Industry Training and Apprenticeships Amendment Bill

The question is that Part 1 stand part. It is a debate on clauses 4 through to 23, and includes schedules 1 and 2.

It is useful that we have come to the time to debate this bill in a very detailed way as we go through the Committee stage of the Industry Training and Apprenticeships Amendment Bill, because the reason why Labour opposes this bill is really in the detail. So let me set out very clearly the two reasons that Labour opposes this bill. Both of these reasons are contained in Part 1 of this bill—specifically, in clause 15 of the bill. The major problem with the bill, as we see it, is the proposal to allow organisations other than industry training organisations to be directly funded by the Government to organise and undertake industry training. That is our first major concern. Our second major concern with this piece of legislation is the proposal to remove the skills leadership function from our industry training organisations and what that is going to mean for the sector. We have some very real concern about what that will be.

So if we have a look at clause 15 of this bill, this is where a lot of the problems for us are embedded. It is also where a lot of the problems that the many, many, many submitters who came to the Education and Science Committee and voiced their opposition to this bill and their concern with this piece of legislation focused their attention. We have spoken at previous readings of this bill about how we had submitter after submitter from a range of organisations come in and tell the committee that this was not a bill that was going to fulfil the purposes that it set out in its purpose statement to do—that this was not a bill that was going to enhance industry training in New Zealand and add to the environment that we have.

If we have a look at clause 15 and the proposal that persons other than industry training organisations may receive funding for industry training, this is nothing more than this Government’s privatisation agenda in the education sector. This is rolling out privatisation into our industry training sector and siphoning out bits of money. Does the industry want this? No. The industry came and very clearly told members at the select committee that this was not something it saw as adding anything to how we deliver skills training in this country.

So direct funding is going to bypass industry training organisations and introduce competition. The tender process is already under way even before we pass this legislation, I note.

If we take one example to consider how this legislation is going to play out for a given industry, there is a very large player in the aged-care sector that is currently tendering to have direct funding under this legislation and to be something other than an industry training organisation that delivers the skills training. The danger here is that what we are going to have is delivery of skills training that suits that business, rather than suiting the industry as a whole. It will be training that is directed at one particular business. Some people might say that there is no problem with a business training to suit the needs of its business, but the problem for us is that this is using public money to do it. It is not simply a private organisation deciding that it is going to do some professional development with its workforce and train those people to suit the needs of its business. This is using industry training money that can potentially be put into the business of one person.

The other major problem that we have with this is that private providers of industry training can cherry-pick the businesses that they deal with. We heard very clearly from the submitters who came to us at the select committee that one of their major concerns about this is that small and medium sized enterprises would miss out under this model and that private providers of industry training would go to the very easy business model of dealing with large organisations. Business-to-business costs would be much lower, and it would be a much cleaner business model for them to deal with. But when it came to the very real need to be delivering industry training for our small and medium sized enterprises, we heard that this is not going to work. On this side of the Chamber we believe that denying good industry training and good skills training to our small and medium sized enterprises is not a way forward for a better New Zealand.

We know that so many of our young people are entering small construction firms, small manufacturing businesses—all kinds of smaller organisations—with, say, fewer than 50 employees. Actually, yesterday I had the good fortune to visit one of these construction companies in the Wigram electorate, and I talked to the owner about what it needed through skills training. What it needs is a very clear plan of what skills training is and a strategic direction from the Government, not a continuation of a privatisation agenda, as in clause 15 of the bill, which inserts new section 11A in the principal Act.

We also have some further concerns about clause 15. It is not just concern about removing the ability to have direct funding going solely to industry training organisations; there is also the skills leadership role that industry training organisations currently fulfil. Under new section 11A in clause 15, what we have is the industry leadership function being withdrawn. Call us old-fashioned, but on this side of the Chamber we think that industry has a role to play in determining what skills are needed by industry. We do not believe that the Government is the sole, best person to make that decision. Government members of the select committee thought that they were much better placed to make decisions about what the needs of industry were in terms of its skills training than those who are on the ground working in the industries, trying to build the houses, trying to run manufacturing companies, and trying to run aged care facilities. But, no, this is a Government that is so arrogant and so out of touch that it does not believe that those on the ground working in these industries should be funded to play a part in determining what skills are needed in this country. That produced a great deal of concern to us—as well as no need to cry over spilt water, now that I have spilt mine.

The concerns about Part 1 did not even stop with clause 15. Some other very real concerns were brought to us by the National Council of Women about what this legislation is really missing the opportunity to do. We have some woeful figures in this country around women’s participation in many of our trades in this country. The National Council of Women came to the select committee with a very elegant solution. It just asked for the word “women” to be included in a priority group of people who could receive skills training. Would Government members listen to that? No, they would not. They are not willing to do anything to address the very real gender gap—and, therefore, pay gap—that we have because of our skills training.

So for us on this side of the Chamber, it is a real disappointment that the Government has not taken the chance to further enhance our industry training sector. In fact, it has just pursued its ideological commitment to privatising our education system. Not content with charter schools and public-private partnerships, and the tendering out of levels 1 and 2 funding within our polytechnic sector, the Government is now seeking to fund money out of the public purse and into private companies through our industry training sector. This did not come as any great surprise to us because on this side of the Chamber we know that this is a Government that has no real commitment to apprenticeship training and skills training. It is a Government that has cut funding. It was a National Government that gave up on apprenticeships in the 1990s, and that was yet another of the things that the Labour-led Government of 1999 had to reintroduce.

