The Missing Generation of Skilled and Reliable Workers

There are two levels to our worker shortage:

• the first is just having enough workers
• and the second the debilitating lack of skilled workers

Both are causing New Zealand an economic apocalypse.

The Reserve Bank Governor when he lifted the Official Cash Rate on 23 November noted that the lack of labour was one of the main causes of inflation. There are four contributing factors:

• poor vocational training outcomes;
• immigration flows into New Zealand stifled;
• a fading work ethic;
• and stifling bureaucracy.

Taking each factor in turn.

Training:

The Government has put another $90 million into vocational education directed at the primary sector. The Tertiary Education Commission (TEC) with its unified funding for vocational training has directed the money to on-the-job training. The million-dollar question is will this money actually find its way to learners?

The new one stop vocational training organisation, Te Pukenga, for the country replacing all the polytechnics and industry training organisations has a massive funding deficit to bridge (we are talking $100 million plus) and most worrying a systemic drop in trainees that has been evident for over the last decade. Simply put funding is short and trainees are an endangered species. Something new is needed to eclipse what has gone before as it has not worked.

Our Government’s answer is Te Pukenga whose focus has been on transition from the Polytechs and industry training organisations. But when is the transformation going to happen? When are the initiatives to be launched to bring back the learners and focus the funding where it can have the most benefit? To be fair these are Te Pukenga’s, the new Workforce Development Councils (WDCs) and the Food and Fibre Centre of Vocational Excellences (CoVEs) laudable goals. One estimate is 10 years for the transformation. That’s too long and to the credit of these new organisations, they are saying 10 years is too long. But today the employer, learners and industry sit in no person’s land and that is not good enough. New Zealand needs faster action. Credit to the Labour Government for making these changes. The acid test will be if the new organisations can deliver.

Immigration:

Year to June 2022 there has been a net loss of permanent and long-term citizens out of New Zealand. The number is 11,500 people leaving New Zealand. This is the lowest net migration loss since the 1990s. Many of these people are the skilled and hardworking people we as a country cannot afford to lose. Our Immigration settings are cast in days gone by with the Government’s focus on driving NZ wages up and forcing the employment of New Zealanders.

The fatal flaw is that there are no New Zealanders that are employable to fill the massive labour and skilled worker shortages. Here are just a couple stats, New Zealand is short:

• 8,000 truck drivers
• 4,000 nurses
• 400 prison staff
• 20,000 construction workers.

Isn’t it time to change our Immigration Policies and adopt the Productivity Commission’s findings that incidentally found that migrants did not take jobs off New Zealanders and do not drive wages down. Time to take the blinkers off and realise that before New Zealand slips into a third world country, we need to change our immigration policies so that they attract the workers and skills New Zealand so urgently needs. And by the way this is not about trying to compete with what Australian’s get paid. It is about making entry to New Zealand and gaining citizenship immediate and hassle free. This would be a complete reverse of what our immigration policies are today.

Work Ethic.

For the remaining New Zealanders that will work even with unemployment around 3% there is the phenomime of “pay day fade”. The Calvinist work ethic of the older generations is an endangered species. There are a number of reasons for this and not the least is the very different world we live in today. Goals and aspirations are different. The work / life balance has swung to life and that it not necessarily a bad thing except where that translates into full timers working only for a few days each week to earn what they need for that week. We now have generations of part time workers which is fine except when there just enough people willing to work. In the future robotics and artificial intelligence may make part-time work a reality. Today that is not the case.

Bureaucracy.

The fourth factor is bureaucracy in overdrive. Every business is struggling for workers and drowning in massive bureaucracy. There is no light at the end of this tunnel just more and more regulation all seemingly for good reason. But the rule of thumb to keep it simple has been lost. There is a whole and rapidly growing new skill set for making the simple complex and then to respond to the complex. Time for a circuit breaker. I ask can the entrenched and complex loving old bureaucracy deliver a new efficient and streamlined governmental system? That it could not make the previous system work is a very questionable way forward.

How can we embrace the future when we are stuck in the past?

It is time for a dramatic change to save New Zealand with new thinking and strategies doubly so because the Reserve Bank predicts we are heading for a recession.

Can we do it before it is too late? Yes, but we, and more particularly the Government, need to act now.