response to the canterbury earthquakes: skills for canterbury · canterbury reoonstruotlon...

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Budget Sensitive

Office of the Minister for Tertiary Education Office of the Minister for Social Development and Employment

Ad Hoc Cabinet Committee on Canterbury Earthquake ReoovalY

RESPONSE TO THE CANTERBURY EARTHQUAKES SKILLS FOR CANTERBURY

Proposal

1 This paper proposes a paokage of government support for the reconstruotlon programme following the Canterbury earthquakes oalled Skills for Canterbury

Executive summary

2 Following the Canterbury earthquakes emergenoy responses were put In plaoe to protect employees and students It is now timely to consider the next stage how employment and skills policies can support the reconstruction programme and subsequent economic recovery In Canterbury

3 The size of the task Is not yet olear Most decisions about what to rebUild and when have not yet been taken Based on tha Information that is so far available It Is ourrently estimated that around 19000 building and construotlon wQrllters will be required for the rebuild with the demand peaking In two to four years time

4 The labour market will largely respond to the demand from the construction sector - people will transition from other Industries construotlon workers Will move to Canterbury from other regions and existing firms wllllncirease the amount of work they undertake However employers and training organisations In Canterbury have raised concerns that the adjustment may not be swift enough and that some additional government support will be required to address the potential for lags in the rebuilding process

5 Therefore Government has developed a package of Initiatives called Skills for Canterbury These Include the following

bull The Tertiary Education Commission Industiy Training Organisations and education providers (particularly polytechnics) reprlorltislng provision to address the Increased demand for construction skills In Canterbury This Includes up to 3000 more constructlon~related training places In Polyteohnlcs In Canterbury and around the oountry

bull $42 million (operating) and $6 million (oapltal) has been reserved for approximately 1500 full time equivalent funded places at PolytechniCS private providers and ITOs for two years If required

bull Acoelerated training programmes at CPIT and other Polytechnics to oomplete training more quiokly and to allow transition to work during training

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bull Using the new trades academy based at CPIT and a related programme at Unwood College to provide secondary school students In Christohuroh with access to trades-based training (eg automotive engineering oonstruotion and oarpentry) alongside NCEA subjeots at school

bull Additlonai skills brokers at relevant Industry Training Organisations to work with employers and and MSD to place people In training

bull $15 million from Work lInd Income to subsidise 650 people into training and work in Canterbury by the end of June 2011

bull An extra $5 million in Budget 2011 for MSD to purchase further Industry Partnerships plaoements and plaoements in other employment and training programmes to help unemployed people take up Job opportunities from the rebuild

Additional support for Maori trainees with Te Puni K61ltiri appointing a dedioated agent to Work with ITOs and employers to support at least 200 Maori Into the oonstructlon sector

bull The Department of Labour will adjust immigration skill shortage lists for Canterbury as soon as looal needs arise and work with New Zealand employers to facilitate reorultment of high-skilled migrants from offshore

bull A new requirement on government oonstruotion oontracts In the Canterbury rebuild that at least 10 percent of workers must be in training or have been trained for the contract

6 This Integrated response approach will be called IISkills for Canterbury Reporting to the Canterbury Earthquake Reoovery Authority the Canterlgtury Employment and Skills Board will ensure that government agenoies Industry Training Organisations polytechnlcs and employers all work together to monitor and respond to labour market needs

7 The adequacy of this response will continue to be reassessed as new Information becomes available about the scope and timing of the rebuild and the labour market needs of the region Officials will alert Ministers If any further government support Is required

Backglound

8 After the second Canterbury earthquake a number of emergenoy arrangements were put in place to protect the employment and skills status of those affeoted These Included

bull Support for stUdents and their families who were Injured or killed In the earthquake

bull Changes to tertiary eduoation funding and student support rllles to allow dotnestio students to continue studying at other Institutions If required

Amendments to immigration and international education policy to allow International stUdents to adapt their study arrangements without detriment

bull An Earthquake Employment Support PC1ckage was introduced inoludlng the Earthquake SlIpport Subsidy ~md Earthquake Job Loss CoveI

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9 The (esponse from Government was extensive responding urgently to praotlcal needs In the past month the focus has shifted to plannln~ fOl the skills needed for the Canterbury reoonstruotlon programme This paper sets out the approach to addressing these needs

10 Whflst this paper focuses upon the skills needed directly for the Canterbury rebulla a range of skills will be needed In the Canterbury region as the economy reoovers These skills needs will oontlnue to be assessed and responded to by local providers and agencies and where neoessary through further adjustments at a national level (in collaboration with the Canterbury Earthquake Recovery Agency) It is important that support for the construction Industry Is not at the expense of other Industries

