Industry Training and Apprenticeships Amendment Bill

Part 2 of the Industry Training and Apprenticeships Amendment Bill is essentially three clauses that amend the Education Act. It is not a particularly long part, but it is an important part because this is the bit where we move on from the previous way in which these industry training and apprenticeships have been managed. It is important that when we are doing so we look at the history of what was good about industry training and apprenticeships under this legislation and ensure that we are not changing it in such a way that it undermines the purpose of industry training.

The biggest issue here when this was debated round the Education and Science Committee table was the question of fees and the payment of fees for the registration of industry training. There was a concern raised by several submitters that the fees that were being paid may increase and may become significant enough that they would impact on trainees themselves. Clearly, we do not want to see that. We want to make sure that industry training remains as open as possible to all those who want to undertake it. That is covered by clauses 25 and 26, which amend aspects of the Education Act around the way in which registration fees will be set and how they will be paid.

It is important to note that when the New Zealand Qualifications Authority comes in to undertake quality assurance activities—and this is in clause 26 of the bill—those fees do not represent a huge burden upon the industry training organisations. Several of the industry training organisations and related bodies that came to the select committee were concerned that there was the potential for this to become a very open clause. We were, again, assured by the officials that that would not be the case.

It is a concern for a lot of people that the New Zealand Qualifications Authority performs an important role in our system but equally is perceived, I think, by many people as merely coming along and extracting money from those organisations rather than providing a huge amount of value. It is important in this case that there is absolute transparency around what it is that the authority is doing and why a body might be paying fees to it, as they are required to under clause 26 of this bill.

We heard from submitters that they were concerned that often the New Zealand Qualifications Authority coming in and working with them was some kind of tick-box exercise. It was some kind of simply filling in a form and that was enough. There has to be more than that in terms of added value from the authority’s involvement with industry training organisations. There needs to be a sense that the authority is supporting the delivery of high-quality training through the setting of high-quality standards. That is the purpose.

If the authority comes in and has conversations like that with the bodies that are paying fees to it, then there will not be any grudge held about paying that fee. The problem arises where the industry training organisations feel that they are simply part of a bureaucratic exercise that is about filling in forms and the authority does not seem to add value. The concern that was expressed to us in the select committee about Part 2 of the bill was what the added value is here from the New Zealand Qualifications Authority. It was a little disturbing, I think, to see the level of cynicism among a number of those representing industry training organisations about the authority and what it would do. I think we have to take that cynicism seriously.

As I said in my earlier contribution, by no means do I believe that industry training organisations should be without scrutiny by the New Zealand Qualifications Authority. It is a large amount of taxpayer funding that is going to industry training organisations, and even more concerning would be when this money was directed to individual businesses under the clauses that have just been passed. That would be of even greater concern, and we would need the authority in there making sure that there is a level of quality assurance available. That is what the fees are paid for under clause 26. We want to see as much transparency as possible in what the authority does, so that those fees can be justified. It is important that the authority take heed of the things that were said about this during the select committee process.

We do believe that the fees are justifiable because the authority is performing a service, but it must be able to show the added value there, and, unfortunately—

I just want to pick up on where my colleague Grant Robertson left off in terms of Part 2 of the Industry Training and Apprenticeships Amendment Bill, specifically clauses 25 and 26. As my colleague has raised, this is the part of the bill where the Education Act is amended and the fees are set. I just want to consider what some of the submitters came and talked about. They talked about how it was that those fees were going to be utilised. My colleague Grant Robertson has set out very well what the function of, and the relationship between, the New Zealand Qualifications Authority and the industry training organisations is. I think we heard some very considered responses to what that relationship is, how these fees that are gathered under Part 2 of the bill are going to be used, and what the regulatory concern about that is. In fact, it would be fair to say that part of the concern that we expressed in relation to Part 1 of the bill, in terms of how it was that non - industry training organisations were going to be able to have access to the direct funding that had previously been solely for industry training organisations, is actually about the lack of regulatory compliance and the lesser amount of regulatory requirement that is there for non - industry training organisations.

Returning to Part 2 and, specifically, what this bit of the legislation is doing, I think one of the most powerful statements was when we had one of the industry training organisations come to us and talk about the nature of the relationship between an industry training organisation—Careerforce, in this case—and the New Zealand Qualifications Authority. It talked in a very compelling way about the need for a partnership between these two organisations. My colleague Grant Robertson has already talked very eloquently about the need for there to be this scrutiny and transparency of our industry training organisations, and I do not think that is something we would ever question, but I think that one of the things that we are seeing is that the industry training organisations really had a considered way in which they were going to work in with the authority.

