Training providers have warned the federal budget plan to extend wage subsidies for apprentices could be a short-term sugar hit because of high drop-out rates.
The Morrison government will spend $2.7 billion over the next four years extending cash payments to businesses who hire trainees and apprentices.
Employers who put people on between October 5 last year and March 31 next year will qualify for the scheme, which reimburses up to 50 per cent of wages for a year, up to $7000 a quarter.
Apprenticeship Employment Network executive director Gary Workman said subsidies were useful in the short term but more support was needed for people to finish qualifications.
"Statistics show that over 42 per cent of apprentices are going to drop out of their training before they become skilled workers," he said on Thursday.
"That means without serious changes to the system, almost half of the Morrison government's apprenticeship budget is going down the toilet."
Mr Workman said group training organisations needed more funding to provide support to apprentices and businesses
"Structural reform is necessary to avoid the same mistakes Australia made after the GFC," he said.
"When stimulus wage subsidies ended, employers returned to importing skilled labour and youth unemployment didn't recover."
Treasury expects the program to support more than 170,000 new apprentices.
On budget night, Employment Minister Stuart Robert described the subsidy program as highly successful.
"This additional $1.5 billion investment will support the employment of newly commencing apprentices and trainees, assisting school leavers and job seekers during the peak hiring period for key industries," he said on Tuesday.
Australian Associated Press