Hon Steve Maharey Speech Notes

Portable Skills Key To The Knowledge Society

Remarks at the opening of the Académie Accor. Vertigo Restaurant, Hotel Novotel, Auckland.

Introduction

I am delighted to be here today to launch this event which marks a tremendous development in industry training in New Zealand.

Let me congratulate New Zealand Accor, and indeed the Accor Group which is the largest Accommodation/Hotel group in the world.

Let me congratulate the Hospitality Standards Institute, the ITO for the hospitality industry and one of the countries leading Industry Training Organisations.

An Australasian framework

The relationship between Australia and New Zealand has been very much in the new recently, and some would suggest that we no longer have the degree of integration and indeed cooperation in terms of labour market and vocational education and training issues.

This initiative suggests otherwise.

In December 2000 four academies were opened in Australia, and I understand that those involved with this initiative have worked closely with the Australian Académie and the Australian National Training Authority (ANTA) to ensure consistency in programmes and qualifications on both sides of the Tasman.

All training materials, workbooks and assessments have been developed to match both Australian and New Zealand National Qualifications.

Accor have committed heavily in funding and resources to provide their employees with clear and deliberate pathways to career linked qualifications, with plans to offer all employees training from Level 2 onwards.

Accor are also working with the Hospitality Standards Institute to introduce the Schools OASIS programme (which brings industry professionals and schools together), and Modern Apprenticeships.

In short, this event today gives me a clear sense of the potential that remains to be realised in so many other industries.

The Government released a discussion paper on Wednesday which is about realising that potential.

The future for Industry Training

Having a highly skilled workforce, capable of continuously learning and acquiring new skills, is key to increasing economic prosperity and social cohesion. People’s knowledge and skills shape our economic prosperity, and play a large part in determining our income as a nation, and the incomes of the individuals, families, and firms within our national economy and society.

In tandem with the Tertiary Education Advisory Commission and its work programme, as we signalled prior to the last election, and again on becoming government, we instituted last year a review of industry training.

In July last year officials from a number of departments and agencies were instructed to conduct a joint official review, the objective of which has been to improve the effectiveness of the industry training system to better ensure that New Zealanders, in business and as employees, have the skills they need to prosper. This includes ensuring that the system is capable of meeting the challenges of rising demands for skills and the increasing speed with which skill needs change. The full terms of reference for the review were publicly released in September last year.

To date the review has been associated with a very high level of stakeholder involvement. This has included meetings between stakeholders and officials to discuss interests in some depth, a meeting with Maori stakeholders, and regular contact with employers, the Industry Training Federation, and the New Zealand Council of Trade Unions. Interviews have also been conducted with firms, with Industry Training Organisations, and unions.

On Wednesday the Prime Minister and I released a public consultation document inviting comment on the future for industry training.

Quite consciously we decided against zero-basing this exercise. We were faced with an industry training system, many of the defining features of which we were and are quite comfortable with – Industry Training Organisations, competency based education and training, and a National Qualifications Framework.

We therefore decided that it would be inappropriate to pull out the plant to examine the roots – even the most modest of gardeners will know what effect that will have on a plant. Instead - if I may continue to use the gardening analogy – we decided how best to grow the plant and to examine the contribution of this particular plant within the context of the garden as a whole.

Looking ahead we must have an industry training system that:

 Continues to raise the quantity and quality of skills held by the workforce

 Responds rapidly to the changing skill needs of the economy

 Equips more New Zealanders to successfully participate in the New Zealand workforce, and

 Becomes more accessible and responsive to all groups in the workforce, including Maori, Pacific peoples, women and migrants

The public consultation document focuses on 6 areas in particular:

 Improving access to and responsiveness to training

 The funding of industry training

 Developing the generic, transferable skills of New Zealand’s workforce

 Raising the level of foundation skills

 Providing better information for decision-makers and planners

 Exploring some of the implications for government agencies

Let me comment on three of these issues and cast my comments in terms of problems and possible solutions.