I think another very compelling submission we heard on this was from the New Zealand Council of Trade Unions, which had some very interesting things to say about the legislation. As we have already talked about in the debate on Part 1 of this bill, the other aspects of its submission are something the Contractors Federation agreed with absolutely wholeheartedly. The council talked about whether or not “the Bill provides that the NZQA can set quality assurance requirements ‘without limitation’ in respect of the management, operation and governance of ITOs. These provisions come on top of requirements already in the Act in respect of governance and other matters.” The council considered that that was a step too far. Its main concern was that this provision represented a tipping point for industry training. Given the significant restructuring of industry training organisations that has already occurred and that we have seen over a number of years, the new performance standards that are in place for industry training organisations, the reduced funding, and now a major review that in many ways some of the changes that we are seeing in this legislation are coming out of, there is a risk that the visibility of industry training organisations as an organisation is now under threat. That is what the council argued.

It was in this context that the council proposed that the quality assurance aspect, that role of the New Zealand Qualifications Authority, should be less burdensome for the industry training organisations, should have less discretion, and should not duplicate or extend quality assurance requirements that are already provided for in the Industry Training Act or through the role of the Tertiary Education Commission. So in the rush to open this up and let other players in, there is a real danger that, in the words of the Careerforce submission, we are going to lose that partnership that we really need to be seeing between our industry training organisations and the New Zealand Qualifications Authority.

If we are going to have quality skills training in New Zealand and if we are going to have quality apprenticeship training in New Zealand, I think all of us in this House agree that there has to be some rigorous monitoring of what that teaching is—as with any part of our education system—and that there are standards. We need to be assured that people who are undertaking that education are being taught according to that standard and that there is a monitoring authority. It is simply the way in which we prefer to see education run in this country. But it is not clear what role the New Zealand Qualifications Authority will have in respect of quality assurance in relation to the funding agreements of the non - industry training organisations. I think that that is something that is a real concern for us and something I would like to hear a Government member take a call on.

I will call the other doctor, Dr David Clark.

Very kind, Mr Chair. Thank you for the call. Of course, we should reiterate that Labour opposes the Industry Training and Apprenticeships Amendment Bill. A lot of the reasons come down to the fact that this is privatisation by stealth, effectively, of the sector. It undermines the quality assurance that we have become used to. It undermines the industry training organisations’ restructure, which is being bedded in. To my mind, Part 2 really does get to that issue, when it comes down to the annual registration fee and the prescribing of quality assurance requirements. This is the nuts and bolts, this is where rubber hits road, and this is where we ask what the value-add of the New Zealand Qualifications Authority is, where we ask whether the regulatory oversight is adequate for industry training.

Let us ask ourselves what would happen if there was no fee. What would happen if there was no quality assurance in the sector? I think what we all know is that that would not be a desirable situation for New Zealand. We already witness a lack of workforce training. We see it in Christchurch, where there is a real skills shortage for an urgently needed rebuild—a lost opportunity. We see it in many places around New Zealand. I myself think of Dunedin, where we know that only 45 percent of the nurses who trained last year were in positions where they could further train and get their practical skills training, because the Government did not have in place a channel for them to carry on in their studies. They did not have work placement. That tells you that this Government has not got a priority on proper workforce training with pathways into the workforce. Likewise with medical students—280 medical students trained for 100 places, we are told. There are some real pipeline issues, and they are not being looked out for by this Government. It is kind of letting everyone sign up and the market decide at the end.

Well, that is not working, because young New Zealanders are following their passions and they do not always have the necessary information to make a decision about what the future workforce needs are. It is a role of the Government to assist with that process to make sure that New Zealanders are training for the future benefit of this country. That also means that they are then appropriately trained to make the most of their skills so they earn a decent living to better their own lives and the lives of those around them. Here in this bill we have the assurance that there will be a fee charged, and we have the assurance that there will be some level of industry oversight, but we need to ask whether that is adequate.

We on this side of the Chamber contend that this move that is going ahead really is not adequate. It is not forward-looking enough. We have seen it in the track record of the Government, with the drop in the number of Modern Apprentices over the last 5 years and the 37 percent drop in the number of industry trainees. Can you have any vision for a better education sector and for a better future for New Zealand, and can you have the kind of opportunity for all New Zealanders that Labour would want if you do not have a proper industry training organisations sector? This bill, unfortunately, is a step backwards because what it does is remove the skills leadership function from the purpose of the industry training organisations. Without that skill leadership function, without that oversight, nobody really is looking at the bigger picture.

