A Struggling System Failing Young People
New Zealand’s apprenticeship system is falling short in providing clear pathways for young people entering the workforce. Only 6% of school leavers pursue apprenticeships, while nearly twice as many—11% of 16- to 19-year-olds—are not engaged in employment, education, or training. A new report from The New Zealand Initiative, Trade Routes: Charting New Pathways from Secondary School to Industry Training, highlights systemic weaknesses and calls for urgent reforms.
The report reveals that vocational education in New Zealand is fragmented, with no structured pathway equivalent to university preparation. “Schools are primarily geared toward university-track education, even though only about one-third of school leavers enrol in degree programmes,” says Dr. Michael Johnston, the report’s author. He argues that New Zealand’s system fails to integrate apprenticeships into mainstream education, leaving many young people without a clear direction.
Johnston points to Germany’s ‘dual training’ apprenticeship system, which, in contrast, sees nearly half of all school leavers enter workplace-based training. Approximately 93% of those trainees graduate, and three-quarters are immediately employed by the companies where they trained. Ultimately, New Zealand’s weak apprenticeship uptake, combined with a high number of young people disengaged from education and work, is indicative of a significant waste of human potential.
The Cultural and Structural Barriers to Apprenticeship Uptake
One of the biggest challenges to apprenticeship growth in New Zealand is a deep-seated cultural bias toward university education. University degrees are widely regarded as the superior pathway, a perception reinforced by parents, teachers, and schools. The secondary school curriculum is designed primarily to prepare students for university, offering little structured support for those interested in vocational training.
Johnston argues that this bias is further embedded by the qualifications system. “The University Entrance qualification illuminates the way to university, but there is no qualification to do the same for trades,” he notes. The report suggests that an equivalent qualification, such as a Certificate of Trades Preparation, could help place vocational training on equal footing with university education.
Another challenge is the lack of coordination between secondary education and industry training. While initiatives such as Trades Academies and the Gateway program provide opportunities for students to gain industry experience, they function as fragmented “add-ons” rather than forming a cohesive pathway. The Trade Routes report suggests that these initiatives should be unified under a single, structured vocational education pathway.
Fixing the System: Recommendations for Reform
The Trade Routes report outlines several key reforms that could improve apprenticeship pathways in New Zealand. Among them is a recommendation to restructure Workforce Development Councils, which currently oversee standard-setting for industry training. The report suggests that Workforce Development Councils should be reconstituted with members elected by industry bodies rather than appointed by government ministers. This would increase their accountability and ensure that vocational education aligns with employer needs.
Another recommendation is to establish cooperative arrangements between secondary schools, allowing them to specialise in different educational pathways. This would mean that some schools could focus on university preparation while others develop strong vocational training programs. Johnston believes this approach could help normalise apprenticeships as a mainstream option rather than a fallback for students who struggle academically.
BusinessNZ has also voiced support for greater investment in apprenticeship training. Chief Executive Phil O’Reilly has praised the government’s efforts to boost funding and incentives for apprenticeships. However, he warns that “higher educational content will need to complement – not replace – practical elements of the training.” Employers, he argues, need a system that produces well-prepared apprentices with hands-on experience.
New Policy Changes Targeting Apprenticeship Completion
The government has introduced two major policy changes for 2025 that could impact apprenticeship retention and completion rates.
First, changes to the Fees Free program will shift funding from the first year of study to the final year of training. Under the new system, apprentices who have not previously used Fees Free funding may have their last year of study covered, with fees reimbursed up to $12,000 upon completion. This adjustment is aimed at reducing dropout rates and ensuring more apprentices reach qualification.
Second, the Apprenticeship Boost program will be refocused on first-year apprentices in high-demand sectors. From January 2025, employer subsidies will only be available for apprentices in industries deemed crucial to New Zealand’s economic growth, including construction, engineering, agriculture, and food production. While some see this targeted funding as a positive step, critics warn that it could leave other industries struggling to attract apprentices.
Could New Zealand Adapt the German Model?
Germany’s dual training apprenticeship system is frequently cited as a model of success, with half of all school leavers entering workplace-based training. The program combines structured classroom learning with paid, on-the-job training, ensuring that apprentices develop industry-specific skills while gaining practical experience.
Johnston acknowledges that fully replicating Germany’s system in New Zealand is neither politically nor culturally realistic. However, he believes key elements—such as closer industry-school collaboration, a clear apprenticeship qualification, and stronger financial support—could be successfully adapted to the New Zealand context.
One potential model for reform comes from Australia’s ‘Busy Schools’ initiative, which helps students transition into the workforce. Busy Schools provides work-readiness education, part-time internships, and structured pathways into apprenticeships. Johnston suggests that a similar approach in New Zealand, possibly through the 2025 charter school initiative, could provide clearer routes into vocational training.
The Economic and Social Benefits of a Strong Apprenticeship System
Expanding and strengthening apprenticeships would not only benefit young people but also address pressing economic challenges. New Zealand faces ongoing skills shortages in key industries such as construction, manufacturing, and agriculture. A more robust apprenticeship system would help fill these gaps while reducing youth unemployment.
Furthermore, apprenticeships offer young people a financially viable alternative to university study. Unlike university students, who often accumulate significant debt, apprentices can earn while they learn, gaining work experience without taking on student loans. This makes apprenticeships particularly attractive for hands-on learners and those who struggle in traditional academic settings.
A stronger apprenticeship system would also improve industry engagement in education. Employers who are directly involved in training programs can ensure that graduates possess the skills needed in the workforce. This reduces the mismatch between education and industry needs, leading to better employment outcomes.
The Path Forward
Addressing New Zealand’s apprenticeship gap will require coordinated action from government, schools, and industry leaders. Education policy must shift to place apprenticeships on an equal footing with university education. Schools must promote vocational pathways as a respected and viable option for students. Employers must be given incentives to take on apprentices and invest in training programs.
Johnston believes that systemic reform is necessary to change the perception of apprenticeships. “If clearer pathways from school to industry training were established as a serious option for all students, esteem for industry training would gradually improve,” he argues.
With recent policy changes and growing pressure for reform, the opportunity to reshape New Zealand’s apprenticeship system is now.