Joyce Steven: Industry Training and Apprenticeships Amendment Bill — Third ReadingText is incorporated into the Bound VolumeJoyce Steven: Industry Training and Apprenticeships Amendment Bill — Third Reading[Sitting date: 15 April 2014. Volume:698;Page:17243. Text is incorporated into the Bound Volume.]Hon STEVEN JOYCE (Minister for Tertiary Education Skills and Employment): I moveThat the Industry Training and Apprenticeships Amendment Bill be now read a third time. Can I thank members for the work they have done on this bill. Their amendments have improved the bill. This is a very important bill which completes this Government’s comprehensive reforms to improve industry training to achieve better performance for employers for trainees for apprentices and also for taxpayers. There is a big opportunity over the next few years to train more New Zealanders in vocational careers that will set them up well for their working lives. To maximise this opportunity it is essential New Zealand has a high-quality responsive industry training system.When we came into office it was clear that that was not the case; in fact industry training was a mess. Government expenditure on industry training had 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 in industry training. This included nearly 15000 Modern Apprentices. However performance as measured by qualification completions and credit attainment was very poor. Only about a third of trainees achieved the qualification 5 years after starting their industry training programme. Typically more than half of industry trainees and over 30 percent of Modern Apprentices achieved no credit between 2002 and 2010. The system was riddled with what has now become known as “phantom trainees”—thousands and thousands of trainees who had not completed any credits. Under the Labour Government of the day it was all about signing people up and nothing about what happened afterwards.That was an obviously unsustainable situation and the Government took very quick and decisive action. Our operational changes have led to significant improvements in both qualification and credit attainment. That work continues and it has freed up funding to reinvest into the system. We also initiated a much more fundamental look at the industry training system. Overall the review found that the industry training system was highly variable in terms of levels of service to employers and trainees in its connection to industry and its performance. The bill implements the changes arising from that review that required legislative change.The first objective of the bill is to enable the establishment of a comprehensive New Zealand apprenticeship system that provides the same level of support to all apprenticesregardless of their age. It repeals the Modern Apprenticeship Training Act 2000 and amends the Industry Training Act 1992 so that legislation related to industry training and apprenticeships is located in one modern piece of legislation.The bill defines apprenticeship training and removes the existing age restrictions on that activity. The bill combines Modern Apprenticeships and other apprenticeship-type training programmes into what is a premier vocational qualification. New Zealand Apprenticeships will provide the same level of support and the same level of subsidy for all apprentices regardless of their age. We have boosted the prestige and the educational content of apprenticeships by requiring all such programmes to be at least 120 credits and to result in a level 4 qualification. This Government has increased the funding for apprenticeships which will allow industry training organisations to invest in the quality of education for their apprentices to lower fees and to encourage uptake.Our apprenticeship reboot has been under way since March of last year. New apprentices enrolled since then have been eligible for a grant of $1000 towards their on-job and off-job costs or $2000 if they are in priority trades with the same amount paid to their employer. Initially the reboot applied to the first 10000 apprentices but uptake has been so good that in December we extended it to the first 14000 who applied. Since the reboot started so far over 11000 apprentices have been signed up.The second objective of the bill is to focus industry training organisations on two core responsibilities: setting skills standards for their industries and arranging training. The bill removed the industry training organisation’s statutory skills leadership function which required it to identify all current and future skill needs for their whole industry. Removing this role will encourage industry training organisations to focus on arranging training which businesses have told us is the service that they most value. Removing the statutory skills leadership requirement does not prevent them in any way from undertaking that role. However it will incentivise other organisations such as companies and industry associations to take a greater direct role in skills leadership with Government agencies like the Tertiary Education Commission the Ministry of Business Innovation and Employment and the Ministry of Education. This will improve links between the Government and industry in determining present and future skills needs.The bill also prevents industry training organisations from owning registered private training establishments. This removes the possibility of industry training organisations directing trainees towards institutions in which they have a financial interest.The third objective of the bill is to strengthen the quality assurance framework for industry training organisations. Thanks to a comprehensive amalgamation programme with the Industry Training Federation we have reduced the number of industry training organisations by two-thirds. We now have fewer industry training organisations and they are larger more capable and well placed to provide a better service to their trainees and employers. However an appropriate regulatory regime needs to be in place to address any unsatisfactory performance that may arise. This bill addresses this by strengthening the quality assurance framework for industry training organisations. The quality assurance framework for industry training organisations is currently weaker than for other tertiary education organisations. This has contributed to the issues of quality of industry training in the past. The bill gives the New Zealand Qualifications Authority power to prescribe quality assurance requirements for industry training organisations. The bill also gives the New Zealand Qualifications Authority the power to impose a graduated regime of sanctions in order to address poor performance by an industry training organisation.Members opposite expressed concern about the provisions in the bill that make it clear that non - industry training organisations can receive funding for industry trainingand apprenticeship training. With the greatest respect these concerns are misplaced. Allowing non - industry training organisations to be funded for arranging training and apprenticeship training activities will strengthen the incentive for industry training organisations to provide excellent service to their employers and their trainees. The review of industry training in 2011 found that a significant number of employers thought their industry training organisation did a poor job. Having this option available as an alternative for employers will encourage the industry training organisations to provide quality service to their employee clients at all times. It is called competition.Secondly I do not expect many employers to take up the option. Only $10 million worth of funding for non - industry training organisations is available in each of 2014 and 2015 which is about 5 percent of total funding for industry training and apprenticeships. It is worth remembering that participating employers must have at least 40 trainees each year.Grant Robertson: Just an ideological little dalliance.Hon STEVEN JOYCE: No it is not ideological Mr Robertson. It is about getting the best result for trainees and the employers.Grant Robertson: You just said they wouldn’t want to do it.Hon STEVEN JOYCE: They do want to do it and they want to do it across regions in New Zealand. The monitoring and assessing of non - industry training organisation arrangements for training will have to be acceptable to the New Zealand Qualifications Authority. Furthermore the funding determination specifies that in order to receive funding non - industry training organisations and industry training organisations must ensure that any programme in which a trainee is enrolled meets the New Zealand Qualifications Authority’s quality assurance requirements. In practice as a matter of policy the Government funds only industry training that leads to transferable qualifications for the employee. That policy will apply to non - industry training organisations in the same way that it applies to industry training organisations. There will be a level playing field.But once again I make no apology: if industry training organisations are not doing their job this Government and this Minister will allow employers to make other arrangements. It is called competition and the Opposition should not be afraid of it.This bill is a vital part of the Government’s comprehensive reforms to industry training to achieve better performance for employers better performance for trainees better performance for apprentices and also better performance for taxpayers—groups that the Opposition is completely estranged from. Most of all the result of this bill and the Government reforms that accompany it mean that many more thousands of New Zealanders will achieve a real vocational qualification that will provide them with a career and that will allow them to provide for themselves and their families into the future. For that this House can be very proud. I commend this bill to the House.