Hipkins Chris: Industry Training and Apprenticeships Amendment Bill — In CommitteeText is incorporated into the Bound VolumeHipkins Chris: Industry Training and Apprenticeships Amendment Bill — In Committee[Sitting date: 08 April 2014. Volume:697;Page:16951. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka):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.CHRIS HIPKINS: —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.CHRIS HIPKINS: 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.