Boat Industry Training Market Analysis
and Conceptual Model
Strategy for recreational boat manufacturing training in Victoria
August 2013
Report to the Department of Education and Early Childhood Development
Allen Consulting Group Pty Ltd
ACN 007 061 930, ABN 52 007 061 930
Melbourne
Level 9, 60 Collins St
Melbourne VIC 3000
Telephone: (61-3) 8650 6000
Facsimile: (61-3) 9654 6363
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Sydney NSW 2000
Telephone: (61-2) 8272 5100
Facsimile: (61-2) 9247 2455
Canberra
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Canberra ACT 2600
GPO Box 418, Canberra ACT 2601
Telephone: (61-2) 6204 6500
Facsimile: (61-2) 6230 0149
Online
Email: info@allenconsult.com.au
Website: www.allenconsult.com.au
Suggested citation for this report:
Allen Consulting Group 2013, Boat industry training market analysis and conceptual model,
Report to the Department of Education and Early Childhood Development, Melbourne.
Disclaimer:
While the Allen Consulting Group endeavours to provide reliable analysis and believes the
material it presents is accurate, it will not be liable for any claim by any party acting on such
information.
© Allen Consulting Group 2013
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ii
Contents
Executive summary
v
Project overview
v
Skills needs of the boat building sector
v
Issues with the boat building apprenticeship in its current form
vii
A long-term vision for meeting the skills needs of the Victorian boat building
industry
viii
Redesign of the boat building qualification
ix
Chapter 1
1
Project overview
1
1.1 Background
1
1.2 Methodology
1
Chapter 2
3
Overview of the boat building sector in Victoria
3
2.1 Market structure
3
2.2 Product segments
4
2.3 Product demand
5
2.4 International competition
6
Chapter 3
8
The specific skills needs and current training delivery in the boat
building sector
8
3.1 The qualification: The Certificate III in Marine Craft Construction
8
3.2 Operational practice, skills requirements and the value of the Certificate
III in Marine Craft Construction apprenticeship
10
3.3 Diverse training requirements across the boating industry
12
3.4 Training delivery in Victoria
13
3.5 Issues with the boat building apprenticeship in its current form
15
3.6 Lessons from the New Zealand model of boat building training
17
Chapter 4
19
Options to meet the training needs of Victorian boat builders in the
short-term
19
4.1 Approach to development of options
19
4.2 Options for the short term: Alternative curriculum and delivery models 21
Chapter 5
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23
iii
A long-term vision for meeting the skills needs of the Victorian boat
building industry
5.1 Long-term considerations
23
5.2 A long-term vision for meeting the skills needs of the Victorian boat
building industry
23
5.3 Redesign of the boat building qualification
25
Appendix A
28
Conceptual model for analysing thin markets
28
A.1 Conceptual model
28
A.2 Training market analysis
30
Appendix B
32
The boat building training system in New Zealand
32
B.1 NZ Marine industry
32
B.2 NZ training system
32
B.3 The boat building apprenticeship system
32
B.4 Pre-apprenticeship courses
33
B.5 Lessons for Victoria
33
Appendix C
34
Stakeholders consulted
34
Appendix D
36
Units in the Certificate III in Marine Craft Construction
36
D.1 Core units
36
5.4 Elective units
37
5.5 Other elective units
38
References
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39
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Executive summary
Project overview
The Allen Consulting Group was commissioned to examine the Victorian market
for recreational boat building training and develop a model for the continuation of
such training in Victoria.
Victoria University, the only RTO in Victoria approved to deliver the Certificate III
in Marine Craft Construction, ceased delivery training in 2012. In recent years
Victorian University had struggled to maintain training in this area due to falling
enrolment numbers and high course costs. The Boating Industry Association of
Victoria (BIAV) and employers are concerned that a lack of boat building training
will lead to a skills shortage in the industry.
This project comprised three stages as follows:

analysis of data on the boat building industry and trends in training provision,
and a literature review of training in thin markets and boat building training in
other countries;

consultation with employers, the BIAV, training providers across Australia and
relevant New Zealand organisations regarding the likely demand for training,
and the viability, content and delivery of options for boat building training; and

development of training options based on a desktop analysis and consultations,
including high level business cases for each option to examine the financial
viability of different courses and delivery models.
Skills needs of the boat building sector
Recreational boat building businesses in Victoria have a range of operational
practices and processes in place with significant variation from firm to firm. Skills
requirements in the industry vary according to:


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Manufacturing setup and scale:
–
manufacturers that have adopted small-scale production line processes or
batch manufacturing processes prefer to employ apprentices or experienced
workers who are competent in working in a particular process or in a
specialised trade;
–
larger manufacturers compete mostly on volume and price, and normally
have a production line setup, with each worker specialising even more
narrowly in a small part of the manufacturing process;
Construction materials used — most businesses tend to specialise in a small
number of product designs based on a single construction material — typically
either steel, aluminum or fiberglass and as a result, most manufacturers tend to
require workers to are competent in working with just one material;
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL

Firm-specific equipment and processes — businesses tend to have firm-specific
fabrication processes and production methods, which often embody the design
philosophy, differentiation and innovation of the individual product or
company;

Pathways into a broad and long-term career in the marine sector — some
businesses suggest that the apprenticeship has suffered from low numbers of
enrolments due to the narrowness of the career opportunities to which the
qualification is geared;

The need to compete in the international boat markets — many firms agreed
that skills would continue to be a critical area of competitive advantage for the
Victorian boat building industry with skills required in:

–
quality workmanship whilst improving operational efficiency and
competitiveness;
–
the area of research and development and product development and design
to ensure constant innovation and product differentiation; and
–
adaptability and versatility to support bespoke products and higher degrees
of product customisation;
The diverse needs of the domestic repair sector — the repair sector requires a
wide breadth of technical skills across all materials and boat sizes.
The diversity of the skills requirements of the boating industry is summarised in
Figure ES1.1 below. The skills requirements of the industry outlined above
provides a clear explanation for the long-standing low levels of enrolments in the
Certificate III in Marine Craft Construction in Victoria.
Figure ES 1.1
MAP OF TRAINING REQUIREMENTS ACROSS THE BOATING INDUSTRY
Source: Allen Consulting Group
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Issues with the boat building apprenticeship in its current form
Following Victoria University’s cessation of provision, four RTOs deliver the
Certificate III around Australia (the Hunter Institute, recently ceased provision in
regional New South Wales.) All four current training providers are experiencing
similar issues with falling student numbers.
The issues relating to the boat building apprenticeship in its current form can be
summarised in three categories:

the industry-specific challenges that are being faced across the boat building
industry — recent falls in local and international demand for recreational
vessels in a time of weak global economic conditions, growing international
competition and the move towards production line and batch production
methods suggests that a declining proportion of firms will consider the
traditional boat building trade to be the qualification that best fits their needs;

issues specific to the Certificate III qualification as it is currently designed —
the Training Package rules are restrictive and often not aligned to the
contemporary work practices and production processes of firms; and

broader issues which underpin the declining popularity of apprenticeships in
many other sectors and trades — consistent with the experience in other
industries, the broader issues with the traditional apprenticeship model include:
–
declining support for a ‘contract of training’ approach due to the
inflexibility and high commitment required from the perspective of
employers;
–
the administration and management costs of having an apprenticeship;
–
issues with the length and timing of block release requirements, which can
adversely impact on production schedules and delivery deadlines;
–
challenges around the retention of apprentices;
–
issues around the work readiness of apprentices, particularly young
apprentices, and the difficulties in identifying suitable candidates;
–
a general move towards workforce development through non-formal
training and on-the-job learning delivered within the organisation rather
than formal education and training delivered by third party providers.
Options identified
Based on stakeholder consultations, and research and analysis undertaken around
the possible variations in the course/curriculum content and the training delivery
model, five options have been identified as potential alternatives to the delivery of
the Certificate III in Marine Craft Construction previously offered by Victoria
University.
The options identified represents a subset of a wider range of options considered
and tested through the consultations with stakeholders and internal analysis. The
primary reasons for omitting the other options from the shortlist were twofold: there
is a long expected lead time to establishing these options as viable solutions; and
there is at present a lack of strong training provider interest in these options.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
The shortlist of options is as follows:

Option 1: Delivery of the Certificate III in Marine Craft Construction by a
Victorian TAFE institute

Option 2: Delivery of the Certificate III in Marine Craft Construction by an
interstate TAFE institute

Option 3: Alternative trade training programs in relevant areas by a Victorian
TAFE institute or private RTO

Option 4: Work- and campus-based delivery by a TAFE institute/RTO of an
alternative trade training program with some specialisation in marine craft
construction

Option 5: Overseas delivery of the New Zealand National Certificate in Boat
Building
A long-term vision for meeting the skills needs of the Victorian boat
building industry
In the future, the boat building industry can expect to see a shift away from the
prescription of one or two courses as the primary qualifications for the sector and
see the emergence of more highly customised provision which is characterised by:

the ability for employers and employees to select from a broad menu of relevant
courses and qualifications at different levels;

work-based training and assessment and other innovations in delivery which
meet the needs of businesses with minimal disruptions to ongoing operations;
and

concurrent delivery of technical and generic skills across all employees within a
given firm including in business administration (such as book-keeping and
compliance), management (including front-line management), environmental
sustainability, and lean and competitive manufacturing.
The issues regarding the long-term sustainability of delivery of any given course
could be obviated in a market where RTOs leverage training of boat building into
other occupations and skills sets in a firm and across the sector.
While the long-term delivery of a holistic boat building provision will continue to
be important to the sector, this is likely to be delivered interstate or overseas.
Building on the map of training requirements across the boating industry, Figure
ES1.2 illustrates how the preferred training options identified in the analysis above
will meet those training needs.
The BIAV could support the evolution and emergence of such a model by
promoting investment by firms in training and on-going professional development
across a wide range of areas as a point of competitive advantage for the industry.
The BIAV could go a step further by playing a facilitative role in the development
of customised training programs for individual member organisations or industry
clusters with similar training needs, and reputable and innovative RTOs.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Figure ES 1.2
MAP OF TRAINING REQUIREMENTS ACROSS THE BOATING INDUSTRY AND PREFERRED TRAINING OPTIONS
Source: Allen Consulting Group
Redesign of the boat building qualification
In the long-run, the redesign of the Certificate III in Marine Craft Construction is a
key underpinning step towards a more dynamic and sustainable training delivery
model. The inflexibility of the existing training package restricts the ability of
RTOs to tailor courses that are more responsive to the specific needs of individual
employers and raises the cost of delivery by requiring highly skilled trainers and
access to teaching infrastructure across a large number of areas.
Manufacturing Skills Australia (MSA) is currently undertaking a full review of the
Metal and Engineering Training Package, which the Certificate III in Marine Craft
Construction falls under. The review is due to be completed in early 2014.
As part of the review MSA could modify and extend the qualification to allow for:
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
a stronger pre-apprenticeships pathway — pre-apprenticeships can present an
opportunity to increase the interest, enrolment and completion of courses in a
particular trade and (not withstanding the differences in the apprenticeship
model) in New Zealand, it is a significant and critical foundational component
of the National Certificate in Boat Building; and

a marine craft construction traineeship — as recommended by one provider
(Challenger Institute), the introduction of a traineeship model for marine craft
construction could present a more sustainable alternative pathway into the
industry. A traineeship model would involve the development on a simplified
version of the current apprenticeship training package, with less focus on the
breadth of technical units of competency and less onerous requirements for
block release (if any).
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Given its strong international reputation, the redesign of the marine craft
construction should draw on New Zealand Certificate in Boat Building. It was
reported that the New Zealand Certificate in Boat Building has been licensed to the
Canadian state of Nova Scotia, demonstrating the international currency of the
qualification. The option of licensing part (or all) of the New Zealand training
model could be explored further as part of the redesign process.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Chapter 1
Project overview
1.1
Background
The Allen Consulting Group was commissioned to examine the Victorian market
for recreational boat building training and develop a model for the continuation of
such training in Victoria. The project was undertaken for the High Education and
Skills Group (HESG) of the Department of Education and Early Childhood
Education (DEECD).
Victoria University, the only RTO in Victoria approved to deliver the Certificate III
in Marine Craft Construction, ceased delivery training in 2012. In recent years
Victorian University had struggled to maintain training in this area due to falling
enrolment numbers and high course costs.
The Boating Industry Association of Victoria (BIAV) and employers are concerned
that a lack of boat building training will lead to a skills shortage in the industry.
This project focused on issues associated with the sustainable future provision of a
qualification equivalent to the Certificate III in Marine Craft Construction, and will
not directly address the broader challenges of the boat building industry.
Nonetheless, the options for the provision of training particularly in terms of
apprenticeship training must be informed by an overall assessment of the structural
trends and medium outlook for boat building activity.
The Victoria Government has established a fund to address market failures in the
vocational education system. As the first initiative to be financed by the fund, this
project is a prototype response to issues of market failure affecting strategic
industry sectors.
1.2
Methodology
This project employed a four part methodology which was developed in discussions
with the project Steering Committee.
The first stage involved an analysis of data on the boat building industry and trends
in training provision, and a literature review of training in thin markets and boat
building training in other countries.
The project then undertook an extensive round of consultation with employers, the
BIAV, training providers across Australia and relevant New Zealand organisations.
The consultations indicated the likely demand for boat building training, and
provided stakeholder views on the viability, content and delivery of options for boat
building training. A full list of stakeholders consulted is in Appendix C.
Based on the desktop analysis and consultations, training delivery options were
developed, including high level business cases for each option to examine the
financial viability of different courses and delivery models.
The conceptual model developed as part of this project for the identification and
analysis of thin markets is in Appendix A.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
This report
The remainder of this report is structured as follows:
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
Chapter 2 –– provides an overview of the boat building industry in Victoria;

Chapter 3 –– examines the supply of boat building training to date, the specific
skills sector and draws lessons from other thin VET markets and New
Zealand’s training system;

Chapter 4 –– sets out the five short-term options for boat building training in
Victoria; and

Chapter 5 — proposes a long-term vision for meeting the skills needs of the
Victorian boat building industry.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Chapter 2
Overview of the boat building sector in Victoria
The recreational boat building industry in Victoria has some unique and important
characteristics which have both direct and indirect implications for the skills and
training requirements of the sector. The following sections discuss:

the market structure of the boat building sector in Victoria, mainly comprising
small businesses;

the wide variety of products and services which constitute the boat building
sector;

the nature of market demand for recreational vessels;

the industry’s exposure to international competition in both local and overseas
markets; and