We on this side of the Chamber have a real commitment to skills training and apprenticeships training. We certainly would not have done what this Government did and leave the bulk of the $42 million allocated for the Skills for Canterbury training sitting in the bank for 2 years while our young people went untrained. There is nothing in this legislation—there is nothing in this bill—that is going to turn that round. There is nothing to signal that this Government has a renewed commitment. Instead, what we are seeing is a continuation of a walking away from the Government’s need to really back the fact that the way for New Zealanders and New Zealand to get ahead is for us to have comprehensive and good skills training in this country.

I want to hear the Minister in the chair take a call and tell us why it is that the National Government does not think that industry should have a role in skills leadership. I would also like to hear from the Minister in the chair why it is that the Government thinks that, despite what industry and all the players in the sector have told us, private providers are better placed to deliver the training.

I call Grant Robertson.

It would appear you have only one option, Mr Chair.

The CHAIRPERSON (Eric Roy): I’m looking forward to it.

Thank you; so am I. I want to pick up from where my colleague Megan Woods was, although perhaps not in the spectacular water display that we just saw over here, and talk about the two main concerns that the Labour Party has about Part 1 of the Industry Training and Apprenticeships Amendment Bill. In order to do that, it is important, for those watching, to remind ourselves what the purpose of industry training is and why the Government funds it. Essentially, industry training organisations, since they have been developed, have had three main roles. Those roles have been to set the standards for industry training, to organise industry training and administer industry training, and to ensure that the skills leadership function that is so desperately required in our workforce planning is undertaken.

What does skills leadership mean? What skills leadership means is working to identify where the skills needs are in a particular industry and ensuring that we have programmes and courses that match up with those skills needs. Under this piece of legislation, that third of those industry training jobs has been taken away from industry training organisations. It was a remarkable thing in the Education and Science Committee to be presented with a sort of nihilistic view of the world—some sort of anarcho-syndicalist view of the world—that skills leadership would just happen, that it would just occur, and that no one would need to be in charge of it; it would just magically happen and some Government agencies would do some things and other industry groups would step up to the plate. That was one of the things we heard.

Well, that is just nonsense. From my point of view, and from the Labour Party’s point of view, industry training organisations are the peak bodies of industry. This is the place where we can learn the most about what is required in the future in terms of skills. Yes, by all means Government departments have a role in making sure that they are feeding into that exercise of saying what the next wave of skills are that are needed in industry, but the leadership role in that surely must come from the industry itself.

It was, as my colleague Dr Woods said, very odd for us on the Labour Party side to be told by the National Party members that the Government should pick this up, when we were saying no, no, actually this is where industry should be leading. Industry knows best what is needed in terms of those skills. So we are very disappointed to see that in Part 1 of this bill the skills leadership function disappears from the role of industry training organisations.

We are disappointed that we cannot support this bill, because there is no doubt that there was and has been a need for industry training organisations to recalibrate themselves. Over a period of time, a number of them had grown to such an extent that they perhaps were not servicing the exact needs of their industries, were not servicing the needs of the businesses within the industries, and certainly were not always servicing the needs of trainees. People were complaining that they were seeing a lot of flash cars being driven by industry training organisation staff but not the outcomes on the ground in terms of delivery of training. We accept that there was a need for some rationalisation of industry training organisations, and that has happened. Businesses have now bought back into the model, so it seems very odd to bring a piece of legislation to the House, we believe, that breaks that up. Just as things are getting better, the Government comes along and makes some quite fundamental changes that are contained here in Part 1.

On the Labour Party side of the Chamber, we strongly support industry training. It is so critical, as part of the lifelong learning and the build-up of skills that make for a productive economy, that we have as many workers as possible engaged in industry training, and a system that organises that in a way that meets the skills needs and allows people to develop their own skills and get transferable skills that can take them from one business to another, and be recognised for that with qualifications. All of that is good. All of that is in the bill, but then it is broken apart by the two key clauses here: the removal of the skills leadership function and the opening up of funding for industry training to non - industry training organisations. Those two clauses are the reason why the Labour Party cannot support this bill.

When we look at the regulatory impact statement that has been provided for this bill, it is quite instructive. It talks about why the Government funds industry training. It says: “The availability of common, transferable qualifications and a training organisation considering the needs of the industry as a whole is akin to a ‘public good’ which is unlikely to emerge without government intervention, particularly in industries with a high proportion of small firms.” That is the nub of the matter. That is the reason why industry training is funded by the Government—not because an individual business needs to train its workers to do the particular jobs. That is the responsibility of an individual business, and it will—and, in most cases, does—go about doing that. What industry training says is that we want a broadly skilled workforce that can move from one business to another and from one industry to another with recognised qualifications and skills that are transferable.

That is actually what the regulatory impact statement says, yet the Government in new section 11A opens up the funding of industry training to non - industry training organisations, effectively to individual businesses. It says to them that they can go off and do this. Every single submitter bar one, which I will come back to, said that they did not believe that this was the way to go. We had the remarkable situation of the Contractors Federation sitting down at the table—in fact, I think the speakers were still standing up when they said it. They said that they agreed with everything that the Council of Trade Unions had just said. What the Council of Trade Unions had just said was: “Do not do this. Do not break up industry training. Do not effectively privatise industry training, because getting those transferable skills, those skills that are for an industry not a specific business, is important to our future productivity. It will also fundamentally undermine the industry training organisations themselves.”

