Financial Review Debate — Ministry of Education

Like the health portfolio, the education portfolio is littered with lost opportunity in a fiscal fool’s paradise. I just want to take members over some of the numbers so they can understand what has actually happened to education under the stewardship of, apparently, the most competent Minister in the Government, Mr Trevor Mallard.

💬 Darren Hughes: The Hon Trevor Mallard.

The Hon Trevor Mallard, and then there is the other education Minister, who has taken up his job recently and cannot stay awake in the House. When I get letters from parents about the fact that their children with special needs cannot get teacher-aides, and that they are getting semi-abusive letters back from the Minister, then I know there is a problem.

I will tell members where the money has gone, because it has not gone to the people who need it. Sneering arrogance from the Government will not change that one bit—not one bit. The member from Otaki can listen to these numbers: in tertiary education, Government spending has gone up between 2002 and 2005 by $1 billion—from $2 billion to $3 billion—and over the next couple of years it is forecast to go up another $500 million, so the rate of increase is picking up. This is when the Government has said that it recognises there is a problem with the Te Wānanga O Aotearoa, and it is going to do something. Well, it is actually not doing something at all—it is doing nothing.

Tertiary spending has got completely out of control, with homeopathy for pets, the “art of health”, which includes learning about the effect of colour on the human soul, and $20 million phantom computer courses that no student ever did. The member for Otaki is going to sit there and giggle at the parents of special needs children who cannot walk, cannot talk, and cannot change their own nappies at school, and who cannot get a teacher’s aide. That is the reality. That is the cost of the fiscal fool’s paradise that this Government has overseen.

A bunch of half-successful lecturers and middle management out of universities have got hold of the Government’s honeypot and spent it all on their mates—in the polytechs, mainly—not on the students. The proportion spent on students has dropped by 20 percent, so we have had a multi-billion dollar blowout in tertiary education, which has not gone on the students. They have not got their fair share. Let us compare the increase in—[Interruption] Well, that member’s local polytech campus is in real trouble, because when Trevor Mallard comes with his cuts—which are inevitable—it will be the first to go. Members heard it here; that member will regret ever raising the topic of the Wanganui campus of the Universal College of Learning, because it will cost her the seat of Whanganui. She just has to wait.

Expenditure on tertiary education, in the two terms of this Government, has gone up 50 percent. That is before the coming salary negotiations, which are going to certainly boost that expenditure, because university staff are looking for a collective contract with big increases.

In schools, Government expenditure has gone up 16 percent over that time but, of course, parents’ expenditure has gone up much faster. Parents now contribute almost $500 million per year to the operating costs of schools. That has gone up 34 percent in just 3 years, from 2000 to 2003. So what will the member for Otaki tell parents in Levin about that—that in 2003, parent donations and fees for Labour’s free State education were $199,863,111?

As they say, a week is a long time in politics. I will read a statement from the financial review of the Ministry of Education, which was tabled on 3 February 2005, which includes a statement on the National Certificate of Educational Achievement (NCEA): “According to the ministry, the recent NCEA examinations went relatively well. Scholarship examinations were introduced this year, and feedback from schools indicates that students found them challenging.” Well, I think that the results from the scholarship exams were more challenging to the Ministers than they were to the students. But that is not the issue that I want to talk about this evening.

The issue I want to talk about is one I first ran across in January when I met a deputy principal of a relatively large secondary school. We got chatting about a variety of different things, and I happened to ask about how they were coping with the non-contact policy issue. He said that they had no problem at all—they just sent the kids home. I asked what he was doing, and he said that once a term his school sends the kids home and they have a teacher-only day, and that is when the teachers can do their preparation and planning. I made some muttering noises about compliance with the law, and he just grinned at me and said that it was the only way they could do it, and that the staff were happy.

During the adjournment week it was reported in the Northern Advocate that two secondary schools in Whangarei are doing this in order to comply with the conditions of the secondary collective contract. Students are being asked to stay at home. Why is this of concern? There are two reasons. Firstly, educationists know that one of the most critical factors in determining learning is what is known as engaged academic learning time, which is the amount of time the learner is actually actively engaged in activities related to his or her learning. One can certainly guarantee that if secondary students are back at home, they will not be engaged academically in learning as they would be if they were at school. But there is a second little problem, and that is that schools are required by law to be open for instruction for 380 half-days per annum. When schools are asking students to stay at home, how can they possibly be open for instruction?

