Apprentices like Jordan Cashmore will have to pay for their own work tools from July 1 after Treasurer Joe Hockey scrapped the tool allowance worth up to $5500.
Under the new system, the region’s apprentices can borrow up to $20,000 and the tax office will deduct the repayments once they earn more than $50,000 a year.
The auto electrician apprentice, of East Maitland, said it was hard enough to survive on third year wages.
“I still live at home and I would really struggle,” he said.
His employer, Hunter Valley Training Company, was highly critical of the government’s slash and burn attack on vocational incentives in general.
Also on the heap is the Australian Apprenticeships Access Program which provides pre-vocational training and support for vulnerable job seekers experiencing barriers when trying to enter skilled employment.
“The decisions announced in [Tuesday] night’s federal budget to scrap funding to these vital programs is a major concern for us and for other group training organisations across Australia,” HVTC CEO Sharon Smith said.
“For almost 15 years, these employee incentives have played a part in addressing financial disadvantage and helping many young people to remain in their apprenticeships.”
Paterson MP Bob Baldwin said some apprentices already paid for their own tools once the $5500 was exhausted.
“It’s what we’ve done to [motivate] people to complete their trades,” he said.
With a trade under their belt these people would receive a 20 per cent discount on their tool debt, which is $4000 off the maximum $20,000 loan.
“They’re not repaying it until they’re earning a sustainable income,” Mr Baldwin said.
Ms Smith said the training cuts, combined with earn or learn policy for those under the age of 30, were potentially damaging.
If apprentices don’t gain employment at the end of their fourth year they will have to wait six months to receive Centrelink support.