Inadequate funding means Kiwis will miss out

Construction Industry Council

15 September, 2004 NEWS RELEASE

Inadequate funding for skills training means Kiwis will miss out
to migrants with skills

Inadequate funding for training programmes geared to resolving the shortage of labour skills available to the building industry threatens the Government target of 250,000 people in training during 2007. It also jeopardises the proposed introduction of builder licensing.

The Chairman of the Construction Industry Council, Mr John Pfahlert, said today that against the background of skills demand far outstripping available qualified recruits it was apparent that the country would have to continue looking to immigration to meet workplace needs.

“A satisfactory skills training programme lies at the heart of moving New Zealanders into better paying employment within their own economy. But unless we get both the policy and the implementation correct overseas people will continue to take jobs that should go to Kiwis simply because there is a lack of skills in the local labour market.

“Alternatively, the country’s roading, housing and commercial construction programmes will continue to be put at risk if there are insufficient numbers of skilled people working in the sector.

“Future ‘buildability’ within New Zealand is a key issue, and the Government needs to sort out its investment in skills training to ensure the right numbers of skilled people come through the system. The industry has itself already responded to the training challenge – doubling the numbers of people in training over the last few years – but the Government’s funding levels have not kept up. The BCITO and Infratrain – the two largest construction-related ITOs – are carrying thousands of unfunded trainees, an unsustainable situation that can’t be allowed to carry on.

“Unless the funding issues are properly addressed, our people will miss out on some of the best benefits of a strong economy, and the Government may find that the training system might not be able to keep up with the introduction of builder licensing.”

Mr Pfahlert said the construction industry was being forced to look offshore to fill vacancies arising from relentless demand in the building and contracting sectors but hoped industry training programmes would reduce the need for overseas recruits.

“For this reason we have become concerned that the Industry Training Federation is predicting that on current funding models of the Tertiary Education Commission, and assuming best cases, the number of people in training in 2007 will be no more than about 177,000. That is a shortfall of more than 70,000 on existing targets.

“This isn’t good enough. It means that inflation pressures on the industry from the labour market won’t die down as quickly as we would like and that we can expect to see rapidly rising demand for recruitment of skilled workers from abroad.”

He said the problem appeared to stem from the system of funding used by the Tertiary Education Commission. This was giving higher sums to tertiary institutions, such as polytechnics, at the expense of training arrangements facilitated by Industry Training Organisations’ (ITOs).

“There are cases of institutions funded according to the number of students they recruit using qualifications developed by the ITOs as the base for their courses but offering no cost recompense for the development, or ongoing improvements, of the qualifications.

“Institutions receiving government funds on this basis get up to three times the $3000 [current average] allocation that goes to providers of industry training qualifications. The Industry Training Federation estimates its providers need approximately $3700 a student to keep on the pace.

“This means that if the Industry Training Organisations are going to meet the 250,000 target in 2007 a funding gap in excess of $80 million over three years will need to be closed by the Government very quickly.”

Mr Pfahlert said that alternatives to a funding injection were tighter budgetary procedures which would involve turning away would-be trainees, more rigorous pre-selection processes and greater weeding-out of under performing trainees.

“Such steps won’t help develop enhanced skill levels across the labour force but they will become inevitable unless there is either a change in approach from the Tertiary Education Commission, or the Government steps in to ensure adequate funding is available.

“It might also look at assessing whether resources are available for higher cost education and training that is needed within the ITO system for developing literacy and numeracy skills – skills most of us thought the primary and secondary education systems were there to nurture before people entered the labour market!”

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