Education (Tertiary Reforms) Amendment Bill

Part 2 deals with related amendments to other enactments of the very important Education (Tertiary Reforms) Amendment Bill. When speaking on Part 1 I stated its importance. Part 2 is equally very important, as is the whole bill, because it is so pivotal to New Zealand’s future economic growth and productivity—the productivity that has been so sadly lacking under the Labour Government over the last 7 years.

It is good to see the Hon Steve Maharey here in the Chamber this afternoon, because in many respects this bill has been brought about by the failure of the continuous reform that has gone on over the last 7 years. In fact, the OECD in its report this year said that, on average, reforms have occurred in tertiary education in New Zealand every 2 years. It has been calculated that just the bureaucratic costs of the reforms has been in the order of $419 million—

💬 Colin King: How much?

From the budgetary estimates it is $419 million. And here we are again with more reforms. Mr Maharey is off to Massey, and he has left Dr Cullen, and now the Hon Peter Hodgson, to take over. But in the meantime, that $419 million has gone to waste when it should have gone into education.

It is quite interesting that clause 44(1) repeals the definition of profiles. After all, profiles and charters were brought in by the Hon Steve Maharey during those turbulent years that resulted in soft courses and a huge extra wastage of money—over and above the bureaucratic wastage—which has amounted to about a billion dollars over the last 7 years. But it is interesting to recall just what the Hon Steve Maharey said about the reforms back in 2002. He said that “These reforms represent the culmination of the government’s promise to overhaul our tertiary education and training systems.”

So there we were, back in 2002, when those reforms were the “culmination of the government’s promise”. But here we are again: one more reform; another reform—what has happened to them? What did he say in 2003? He said: “The TEC will bring clear strategic direction to the system as a whole.” But we all know that the whole system has been mired down in a fog worse than those at Wellington Airport.

Extraordinarily, in 2005, the vice-chancellor of Victoria University wrote to Minister Maharey to proclaim that “The system is haemorrhaging dollars right before your very eyes.” That is how bad the legacy has been, and that is why Dr Cullen was called in to bring in the latest reforms, which we have here in Part 2.

As I said, the charters and profiles have been taken away. They were instituted by the grand architect over there, Steve Maharey, but have been dispensed with by the new investment plan, the grand new investment plan, that is supposed to be introduced every 3 years. But in actual fact, if we look at the wording of this bill more closely we see that it looks as if the Tertiary Education Commission has the Draconian power not only to insist on a 3-year investment plan but to require institutions to have a short-term plan, a medium-term plan, and a long-term plan.

But I will stick strictly to Part 2 of the bill, because it deals with industry training organisations. There were some good submissions, particularly from Competenz, which submitted that the bill legitimises existing implementation tools. However, it said that the Tertiary Education Commission’s decisions were negating the intent of those tools.

Competenz contended that the tertiary education strategy and the investment guidance required industry training organisations to develop more qualifications at levels 5 to 7 of the national qualifications framework, to ensure that training took place. However, the Tertiary Education Commission’s cap on industry training organisation funding at levels 5 and above constrained its ability to meet this requirement.

Those are the sorts of topsy-turvy things that the Government has done. On the one hand it has said that it wants organisations to offer higher-level training, but on the other hand it is bringing in these caps, which will make it more difficult.

Just to conclude, it is important to say that this bill was supposed to be about quality, value for money, and relevance. Yet we have a situation with Modern Apprenticeships. I am sure my colleague Colin King, who is an expert on them, will expand a little further on this aspect. Modern Apprenticeships were supposed to be the great new thing of the Labour Government, but we know now that the scheme’s completion rate is abysmally low. The Labour Government has lauded the scheme as being the grand new thing, yet we know that back in 1992 the industry training organisations had to come in. The old apprenticeships system was a shambles. We needed to modernise training within industry, and that was done very well by the National Government of the time.

Over the last 7 to 8 years, the Labour Government has poured millions of dollars into its so-called flagship Modern Apprenticeships scheme, only to find that an abysmally low number of apprentices have actually completed the courses.

