Industry Skills Fund


Context
The $476 million Industry Skills Fund – Growth Stream (the fund) is a key element in the Australian Government’s Industry Innovation and Competitiveness Agenda and will provide up to 200,000 training places and support services over four years.

The fund prioritises SMEs, including micro businesses, and is delivered through the single business service, which streamlines access to essential information for all Australian businesses.

Businesses that are awarded funding under the Fund must financially co-contribute to the proposed project. The contribution amount is based on business size. Currently, the sliding scale based on workforce size is as follows:

  • Micro Business (0-4 employees) – 25%
  • Small Business (5-19 employees) – 34%
  • Medium Business (20-199 employees) – 50%
  • Large Business (200+ employees) – 75%

Position
The number of workforce size categories that the Department of Industry provides is far too limited. The contribution rate for each workforce size category is too high, particularly for micro and small businesses. Having micro and small businesses contribute 25% and 34% respectively towards the co-payment will consequently discourage take up by small businesses.

Further, the fund should not be a rehash of the National Workforce Development Fund (NWDF). The NWDF did not incentivise small employers to participate in training due to problems concerning excessive paperwork and the cost prohibitive employer co-payment.

Recommendations

  • The current workforce size categories should be further divided into smaller increments and that the sliding scale of co-payment should increase exponentially in a gradual manner. This will result in a more fairer and equitable co-payment model.

18 June 2015