Eligible apprentices in housing construction will receive $10,000 in incentive payments on top of their wages under the Key Apprentices Program.
Five separate payments of $2000 will be made at six, 12, 24 and 36 months respectively, and at the end of apprenticeships.
Building apprentices currently receive a $5000 front-loaded payment, which will continue until the end of the year for those who are not eligible for the increase.
Eligibility for the incentive will be determined by the Jobs and Skills Australia and Jobs and Skills Councils.
An increase in the Living Away from Home Allowance, and a boost to wage subsidies for hiring more apprentices with disabilities, were also announced by the government.
Prime Minister Anthony Albanese said the incentive increase would help both apprentices and the country more broadly.
“This will support apprentices with cost of living, while ensuring we have the skilled workforce we need to deliver our Homes for Australia plan,” Mr Albanese said.
The government is aiming to build 1.2 million homes in five years under the Homes for Australia plan.
Master Builders Australia chief executive Denita Wawn applauded the announcement, which she said would encourage apprentices to finish their training.
“Australia’s building and construction industry faces the enormous task of building enough homes, commercial premises and infrastructure to meet increasing demand and a growing population,” Ms Wawn said.
“Labour shortages are currently the biggest handbrake on fixing the housing crisis.”
The announcement was also welcomed by ACTU assistant secretary Liam O’Brien, who said low wages were a major challenge for apprentices.
“Thousands of young Australians, especially in our outer suburbs and regions, make huge sacrifices to pursue an apprenticeship so they can get ahead,” Mr O’Brien said.
“The $10,000 wage bonus will go a long way in easing their cost-of-living so they can build Australia’s future.”
However, the incentive increase was criticised by the Independent Tertiary Education Council Australia.
Chief executive Troy Williams said the increase did little for those who were not part of eligible industries, where skills shortages were just as urgent.
Mr Williams said industries such as agriculture, health and aged care, vehicle repair, tourism and the resources sector were missing out.
“This measure fails to address the needs of the small businesses in other parts of the economy,” he said.
“Without meaningful support for employers, the pipeline of skilled workers will continue to remain under threat.”
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