New Zealand already has a very low number of days that students are required to attend, relative to our international counterparts. I also tell the Associate Minister of Education, David Benson-Pope, that there was a report in 1997 by the Education Review Office that showed that there was already considerable slippage within our secondary system of the days open for instruction, or of the interpretation of the days open for instruction. What is actually happening as a result of the terms of the collective contract, plus the lack of provision of additional teaching resources to the schools, is that students are being robbed of academic learning time. It is the only way in which schools are able to meet the commitments that the Government has entered into with the Post Primary Teachers Association (PPTA).

How did this situation come about? It came about in 2002, when the Minister of Education, the Hon Trevor Mallard, got himself into a bit of a problem with the PPTA. There was a looming election, so his way out of it was to give it to an independent body. The independent body came up with a solution that in fact neither New Zealand First nor the Minister agreed with. New Zealand First said: “Yes, we do need additional staff, and we have lobbied the Government for 2 years to put in more staffing, particularly with NCEA coming up. Put them into the secondary schools. It has to be done, otherwise you will have a real problem on your hands.” The Minister said no. The reason why we did not go along with the guaranteed non-contact time on a weekly basis was that it took away all the flexibility that secondary schools need to be able to determine how to best use the staff resource they have. The Minister agreed with that—but when it came to the crunch he bowed to the pressure and gave in. But he did not come up with the resources.

I have been hearing for a number of years now that we do not have the resources to provide the non-contact time that we have to provide under the collective contract. So how is it being done? There are only two ways that it can be done. The first is to reduce the number of subjects, and the second is to increase class sizes in order to get the commitment there. Schools, quite naturally, are not planning to do that. Instead, they have taken away learning time from the students. Who will suffer from students being asked to stay at home for another 3 or 4 days of the year? Of course, the schools are still supposed to be open for instruction, so there is a breach of the law there, and I will be asking the Associate Minister what he is planning to do with the schools in this particular regard.

JILL PETTIS (Labour—Whanganui): I feel I have to rise to speak after listening to that outrageous contribution from Bill English. I thank Brian Donnelly for his contribution, which was, as always, well researched and well considered. But Bill English’s speech was just an absolute rave. He is losing the plot. The ranting speech he has just given was not in his usual style, so I do not know what pressure he is under at the moment.

I want to remind the member of some recent history. When Labour came into power in 1999, one of the first things it had to do was to put $40 million into Special Education, just to help that sector keep its head above water. That money has been well invested. We know that more is required. We know that Special Education is an area that requires serious funding. In no way at all do we think that that is all we have to do. We know that more needs to be done.

One of our first expenditure items was to put $40 million into Special Education. We are now spending $40 million a year on numeracy and literacy initiatives. That is money well spent. It is investing in the future of young people in this country. We also spent $40 million on rescuing the polytechnic sector in Wanganui, Palmerston North, Ōtaki, and Wairarapa. In fact, more than that was spent, but I know that $40 million went into ensuring that Wanganui had provision for tertiary education. It was amazing, because there was not one peep from our closest geographical member of Parliament from the National Party. The reason was that Maurice Williamson wisely took him aside, and said: “Don’t open your mouth. You can’t win on this one. Let them get on and do it.”, and we did. Mr Power can confirm that he did not once open his mouth when we were rescuing the polytechnic sector in and around the Wanganui district and surrounding districts.

I want to say that although our polytechnic will face some difficulties with student numbers—I tell Mr English that that is what happens in regional polytechnics—there is nothing new about that, at all. This Government recognises the value of the provision of tertiary education and training in provincial New Zealand. We will continue to recognise that, and we will continue to support it with funding.

This Government has increased education funding substantially since it has been in office, and the member knows that only too well. Since we have been the Government, we have increased school operational funding by over 15 percent in real terms, and we have delivered 2,700 extra teachers over and above roll growth. We acknowledge that we have had to rationalise some schools in the smaller rural areas, but National closed 360 schools when it was in Government—even though my unfortunate National opponent said on the wireless the other day that the schools closed themselves. I recommend that National keeps that man hidden. We have funded schools at a level at which they have never been funded before.

One area where I am particularly pleased with the additional funding—and it is huge—is in the tertiary sector. We are continuing to work to make education more and more affordable for young people in New Zealand. I have had the experience of being a parent of two children, both of whom went to university—one under a Labour Government and the other under a National Government. There was a vast difference in their debt levels at the end of their tertiary education. The reason was that tertiary education was more affordable for our oldest child who did the greater part of his tertiary education under a Labour Government, as opposed to our daughter who did hers under a Tory Government. This Government is increasing the spending in tertiary education, because it knows how important it is to make tertiary education more affordable.