Problem definition

11 Considerable effort will le required to repair the damage to the physical economic and SOCial Infrastructure of Canterbury There will be some delay before significant building work gets underway with construction work likely to start late In 2011 peaking in two to four years time (partloularly for oommerolal buildings)

12 The labour needed to undertake the rebuild Is unoertaln and will be determined by the total amount and phasing of the repair and rebuilding work The sope and timing of the rebuild will beoome clearer over time and estimates of skills needs will be adjusted accordlngly1 The Canterbury Employment and Skills Board will oontlnue to liaise with employers tertiary eduoatlon organisations and government agenoies 10 ensure appropriate responses to this updated information

13 The ourrent best estimate (prepared by the Canterbury Developmeft Corporation) suggests that demand will peak two to four years after the rebUild oommencesr and that an additl~nal 19000 construotlon workers are likely to be reqUired PI range of oocupatlons and skill levels will be required At the last census 57 of workers in the building and construction seotor had no post-school qualifloations 5 had a level 1 3 certificate 26 had a level 4 certificate (the typical level for a trades quallfloation) and 12 had a diploma or degree

14 Most of the projected demand for skills in the Canterbury region is likely to be met through the normal operation of the labour market Including Increases In the numbers of hours worked by the existing workforoEl movement of people Into sectors where there is C high demand fot workers and the movement of workers into the region from other parts of the South Island and New Zealand as a whole However while In some oases we can antlolpate slltlIl rieeds and make relevant changes In response In many areas the needs are not yet clear and the best preparation Is to ensure that 1here Is flexibility to respond to needs as they emerge (Initially through front~lIne servloes but if necessary through the use of levers available to government agenoles) In order to ensure skilled workers are retained in Canterbury It will be as Important to make sure that people are not trained too early as too late

15 The Canterbury earthquallte together with the wider economic situation will lead to an Increase In unemployment In the short term At the end of April 2011 there were around 6300 Clients In receipt of an unemploymenHelated benefit In the Canterbury region (of whom about 2800 had been on benefit for longer than six months)

1 The Canterbury Employment and SkHls Board will provide updates to the Cabinet Committee for the Canterbury Earthquake Recovery

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16 As at 1 April there were about 780 building and construotlonrelated oooupatlpns listed on Oanterbury clients current work experience profiles (the number of people with this type of experience will be less than that as people may list a number of oooupatlons on their profile) Around 675 people have also noted that they have general labouring experience (some of these people may also have construction-related experience) One souroe of unoertainty is the future of those receiving the Earthquallte Support Subsidy rhe first package ended on 18 April and a second round of the Earthquake Support Subsidy which Is more tightly targeted and provides support for up to six weeks started on 19 April As this support Is withdrawn more people may be made redundant depending upon businesses ablllty to recover

17 However International experience Is that businesses adapt quclltly to a natural disaster as long as power transport and other utilities are restored quickly and the marlltet process is allowed to operate normally There Is some evidence of resilience In the Canterbury economy

bull The number of skilled job advertisements In Christchurch recovered somewhat In March after failing immediately after the February earthquake The rebound Was strongest In construotloh and Information technology while job ads oontlnued to fall In the retail education and health industries (Jobs Onllne data)

bull As at April 2011 there were almost 600 Job vacancies on Work and Incomes books In the Canterbury region compared to 505 vaoanoles In the weellt prior to the February earthquake and 177 a year earll~r

bull Whilst people have moved away from Canterbury 80 of the 11000 mail redlreotions are to another address In Canterbury (New Zealand post data)

bull Paymark data shows the EFTPOS dollar value transactions in Canterbury for the weellt ending 27 March were down only 3 percent compared to a year earll~r

bull Westpacs recent telephone survey of 2778 Canterbury business customers found that 2 percent of customers said they were permanently affected by the earthquake 13 percent said they were temporarily affected and 85 peroent said the~ were not affected

18 At the same time as demand fol workers in the building and construction sectors Is projeoted to Increase It is expected that there will be a drop In retail and tourism related activities Some workers In retail and tourism sectors may have transferable skills ~ and their transition Into alternative employment In other sectors could be smoothed through better processes for recognition of current competencies thrbugh the tertiary eduoatlon providers

19 This paper dlsousses the Government response to the labour marlltet needs arising from the Canterbury rebuild In some cases we can anticipate skill needs and make relevant changes In response However in many areas the needs are not yet clear and the best preparation Is to ensure that there is flexibility and funding to respond to needs as they emerge (Initially through front~lIne services but If neoessary through the use of levers available to government agencies)

Labour market dynamlos in Canterbury

20 Over tbe next two years the demand In Canterbury for construction worilters of all sllt11I levels will increase rhe labour market will respond in several ways