As I rise to speak to Part 2, I would like to say that it is good to have a Minister in the chair, Maryan Street, who at least listens to the debate and responds to some of the concerns we raise, unlike other Ministers who sit and do crosswords.

I would like to start by commenting that here we are, as late in the piece as this, after nearly 8 years of a Labour Government, still looking at tertiary sector reform. Every 2 years, as my colleague said, we are right back here, looking at tertiary reform. I think out there in tertiary land a number of people are suffering from reform fatigue. They have seen it all before. A lot of tertiary providers bought into the production of their charters and their profiles. They spent a huge amount of money genuinely going through the processes, only to be told that everything was going to change and we were to move to a 3-year plan. I would like to hear what Steve Maharey has to say on this. I would like him to take a call, actually, to tell us whether he will change his tune on tertiary reform, because when he takes on his new role he will find he will be asked to plan, plan, and plan again.

I draw members’ attention to some of the comments made by representatives of the Vice-Chancellors Committee, which gave a very powerful submission—and I know that Minister Maharey will enjoy taking part in Vice-Chancellors Committee meetings. The vice-chancellors had some very serious things to say about the bill. They said there would be an unwarranted loss of academic freedom and autonomy. They said the bill was going to be uniformly directive and controlling, and they talked about it providing the Minister with greater powers than ever before. They said they were concerned that the bill would open universities to direct ministerial intervention, and they made the point that none of the world’s leading universities were subject to the degree of control proposed in this bill. So I am sure that when Steve Maharey gets out there into tertiary land, he perhaps will change his tune on a lot of these things as he finds it increasingly difficult to run a university under this bill.

This bill proposes less bureaucracy and more focus on quality and value. That is what the rhetoric says, but what we have in here is something quite different. The Minister said that things will no longer be demand-led. I do not think we can ever turn our back on demand, because a lot of the services provided in our tertiary sector are in increasing demand. In the early childhood education area there is a shortage of trained teachers, and, of course, there is an increasing demand on some of the services to provide education for people who want to learn and to get them out into the market place.

Through this bill, the Tertiary Education Commission is proposing that it puts a cap on the number of seats for prospective students, at a time when there is an increasing demand for those services. So there must be some flexibility there, because the country does need people with the sorts of skills provided by those services, and we need to ensure that we can support and train as many as we wish. On the other hand, in some areas there are not as many positions available for people to go into afterwards.

In respect of Part 2, I refer now to industry training organisations. We have heard a lot of discussion about the Modern Apprenticeships system, and the Government has patted itself on its back endlessly about the number of Modern Apprentices that have been created. [Interruption] I tell Lesley Soper that her Government does not know how many apprentices are completing their apprenticeships. It is all very well to have thousands and thousands of apprentices, but we would quite like them to finish their apprenticeships and go out into the workforce. I know that when I have asked the Minister for completion rates—as have my learned colleagues—we have been told time and time again that he does not have a clue and that the Government does not have a clue how many of these young men and women are actually finishing—

💬 Lesley Soper: Go and tell all those business people about what wonderful things you did for the apprenticeship system, and see what they have to say about it.

Deluded! I rest my case. That member obviously does not understand this bill. She was a useless member for the New Zealand Educational Institute in Invercargill, and I think she proves the point by some of her inane utterances here in the House.

It is interesting to compare Part 2 of this Education (Tertiary Reforms) Amendment Bill, in respect of industry training organisations, with related amendments to other enactments. It is just a little bit of material compared with what is in Part 1, and it sort of indicates where the problems are in the tertiary education system.

When I stop to think about industry training organisations and the Industry Training Act, I would say there are about 40 such organisations. It was a marvellous concept that went forward with cross-party support and it was seen to be a solution at that time—before 1992—to an apprenticeship model that was not quite meeting needs. It worked itself through very, very effectively and by 1999 some 50,000 people were employed in training under the industry training organisations’ standard training measure model. They effectively covered a full range of industries.

