The Albanese government has announced it will cut apprenticeship incentive payments in half for most industries from January 2026, while maintaining full support only for housing construction and new energy sectors—a move that has drawn sharp criticism from hospitality industry leaders grappling with severe skills shortages.
From next year, most apprenticeships—including chefs—will see their government incentive payments significantly reduced. The total incentive will drop from $15,000 to $5,000 per apprenticeship, with employers receiving $2,500 (down from $5,000) and apprentices receiving $2,500 (down from $10,000).
Only two sectors will maintain full funding: housing construction and new energy. In these priority areas, employers will continue receiving $5,000 and apprentices $10,000—totalling $15,000 per apprenticeship—through to December 2026 for trades including carpenters, joiners, plumbers, and electricians. More than 22,000 apprentices have commenced training under these programs since July.
The decision follows recommendations from a Strategic Review of the Incentive System and aligns with the government’s agenda to meet net zero targets and build 1.2 million homes by 2029.
A significant policy setback for hospitality
For hospitality operators already struggling to attract and retain culinary talent, the announcement represents a significant policy setback.
“The Federal Government’s decision to cut incentive payments for many apprenticeships—including chefs—is a serious blow to Australia’s already fragile hospitality workforce pipeline,” said Wes Lambert, CEO of the Australian Restaurant & Cafe Association. “At a time when restaurants, cafés and pubs are battling chronic skills shortages, rising wage pressures, and declining training enrolments, removing support for apprentices doesn’t just hurt young people entering the industry—it puts the entire sector at risk.”
Lambert warned the cuts would reduce the number of future chefs, increase pressure on stretched kitchen teams, push training costs higher for small operators, and undermine long-term workforce sustainability.
“We should be doing the opposite: investing more in skills, not less,” he said.
The hospitality industry has faced persistent workforce challenges in recent years, with many venues reporting difficulty filling positions and maintaining adequate staffing levels. The sector has relied on apprenticeship programs as a critical pathway for developing skilled workers.
Skills and Training Minister Andrew Giles defended the changes, saying they were “carefully calibrated to target support towards housing and new energy occupations, ensuring a skills pipeline in these nation-building industries.”
Employment and Workplace Relations Minister Amanda Rishworth emphasised the government continues to provide other supports for apprentices, including Free TAFE and Australian Apprenticeship Support Loans of up to $25,983.
However, Lambert said the Australian Restaurant & Cafe Association would continue advocating for restoration and expansion of apprenticeship incentives, a dedicated hospitality workforce strategy, and policy settings that boost rather than shrink participation in training programs.
“Australia’s future chefs deserve better,” he said. “And so do the venues that train them.”
Apprenticeships that commence before January 1 2026 will not be affected by the changes and will continue to receive the current level of support.