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bull People will shift from other Industries In the last decade around 60 per cent of people entering the construction seotor came from other Industries and olose to 60 per cent of workers who left the construotlon Industry left for employmentmiddot In another Industry This means that there Is a pool of people who oan work on the Canterbury rebuild without further training The key determinant for this group will be the attractiveness of the paymiddot and conditions for working on the rebuild (Includlng the availability of housing)

bull People will -shift from other regions (and pre-fabrloatlon will allow people to oontribute to the rebuild from outside of Canterbury) This will depend upon demand elsewhere In the country (whloh Is low In some regions but high In Auokland and other areas) and demand from other countrIes (eg Australia)

bull Firms will Increase the amount of work they undertake (many firms ale working fewer hours than they did before the downturn) This relies on these firms being able to remain In business until the rebuild starts

21 Prloe will play a key role In this adjustment process It is expected that wages will rise In response to increased demand for skills which will in turn Increase the supply of labour If the price of labour rises to the point where It Is unaffordable for those rebuilding (partlGularly for Insurers and the Earthquake Commission) rebuilding efforts are likely to slow However government agencies have a range of levers avalrable to support this adjustment process ~ making Investment choices for tertiary education and brokerlng servloes for employers and Jobseekers These levers will serve to moderate the pressure on prloes and smooth the adjustment process overall

Feedback from stlkeholders

22 In the past weeks we have met with several groups with Cl good understanding of the likely needs of the Canterbury region This Included the Canterbury Development Corporation the Reoover Canterbury Group (a Joint venture between the Canterbury Development Corporation and Canterbury Employers Chamber of Commeroe) the oonsttuctlon seotor Industry Training Organisations and a group of construction sector ohlef executives (eg of Fletohers Malnzeal Jasmax)

23 These groups expressed oonoerns about the availability of suitably qualified trades people They could see that for the oonstruotlon effort to get underway quiokly there would need to be a sharp Increase In the number of slltlIIed tradespeople available in Canterbury T~ey were bonoerned that the time required to train new tradespeople should not delay the progrtlss on the rebuild

24 These oonoerns expressed by people with an immediate understanding of the needs of the Canterbury region have Informed our proposed approaoh to the Governments suppoli for the Canterbury rebuild

Skills for Canterbury Governments support for the Canterbury rebuild

25 A response has been developed to address the high forecast demand for construotion sector skills allowing for the ongoing unoertalnty about the timing and soale of needs The package of InltiEltlves to address these needs iscalled Skills for Canterbllry It inoludes the following

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bull The Tertiary Education Commission Industry Training Organisations and eduoatlon providers (particularly polyteohnics) reprlorltlslng provision to address the Increased demand for oonstructlon skills In Canterbury This inoludes up to 3000 more oonstruction-related training places In Polytechnics In Canterbury and around the oountry

bull $42 million (operating) and $6 million (capital) has been reserved for approximately 1500 full time equivalent funded plaoes at Polytechnlos private provld~rs and ITOs for two years If required

bull Aocelerated training programmes at CPIT and 9ther Polytechnlos to complete training more quickly and to allow tr~nsltionto work during training

bull Using the new 1rades academy based at CPIT and a related programme at Linwood College to provide secondary school students In Chrlstchurch with access to trades-based training (eg automotive engineering construction and carpentry) alongside NCEA subJeots at sohool

bull Additional skills brokers at relevant Industry Training Organisations to work with employers and and MSD to place people In training

bull $15 million from Work and Inoome to subsidise 650 people into training and work in Canterbury by the end of June 2011

bull An extra $5 million In Budget 2011 for MSD to purchase further Industry Partnerships placements and placement~ Inmiddot other employr(1ent and tr~inlng

programmes to help unemployed people take up job and training opportunities from the rebuild

bull Additional support for MMrl tralne~s with Te Punl K61ltirl appointing a dedicate~ agent to work with ITOs and employers to support at least 200 Maorl into the construotlon seotor

bull The Department of Labour will adjust Immigration skill shortage lists for Canterbury as soon as looal needs arise and work with New Zealand employers to facilitate recruitment of high-skilled migrants from offshore

bull A new requirement on government construction oontracts In the Canterbury rebuild that at least 10 percent of workers must be In training or have been trained for the contract

Governanoe

26 The Skills for Canterbury package will be oo-ordlnated locally by the Canterbury Employment and Skills Board which was established to identify labour market needs and ensure the appropriate response is put in place The Board will work to the Canterbury Earthquake Reoovery Authority and Inoludes representatives from looal and central government (Includlhg from the Ministry of Education Tertiary Education Commission Department of Labour and Ministry of Social Development) employers eduoatlon providers and Industry Training Organisations

27 The Board provides a means of identifying and responding to skills Issues at a local level and Identifying the need for ohanges at national level where looal solutions are Insuffioient The 80ard Is supported by the Canterbury Development corporation and the Department of Labour

