There are no plans to bond apprentices to ensure they remain in New Zealand and avoid the risk they will move overseas, Education Minister Chris Hipkins says.
Education Minister Chris Hipkins says there is no evidence that apprentices will move abroad. Photo: RNZ / Angus Dreaver
His comments come after the government announced an extension of its support for 38,000 apprentices in jobs and training.
The scheme has been paying employers $1000 per month in the first year of an employer's apprenticeship since 2020.
It was meant to end in August, but has been extended to December 2023 at a lower rate of $500 payment for each apprentice in their first two years of work.
The new support means 24,000 new apprentices will get government assistance, in addition to the 14,000 already receiving support.
The $230 million move is one of a number of big-ticket items in Budget 2022.
Hipkins said there had been a 50 percent uptake in the number of building apprentices and the country needed that to continue to meet the current demand as the building sector continues to boom.
However, Hipkins told Morning Report there was no need to bond apprentices to work in New Zealand to stop them moving overseas for better-paying jobs and housing opportunities. He said retention rates were high within firms, with incentives for apprentices to move were less and there was no evidence they would move overseas either.
He said government would revisit the issue if retention rates were slipping.
"We haven't looked at it at this point, but if we do see that there was a significant exit rate at the end of an apprenticeship, which we're not seeing at the moment, we would potentially consider that in the future," he said.
"We must ensure we have a workforce to meet that demand." - Education Minister Chris Hipkins
Hipkins rejected criticism that building firms were being given money unnecessarily in the middle of a sector boom where they were already making profit from apprentices, who were on good rates of pay.
"Ultimately if you look at the level of subsidy we're providing for apprenticeships now relative to the subsidy of someone completing a degree we've historically underfunded the trades and funded them far less than someone who's doing a degree," Hipkins said.
"Actually the areas that we've got the greatest skills shortages in the country at the moment are those areas of trades.
"They're already doing their bit by taking on apprentices. Even with the subsidy there are still costs to the businesses from having apprentices on board. They require extra support and training and ultimately they're not just there as workers, they're also learning whilst they're doing that work. Employers are contributing to the cost of that.
"This is government saying 'look we recognise you are doing some of the hard yards in making sure we're building up the future workforce and we want to come alongside you and support you to do that."
The minister said the possibility of having a glut of builders in a bust period of sector growth was minimal, given the need to build houses across the nation.
"We've seen tens of thousands of people entering apprenticeships, up 55 percent of what the levels were up previously." - BusinessNZ education, skills and immigration manager Rachel Simpson
"I think if you look at the pipeline of work already out there now we know that this pipeline is well over a couple of years. This isn't a short-term cycle that we're going through... and therefore we must ensure we have a workforce to meet that demand."
BusinessNZ education, skills and immigration manager Rachel Simpson told Morning Report the drop in subsidy rate was disappointing, but the extension was not and that the government was trying to make the scheme more sustainable in the long term.
There was an ongoing need for the subsidy and that it had 'turbo charged' an uptake in people entering trades at a time of skills shortages, she said.
"The scheme has worked. We've seen tens of thousands of people entering apprenticeships, up 55 percent of what the levels were up previously. So if it's working let's try to grow it."