The Government will shortly release proposals to reform New Zealand’s vocational education and training (VET) system. The vocational education and training system includes both workplace and provider-based training. These reforms have been sparked by serious financial issues in the institutes of technology and polytechnic (ITP) sector, but they are taking a more fundamental look – how well is our vocational education system contributing to the skills and productivity of New Zealand’s workforce?

Rightly, the Coalition Government placed a high priority on New Zealand’s skills issues – it’s the first theme of the Prime Minister’s Business Advisory Council, and central to the Finance Minister’s Future of Work Forum.

Why? Because 96 out of every 100 people in our available workforce are already working.  Because businesses across the economy struggle to access the skills they need in the numbers required.  Our workers are more qualified than ever but productivity remains relatively low, skills mismatch is high, and a million working New Zealander’s have literacy and numeracy skills below the OECD benchmark in a modern economy.

The future is here – accelerated technology, changing employment structures, longer lives, aging workforces and lifelong learning are givens.

The job of a vocational education system is to improve the skills, capabilities and prospects of people already in the workforce, not just those looking for a way in. Its mission needs to focus on upskilling New Zealand’s 2.5 million workers, not just our 60,000 school leavers, or 25,000 university graduates.

Around the world, the best vocational education systems integrate the world of education into the world of work. Workplaces themselves are the cornerstone of the system, and rightly so.  When 96 out of 100 adults are working, we need them to be learning at work. Work-based training and apprenticeships are the surest way to maintain pace with technological change and ensure New Zealand’s investments in skills are getting to where they are most needed.

Right now, 25,000 of New Zealand’s employers are also education providers, offering formal ITO training and apprenticeships.  That’s around 15 percent of all businesses that employ people. Their combined roll is 145,000 students, that’s slightly more than those enrolled in University.  ITO arranged training and apprenticeships are efficient, bespoke, and cost effective.  Students get the right skills because they are working in real industry.  There will be a job at the end of their training because they’ve already got one.  Government doesn’t have to pay for the buildings, and the students are taxpayers, rather than beneficiaries of the student support system.

At the same time, industry also relies on a sustainable network of ITPs.  It does not serve industry when regionally-based ITPs close or fall into disrepair.  The best vocational education systems in the world have thriving technical and vocational education colleges, largely populated by people training as part of their employment. They deliver skills most effectively in the classroom, and provide pathways into industry for new entrants and career-changers.

New Zealand needs its ITPs to be supported by funding policies and performance measures that support their connection and contribution to industry. Funding also needs to support and encourage more employers to be part of the VET system. Currently, just six percent of the government’s tertiary education and training subsidies go into work-based training and apprenticeships.  If we want our VET system to support workforce development, and address our workforce needs and shortages, the Government must invest in more workplace training.

The Industry Training Federation has always argued for a more joined up vocational education system – with adequate and equitable resourcing, sensible success measures linked to entry and progression in the workforce.  Fundamentally, the vocational education system must work together to meet the current and emerging needs of industry and New Zealand, as a whole.

However, no matter what track through the system someone takes to get their skills, industry ultimately judges if the skills are right, no matter how the system is organised. Learners either do or don’t have a good employment outcome depending on what employers think of their skills and qualifications.

Following that premise, regionally and nationally, the industry voice must determine what is delivered in vocational education.  The system then gets on and delivers that, whether work-based, provider-based, online, or permutations of those. Industry must also have meaningful quality levers to ensure that industry standards are being met.

The Industry Training Organisation (ITO) system was conceived on a core principle – that industry wins when the skills are right, and industry loses when the skills are wrong.  To achieve this industry must determine skills requirements and ensure that industry standards are being met in education.

This remains even more important today, given the rapid changes in employment structures and technology, and especially necessary in the face of New Zealand’s workforce and skills challenges.

The question is: will the Government respond with changes to the current VET system to meet the ongoing needs of New Zealand’s workforce and employers – now and into the future?


    • Yes, they are a statutory responsibility of the Industry Training Organisations referred to by Josh. You can find them on the New Zealand Qualification Authority’s website.

  1. If you want to encourage the current workforce to upskill etc, there needs to be a legislation change and a whole new brand of thinking by employers when it comes to pay rates, especially for older employees. In Australia if a person undertakes an apprenticeship the costs for that training are mostly covered by the employer and government with little cost to trainee. The trainee also gets a tool allowance each year to cover the cost of tools needed for the job. Probably the best thing in encouraging experienced, more mature workers to take up apprenticeships is the adult apprenticeship wage rates. People 21 yrs of age or older get paid adult apprenticeship wages which are higher at $19.42 per hr minimum in QLD and similar in rest of country. This is recognising the fact that older apprentices are more likely to have wife, kids and/or house and vehicle loans so without the higher rate a lot of adults wouldn’t be able to undertake the apprenticeship, no matter how much they may want to. The other thing is in NZ the average apprenticeship wage is $15.72 per hr for an electrical apprentice and that stays the same over the course of apprenticeship. In Australia each yr the apprentice gets a wage increase, which is how it should be considering that as they complete each year they gain more experience and knowledge. This increase in wages each year is a massive incentive to the trainee to continue. I believe a large reason why there are a lot of apprentices that withdraw and then re-enrol later is due to people stopping for a period as finances become a struggle. Whether to get better paying jobs or just not have the cost of the apprenticeship to pay for a period. AS $3000-$10,000 over a period of 3-5 years is a struggle when you are earning below the minimum wage……

  2. I read your article with interest Josh and yes the big question is ‘will the government respond affirmatively.’ Mmm, the jury’s out on this one!

    Is there any hope that the NZ government will follow in the footsteps of the Australian government in terms of older apprentices getting paid the higher wage.

    Interesting times ahead methinks!

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