Hipkins ChrisEDUCATION (VOCATIONAL EDUCATION AND TRAINING REFORM) AMENDMENT BILLFirst ReadingHon CHRIS HIPKINS (Minister of Education): I move That the Education (Vocational Education and Training Reform) Amendment Bill be now read a first time. I nominate the Education and Workforce Committee to consider that bill and at the appropriate time I intend to move that the bill be reported to the House by 10 February 2020. This Government is committed to creating a strong unified and sustainable vocational education system in this country. The world of work is changing rapidly and changing significantly and how New Zealanders learn needs to change and needs to adapt to stay ahead of the significant changes in the way we work. The trends driving the future of work will change the skills that are needed in all jobs. It will see people changing jobs and careers much more frequently over the course of their working lives and our vocational educational system that we've got today is not geared up for this future. There are four big challenges that we have with our current system. First we need to address the serious skill shortages that we face across a number of our industries. New Zealand is experiencing persistent and widespread skill shortages that highlight significant imperfections in our vocational education and training system. Secondly the vocational education and training system that we have now is far too disjointed and it does not always meet the needs of learners employers or our regions. We currently have two separate vocational education and training systems—the system offered through industry training organisations who primarily support on-the-job training and the providers who are primarily delivering off-the-job training—and each of them have a different funding system and a different regulatory system to support their activities. People are uncertain about how to begin training or learning how to progress and particularly how to move between on-the-job and off-the-job training and ensure that their learning is recognised as they do so. The system needs organisations that consider the needs of both the learners and employers at the same time or otherwise neither those learners nor the employers are getting what they want. Thirdly many of our institutes of technology and polytechs are facing big challenges. That is widely known and it's been widely canvassed. Some of our institutes of technology and polytechs have continued to experience growth and are high-performing institutions but others have suffered from falling domestic enrolments over recent years. Fourth—and critically important—employers have told us that the lack of input that they have into the off-the-job learning and training that's taking place at the moment is frustrating and it's meaning that the skills that they need are not being delivered. The industry training organisations (ITOs) of course were originally conceived of as standard-setting bodies for the whole system but in reality they don't have that much ability to influence and shape the off-the-job education and training that is currently being delivered. So even though they represent industry and they bring that industry voice to the table they have been frustrated that a significant part of what's delivered through vocational education and training at the moment they don't have sufficient influence over. So this bill will create a unified and cohesive vocational education and training system to help us prepare for the future of the workplace. It establishes a single regulatory framework for vocational education and training it enables workforce development councils to be established that are going to give industry much greater leadership across the whole of our vocational education and training system it establishes the New Zealand Institute of Skills and Technology to provide and support a range of vocational education and training and it provides for a smooth transition of functions and responsibilities from the systems that we have now to the new system. The current polytech and industry training systems operate and are funded independently of each other. This dual system stemming from two different pieces of law is legislatively and operationally quite complex. The bill's going to integrate vocational education and work-based training into one piece of law. It'll create a new single system for all vocational education and training. To do this it'll amend the Education Act 1989 including integrating the provisions of the Industry Training and Apprenticeships Act 1992 and then repealing it.The bill will enable the establishment of workforce development councils by Order in Council to represent one or more industry and we'll be working with industry to decide how industry coverage will be grouped together. Those conversations have already started and people are excited and engaged in those. To have effective vocational education industry must have a greater say in what people are teaching.Workforce development councils will get to decide if programmes are fit for purpose whether they are best delivered on the job through something like an apprenticeship or an industry traineeship or whether they're taught on campus or online or by a combination of those different delivery methods. Unless a programme has the workforce development council's confidence—effectively industry's confidence—it won't be approved and it won't get funded. They'll also provide advice to the Tertiary Education Commission on their funding decisions more generally and they'll get to determine the mix of training that's being delivered to meet the needs of their industries.Given their powerful oversight role they will not be directly involved in running apprenticeships or other forms of on-the-job training because instead we're bringing together on-the-job and off-the-job training to create a seamless system. So as workforce development councils take the place of ITOs the role of supporting apprentices and other on-job training will move to the New Zealand Institute of Skills and Technology or other providers including wānanga and private training establishments. This will create a much tighter connection between these trainees and those who are doing off-job training in the same fields and it will give them access to a much better range of learning and pastoral support and we'll be working with the sector to ensure that we retain existing capability and expertise as these functions transfer across.Communities value what their institutes of technology and polytechs do and too many of them are seeing those institutions shrinking or disappearing. We want to make sure that the best of what they're doing now continues but we also understand that the financial problems that many of them have mean that they simply cannot continue as they are.Our Government is committed to ensuring that high-quality vocational education and training is available in all regions and to do that the majority of vocational education and training provision will be delivered through a single national institute. The bill establishes the New Zealand Institute of Skills and Technology to provide arrange and support a range of workplace on-campus and online learning. It will bring together the 16 existing organisations to operate as a unified sustainable public network of regionally accessible vocational education. It will be a degree-granting provider and it will offer everything from degrees through to foundational learning. They'll have a greater ability to create pathways throughout the system. It will have a new focus and a new culture different from the institutions that are being integrated into it meaning that all of the regions will be able to share resources support each other and share accountability to deliver higher performance.The bill includes a charter that the institute must give effect to. The charter will ensure that the institute will be responsive to the needs of all regions throughout New Zealand. It ensures that the institute offers a mix of education and training in each region including on-the-job face-to-face and distance delivery and it ensures that the institute must meet the needs of all learners in particular those who are under-served by the education system including Māori Pacific and disabled learners. It's going to develop meaningful partnerships with industry and communities including hapū iwi and Pacific communities.We know these changes are significant and we know that they'll take time. They will mean changing functions of many organisations which will change the relationship they have with their staff with their learners and with their stakeholders. So there are a range of changes that come into force on 1 April 2020. Students and the staff of the polytechs and institutes of technology will transfer to the subsidiaries of the institute on the commencement of that Act. There will then be a transition period until 31 December 2022 to allow time for the functions to transfer to the new organisation at an appropriate time and in the meantime the current system will continue to support learners and to support those who currently work in it.For work-based training industry training organisations will become transitional ITOs. They'll develop transition plans detailing how their activities will transfer to workforce development councils and to providers to support the providers in the transfer of those responsibilities. This will allow current training arrangements to continue to operate until the time is right for them to transfer.So together these changes introduced through this bill create a unified and cohesive system of vocational education and training that will respond effectively to local needs. The system created by this bill will better serve our economy and all New Zealanders. So I commend this bill to the House.