Clark David: Industry Training and Apprenticeships Amendment Bill — Second ReadingText is incorporated into the Bound VolumeClark David: Industry Training and Apprenticeships Amendment Bill — Second Reading[Sitting date: 18 March 2014. Volume:697;Page:16806. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):I am always disappointed not to hear more from that member Tim Macindoe but perhaps he feels that there is not much more worth talking about in the Industry Training and Apprenticeships Amendment Bill. And embarrassed he might be because this is a bill that once again sees small businesses being squeezed. As Labour’s small-business spokesperson I feel strongly about industry training organisations being undermined through the de facto privatisation of industry training that takes place in this bill. As many of those who have contributed this evening have noted there was virtually no support for this proposal from the submitters to the Education and Science Committee and we believe that it has the potential to damage the provision of quality industry training in New Zealand.This is a Government that is out of touch. It is looking out for the few at the top.John Hayes: Read the Tui ad: “Yeah right!”.Dr DAVID CLARK: It is arrogant. And Mr Hayes yells “Tui” across the House. He is not listening. That is illustrative of the exact point we are making—dismissive cursory one-liners. He is no longer engaged in what is going on in real New Zealand. That member is willing to dismiss the arguments willing to dismiss the submitters and willing to abuse the submitters I was just representing with a quick one-liner.An economic recovery in New Zealand should not benefit only the few; it needs to benefit all of New Zealand. Industry training with its skills leadership provides support to those small-business people who risk their shirt every day who struggle out there to make ends meet and who want to pay their workers a living wage but are squeezed by the bigger players in town who have scale and who often have fancy tax arrangements to avoid paying their fair share. The ordinary Kiwis out there who struggle day after day after day after day putting their mortgages on the line to fund their small businesses find that another plank of support is ripped out from under them with this bill.Direct funding will work for large businesses that are not interested in looking after the few employees they have got. They can buy the cheapest CD-packaged course from a non-accredited agency and not be concerned about skills leadership. But industry training organisations in their existing form have a concern for their own reputations. They have a passion for their industry they have invested in their industry and they have a background that leads them to be strong providers. There has been a big restructuring in this sector and I have heard no one from this side of the House argue strongly against that. That restructuring is making a real difference to the performance of the industry training sector and the services that are on offer but putting in place a system that will undermine these changes is short-sighted and would likely in my view erode the growing confidence of businesses in industry training organisations.When every man and his dog and every woman and her cat can go out produce a CD and market it as a course or skills training that will appeal to the lowest common denominator. That will appeal to that group of employers who are not particularly concerned about skills development in their workforce but are more concerned about getting wealthy off the back of cheap labour. And those who wish to support their workers who wish to strengthen their skills and who wish to grow value businesses—moving along the chain from volume to value—will struggle because the quality industry training organisations will be undermined by this new structure.So the skills leadership function being removed as a purpose from the industry training organisations is something that we strongly oppose on this side of the House. Now no one will be responsible for skills leadership in this sector. We learn in this bill that now everyone all at once is somehow responsible.Dr Megan Woods: No funding—none.Dr DAVID CLARK: Well if I have learnt one thing during my time at Treasury it is that clear lines of accountability matter—clear lines of accountability. To be able to go back and say: “This person is ultimately responsible for that happening.” is an incredibly important management principle. Saying that everybody is responsible for making it happen devolves it down so that no one takes responsibility.As my colleague Dr Megan Woods pointed out there is no funding there as well. Once again another important principle I learnt at Treasury or had reinforced there was that incentives matter. If there is no funding there is no incentive to develop quality training and that is not good for industry. It is not good for the future skill needs of our people. It is not good for the small businesses that rely on the industry training organisations. It is not good for our ability as a nation to be flexible on our feet to scale up to meet needs. I think of the marine sector where the industry training organisations meet—if you can excuse the pun—these bits of business that come in waves. Sometimes there are a whole lot of ships that need building; sometimes there are few. Those industry training organisations know how to scale up and know how to scale down. They are concerned with quality provision and meeting the needs of a high-value industry.If we have players that fly by night that undermines those industry training organisations that are concerned about quality provision and we as a country might lose them. Once they are gone they are gone. Then we have people with uncertain jobs who are there responding to the incentives to make a buck and provide the provision that ticks the box for the employer. Sadly that undermines the skills leadership function that has been developing so strongly in recent years and particularly through the changes that have been brought on through the restructuring which no one on this side of the House as I have said has opposed.The shortage of skilled tradespeople in New Zealand is a serious concern which National has exacerbated by failing to invest in apprenticeships and industry training. This is not a new phenomenon. People watching at home should know that from 2009 to January 2013 there was a 20 percent drop in the number of Modern Apprentices and a 37 percent drop in the number of industry trainees. That is a very very sad record for this Government.Labour is committed to ensuring that New Zealand has the skilled workforce it needs. Labour wants New Zealanders to have jobs and opportunities and to ensure that the Government cannot sit on its hands as this National Government has done and continues to do. After coming into office National oversaw that loss of thousands of apprenticeship positions—Dr Megan Woods: Shameful.Dr DAVID CLARK: —a shameful loss to oversee—and by the time it finally woke up the skills deficit had been created. Now we see further steps to undermine the industry training sector to undermine that skills leadership function which potentially will lead to higher costs for small businesses over time as you lose that regular training and you have to invest heavily from time to time.Dr Megan Woods: Privatisation.Dr DAVID CLARK: We have got privatisation in the sector. Once again we are seeing that this economic recovery that is being talked about is going to benefit only a very few at the top.Labour stands for opportunity for all New Zealanders. We support skills training. The OECD is very clear in its work on economic development that the best way to raise GDP growth in a country is to start with the low-skilled workers in the regions. The model of hubbing of bringing together the highest skills in the big cities has been pushed over many many years and it has its merits. There is agglomeration. There are benefits in that way of doing things. But the OECD has produced research that says that actually now the low-hanging fruit is not about having one or two more highly skilled people in those bigger centres but about raising the skills of the lowest-skilled workers in the regions. That is where 60 percent of our workforce is already and raising those skills will make the biggest contribution to GDP improvement.So it is logical that industry training organisations should be strengthened and not undermined as this bill is suggesting. That is the way to make sure that the benefits of any economic recovery are shared fairly so that the gap between rich and poor does not continue to grow and we know that that gap is at the highest level it has been in recorded New Zealand history. That is the shameful record of this Government: the gap between rich and poor continues to grow and it does nothing about it. We know that so much of it goes back to those 2010 tax cuts where the top 10 percent got 40 percent of the value of the tax cuts. The bottom 20 percent of New Zealand earners got just 2 percent of the value of the tax cuts and of course that was swallowed up in GST.That gap between rich and poor could be addressed by good policy on industry training organisations ensuring that skills training is available to everybody that evidence-based learning is followed and that the benefits of those industry training organisations that have contributed so much are built upon rather than undermined through a de facto privatisation of the industry training sector.