In that quote from the regulatory impact statement, I mentioned the reference to the fact that need for Government intervention is “particularly in industries with a high proportion of small firms.” It is the small firms that will miss out under this process, because it is the small firms that will be left behind.

💬 Dr David Clark: Why does National hate small businesses?

A big firm goes off and decides to run its own industry training, but small businesses will be left with increased costs to keep their industry training organisations going and there will be further burdens on them, as small businesses. My colleague Dr Clark knows from his travels around the country talking to small-business people that they are already struggling, and here will be an additional burden. Here will be an additional cost. That is another problem. Not only will we end up with training that is not industry wide but business specific, but it will also undermine small businesses and increase their costs.

There is already flexibility for employers to move from one industry training organisation to another. They are not stuck in the industry training organisation they are in now, and we have seen quite a bit of that in recent times. The argument that this opening up of industry training under new section 11A somehow or other will lead to increased flexibility is just plain wrong. The flexibility is in the system already.

The only organisation that came to the select committee and said “Yes, we think this might be OK.” was Business New Zealand, but it would be fair to say that Business New Zealand’s endorsement was a little on the lukewarm side. It, in fact, told the committee that it was not opposed to the idea. It said that it was “cautiously supportive”, but it wanted to make sure that the approach was “independently evaluated to ensure that it results in learning outcomes linked to industry needs”. That is what it said. Business New Zealand was worried that this opening up of industry training to individual businesses would mean that we would not have industry-wide skills and qualifications. Business New Zealand does not really like this either. That is the truth. Every other submitter—from the Contractors Federation to the Council of Trade Unions, Careerforce, the Amalgamated Engineering, Printing and Manufacturing Union, and the National Council of Women—said there is no justification for opening up industry training to be funded to individual businesses.

It is hard to escape the view that it is simply in this bill as part of a wider agenda of privatisation, be it charter schools or be it public-private partnerships. It is all in the same direction and it is the wrong direction. We want a strong public education system that delivers skills training and education that is applicable right across the board. That is why the Government should fund these things. We support strong funding for industry training and apprenticeships, but under this bill and under this part of the bill, that is consistently undermined.

It seems remarkable that in trying to consolidate and improve some bits of industry training, if this bill passes in the form that it is in now, it will fundamentally undermine industry training. I challenge the National Party members on the other side of the Chamber to get up and tell us why industry training funding should be delivered to specific businesses to deliver training that is only relevant to them. Why should we not have a situation where we fund, as a Government, only skills that go across an industry rather than specific businesses?

I am pleased to take a call on the Industry Training and Apprenticeships Amendment Bill, firstly to make the point that Labour members should hang their heads in shame in respect of their record on industry training. You see, when National came to Government, less than 50 percent of the people who were undertaking apprenticeships had acquired, 5 years later, any qualification or credit from their programme of work—less than half. I make no apologies for being part of a Government that is about reforming industry training to make sure it is of quality and to make sure it is not just about bums on seats, which was the driver of policy under the previous Government.

The speaker who just resumed his seat, Grant Robertson, has got this ideological block about any organisation other than a public body being able to provide training. We differ. Can I give the member an analogy. Can I give him an analogy. In my community in Nelson we have an institute called the Cawthron Institute. It provides excellent science. But Labour policy said it had science being done only at Crown research institutes, not at the Cawthron Institute. It is this Government that says no, we will provide funding to the Cawthron Institute on exactly the same grounds as to a Crown research institute.

💬 Dr Megan Woods: That’s not true.

Dr Megan Woods has said that is not true. Let me be very clear: under Labour, there was no capacity funding for organisations unless they were a Crown research institute.

The Cawthron Institute was the Cinderella of the science community until we came into Government and said no, it is about the quality of the science, not who owns the bricks and mortar. When it comes to industry training, our Government simply says that we should contract to provide industry training from whoever can provide quality.

Let me give an example. Many members of this House will have been to the Westport Deep Sea Fishing School. It is an outstanding institute. It provides training for people in the most important industry in my area. We have ideological opposition from Labour members, who say: “Oh, no, no, no. Because it is not owned by the State, we cannot provide it with funding for training.” We say that that is an ideological block, that is a nonsense, and that we should be able to provide funding to organisations that provide training based on the quality of their programmes, not on who owns the bricks and mortar. We apply that to our science policy. We apply that to upper tertiary education, we apply it to trades training, and we apply it to science because we are a pragmatic Government that is about getting the best results for the Kiwi taxpayer, and we are not going to let ideology get in the way of what makes sense.

I am pleased to make a few comments on what could have been a very good bill, and a bill that the Green Party actually supported at its first reading to the Education and Science Committee because we saw some good things in it. Unfortunately, there are two deal-breakers in the Industry Training and Apprenticeships Amendment Bill for us, and I think we share the concerns of the Labour Party.

I was interested to hear just now from the Minister in the chair, the Minister of Conservation. He seems to be conflating opposition to this bill with opposition to the private provision of education, science, and much else. That is clearly nonsense. I mean, yes, most certainly we support the public tertiary sector. We also see a very legitimate place for private training establishments and the Cawthron Institute, an organisation with a splendid history and, hopefully, an equally splendid future. What we push back against is the unnecessary privatisation of services that are better located within the public sector, meaning you get an unreasonable level, an unfair level, of competition. We are seeing this with the push to contract out the provision of education, such as we have seen at Unitec and we are now seeing in action at Lincoln University.

