I am familiar with Palmerston North having worked here some 40 years ago when the train ran through the main street.

I'd like to take up cudgels with Vivian. I wish you to put aside what Mr Rifkin has said because you must not go to your discussion groups weighed down and misled by his view. We need a view of the here and now of what we can do in Palmerston North.

Let me say what we can do in New Zealand.

I have a passion about young people getting jobs and getting people to train effectively for their future long term life and satisfaction.

Can I say to you that apprenticeship and taking on young people is still a great challenge today, it is effective, it's got a future, and I will tell you in New Zealand, 95% of our employers have less than 15 people. Now those employers are not going to be hit by Mr Rifkin. Those are the employers you need to work with to increase their staff by one, and you have solved a lot of the problems.

Secondly, can anyone tell me of a skilled person that is unemployed at this time? (several raise their hands) Specific trades - yes. Are they numerous? Have you seen a lot of skilled people short of an opportunity, or thinking of going to Australia, overseas?

Let's take a look at what Ireland did a few years ago. Ireland suffered dreadfully in the European scene so they put all their efforts into training their people and what have they got today - a tremendous, vibrant economy because the companies came from overseas and challenged their workforce who were skilled.

We shall have to skill our workforce if we want future employment from overseas. There is one good example from Auckland. The Ford motor company is expanding the wheel plant. The thing that finally got it was the ability to prove we could provide skilled labour. Now, it was either that or they would have been enticed across the Tasman by high incentives by the local community in Victoria or South Australia.

A skilled workforce is absolutely vital for the long future haul of New Zealand to have employment of the local nature and the broader international nature.

We have a wonderful opportunity today with a new system of recognising skills. Examinations have gone.

How many of you know anything about the Framework system for skills training - Quite a number. Have you really seen the benefits of it yet? Yes and No! I personally believe it’s the only future, we are committed to it, we've got to make it work and the problems are not insurmountable.

There are currently somewhere between 80,000 and 90,000 trainees hooked on the Framework according to the ETSA figures last week from Rick Julian when he was at the Youth Skills Competitions. They are a fraction of what we should have. Of the engineering industry and food manufacturing ITOs with which I was involved they had 4500 trainees last year up to about 5000 now and of those 2500 approximately were apprentices, the other 2000 were older people who are going to be recognised with a certificate based on their current competencies.

Now the new system allows you to recognise those workers who've never had a certificate in their life, they've got all the skills of trained people and what a tremendous thing it is to empower them with a certificate. They can then say I've got my ticket to practice.

I was fortunate and went to university and did engineering. My certificate is a ticket to practice in engineering. It is no different with trades in my view. They need certificates of competency and it can be achieved today. I urge you all to have a very good look at what's possible under the new Framework system.

Let me say to you, under the examination system you used to say 50% fail, 50% pass. Now when I got on the plane this morning I thought, if this pilot was under the examination system and if he passed by 50% I wonder whether that 50% was to fly the plane up or to fly the plane down. I know what I'd like; I'd like recognition of current competency to do both.

Simply, I appeal to you please, to understand the opportunity in the education system. We may have 25-30 % of our young people going to polytechs or universities; what's happening to the other 70% that leave school? It used to be that 35% or so entered into the trade's skills, 39 trades, which are being replaced by new ones.

Let me express my own experience. I've had 40 years in the fire protection industry. We were hooked in as other trades into the metal trades award and we used to have a terrible problem with the union limiting us doing anything about it, but today, the new system of skills training for the industry is now on the Framework, it's now moving and we've enrolled500 out of 1500 employees in the industry who are either completing or learning from scratch a skill in fire protection engineering, in fire alarms, sprinklers or fire alarm or fire extinguisher servicing. Now that's what the opportunity is. We've got all sorts of other types.

Last week we had 25 schools at the competitions For Youth Skills New Zealand and among those were demonstration trades, one of them in the security industry. Now when you get someone come in and he is already skilled, he knows what he is doing, so we encourage them to come in and show they can do the job. They have their training system on the Framework. So there are all sorts of opportunities opening in a multiple of vocations, which was not possible previously. Please don't think of apprenticeships and traineeships in the narrow confines we had ten years ago. It's very much broader. Therefore it empowers you folk who are working with young people to say, "what do you want to do? Have a look round." There is a lot more opportunities.

And I issue a challenge to Massey University - what's happened to the concept of aptitude measurement? Fifteen to 20 years ago I was working in New Lynn at the tool-making industry, used aptitude testing for hiring of the staff that

I was going to make into toolmakers. One company took six on - they measured those through their period, the aptitude testing said that a. would stay as a worker on the bench, b. would want to be a foreman, c. would work for them then he would go overseas and he'd do something else but he'd probably go into his own business, and as it worked out the whole six of them measured at the end of their training exactly that way. You can find out what people are good at.

I wonder what's happened at the universities in terms of getting to grips with our real employment problem, and I say this as a challenge, because we have all the theories going on but we don't seem to be able to work at the coal face to identify how we can help people to assemble their own thinking and identify what they really wish to do.

