12 May 2004 Media Statement

Budget 2004:

$57 million boost to get young people into education, training or work

A $56.9 million package of new and expanded initiatives in Budget 2004 will cement in the government's commitment to provide all 15 to 19 year olds with a kick start to their working lives.

The package includes the introduction of a new youth transitions service, personalised career planning for secondary school students and an expansion of the Gateway and Modern Apprenticeships programmes.

Steve Maharey made the announcement during a visit to the Porirua Visitor Information Centre, which has provided seventh-form Porirua College student Donna Ryan-Huntly with work experience this year as part of the Gateway programme.

"It is estimated that, at any point in time, between 10 to 17 per cent of those aged between 15 and 19 - or approximately 27,000 to 45,000 young people - do not enrol in tertiary study or get a job after leaving school.

"Although not all of this group are at risk, there are some that are at real risk of long term unemployment and other problems later in their lives. For other young people, simply making sense of the multitude of choices before them can be a real challenge.

"The Labour and Progressive partners in the coalition government made firm manifesto commitments to ensure that all young people get a good start in life. In October 2002 we also signed a formal memorandum with the Mayors' Taskforce for Jobs adopting the formal goal that by 2007, all 15-19 year olds will be engaged in appropriate education, training, work or other options which will lead to long term economic independence and well-being.

"Over the next four years the government will invest an additional $56.9 million to provide this group of young people with a wider range of career-focused choices."

The package comprises:

- The establishment of a new transitions service for young people leaving school. The service will be contracted to exisiting community-based organisations and will provide customised support and career planning, working with local employers, training and education providers. The service will be piloted in 14 communities by 2007 (starting with 5 communities next year).

- A two-year Designing Careers pilot programme in 75 schools which will see all Year 10 students preparing an individual learning and career plan with assistance from their parents, careers advisor and form teacher. Year 11, 12 and 13 students at pilot schools at risk of not making a successful transition from school will also participate in the programme.

- Expansion of the Gateway programme to all decile 6 schools by 2008. Gateway enables senior secondary students to begin structured workplace learning while still at school. Gateway is currently available 126 schools (4,000 students) and when fully expanded will by available to 269 schools (13,000 students).

- Providing an additional 500 Modern Apprenticeships taking the number of places available to 8,000 by June 2006.

- Providing increased support for STAR (Secondary Tertiary Alignment Resource) programmes at high schools. Schools can use STAR funding to run programmes for senior secondary school students that include work-based or tertiary type study and training. Five positions will be established at colleges of education, with national supported provided by the Ministry of Education, to better coordinate and support STAR programmes in schools.

- A three-year pilot programme to evaluate whether extending the Training Incentive Allowance (TIA) to teenage parents would encourage them in remain in, or return to education. The pilot programme will provide access to the TIA for 200 teenage parents.

"The package of new and expanded youth career initiatives builds on the $56 million package provided in Budget 2003," Steve Maharey said.

Context

In recent years, there has been a groundswell of interest at a local, regional, and national level in improving outcomes for young people. This interest resulted in the Government and the Mayors Taskforce for Jobs developing a shared goal that "by 2007, all 15-19 year olds will be engaged in appropriate education, training, work or other options which will lead to long term economic independence and well-being".

While most young people make the transition from school successfully, some do not, and it is estimated that at any point in time around 10 - 15% of 15 - 19 year olds are not in education, training or work. Not all of this group are at risk, but some may be at real risk of long term unemployment and other problems. This group, particularly school leavers aged between 15 and 17, are often not "picked up' by any Government agency and accordingly during this critical period of their lives may not receive any assistance to help them into education, training or work.

For other young people, simply making sense of the huge range of choices available to them both in school and in forming their career pathways can be a real challenge.

This work therefore has a key focus on those most at risk of not making a successful transition, but also recognises the needs of a broader group of young people who might be unsure about their futures.

To work towards achieving the goal, Budget funding of $56.9 million over four years is to be provided for an integrated package of initiatives. These are aimed at both school students and school leavers, and at addressing existing gaps in New Zealand's transitions system. The initiatives fall into three main categories:

- Improving career information, advice and guidance for school students

Through piloting, over two years, the Designing Careers initiative that involves the development of individual career and learning plans for students at 75 secondary schools throughout the country, and through investing in research to develop a better understanding of current provision and of what constitutes effective career information, advice and guidance in New Zealand schools.

- Building on and better co-ordinating the post-school local support services for those most at risk

Through establishing a new Transitions Service for school leavers that will follow-up school leavers in selected locations, and for those who need more help in making the transition, provide proactive individualised assistance and support. The Transitions Service will be rolled out to 14 Territorial Local Authorities across the country over three years.

