA000089] - Fair Work Ombudsman,” 2025.
15 Fair Work, “Vehicle Repair, Services and Retail Award [MA000089] - Fair Work Ombudsman,” 2025.
16 Australian Government, “Living Away from Home Allowance,” 2025.
17 Note: Although these key support payments are phased to taper over time, to a greater or lesser degree, an apprenticeship can generally be completed from three to four plus years or more. This quarterly timeframe is designed to illustrate this.
About the author
Annelies MacDuff
Annelies MacDuff is the Research Assistant in the Workforce Planning and Policy team. Annelies specialises in qualitative and lived experience research, and backs it up with a strong intuition for data.
About the author
Sam Hughes
Sam Hughes is the Senior Research and Policy Adviser in the Workforce Planning and Policy team. Sam specialises in all things policy with a strong motivation for working out the unknown and determining policy impacts.
About the author
Dr Aneeq Sarwar
Dr Aneeq Sarwar is Senior Manager, Workforce Planning and Policy at AUSMASA, overseeing our research, workforce planning, and policy functions. Dr Sarwar is an experienced research leader who has managed quantitative and qualitative research projects across industry, academia, and for government.