Hipkins ChrisEDUCATION (VOCATIONAL EDUCATION AND TRAINING REFORM) AMENDMENT BILLSecond ReadingHon CHRIS HIPKINS (Minister of Education): I move That the Education (Vocational Education and Training Reform) Amendment Bill be now read a second time. This is a significant day for vocational education and training in New Zealand. This Government is putting trades and vocational education back on the map. We are bringing together a coherent system of on-the-job apprenticeships and off-the-job training for the first time in 30 years—the first time since the National Government abolished apprenticeships in the 1990s.This bill will help us to create a new system that's simple to understand and easy to navigate that's responsive to the needs of learners and employers and that's flexible enough to keep changing and evolving as the needs of New Zealanders change and evolve. This bill gives effect to our objective of creating a unified and cohesive vocational education and training system. The bill helps to create a new unified network of off-the-job education and training support for on-the-job apprentices and trainees and newer learning modes like online and blended learning.The bill puts industry and employers in charge of determining what their skill needs are through the creation of workforce development councils. Unlike the industry training organisations (ITOs) that they replace workforce development councils will have a standard-setting role in off-the-job training as well as on-the-job training. A new unified funding system will bring an end to the perverse incentives that we have in our current system where on-the-job training and off-the-job training compete with one another rather than being seen as integral parts of our skills development system. Contrary to the claims by some who should know better this bill will not result in on-the-job apprenticeship training being moved into classrooms. In fact quite the opposite: this bill is about ensuring that we have more on-the-job learning opportunities available to more people and that they and their employers have more support in the process.For learners the changes that we are progressing through this bill will result in more support while they're training and courses and training that are more relevant to their work. It will result in an easier pathway for them to continue their learning when they have to move—as people often do: they have to move employers they have to move places and sometimes they have to move between on-the-job learning and off-the-job learning.For employers the new system will deliver a much greater focus on ensuring that they get the skilled workers that they need—something that employers are crying out for. Employers will get more support to upskill their own workforces—something that we know they are keen to do. It will result in greater consistency in the skills courses and qualifications that are offered with a much bigger focus on supporting those employers who don't currently engage in on-the-job training.These reforms respond to huge changes that are taking place in the world around us and they recognise that learning is no longer limited to a classroom. Learning is something that can happen in any place at any time and trying to draw a distinction between learning that happens in a work-based context and learning that happens in a classroom or tertiary provider - based context is arbitrary and unnecessary.The reforms signal a significant paradigm shift in the way we think about education and training—away from thinking about learning as a system or as an institution that learners need to organise their lives around to instead thinking about learning as something that needs to flex and fit around the lives that people lead including their work. We're talking about practical purposeful real-world learning. That's what vocational education and training is all about.I do want to thank the members of the Education and Workforce Committee for their diligent consideration of this bill. I want to thank the 236 individuals and organisations that took the time to submit on the bill. The select committee's proposed amendments demonstrate that their submissions have been carefully considered. Some submitters thought for example that for the New Zealand Institute of Skills and Technology (NZIST)—the new unified network of delivery that I spoke of—academic freedom should be unfettered by the functions of workforce development councils while others indicated that the current provisions provided too much academic freedom to the New Zealand Institute of Skills and Technology and more preference needed to be given to industry. That is probably a good sign that we're about in the right place but there are improvements that can be made. The committee amended the bill to clarify in particular how academic freedom provisions interact with the workforce development councils.They've added a requirement for the councils to collaborate with providers in particular the New Zealand Institute of Skills and Technology when they're performing their standard-setting functions and developing qualifications. They also are designed to ensure that they're not limiting the freedom of staff and students to comment and engage in research and on the ability of the providers to appoint their own staff. However the particular functions of a workforce development council do sometimes overlap with the provider's freedom to regulate the subject matter of its courses and to teach and assess its students in a manner that it views appropriate. That's why these provisions have been further clarified to provide greater clarity. I do welcome the committee's amendments to these proposals. They make sure we're getting the balance right between academic freedom and ensuring that we achieve our objective of putting industry in the driver's seat.The New Zealand Institute of Skills and Technology's charter sets out the enduring principles by which it must carry out its functions. Following recommendations from submitters the committee has amended both the functions in the charter of the NZIST. The functions are amended to clarify that the NZIST is to conduct research with a focus on applied and technological research and that they will deliver a wide range of vocational education and training including vocational foundation and degree-level and above provision. The changes to the charter include the requirement for the NZIST to work collaboratively with workforce development councils to strengthen their commitment to equitable outcomes in pursuing equitable access for learners across all regions and requiring the NZIST to work to expand training to more small industries and businesses. There is huge opportunity for us if we can get more training and more apprenticeships in small businesses across the country. I welcome the committee's amendments in that regard.Several submitters expressed their support for workforce development councils to be owned and led by industry and the committee has made some amendments in order to strengthen those provisions including an outline of how industry can be involved—that the Order in Council must now include an outline of how industry can be involved in the councils requirements for the redistribution of assets and the transition between ITOs and workforce development councils and any conditions on workforce development council functions. The Minister can also amend or revoke an Order in Council on reasonable grounds or if requested by specified industries. I do support the committee's amendments in that regard.There was some concern from submitters about ITO staff who could lose jobs in the transfer to the new system and the committee has inserted similar job protection provisions for ITO staff as were already in the bill for those who were working at one of the existing polytechs and institutes of skills and technology and the Government supports those as well.At the appropriate time I'll be moving a Supplementary Order Paper that prevents a provider from charging a trainee a compulsory student services fee until 2022. It's important to note that once trainees are transferred from ITOs to providers they become students as well as trainees and the Government did not want to see that meaning that they would automatically be charged the compulsory student services fee. That would be a significant impost on around 50000 apprentices in the vocational education and training system: potentially $15 million of additional costs in fees. We want to stop that from being something that happens so we put those transitional measures in place—bearing in mind of course too that most trainees are not eligible for student loans in order to meet those kinds of costs. So it'll be a transitional provision and I'll be moving that one by Supplementary Order Paper along with several other small and technical changes.The changes outlined in this bill are ambitious and they are transformational. Our Government isn't willing to stand by while New Zealanders are denied the education and training opportunities that they deserve and while employers are crying out for the skilled workers that they need in order to deliver for New Zealand and fulfil their objectives. We are not going to accept the ongoing decline of our vocational education system which we have seen over the last decade. That is something that we will never do on this side of the House. We want a robust vibrant vocational education and training system that delivers to all New Zealanders in every region across the country that meets the needs of all employers. That is what this bill is about. I commend it to the House.