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middot lt _ ~__h_~_

28 At the national level the Depaliment of Labour Ministry of Eduoatlon Tertiary Educatlon Commission and Ministry of Soolal Development will oontlnue to work together to ensure that the national response Is consistent with the local Initiatives and to advise Ministers If there is any need for further assistance or Intervention

29 The following seotions provide further detail about the aotlona to be taken across Government as part of the Skills for Canterbury package

Immigration responses

30 It is expeoted that International reorultment will be required This Is particularly true for higher skilled workers who form a small but critical part of the oonstructlon sector At the last oensus 5 of people working in the building and construction sector had a diploma and 7 had a degree or higher qualifioation

31 Some qualified worllters may be able to be attracted baok Into the Industry However there are already skill shortages In many speclalisrJd construotlon ocoupations such as construction project managers project builders quantity surveyors surveyors urban and regional planners and civil engineers and civil engineering teohnloians

32 Drawing on the Canterbury Development Corporation and Department of Labour modelling of the Canterbury labour market the Department of Labour Is reviewing the lmmlglatlon skill shortage lists specifically for Canterbury Challges If any are required will be made from July 2011

33 Onoe the soale of slltlll needs Is oleaI the Department of Labour will work with relevant agenoles and employers to develop an approach to targeting relevant mlgtants This will aim to deliver an end-to-end service to employers and migrants covering promotion visa services and settlementretention The Department of Labour will draw on its existing database of potential migrants (a large number of whom have oonstruction-related skills) to assist local employers to find the skills In shortage

34 For example Fletoher Building is seeking to reorult up to 80 high-skilled people from Ireland Including quantlty surveyors and engineers The Department of Labour Is worllting with Fletcher Building to ensure that Immigration barriers are minimised for these migrants

Education and training response

35 The main role for eduoatlon and training Is In meeting the need for additional tradespeople The model develoied by the Canterbury Development corporation and Department of Labour foreoasts a numbel of trades will be in demand as part of the Canterbury rebuild The top ten oooupatlons are foreoast to be carpenters and JOiners plasterers bricklayers and stonemasons wall and floor filers roof tilers glaZiers plumbers concreters electrioians and floor finishers

36 At the last census 26 of people working in the building and constructionsector had a level 4 certificate which Is the level of qualification required for most of these ocoupatlons A further 5 had a level 1 to 3 oertlflcate gained post-school which include some trades qualifications

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37 It is possible to undertake training In these occupations over the next year or two to supplement the labour market responses desorlbed In paragraph 20

38 Trades training can be provided to students at plovlders (fargely through polytechnics) or to employees (as industry training) Beoause It will take some time for the rebuild to aocelerate the greater demand Is likely to be for provlder~based trades training The Minister for Tertiary Education and the Tertiary Education Commission have been working with providers to Increase their trades related provision Initially and then as demand for skilled tradespeople Increases Increase the relative proportion of training undertaken In employment

bull At present there are around 6700 funmiddottlme equivalent places2 in trades training In polytechnlos (and a small amount more with private training establishments) Providers can change the mix of provision within their baseline funding and they report that there Is scope to inorease the number of oonstruction-related places by up to 3000 full-time equivalent plaoes through this replloritisation (including 850 In Canterbury) This repriorltisatlon will need to be oarefully oonsldered against the demand for other skills In the economy but this Is part of the regulal adjustment that providers must manage

bull Industry Training Orgi3nisatlons have 8300 full-time equivalent plaoes In construction-related trades training There Is soope to reprioritlse substantially within existing baselines In part beoause the economic situation has reduced the pressure on training places

39 As part of meeting the needsof the Canterbury rebuild polyteohnlos ara developing approaches to shortening the delivery time for pre-trades programmes In circumstances that more closely simUlate employment conditions They are exploring the feasibility of delivering a 34 weellt (full-year) prefrades training programme In 17 weeks (a half-year) by requiring 40 hours study per week flom leamers

40 Additionally polytechnlos and Industry Training Organisations are developing flexible training options so that trainees can move more easily between provider-based training and Industry training This Inoludes Improved reoognltlon of prior learning processes to oredentiallse people with existing competencies Industry Training Organisations are also hiring additional skills brokers to work with employers and plaoe people in training

41 The existing Group Training Companies which were first Intr9duced during the last re~ession are under stress There Is scope for both the Tertiary Education Commission and the Ministry of Social Development to work with them the Industry Training Organisations and training providers In order to manage the pool of available trainees in Canterbury matoh them with employment and provide a route for government employment subsidies if necessary

2 There is not aone to one relationship between a fulHlme place and entry Into the construction sector The numbel of trained workers available to the construotlon seotor will depend on hoW much full-time study Is required to complete the qualification (which varies by occupation) the completion rate for the qualification and the share of those who complete who find Jobs

