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Anderton: Training designed to meet future needs

Anderton Speech to Agriculture ITO AGM

Training schemes have to be designed to meet future needs

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This organisation is here to provide skills in our agricultural sector. I want to emphasise the importance of what you do. Agriculture remains the backbone of our economy. Though it will change, it will be our dominant industry far into the future. And we need more skills across our primary industries to realise our potential. There is a common belief that primary industries are slowly being displaced by the growth of other sectors. The facts tell a different story.

In recent years agriculture has been growing faster than other parts of the New Zealand economy. Over the last fifteen years agricultural and forestry industries averaged productivity growth of 2.8 percent each year. Other manufacturing industries achieved just 1.1 percent growth. From 1986 to 2002 the contribution of agribusiness to New Zealand's economy rose from 14.2 percent of GDP, to 16.5 percent. So our primary industries have been doing their bit. They are not only growing...they are growing in importance.

If we want to keep increasing New Zealanders' incomes and living standards as we have been doing over the last six years, then the top priority is the primary sector. No other sector is of such significant world scale that it can make the contribution made by agri-businesses. When I talk to agribusinesses - like other businesses around New Zealand - one of the most frequent issues raised is the shortage of skills.

Skills shortages are affecting most of our businesses and industries. Our growth is lower because we can't get enough skilled people to maximise our potential. The skills shortage makes it harder to develop high value industries and increase productivity. It's not surprising, perhaps, because we have the lowest rate of unemployment in the developed world. We've enjoyed six straight years of solid growth, with every region of New Zealand growing. And though things slowed down during the election season last year, unemployment stayed low.

But the skill shortage wasn't only caused by our success in getting more people into jobs. It's partly a legacy of how New Zealand used to do things.

Government would sit on the sidelines and say it had no role in matching skills to industry needs. I used to receive letters from parents who were desperate about the choices New Zealand offered young people. They would go deeply into debt pursuing courses for which they would get certificates but for which there were no jobs at the end. Sometimes young adults trying to enter the workforce would train and retrain and find themselves repeatedly rejected.

Many industries survived by cutting back on investment in training. Apprenticeships became a dirty word.

It's hardly any wonder that when the economy began to grow smoothly and strongly over the last six years, we began to run out of skilled staff. The government has responded with a range of initiatives. We're working with industry to identify shortages of skilled workers. The skills training infrastructure is being strengthened to close the gaps. The Modern Apprenticeship scheme has been very successful.

I'm proud of the Labour-Progressive's government's track record in industry training. There were 150,000 New Zealanders learning on the job at the end of last year. Some thirty thousand businesses are involved in industry-training programmes. We have come a long way from the 'hands-off' days of the eighties and nineties. But I'm not here to tell you that we are going to rest with things as they are. The government is ready to adapt the way we work with industry to ensure we continue to deliver better skill matches and rising productivity. Productivity is the guiding beacon of the next three years of economic and industry policy.

After the last election I was appointed Associate Minister of Tertiary Education to deepen the government's partnership with industry in the skills area. The nature of a partnership is that everyone with a stake in the issue works together to identify our highest priorities for development. Industry, the government, training providers, representatives of working people all have a role to play. The government is not going to design an optimal training scheme on its own. Training needs to be adapted to the needs of employers.

It needs to work well for employees in their sector. Nothing is worse for creating cynicism about an industry than training for jobs that aren't there;

Equipping young people with false expectations about the future is a waste of everyone's effort. So it is vital to align skills with demand.
Training schemes then have to be designed to meet those future needs as reasonably as we can.

The emphasis needs to be on lifting productivity and the overall economic contribution of the sector. I'm prepared to give an assurance that the government stands ready to play its part. I'll look at your top priorities for how we can do that better. We need to make sure the government's tertiary framework fits with the programmes that actually work for the sector. I'll give you two examples where I've been briefed on very successful programmes.

One is Farmsafe. It's the only programme that has been recognised and accepted by the agriculture community as working well in improving safety on the farm. ACC long ago recognised we needed to improve our farm safety record. Last year ACC helped 4816 people who suffered moderate or severe injuries on farms - 13 per day - while OSH investigated 23 accidental farm deaths. Of last year's tally, more than 1000 people had been so seriously injured on farms that they continued to need ACC help five years or more after their accident and ACC provide ongoing care for as long as it is needed - which can mean a whole lifetime But ACC also realised every farm is different and it's not easy to design a national plan. The best solution is to give farm workers the skills to recognise and manage risks themselves.

Farmsafe has been effective at educating a base of trainees who are widely dispersed and remote. Over 17,000 farmers and farm workers have attended various aspects of the FarmSafe programme - and over 80% successfully achieved all credits offered. That is an amazing result when you think that the last time many farmers and their employees attended any formal education was secondary school. The programme has been recognised by industry and government. It's making the agriculture industry more efficient and safe - with benefits for individuals, employers, communities and the economy.

Farm Smart is another programme that has been identified as having strong potential to benefit the rural sector. It's a programme aimed at improving IT skills. The farming sector can potentially be transformed by broadband, for example. But users need the skills to use the technology first. There are issues in fitting both Farm Smart and Farm Safe into the national framework for tertiary education.

That's not a criticism of the overall approach to the tertiary sector. I'm very proud of our record of success in training and education. But we also need to be flexible enough to ensure that successful programmes can thrive and flourish. I am working on ways forward on this issue. Skills are a priority and I am committed to removing the obstacles to a better performing sector.

The government is also committed to working in partnership with the industry and with everyone with a stake in its development. The highest priority is to lock in productivity gains in the future. Productivity is the result of innovation.
Innovation, in turn, results from skills, research and development and industry partnerships. The value of a highly skilled workforce is felt across the economy. The average output of all New Zealand workers nationally is around $60,000 per person. The average added value output of a worker in a Christchurch electronic engineering firm is $250,000. The average value added by a biotech worker in Taranaki? $1 million - each. We can't all be biotech workers...but the example illustrates how the addition of knowledge and ideas increases productivity.

Skills training lifts incomes for everyone. Industry training and skills development is the key to creativity and innovation. Our economy will grow faster as we continue to improve the quality of our skills training, and work in partnership to better adapt skills to industry needs,
I'm confident about the future of New Zealand, mainly because I'm confident about the creativity and talent we are unleashing. Our future is going to be shaped by the young people who are emerging into the workforce this year.

It will be shaped also by the vision and skills of New Zealanders practising their craft: primary sector workers who develop better on farm management techniques, the scientist who introduces new technology, the manager who shapes a business niche round the talents of trained staff and the sales staff who use their skills to develop new networks in offshore markets. All of these have a role in transforming our economy.

We are guardians of the future and if we want a caring New Zealand where everyone has a place and opportunity, we will put skills in the hands of all New Zealanders. We will give them a fair chance of a job, and a good income in a vibrant industry. Agriculture has the potential to provide that future and for the contribution you are making to it and I would like to convey my recognition

ENDS

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