The motor Trades Association of Australia (MTAA) says the Federal Government’s decision to halve key apprenticeship incentives from January 2026 risks worsening the automotive industry’s critical workforce shortages.
Under the changes, the Priority Hiring Incentive for employers will reduce from $5,000 to $2,500, while the Australian Apprentice Training Support Payment for apprentices will also fall from $5,000 to $2,500.
MTAA interim executive director Peter Jones says the cuts come at a time when workshops across the country are already struggling to find qualified 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,” Jones says.
“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.”
Jones says retaining higher incentives exclusively for clean-energy trades fails to reflect the 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,” he says.
“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.”
MTAA and state motor trade associations have been promoting automotive careers nationally and say many businesses had planned their 2026 apprenticeship intake based on the existing support structure.
“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, and this sudden reduction leaves them exposed,” Jones says.
He warns workforce shortages have direct consequences for motorists.
“When repair workshops can’t access skilled labour, the consequences are felt by every motorist in longer booking times, extended repair periods and higher costs. Reducing apprenticeship support during a skills shortage is a false economy that will ultimately cost consumers more,” he says.
The MTAA is calling on the Federal Government to reconsider the reductions and ensure policy settings support the industry’s ability to train the technicians Australia needs.
“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,” Jones says.
“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.”
Automobile Magazine-AU