To return more specifically to this piece of legislation, as I said, we would have been happy to support it but for these two issues that have been identified, one of them being the removal of the skills leadership function. It is interesting to note that the 30-odd submissions to this legislation were for the most part supportive but were almost universally opposed to the notion that skills leadership should be left to who knows whom. There seems to be a pious hope embedded in this legislation that somebody, somewhere, will pick up the ball, and, indeed, in some industries that may be the case.

The Building and Construction Industry Training Organisation was very strong on the issue. It made the very valid point that within its industry, within building and construction, something like 90 percent of apprentices are trained by companies with fewer than 20 employees and, in many cases, fewer than 10. It is simply disingenuous to think that companies and businesses of that size, of that scale, are somehow going to collaborate to provide skills leadership in any sort of meaningful way. It is actually going to make the task of the Government and all of those various groups that collectively want to direct and ensure that we have a good sense of what skills are required in the future—what are the best training programmes and mechanisms to put in place—much more difficult if they are not to have that reliable feedback.

Initially, as I said, when we first saw the bill, we thought: “Oh, that’s interesting. They want to take skills leadership away from the industry training organisations.” We thought that it would be interesting to see which agency, which mechanism, and by what means the Government was seeking to improve leadership. Sadly disappointed we were when we discovered that, in fact, no—it was just being left to somebody out there. As I said, there is this pious hope that somebody, some organisation, will both be willing and, critically, be able to provide leadership within whichever industry it may be at the moment.

The other issue, of course, is the matter of public funding being directed to single companies, to single organisations. The point has been made that even Business New Zealand, which is typically quite pro-business and quite pro the private sector, gave very, very qualified support—qualified to the extent that it asked the very sensible question: “Well, if not the industry training organisations, then who?”. That question has clearly not been answered in this legislation; nor has it been answered, I would hazard to suggest, by the Minister in the chair’s last contribution.

There is Supplementary Order Paper 426 in my name, which would seek to remedy the two issues that the Greens have with this legislation and that, I believe, our Labour colleagues share. It would seek to reinsert the provisions that assign skills leadership responsibility to the industry training organisations, where it ought to rest, and it would delete the section that allows public funding to go to private entities. Even with the best will in the world, a private organisation—a company producing whatever goods or service—would inevitably tailor the training and the education it provided to the needs of its specific activity. It is the nature of business—it is human nature, indeed—to be a little bit self-interested, and it is difficult to imagine a situation where a private provider of that sort could actually be relied upon to deliver the breadth and depth of skills, awareness, information, ability, and so on that is really required of people coming into the trades.

I want to begin by just responding to one or two of the comments that Nick Smith made in his earlier contribution about completion rates, because that is something that I spent some time in a previous life looking into. If anyone should be hanging their heads in shame about that, it should actually be the former National Government in the late 1990s, which established the industry training system in the first place. Actually, the genesis of all of that was around the original passage of that legislation and the desire of Bill Birch, who was the Minister in charge at the time, to basically say to industries, no matter where they were: “Anyone can have an industry training organisation. Set up your own industry training organisation. We’ll slosh all this money around.” That, effectively, is where it all started.

By the time it had reached its kind of peak of growth, there was some work that needed to be done, but there was another area—which was a design flaw, again—that the previous National Government was directly responsible for. It was that when people enrolled in programmes, in many cases they enrolled in those programmes never with the intention of completing them, because they only ever wanted to do a part of the programme in the first place. But the funding system was so inflexible that a business that wanted someone to study a particular area, which, say, might have been a health and safety area, had to sign that person up with an industry training organisation for a whole programme, even if it never wanted that person to do the whole programme. It was a design flaw.

So what we found industry training organisations doing, for example, was that over time they moved to establishing limited credit packages, which they were able to fund, and which allowed businesses to target that investment more strategically, and that did lead to people being more inclined to complete those limited credit packages than to complete whole qualifications. So it was actually a fault of the system that was designed and implemented by the previous National Government. So before Nick Smith says that anyone should be hanging their heads in shame, he might want to actually get his facts right and consider who it is who should be hanging their head in shame, because, actually, Ministers in the previous National Government were the ones responsible for designing that entire system.

I worked in the industry training sector. I worked under contract for a couple of large companies in the oil and gas industry that used New Zealand’s industry training framework—

💬 Grant Robertson: Big oil.

—big oil, that is right—to provide some of the training needs for their staff. I am very concerned that some of the provisions in this bill will create significant loopholes that, first of all, will allow the Government funding of industry training to be exploited by large multinational companies. Rather than creating workers who are equipped for the New Zealand workforce, it will actually create workers who are equipped and ready for the export market—basically, to go and work elsewhere within the multinational corporation’s areas of operation, rather than being able to move seamlessly throughout New Zealand. The New Zealand Qualifications Framework is designed to ensure the portability of qualifications within New Zealand. We have this system so that if someone is doing structured, on-job industry training for one large employer and they receive qualifications as part of that, they should be able to take those qualifications down the road if they go and get a job with another employer. It is one of the great virtues of our system—its qualifications portability.

