The reforms in a nutshell

Yesterday Education Minister Chris Hipkins released wide-ranging proposals for reforming New Zealand’s vocational education system, with major changes on the cards for the polytechnic and industry training sectors.

“At a time when we’re facing critical skill shortages, too many of our polytechnics and institutes of technology are going broke,” he said, citing one of the main reasons for the Government’s most significant proposal: placing New Zealand’s 16 polytechnics under the control of one central institution – the New Zealand Institute of Skills and Technology.

“It’s time to reset the whole system and fundamentally rethink the way we view vocational education and training, and how it’s delivered,” said Hipkins.

Along with the over-arching polytechnic proposal, the reforms also proposed that industry training organisations (ITOs) will lose many of their core responsibilities; significantly, their key role of administering work-based trainings and apprenticeships will defer to the new Institute of Skills and Technology.

The third proposal was for a unified vocational education funding system.

“What we are proposing is ambitious, but it needs to be. We cannot continue to tweak the system knowing that the model is fundamentally broken and isn’t delivering our workforce the skills that they need to thrive,” said Hipkins.

Public consultation is open until 27 March.

The ITOs – reforms will dismantle NZ’s industry-led training and apprenticeship system

The industry training sector is reeling from the Government’s proposals which would dismantle New Zealand’s industry-led training and apprenticeship system.

Chief Executive of the Industry Training Federation (ITF) Josh Williams says they intend to ask employers and industries if they would prefer that their training organisation is taken over by a single government-owned institute.

The ITF is concerned that, despite ITOs’ efforts to bolster industry training, they will fare badly from the new proposals while the polytechnic sector’s poor financial management has landed polytechs with more responsibility.

“We currently have 145,000 people per year in workplace training and apprenticeships training in 25,000 firms supported by the eleven ITOs. This is the largest form of post-school education. We do this with just six percent of Government funding for tertiary education. For every $1 million invested in the tertiary sector, ITO-arranged training qualifies 300 skilled workers. By comparison, the polytechnics currently qualify 50,” says Williams.

Williams is not convinced that central management of workplace training and apprenticeships will incentivise more employers to engage and participate. He says that while the ITF supports the role polytechnics play and has consistently argued for a more joined-up vocational education system, dismantling the industry-led workplace training system is not the way to do it.

“The big opportunity of this reform is to build on the success of our work-based system, because that is how we can address skills shortages and get the right skills in the right place at the right time.”

Garry Fissenden is chief executive of The Skills Organisation, New Zealand’s largest ITO, representing 22 industries, 4,400 employers and over 10,000 apprentices. He believes thousands of apprentices and students will be disadvantaged by the proposed reforms.

Further, the changes would create immediate uncertainty among businesses at a critical time in New Zealand’s economic development, says Fissenden. He says the changes will undermine the crucial role of ITOs and reduce employer involvement in the learning process which will manifest as an increased risk to business.

“Employer engagement in industry training is essential to its success – the proposed new model puts this relationship, the responsiveness of training programmes to business needs, and the employment opportunities of thousands of students in jeopardy,” says Fissenden.

“While more can be done to improve the financial management of the polytechs, reducing the input that employers have in the development of industry relevant training programmes is a step too far,” he says.

Dr Grant Davidson, chief executive of ITO Skills Active, agrees. He describes the proposals as “potentially destructive” to an on-job training system in New Zealand that is already reformed and is “humming”.

“The answer to the problems in New Zealand’s troubled ITP sector is not to disassemble the successful and high-performing industry training sector and pass this over to a vocational educational system that is administrative heavy, economically inefficient and already struggling.

“Why would you take an efficient system, much admired throughout the world as unique and effective, and burden it with the inefficiencies already identified in the ITP world? How could this transfer – to organisations already struggling to achieve their core function – make on-job training more cost-effective and provide better outcomes for employers?”

The polytechnics – a single over-arching polytech not the option sector was working towards

The New Zealand Institutes of Technology and Polytechnics (NZITP) agree it is time for a step change for the vocational education sector, but have reservations about the proposal to move towards a single New Zealand Institute of Skills and Technology.

“We strongly endorse the goal of expanded course delivery in more locations around the country and the proposal for a unified educational funding system,” said independent chair Charles Finny. 

Finny said that the ITP sector also welcomes the redefined roles of education providers and industry training organisations, and in particular the proposal to deliver training through education providers. It is pleased also that there are no proposed changes to degree delivery. 

“However, the proposal to establish a single New Zealand Institute of Skills and Technology is a bold one and was not the option that the sector had been working towards in last year’s Roadmap exercise. The proposal has major implications for our sector, our towns and cities, and for our communities, regions and for iwi. We will need to consider this carefully and work through the detail of what is being proposed by Government,” he said.  