the operational practices and processes of firms, and the corresponding range of
skills and training requirements across the sector.
2.1
Market structure
The recreational boat building industry is made up of companies that build or repair
small to medium-sized boats. As Figure 2.1 shows, there were around 115
businesses in the industry in Victoria as of 2011-12.
A key feature of the recreational boat building industry in Victoria, and Australia
more broadly, is that the industry primarily comprises small firms, with the majority
employing less than 20 workers. Only 8 per cent of firms in the boat building
industry employ more than 20 workers. This has a direct impact on the capacity of
each individual business to take on and maintain an apprentice through a four-year
contract of training — this is a problem common to most small businesses
particularly in the manufacturing sector.
Victoria’s recreational boat building industry is concentrated in Melbourne,
Geelong and the Mornington Peninsula, with small clusters of boat builders in some
regional Victorian towns such as Lakes Entrance.
Victoria accounts for approximately 13 per cent of the 870 recreational boat
building companies in Australia. The majority of businesses are located in
Queensland and New South Wales (IBISWorld 2013).
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Figure 2.1
BOATBUILDING BUSINESSES IN VICTORIA
Source: ABS 8165.0
2.2
Product segments
The products and services offered across the boat building industry are diverse.
Business can first be divided between manufacturers and repairers. The
manufacturing side of the sector includes firms that build a wide variety of small to
medium sized vessels (boats of under 50 tons displacement) of which the main
segments are listed in Figure 2.2. Stakeholders interviewed included manufacturers
of speedboats, sailboats, pilot boats, fishing cruisers, houseboats, and racing sculls.
Figure 2.2
AUSTRALIAN BOAT BUILDING BUSINESSES BY PRODUCT SEGMENTS
Source: IBISWorld Industry Report C2392 Boatbuilding and Repair Services in Australia 2013
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
In addition to differences in vessel type and design, manufacturers in the industry
also vary according to the materials. Modern materials primarily comprise
fiberglass and other composites, aluminum and steel. Some niche manufacturers
continue to specialize in timber vessels.
2.3
Product demand
Most of the recreational marine craft built by boat building companies can typically
be classed as luxury goods; the consumption of luxury goods increases more rapidly
as income levels rise and demand is more sensitive to household disposable income.
It is clear that the industry is thus particularly exposed to the economic cycle. When
consumers experience a fall in their income levels, spending on luxury goods,
including recreational marine craft, is often one of the first areas of expenditure to
be reduced.
Some observers note that the impact of the global financial crisis on superannuation
funds also impacted on the purchasing decisions of retirees (and those approaching
retirement) who drive a significant proportion boat sales. Some of the larger
manufacturers (Riviera and Whitley Marine Group) went in to receivership as a
result of weak demand following the global financial crisis (IBISWorld 2013).
In 2011-12, the Australian boat building industry generated around $1.6 billion in
revenue annually, a sharp decline from the peak of approximately $2.3 billion in
2005-06. In recent years the fall in industry revenue has continued due to the
adverse economic conditions following the global financial crisis of 2008-09.
However as Figure 2.3 shows, there appears to have been a modest recovery in the
2011-12 financial year. In the same period, total employment in the sector has also
been declining, falling 18 per cent since 2006-07 (Figure 2.3).
Figure 2.3
2,500
10,000
2,000
8,000
1,500
6,000
1,000
4,000
500
2,000
Revenue (LHS)
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
0
2003-04
0
Employment
Revenue $m
BOAT INDUSTRY REVENUE AND EMPLOYMENT
Employment (RHS)
Source: IBISWorld 2013
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Despite the recent downturn in the boat building industry, stakeholders consulted
suggest that there is the potential for growth. Constraints on local demand, in
particular the limited access available to slipways and moorings in Victoria suggest
that domestic ownership and sales may be somewhat depressed. IBISWorld
forecasts average annual revenue growth of 4.3 per cent over the next six years,
although employment growth is only expected to average 1 per cent, likely due to
increased automation in the industry.
2.4
International competition
Like most manufacturing industries in Victoria, the domestic recreational boat
building market is subject to competition from overseas manufacturers and
imported products, while local manufacturers also produce for export and compete
in overseas markets.
From 2003-04 to the onset of the global financial crisis, both imports and exports
were increasing, although imports had been growing more strongly — see Figure
2.4. The global financial crisis saw imports and exports fall as demand in Australia,
and in overseas markets such as the US and Europe, was impacted by the economic
slowdown.
While imports appear to have plateaued, exports have continued to fall. Like all
manufacturing sectors, the continued strength of the Australian dollar is likely to be
an important factor in making imports more affordable to local consumers while
exports become less competitive in overseas markets.
Figure 2.4
RECREATIONAL BOAT IMPORTS AND EXPORTS
700
600
500
$m
400
300
200
100
0
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Exports
Imports
Source: IBISWorld 2013
In addition to exchange rate impacts, Australia has also recently seen a large
increase in the practice of importing second hand vessels from the United States,
offering domestic consumers a more affordable alternative to buying a new boat.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
At the same time, there is also emerging competition from mass-produced imported
vessels from China. While China accounts for only 7 per cent of all recreational
boat imports into Australia at present, growth has been very strong, averaging
28 per cent annually over the last 5 years (UNCOMTRADE 2013). Consultations
with stakeholders and industry analysis share the expectation that imports from
China (and the quality of those imports) can be expected to grow, putting additional
pressure on the industry, particularly the larger manufacturers.
One advantage local manufacturers have over imported products is a preference for
locally designed and manufactured vessels. There is strong anecdotal evidence to
suggest that consumers develop a high level of brand loyalty and maintain an
affinity for locally manufactured products designed especially for local conditions,
particularly those vessels produced by custom boat builders.
In the future, most of the manufacturing firms consulted agree that while price and
therefore efficiency are critical to competition, Australian boat builders will have to
compete primarily on the basis of product differentiation, innovation and
customisation.
Unlike the manufacturers, the repair sector is a service industry and is therefore not
exposed to international competition and is likely to continue to grow in line with
boat ownership in Victoria.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Chapter 3
The specific skills needs and current training
delivery in the boat building sector
This chapter examines the current Australian boat building apprenticeship
qualification, and the reasons the sole provider in Victoria decided to cease offering
it. The chapter identifies boat building training as a thin VET market, and draws
lessons from other thin markets around Australia. The final section examines the
strengths and weaknesses of the New Zealand system of boat building training.
3.1
The qualification: The Certificate III in Marine Craft Construction
The Certificate III in Marine Craft Construction (MEM30705) is delivered as a
three year apprenticeship with off-the-job training occurring over eight weeks of
block release annually.
According to the training package rules, the qualification must comprise the
following three categories of units:

There are 12 core, generalist engineering units such as measurement, task
management and occupational health and safety (OH&S).

Each student must then complete around 20 elective units (depending on how
many points each unit is worth) covering specific marine craft construction
skills.