However, if you take a large industry like the oil and gas industry, increasingly what I found when working in that industry is that the large companies are far more interested in portability within their company’s operations than in portability across the country. So they were saying: “If we have got an oil rig here in New Zealand, we do want someone to be able to operate that, but we also want them to be able to operate an oil rig run by our company to the same standard somewhere else in the world. We do not really care whether they can operate something else in New Zealand for a different company.”

They were interested in supporting their companies’ own interests, not the interests of the employee, necessarily, and certainly not qualification portability.

One of the reasons I raise that and I am concerned about that is that the wording in this bill around whether or not the training being delivered and being paid for by the Government has to be part of the Qualifications Framework is incredibly sloppy. The businesses delivering training under this bill will have a lower standard of compliance with the Qualifications Framework than what an industry training organisation has to have. So, effectively, what we could end up doing is subsidising corporate training for large corporate companies that is not aligned to the New Zealand Qualifications Framework and that is purely in the interests of that company, not in the interests of the individual employee who is receiving the training. Ultimately, that is not a wise or a prudent use of New Zealand taxpayer funding. If New Zealand taxpayers are going to be putting money into industry training, it should not be purely for the benefit of a large corporate company, which should be paying for that training anyway.

One of the areas where we could see this happening quite a bit is around the provision of health and safety training. Businesses should be providing health and safety training to their employees anyway. That is part of the cost of their doing business. What this bill does is it allows large corporates, large companies, to say: “Well, we have to do health and safety training anyway, so let us get the taxpayer to pay for it.”, rather than them paying for it. They should be paying for that. That is part of the cost of their doing business, and, actually, what this bill effectively amounts to—and we should not be surprised, because it is a National Government bill—is that it now creates another loophole. Big businesses predominantly can basically get more money out of the taxpayer for doing what they should be doing anyway.

It is yet another example of the National Government throwing potentially huge volumes of taxpayer money at large corporates. That is effectively the loophole that this bill creates. Otherwise, why would the Government, as it is doing in this bill, create a lower standard of compliance for a business delivering industry training to what it creates for an industry training organisation? No answer from the Government. No one on the Government side is willing to even speak about it. There is simply no justification for it, because the Government knows that this is creating another rort. This is opening up another loophole that can be totally and utterly rorted.

💬 Dr Megan Woods: Like a charter school.

Like a charter school, as Dr Woods is saying. The second question I have, among many, is: who is going to now take over the function of skills leadership for an industry if an industry training organisation is not going to do it? This is actually a big challenge for New Zealand. We have been really, really bad in New Zealand’s history, particularly our recent history, of matching training and education to the actual skill needs of industry and the actual workforce needs that we have out there. One of the reasons that industry training organisations were given this leadership role in determining what skills industry required is so that we could get more strategic investment, so that we would not fund people to train in a whole lot of areas where we did not need them to be trained, and so that we could actually target the investment into the areas where we needed it. And who are the best people to make those decisions? It is the industry itself through the industry training organisation.

But the industry is going to have competing interests. If you take an industry that is dominated by large corporates—and the oil and gas industry is the one that I am most familiar with—the players in that are going to have competing interests. There needs to be some way of reconciling those, and that is actually one of the core roles of an industry training organisation. It is basically to get the big players together and say: “Well, across the industry, this is what we think the skill needs are going to be in the next 10 to 20 years, and this is how we are going to make that real and how we are going to deliver on those things.” The Government taking that function away from industry training organisations begs the question of who is going to do it. Because if the industry training organisation is not going to do it and there is no guarantee that anyone else is going to pick up that responsibility, the end result is that the taxpayer—the good old Kiwi taxpayer—will end up forking out a whole lot more money for training that is potentially, in the longer term, completely irrelevant.

We could end up training more people in areas where they are unable to get work, or where the scope of their work is so narrow that when they leave the job that they are in at the moment, they are unemployable by anyone else. That is something that the New Zealand taxpayer should not be forking out for. If a company wants to train an employee for a specific niche role in its business, it should pay for that. The New Zealand taxpayer should be paying for transportable, portable skills that can work across industry in a number of businesses that actually give people choice and opportunity. Narrowing it down so that industry training can be specifically targeted to the narrow interests of one individual business is not a prudent use of the taxpayer’s funding. It is a corporate subsidy—nothing short of that. That is wrong. If we are funding industry training, and we should fund industry training, it should be for the benefit of those employees and for the benefit of New Zealand as a whole. It should not be seen as a taxpayer subsidy to one individual company.

That is the loophole that this bill creates, and it does that in two ways: by allowing businesses to be funded directly rather than through the industry training organisations, and by removing the skill leadership function from industry training organisations that helps to ensure that those skills that people are being trained in are portable and are what the whole industry needs, rather than what one individual player within that industry needs. So those are some of the reasons why the Labour Party will be voting against this.

Kia ora, Mr Chair. There are two sides to the Industry Training and Apprenticeships Amendment Bill. One is the apprenticeships side and the other is the industry training side. Just to be clear, some of the rhetoric that has gone on in the Committee today has made it sound as if when young people are in industry training—actually, I take that back. It is not just young people, and that is one of the positives in the bill. One of the positives in the bill is that the same amount of support will be provided to all apprentices, so we are pleased to see the ageism around apprenticeships being taken away. But young people and people in industry training also gain a debt. They also have to pay a certain amount to gain the industry training, whether it be in hairdressing or in building, or whatever. The industry training organisations’ services, although subsidised by the State, are not 100 percent free. That needs to be made clear, because it sounds as if this is all just an argument about a Government gift, and it is not an argument about a Government gift.

