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Chef loses dough as grant turns into a loan

Apprentices who have yet to complete their qualifications stand to lose thousands of dollars in an axed tax-free cash payment that will be replaced by a HECS-style loan from July 1.

Thousands of apprentices eligible for the federal government's Tools for Your Trade payment, worth up to $5500, have been told they will not get future instalments and can instead apply for the newly introduced Trade Support Loan.

Students close to finishing their apprenticeships are furious that the payment, which helps with training costs and is paid in five instalments during an apprenticeship, will not be honoured.

Alex Martin, who is due to finish her chef apprenticeship in October, will lose $2700, as will her classmates at Ultimo TAFE.

The 25-year-old from Dulwich Hill will miss out on the last two instalments, worth $1200 and $1500 respectively.

''This is something we have all been working towards and … have all been expecting to get,'' she said. ''Just to be told it's not happening any more is so disappointing.''


The Tools for your Trade payment, worth $915 million over four years, was axed in the federal budget. The government announcing eligible students could apply for the $20,000 loans instead.

But Ms Martin, who is working at Surry Hills restaurant Porteno, questioned how recently qualified apprentices would afford to pay the loan.

''For a chef, when you finish your training you are lucky to get a base salary of about $45,000 a year,'' she said. ''It's not a lot of money to be thinking about taking on $20,000.''

Under the scheme, apprentices have to start repaying the loan once their income reaches $53,345 a year.

The Greens have raised concerns about the loan scheme. Their analysis showed that it would take a carpenter on a starting salary of $40,000 up to 34 years to repay a $20,000 loan.

The estimates take into account the 20 per cent bonus an apprentice receives for completing their training and a 3.9 per cent pay rise.

The findings show an electrician on a starting salary of $62,000 would take seven years to pay off the loan, and a plumber starting on $55,000, eight years. A welder would take up to 13 years and an automotive engineer, 23 years.

Greens higher education spokeswoman Lee Rhiannon said: ''The Abbott government is trying to portray itself as a supporter of apprentices when in reality it is ripping more than $900 million out of apprentice training programs.''

The national secretary of the Construction, Forestry, Mining and Energy Union, Dave Noonan, said the loans scheme would discourage young people from entering into apprenticeships and exacerbate the skills crisis.

A spokesman for the Department of Industry said the Greens' modelling was flawed and that the loans, which are indexed annually to the consumer price index, would take an average of eight years to repay once an apprenticeship is completed.