Students then complete a further 15 elective units from a wider set of trade
specialisiation units from the Metal and Engineering Training Package
(MEM05).
The core and elective units are listed in Appendix D.
The Certificate III in Marine Craft Construction is the only qualification that
specifically caters to the boatbuilding industry. The apprenticeship has traditionally
been the sole entry-point for new workers seeking a career as a boat builder.
While the Certificate III in Marine Craft Construction continues to be the primary
qualification required in many boat building and boat repair businesses in Australia,
it is apparent from the consultations with industry that a large proportion of firms
no longer consider it the preferred qualification, much less the required
qualification (see discussion below).
The ‘boat builder and repairer’ category was identified by Department of
Education, Employment and Workplace Relations (DEEWR 2012) as an area of
skills shortage in 2005-2008 and 2011 but consultations with the boat building
industry in Victoria did not identify any notable skills shortages, primarily due to
depressed market conditions at present.
In Victoria, the Certificate III in Marine Craft Construction attracts the highest
possible rate of government subsidy at $12.50 per student hour (DEECD 2012).
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Enrolment numbers
Figure 3.1 shows the total number of apprentices Australia-wide registered in the
Certificate III in Marine Craft Construction from 2006 to 2012. Queensland and
New South Wales have historically had the highest number of apprentices enrolled
but both states have seen significant falls in registered apprentices since the global
financial crisis.
The decline in Queensland, where a large proportion of the boat building industry is
concentrated, has experienced a precipitous fall over the last four years with the
number of registered apprentices now at less than one-fifth of the levels observed
prior to the global financial crisis.
Figure 3.1
NUMBERS OF REGISTERED APPRENTICES IN THE CERT III IN MARINE CRAFT CONSTRUCTION BY STATE 2006 2012
450
400
350
300
250
New South Wales
200
Victoria
150
Queensland
100
South Australia
50
Western Australia
Jul - Sep 2012
Apr - Jun 2012
Jan - Mar 2012
Jul - Sep 2011
Oct - Dec 2011
Apr - Jun 2011
Jan - Mar 2011
Oct - Dec 2010
Jul - Sep 2010
Apr - Jun 2010
Jan - Mar 2010
Oct - Dec 2009
Jul - Sep 2009
Apr - Jun 2009
Jan - Mar 2009
Jul - Sep 2008
Oct - Dec 2008
Apr - Jun 2008
Jan - Mar 2008
Jul - Sep 2007
Oct - Dec 2007
Apr - Jun 2007
Jan - Mar 2007
Oct - Dec 2006
Jul - Sep 2006
Apr - Jun 2006
Jan - Mar 2006
0
Tasmania
Source: VOCSTATS
Figure 3.2 shows that Victoria’s enrolment levels have not faced such a significant
decline but rather have been persistently low, averaging approximately 60
registered apprentices at any given time. For a three-year program, this is roughly
equivalent to 20 new apprentices every year. There has been a further reduction in
enrolments in the last year with only 40 registered at the end of 2012.
For any provider these numbers are not likely to support a decision to enter the
market in an environment when all RTOs require a reasonable return for any
program offered under the Victorian Training Guarantee and decisions to enter new
markets are assessed against other market opportunities.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Figure 3.2
REGISTERED VICTORIAN APPRENTICES IN THE CERT III IN MARINE CRAFT CONSTRUCTION 2006 - 2012
90
80
70
60
50
40
30
20
10
Jul - Sep 2012
Apr - Jun 2012
Jan - Mar 2012
Oct - Dec 2011
Jul - Sep 2011
Apr - Jun 2011
Jan - Mar 2011
Oct - Dec 2010
Jul - Sep 2010
Apr - Jun 2010
Jan - Mar 2010
Oct - Dec 2009
Jul - Sep 2009
Apr - Jun 2009
Jan - Mar 2009
Oct - Dec 2008
Jul - Sep 2008
Apr - Jun 2008
Jan - Mar 2008
Oct - Dec 2007
Jul - Sep 2007
Apr - Jun 2007
Jan - Mar 2007
Oct - Dec 2006
Jul - Sep 2006
Apr - Jun 2006
Jan - Mar 2006
0
Source: VOCSTATS
The data above is consistent with information supplied by the previous sole
provider of the Certificate III in Marine Craft Construction in Victoria — Victoria
University. Table 3.1 shows that since 2007 the annual intake of boat building
apprentices has been approximately 14 per annum with some volatility and only 11
enrolments in 2012.
Table 3.1
VU STUDENTS – CERTIFICATE III IN MARINE CRAFT CONSTRUCTION
Intake year
Apprentice notifications*
Finished/current
2007
18
14
2008
20
14
2009
9
6
2010
22
12
2012
16
14
2012
11
N/A
Source: Unofficial records from Victoria University
Note: *Apprentice notifications includes apprentices who dropped out of the course, and people who
registered for the course but did not commence.
3.2
Operational practice, skills requirements and the value of the
Certificate III in Marine Craft Construction apprenticeship
Skills required based on manufacturing setup and scale
As discussed in Section 2.1, the vast majority of businesses in the boat building
industry are small enterprises. Most of the manufacturing businesses consulted
operate on small-scale production line processes or batch manufacturing processes.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Many manufacturers that have adopted small-scale production line processes or
batch manufacturing processes do not consider the Certificate III in Marine Craft
Construction to be the core or requisite qualification. Most employers recognise the
value of having a person trained in the breadth of skills and knowledge in marine
craft construction but nonetheless many prefer to employ apprentices or
experienced workers who are competent in working with composites,
boiler-making, welding, wood-working and electrical components.
For many of the small businesses interviewed, a competent and adaptable
manufacturing workforce is more important than craftsmen capable of building a
wide variety of vessels from start to finish. For this reason, most employers were
not concerned about the loss of the Certificate III in Marine Craft Construction —
with the exception of those boat builders who worked with the more traditional
materials and the boat repairers who had to work across a range of designs and
materials (see discussion below).
Larger manufacturers compete mostly on volume and price, and normally have a
production line setup, with each worker specialising even more narrowly in a small
part of the manufacturing process. As a result, the skills needs of these businesses
are even narrower.
Skills required based on construction material used
Most businesses also tend to specialise in a small number of product designs based
on a single construction material — typically either steel, aluminum or fiberglass.
The skills required to work with these materials are distinct. As a result, most
manufacturers tend to require workers to are competent in working with just one
material.
In contrast, the Certificate III in Marine Craft Construction is an apprenticeship
which builds on the traditional shipwright’s craft, and it includes a wide range of
units for working with steel, composites and timber; aluminum units are notably
absent from the current qualification.
Skills required based on firm-specific equipment and processes
Businesses tend to have firm-specific fabrication processes and production
methods, which often embody the design philosophy, differentiation and innovation
of the individual product or company.
Some businesses report that in some instances, the delivery of the Certificate III in
Marine Craft Construction can be in fact be counterproductive as apprentices learn
of methods or processes that are either out-dated or ill-suited to the particular
approach adopted at their enterprise.
Skills required to have a broad and long-term career in the marine sector
Some businesses suggest that the apprenticeship has suffered from low numbers of
enrolments due to the narrowness of the career opportunities to which the
qualification is geared. At least two firms support the broadening of the
apprenticeship to allow more varied career paths through the sector.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Skills required to compete in the international boat markets
Many firms agreed that skills would continue to be a critical area of competitive
advantage for the Victorian boat building industry with firms increasingly
competing locally and globally on the basis of quality and innovation, which in turn
depends on a skilled workforce.
In many instances, these skills will be required in:

quality workmanship
competitiveness;

the area of research and development and product development and design to
ensure constant innovation and product differentiation; and

adaptability and versatility to support bespoke products and higher degrees of
product customisation.
whilst
improving
operational
efficiency
and
Conscious of international competition, most businesses consulted saw lean
manufacturing as an emerging skill need, and one business had already invested in
gradually upgrading the skills of its employees in this regard.
Some businesses also recognised that while the skills needs of the technical
production staff on the workshop floor were important, the skills needs of other
staff including administrative staff, sales staff and management could not be
overlooked.
Skills required for the domestic repair sector
The repair sector requires a wide breadth of technical skills across all materials and
boat sizes. Repair sector employees must work with wood, composites, and
aluminium, and be able to repair all parts of a boat.
As a result, the repair sector is understandably more strongly supportive of the
ongoing delivery of the Certificate III in Marine Craft Construction, which offers a
well-rounded introduction to the industry for their apprentices.
3.3
Diverse training requirements across the boating industry
The diversity of the skills requirements of the boating industry is summarised in
Figure 3.3 below, and can be categorised as follows:
The Allen Consulting Group

the mass producers that compete primarily on volume and price tend to be
larger businesses that require workers who are specialised in a small number of
steps in the production line;

batch manufacturers and custom builders competing on smaller volumes of
highly innovative or bespoke vessels will require a more versatile workforce
that is highly competent in the specific production methods and practices of the
firm; and

the domestic repairers will continue to seek apprentices with broad technical
knowledge across all aspects of marine craft construction.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Figure 3.3
MAP OF TRAINING REQUIREMENTS ACROSS THE BOATING INDUSTRY
Source: Allen Consulting Group
3.4
Training delivery in Victoria
The skills requirements of the industry outlined above provides a clear explanation
for the long-standing low levels of enrolments in the Certificate III in Marine Craft
Construction in Victoria depicted in Figure 3.2.
In Victoria, the Certificate III in Marine Craft Construction had been delivered by
Victoria University for a number of decades. The course took place at the VU
Boatbuilding Program Facility at the VU Newport Campus.
The majority of students came from the western suburbs, metropolitan Melbourne,
and Geelong — Figure 3.4. Due to a lack of training in their own state, some
students would travel from Tasmania to undertake the Certificate III at VU.
The Allen Consulting Group
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Figure 3.4
DISTRIBUTION OF APPRENTICES ATTENDING VICTORIA UNIVERSITY IN 2011
First-year apprentices
Second-year apprentices
Third-year apprentices
Apprenticeship numbers
12
10
8
6
4
2
0
Docklands,
Williiamstown,
Laverton
Metro Melbourne
Geelong
Tasmania
Others
Source: Unofficial records from Victoria University
In 2012, VU ceased offering the Certificate III in Marine Craft Construction.
Consultations. Various current and past members of the relevant faculty identified a
number of factors contributing to this decision, but ultimately it came down to the
fact that the course was not commercially viable.

The Certificate III had been cross-subsidised by VU for sometime, with hobby
builders also exerting pressure on VU to maintain the training facility used for
boat building training. A letter from VU to DEECD in late 2011 indicated that,
VU had been operating its boat building program an annual loss of about
$200,000.

The course administrators had exhausted efficiencies and cost savings in the
delivery of the course — average annual enrolments were simply insufficient to
sustain the employment of one trainer.

Victorian Government reforms of the VET sector, in particular reductions in
subsidy rates in other areas and the removal of other financial support to TAFE
institutes meant that the avenues for cross subsidies were no longer available.