Some of the changes that were made to the industry training organisations previously—and this is the end of a long period of change for the industry training organisations—were around minimising the industry training organisations, getting some clarity for both employers and young people in apprenticeships and industry training and their families, and ensuring that the qualifications they were gaining had value out there in the market place across the board. And therein lies one of the major concerns about this shift, or the proposal in this bill, to hand industry training money to business. That is a complete contradiction to the controls around making sure that we can quantifiably say that the qualifications that those apprentices and industry training individuals gain are quality. We start to lose that ability to truly say that they are quality because, as my colleagues from the Labour Party said, there are lower criteria, a lower threshold, for those businesses. It is relatively silent, actually, with regard to those criteria.

It is very, very interesting that none of the proponents for the ability for industry to be funded in this way came to the Education and Science Committee to submit—not one. One has to ask oneself why that is. Is it because it is actually not that important? Or is it because, actually, they knew they did not have to? Is it because they already knew that it was going through anyway and that it did not matter whether it was supported or not—that the Government was just going to put it through? Why did those in industry not then bring their voice and add the reasons why they wanted it? Not a single one did. You have to ask yourself, then, why, if nobody came and asked for it, it is still here. Why, when most of the submitters said: “This is a problem and we don’t recommend it. This is of concern to us.”, did the members of the National Party on the select committee just shrug their shoulders and say: “Oh, well, why not?”.

There has never been any argument put forward by the Government members on the select committee as to why this needs to be there. It did come out of a review—absolutely, as did many other steps that have been taken—but there was no support in the submissions, and yet from those members there was just a shrug of the shoulders and: “Oh well, never mind, we will do it.” That is exactly the same response that the Government members on the select committee had to charter schools—“Oh well, why not?”. New Zealand First is not confident that that is a good way to create legislation—“Well, why not? Let us just do it anyway, whether or not we need it. Let us do it anyway, whether or not industry wants it.” We are in a dilemma around that. The Minister in the chair might be able to answer it, or perhaps one of the members from the Government benches on the select committee could stand and answer that question. Why exactly is it still in the bill? To date, those members have not been able to answer that.

I think the comments Nick Smith made with regard to apprenticeships, industry training, and so on and so forth, were very interesting. He gave the impression that the Opposition is opposing the bill because it does not like any money to go to private training providers. Obviously, anybody who has spoken to any of the Opposition members—and, believe me, many, many, many people in education are speaking to Opposition members as we move towards the election date—will know that private training establishments are strongly supported by the Opposition parties and that there is much discussion going on around their role in training. That is just to make sure that that little sound bite from the Minister does not stay out there in the ether, because that is certainly not the case.

The other point that New Zealand First would like to make with regard to this particular bill is probably the lost opportunity here. There are continual contradictions with the National Government in the way it deals with anything to do with education, actually. In this bill, on the one hand you have a large subsidy for industry, or businesses, if they want to tap into the education dollar and train people specifically for their specific industry, as opposed to, on the other hand, the Government supporting vocational pathways—supporting that there should be a generalised education pathway towards the vocations and that it should be wide so that young people, people in this sort of training, can change through companies as we go forward. We all know that the whole area of employment is going to change, and we cannot pick winners and losers in this environment as we move forward into the 21st century.

But the other thing that has happened is that on the one hand we have got this subsidy for large business now being written into the bill, and at the same time small and medium sized business—and we have heard it before—still have a financial barrier to taking on apprentices. A hairdresser, for example, who wants to take on an apprentice has to pay $500 a year—$500 a year—for every year that that hairdressing apprentice wants to be there. How do the small and medium sized businesses in rural communities that want to participate with the educational advancement of their young people and the educational and economic development of their areas manage? It may not sound like much, but how does a single hairdresser who works in a sole-chair outlet in their small town and who wants to support a young person into industry training or an apprenticeship cover that fee? It would be our suggestion that, rather than subsidising big business, there was an opportunity in this bill to take away some of the financial barriers to small and medium sized businesses so that they can support their communities.

The Government would argue that the industries should have skin in the game. The industries do have skin in the game. The industries have skin in the game on the boards of the industry training organisations and in the setting of the direction around the skills, which comes now to the setting of the skills standards and the removal of the name of anyone to be responsible for it. If there is nobody responsible, whom is the Government going to hold accountable? If there is nobody’s name on that job, whom will the Government hold accountable? At the end of the day, somebody is going to do it, but if nobody is identified as that somebody, you cannot hold them accountable. You cannot take their funding. You cannot say they should have done it. You cannot do anything. You have to put a name on it, and then through accountability measures you make them responsible.

You might have picked up that New Zealand First will not be supporting the bill. There are some very smart things in this bill, and it is a shame that the two things—and New Zealand First will be supporting the amendments on David Clendon’s Supplementary Order Paper 426. We ask that the Government consider supporting them also, and then there would be agreement across the House. They are amending the two small, yet very important things in this bill that New Zealand First cannot support.