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ProvisIon for further asslstanoe additional tertiary education plaoes

42 Whilst these responses may be suffioient it is too early to be certain The Canterbury rebuild will require substantial effort over a relatively short period of time and the key will be to have the systems in place to respond as needs become clearer

43 Therefore funding has been set aside as part of Budget 2011 so that the rapid response arrangements being put in place by providers oan be extended further If necessary I have established a contingency of $42 million (operating) and $6 million (capital to cover student loans) to meet additional demand for trades training This would fund approximately 1500 fulHlme equivalent places for two years This Includes additional places In polytechnics and other providers and extra youth GUarantee places If necessary

44 The scale-up In provision would b~ focussed within Canterbury but If additional capaoity was required It would be sought from elsewhere within the South Island or If rJecessary the North Island as well

45 The modelling work of the Canterbury Development Corporation and the Department of Labour and advice from the Canterbury Employment and Skills Board will help Identify whether this funding should be released

Social development response

46 The Ministry of Sooial Development primarily addresses the labour market need fOI lower-skilled workers through Job brokerlng and short focussed training p~ogrammes At the last oensus 26 of people working In the building and oonstruction seotor had no qualification and 32 had a school qualifioatlon (but no tertiary qualifloations)

support for unemployed people to undertake further training

47 The rebuilding of Canterbury presents an opportunity to encourage Work and Inoome clients to undertake training in areas of projected demand in the region Including the construction sector Work and Income Is responding to this opportunity As detailed below It Ilas set aside funding and Is already engaging with Iltey employers It has also designated El staff member (Jo Aldrldge) to coordinate engagement with employers and training providers This will enable olients to take advantage of job opportunities when they emerge and provide them with skills that should help them to stay off-benefit In the future

48 Sinoe the earthquake Work and Income has worked with a number of Canterbury employers via the Industry Partnerships programme to support them to hire and train Work and Inoome clients For example Worllt and Inoome entered Into a contract with Malnzeal to provide a Straight to Work oonstructlon programme for 20 clients in Canterbury The programme Includes on-the-job training In bLllldlng repair work due to damage caused by the earthquakes

49 Work and Income will also Invest $15 million in providing an extra 650 employment and trainIng places in Oanterbury by the end of June 2011 through the following programmes

bull A new Initiative where Work and Inoome contraots wIth the IndLlstry Training Federation and the Built Environment Training Alllanoe to provide short-term trades training and placement Into work This Initiative will be suitable for Work

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and Income clients who are broadly work-ready but may need a small amount of upskilllng to find work In another area Industry Training Organisations will be oontracted to find Job opportunities assess the skill needs of clients provide shortshyterm training and plaoe them with an employer who develops a trainng plan

bull A $3000 package (per person) of employment and training support for large employers to create a Job for a looal

bull Engaging with private training providers that Worllt and Income currently contracts with to inorease programme capacity in areas where there Is current demand

60 In addition a new programme (to be available nationally) SIlt1II8 for Growth will be announced as part of Budget 2011 The programme provides support for employers to upsltjll a young person while they are employed This will provide employers with a $5000 subsidy (on average) for 12 months to employ a young person and train them up to at least a Level 2 qualifioatlon on the NZQF

61 Further $5 million of extra funding for employment assistance In Canterbury has also been set aside In the 201112 flnanolal year The Ministry of Social Development will use the funding to purchase extra Industry Partnerships plaoements and placements In other employment and training programmes to help beneficiaries tallte advantage of the Job opportunities arising from the rebuild Further detail on the package that will be developed will be available as the soope and timing of the rebuild and the labour market (leeds of the region become clearer Possibilities Include

bull Building on Work and Incomes relationship with large employers In Canterbury suoh as Malnzeal Downer Fletchers and Fulton Hogah to provide them with support via Industry Partnerships to hire and train Worllt and Income ollents wh~n demand Inoreases Work and Inoome has already started to engage with the ne~ly establishedlnfrastruoture Alliance (oomprlsing Downer Fulton Hogan Fletchers MbConnell Dowell and City Care) Th~ alliance Is a collaborative effort by major employers to co-ordinate a range of servloes including workforce planning reorultment and retentlon3

Increasing the number of placemens and expanding the range of Industries for the new initiative to oontraot the IndustrYTralnlng Federation to provide short-term training and plaoement into work

62 The Ministry of Social Development is also using Its full range of existing training and employment programmes suoh IS Industry Partnerships 81ltlIls Investment SLlbsidy and Job Ops to meet the changing needs of the ourrent Canterbllry labour market

and help plaoe people Into work

Brocerlng and plaoement In lower skilled oocupatlons

53 A pool of unemployment beneflolaries will be able to be drawn on to provide lower slltllled labouring work As discussed above at the end of April 2011 there were around 6300 clients In reoelpt of an unemployment-related benefit In the Canterbury region As at 1 April ther~ were around 675 people with general labouring work