With the high hourly funding rate and the removal of limits on fees, VU found
that student numbers were too low to sustain the course even if tuition fees
were increased. Towards the end of the course at VU, students per year were
below 15, with a particularly low number in 2009, possibly due to economic
conditions at the time (Table 3.1).
VU closed its Newport Campus in 2012, moving most courses to the new Sunshine
Construction Futures facility. While the Sunshine campus did not factor in the
infrastructure required to deliver the Certificate III in Marine Craft Construction,
the infrastructure costs were not the main issue for VU.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
3.5
Issues with the boat building apprenticeship in its current form
Following VU’s withdrawal from provision, four RTOs continue to deliver the
Certificate III around Australia (an additional four have the qualification on their
scope of registration) — two in Queensland and one each in New South Wales and
Western Australia. The Hunter Institute, recently ceased provision in regional New
South Wales.
The issues relating to the boat building apprenticeship in its current form can be
summarised in three categories:

broad challenges that are being faced across the boat building industry;

issues specific to the Certificate III qualification as it is currently designed; and

broader issues which underpin the declining popularity of apprenticeships in
many other sectors and trades.
Industry-specific factors
The challenges facing the boat building industry discussed in Sections 2.3 and 2.4,
including the recent falls in local and international demand for recreational vessels
in a time of weak global economic conditions as well as growing international
competition, suggest that there is unlikely to be a short-term increase in
apprenticeship numbers.
For the Victorian industry in particular, apprenticeship numbers have been
relatively static, even during the pre-GFC boom years.
In addition, the move towards production line and batch production methods
discussed in Section 3.2 suggests that a declining proportion of firms within the
sector will consider the traditional boat building trade to be the qualification that
best fits their skills needs.
Issues specific to the Certificate III in Marine Craft Construction
While there appear to be a large number of elective units available as part of the
Certificate III in Marine Craft Construction, the Training Package rules are in fact
restrictive. As a rule, providers are required to deliver units across steel, composites
and wood, but are unable to focus or specialised on a single material to mirror the
practice in industry. Providers are also unable to include units for aluminium boat
building.
In addition, as discussed in Section 3.2, employers report that some units are not
aligned to the contemporary work practices and production processes of firms. In
the model of delivery previously adopted by VU there has not been a significant
component of work-based training.
In the eyes of some firms, the Certificate III in Marine Craft Construction is held to
be an adequate but by no means ‘cutting edge’ qualification.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Broader issues with the traditional apprenticeship model
It is important to recognise that the issues regarding low and declining enrolment
numbers in the boat building apprenticeship are symptomatic of broader issues with
the apprenticeship model in Australia. Consistent with the experience in other
industries, some employers in the boat-building sector who support the traditional
apprenticeship appear to be driven in part by a philosophical commitment to the
training model based on their own personal experience having completed the
qualification. Nonetheless, supporters of the boat building apprenticeship and those
who are unsupportive or simply indifferent report a consistent list of challenges,
which exemplify the broader issues with the traditional apprenticeship model across
a range of trade areas.

In general, there has been declining support for a contract of training approach
due to the inflexibility and high commitment required from the perspective of
employers.

The administration and management costs of having an apprenticeship are also
an obstacle for some firms, particularly smaller firms.

Employers often take issue with the length and timing of block release
requirements, which can adversely impact on production schedules and delivery
deadlines.

Employers and providers alike report retention challenges as a proportion of
apprentices inevitably realise that they are no longer interested in the limited
career offered by a traditional trade (or simply lose interest or have a falling out
with their employer).

The work readiness of apprentices, particularly young apprentices, and the
difficulties in identifying suitable candidates is an important factor that
discourages more firms from participating.

There is a general move towards workforce development through non-formal
training and on-the-job learning delivered within the organisation rather than
formal education and training delivered by third party providers.
1
In sum, a range of other niche trades are facing thin market issues which are in turn
eroding the long-term commercial viability of provision. Governments, industry
and RTOs have employed a number of strategies to overcome thin markets.

Some states place restrictions on the number and/or type of RTOs which can
receive public subsidies to deliver the training in thin markets, thus making the
provision of training more financially appealing. Consultations indicate that one
Victoria RTO would be much more likely to offer the Certificate III in Marine
Craft Construction if it was given a monopoly over provision.

In another area, a private RTO operating in thin VET markets in regional NSW
has sought to increase the viability of training by employing distance education
options, and by using ‘a traineeship as the first year of the apprenticeship so
that training and assessment can occur fully on the job’ (Ferrier et al 2008).
1
The Allen Consulting Group
Thin markets can be defined as occupational or geographical areas where there are an insufficient number of
learners seeking training to make the provision of such training viable. Causes of thin markets include
declining industries, out-dated forms of training, low staff turnover within industries and ‘a failure to recognise
synergies for training in other occupations and industries’ (Ferrier et al 2008).
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL

3.6
For many years states in thin market apprenticeship areas such as printing and
watchmaking have arranged for apprentices to be trained interstate under block
release models.
Lessons from the New Zealand model of boat building training
Apprenticeship training in New Zealand underwent a series of reforms in the 1990s
which led to the country’s ‘Modern Apprenticeships’ system, which is predicated
on strong industry support and involvement in the development and delivery of
qualifications through Industry Training Organisations (ITOs). ITOs are funded by
the relevant industry and government. The government does not fund
apprenticeship training separately, which gives ITOs significant control over
curriculum development and delivery.
The New Zealand National Certificate in Boat Building is a highly regarded
apprenticeship model — both for the quality of the curriculum and the involvement
of the industry in its design and delivery.
The New Zealand Marine Industry Training Organisation (NZMITO) was
established in 2000 and is the training division of the NZ Marine Industry
Association. The NZMITO is responsible for developing the apprenticeship
curriculum, which is then reviewed and updated every five years, ensuring it keeps
pace with current technology.
Apprenticeships normally take 4-5 years. The curriculum is structured through ‘unit
standards’ or competencies. Students learn on the job, through an e-learning
platform and at technical college. Most learning takes place at the apprentice’s
worksite with unit standard manuals provided by the NZMITO. There are around
seven assessors traveling to worksites throughout New Zealand to assess
apprentices against the competencies set by the NZMITO. The ‘unit standards’ are
reviewed every five years to ensure the course is consistent with current technology
use in the industry.
The National Certificate in Boat Building facilitates sector specific skills with each
apprentice choosing one of eleven areas to specialise in, including composites,
wooden, alloy, marine systems engineering, and marine cabinetmaking. The
NZMITO also offers apprenticeships in Marine Sales & Services, Competitive
Manufacturing and Marina Operations and Services.
The NZMITO training program has trained approximately 1300 apprentices —
including around 200 from Australia — in the 12 years since its establishment with
approximately 420 students currently enrolled (78 per cent of whom are in the Boat
Building relating trade).
NZMITO field officers develop individual training agreements with boat building
apprentices, with most training taking place in the workplace or online. For formal
apprenticeship training, the NZMITO subcontracts to training provider Unitec
Institute of Technology. Apprentices normally undertake two weeks of block
release annually, except in their first year. As Unitec is the only provider of formal
boat building education, apprentices travel from around New Zealand to its campus
in Auckland. The cost of formal training is split between the NZMITO and
apprentices.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Unitec offers a stand-alone formal vocational qualification, which takes one year
full time and is considered a ‘pre-apprenticeship’. Annual student numbers are
around 30-40, with international students accounting for around 50 per cent of
students. The Unitec certificate is independent of the NZMITO qualifications,
although students may obtain credits towards the qualifications. Around half of
Unitec boat building graduates go on to the NZMITO apprenticeship.
Consultations indicate that the block release is not particularly profitable for Unitec,
and that its provision may not be viable without the one year course which supports
the training facility and materials, and trainers.
There are a number of issues raised by the New Zealand model of training that
Victoria could consider including:

More industry involvement in course development and regular review of the
training curriculum;

Increased use of online learning;