I know we all wanted to drive fire engines or drive the railway engines or we wanted to drive cars. If you can build on that sort of thinking when they are young and if you can capture their stream of thought and get them into an occupation that world is still very open and our system of education now for qualifications is very positive.

Let me move on quickly to say that out of this there is a challenge for Palmerston North to enter into what I call "group apprenticeship training". The engineering and food manufacturing ITO has endorsed this as a positive policy. In this document (the Background papers) there is a section on the Engineering Trust. That's the second group that's been set up.

Let me talk about the Electrical Training Company set up by ECAD, the electrical contractors association and the union. They employ 125 to 150 apprentices throughout New Zealand, North Cape to the Bluff. They have kept the electrical trades supplied, the one man businesses that come and service your house, supplied with apprentices, because they take all the hassle out of managing their work plus managing their odd job, attendance at block courses, they manage the ACC, their holiday pay, all those things are handled by the Trust. The Trust employs them and they hire them on to an employer for six months at a time. Now there are a lot of benefits in that. If the employer has only got six months work, he knows he can send him back to the Trust and he'll get another job. If he's incompatible, the employer can say, "I'll keep him for six months then I'll try someone else and find a compatible person."

There are a number of real opportunities in the group apprenticeship system. In Australia there are 18,000 apprentices on group apprenticeship training. In Western Australia, a man over recently talking to the manufacturers in Auckland confirmed that you need to get equipped with this and manage it. If you scale up in terms of the cost structure in the book, after about 35 apprentices you can afford to have one person managing. You can pay a salary. What's happened in the Auckland Trust and it works over in New Plymouth and also in Hawkes Bay, in Auckland now, the manager is an ex tutor at the Polytech and because over night AIT and Waikato Polytech cancelled all night classes the tutors who were left without any students said "I'll come down to Hamilton once a week, you come in for tutorials and I'll help you with your assignments." There is a lot of flexibility . So if you've got a Trust manager who is pro-active he will help young students much more so than ever was possible under the old system.

I challenge Palmerston North to seriously put together a group that will sponsor group apprenticeship. Now my personal view is - you don’t have to do it by single discipline, the principles are the same whether you are in engineering, or motor mechanic or spray painter or doing textile work or other things. In my view there is a challenge for one group to effectively manage a broad range of apprenticeships. I leave that as the challenge for you.

I'd like to talk briefly about an experience I've been involved in and that's encouraging young people who want to get into business.

The key thing here is venture capital money. For people starting in business or to stay in business this is very hard to find. I am talking about a fund which started with some money available through the Auckland Methodist Mission. They said to a group of us, "What can you do about unemployment? Here is $330,000." We set to, we made a very simple big decision, we would try and use that money to leverage employment. We were not going to throw it at employment directly, we decided we were going to recycle the money. We've had further substantial funds and we now have a capital of $430,000 and we've lent $500,000 in five years.

What we've done is said to the companies, we will finance you for three years, we want the money back, we'll charge you 8% interest. The interest income we've earned has paid for our losses which are about 12.5% of the projects. We've supported over 90 projects in Auckland and Northland and remember Northland is supposed to be the hardest place in New Zealand to get employment going, we've had some very good successes.

Our average loan is of the order of $10,000 per project. We're not throwing big chunks of money at it and in fact we often find that by getting in there and talking through with the people concerned and with the facts that they don't or wont need big amounts of money, they just need to manage it better. We offer a mentoring service.

A key part here is that our part-time manager is on 30 hours a week. He is always available on the phone, he keeps in contact with the people we're supporting and he keeps a regular check of what they are doing.

We now have a single page that tells us the debtors and creditors, the stock, and their sales. We can tell if they are making money or they are going down the tubes. You can do it once a week, once a month and you can monitor and mentor it very simply.

I think there are too many of these schemes that do not manage the system because what you tend to do is put people into a situation where they have got to jack of all trades and manage everything. They very often haven't got the skills to be the accountant, the human resources person, the manager and the key person who does the job. So you are trying to get them to accept support from various places and understand they concentrate on their speciality. That's the key to it. Mentoring is absolutely vital; that type of support in the ventures we have supported over the period.

These people are in full-time employment that the government hasn't paid a $ for and from which the government has got taxes, so there are real benefits if you can make this work.

The most rewarding probably are those businesses that are already running and need further funding. After the first year a lot of people get into trouble because they want to expand and they haven't got the where-with-all to do this. We have often moved in and given them a few $000 to help them through that step and the number of employees that they can take on always pays us back in terms of results.

Its surprising where there are hidden funds. We've just unlocked a fund that's been sitting dormant and after next week was going back into the consolidated fund, for $75,000, which will help us no end. I know in Northland there's a big fund arising out of the port trust. We've started to access it for this purpose. The management were tied by their legalese and their own constraints and were not prepared to get into taking on venture capital work. We've done it and we've had some great and interesting successes.

For example: Phoenix foods - a staff of 3 went to 15, now to 25, over 4 years. Also, a group of Russian immigrants, very highly qualified, are collecting honey dew and bee stings for export. They employ three full-time and several part-timers.

It's been a most rewarding opportunity. We are prepared to offer our experience as a whole to anyone that wishes to pick it up.