On 21 December 2015, Minister for Public Transport and Employment Jacinta Allan, along with the Minister for Industry Lily D’Ambrosio and Minister for Training and Skills Steve Herbert, announced the ‘Major Projects Skills Guarantee’, which mandates minimum apprenticeship requirements for all publicly funded major projects. The details of the policy were released after this week.

The Major Projects Skills Guarantee:

• Commences on 1 January 2016
• Applies to all government contracts valued at or over $20 million dollars
• Requires that 10 per cent of hours of all work carried out on those construction projects must be undertaken by apprentices, trainees or engineering cadets
• Applies to all publicly funded building, construction, infrastructure, civil engineering and other capital project contracts put out for tender after 1 January 2016

The responsibility for meeting the requirement rests with the principal contractor, who must submit a ‘Compliance Plan’ at the shortlist stage for tender. The principal contractor is also required to report the progress towards, and final compliance with, the mandatory requirement. The progress reporting and liaison with the government will be important aspects for builders, as the failure to comply with the requirements may constitute a breach of contract.

A prescribed formula to determine the number of hours required has been published by the government. The estimated total labour hours will be based on the overall or total value of the contract, including all sub-contracting under the principal contract. Separate deemed-hours formulas have been developed for application for building and construction project contracts, infrastructure/ civil engineering project contracts, based on industry data.

Master Builders continues to be concerned that the Andrews Government has not listened to industry to create a practical solution to this issue. Master Builders considers that a range of comprehensive reforms are required to improve apprentice completion rates, including by introducing trades registration to ensure that there is a purposeful career path for trades in our industry. Policies should not be pursued in isolation, and should be capable of practical implementation to ensure their effectiveness.

The government has undertaken to review the policy after 12 months. Master Builders will seek feedback from members regarding the implementation of this policy and ensure that the government is able to incorporate this into its 12 monthly review.

For more information on the Major Projects Skills Guarantee, including the Fact Sheet and Explanatory Guide, please visit http://economicdevelopment.vic.gov.au/about-us/strategies-and-initiatives/major-projects-skills-guarantee