A reduction in the number of block release weeks; and

Consolidation of training provision and increased travel by apprentices for
block release.
A detailed description of the New Zealand model of boatbuilding training is in
Appendix B.
The Allen Consulting Group
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Chapter 4
Options to meet the training needs of Victorian
boat builders in the short-term
This chapter outlines a series of potential options for boat building training in
Victoria.
4.1
Approach to development of options
As discussed in Chapter 3, a key factor governing the sustainability of an alternative
training solution for the boat building industry will be the financial viability of the
proposed solutions.
This focus on options that are most likely to be viable leads to the identification of a
range of factors affecting the two principal factors, namely:

adequate numbers of enrolments in the proposed training solutions going
forward, which are reliant on both employer support and student demand; and

payment of an economic price which is contingent of sufficient revenue from
government subsidies and tuition fees that will cover the cost of delivery.
The complete list of eight factors that ultimately determine the sustainability of
provision are listed in Figure 4.1.
Figure 4.1
DETERMINANTS OF COURSE SUSTAINABILITY
Source: Allen Consulting Group 2013
The Allen Consulting Group
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
For each of these eight factors, the options considered fall on a spectrum of
possibilities which either promote sustainable provision or pose a challenge for
sustainable provision.
Based on feedback from stakeholders, Figure 4.2 illustrates how under the previous
arrangements the delivery of the Certificate III in Marine Craft Construction at
Victoria University was unsustainable. According to a letter from Victoria
University to DEECD, the Certificate III in Marine Craft Construction was running
at a loss of approximately $200,000 per annum. Stakeholders suggested that the
course:

was ‘merely adequate’ and not cutting edge;

was highly focused on boat building and so missed a chance to develop a set of
skills that could transfer across the broader marine sector;

developed apprentices who were relatively less well paid than those trades in
high demand in interstate resources projects or in local infrastructure projects
such as the desalination plant;

attracted a very high rate of government subsidy, but with low willingness to
pay on the part of students and employers;

was based on the traditional apprenticeship model, with training package units
across a wide range of expertise and knowledge (including more traditional
boat building materials such as timber); and

required too many periods of block release throughout the year.
Figure 4.2
PROMOTING SUSTAINABLE PROVISION
Source: Allen Consulting Group 2013
The Allen Consulting Group
20
BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
4.2
Options for the short term: Alternative curriculum and delivery
models
The contribution of each of the eight factors towards sustainable provision listed
above depends first and foremost on both the course/curriculum content and the
training delivery model.

The course/curriculum content encompasses the range and possible
combination of relevant units on offer at different levels. The range of units
may span highly specialised and/or traditional units, or include more generic
and transferable units of study.

The training delivery model relates to the mode of delivery of the relevant units
including the role of the employer in training (including
traineeship/apprenticeship models), on-campus versus work-based training, and
the use on online models.
The course/curriculum content and training delivery model are the key levers that
have the potential to directly or indirectly influence all other factors. The Certificate
III in Marine Craft Construction on offer at Victoria University can be characterised
as having:

a broad curriculum and a diverse curriculum, with limited flexibility and a wide
variety of units that had to be delivered under the packaging rules; and

a typical apprenticeship delivery model, including a total of six weeks of block
release per annum.
Options identified
Based on stakeholder consultations, and research and analysis undertaken around
the possible variations in the course/curriculum content and the training delivery
model, five options have been identified as potential alternatives to the delivery of
the Certificate III in Marine Craft Construction previously offered by Victoria
University.
The options identified represents a subset of a wider range of options considered
and tested through the consultations with stakeholders and internal analysis. The
primary reasons for omitting the other options from the shortlist were twofold: there
is a long expected lead time to establishing these options as viable solutions; and
there is at present a lack of strong training provider interest in these options.
The shortlist of options is as follows:
The Allen Consulting Group

Option 1: Delivery of the Certificate III in Marine Craft Construction by a
Victorian TAFE institute

Option 2: Delivery of the Certificate III in Marine Craft Construction by an
interstate TAFE institute

Option 3: Alternative trade training programs in relevant areas by a Victorian
TAFE institute or private RTO

Option 4: Work- and campus-based delivery by a TAFE institute/RTO of an
alternative trade training program with some specialisation in marine craft
construction
21
BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL

Option 5: Overseas delivery of the New Zealand National Certificate in Boat
Building
These five options are depicted in Figure 4.3 against the two dimensions of
course/curriculum contents and the training delivery model. These options are
discussed in turn in the following sections and assessed in detail in the following
chapter.
Figure 4.3
SHORT-TERM OPTIONS IDENTIFIED
Source: Allen Consulting Group
The Allen Consulting Group
22
BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Chapter 5
A long-term vision for meeting the skills needs of
the Victorian boat building industry
5.1
Long-term considerations
Four important external factors need to be factored into any decision regarding the
long-term training solutions for the Victorian boat building sector.
First, the impact of the introduction of an entitlement in other states is imminent
with all states having signed up to the National Partnership Agreement for Skills
and Workforce Development. Although it is likely that other jurisdictions will adopt
entitlement systems that are more conservative that the Victorian Training
Guarantee, there is nonetheless a significant amount of uncertainty regarding the
impact of an entitlement and new funding rates on provision at North Sydney
Institute and SkillsTech Australia.
Second, the cessation of delivery by Victoria University is a significant shock to the
local delivery of the Certificate III in Marine Craft Construction. Some apprentices
have already initiated their continuation of training interstate with SkillsTech
Australia. If this model of interstate delivery becomes the accepted model of
training (as it has been for Tasmania and South Australia for some time) then local
providers such as Advance TAFE who are looking to enter the market will need to
be prepared for the fact that it may not be able to enjoy Victoria University’s past
position as the monopoly local provider of choice.
Similarly, it is unclear whether the cessation of delivery by Victoria University and
the move towards generic courses such as the composites course will come to
represent a permanent shift away from the traditional boat building trade. Such a
shift could persist in the longer term if there is a decline in industry’s commitment
to the Certificate III in Marine Craft Construction or to the apprenticeships model
more generally.
Finally, as discussed in Section 3.5, there are broad and systemic reasons for the
declining popularity of the apprenticeship contract of training as a model of
workforce development and VET markets are gradually moving towards more
responsive customised training models that meet the breadth of training needs that
may be specific to individual or clusters of firms.
5.2
A long-term vision for meeting the skills needs of the Victorian
boat building industry
With the skills reforms starting with the introduction of the Victorian Training
Guarantee and national skills reform, VET providers in the Victoria are well-placed
to work with the firms that constitute the boat building industry to identify and
address their skills and training needs. In particular:

The Allen Consulting Group
firms and their employees have access to a student entitlement for training
(subject to basic eligibility criteria);
23
BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL

RTOs are able to enter into new training markets based on known rates of
subsidy and demand-driven funding;

RTOs are able to develop customised training programs within and across
increasingly flexible training packages; and

fee deregulation allow RTOs to work with firms to develop training programs
that meet their needs and deliver value for money.
A dynamic training market response to the needs of the boat building
industry
In the future, the boat building industry can expect to see a shift away from the
prescription of one or two courses as the primary qualifications for the sector and
see the emergence of more highly customised provision which are characterised by:

the ability for employers and employers to select from a broad menu of relevant
courses and qualifications at different level;

work-based training and assessment and other innovations in delivery which
meet the needs of businesses with minimal disruptions to ongoing operations;
and

concurrent delivery of technical and generic skills across all employees within a
given firm including in business administration (such as book-keeping and
compliance), management (including front-line management), environmental
sustainability, and lean and competitive manufacturing.
The issues regarding the long-term sustainability of delivery of any given course
could be obviated in a market where RTOs leverage training of boat building into
other occupations and skills set in a firm and across the sector.
While the long-term delivery of a holistic boat building provision will continue to
be important to the sector, this is likely to be delivered interstate or overseas.
Building on the map of training requirements across the boating industry developed
in Chapter 1, Figure 5.1 illustrates how the preferred training options identified in
the analysis above will meet those training needs.
The BIAV could support the evolution and emergence of such a model by
promoting investment by firms in training and on going professional development
across a wide range of areas as a point of competitive advantage for the industry.
The BIAV could go a step further by playing a facilitative role in the development
of customised training programs for individual member organisations or industry
clusters with similar training needs, and reputable and innovative RTOs.
The Allen Consulting Group
24
BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Figure 5.1
MAP OF TRAINING REQUIREMENTS ACROSS THE BOATING INDUSTRY AND PREFERRED TRAINING OPTIONS
Source: Allen Consulting Group
5.3
Redesign of the boat building qualification
The existing training package rules offer only limited flexibility to RTOs in terms
of the units of competency that can be included from across the training packages in
the areas of light manufacturing. In addition, many of the units that must ultimately
be incorporated include units that are of limited relevance to most businesses (for
example units relating to working with timber) while not allowing for more in depth
skills development (such as additional units relating to working with composites or
electro-technology).
In the long-run, the redesign of the Certificate III in Marine Craft Construction is a
key underpinning step towards a more dynamic and sustainable training delivery
model. The inflexibility of the existing training package restricts the ability of
RTOs to tailor courses that are more responsive to the specific needs of individual
employers and raise the cost of delivery by requiring highly skilled trainers and
access to teaching infrastructure across a large number of areas.
Manufacturing Skills Australia (MSA) is currently undertaking a full review of the
Metal and Engineering Training Package, which the Certificate III in Marine Craft
Construction falls under. The review will cover all 24 qualifications and 577 units
of competency with regards to:
The Allen Consulting Group

