Skills Group has published a white paper arguing that apprenticeships deserve the same funding, status and student support as a university degree. On parity, it is right. But a qualification label does not cover the hours a senior electrician spends watching a 19-year-old wire a switchboard. That cost sits with employers, and the state’s contribution to it keeps shrinking.
The parity case is hard to argue with
Josh Williams, head of consulting at Skills Group, told RNZ that funding all apprenticeships only up to level 4 of the Qualifications Framework is outdated. Level 4 sits one step above school-leaver standard. Williams argues many trades, judged on real skill and professional responsibility, sit closer to level 6 or 7. He points to Scotland, which delivers bachelor’s degrees through apprenticeships, and to Singapore and Australia treating skills rather than qualification levels as the currency of workplace training.
He also makes an efficiency point business owners will recognise. More than half of construction apprentices already come from elsewhere in the industry, yet the system makes them restart a full qualification instead of crediting what they already know.
The urgency is in the numbers. Ministry of Education data behind the paper shows total apprenticeship numbers fell 14 percent between 2024 and 2025, while new entrants fell 24 percent. Five-year completion rates have slid from 54 percent for the 2016 cohort to 40 percent for those who started in 2021.
The bill nobody wants to name
The white paper does call for incentives for employers who recruit, train and support apprentices through to completion. It is one line among many, and it deserves to be the headline.
Peter Couchman, general manager of Seven Electrical, called the recommendations “on the money”. His firm already pays apprentices above the adult minimum wage because of Wellington living costs. That is a business absorbing a cost the system does not acknowledge.
The main tool for offsetting it, Apprenticeship Boost, has gone one way. It launched in 2020 as an uncapped subsidy, was halved to $500 a month, capped at 24 months, and from January 2025 restricted to first-year apprentices for a maximum of 12 months. The effect is visible. Learners supported fell from 25,725 in 2023/24 to 17,355 in 2024/25, and commencements dropped from 14,915 to 11,660, partly due to the construction downturn.
Tellingly, the completion rate for those still supported rose to 85.7 percent. Support works when it is there. The cuts simply mean fewer people get it.
Treasury is heading the other way
In March 2026, Treasury officials modelled a hard cut-off to the Final-Year Fees Free scheme from the end of this year, saving $300.6 million a year. The same paper described Apprenticeship Boost as suffering “limited uptake and consistent underspends”. That reads less like a case for expansion than a justification for the next trim.
Fiscal restraint is defensible. Cutting a programme with an 85.7 percent completion rate while complaining about a skills shortage is not restraint, it is false economy.
Employers are already paying, and they know it
Businesses have flagged this before. In 2025 the EMA told MPs that “businesses already make a substantial investment in staff training”, and warned that more compulsory levies would deepen employer disengagement and mistrust of vocational education. It also proposed letting employers recover training costs from apprentices who leave early.
Skills Group itself was blunter in a 2025 submission, arguing that “without direct government support mechanisms, employers lack sufficient incentive” to train school leavers. It proposed topping up young apprentices’ wages to the minimum, modelled on Australia. That idea belongs at the centre of this new paper, not the margins.
The culture problem is real too
Parity still matters. A 2025 report found only about 6 percent of school-leavers went straight into workplace training, against roughly half in Germany. Couchman thinks a degree-equivalent pathway would change the conversation at the kitchen table, and notes trades look comparatively insulated from AI disruption. That is a recruiting pitch the sector should use hard.
Pay for completions, not paperwork
The smart fix is not another levy or an uncapped Covid-style handout. It is targeted, outcome-linked funding: pay employers when apprentices reach competency milestones and complete, credit prior skills so nobody wastes two years relearning basics, and give employers a fair clawback when trained staff walk early.
Budget 2027 is the next test. If the government wants more tradespeople building houses and fixing pipes, it has to stop treating workplace training as a favour business does for the country free of charge. Rebadge apprenticeships as degrees by all means. Then fund them like it.
Sources
- RNZ: Apprenticeships should be offered at same level as degrees – training provider (2026-10-12)
- Waatea News: Apprenticeship Shake-Up: Calls for Degrees, Student Loans and Better Support as Training Numbers Plunge (2026-10-12)
- Tertiary Education Commission: Apprenticeship Boost (2026-03-30)
- Treasury: Aide Memoire T2026/511 – Options for Fees Free and Support for Apprentices and Trades Training at Budget 2026 (2026-03-19)
- EMA: Submission on the Education and Training (Vocational Education and Training System) Amendment Bill (2025-06-01)
- Skills Group: Proposal to Replace NCEA with New National Qualifications (2025-09-01)
- RNZ: Report calls for a trades entrance qualification to rival University Entrance (2025-03-19)
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