The state and federal governments have been urged to act after it was revealed there are 45 per cent less apprentices working in western NSW compared to last year.
Western NSW regional manager for Business NSW, Vicki Seccombe, said the number of apprenticeships being started in the region, which includes Dubbo, slumped once the COVID-19 pandemic started in March.
Ms Seccombe said 2299 apprenticeships were started in 2019 but only 1249 had been started in western NSW this year.
"It could go up but the prime time to start an apprenticeship is January-February-March," she said.
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Ms Seccombe said about 54,000 apprenticeships had been lost across NSW including 1050 in western NSW.
She said she had hoped the situation in western NSW would be better than the metropolitan areas but that was not the case.
"It is on par with the rest of the state which is not good," she said.
Ms Seccombe said while the construction industry was reasonably busy in the region it would be one of the industries affected. She said other industries hit in the region included hairdressing, beauty and retail.
"Our numbers were tracking quite well, on schedule, but as soon as the COVID hit the numbers dropped," she said.
"COVID-19 has had a huge impact on businesses, with many still willing but incapable of providing training opportunities," she said.
"Taking action now will help the current and future generations of young people gain the skills they need to avoid a life on welfare."
She said without intervention, the number of apprentices in training in 2021 will fall to levels not seen since 1998 and are unlikely to recover until 2025.
"Given the scale of the impact, government must act now to make any inroads into turning the trend around, including by providing employers with a significant subsidy for new starter apprentice wages."
She said the "highly effective" Supporting Apprentices and Trainees subsidy needed to continue past October 1, when it was due to expire, and be phased out over the next year.
"Young people also need access to an industry-supported pre-apprenticeship program to help them prepare for the workforce," she said.
"Ongoing support for Group Training Organisations is also crucial to support both apprentices and their employers."