Key's state of the nation: Apprentices get cash

STATE OF THE NATION: John Key delivers his speech at the North Harbour Club in Auckland.
STATE OF THE NATION: John Key delivers his speech at the North Harbour Club in Auckland.

Labour leader David Shearer says a new apprenticeship scheme announced by the Prime Minister today comes four years too late, but industry groups are welcoming the plan.

John Key announced a new combined apprenticeship scheme during his state of the nation speech at the North Harbour Stadium in Albany.

Ten thousand apprentices - of any age - will be given up to $2000 towards tools and course costs, as the Government kick starts moves to streamline apprenticeships and boost numbers in training.

DAVID SHEARER: Key's announcement "too little, too late".
DAVID SHEARER: Key's announcement "too little, too late".

Shearer this afternoon responded to the announcement, saying modern apprenticeships had declined by 20 per cent under National.

"The Government has sat back and watched trades training wither at a time of growing unemployment and in the face of the desperate need for skilled workers for the Christchurch rebuild.

"Any move to increase the number of apprenticeships is welcome, but this is too little too late.  The lack of apprenticeships is a direct result of four years of inaction from John Key and National," Shearer said from Ratana.

However industry and training groups welcomed the plan.

Industry Training Federation Chief Executive Mark Oldershaw said the news was largely positive.

"We particularly welcome the news that there will be no differentiation between support available to apprentices based on their age.  This will give opportunities to second chance learners and give more flexibility to employers.''

BusinessNZ chief executive Phil O'Reilly said changes to the current scheme, from higher education standards to greater financial incentive were ''welcome''.

"Past problems in the system that resulted in waste and large numbers of 'phantom trainees' have been robustly addressed by recent work in this area and by the changes announced today.

''BusinessNZ strongly recommended that savings from fixing the problem should be reinvested in industry training and it is pleasing to see this happening.''

Meanwhile, Green Party co-leader Metiria Turei said people would be underwhelmed by Key's "excuse-making and visionless" speech.

"Four years ago, Mr Key was promising a brighter future; today's he's making faded old excuses and defending his failure on jobs," Turei said.

"Blaming his failure on jobs and the economy on the previous government just doesn't cut it after four years. It's past time for Mr Key to take responsibility for his own record.

"It's also no longer credible for Mr Key to blame his economic failures on the rest of the world when unemployment is rising here while it is steady or falling in most developed countries."

BusinessNZ boss Phil O'Reilly elected chairman of the OECD-focused Business and Industry Advisory Council.
BusinessNZ boss Phil O'Reilly elected chairman of the OECD-focused Business and Industry Advisory Council.


Key today announced the current modern apprenticeships scheme, available only to 16-21 year olds, along with other schemes, would be combined under a single programme, New Zealand Apprentices.

He estimated the new programme, which would include a special payment for those who applied this year, would increase the number of apprentices by 14,000 over the next five years, compared to previous forecasts.

''These new apprenticeships will provide the same level of support, and the same level of subsidy, for all apprentices, regardless of age.''

Key's speech said the overall level of subsidy funding would be increased by $12 million a year, rising over time as the number of apprentices increased.

The scheme will see Industry Training Organisations (ITOs) earn slightly less per head for the 16-21 year olds under the current Modern Apprenticeships scheme, but substantially more for older apprentices.

It will also open the door for employers to ditch under performing ITOs - most of which have a monopoly in the areas they operate - in favour of setting up their own training programme.

Employment Minister Steven Joyce said he did not expect many employers to want to set up the scheme but ITO's would be ''kept honest''.

In a bid to increase the profile of apprenticeships, the first 10,000 applicants who enrolled after April 1 would be given $1000 towards tools and off-job course costs, or $2000 if they were in ''priority construction trades''. The scheme would be known as ''re-boot''.

More than 30 apprenticeship schemes, covering construction, infrastructure, engineering and electro-technology would be eligible for the higher subsidy under re-boot.

Industry training organisations would be given clearer performance expectations, while the educational content of apprenticeships would be boosted, Key said this afternoon.


As well as pushing ahead with plans to sell up to 49 per cent of Mighty River Power, Key said the Government would push ahead with another sale later in the year.

Late in 2012, Finance Minister Bill English said it was possible there could be three state owned asset sales this year.

"The whole share offer programme will be a shot in the arm for New Zealand’s capital markets," Key said.

"It will give New Zealand savers an opportunity to invest in big New Zealand companies, and the companies themselves will benefit from better monitoring and market disciplines."

The speech repeated the line that New Zealanders would be "at the front of the queue" for the sales, but it did not spell out what the term meant.


Key signalled the Government would attempt to make developing housing easier by working with councils to make more land available, with ''more streamlined processes and less costly red tape'' but gave no indication that more state houses will be built.

''This doesn't require the Government to spend a lot of money. We are already a huge player in the housing market and I'm very wary of spending more of taxpayers' money.''

Last year the Labour Party signalled it would build 100,000 ''affordable'' homes over a decade if it was in government. This week the Green Party announced a rent-to-buy scheme designed to work with the Labour scheme.

Key said the Government was already building 2000 over the next two financial years, and would focus on improving the process for the private sector.

''There are plenty of private sector investors who want to invest in housing - if only we can remove the roadblocks that are slowing down the process and driving up costs.''