Axing Labor's free Tafe would mean fewer builders and higher house prices, experts warn

The Guardian

15-04-2025

Australia's construction worker shortage – and prospects for affordable housing – would worsen if Peter Dutton scraps Labor's free Tafe program, experts warn, pushing housing prices even further out of reach of prospective buyers.
After a video emerged of Liberal frontbencher Sarah Henderson saying the fee-free Tafe policy was 'just not working', the opposition leader was asked on Tuesday if he would cut the scheme – designed to encourage people to work in priority industries like the construction sector.
He replied that the Liberal party had said it was 'not supportive of the government's policy in relation to Tafe'.
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Labor's bill to legislate its $1.5bn fee-free Tafe program, which the opposition voted against, passed in March.
It directs ongoing funding to states and territories from 2027 for at least 100,000 fee-free course places a year, prioritising equity cohorts including First Nations people, women, youth, people out of work or receiving income support, unpaid carers and people with disability and areas of 'high workforce demand' such as housing, care, early childhood education and defence.
The Coalition said it had consistently opposed the scheme because it was 'badly designed and poorly targeted'.
Roy Green, special innovation adviser at the University of Technology Sydney, said fewer homes would be built if the program ended.
'If you don't have the skills, you won't get the resulting supply of houses, and will continue to have housing shortages and high prices and high rent,' Green said.
Australia's construction industry suffers from a shortage of workers, with 83,000 more skilled tradespeople needed for the country to build the 1.2m new homes planned by the Albanese government, according to the Housing Industry Association (HIA).
Close to 40,000 people had enrolled in construction courses at Tafe with free tuition since 2023, with nearly a further 530,000 enrolling in other subsidised qualifications, the federal government said in January.
The fee-free program had helped people into vocational training who might otherwise have stayed away or were from disadvantaged backgrounds, said Melinda Hildebrandt, a policy fellow at the Mitchell Institute.
'We're dealing with a pretty crazy cost-of-living crisis right now, so it does actually help,' she said.
The construction sector has persistent problems attracting new trainees and in September 2024 hit its lowest level of new apprentices since 2020, according to the National Centre for Vocational Education Research (NCVER).
But industry bodies have also drawn attention to the sector's struggle to retain trainees. More than half of those starting construction courses in 2019 have since withdrawn from the courses, NCVER found.
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An unknown number of trainees have dropped out of the free Tafe courses, which a Coalition spokesperson highlighted when asked about whether the opposition would remove free Tafe and offer a new program.
'We can do better than Labor's free Tafe program and under a Dutton Coalition government we will do better,' the spokesperson said, without outlining alternatives.
The major parties announced their competing housing plans this week, in an election focused on cost-of-living policies, particularly housing affordability.
Both major parties plan to pay to keep trainees in the construction sector, with Labor offering wage subsidies and $10,000 incentives for apprentices staying on, while the Coalition would give some businesses up to $12,000 for taking on new apprentices.
HIA said rewarding employers and students for completions would be more effective than free Tafe.
But Nathan Quinn, Carpentry Australia's head of development, said removing free Tafe entirely would deter people from taking up construction courses.
'You would see a huge drop off and a huge lost opportunity to really meet that workforce demand of the future,' he said.
More supports could help free Tafe get the outcomes the sector needs, he said.
'We've got part of the puzzle, right? We just need their surrounding pieces to be in the right place.'