HIA says government support crucial as small businesses struggle to attract trades

IN SHORT

• The Housing Industry Association is calling for long-term commitment to apprenticeship incentives, citing data showing 85 per cent of apprentices work for small businesses
• An HIA survey found 67 per cent of small building businesses are having trouble recruiting or retaining staff, with skilled trades shortages among the top five issues facing builders
• The industry group says apprentice retention programs are crucial during the first 18 months when dropout rates are highest, and financial support makes training viable for small businesses.

The Housing Industry Association has called on the Federal Government to commit to long-term apprenticeship incentives, citing data showing 85 per cent of apprentices work for small businesses.

The national industry body released the figures as part of its 2026/27 pre-budget submission, arguing that financial support programs are essential to addressing skilled labour shortages across the home building sector.

New data from the Key Apprenticeship Program shows steady uptake of government incentives, with each apprentice representing a future skilled tradesperson in the residential building industry.

HIA Managing Director Jocelyn Martin said access to skilled labour remained one of the most pressing issues facing home builders.

"It is one of the biggest operational issues holding the industry back from contributing to meeting the nation's housing targets, which have been set by National Cabinet," Ms Martin said.

A recent HIA survey of small business members found cost and access to skilled trades were both in the top five issues placing pressure on builders, with 67 per cent reporting difficulty recruiting new staff or retaining existing workers.

For regional areas including Hay, Balranald, Carrathool and Central Darling shires, skilled trades shortages compound existing challenges around housing supply and affordability.

Small building businesses in these areas face additional hurdles including distance from major centres, smaller labour pools and higher costs associated with attracting workers to remote locations.

Ms Martin said demand for apprentices by small businesses was highly sensitive to price, reinforcing the need for adequate financial support.

"Programs such as the KAP, which provides financial support to apprentices to assist them during their training, are essential to attracting prospective trades into the sector," Ms Martin said.

"The importance of incentives that support the employers who take on apprentices should also not be underestimated.

"A trade apprentice will typically not start making a return for the business until well into their second year, and the provision of financial assistance to help defray the additional costs of training and supervision is crucial to make the equation viable for many small businesses."

The HIA submission highlights apprentice retention as an ongoing challenge, with high dropout rates during the first 18 months of training.

"Apprentice retention also remains a challenge, therefore targeted retention programs – particularly during the first 18 months where we see a high level of drop outs – are extremely important," Ms Martin said.

"There is a clear correlation between the availability and level of incentives, and the appetite for employers to take on apprentices and for young people to consider a career in residential building.

"In our 2026/27 pre-budget submission we call on the Federal Government to commit long term to the existing incentives for both apprentices and employers," Ms Martin said.

The Key Apprenticeship Program provides financial support to apprentices during their training period, while separate incentive programs support employers who take on apprentices.

The Federal Government's 2026/27 budget will be handed down in May.