The Motor Trades Association of Australia (MTAA) has warned that the Federal Government's decision to slash apprenticeship incentives could have severe consequences for the automotive industry's ability to address critical workforce shortages nationwide.
Under changes taking effect from 1 January 2026, both employer and apprentice incentives for priority occupations will be halved, with the Priority Hiring Incentive dropping from $5,000 to $2,500 and the Australian Apprentice Training Support Payment similarly reduced from $5,000 to $2,500.
MTAA Interim Executive Director Peter Jones said the reduction in financial support comes at the worst possible time for an industry already struggling to meet demand for skilled technicians.
"Employers across Australia are facing unprecedented challenges in finding qualified automotive technicians. Cutting the incentives that help make apprenticeships viable will only compound this crisis," Mr Jones said.
"The apprenticeship pathway requires significant investment from employers – not just in wages, but in supervision, training time, and resources. These incentives have been crucial in encouraging businesses to take that step, and halving them sends the wrong signal entirely."
While the MTAA noted that the Key Apprenticeship Program incentive for clean energy trades will remain at current levels, Mr Jones questioned whether the policy adequately reflected the automotive sector's immediate needs.
"Australia's transition to electric vehicles is progressing, but it's happening gradually. With electric vehicles accounting for only around ten per cent of new car sales, the overwhelming majority of vehicles requiring service and repair are
conventional petrol and diesel models, and they will be for some time," he said.
"Maintaining higher incentives exclusively for clean energy apprenticeships, whilst cutting support for traditional automotive trades, creates a policy misalignment that doesn't match the reality of what Australian motorists need right now."
The MTAA and state motor trade associations across the country have been working nationally to highlight career opportunities in the automotive sector and encourage young Australians to consider trades as a viable professional pathway. Together, these organisations have invested considerable resources in demonstrating that automotive careers offer strong employment prospects and diverse specialisation options.
"Australian automotive businesses have responded to calls to train more apprentices, but this policy change undermines their efforts," Mr Jones said.
"The majority of automotive businesses are small to medium-sized enterprises operating on tight margins. They've planned their training commitments based on existing support structures, and this sudden reduction leaves them exposed."
Mr Jones stressed that workforce shortages in the automotive sector have direct flow-on effects for all Australians.
"When repair workshops can't access skilled labour, the consequences are felt by every motorist in longer booking times, extended repair periods, and increased costs. Reducing apprenticeship support during a skills shortage is a false
economy that will ultimately cost consumers more," he said.
The MTAA is urging the Federal Government to reconsider the incentive reductions and to adopt a more balanced approach that recognises the full spectrum of automotive skills Australia requires.
"We're not asking for preferential treatment – we're asking for policy consistency that supports the industry's capacity to train the workforce this country needs, both now and into the future," Mr Jones said.
"The automotive sector is ready and willing to play its part in building Australia's skills base. We need government policy that enables us to do so effectively."
ENDS
Media contact
Andrew Molloy
Manager, Marketing & Communications
Victorian Automotive Chamber of Commerce
P: 03 9829 1248 | M: 0457 188 375
E: amolloy@vacc.com.au
