Education (Export Education Levy) Amendment Bill

When the original Education (Export Education Levy) Bill was introduced to the House, members were told very positively by the Minister of Education that this was the bill that would fix everything in export education. He assured the public that the Labour Government cared for export education and that this export education levy would do the job. But hardly a year has gone by, and we are here to fix up this—

💬 Hon Bill English: I raise a point of order, Mr Chairperson. I did not want to interrupt my colleague, but I intervene here only because I thought the comments made by the Minister were ones that the Parliament ought to take seriously. He said, not quite in this order but certainly with the clear implication, that a member of this Parliament was sabotaging that member’s country. I think he put it around the other way—“think of your country and stop sabotaging it”, or something like that. Of course, that is quite unparliamentary. There are not many worse or more offensive statements that can be made about a member of this Parliament. I ask that the Minister withdraw and apologise.

The CHAIRPERSON (Hon Clem Simich): Yes, I heard that.

💬 Hon Trevor Mallard: I am happy to withdraw.

When debating this bill, one started to get used to taking personal insults from the Minister of Education, which I always thought was using a very bullying tactic—

The CHAIRPERSON (Hon Clem Simich): That matter has been dealt with.

As I say, it is less than 1 year since we had the original version of the Education (Export Education Levy) Amendment Bill, and we have just heard various debates on it.

I think the title of the bill should be “Education (Export Education) to Fix the Failure Bill”, because this bill intends to fix three types of failure. First of all, it is meant to punish the private educational institutions that perform well, for the failure of their competitors, even though those successful institutions have no control over which providers can join the export education sector. That control is in the hand of the New Zealand Qualifications Authority. The second type of failure was by the New Zealand Qualifications Authority and the related part of the Ministry of Education. The authority is the gatekeeper—the only one that can accredit an institution—and it is supposed to monitor and audit the behaviour of those institutions. In a previous debate I outlined two cases where problems were identified a year before the collapse of those high-profile institutions. Those collapses led, in effect, to New Zealand’s export education sector’s reputation suffering. The third failure we were told about was the one that goes to the heart of this version of the bill—the inability of the Government to get the first version right. We are now told that the first Education (Export Education Levy) Regulations were not quite in order, so therefore part of the time spent on this bill has to be devoted to fixing the original regulations.

The National Party’s Hon Bill English and Dr Wayne Mapp have today pointed out some serious problems, but we still do not have the Minister reassuring us during the passage of this bill. We will not support it, but unfortunately the very unprincipled Green Party will support the Labour Government in punishing the private sector. So we are still not reassured by the Minister, through his officials, as to whether this bill really will fix all those previous drafting errors.

There are two important things missing from the part of the bill that contains the title and the commencement date. The first is that the legislation does not bind the Crown, and the other is that the title does not reflect the true intent of the bill. The title should actually be “Education (Export Education Private Providers Levy) Amendment Bill”, because it does not relate to all providers of export education. It relates only to private exporters of education. I have huge difficulty with that term, anyway.

We have reached the situation in New Zealand where we have forgotten that we are actually dealing with human beings, in terms of export education. We are starting to think along the lines of fattening cattle for beef. That is something that gets lost in the economics of this sort of legislation, and it is only the private providers that are punished by such legislation. There is absolutely no need for this legislation. If members looked at what was in place before it came into being, they would see that the New Zealand Qualifications Authority had suggested that private tertiary educators were not being responsible—they were shirking their responsibilities—when it came to assuring students that tuition fees were safe. But that is absolutely not the case. If we go back to the history, we find that the combined registered English language schools—CRELS, as they were known—comprised a voluntary organisation they all belonged to. They all agreed, without being forced by Government and without this sort of legislation, that they would take on the students from fellow members of their organisation if those providers got into financial difficulty and could not provide their courses. That agreement was reaffirmed as being in place a week before the Modern Age Institute of Learning folded. The members knew that that institute was going to fold, yet they stuck by the deal they had made whereby they would take on those students.

Those were private institutions that were already acting responsibly. They are now going to be punished by this legislation. That is why, if this title were a true reflection of the bill, the words “private providers” should be in the title, or there should be the clause in the bill that provides: “This Act binds the Crown.” It is the public institutions that will be allowed to get away with doing exactly what they have been doing. Many of the polytechs—not all; places like Unitec are not included in the association of polytechs—have been getting away with taking money for purposes, and not using it for those purposes. It is the policy the Minister has set up.

I would strongly argue that this title is misleading, and any claims that private providers have behaved irresponsibly and should be punished are ridiculous. In fact, the combined registered English language schools have actually had a legal opinion from Geoffrey Palmer that they had no extra liability after Modern Age collapsed, and that they had fulfilled all their obligations in taking on those students. Even though they knew that Modern Age was going to collapse, they still took them on. Yet this Minister is intent on bringing in this legislation that will punish them. Not only that, the bill is being put through with a totally misleading title, and it is allowing public institutions to be let off the hook. The bill is not necessary, and it should be thrown out.

This part is essentially the summary in a wide-ranging debate, and National wants once again to restate its fundamental opposition to this legislation. It is statist. It is the sort of legislation one would expect from a Government that stems from a socialist background. I see the members across the Chamber are proud of the fact that they believe in a statist, socialist background.