Problems and solutions

 Improving access to and responsiveness in training

With 47 ITOs in operation the limited scope of some ITOs can work against them taking a broader industry focus – this can reduce ITO effectiveness, potentially lessen the transferability of their qualifications and may also compromise their ability to provide national coverage.

Some important sectors of the economy have no ITO coverage – these include the Information Technology sector, finance and insurance.

The fact that Industry Training Organisations have guaranteed coverage within a specified industry has created problems – firms must often deal with multiple ITOs and this increases the time and cost required arranging training, for both the firm and the ITOs concerned.

An example is Sky City, which works with at least four ITOs to arrange its training.

Another issue is that ITOs may not offer training arrangements in a form that employers prefer – possibly because the ITO does not have the capacity to offer a range of training options.

 What are the options?

Government could explore ways and means of strengthening the management of the current system

This could involve:

 Requiring ITOs to develop a skills development plan addressing current and future needs for the industries they represent

 Changing the definition of industry to include a wider definition of stakeholders

 Ensuring that before an ITO is ranted statutory recognition there are stronger tests of the ITOs ability to meet industry needs

 Managing contracts with ITOs to achieve better performance

 Fostering best practice among ITOs

 Developing generic transferable skills

These skills range from skills such as teamwork and communication skills to multi-industry skills such as customer service and information technology. These types of skills make up a greater proportion of the jobs in our economy than ever before. It is vital to New Zealand's future prospects that we continue to develop a workforce with a high level of transferable, generic skills which can increase the flexibility and adaptability of the workforce.

How can we improve the transferability of skills?

One way would be to develop generic unit standards as well as ensuring that the transferability of those standards is readily visible to learners

Clearly the large number of ITOs is also an issue here – the relatively large number of ITOs narrows their focus and doesn't encourage the transferability of skills from one industry to another.

We need to increase the development and use of generic skills and thereby increase the value of qualifications for trainees, and reduce waste through unnecessary repetition of assessment or training.

 Raising the level of foundation skills

According to the International Adult literacy Survey conducted in 1996 in New Zealand, where level 1 denoted the lowers level of ability on a scale of 1 to 5

 20% of adults function at level 1
 60% of Maori function below level 3
 over 40% of Pacific peoples are at level 1
 70% of unemployed people are below level 3

People functioning at level 1 could be expected to experience considerable difficulty in using many of the printed materials encountered in daily life, such as understanding a bus timetable.

There is a pressing need to achieve a better partnership between industry and government to raise literacy and numeracy levels in the workplace.

Current industry funding and regulations do not distinguish between training for foundation skills and other types of learning.

One option is to fund such skills at a higher rate or establish a separate funding pool for literacy and numeracy development.

Designing enter-level qualifications to include a literacy/numeracy component would help to ensure that these essential skills are not overlooked in industry training. It would also help with the early identification of literacy/numeracy deficiencies among learners and workers.

Conclusion

The industry training system has matured over time, and one of the strengths of the system is that industry has become more involved in structured education and training – we want to build on that industry ownership. The emphasis over the past decade has been on the development of the system and its infrastructure, and now is the time to address the problems that have emerged and to enhance the performance and effectiveness of the system.

The level of participation across industries is very uneven, And while the government has no intention of taking a compulsory approach, a more managed strategy will, we anticipate, lead to a system better adapted to meet the wide variety of industry and trainee needs.

We need to extend the services of Industry Training Organisations to the widest possible range of firms, while encouraging those ITOs to focus on high achievement rates and quality learning.

We need to move from an industry training system to an integrated skills strategy.

The government has made its choice clear – the only path that will allow us to increase economic prosperity and social cohesion is that provided by an innovative and flexible economy. An efficient and responsive industry training system provides the most direct route for matching the skills demanded by an economy in the process of transformation.

Today's launch gives us a clear sense of the direction we should be pursuing.

Ends

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