3 Industry partnership agreements are stili being negotiated with employers and preCise allocations of the funding between employment programmes have not yet been finalised While It Isnt yet possible to say how many new Industry partnership places will be created as part of this paclltage current average funding fol Industry partnerships Is approximately $4000 per place Acoordll1gly for each $1 million spent on this programme around 26~ places would be created

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experienoe (some of these people may also have oonstruotion or building work experl~nce)

54 The Ministry of 800lal Development will use Its existing work broker services to match clients with vaoanoies and Its relationships with employers to enoouragethem to take on its cHents For jobs that require little or no training Worl( and Inoome can use employment programmes like Job Ops whioh provide work experience for a young person for six months The SIltills Investment Subsidy also Incentlvlses employers to employ Work and Income ollents by providing them with a wage subsidy until the olient has reaohed the required skill level for the job - the subsidy oan also be used for training

Risk Mitigation

65 Employment and training programmes inherently involve Ilsllt$ of substitution and displacement ~ where for Instance El subsidised worker Is simply chosen for a Job over an unsubsldlsed worker or dlsplaoes another employee There Is also a rlsllt of employers shIfting the oasts of training or paying workers they would have paid for anyway onto the Crown Work and Inoome works to minimise these risks through its programme design and employer engagement

Government procurement Encouraging employers to take on more trainees

56 The active commitment and support of employers will be a key element of the vooational education and training response rhis is because of the role that employers play In choosing who to employ and providing opportunities for employees to access on the Job training

57 The Skills for Canterbury paolltage will provide a range of mechanisms to support employers through developing and helping place suitably slltlHed employees and subsidising on the job training

58 The most significant isslle for people whO undertake training particularly pretrades and preemployment training is In getting a job soon after completing the training If trainees do not start using the skills they have learned soon after completing the training they will lose the skills and the Investment we h~ve made will be gone

59 We oonslder that any contract let by the Government assoolated with the rebuilding effort should Inolude a requirement that at least 10 of all employees engaged on any rebuilding work be either reoruited from people previously enrolled In a pre employment training programme andor engaged in some form of vooatlonal eduoatlon and training as part of their employment

60 This requirement may Increase the costs for contractors engaging on the rebuild but thll risk must be balanced against the benefit for the industry as a whole (and for Canterbury) of ensuring a good supply of skilled workers for the rebuild

61 Further work will be required to consider how this requirement will be Implemented It will be important to minimise compllanoe oosts on government agencies and oontraotors (espeoially small and medium sized enterprises who will oarryout muoh of the work as sub-contractors) It will also be important to design an approach

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consistent with New Zealands free trade agreements by ensuring that It does not create a barrier to International firms seelltlng to plovlde services for the rebuild

Training and employment opporlunlties for Miiorl

62 fe Punl K5kirl will appoint an agent to

bull Reoruit at least 200 Maorl In Canterbury Into Te Ara Puawal a pathway that supports training suitable to the skill levels of the Individual and subsequent employment

bull Worllt with the Built Environment Training Alliance (BETA) to have reoruits Interests and skill levels assessed seoure relevant support (eg Ministry of Soolal Development funding may be relevant for unemployed people) and have reoruits plaoed into trades-related ttalnlng programmes

bull Identify and address any support required for trainees during training bull create a network of Maorl trainees by holding bi-monthry hul with all trainees to

discuss theIr progress and identify any emerging Issues to be addressed with training provld~rs or Industry Training Organisations

bull Work with employers and Industry Training Organisations to secure employment and commitments to further training for trainees

63 This approach has been

developed through work with Te RQnanga 0 Ngai Tahu and a range of relevant stallteholdeimiddots It supports Te PUnI K6kirls wider Growing Maorl Assets through targeted eduoation and training frameworllt as well as complementing the recovery efforts In Canterbury

Conclusion

64 fhe Skills for Canterbury paolltag~ will provide oonstrllotion seotor training for thousands of people primarily in Canterbury but also around New Zealand Whether tlie training is In polytechnics Industry Training Organisations or as part of a Work and Inoome programme it will be based around close relationships with employers and a good understanding of the needs of the Canterbury rebuild

65 students and Industry trainees can expect to reoelve a SUbstantial qualification in a high demand oocupatlon driven off a strong working relationship between employers and training organisations

66 Beneficiaries can expect to reoelve employment support tailored to their particular barriers to finding work That may Inolude short periods of training and wage subsidies For those beneflolarles placed through Industry Partnerships this support will be linkecj to a commitment by an employer to provide aJob

