Government announces changes to upgrade NZ apprenticeship system

The Government has announced a major revamp of the apprenticeship system in New Zealand with financial incentives for employers and workers to participate.

Prime Minister John Key yesterday devoted much of his state of the nation speech to committing the Government to a wide range of measures to build a more productive and competitive economy.

The details of the scheme were left for Tertiary Education, Skills and Employment Minister Steven Joyce to announce. Among the measures announced was giving the first 10,000 apprentices who enrolled after April 1 this year $1000 towards their tools and off-job course costs, or $2000 if they were in priority construction trades. The same amount would also be paid to employers.

Competition would be increased by allowing employers direct access to industry training funding.

''This is a big opportunity over the next few years, particularly with the rebuilding of Christchurch, to train more New Zealanders in vocational careers that will set them up well for their working lives.''

From January 1, the Modern Apprenticeships scheme and other apprentice-type training would be combined under an expanded scheme called New Zealand Apprenticeships. The new apprenticeships would provide the same level of support, and the same level of subsidy, for all apprentices, regardless of their age.

The current top-up for Modern Apprentices would be redistributed across all apprentices. In addition, overall subsidy payments would be increased by about $12 million in the first year, rising over time.

At a minimum, the educational content of apprenticeships would be lifted requiring at least 120 credits that resulted in a level four qualification.

Mr Joyce said the changes announced were being funded from the money the Government had saved by tightening up the industry training system to remove ''tens of thousands of phantom trainees'' who were not earning any credits.

By rebooting apprenticeships, the Government estimated there would be an additional 14,000 new apprentices starting training over the next five years - over and above the 7000 who enrolled every year.

The industry training review was held because although Government funding for the programmes had trebled, the value for money had been poor with qualification completions and credit attainment very low, Mr Joyce said.

In 2008, 96,831 people being funded to participate in industry training did not achieve a single credit. In 2009, the same figure was 100,801. Audits of ITOs in 2009 and 2010 also revealed the Government had been subsidising a significant number of trainees who were not eligible for funding under the existing funding rules.

''In response to these issues, the funding rules were tightened and monitoring was increased. Qualification and credit attainment in industry training has improved as a result.''

The total cost over four years will be about $106 million, made up of about $12 million a year for the increased apprenticeship funding, $7.5 million a year for the increased industry training subsidy, and $28 million for the reboot programme. All of the costs were being funded from industry training fund baselines and the industry training contingency established in Budget 2012.

BusinessNZ chief executive Phil O'Reilly said the increased funding and focus on apprenticeships was the right approach.

''It will be important for these changes in apprenticeships to be executed well. Employers want quality apprenticeship training,'' he said.

Green Party co-leader Metiria Turei was left underwhelmed by the announcement.

Four years ago, Mr Key was promising a brighter future. Now, he was making ''faded old excuses'' and defending his failure on jobs, she said.

Council of Trade Unions secretary Peter Conway said the announcement was a good start but a drop in the bucket. It would not solve New Zealand's job crisis.

Higher subsidy skills
Construction: Carpentry, painting, decorating, plastering, steel fixing, concreting, plumbing, gas fitting, drain laying, roofing, scaffolding, rigging, joinery, brick and block laying, paving, tiling, masonry, construction.
Infrastructure: Plant operator, road construction and maintenance, bituminous surfacing, foundation works, pipe laying, bridge construction and maintenance, engineering (highways), quantity surveying.
Engineering: Boiler making, welding, sheet metal working, diesel fitting, fitting and turning, civil engineering, mechanical engineering, fabrication.
Electro-technology: Electricity supply (electronics and communication), instrumentation and control, refrigeration and air conditioning, electrical engineering.


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