Hon Chris Hipkins
Minister of Education

1 August, 2019 MEDIA STATEMENT

The Government is tackling the long-term challenges of skills shortages and the mismatch between training provided and the needs of employers, by comprehensively reforming vocational education, Education Minister Chris Hipkins announced today.

“A strong, unified, and sustainable system for vocational education and training will provide opportunities to improve the skills of all New Zealanders, no matter where they are in their education or career and will support a growing economy that works for everyone,” Chris Hipkins said.

“Vocational education, trades training and on-the-job training have been allowed to drift for too long. These are long-term challenges that this government is committed to fixing.

“The comprehensive changes we are making will address the widespread skills shortages across most industry sectors. These shortages highlight the limitations of the current vocational educational system.”

Why we are making these changes

“Repeated forecasts show that one third of all jobs in New Zealand are likely to be significantly affected by automation, and by as early as 2022 more than half of all employees will require significant upskilling and retraining.
“As lower-skilled jobs disappear we need our people to learn new skills, often while on the job, earning while they are learning. Furthermore, advances in automation and artificial intelligence mean it won’t just be lower-skilled workers affected.

“We also know the regions are increasingly struggling to find enough skilled people to keep their economies strong. Too many Māori, Pacific and disabled learners are being left behind to achieve at a lower level because the system just won’t respond to their needs.

“New Zealand needs to lift productivity and for that to happen we need more companies to be involved in training and taking on more apprentices.

“Currently however, nearly nine out of 10 of our businesses are not training through industry training. Yet at the same time, 71% of employers surveyed say there is, or will soon be, a skills shortage in their industry area.

“No one thinks the status quo works well for New Zealanders. Except National, which tinkered around the edges and stood back while polytechnics struggled, the number of people in training dropped and skills shortages worsened. This Government was forced to step in and bail several polytechnics out with $100 million, and we know without significant change, things will keep getting worse.
“The plain truth is that while there are some bright spots, the current system is not set up to produce skilled people at the scale we need,” Chris Hipkins said.

The changes

“The changes we are making will give industry greater control over all aspects of vocational education and training, making the system more responsive to employers’ needs and to the changing world of work.

“Industry and employers will identify skills needs, set standards and approve qualifications and credentials, and influence funding decisions.
“The changes will also ensure we do better for learners who haven’t been well-served by the present system.

“We need to make sure that trades and vocational education are recognised and valued. There are great, well-paid jobs available for people with the right skills. We just aren’t meeting the skills needs at the moment.

“We want everyone to have the opportunity to develop the skills they need to thrive in the workforce and earn a good living. People should always have relevant, up-to-date skills that employers need.

“We want to see more work place learning, more apprentices and more opportunities for people to earn while they learn.”

The seven key changes announced are:

• Around four to seven industry-governed Workforce Development Councils will be created by 2022. This will give industry greater control over all aspects of vocational education and make the system more responsive to employers’ needs and to the changing world of work. The councils will replace and expand most of the existing roles of industry training organisations.

• The country’s 16 institutes of technology and polytechnics will be brought together to operate as a single national campus network. A new Institute will start on 1 April 2020 and will be a new kind of organisation that provides on-the-job and off-the-job learning. The head office will not be in Auckland or Wellington, and a charter will be set out in legislation to make sure a number of bottom lines are met.

• New Regional Skills Leadership Groups will represent regional interests and will work across education, immigration and welfare systems in each region to identify local skill needs and make sure the system is delivering the right mix of education and training to meet them.

• Over the next two to three years, the role of supporting workplace learning will shift from industry training organisations to training providers. Holding organisations will be formed from Industry Training Organisations to smooth the transition

• Centres of Vocational Excellence (CoVEs) will be established at regional campuses to drive innovation and expertise, and improve linkages between education, industry and research.

• Māori will be included as key partners, including through Te Taumata Aronui, a Māori Crown Tertiary Education Group – that will work with education agencies and Ministers and cover all aspects of tertiary education. This recognises the needs of Māori learners and that Māori are significant employers with social and economic goals, with an estimated national Māori asset base valued at over $50 billion.

• The dual funding system will be unified and simplified to encourage greater integration of on-the-job and off-the-job learning, ensure learners can access more work-relevant and tailored support, and enable new models of education delivery which are more responsive to employer and industry demand.

The transition process

“We have given a great deal of thought to how to minimise disruption, and listened carefully to the concerns of employers, staff and students,” Chris Hipkins said.

“We are not going to rush the implementation of the changes. To ensure continuity for learners and employers and to allow time to build new capacity, the transition will take three to four years to get fully underway.”
“Learners should enrol in the education provider of their choice as they normally would in 2019 and 2020, including in multi-year programmes, and I encourage people in the workplace to keep training and employers to encourage more workers to sign up.”

Relevant links:
- Cab paper and proactive release documents are here.
- Copies of an overview and a detailed change summary document, along with a summary of submissions and FAQs, is available here.

http://img.scoop.co.nz/media/pdfs/1908/MOE190704SummaryofChangeDecisions.pdf

http://img.scoop.co.nz/media/pdfs/1908/Speech_Hipkins__RoVE_decisions__public.docx

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