67 The most diffloult factor in managing this training Is the timing The peallt of the Canterbury rebuild will be in two to four years time but employers are telling us that skilled workers will be needed much sooner If training gets underway too early trainees may find they finish their programmes and oannot find work - potentially being attraoted away to Australia or other parts of New Zealand The flexibility in the current package (Including the options about when and how to use the $42 million

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tertiary education contingency) leaves scope to respond to these Issues as they develop

Consultation

68 The following agencies were consulted on this paper the Treasury the Ministry of Soolal Development the Ministry of Economic Development the Department of Labour the Department for Building and Housing the Canterbury Earthquake Reoovery Authority and the Tertiary Eduoatlon Commission

Treasury comment

69 Treasury does not support the proposed quota of 10 of employees either being recruited from or people previously enrolled In a pre-employment training programme or some form of vooational education and training (reoommendation 6) as It may reduoe the flexibility of the Canterbury labour marlltet to fill labour demand for reconstruction work Such a quota does not allow for natural adjustments that may occur within the canterbury labour market over the next few years may inorease the oosts of the rebuild and reduce employment opportunities for others

70 Treasury also notes the potential for all training places funded through the Trade rralning Contingency to be allocated to the Canterbury region We suggest that the allooation of these places be revisited once there Is a clearer picture of the demand for skills and training In the Canterbury region

Ministry of Economic Development and Department for Building and Housing comment

71 The Ministry of Economic Development and the Department for Building and Housing do not support the proposal to Introdlloe a requirement to proourement contraots for the rebullCl (that 10 of employees should be trainees 01 have received prsshyemployment training) This proposal

bull willlnorease the costs of the rebuild due to the costs of training or finding people who have received pre-trades training

bull will negatively Impaot the efflolency and produotivlty of government agencies due to Inoreased administrative compllanoe oosts (particularly for contraot monltollngj management and reporting) and for contraotors In the oase of small arid medium sized enterprises this runs counter to the procurement reform objectives of cutting red tape and malltlng It easier to seellt and undertallte government conttacts

bull may distort the national distribution of training and slltllIed workers due to large firms reducing training efforts on other contracts to offset the Increased oosts In Canterbury and potentially Increasing the oost of labour in other parts of the country

bull may be oonsidered an attempt to require domestio oontent In proourement contraots which would breach commitments made in free trade agreements

13

Financial implications

72 There are no flnanoial Implications arising from this paper Proposed spending Is Included In the relevant Budget paokages Proposals for additional funding or to release oontingency funding will be advanced to Cabinet as usual

Legislative implications

73 This paper has no Immediate legislative Implications

Human rights implications

74 None of the proposals contained In this paper are In any way Inconsistent with the New Zeal~nd Bill of Rights Act 1990 or the Human Rights Aot1993

Gender Implications

75 This paper has no gender Implications

Publicity

76 The approach proposed In this paper will be communicated as part of Budget announcements The Tertiary Education Gommlssion Ministry of Soolal Deyelopment and Department of Labour will co~ordlnate with the Canterbury Earthquake Reoovery Authority to communicate the Skills for Canterbury approaoh locally

Recommendatlqns

77 The Minister for Tertiary EdUcation and the Minister for Social Development and Employment recommend that the Committee

1 note that this paper discusses the second phase of the employment filnd skills responseto the Canterbury earthquake moving on from the initial emergency arrangements to oonslder the arrangements required to support the rebllild

2 note that there Is considerable uncertainty about the timIng and scale of the Canterbury rebuild and that In light of this uncertainty It is Important to ensure that the response Is flexible and based on a good understandIng of local needs

3 note that the Canterbury Employment and Skills Board Is oo~ordlnating the response In Canterbury (with the Canterbury Earthquake Reoovery Agency) and that this Board will update information about labour marlltet needs and work to broker solutions locally as well as nationally w~ere required

4 note that officials from the Ministry of Eduoation Ministry of Social Development Department of Labour and Tertiary EdUcation Commission are co-ordinating responses at a national level and will advise Ministers (and if necessary Cabinet) on Issues as they emerge

6 note that a Skills for Canterbury paclltage has been developed Including

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61 a review of the Immigration skill shortage lsts In light of forecast shortages In high-skilled occupations in Canterbury

52 repriorltislng tertiary eduoation pravison to address the Inoreased demand for oonstruotion slltlIls In Canterbury

53 a oontlngency of $42 million (operating) and $6 million (capital) to expand tertiary education provision further if neoessary Inoludlng provision for additional Youth Guarantee plaoes

54 using the new trades aoademy based at CPIT and a related programme atshyLinwood College to provide seoondary sohool students In Chrlstohurch with access to trades-based training alongside NCEA subJeots at sohool

