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This article is an analysis of recent reform of vocational education and training in New Zealand. I argue that the 1999 election of a ‘third way’ government led by the New Zealand Labour Party raised the possibility of the previous administrations’ neo-liberal or market-led vocational education and training strategy being overturned. Evidence suggests little progress has been made towards realising this goal, and the basic thrust of the previous administrations’ vocational education and training policies have been retained. Moreover, the Labour Government has introduced new policies which are likely to increase competition within the vocational education and training sector. The implications for policy that emerge from this are discussed.