Pressure builds on training

The Building and Construction Industry Training Fund is considering a boost to its industry levy to keep apprentices and trainees in jobs, following a forecast 9 per cent drop in housing approvals this financial year.

The fund, established in 1990, currently collects a levy of 0.182 per cent on the value of all residential, commercial and civil engineering contracts in the state worth more than $20,000.

Revenue raised through the levy is channelled back into the industry via subsidies, which are received in two instalments by employers that directly indenture, or monthly by providers of apprentices who are contracted out.

BCITF executive director Ralph Dawson told WA Business News the scheme had assisted employers of 4,200 apprentices, as well as 32,000 existing workers, through its funding of training courses during the past financial year.

But in order to maintain its level of assistance, the BCITF has called for the industry levy to be increased from 0.182 per cent to 0.2 per cent, likely to generate an additional $1.5 million.

Mr Dawson said the fund’s forecast revenue of $17.6 million for 2006-07 was $500,000 lower than revenue collected from 2005-06 as a result of falling building activity estimates from various industry associations and research groups.

“Sixty per cent of our revenue is sourced from the housing industry and we know from their June quarter forecasts that they predict a 9 per cent reduction in housing starts in 2006-07,” he said.

“This means we must build our projections primarily based on that information and an industry which is increasingly volatile.”

The volume of home starts is predicted to level off and eventually fall because of land shortages in WA, according to Mr Dawson.

Despite this, however, Housing Industry Association executive director John Dastlik urged the government to take a long-term view and encourage a greater uptake of traineeships and apprenticeships.

Mr Dastlik said the high cost of housing was driven, in part, by the labour shortage, resulting from skilled tradespeople moving to higher-paid construction work in the mining sector and ageing tradespeople choosing to retire.

He said the BCITF should reallocate its funding sources, and was critical of the training levy exemption given to the mining, resources and petrochemical industries by the government.

The building and construction industry should not have to shoulder all of the cost, he said.

“I have no sympathy for the mining sector when they scream out for another 30,000 construction workers. They contribute no funding towards trade training and we think they should pay the same levy as everyone else, if they want a slice of it,” Mr Dastlik told WA Business News.

While the subsidies are important to employers, Mr Dastlik was certain the costs of an increased levy would be passed on to consumers.

Master Builders Association of WA executive director Michael McLean said the BCITF had done a great job to alleviate the skills shortage.

“We think the levy increase is warranted to boost the funds that are distributed to employers of apprentices and other skilled training providers,” he said.

“There will be a marginal cost increase as a result, but we would have preferred if the prospective increase was shared across resource construction projects.”

Mr McLean said although the mining industry paid royalties to the state, none of this was designated towards training purposes.

“Essentially the mining industry is buying the labour from the industry that is training the labour. This anomaly sticks out like a sore thumb” he said.

The replacement of this labour is an important issue for the MBA, which says without it and further supplementation there is no scope for workforce expansion.

As at June 2005, 111,700 people were employed in the state’s construction sector. Of these, 38,716 were tradespeople and only 3,677 were apprentices in training.

The BCITF reports that the figures equal a training rate of 9.5 per cent.

A rate of 15 per cent is accepted as necessary to replace the current workforce, it claims.

In addition, further research undertaken into the attrition of workers has revealed that up to 20 per cent of current tradespeople intend to leave the industry in the next five years.

While Mr McLean said there was no short-term fix to the problem, he urged the government to make the levy more equitable and encourage more school leavers to take up trades.