content currency and relevancy;

prerequisites including multiple prerequisite pathways;

compliance with policy and templates; and

grouping within qualifications.
25
BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
While the ‘continuous improvement’ process allows MSA to modify the training
package to address technology changes and other emerging issues, there has not
been a structural review of the training package for seven years. The review is due
to be completed in early 2014.
Any changes to any training packages in Australia, from small modifications to
structural reviews, must follow the National Skills Standards Council’s ‘Training
Package Development & Endorsement Process Policy’, as set out in Box 5.1.
Box 5.1
THE PROCESS FOR MODIFYING VET TRAINING PACKAGES
There are eight steps in the process of modifying VET training packages.
1. ISCs produce annual Environmental Scans that identify changing industry skills
needs.
2. ISCs produce an annual Continuous Improvement Plan (the Plan) that sets out
the changes that need to be made to the training packages to enable them to
meet the skills needs of industry.
3. The ISC briefs Commonwealth, each state and territory government and VET
regulators on the changes needed.
4. National consultations on the proposed changes.
5. Changes are validated by a representative sample of industry stakeholders as
reflecting accepted industry practice.
6. Final independent review of the training package components against the
Standards for Training Packages. This is provided to the National Skills
Standards Council (NSSC) prior to submission.
7. Submission of ‘Case for Endorsement’ to the NSSC outlining changes to be
made and stakeholder views.
8. The NSSC considers the Case for Endorsement and if the modifications are
endorsed, they are recorded on the National Register.
Source: NSSC 2012.
As part of the review, MSA could modify and extend the qualification to allow for:

a stronger pre-apprenticeships pathway — pre-apprenticeships can present an
opportunity to increase the interest, enrolment and completion of courses in a
particular trade and (not withstanding the differences in the apprenticeship
model) in New Zealand, it is a significant and critical foundational component
of the National Certificate in Boat Building; and

a marine craft construction traineeship — as recommended by one provider
(Challenger Institute) the introduction of a traineeship model for marine craft
construction could present a more sustainable alternative pathway into the
industry. A traineeship model would involve the development on a simplified
version of the current apprenticeship training package, with less focus on the
breadth of technical units of competency and less onerous requirements for
block release (if any).
2
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2
VU’s experience with pre-apprenticeships in Victoria has not been encouraging with only three enrolments in
2011.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Given its strong international reputation the redesign of the marine craft
construction should draw on New Zealand Certificate in Boat Building. The New
Zealand Certificate in Boat Building has been licensed to the Canadian state of
Nova Scotia demonstrating the international currency of the qualification. The
option of licensing part (or all) of the New Zealand training model could be
explored further as part of the redesign process.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Appendix A
Conceptual model for analysing thin markets
This chapter sets out three complementary approaches for analysing thin VET
markets.
A.1
Conceptual model
A conceptual model of the market for boat building training was developed through
this project (Figure A.1). The model is well suited to examining other thin VET
markets and could be used as a basis for developing and assessing options for the
sustainable delivery of training in other areas. It has a number of components,
which are outlined below.
Drivers of demand
Demand for skills in a particular industry is influenced by a number of factors
including consumer demand, industry growth, student preferences, and economic
conditions.
Consumer demand will be driven by price, quality, competition, and the reputation
of industry goods or services. Demand will also be also by influenced by
macroeconomic conditions, including the impact of the exchange rate in the case of
trade-exposed industries.
Learner demand for training in a particular occupation or field is likely to be
influenced by perceptions of industry conditions, such as employment
opportunities, relative wages and working conditions. Course supply and costs will
also influence training demand.
Size of potential market for training
It is important to gain a full picture of the size and composition of the potential
market for training. Demand for training is likely to come from a number of areas,
including from school leavers, apprentices (including mature age learners), trainees,
and the current workforce.
Demand filters
The manner in which the size of the potential market for training translates into
demand for training is contingent on a number of factors. The number, type and
quality of study options is particularly important. Industry efforts to promote
careers in particular fields also feed into learner demand for relevant training.
Demand will be influenced by the attitude of employers to formal training. If there
are not enough businesses willing to take on apprentices, or commit to other
qualifications or training products, student interest in relevant training may not
translate into demand. The attitude of business towards up-skilling of the current
workforce is therefore also important.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Revenue sources
The revenue to provide particular training can come from a number of sources,
including learners, businesses and government contributions.
Supply specifications
There are a number of different options for the supply of training. These include but
are not limited to the following considerations:

Qualification level and design;

Training providers;

Training delivery modes; and

Training content.
Training governance
Based on the supply specifications, there are a number of potential governance
arrangements. The governance framework will deal with implementation of the
training delivery model, monitoring, and any refinement the supply structure.
The role of the Victorian Government
In a demand driven system the role of the Victorian Government is based on market
facilitation, including identification and appropriate response to specific market
failures. Government may also have a role in the governance arrangements of the
training delivery model in selected areas where market failure has been identified.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Figure A.1
CONCEPTUAL MODEL
Source: Allen Consulting Group
A.2
Training market analysis
Based on the analysis undertaken for this project, Figure A.2 summarises the
process for analysing a potential VET market gap. It begins by asking whether there
actually is a gap in the market based on student and industry demand for training,
supply of similar training and the market response from RTOs.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
If there was a previous provider, the flowchart calls for analysis of why the RTO
left the market. From this analysis, the flowchart suggests a number of supply and
demand side measures that could assist in closing the market gap.
Figure A.2
TRAINING MARKET ANALYSIS FLOWCHART
Is there a gap in the market?
Student demand (possibly including un-completed students)
+
Industry demand for training
N
-
+
No similar training provision
+
Lack of interest from training providers
Y
Was there a previous
provider?
-
N
Y
What was the reason the
previous provider pulled
out?
Price
Enrolment numbers
Student/
industry
contribution
Subsidy
Further investigation
needed
Weak demand
from students
N
Is the
government
willing to
increase the
subsidy?
Y
Weak demand
from
employers
Can fees be
increased?
N
Y
Low wages /
poor career
options
Declining/small
industry
Lack of
awareness of
career/training
Inconvenient
delivery
Outdated
curriculum
Lack of training
culture
Industry
promotion, VET
in schools
Change
delivery mode
Update
curriculum
Change culture
Subsidy
increase
Increase fees
Supply side measures
Demand side measures
Source: Allen Consulting Group
The Allen Consulting Group
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Appendix B
The boat building training system in New Zealand
B.1
NZ Marine industry
The marine industry in New Zealand is one of the largest manufacturing sub-sectors
with over $2.2 billion in annual sales in 2011 (6.3 per cent of GDP) (Statistics NZ).
The industry accounts for around 1000 companies which employ over 10,000 staff.
The ships, boats, and floating structure exports totalled $231 million in 2012
(0.5 per cent of total exports).
The early 1990s saw the development of a significant boat-building cluster in
Auckland; currently 56 per cent of industry trainees and apprentices are located in
the city.
B.2
NZ training system
Vocational education in New Zealand is structured around government recognised
Industry Training Organisations (ITOs), which work with business and training
providers to develop qualifications. The national government, through the New
Zealand Qualifications Authority, approves qualifications and standards (New
Zealand Government 2011).
ITOs are funded by the relevant industry and government and have primary
responsibility for curriculum development and management (Mitchell 2006).
B.3
The boat building apprenticeship system
The ITO in the boat building industry is the Marine Industry Training Organisation
(NZMITO), the training division of the NZ Marine Industry Association. Since its
creation in 2000, the NZMITO has developed a large array of training programmes
and setting the standards and qualifications for boat builder training. Every five
years, NZMITO updates course curriculum content.
Training consists of learning in the workplace, supplemented by specialist courses
at technical colleges. The employer and the NZMITO field officers support and
regularly assess the apprentice to determine what skills have been achieved.
For formal apprenticeship training, the NZMITO subcontracts training provider
Unitec Institute of Technology to provide vocational education, which contributes
to NZMITO established qualifications. Unitec still offers standalone formal
vocational education, but such courses are independent of the NZMITO
qualifications, although students may obtain credits towards the qualifications.
Numbers and duration
The total number of boat building trainees and apprentices in 2012 was around 420.
Apprenticeships normally last between three to five years.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Block courses
Apprentices normally undertake two weeks of block release annually, except in
their first year. As Unitec is the only provider of formal boat building education,
apprentices travel from around New Zealand to its campus in Auckland. Some
apprentices do less than the normal amount of block release where their employer
has the requisite equipment on site.
Prices
Each two week block release is priced at around NZ$1,200, with costs shared
between the apprentice and employer. Over the life of the apprenticeship total
training costs are around NZ$5000, including resources such as manuals for
on-the-job training.
E-learning
‘RudderLive’, the NZMITO’s e-learning platform, allows students to complete
some of their study in their own time and in an interactive manner over the internet.
It also allows employers and apprentices to keep track of the training process,
including upcoming classes.
B.4
Pre-apprenticeship courses
Unitec offers a stand-alone formal vocational qualification, Certificate in Applied
Technology (Boatbuilding), which takes one year full time and is considered a
‘pre-apprenticeship’ course. Annual student numbers are around 30-40, with
international students accounting for up around 50 per cent of students. The
Certificate costs NZ$18,000 for international students.
Students that complete this Certificate can undertake further study though the
Bachelor of Applied Technology (Marine), which is aimed at developing senior
tradespeople with design skills.
Consultations indicate that the block release is not particularly profitable for Unitec,
and that its provision may not be viable without the one year course which supports
the training facility and materials, and trainers.
B.5
The Allen Consulting Group
Lessons for Victoria

