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PM: Address to the Industry Training Federation

Thursday 28 July 2005

Rt Hon Helen Clark Prime Minister

Address to the Industry Training Federation Conference

At the Te Papa Wellington

Thank you for inviting me to address this conference.

Labour fully recognises the critical role industry training must play in transforming the New Zealand economy. That's why we have given huge priority ever since our election in 1999 to building up work based training. We believe that prosperous economies in the 21st century will be driven by knowledge, skill, technology, innovation, productivity, investment and entrepreneurship.

Our government has taken many steps in many policy areas to lay the basis for an upmarket and inclusive economy which delivers higher living standards. Those policies stretch across education, science and research, business growth and economic development initiatives, and health and other social policies.

Industry training is a key component of our programme to lift New Zealand's economic performance. A more highly skilled workforce will lead to higher productivity, more innovation, more secure employment opportunities, and higher pay for working New Zealanders. Opportunities to acquire new skills must be available throughout our lives.

As the NZIER survey for this Federation reported, industry training benefits:

- the individual trainee through the higher wages associated with higher skills.

- firms through enhanced profitability, and

- society as a whole through having greater economic growth and a better educated workforce.

When we were elected in 1999, we had a big job ahead of us to rebuild skills levels. Industry training had languished in the 1990s, and the old apprenticeship system had been abolished.

During our last two terms in government, Labour has:

- Doubled the amount of government funding in structured industry training via the Industry Training Fund, from $56.1 million when National was in office in 1999 to $128.9 million in 2006.

- Increased the funding provided to Industry Training Organisations by over sixty per cent.

- Continually increased participation in industry training. There are now just under 140,000 people participating in industry training - up 60,000 since 2000.

- Introduced the Modern Apprenticeship scheme in 2000, creating new work-based training opportunities for young people.

- Since Modern Apprenticeships were rolled out nationally in 2001, funding has increased by 340 per cent - from $6.8 million in the 2001/02 financial year to approximately $29.9 million in the current financial year. Already 7,760 young people have been placed in the scheme.

- Assisted Industry Training Organisations to anticipate better and respond more effectively to emerging skill needs in industry.

- Passed legislation to provide a balloted levy mechanism which allows industry to contribute to the cost of maintaining an effective Industry Training Organisation.

- Introduced the Gateway programme, which builds pathways for senior secondary school students into work-based learning and encourages linkages between schools and local businesses.

We have promoted the Modern Apprenticeship Scheme as a flagship policy. It has the great advantage of providing a mentoring system, with skilled and experienced adult workers passing on a wide range of work and life skills in a supportive environment.

It has helped to promote careers in trade and technical areas for school leavers. It is now working in 31 industries, particularly in those facing skill shortages.

I have met many young people in the programme all over New Zealand. All are positive about the job opportunities which the scheme has opened up for them, and so are the employers who have taken them on.

I thank the Industry Training Federation, and the many ITOs which are involved with Modern Apprenticeships, whether as co-ordinators themselves or in supporting the work of others who carry out the co-ordinator role. I also thank the thousands of employers who are embracing the scheme and taking on apprentices.

In this year's Budget, we once again set a new target for the number of young people in the Modern Apprenticeships Scheme. It now stands at 9000 to be achieved by December 2006.

Today I am announcing our policy to increase the numbers in Modern Apprenticeships even further, and to continue the rapid increase in industry training during a third term in government.

This area of policy is so significant to Labour that we are making it one of our top commitments on our pledge card.

So, today I am announcing that our third commitment on Labour's election pledge will be our pledge to fund 5000 more Modern Apprentices during our third term in government - that's 5000 more than the 9000 already planned for by the end of next year.

This new target will take the total number of Modern Apprentices to 14,000 in 2008. Funding for the first 2,000 of these extra apprentices is coming from the savings made following the review of certificate and diploma programmes. The other 3,000 modern apprenticeship places will cost approximately an additional $10 million per annum.

We have also decided that up to twenty per cent of Modern Apprentices in any industry will be able to be older than the current age limit of twenty-one years.

I am also announcing other aspects of our industry training policy today. During a third term in government, Labour will:

- Continue to increase participation in structured industry training towards our goal of 250,000 participants.

- Collaborate with employers, unions, employees, Industry Training Organisations, and training providers to reach these goals and to boost the quality and relevance of industry training.

- Work with small and medium sized enterprises and the self-employed to lift their participation in training.

- Continue support for the Skill New Zealand partnership with business and employee representatives to promote trades as a career option for young people.

We expect that by the end of the next term in government this will see an additional $30 million per annum invested in industry training.

We cannot support suggestions of lifting the cap on industry training places. We are now repairing the damage caused to certain areas of tertiary education from the lack of proper controls, and we do not want problems appearing in industry training. We believe the expansion of industry training must be structured, and it must be sustainable. That means addressing areas of skills shortages, and addressing them at a rate which does not outpace the capacity of the sector to deliver quality training. We will not sacrifice the quality of the programmes just to increase the numbers.

Building clear pathways from secondary education into industry training is an important part of our policy. During our third term we will:

- Introduce a Youth Apprenticeships pilot, providing opportunities for young people to gain credits towards their apprenticeships while still at school.

- Continue to work towards the goal of all fifteen to nineteen year olds participating in some form of education, training, or work by 2007.

- Expand the Gateway programme which builds pathways for senior secondary school students into work-based learning to all state high schools by 2007.

- Expand the Youth Transitions Service to cover all regions in the country.

We will also explore the possibility of establishing a structured cadetship programme as an alternative to institutional training for those entering associate professional roles.

We have already announced in the Budget that we are investing another $7 million over the next four years to fund foundation learning in the workplace, specifically for literacy and numeracy. This initiative will utilise the Industry Training system.

During our two terms in office, New Zealand's economic growth has averaged close to four per cent per annum. The unemployment rate has halved to become the second lowest among OECD nations. This economic success has created a big demand for skilled labour. By working together, government, industry, and educators can meet the challenge of providing the skills base our economy needs.

This government appreciates the leadership role which the Industry Training Federation and individual ITOs have taken in the nationwide effort to boost industry training, and your willingness to partner with government.

I hope that through our initiatives and with your support, many more young New Zealanders, and adult New Zealanders seeking new opportunities, will find through industry training the pathway to good jobs and careers, and to contributing to our nation's economic and social development.

I wish you all a successful conference.


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