Federal Budget 2026 – A deeper dive into the budget papers

Apprenticeship incentives 

A key budget initiative is to change employers’ access to apprenticeship incentives from 1 January 2027, creating savings of $266 million. This comes from lowering the employer incentive for the Key Apprenticeship Program, which targets new energy and housing construction apprentices, and removing access to any incentive for employers with 200 or more staff. The new incentive table is shown below. 

Group Training Organisations (GTOs) remain eligible for incentives regardless of their number of employees. 

Australian Apprenticeship Priority List 

The Priority List identifies occupations for which incentives may be payable. It is based on occupations displaying skill shortages which require training that sits at Certificate III level or above. The methodology for determining the Priority List will be reviewed over the coming months. The intention is that the List: 

• takes both national and regional skills shortages into account, informed by the Occupation Shortage List developed by Jobs and Skills Australia each year, 

• considers shortage ratings over two years to improve stability and support business planning, 

• matches government priorities and targets support where it is needed most, including construction, net zero, manufacturing, and care and support, and 

• still includes priority jobs that support women and First Nations communities. 

These changes will take place from 1 January 2027. The 2026 Priority List will stay the same for the rest of 2026. 

Recognition of Migrant Skills 

The Government announced it will provide $85.2 million over four years from 2026–27 to the Department of Employment and Workplace Relations (DEWR) for better recognition of migrant skills through faster, more flexible skills assessments including: 

• $75.1 million for a new, modern skills assessment system for Trades Recognition Australia (TRA) to facilitate the integration of occupational licensing. This includes streamlined assessment‑to‑licensing pathways for priority trades such as electricians and plumbers. 

• $5.6 million for TRA to deliver a new program of skills assessments for onshore visa holders, ensuring their existing qualifications and practical trade experience is recognised for the purposes of gaining employment and meeting workforce shortages. 

• $4.5 million to strengthen regulatory oversight of Assessing Authorities. 

DEWR will also consult on requirements for a skills migration commissioner. 

Member Forum: Have your say on changes to apprenticeship incentives 

CET is planning a Teams meeting for Australian Industry Group members to gather your views of the changes to apprenticeship incentives announced in the Budget. 

The meeting will take place at 11:00am AEST on Wednesday 17 June. To register to attend the meeting, contact CET@australianindustrygroup.com.au.