56 aocelerated trades training In polytechnlos Integrated with Industry training so that trainees will be able to oontlnue their stUdy as they move Into work

66 Indusiry Training Organisations worltlng closely with employers the Ministry of SOCial Development and education providers to dEver the right

_training at the right time

57 an extra 650 employment and training places for Worllt and Income clients In Cinterbury by the end of June 2011

68 $5 million In Budget 2011 for extra placements In the Ministry of Social Developments employment and training programmes In 201112 in

_Canterbury Including placements with employers that Include training

59 support from the full range of Ministry of Sooial Development programmes

510 support for at least 200 Maorlln the Canterbury area to enter training and subsequently employment In the Construction sector

6 agree that any contraot let by the Governmentas$oclated-with the Canterbury rebuild will Include a requirement that at least 10 of all employees working on the oontraot be either recruited from people previously enrolled In a preshyemployment training programme andor engaged In some form of vocational edUcation and training as part of their employment

7 note that the Ministry of Eduoation and the Tertiary Education Commlssipn will work with the Ministry of Economic Development to establish an approach to Implementing the procurement requirement In recommendation 6 that minimises oompliance costs and addresses the requirements of free trade agreements

8 agree that the levGI of government support needed for the rebuild will continue to be assessed as further information becomes available about the pace and scale of the rebuild and the resilience of the local eoonomy

15

shy

9 agree that the Elpproaoh will be communloated as part of a Pre ~ Budget announcement In the week of the 8th of May 2011

Hon Steven Joyce Minister for Terllary Eduoatlon __I 1___

Hon fDElula Bennett Minister for Social Development and Employment

__I 1__

16

bull Using the new trades academy based at CPIT and a related programme at Unwood College to provide secondary school students In Christohuroh with access to trades-based training (eg automotive engineering oonstruotion and oarpentry) alongside NCEA subjeots at school

bull Additlonai skills brokers at relevant Industry Training Organisations to work with employers and and MSD to place people In training

bull $15 million from Work lInd Income to subsidise 650 people into training and work in Canterbury by the end of June 2011

bull An extra $5 million in Budget 2011 for MSD to purchase further Industry Partnerships plaoements and plaoements in other employment and training programmes to help unemployed people take up Job opportunities from the rebuild

Additional support for Maori trainees with Te Puni K61ltiri appointing a dedioated agent to Work with ITOs and employers to support at least 200 Maori Into the oonstructlon sector

bull The Department of Labour will adjust immigration skill shortage lists for Canterbury as soon as looal needs arise and work with New Zealand employers to facilitate reorultment of high-skilled migrants from offshore

bull A new requirement on government oonstruotion oontracts In the Canterbury rebuild that at least 10 percent of workers must be in training or have been trained for the contract

6 This Integrated response approach will be called IISkills for Canterbury Reporting to the Canterbury Earthquake Reoovery Authority the Canterlgtury Employment and Skills Board will ensure that government agenoies Industry Training Organisations polytechnlcs and employers all work together to monitor and respond to labour market needs

7 The adequacy of this response will continue to be reassessed as new Information becomes available about the scope and timing of the rebuild and the labour market needs of the region Officials will alert Ministers If any further government support Is required

Backglound

8 After the second Canterbury earthquake a number of emergenoy arrangements were put in place to protect the employment and skills status of those affeoted These Included

bull Support for stUdents and their families who were Injured or killed In the earthquake

bull Changes to tertiary eduoation funding and student support rllles to allow dotnestio students to continue studying at other Institutions If required

Amendments to immigration and international education policy to allow International stUdents to adapt their study arrangements without detriment

bull An Earthquake Employment Support PC1ckage was introduced inoludlng the Earthquake SlIpport Subsidy ~md Earthquake Job Loss CoveI

2



Problem definition







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Governanoe



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7









8













9













10



Risk Mitigation









11











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




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Problem definition







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Governanoe



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10



Risk Mitigation









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Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




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16












4











5












Governanoe



6

middot lt _ ~__h_~_












7









8













9













10



Risk Mitigation









11











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16











5












Governanoe



6

middot lt _ ~__h_~_












7









8













9













10



Risk Mitigation









11











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16












Governanoe



6

middot lt _ ~__h_~_












7









8













9













10



Risk Mitigation









11











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16

middot lt _ ~__h_~_












7









8













9













10



Risk Mitigation









11











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16









8













9













10



Risk Mitigation









11











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16













9













10



Risk Mitigation









11











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16













10



Risk Mitigation









11











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16



Risk Mitigation









11











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16











Conclusion





12


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16


Consultation


Treasury comment









13







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16







Gender Implications


Publicity


Recommendatlqns







14
















15

shy




__I 1__

16
















15

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response to the canterbury earthquakes: skills for canterbury · canterbury reoonstruotlon...

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