Like my colleagues, I am rising to speak in opposition to this Industry Training and Apprenticeships Amendment Bill. I have to say, like a couple of people who have mentioned this, that this is a lost opportunity. I just want to explain before I speak specifically on clause 15 of the bill—and particularly in relation to new sections 11A and 11B around industry training organisations and also persons other than industry training organisations receiving funding for industry training—that the reason this is a missed opportunity is that we had a real chance to get a bill that dealt with something as important as industry training and apprenticeships to have support across the House. That would have been, I think, a very important signal.

In some regards this is one of the key structural problems in our economy—the skill shortages that we have in trades and technical areas—and the fact is that we have high unemployment, especially for young people, at a time when we are having to import people into Christchurch to rebuild that city because we do not have enough skilled tradespeople. When there is a change of Government and we get a real building programme going in Auckland for affordable housing, we will have the problem of a shortage of tradespeople to do that work.

That is a really important structural problem in our economy. It is absolutely disgraceful that we are not dealing with that, and we could have. There was an opportunity with this bill to get real consensus on something as important as industry training and apprenticeships. I think the public of New Zealand want to see this issue sorted out, because people know that it is important in our economy to have the people who can do that skilled work. It does not necessarily require them going to university to get a degree, but it does require them going through what is a time-tested and very, very worthwhile process, and that is an apprenticeship—an apprenticeship to get a skill that is really important and valued in our country. But, in fact, what we have done here is miss that opportunity. We have missed that opportunity.

As others have said, we will be voting against this bill. The Government will force through a bill that actually potentially undermines those important needs that I have just outlined. Our first reason for thinking that that is an issue of concern is this almost, I think, ideological provision. So instead of industry training organisations being able to get about and do their job, we are going to enable funding to go to others to do this. Who will those others be? Those others will be large businesses. They will not be small businesses and they will not necessarily be delivering the industry training that we need delivered, which is to provide people with the sorts of skills that are transferable—the sorts of skills that we need across a whole industry and that are not specific to a particular business.

When the industry training scheme started I was on the board of an industry training organisation, and at that stage that was clearly what happened with the funding. The funding came in and it basically went out to the larger businesses in that industry to do training that actually, in all honesty, they should have been doing themselves—business-specific training.

This industry training and apprenticeship money is not to do the training that businesses need for their own specific needs. That is a cost of doing business, as is health and safety training. Those things actually pay real dividends to a company. There is no question about it. Any good employer knows that if you invest in training and if you teach people what they need to do, you will get better outcomes. Productivity will rise. There is research evidence after research evidence on that.

But the question here is what are the things that are particular to that individual business, and what the things are that we need for people who are going to be tradespeople in a particular area. What are the things that they need to have that will mean that they can operate at that business, at another business, at a different business again? That is the question here, and by providing the opportunity for particular companies to get funding to do industry training, we think there is a real risk there that what will, in fact, happen is business-specific training. It is yet another example of the commitment to privatisation. So we are very concerned about that provision in new section 11A, set out in clause 15.

In some ways, ironically—before I go on—this is undermining what has actually been some reasonably good work in terms of reviewing industry training. We have not been ideologically opposed to the need to look at how industry training organisations have operated. We have said: “OK, yes, there are things that need to change.”, and there has been some work done there. Industry training organisations have gone through a significant period of restructuring and are well tooled up, potentially, to go forward here, but now, ironically, the Government is legislating to undermine their ability to do their job. That seems just absolutely ridiculous.

The funding—just to summarise—going to those specific businesses potentially benefits individual large businesses at the cost, potentially, of small businesses. It will undermine the good work that has gone into restructuring, and it potentially means that we do not deal with the real industry skills needs that we have in this country.

This leads me nicely into my second point, and the second major concern we have had, which is about removing the skills leadership role of industry training organisations. It is almost like there is a pathological opposition across the Chamber to being strategic or to planning for anything. It is like somehow the invisible hand will tell you where there are skills shortages and what the needs going into the future of a particular industry might be. Well, actually, that is an absolute nonsense. We do need to collaborate at an industry level and to get together to say what the emerging trends in this industry are, what the changes to technology that are happening in this industry are, what we are seeing in terms of the people coming into the industry, and whether we need to broaden the pool of talent that we are accessing—and I am going to come to that point in a minute. But that happens at an industry level, not an individual business level, and that skills leadership role for industry training is being taken off industry training organisations. That is just a complete and utter sham and a nonsense.

We have skills shortages. I absolutely challenge somebody opposite to stand up and tell this Committee that there are not major skills shortages in this country. I know that none of the members opposite can do that because we know it to be true. The public know it to be true, and to do something about that we need to be strategic and we need to plan.

I do have to mention one particular thing that my colleague Dr Megan Woods touched on, and it was that under new section 11B, “Obligations of industry training organisations”, one of the obligations is to “have regard to the needs of Māori and other population groups”. It is critically important that we deal with the absolute gap that there is in industry training, and that is the lack of women in industry training. When 1 percent of the trainees in building and construction are women, and it is 6 percent in infrastructure and 7 percent in electrical supply, there is a problem here. As was mentioned, the National Council of Women came up with a very sensible suggestion about dealing with this, which could also have been part of this bill, and that was to put women specifically in there as one of those targets, if you like. We are talking about the majority of the population. We are, therefore, reducing the opportunities available to women but this is also meaning that businesses are not necessarily accessing the full pool of talent.