I want to talk about the student loan scheme, referred to on pages 5 and 6 of the report, and make some suggestions. It is very clear that in the year under review nearly 10 percent of the population had taken out a student loan. But more startling, in 8 years’ time that figure will have increased from nearly 10 percent to just over 25 percent. In the year under review it appears the total amount of student loan debt was just over $5.3 billion. By 2010 it will explode; it will double to $10.6 billion. That is a huge increase. It is like a steam engine rolling down the line towards us.

I would like to make some suggestions on behalf of United Future. We have to keep that end in mind, and find a way to solve this ever-explosive situation. We urge the Government to press ahead with the hard work in designing a loan scheme that will amount to a tertiary savings programme. In the long term we will have whittled down this debt load and eventually there will be no need for any student to borrow, because savings would have been built up over time.

An article on the front page of the New Zealand Herald stated the Government had ditched the savings plan, but I understand that is not the case. United Future says it is unacceptable that young men and women have so much student debt they will never contribute fully to the workforce, and will delay the purchase of their first home and starting a family. That is not the basis on which to build a society, and we do not want to see that carry on.

We need an education policy that encourages parents to save voluntarily for their children’s tertiary education—from birth. For example, they could save contributions from relatives and from the children themselves as they grow up, from charitable organisations and other donations, iwi trusts, and all sorts of things, as well as some incentives from the Government to help along the way. The Government is aware of this need. It sought responses to a letter it sent out to the nation last year about a savings programme, asking what people thought was the most important thing the Government could do. The most popular suggestion from 59 percent of submitters was for some sort of pre-education savings scheme. That is a huge endorsement of a concept that can be developed and worked through.

We have the examples of Canada, Sweden, and Britain where Governments put in a lump sum, on the birth of a child, varying according to parental income, thus the child receives some sort of minimum endowment. That money can be carried forward for the rest of the child’s years, and built up with contributions from the parents, and so on.

United Future thinks that maybe parents could be given the option of diverting part of their family assistance payment into such a savings scheme. It would incentivise people towards a savings culture. The Government has flagged that as one of its prime issues, and we give that support. If we change the culture and New Zealanders learn how to save, that will produce assets for our nation.

I have a series of questions the Minister in the chair, the Hon David Benson-Pope, might like to answer. One picks up on the issue raised by my colleague who has just sat down. Is the Government doing a savings scheme for tertiary education, or not? I suspect that yesterday it was not, but since the New Zealand Herald ran it on its front page today that something the Prime Minister said would happen could not happen, today the policy is back. So the Minister can tell us about that. I also want the Minister to answer some questions about the exploding bureaucracy that he is overseeing.

Can the Minister tell the Committee why the amount of money spent by the Ministry of Education on policy advice has doubled under his Government? Are they the people who gave advice about how to waste hundreds of millions of dollars on tertiary education? Are they the people who advise the Government to ignore the needs of children with special education needs? Why has spending on policy advice doubled from $25 million to $47 million? Why has the amount of money spent on ownership advice doubled? Twenty million dollars a year is now spent in the Ministry of Education on ownership advice. That figure is twice what it was 5 years ago. Why has the amount of money spent on administration of regulation trebled on the Minister’s watch? Why has that amount trebled? Can the Minister tell us?

Spending on policy advice has increased by 200 percent, spending on ownership advice has increased by 200 percent, and spending on the administration of regulation has increased by 300 percent, but the operations grant increase for schools in 2005 is just 2 percent. That shows us the Minister’s sense of priority. Why has the bureaucracy, the number of civil servants employed in the Ministry of Education—putting aside the intake of special education needs into the ministry—gone up by 24 percent? Why does he need 24 percent more bureaucrats to give bad advice on how to run the education system? Can he tell us that?

Another thing I want to ask the Minister is this. Why is the Government so wrong in its forecast about tertiary education expenditure? I have looked back at the forecasts for the 2005-06 year. That is the next one coming up. To go back to 2002, it forecast $2.8 billion. The latest forecast is $3.26 billion. Why is the Government’s forecast half a billion dollars out? Why has that forecast changed by half a billion dollars? How many special-needs kids’ nappies would that change? That shows that Government expenditure on tertiary education is completely out of control. Suddenly $500 million has appeared in the forecast, which means that parents are selling raffle tickets to pay for teachers and doing sausage sizzles outside the The Warehouse to buy some decent computers. They are using the leftover money from the computers to pay for the teacher-aide to change the nappies of the child who cannot walk or talk, but suddenly the Government can find $500 million extra for tertiary education. It just appears in its forecast. Where does that $500 million come from? It would have been more, except that the Government doubled the amount of money spent on policy advice.

