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Invest in skills to increase productivity

Invest in skills to increase productivity

15 December 2004

"'Invest in skills to increase productivity' has been a common message from commentators debating the merits of the budget surplus and a possible mix of debt reduction, spending and tax cut options" said Darel Hall Executive Director of the Industry Training Federation.

"We know that industry training increases productivity and wages, and we know it's very cost effective for the tax payer. We know that industry training builds and recognises skills in many people who have previously not had those opportunities - over half of industry trainees have no previous qualifications or a fifth form (Year 11) highest qualification".

The New Zealand Institute of Economic Research report released in November shows that on average, a learner after industry training is likely to be 5% -20% more productive than they would otherwise have been.

Industry trainees are likely to be at the high end of the 5% - 20% range because of their lower skills/ qualification level prior to training (ie they learn more), and the formal qualifications gained through Industry Training.

"The NZIER research uses the normal practice of using wage effects to measure productivity gains, so those increases are what goes into workers' pockets", Darel Hall said.

"Industry Training receives a much lower taxpayer contribution than other forms of tertiary education, with industry paying the lion's share of the cost.

"No doubt these factors contributed to the Workplace Productivity Working Group report 'The Workplace Productivity Challenge' calling for greater investment in firm specific education to increase productivity, including through Industry Training Organisations"

"Targeted spending increases focused on firm productivity, including industry training, are a good investment for all involved in industry", said Darel Hall.


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