- Enhancing the vocational education and training available at and post-school

Through enhancing the school based STAR programme which provides senior secondary school students with a range of learning opportunities to assist in their transition from school. Through expanding Gateway, a programme that integrates structured workplace learning with senior students' classroom based learning, to include all decile 6 schools. And through expanding Modern Apprenticeships by 500 places to enable 8,000 Modern Apprenticeships by June 2006.

In addition, allowing teen parents to access the Training Incentive Allowance will also be piloted. Under the three year pilot 200 teenage parents will be provided with access to the Training Incentive Allowance to get them into education by helping overcome financial barriers such as childcare, transport and course related costs.

These initiatives form a mutually reinforcing package that work alongside, and build on, existing government interventions.

A detailed factsheet on this package of initiatives is attached.

The work does not stop in 2004. Government has asked officials to identify further improvements that can take place, each year, until 2007.

These initiatives build on international findings on supporting young people through transitions

In developing the initiatives in this package, New Zealand's transitions system was assessed against international models of best practice. The Organisation for Economic Cooperation and Development (OECD) has identified key features of policies and programmes that are effective in delivering successful transition outcomes for young people. It identifies five features, with a healthy economy being a fundamental underlying factor:

1. Well organised pathways that connect education and training and the labour market

2. Workplace experience combined with education

3. Inclusive transitions systems targeted at potential school leavers and unemployed

4. Good information and guidance about services at school and post school

5. Effective institutions and processes

New Zealand generally compares well. We have a number of features of a good transitions system and our transitions system has seen significant improvement in recent years. There are, however, areas where measures are required to ensure that New Zealand's transition system better contains the key elements. In particular, our transitions system for at risk school leavers is limited, resulting in significant numbers of young people being able to fall through the gaps in service provision. The establishment of the new Transitions Service is particularly aimed at addressing this gap.

Why these initiatives?

While New Zealand has a number of pathways and programmes available to young people, significant numbers do not access these pathways and programmes..

Consequently, their long term prospects of achieving economic independence may be negatively affected. The provision of post school support services, through the Transitions Service, will help to fill this gap by following-up school leavers, and for those who need help, providing individualised assistance into education, training or work.

The new Transitions Services is intended both to decrease the number of currently disengaged youth, and to ensure that those school leavers who are at high risk of making a poor transition receive timely, intensive and appropriate services. A key feature of the Transitions Service will be the involvement of community groups, local government, central government agencies, Iwi and Pacific organisations, and education and training providers in defining the community's needs and in ensuring services are appropriate to young people.

Better equipping young people for the transition process is also critical. Enhancements to the career information, advice and guidance available for young people will be made through the Designing Careers pilot. The pilot will establish the effectiveness of the approach and the level of resource necessary to improve career planning in all schools.

The government intends to expand the range of pathway programmes available to senior secondary school students, through the expansion of Gateway to decile 6 schools and enhancements to the STAR programme. These programmes broaden students' options by offering them both traditional and workplace learning, along with providing access to externally provided courses such as polytechnic courses. Gateway is based on structured learning within a workplace.

Modern Apprenticeships is a proven initiative, creating a prestige pathway for young people to attain a qualification on the job. Demand for places and interest among employers is high. An additional 500 places will be made available by June 2006, taking the total at that date to 8,000.

The findings of the teen parent pilot will assist in determining whether the Training Incentive Allowance could be used to encourage teenage parents to remain in, or return to education.

Building on Budget 2003, and a range of other initiatives and programmes

In recent years, the Government has made considerable investment in improving the transitions system for young people. There are many initiatives currently underway in the secondary and tertiary education sectors, and in the employment and social and economic development areas, which are having a significant influence on youth transitions now and into the future. Key amongst these initiatives are the Gateway and Modern Apprenticeships programmes, the Secondary Futures project, the National Certificate of Educational Achievement (NCEA), , and the local initiatives undertaken by the Mayors Taskforce for Jobs.

Significant investments in young people have also been made in the youth justice area and health areas which will complement these "transitions' initiatives.

In Budget 2003 the Government made a considerable investment in building pathways from school into work, education or training, with a package totalling $56.6m over three years. This package allowed for

- the expansion of Gateway to all decile 1 - 5 schools by 2007,

- the expansion of Modern Apprenticeships to 7,500 participants by June 2006;

- the establishment of a fund to support Work and Income regional initiatives for young people in transition who are not eligible for social assistance;

- piloting an intensive support programme for 100 young people leaving state care;

- expanding support for young people who have completed Youth Training,

- enabling 16 and 17 year olds who have completed year 13 at school to apply for student allowances; and

- piloting individualised support programmes by Career Services for 90 young people over three regions.