Why does the Government not cut back the spending on policy advice and spend some of that on special education? Why not cut back the ownership advice funding—$20 million? All that does is pay officials to go around polytechs telling them how to break the rules so that they can get enough money to be financially viable without fixing their basic financial problems. [Interruption] That is what they tell me. The officials from the Ministry of Education turned up and said: “Why don’t you run one of these phantom computer courses? That’ll fix up your financial problems.” Is that not great! The Government is paying one official millions to tell the other officials how to blow out the Government’s budget by hundreds of millions. That is some kind of perpetual motion machine that just keeps spewing money out week after week and year after year. Would the Minister please give us the answers.

I am delighted to take a call, and I begin by thanking Mr Donnelly, who spoke a little earlier, for the rational contribution he made to this debate, and, equally, Mr Ogilvy. Unfortunately, the previous speaker, in his second contribution, went into the extraordinary hyperbole we have become accustomed to in this House, most of it without any connection with reality. I guess that one of the two things Mr English has to face up to is the fact that members of this House, and the general public, have completely lost faith in the extraordinary statements he makes, mostly without foundation. The second thing he has to face up to is the short period he will have in his job when Mr Peachey arrives in this place, because, as Mr English knows, Mr Peachey is a friend of Dr Brash, and Dr Brash will make sure that Mr Peachey sits in Mr English’s place, quick smart.

We have heard the most extraordinary diatribe from the Opposition, which has been criticising the Government for huge increases in education spending. I shall detail those. We have had the extraordinary position of Mr English criticising the Government for a 50 percent increase in tertiary funding, and for—although he never mentioned this figure—a 30 percent increase in Special Education funding. I tell Mr English that that will never be reversed, because when National was in Government it did not fund education—in fact, it gutted our educational institutions—and that is not lost on members of this community. It is certainly not lost on members of this House. In many years’ time, when those on the Government benches sit in Opposition, there will be absolutely no chance that they will be criticising that person in Government, or any of his successors—Mr Peachey, no doubt—for the sort of commitment to education this Government has made.

It is no surprise that the Labour Party and a Labour-Progressive coalition Government would be focused on health and education. Those areas have always been our traditional focus, and they will remain so. That is why I am pleased to tell the House that, although we are talking of increases in education expenditure, the increases in my particular area of responsibility for schools since 1999 have been a massive $1 billion. In the area of schools, expenditure has been lifted from $3.5 billion in 1999 to $4.5 billion in 2005. What an extraordinary contribution and commitment that is to the future of the young people in this country.

I shall also talk briefly about the comments Mr English made about the shortage of teacher-aides. We are aware of the pressure on teacher-aides. We are aware of the invaluable work they do alongside their trained teacher colleagues. One of the reasons we have such problems with providing enough teacher-aides in the community is the employment situation. It is a problem, and we acknowledge that—but what a fantastic problem to have. It is a result of unemployment being at record lows—3.8 percent unemployment. Is it any surprise that people who are not sufficiently remunerated and who need to renegotiate their collective contract—as they are doing this year—are difficult to staff because of better remunerated positions in so many parts of the economy? How different is that from what we inherited in 1999, when the failed National Government, with its failed policies of the past, had done nothing to provide any workplace continuity?

My predecessor, who spoke earlier about Vote Health, alluded to this in terms of the health workforce supply. It is no different in education. One of the greatest challenges for us, and one of the reasons for redeveloping and rebuilding the ministry that had been so gutted by our predecessors, is that we have to provide the continuity of workforce supply. That has never been done by the Opposition.

I refer to the operations grant. If one looks at what I think is a quite rational review by the Education and Science Committee—and again I compliment the chair of that committee, Mr Donnelly, and its membership—one can see that one of the first issues talked about is operational funding. Let me say to members of the Opposition, particularly Mr English, that since 1999 operational funding has increased by 13 percent—that is if we do not include the $111 million that this Government has spent on software licences, on software programmes, and on all sorts of things that were never provided for schools previously. Including that expenditure, since 1999 the operations grant for schools has increased, in current inflation-adjusted dollars, by 18 percent. So members of the Opposition should not tell me that we have not kept up with inflation, because the consumer price index certainly has not moved in that degree.

Report noted.

Ministry of Transport