Supposedly, the Government strategy is to have greater economic independence for women. Rather than paying our aged-care workers what they are worth and dealing with pay equity, the strategy of the Ministry of Women’s Affairs is that women will move into higher-paid roles and get better incomes that way—including in non-traditional jobs like those in trades and technical industries. Well, that has been a resounding failure, and an opportunity to really push that in this bill has been missed.

I think, again, if we are looking at ensuring that our economy has the trained people that we need in those trades and technical areas but also, flipping it over, if we are making sure that people in this country have an opportunity to get good-quality skilled work that provides a range of opportunities for them and their families, then there is a real problem here. There is a real failure to address that in this bill.

I move, That the question be now put.

I am sad that the contributions from members of the Education and Science Committee on the other side of the Chamber have been so limited today, because they heard the same submissions that we did on this side of the Chamber. I want to come to a couple of matters that have not been covered yet by speakers. In particular, I want to talk about clause 9 of the Industry Training and Apprenticeships Amendment Bill, which talks about training contracts and apprenticeship training agreements being part of employment agreements. I want to mention that in this stage of the debate because it was raised as a concern by a number of submitters who came to the select committee that we would be limiting in some way or another the ability of people who were volunteers or people who were contractors to be part of apprenticeship training or industry training.

I want to make sure it is on the record of the House that officials were very clear with us that that was not the case, and that there was no limitation here. What it effectively means is that whatever the employment arrangements in place with an employee, that is where we will find the arrangements for training. That is essentially what they said. It is very important because a number of industry training organisations that are involved in the training of both volunteers and contractors appeared before the committee. We heard from the Primary Industry Training Organisation that there are a large number of contractors within that industry who have very important training needs—health and safety type training needs, but broader training needs as well. This bill still allows for the training to be a component of the agreement that they have to perform that task.

Equally, this also applies among volunteers. There is actually some very important work being done in terms of search and rescue training at the moment that involves volunteers, and we would not want a piece of legislation passed in this House that would unintentionally limit in some way or another the ability of those people to get that training. We have been assured that new section 3 in clause 9 does not do that and I wanted to make sure that that was on the record of the House.

The other area that caused quite a lot of controversy from the submitters was around the role of the New Zealand Qualifications Authority alongside industry training organisations. This is covered in numerous clauses in the bill, but the one that I want to refer to is one that the committee amended, and that is new section 13 in the bill as set out in clause 16, and in particular on the expanded role that the New Zealand Qualifications Authority has. The heading of new section 13B is “Qualifications Authority may prescribe quality assurance requirements”. This caused concern. There was a feeling among industry training organisations that the New Zealand Qualifications Authority already had a fairly stringent oversight of the industry training organisations and that this would move that from being about the quality of the training that was being arranged and about the quality of the standards that were being set, more to the point, to being about governance. They questioned why the authority should have that increased role.

The committee picked up on this concern—and I want to pay tribute to the chair of the committee, Cam Calder, because he picked up on this concern particularly—and new section 13B has been amended by the select committee to ensure in section 13B(d) the ability of industry training organisations to acquire and to maintain New Zealand Qualifications Authority approval for programmes or training schemes and consent to assess students, and that the governance arrangements for this can be part of the New Zealand Qualifications Authority’s work only where it is relevant to those skills standards and that organisational training. So it is not carte blanche for the New Zealand Qualifications Authority to wade into an industry training organisation and say that it thinks the organisation has got the wrong number of people on the board or that it wants to change the governance arrangements. But rather, where it is relevant to the standards setting and to the organisation of training, that can be a matter that the New Zealand Qualifications Authority is interested in.

From our point of view on the Labour Party side of the Chamber—and I think this goes for Green and New Zealand First Party members as well—that satisfied us that the concerns that were being raised about the authority’s role had been met.

None of us wants the New Zealand Qualifications Authority to be overreaching here and making life more difficult for industry training organisations. What we do want is taxpayers—who are paying money for industry training to be organised and for skills standards to be set—to know that that money has been well spent. The New Zealand Qualifications Authority does have an important role in that, so we want to maintain that role without increasing it and enhancing it. I thought it was important to make sure that those two points, given that Government members seem not to be interested in their own bill, were put on the table.

I want to return, though, to a little bit more detail around the skills leadership function, because I think it is important, given that this is something that has been in place for more than 20 years now, that this role is there for—

I move, That the question be now put.

The question is that the question be now put. Those of that opinion will say Aye; to the contrary, No. A party vote—the Clerk will conduct a party vote.

I raise a point of order, Mr Chairperson. I think there is a process here. I am not sure that anyone had actually called for a party vote. There is a process that we go through—

The CHAIRPERSON (Eric Roy): So the member does not want a party vote?

I do want a party vote, but you did not actually ask for one.

Well, exactly. Now we will conduct one.

I raise a point of order, Mr Chairperson. I do not want to be pedantic, but there is a process in this House for how we call for party votes, and I think it is important that we stick to that process at all times because if we vary from it, that can cause confusion. The process—say, in this case, when we went one way and the Government members went the other—is that you would normally then ask whether there should be a party vote. I just ask that we stick to the process.

I acknowledge the member’s point of view, and I acknowledge the energy that was put into the “No” call. I looked across and said “Party vote” and then proceeded to call it, because I presumed that would be the case. If that has caused offence, I apologise. But I think my perception was correct, and that a party vote is required—

💬 Grant Robertson: Yes, it is, thank you.

The CHAIRPERSON (Eric Roy): Thank you. We will now have a party vote.