Lotu-Iiga Sam: Industry Training and Apprenticeships Amendment Bill — Second ReadingText is incorporated into the Bound VolumeLotu-Iiga Sam: Industry Training and Apprenticeships Amendment Bill — Second Reading[Sitting date: 18 March 2014. Volume:697;Page:16791. Text is incorporated into the Bound Volume.]Hon Peseta SAM LOTU-IIGA (Minister of Pacific Island Affairs)on behalf of theMinister for Tertiary Education Skills and Employment: I move That the Industry Training and Apprenticeships Amendment Bill be now read a second time. This is an important bill that implements the legislative changes required following a policy review of industry training. It complements the operational improvements to industry training that are already under way many of which came into effect on 1 January of this year.By way of background Government expenditure on industry training more than trebled from $64 million in 2000-01 to $204 million in the 2009-10 financial year. In 2011 there were approximately 154000 trainees and apprentices enrolled and this included 14300 modern apprentices compared with an average of 25000 per annum before 1992. However performance as measured by qualification completions and credit attainment was poor. Less than a third of trainees achieved a qualification 5 years after starting their industry training programme and typically over 50 percent of industry trainees and over 30 percent of modern apprentices achieved no credits between 2002 and 2010. This situation was obviously unsustainable and the Government took quick and decisive action. Our operational changes have led to significant improvements in both qualification and credit attainment. That work is ongoing and it has freed up funding for reinvestment into the system.The next step was to take a more fundamental look at the industry training system. In 2011 we initiated a comprehensive policy review to assess whether the current model is fit for purpose. The Industry Training and Apprenticeships Amendment Bill implements changes arising from that review that require legislative change.The bill will first establish a comprehensive apprenticeship system that provides the same level of support to all apprentices regardless of age. Secondly it focuses industry training organisations or ITOs on two key functions: setting skill standards for the industries and arranging training. Thirdly it clarifies the functions and powers of the New Zealand Qualifications Authority or NZQA in relation to those industry training organisations. Fourthly it includes criteria relating to quality assurance and the process by which the responsible Minister recognises an organisation as an industry training organisation.The bill’s reforms to apprenticeships are important. A big part of the vocational training story in New Zealand has always been apprenticeships. However the importance of apprenticeships slipped over the last 10 years in favour of more generic industry training. This in many cases involved a lot of short courses and very low levels of completion. The bill enables the establishment of New Zealand Apprenticeships a comprehensive apprenticeship system that provides the same level of support to all apprentices regardless of age. Submitters to the Education and Science Committee were supportive of this objective. The bill repeals the Modern Apprenticeship Training Act 2000 and amends the Industry Training Act 1992 so that legislation relating to industry training and apprenticeships is located in one modern piece of legislation. The apprenticeship reboot has been under way for a year now and the first 10000—and later extended to 14000—new apprentices enrolled since March 2013 have been eligible for a grant of $1000 towards their tools and off-job costs or $2000 if they are in priority trades with the same amount paid to their employers. Since the reboot started over 11000 apprentices have been signed up.I want to thank the members of the Education and Science Committee for their diligent consideration of the bill. I especially want to acknowledge the chair Dr Cam Calder. I also wish to thank the 30 organisations and individuals that made submissions on the bill.I will briefly cover the substantive amendments that the committee has made to the bill. The amendments illustrate that in its deliberations the committee has been particularly mindful of the status of industry training organisations as industry-owned and industry-governed bodies and I thank it for that. The committee has amended clause 11 new section 5 of the bill so that the Minister may impose or amend only conditions on the recognition of an industry training organisation that are “reasonably necessary to maintain the quality and effectiveness of industry training …”. I welcome the committee’s amendments to the provisions concerning the Minister’s power to impose conditions on recognition. Conditions on an industry training organisation’s recognition are intended to be the penultimate response before cancellation of registration for serious poor performance or non-compliance with lower-level quality assurance interventions. It is therefore appropriate that any such conditions are subject to a test of reasonableness and are limited to maintaining the quality and effectiveness of industry training.Clause 16 of the bill which inserts new section 13B gives the New Zealand Qualifications Authority the power to prescribe quality assurance requirements for industry training organisations using rules made under the Education Act of 1989. The committee has amended the bill so that quality assurance requirements may relate to an industry training organisation’s ability to hold approval by the New Zealand Qualifications Authority for the industry training organisation’s programmes or training schemes and to assess students against skill standards.The committee has also amended the bill to limit the extent to which quality assurance requirements may relate to the governance of industry training organisations. This amendment improves the bill. Industry training organisations are industry owned and governed organisations but it is important that industry training organisations are subject to appropriate quality assurance. The New Zealand Qualifications Authority has a valid interest in the governance of industry training organisations but only to the extent that it is assured that the industry training organisation has the ability to carry out its core functions and the committee’s amendment ensures this.I welcome the committee’s amendments throughout the bill to clarify that industry training organisations are responsible for maintaining skill standards as well as developing them. This is an important change to the bill which will have a real impact on ensuring the skill standards that industry training organisations set are responsive to the rapidly changing needs of industries.The committee has made several other amendments relating to the New Zealand Qualifications Authority’s powers under the bill. It has made amendments to address the fact that the bill as introduced did not include any consequences when an industry training organisation fails to address a quality assurance improvement notice. The committee has also made amendments so that the annual fee prescribed by the New Zealand Qualifications Authority may cover the cost of issuing quality assurance improvement notices and so that the bill references the relevant statutory powers under the Education Act 1989 for the authority to charge fees to industry training organisations.The bill enables the Minister to issue by notice in the Gazette an apprenticeship training code covering the responsibilities of apprentices their employers and organisations that arrange apprenticeship training. The bill’s provisions relating to the code generally re-enact provisions of the Modern Apprenticeship Training Act 2000. The committee has amended the bill to specify that before issuing a code the Minister may consult any person or organisation that the Minister considers appropriate. The committee has also made amendments to clarify the code to state that the code is intended to be mandatory and to require the Gazette notice to specify the date the code comes into force. The Government intends to support the amendments recommended by the committee.In summary the bill is a vital part of the Government’s comprehensive reforms to industry training to achieve better performance for employers for trainees and apprentices and also for taxpayers. I now commend the Industry Training and Apprenticeships Amendment Bill to the House.