More industry involvement in course development and regular review of the
training curriculum;

Increased use of online learning;

A reduction in the number of block release weeks; and

Consolidation of training provision and increased travel by apprentices for
block release.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Appendix C
Stakeholders consulted
Table C.1
STAKEHOLDERS CONSULTED
Organisation
Name
Contact
Details
Employers
Bar Crusher Boats
Lee Cottam
Face to face
Aluminium Sector
Status Luxury Houseboats
Darren Withoos
Phone
Aluminium Sector
International Marine
John Barbar
Face to face
Composites Sector
Whittley Cruisers
Neville Whittley
Face to face
Composites Sector
Hart Marine
Mal Hart
Face to face
Composites Sector
PM Marine Manufacturing
Paul Junginger
Face to face
Composites Sector
The Wooden Boat Shop
Tim Phillips
Face to face
Wooden and Repair Sector
Sykes Racing
Nick French
Phone
Composites Sector
Haines Hunter
Nick Edgerton
Face to face
Composites Sector
Penfolds Marine
Roger Penfold
Face to face
Repair Sector
Boating Industry Association of
Victoria
Steven Gill
Ben Scullin
Face to face
Peak body representing for the recreational
and light commercial boating industry in
Victoria
Victoria University
Kath Curry
John McCloud
Eric Sandberg
Coralie Morrissey
Face to face
The RTO previously offering the Certificate III
in Marine Craft Construction
Chisholm Institute of TAFE
Andrew Kong
Phone
Large RTO with engineering program
Kangan Institute
Phillip Murphy
Face to face
Large RTO currently providing the Certificate
III Engineering (Composites Trade)
CLB Training & Development
Matthew Trounce
Phone
Large, private RTO currently providing training
in niche apprenticeship areas
Advance TAFE (East Gippsland
Institute of TAFE)
Fred Vanderslik
Richard Owen
Phone
RTO located at Lakes Entrance
FGM Consultants Pty Ltd
Michael Grogan
Phone
Small, private RTO
Bass Coast Adult Education
Centre
Bill Street
Phone
Small, community RTO
NWT
Fiona Martin
Phone
Small, private RTO
SkillsTech Australia
Ian Lawrence
Face to face
A provider of Certificate III in Marine Craft
Construction in Brisbane.
Gold Coast Institute of TAFE
Glenn Cuthbert
Phone
A provider of Certificate III in Marine Craft
Construction on the Gold Coast
Northern Sydney Institute
Glenn Williamson
Phone
The NSW provider of Certificate III in Marine
Craft Construction
Victorian training providers
Other training providers
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Organisation
Name
Contact
Details
Challenger Institute of
Technology
Melanie
Sorensen
Face to face
The WA provider of Certificate III in Marine
Craft Construction
MEGT
Steve Allen
Phone
A large Group Training Organisation
New Zealand Marine Industry
Training Organisation
Chris van der Hor
Phone
Responsible for the apprenticeship curriculum
in NZ
Unitec Institute of Technology
Rob Shaw
Phone
Technical college delivering boat building
training
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
Appendix D
Units in the Certificate III in Marine Craft
Construction
D.1
Core units
Table D.1
CORE UNITS — ALL UNITS FROM THIS LIST
Unit code
Unit title
MEM12023A
Perform engineering measurements
MEM12024A
Perform computations
MEM13014A
Apply principles of occupational health and safety in the work
environment
MEM14004A
Plan to undertake a routine task
MEM14005A
Plan a complete activity
MEM15002A
Apply quality systems
MEM15024A
Apply quality procedures
MEM16006A
Organise and communicate information
MEM16007A
Work with others in a manufacturing, engineering or related
environment
MEM16008A
Interact with computing technology
MEM17003A
Assist in the provision of on the job training
MSAENV272B
Participate in environmentally sustainable work practices
Source: MEM30705 Certificate III in Marine Craft Construction (2012)
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
5.4
Elective units
Table D.2
GROUP A - MARINE CRAFT CONSTRUCTION STREAM UNITS — UNITS FROM THIS
LIST TO THE VALUE OF AT LEAST 40 POINTS
Unit code
Unit title
Points
MEM04018B
Perform general woodworking machine operations
4
MEM07001B
Perform operational maintenance of machines/equipment
2
MEM07024B
Operate and monitor machine/process
4
MEM08002C
Pre-treat work for subsequent surface coating
4
MEM08011B
Prepare surfaces using solvents and/or mechanical means
2
MEM08014B
Apply protective coatings (basic)
4
MEM09002B
Interpret technical drawing
4
MEM09021B
Interpret and produce curved 3-dimensional shapes
4
MEM12007D
Mark off/out structural fabrications and shapes
4
MEM13003B
Work safely with industrial chemicals and materials
2
MEM13004B
Work safely with molten metals/glass
2
MEM18001C
Use hand tools
2
MEM18002B
Use power tools/hand held operations
2
MEM25001B
Apply fibre-reinforced materials
2
MEM25002B
Form and integrate fibre-reinforced structures
4
MEM25003B
Set up marine vessel structures
4
MEM25004B
Fair and shape surfaces
2
MEM25005B
Construct and assemble marine vessel timber components
8
MEM25006B
Undertake marine sheathing operations
2
MEM25007B
Maintain marine vessel surfaces
4
MEM25008B
Repair marine vessel surfaces and structures
4
MEM25009B
Form timber shapes using hot processes
2
MEM25010B
Perform fitout procedures
4
MEM25011B
Install marine systems
8
MEM25012B
Install and test operations of marine auxiliary systems
6
MEM25013B
Produce three-dimensional plugs/moulds
12
MEM25014B
Perform marine slipping operations
2
MEM25015A
Assemble and install equipment and
accessories/ancillaries
2
MEM50002B
Work safely on marine craft
1
MEM50003B
Follow work procedures to maintain the marine
environment
1
MEM50004B
Maintain quality of environment by following marina codes
1
MEM50009B
Safely operate a mechanically powered recreational boat
2
Source: MEM30705 Certificate III in Marine Craft Construction (2012)
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
5.5
Other elective units
Select units from Certificate III Trade Specialisation units listed in Appendix I,
Volume 1 of MEM05 to bring the total value of units to at least 73 points, including
any prerequisites.
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BOATING INDUSTRY TRAINING MARKET ANALYSIS AND CONCEPTUAL MODEL
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