Labour is committed to ensuring that New Zealand does have the skilled workforce it needs, and we are committed to making sure that the shortage of skilled tradespeople in New Zealand is addressed, and that means investing in apprenticeships and industry training. That means making sure that this annual registration fee is going the right way as the funding that comes out of the sector to support quality assurance and support appropriate workforce training—that it is directed in the right area.

The question I posed at the beginning of my contribution was: what if there was no fee? What if there was no quality assurance? This is the track that we seem to be heading down, and that is the concern that I have. I am concerned that if we do not have proper oversight and if we do not have a skills leadership function, we will end up in a situation where we have loads and loads and loads of some professions that are more accessible and of which we already have too many. We know, for example, that in New Zealand we train far too many hairdressers. We need hairdressers. Hairdressers are good people. I do not need a hairdresser—

💬 Grant Robertson: Some of us do.

—but many people do. But we need only so many hairdressers, and there has got to be skills leadership around choosing just which people we need.

Part 2 of the Industry Training and Apprenticeships Amendment Bill is obviously a very small part of what is a very significant bill. As I added in my earlier contribution, I believe this is a very significant bill and one that is a real lost opportunity, one where we could have had real consensus about something as important as industry training and skills in our country, which are vital to provide decent jobs and vital to ensure our economy works to its best capacity. In Part 2 we are looking specifically at amendments to the Education Act 1989. There are only three clauses there: clause 24, which actually states that “This Part amends the Education Act …”; and clause 25, which empowers the New Zealand Qualifications Authority to make rules “prescribing quality assurance requirements for industry training organisations,”. That bit was actually amended following the work of the Education and Science Committee. The select committee amended clause 25 to introduce into section 253 of the Education Act the necessary authorisation for the New Zealand Qualifications Authority to charge an annual fee to industry training organisations. That was important, I think, to cover the costs of issuing quality assurance improvement notices, in addition to covering other costs. That change was recommended from the select committee work.

Clause 26 amends section 254 of the Education Act to empower the New Zealand Qualifications Authority to charge fees for quality assurance activities undertaken in accordance with its function under the Industry Training and Apprenticeships Act 1992. The important thing here—and I was not a member of the select committee, so I did not get to hear all of the submitters on this. But what I do understand is that the relationship between industry training organisations and the New Zealand Qualifications Authority is important, and none of us in this House, I am sure, would dispute the requirement for robustness and the requirement to ensure that we do have good quality. We want to have a very robust, high-quality industry training system. In fact, ironically, the recent review has actually led to some good improvements—improvements that we acknowledge needed to be made.

We do believe this bill overall, particularly in allowing funding to non - industry training organisations, namely large businesses, to deliver industry training, has the potential to undermine that good work and the robustness and the quality of our industry training system. But the relationship between industry training organisations and the New Zealand Qualifications Authority is an important one, as is quality assurance, as is mentioned in this part.

One of the things I would be interested in knowing, and I am sure the Minister in the chair, the Minister for the Environment, would love to clarify this for me, is how these provisions around quality assurance apply to the non - industry training organisations that will be providing industry training, because, as I have said, this bill opens up industry training, effectively privatising it, so that individual businesses will be able to be funded to deliver so-called industry training. What I want to know—and it may already be clear to those who were on the select committee, and if that is so, please excuse me. If the Minister could take a call—because there has been an absence, I have to say, an absolute absence, of Government members commenting on what is a very important bill—and please let me know how these quality assurance provisions will apply to non - industry training organisations providing industry training.

The other thing, I guess, is whether they will be subject to the same fees if these provisions do apply. Will they be subject to the same fees that are flagged up in these clauses 24 to 26 here in Part 2? I am hoping the Minister will feel moved to get up and comment, or perhaps a member opposite who was on the select committee might be able to answer my question for me. We are disappointed to be in the situation of opposing this bill. We had supported the bill to select committee because we did see there was an opportunity here to work on improving industry training, which is so vital to our economy. There are such major skill gaps at the moment. We really did want to see an improvement in this space, but, unfortunately, the Government, in its wisdom, has gone with two measures that are absolutely of fundamental concern to us: the privatising of industry training and the removal of the skills leadership role for industry training organisations.