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Recent key developments in MAKE│NZ
-I’m back! (Sabine, that is). And for those of you who, I’m sure, missed me dearly – I come offering this:
And what is that you may ask? Why it’s obvious! It’s a super high quality, amazingly taken, photo of Mt Fuji!
But now that I’m back, and with the success of our conference behind us, it’s time for the team to keep doing what we love – growing our manufacturing community. We’ll be trying out some new initiatives over the next few months, some more noticeable than others, but if you’ve got any ideas on what you’d like to see from us or any feedback on what we get up to, don’t hesitate to let the team know! Dieter and I are just an email or phone call away~
Recent key developments in New Zealand
Over the last few months, we’ve been trying to keep you up to date with the changes in New Zealand’s publicly-funded vocational education and training (VET) system. Remember, the last (Labour) government introduced large-scale changes in the system, including setting up a single entity – Te Pukenga. When the current National-led government came in, it immediately announced the roll-back of most of the changes introduced by its predecessor. That process, which included a couple of consultation exercises, has now led to the final step – the introduction of the draft Education and Training (Vocational Education and Training System) Amendment Bill [The Bill], submissions on which will close on June 18.
A less-than-welcome surprise in the draft bill were detailed provisions allowing the newly-established Industry Skills Boards [ISB] to impose a levy on companies that are part of the industry covered by that ISB.
Levies in New Zealand are common in the primary sector, where they are governed by the Commodity Levies Act (1990). Under the Act, levies can only be imposed if they are being supported by more than half of the prospective levy payers in a referendum. No such binding criteria here. All that is required is that “the industry skills board has undertaken adequate consultation with the levy group concerned.”
Funds raised through the levy may be used by the ISB to “meeting the costs of the relevant industry skills board performing its functions”, which specifically includes “using any part of a levy to publish or sell any educational, informative, or promotional material (whether or not for profit);”, but specifically excludes “meeting the costs of arranging delivery of work-based training.”
Thus, the money can be used to fund the internal business processes of an ISB, but not for supporting work-based learning.
Apprenticeship training in New Zealand – as in some other countries – has a ‘free-rider problem’. The costs are borne by those that train, the benefits – in the form of trained workers – are available to all. The only way for those that train to reap the benefits of their investment is by “Training them so they can leave, treating them so they don’t want to”. Which doesn’t always work.
The UK introduced a ‘Train or Pay’ apprenticeship levy in 2017 which, in summary, didn’t achieve its goals best and was counterproductive at worst. How and why it failed will be a story for another day.
We do not support the introduction of a levy as prescribed in The Bill. There are many reasons for that, not the least in the fact the levies will put an extra cash cost burden – plus additional compliance cost – on manufacturers. At the same time, administering these levies and collecting the money will put an additional burden (and cost) on ISBs, meaning the net benefit will be minimal unless levies are set at a high level. However, if a levy scheme were to be introduced, it would need to work exactly the other way round: funds to be used to support work-based training, thus addressing the ‘free-rider’ problem, rather than to pay for the inner workings of ISBs.
Recent key developments in the World
– There is an interesting international comparison compiled by researchers at Harvard University, comparing the capability and capacity of 25 countries in five key critical technology areas: Artificial Intelligence, Biotechnology, Semiconductors, Space Technologies and Quantum Technologies (https://www.belfercenter.org/critical-emerging-tech-index ). That New Zealand was included at all makes for a good start, but detailed results are even more encouraging. We are at #21 (ahead of Turkey at #22!) across all categories:
Quite interesting to see where – according to the criteria used in the study – New Zealand’s relative strength(s) lie in each area:
In AI (above), we’re all about Data, whereas in Biotechnology, our strength is in Security (below):
In Semiconductors we aren’t really on the map at all, whereas Space Technologies we’re deemed to have strength right across the board:
Possibly most surprisingly to many, however, will be New Zealand’s high ranking in Quantum Technology:
Contrary to the predictions of some economists, inflation figures in the US show no sign if increasing in the wake of ‘Liberation Day’. Monthly inflation rates, compared to the same month in 2024, declined form 3.0% in January to 2.3% in April and May (estimate). That doesn’t mean the cost to business hasn’t been impacted – Transportation costs, for example. Seafreight (container) costs have risen sharply just recently:
Fun Fact: Defence procurement tends to work better on the back of a strong industrial base …
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