Over the last few years, I have written about the need for business, government, and educational institutions to come together to address NZ’s productivity crisis.

Recent actions by government show the extent of the work to be done. Funding has been cut for trade training and apprenticeship funding (TTAF) and fees free funding is nigh on impossible to access if you have ever done any level 3 or above training or a degree anywhere.

These funds have now been redirected to universities to help with their funding gaps due to lower overseas enrolments etc. Whilst I understand the need to support institutions through this post covid period as they re-establish their new reality and business models it should not be at the expense of training and developing our future leaders in productivity!

It is instructive to note that the UK is funding productivity training directly and reviewing university funding based on contribution to the economy.

Of course, this creates arguments about how you value this, but the UK is clearly prioritising the need to build capability to ensure they can be more productive and competitive in future. They have stiff competitors, Ireland is setting new benchmarks, Brexit has challenged traditional relationships.

It could be argued this is not relevant to NZ so for a more local comparison, Australia. On a per head basis, they train twice as many people in post graduates diplomas as we do!

Over 15 years ago the UK drove the adoption of lean as a key strategy of Highways England, with documented savings as an outcome. Over the last few years, they have delivered significant projects on time and on budget with billions of pounds of savings.

The key point to this is government and the public sector demonstrating the application of “best practice” and requiring it in their major spends. This has driven adoption of best practice and lean construction throughout the contracting industry.

As we face into large infrastructure investment, surely, we would do the same thing?

It was both encouraging and disappointing to read the latest activities in central and local (Auckland) government with the desire to adopt fiscal review committees to ensure all proposed spending was appropriate and properly challenged.

This is good governance and great to see this direction; of course, disappointing this wasn’t being done before (else why introduce it?). However why couldn’t we go a further step and challenge all significant spends to adopt best practice, with set goals and approaches and savings targets?

This would drive the investment in better practice, be self funding and show the leadership we need.

The question I have is why have we not done this? What does it take to get proven methods and practices adopted as cornerstone methodologies, to prove to taxpayers and ratepayers that our elected representatives are driving best value for our dollars.

Our current political leaders inherited this situation yet have not addressed it. It is a thirty-year failure, and we now lag the world by 20 years. I can only assume that this has not been done through either lack of awareness or a political system that is too hard to work through and not enough key people aligned with the will and drive to get through it.

This is the time to be brave, we need our elected representatives to stand up and lead the nation in up-skilling in productivity, applying these approaches to key government and local government institutions and driving change.

They must follow the path proven not only overseas but by leading companies such as Fisher and Paykel in NZ and helping us assure our future prosperity.

Ian Walsh

Partner, New Zealand

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