Skills shortages still hampering business growth

THE federal government is pouring billions of dollars into training skilled workers. Six hundred thousand Australians are unemployed yet skills shortages have re-emerged as a key problem for business.

Two new reports show the number of trade apprentices taken on last year dropped to a five-year low, while one in three firms say skills shortages will hold back their operations this year.

The National Centre for Vocational Education and Research reports 15,000 fewer people started trade apprenticeships or traineeships in 2009, with slumps of more than 20 per cent in key sectors such as construction, automotive and electronics trades.

And an Australian Industry Group survey found that almost half the firms surveyed believe skills shortages will be limiting their operations by 2015 with many saying that is happening now.

"Skills shortages are set to intensify with a vengeance, and are arguably the number one threat to our economic growth", said Ai Group chief executive Heather Ridout.

"Businesses are seeking to do their share of the heavy lifting by putting on more apprentices where possible. For government, addressing skills shortages needs to be put right at the top of the policy agenda."

Ms Ridout urged the government to lift funding for vocational education and training to allow for 3 per cent growth each year in apprentice numbers, and lock in the temporary bonus for trade apprentices. The good news in the apprenticeship figures was that last year saw a record 46,200 people complete trade apprenticeships, and 91,100 completions in other occupations. The bad news was that commencements plummeted, and dropout rates remained astoundingly high.