Sitting suspended from 6 p.m. to 7.30 p.m.

As I was saying prior to the dinner break, National has profound objections to this bill, and we have these profound objections because of the Labour Government’s knee-jerk approach to dealing with a genuine problem. I think everyone would acknowledge there is a real problem involved in the question of how we protect consumers, particularly overseas students, in the event of failure of the institution they attend.

Labour’s solution is the classic statist solution that we have grown to expect from this Government. Of course it is the reason why so many New Zealanders have come to the view that this Government has really run out of steam; that this Government has now just simply, when confronted with a problem, taken the easy way out. What is the easy way out for a Government of Labour’s heritage? The easy way out is more regulation, more statutes, and, in particular, more cost on the private sector.

The private sector, as the Government will know, did not want this bill. The private sector is opposed to this bill. The private sector does not just oppose it because it does not want to do anything about the problem. It actually came up with realistic solutions that, in fact, all the speakers thus far have referred to. Members spoke about bonds as one particular option, about insurance as another possible option, and about better prudential supervision as a third option. They even spoke about self-regulation as probably the worst of all those private sector approaches, where they would manage a levy system themselves.

This was clearly not seen as the most desirable outcome, but all three of those solutions were seen as better than the statist solution—the solution that is always the recourse of the neo-socialist, such as the Minister sitting in the chair today, the Hon Chris Carter, who I am sure will be voting for this bill in just a few minutes. He and his Green mates, in that other party that no one would recognise as a sensible party, are from the only two parties in this entire Parliament that support this kind of State lunacy. Every other party is opposed, including their erstwhile coalition partners of a sort, the United Future party, including the New Zealand First Party with which National has considerable differences these days, and including the ACT party. All of those parties, coming to the issue from different perspectives, have all concluded that the statist solution is fundamentally wrong, particularly when there are better options available.

So, even when the Government removed the retrospective nature of the bill, that could not and did not fix its fundamental flaws—the fundamental flaw is the statist approach. This will not fix the problem in an effective way. There were better ways available to the Government. It should have listened to the sector, and we would not be confronted with this bill, which I guess reflects, more than any other bill that we have debated today, the fundamental divide between the old-fashioned statist solution and the contemporary approach, which is to trust the private sector. Let the private sector organise its own solution, maybe with a bit of State guidance and assistance in a prudential supervisory way, but not the old-fashioned: “Let’s just levy them; make them pay; we’ll organise it and trust the New Zealand Qualifications Authority to deal with it.”

I would like to continue the theme started by my colleague Dr Wayne Mapp. There is a problem in the export education sector. Actually, the biggest problem is the Labour Government, because 2 years ago—

💬 Hon Dover Samuels: What’s wrong with that?

The member asks a good question. The Labour Minister has not even bothered to brief his own colleague on what the problem is. The problem is that a Labour Minister brought in some legislation 3 years ago and told all political parties that if they supported the Government in passing the Code of Practice for the Pastoral Care of International Students, then export education would be fine. In the next minute we were told that if the Education (Export Education Levy) Amendment Bill was also passed, the export education sector would be an absolutely top performer.

Actually, the export education sector was performing without the Labour Government. In fact, it was doing very well. In 2003 it was one of the top five export earners for New Zealand.

Then, successively, we had two very high-profile collapses. The problems of those two institutions—the Modern Age Institute of Learning and Carich New Zealand—had, in some cases, been detected a year before they hit the media, and before harm was done to New Zealand’s export education industry’s reputation.

The Labour Government’s remedy was, first of all, to shift the blame. So instead of the Government admitting that it was the fault of the gatekeeper—the New Zealand Qualifications Authority; the organisation authorised to accredit institutions that could enrol international students—it shifted the blame and said: “Well, if only good students came to New Zealand, and if only good schools existed in New Zealand, then none of those problems would exist.” But the truth is that if the gatekeeper, the New Zealand Qualifications Authority, had done its job, a lot of the problems, even if they had happened, would have been minimised.

In this case, passing a bill to charge for an extra levy—to punish private education providers for the failure of their competitors—is not providing any solution to the problem. If the Labour Government is serious about trying to fix the problem in the export education sector, it has to engage the sector in carrying out a proper inquiry into the New Zealand Qualifications Authority, to see whether the authority has the expertise and the competence to carry out its monitoring role.

In my previous speeches, in respect of staff from institutions that had collapsed, I provided examples of how staff had tried to alert the New Zealand Qualifications Authority to problems in those institutions. So either the authority was reluctant to implement, or it was not capable of implementing, quick actions to stop New Zealand’s export education sector from suffering those high-profile collapses.

The passage of the export education levy legislation will certainly not solve the problem. I urge Labour members to rethink, because this bill concerns a very important sector and its passage is not supported by members on the Opposition benches—that is, almost all members apart from the Greens, who have a problem philosophically with private institutions. The Greens are against anything that is private, which is a shame in this case because I do not think they have the good of international students at heart. If we are really serious about wanting to enhance New Zealand’s reputation in international education, we should not pass this bill.

I move, That the question be now put.