Mana in Mahi - The Government's New Strength in Work Scheme

16 August 2018

Last week, the Government announced their Mana in Mahi – Strength in Work Scheme, a ‘work for the dole’ programme which will provide support payment equivalent to the person’s benefit to employers taking on apprentices aged 18 to 24 years who have been on a benefit for six or more months.

The idea is not new – proving dole payments to employers to incentivise bringing on workers on a benefit to provide experience, additional income and training.

This is a good step forward in supporting our youth into apprenticeships. A chance for young people to gain great practical experience, skills and qualifications, hopefully leading them into well-paying jobs eventually.  If rolled out to include manufacturing companies next year, this scheme has potential to help incentivise manufacturers to take on additional apprentices and take a chance on some workers who may not have had access previously, increasing the skill base in our economy.

In New Zealand we have dual problems of a high number of our youth who are not in employment, education or training, or underemployed. At the same time productive businesses are facing severe skill shortages that hold them back from further growth, particularly in the area of skilled trades’ workers.

It is encouraging to see this policy being paired with additional support for pastoral care – this is particularly important for many of the people who come under the category of which this policy is targeting.  Without such additional support, the transition into an apprenticeship and work may be difficult and not as effective as it could be.  The Government also needs to support and encourage the use of group training schemes as part of this policy, as these are often very effective in these areas.

The question is – why doesn’t Government support apprenticeships more generally, given the skills shortages which already exist, in manufacturing for skilled trades’ workers, as well as across other sectors.  Education and training in other forms, particularly tertiary, currently experience a high level of Government contribution to cost – both through the new fees-free policy and through existing substantial subsidies and support for students. While apprenticeships also benefit from the first-year-fees-free policy, because of the lower cost, the effective subsidy value is far lower than in other more expensive forms of education, particularly University.  And of course, apprentices contribute to businesses growth, earn an income and pay tax while they study. 

So why not provide additional incentives to employers to train more apprentices, since we currently provide much higher support to other forms of education? This argument was made on RNZ by Josh Williams, CE of the Industry Training Federation.

But we also have to ask ourselves – as an industry, and as individual companies – whether we are doing enough to contribute to growing the next generation of manufacturing workers? We appreciate the additional cost – both financially, and operationally – of taking on apprentices, but we have to be prepared to make those sacrifices if we want to have a future as an industry. Relying largely on migrant labour is a high-risk strategy, and while it is tempting to ‘leave it to others’ when it comes to taking on (more) apprentices, especially when the business is under pressure to perform and what we need is experienced workers who can make a difference on day one, this is a form of freeloading and not sustainable in the long term. At the same time we acknowledge that the current apprenticeship scheme is faulty in a number of aspects, and The Manufacturers’ Network is already engaged in discussions with the government, ITOs and tertiary education providers on how to make it easier for employers to take on and successfully manage apprentices. We’ll provide more information on that in the near future.