New Zealand's apprenticeship system is in for a major shakeup after evidence that only a fraction of young people are starting apprenticeships, and most who start drop out.

A damning report by the Mayors' Taskforce for Jobs, representing 68 of the country's 73 mayors, has found the modern apprenticeship system is dogged by dysfunction and tension between industry training organisations and other apprenticeship coordinators.

An OECD report says apprenticeships have become "a prestige pathway limited to a chosen few", reaching only 4.2 per cent of Pakeha in the target 16 to 21 age group, 2.9 per cent of young Maori and 1.3 per cent of Pacific youth.

Only 12 per cent of the 12,933 apprentices are female. Even among those who started apprenticeships in 2002, only 41 per cent of Pakeha, 34 per cent of Pacific and just 27 per cent of Maori completed their apprenticeships within six years - much longer than the expected three to four years.

Otorohanga Mayor Dale Williams, who chairs the mayors' taskforce, said the flagship programme started by the Labour Government was failing to give apprentices on-the-spot support that many needed to cope with book work and personal issues in their lives.

Many modern apprenticeship co-ordinators, who are supposed to provide such support, are based far away and are obliged to visit only every three months.

"It's a tick in the box and the cheque comes," Mr Williams said."How the hell can you provide intensive support to a struggling apprentice 200km away with a phone call every three months? The short answer is: you can't."

The mayors want to change the criteria for appointing co-ordinators to ensure they will be good mentors for young people and to give them targets for the percentage of apprentices actually completing their apprenticeships.

New Tertiary Education Minister Steven Joyce has agreed to meet the mayors in the next fortnight and said he agreed with the principle of performance-based funding.

He said the Tertiary Education Commission was reviewing all industry training and was about to finish "a completion study on the success factors for modern apprenticeships".

"Probably the one important thing is to get some sort of performance funding component into the system."

Business NZ chief executive Phil O'Reilly said low completion rates were a problem across the whole tertiary education and training sector.

The mayors' taskforce represents all the country's mayors except Wayne Brown (Far North), John Banks (Auckland), Stuart Crosby (Tauranga), Michael Laws (Wanganui) and the Chatham Islands mayor.


The "nine-day fortnight" scheme launched after Prime Minister John Key's Job Summit a year ago today has saved 623 jobs in its first year.

The scheme pays a minimum-wage subsidy for up to five hours a fortnight per worker for six months to employers who cut working hours by at least 10 hours a fortnight, on condition that they save jobs that would otherwise have been lost.

Social Development Minister Paula Bennett said 50 employers had taken up the scheme so far, receiving subsidies for 4092 workers to save 623 jobs that would have gone otherwise.

Most of the jobs - 509 out of 623 - were saved in the scheme's first five months up to last July. Use of the scheme has tailed off but it remains open to new employers until June 30.