These initiatives also build on the important findings of the Destinations and Tracking pilot, which was run by Career Services in 2001/02. This pilot filled a gap in information about the aspirations and destinations of young people leaving school, and emphasised the importance of keeping in contact with young people at risk and providing individualised assistance into education, training or work options.

- The cadetship initiatives offered by the New Plymouth and Manukau City Councils, complement national programmes such as Modern Apprenticeships in a way that is uniquely responsive to local needs and conditions. This work will be a vital contribution towards improving the rate of youth employment, as well as helping to address the skills shortages New Zealand is currently experiencing.

- In Dunedin, the Transition-To-Work (Southern) Trust has been established, which will operate across the region and offer 12-month internships in business and industry, targeting in particular the children of intergenerational beneficiaries.

- Nelson's "The Hub', provides advice to all young people wanting to drop in and find out about job opportunities, training or help with income support. On a different model, Dannevirke, Pahiatua, Levin, Otaki and Foxton's new Career Coaches are providing similar advice, but in local secondary schools.

- In Nelson and Tasman, the Mayors are leading a project designed to develop an integrated, accessible and collaborative set of services for young people. The Mayors intend to rationalise the around 140 youth programmes and initiatives currently available in Nelson/Tasman. They are focusing on three key priorities: delivering appropriate services; improving methods of assessing young people and tracking their progress; and improving the co-ordination of funding.

10-15% not in education, training or employment: most young people do make successful transitions to further education and training or employment. At any one point in time, however, an estimated 10-15% of young people aged 15 - 19 are not in education, training or employment. This represents somewhere between 27,000 and 40,000 young people (according to Census 2001, there are approximately 265,000 young people aged 15-19 in New Zealand).

Not all of the 10-15% are at risk: within this group there are a range of young people with different issues, aspirations, and intentions. The statistics will pick up some young people at a point where they are moving between states, for instance between education and work or will be taking "time out' to pursue leisure activities. The key factor that indicates that a young person is at risk of not making a successful transition appears to be holding low or no qualifications. Spending considerable amounts of time outside of work, education or training also appears to be a strong indicator of risk.

Demographic considerations: young people not participating in education or employment are likely to become an increasing issue over the next decade, as the "baby blip' cohort reaches 15 - 19 years of age. Importantly, an increasing proportion of this cohort is Maori and Pacific people who currently have higher rates of non-participation in education and employment than other ethnic groups in the population.

A changing educational environment: New Zealand has a fairly broad spread of school qualification achievement. Around 17% of young people leave school without any qualifications, and there has been little change in this picture for a decade. The NCEA is expected to have an impact in this area, because it allows assessment of and credit for traditionally underemphasised areas and recognition of a broader range of learning areas. Rates of participation in tertiary education are growing. The number of tertiary qualifications on offer has grown rapidly, however, with a wide variety of new providers entering the "market'. Some young people need more support to succeed in this new environment.

Some good news in trends in youth employment trends: the number of young people who are job seekers has declined relative to the increased numbers who are now entering tertiary education or training. This means that there has been a slight decline in labour force participation rates among young people: the annual average employment rate for 15-19 year olds rose steadily from 43.6% in 1999 to 46.4% in 2002, then fell to 45.5% in 2003. Benefit receipt for 15-19 year olds is decreasing, showing a steady decrease from an annual average of approximately 28,000 recipients in 1999 to approximately 18,000 recipients in April 2004. Approximately 7,000 of the 18,000 benefit recipients in April 2004 were receiving an unemployment benefit. Unemployment rates for 15 - 19 year olds have improved since the early 1990s, and the proportion of this age group who are long-term unemployed has declined over the last decade.

But youth face some difficulties in the labour market: New Zealand is currently experiencing very low unemployment, but youth unemployment remains comparatively high, in keeping with international and historical trends. Young people who enter the labour market immediately on leaving school often lack the skills and qualifications needed to gain and retain employment. Even youth with skills and qualifications can find it difficult to get a job when they have no work experience and they are competing with people who have more work experience and referees who can vouch for attitudinal factors in a work environment. Young people often also have relatively short periods in employment or try out a mix of different jobs, or mix part-time employment and education or training. Youth employment is concentrated mainly in sales, hospitality and customer services.

ENDS

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