Hipkins Chris: Industry Training and Apprenticeships Amendment Bill — Third ReadingText is incorporated into the Bound VolumeHipkins Chris: Industry Training and Apprenticeships Amendment Bill — Third Reading[Sitting date: 15 April 2014. Volume:698;Page:17257. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka): I just want to make the point following on from Tim Macindoe that I think it is important that we remember that qualification completion—or full course completion—and completion of learning are not necessarily the same thing. People can complete parts of qualifications but not complete the whole qualifications for a variety of reasons. Sometimes there are really good reasons why people do not complete an entire qualification. They may go into a qualification and upgrade to another qualification. They may start with a fairly low-level qualification find that they actually quite enjoy it and move up to a higher qualification. That is a successful outcome. They may begin a qualification in workplace training that then leads them to think about their career which involves them then moving on to another job a better job where they are doing a different qualification or they are doing some different form of training. That is a successful outcome.The fact that they have not completed the specific qualification does not mean there has not been value from them engaging in that qualification in the first place. I think that that is actually a really important point to remember because when we are looking at workplace training getting people engaged is the first priority. Getting people doing learning in the workplace is important. Sometimes that will mean that they switch to some qualification or some form of training that is different from what they originally enrolled in. We should not discourage that. In fact that is quite often a very welcome thing.I do agree that there was huge room to improve qualification completion—there is no doubt about that—but if that is the only measure we are potentially saying to some of those people who are moving out of one qualification pathway and into another without completing the first that that is the wrong thing to do when actually sometimes that is the right thing for them to do. Not completing their qualification if they are going on to something bigger and better is actually a good thing and we should celebrate that and recognise and reward that.The Labour Party is opposing the Industry Training and Apprenticeships Amendment Bill for two main reasons. The first is the decision to allow industry training funding to be given directly to companies corporate entities employers rather than to industry training organisations. The second is the removal of the skills leadership function from industry training organisations.I worked in the industry training field for a period of time—nearly 2 years. It was a very rewarding and eye-opening experience for me. The first thing I did was work at the Industry Training Federation where I was involved in researching and writing the history of industry training up to the beginning of the 2000s. I was looking at how we had gone from the previous apprenticeship system through to having industry training organisations in the first place. What was very clear there was there were some great strengths in the new industry training system but there were some weaknesses in the way the new system was established by the then National Government. Let us not forget that it was put in place by a National Government—Bill Birch Lockwood Smith etc.There were some great strengths in that system but there were some weaknesses and one of them was that there was a huge emphasis on the fact that anyone could set up an industry training organisation. Bill Birch admitted he went around the country and said everyone can set up an industry training organisation. So from the beginning it wasabout numbers. It was about getting more people into industry training organisations and more industry training organisations being set up everywhere rather than looking at some of these more strategic questions which in future years Governments would look at. The last Labour Government looked at them and this National Government is looking at them. That was not the case early on when the industry training system was established. So that was one of the first things that came out of my early work in industry training.Then I went to work in the oil and gas industry and I was primarily working for one of the largest companies in New Zealand in the oil and gas industry. By a process of deduction it is not that difficult to figure out who it was.Simon O’Connor: Don’t tell the Greens.CHRIS HIPKINS: That is right; I will not. My good friends the Greens have forgiven me. What is absolutely clear from that experience is that the large multinational company I was working for in the oil and gas industry was actually much more interested in qualification portability within its own company around the world globally than it was in qualification portability within New Zealand.If you think about why we have an industry training system in New Zealand and why we have a qualifications framework in New Zealand a lot of it is about ensuring qualification recognition recognition of skills that are transportable portable across businesses in New Zealand and across different jobs. A company if it is given the money directly to provide its own training onsite and so on is going to be more interested in using that as much as it can for its own competitive advantage. That means there is potential for it to be aligning that training more with its internal—and when I say “internal” I mean globally internal—systems of training and qualification requirements rather than ones that are going to make those employees readily transferable amongst different employers within New Zealand.So the question I have to ask is why the taxpayer should pay for that. If the qualifications and training that are taking place within an individual company are specific to that company and are basically training requirements that that company would have to be doing with those employees anyway why should the taxpayer be subsidising that? We subsidise industry training through industry training organisations because we recognise that there is value for this country as a whole in having a skilled workforce—skills that can be transferred skills that can move from one employer to another.When we start giving money directly to companies themselves rather than through a structured industry body we start saying that those things are not as important and I do not agree with that. What I think we could see here is companies using taxpayer subsidies for health and safety training and so on that they have a duty and an obligation to pay for and provide as good employers. Why should the taxpayer be subsidising those things when that is part of the cost of companies doing business? If those are the minimum requirements they have to have just to operate then they should be paying for that. I think that is one of the issues that are very lacking from this debate. The Government has not made the case for why giving industry training funding directly to businesses rather than through industry training organisations is going to lead to better outcomes. I am not convinced from my own experience working in industry training that that is going to be the case.There is a shortage of skilled tradespeople in New Zealand and the National Government has certainly exacerbated that by its current approach to industry training funding. We have seen the loss of thousands of people in apprenticeship positions. The fact that the National Government woke up to that in January this year after being in Government for 5 years is a very welcome thing but had it not implemented many ofthe policies that it has implemented over the last 5 years then maybe we would not be in as much of a position with that as we are now.Let us look at Modern Apprenticeships for example. Between 2009 and 2013 there was a 20 percent drop in the number of Modern Apprenticeships and a 37 percent drop in the number of industry trainees. It is easy to improve completion statistics and so on when you push a whole lot of people out of their training but actually we should have been looking at the reasons why they were not completing it because as I said right in my first comments sometimes there are good reasons why they are not completing their training. I think simply damaging the credibility of the entire system because of that is not necessarily a good thing.We should never forget that it was the National Government in the 1990s that did away with the old apprenticeship system in the first place. We should never forget that. I think sometimes—Carol Beaumont: Vandalism.CHRIS HIPKINS: Well it was vandalism but I think that sometimes when people talk about that they forget about what was put in place which was the industry training system. I am a big fan of industry training organisations having worked in that sector. I do believe that industry training organisations provide a very useful contribution but there is no doubt that in the hurried transition between the old apprenticeship system and the establishment of new industry training organisations an awful lot of expertise was lost and an awful lot of momentum from various industries was lost. It has taken quite some time for some of them to get back on track again so we are still suffering from the legacy of the 1990s and the decisions made by the then National Government.Finally I have got a chance to touch very briefly on the removal of the responsibility of industry training organisations around skills leadership setting leadership for their industries. If they are not going to do that who is going to? Why is the Government going to invest a whole lot money in industry training if we do not know that that is actually what the industry needs? That has got to be a fundamental question. We are very very bad at workforce planning in New Zealand in terms of making sure we have got the right people with the right skills at the right time. We have never done that very well but taking responsibility away so that no one has actually got any responsibility for it is not the right thing to do. In fact industry training organisations were probably only just coming to grips with the significance of that role. They had it only for a relatively short period of time and they were only just coming to grips with what providing that kind of leadership to their industries actually meant and that has now been taken off them.I think we should have strategic leadership around skills. I think the industry training organisations have the right people to be doing that. I think that this bill is very short-sighted and it is another one of those things where someone will look back in 10 years’ time and go “Oh gosh wasn’t that a mistake! How have we ended up in the position we’re in now?”. Almost certainly some of the problems we will be facing in 10 years will be traced back to this bill.