Polytechnic chief executives caution that it will be critical that the new system ensures the closest possible linkages with businesses throughout the country and that it is flexible enough to respond quickly to individual regional, community and iwi needs. 

The unions – reforms a “solid platform” to steer away from competitive approach to education

The Tertiary Education Union (TEU) is pleased to see an end to market competition between education providers signaled with the proposed reforms. They believe this has led to the strife polytechnics are finding themselves in.

TEU president Michael Gilchrist says the plans give a “solid platform” to put the focus back on teaching, learning and research.

“This means good jobs with secure futures. The minister is right when he says that ad-hoc approaches were never going to provide the lifelong learning opportunities the country needs.”

TEU industrial and professional vice-president George Tongariro is excited by the prospect that he and other lecturers and tutors around the country will be able to ensure that courses reflect community needs.

Tongariro notes that staff and students at Whitireia Polytechnic were facing losing distinct kaupapa Māori teaching and learning spaces due to the financial and competitive pressures the institution faced under the failed market-model of provision.

“The proposal for a single polytechnic to provide courses around Aotearoa is only tenable because there is strong recognition that we have diverse students and communities. This means staff being given the freedom to adapt collectively designed material to reflect local needs and opportunities.”

The union is convening a meeting of representatives from all ITPs next Tuesday to discuss the reform proposal, as well as setting up online and face-to-face meeting spaces for staff to collectively respond to the government’s proposal.

The New Zealand Union of Student Associations (NZUSA) agrees that the “bums on seats, market-driven approach to vocational education” needs to end.

The union suggests Regional Leadership Groups will be much more effective in furthering the interests of students than competing independent institute councils.

Poihaere Whare, president of the Students’ Association of Waikato Institute of Technology says that while the reforms looked to be “heading in the right direction” there was very little detail on student voice.

“With the introduction of voluntary student membership in 2011, student voice and student leadership has been stripped from ITPs more than elsewhere.”

President of the Association of Students’ at the Universal College of Learning Karla Davis is excited for this necessary change; however, she stresses the importance of student support throughout the process of change.

The opposition – reforms will strip power from regions

National’s Tertiary Education, Skills and Employment spokesperson Shane Reti says the proposed reforms will strip power from regional New Zealand and hand all of it to Wellington bureaucrats.

“Businesses and the regions know what demand there is for skills in their own backyard. But this Government wants all of the decision-making to be done by a centralised body in Wellington.”

“Industry training organisations, which represent businesses and their needs, will be disestablished. These are the groups that know and understand the demand for the trades better than anyone else.”

Reti also expressed concerns over mass job losses and the very short consultation period of six weeks, much shorter than the recent education reform consultation periods for the NCEA and Tomorrow’s Schools’ reviews.

He also pointed out that the discussion document was “strangely silent” about the future of private training establishments and wānanga. These institutions deserve certainty about their futures, he says.

Meanwhile, ACT leader David Seymour says the Government should see the failure of the polytechnics to compete with the private sector as an opportunity to privatise them.

“If anyone suggested that the Government, having failed as the owner of polytechnics, should take over the private sector, you’d think they were nuts. By the same logic, why should the Government continue to own the polytechnics in any form?

“Students and taxpayers alike would be better off if the Government completely privatised polytechnics and institutes of technology. Private owners would have a much better incentive to make them effective and profitable than the even larger and more remote bureaucracy Chris Hipkins is proposing,” says Seymour.

The employers – there still needs to be a strong regional lens

Canterbury Employers’ Chamber of Commerce chief executive Leeann Watson described the reforms as “encouraging” but wanted to see closer links between business and education.

With employer investment still expected to help support the unified funding system, and with an onus on businesses to support some training options, Watson says there needs to be a stronger focus on co-creation and collaboration with the business community.

“There needs to be a strong interface with business to identify current and future pressure points, and to provide training provisions to meet these needs. This will give learners confidence that they will have enhanced employment opportunities and business owners the security they can get the skills they need, when they need them, to support productivity and future growth.”

While there are obvious benefits to a centralised model, Watson says that there still needs to be a strong regional lens.

“We need to ensure that, in opting for a centralised model, there are still opportunities for open dialogue between local businesses and local education providers to ensure regional skills shortages are identified and met.”

Watson points to “pockets” where education and business currently work well at a local level.

“We need for these kinds of partnerships to be strengthened in the design of a new model.”

She also emphasised the importance of catering to the needs of both young people at the start of their careers and those already in employment who are looking to upskill.


  1. Ludicrous that New Zealand continues to have an overly complex, overly bureaucratic fiscally unsustainable VET sector – and that the vested interests above scaremonger to preserve their own overpaid roles. Wake up – we have less people than Sydney!


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