Attention politicians: We need more skills

Politicians who will form the next Government after the September 17 election are being urged to treat the skills shortage as an emergency.

The Herald's survey rates the shortage as the factor which most concerns chief executives in their workplaces.

Business New Zealand chief executive Phil O'Reilly - whose nationwide organisation represents many SMEs as well as larger employers - says it gets top billing because it "is in everybody's face".

"The political parties need to recognise there is an emergency on right now and that more trade training is absolutely critical.

"They have to move quickly to retain the confidence of businesses and workers, [convince them] they don't have to export jobs and there is a future for them here."

Rural Portfolio Investments chairman Craig Norgate says that focus should extend to the widening gap in living standards between New Zealand and Australia.

"You can forget about the 'rest of the OECD' and start thinking about the reality that we're not a European country - we're not the States.

"The area of the world that most people identify with is right next door to them because that's where all the next door neighbours are heading."

NZ Business Roundtable executive director Roger Kerr points to complex reasons behind the skill shortage and suggests it cannot be addressed in isolation from other growth policies such as lower taxes and less business regulation.

The Labour Government might have been slow to address training issues, maintains O'Reilly, but what is happening now is positive.

"They've got engaged in workplace productivity and skills are a key issue there."

"But they have ignored so far many of the other kinds of productivity issues such as the tax regime ... they've done a little bit in depreciation and made a start on infrastructure."

Unions - which are waging a campaign for five per cent pay increases - are restive that the big end of town has been slow to concede that companies will have to pay more to keep staff if they are not to shift and take advantage of better take-home pay in Australia.

A meat industry chief executive agrees that pay rates need to rise as "people need more money in their hand to attract immigrants and halt the flow of young people overseas"

Business NZ has campaigned vigorously to get the political parties to make a commitment to tackle skills and productivity issues.

O'Reilly said many have issued useful policies - particularly Economic Minister Jim Anderton's Progressives party.

Anderton has pledged to double the number of people in apprenticeships and industry training by 2007 and offer scholarships for areas identified in "skills shortage stocktakes".

Labour proposes 5000 more Modern Apprenticeship places.

Its potential coalition partner, the Greens, also want to encourage women, Maori and Pacific Islanders to train in industries in which they are under-represented.

United Future wants to increase apprentice numbers and NZ First plans a "community wage" pay top-up.

"We really need to get over the bias against apprenticeships," said O'Reilly.

"When I go down to the beach on Saturday morning, the biggest boats on the ramps belong to carpenters and plumbers."

National has yet to release its policy. But it says it will liberalise employment laws and raise the funding cap for industry training. Act says lowering taxes will lift relative wages.

Deloitte chairman Nick Main says professional firms are also being squeezed by the size of the available pool of skilled and talented people to help us serve clients.

Main is concerned the situation will be exacerbated by falling immigration figures and an ageing workforce.

Employers & Manufacturers (Northern) chief executive Alasdair Thompson said one of Auckland's biggest employers has suggested the new Government should allow companies to form clusters and be authorised by Immigration NZ to recruit overseas people with needed skills and take the paperwork through to a certain stage so approvals can be fast-tracked.

Increasing the number of immigrants with good English skills is a priority for 95 per cent of business leaders surveyed.

But, warns Thompson, do not forget the fact that some one in five New Zealanders are leaving the education system without achieving competency in literacy and numeracy.

"It's like any manufacturing system, if you are turning out defects you have got to look to the reason why and request them to change their methods."