So when we look at Part 2, we see the changes around plans, and proposed plans are transferred into the Industry Training Act. On that basis it is significant to appreciate that a proposed plan is what it says—it is a proposed plan; it is not an approved plan. Basically it is a plan put forward, with consultation and discussion, to be approved by the Tertiary Education Commission. Once it has been approved it becomes the plan. However, it is worth noting today that a complex situation has been created around tertiary education whereby some 15 percent of people go to university, and some 85 percent of kids leaving school go into trades-related or industry training provider types of training and employment. Therein lies some of the concern in relation to this entire bill, but which is particularly highlighted because of the Industry Training Act 1992.

Very little has been said about the New Zealand Qualifications Authority, but it is a fascinating beast in itself because it is meant to ensure the quality of training, of the qualifications, of the moderation, and of the approval of new qualifications. The industry training organisations manage industry training. They manage the qualifications, which are put on to the New Zealand Qualifications Authority framework, and those providers that are contracted by the industry training organisations deliver to those qualifications.

However, the Plumbing, Gasfitting and Drainlaying Industry Training Organisation, which has been trying to align its qualifications with the exams and registration that come from the Plumbers, Gasfitters, and Drainlayers Board, has taken virtually 2 years to get that approval through. I recognise—as highlighted by Hazel Armstrong—that some personality problems were involved, but in putting questions to the Minister for Tertiary Education the feedback we were getting was that things were pretty well in line. On that basis, it is hugely concerning for the many people involved in industry training that it is taking as long as this. It is not good enough. When reference is made to a plan, and people are interfacing with the Tertiary Education Commission, the fatigue and demoralisation caused because of the time it is taking is concerning. Quite often the comment that comes back to us is “We’re being thorough.” Unfortunately, we are hearing from the industry training organisations that every time they make contact with the New Zealand Qualifications Authority they are making contact with a different person. There seriously needs to be a way of managing institutional knowledge so that things are moved forward quickly.

When we look at the plan, in Part 2, it is worth noting that the industry training organisations have been capped for many years at a total of $174 million. In the last Budget they were given $14 million to take on a leadership role. On that basis it is interesting to see that the private training establishments and the industry training organisations were capped. In fact, the majority of the industry training side of things has been capped, which leaves us with an interesting challenge in the middle.

I want to talk for a few minutes on the issues that this bill does not address, but which are referred to in Part 2, “Related amendments to other enactments. Amendments to Industry Training Act 1992”. It is the overlapping provision and it is something that no doubt an incoming National Government will have to get to grips with.

There is a bad relationship between the industry training providers and the industry training organisations. It has been brought about by an overlapping of provision. What that means is that the industry has developed qualifications that are funded at a standard training measure rate of $3,200 per year per 120 credits. However, the polytechnics are funded at a rate of up to and above $8,700 per standard training measure. So this is an area that a National Government will have to sort out, because it is untenable.

💬 Sue Moroney: Oh, like you did last time!

If I may seek the indulgence of the Chair, I would like to talk for a few moments about the Modern Apprenticeships scheme because, for the benefit of the new junior whip, it too has now been embroiled in this. The Minister Pete Hodgson said the other day that there are now 13,000-odd Modern Apprentices, and that barely 4,000 of them have completed their apprenticeship. An example of the butchered nature of what would otherwise have been a very good policy is the case of Masterlink, which is a Modern Apprentice coordinator, receiving $165,000 and having only one completion. That is only half of the equation, because if we put in the standard training measure funding, which is probably another $50,000, there is in excess of $200,000. I want the junior Government whip to remember that. There has been a good policy. This member was a Modern Apprenticeship coordinator, and the first time I met the Minister Steve Maharey was when I shook his hand when Labour introduced the policy. Unfortunately it has been totally butchered.

💬 Sue Moroney: Labour introduced the policy!

💬 Lesley Soper: There we are.

If the two members who are interjecting would just listen they will learn. Last year in Auckland under the building and construction industry training, only 9 percent of building apprentices completed their apprenticeships. The Manukau Institute of Technology’s managed apprenticeships—we now have managed apprenticeships being run by the industry training providers—had 90 percent of completions. So now we have a real issue. The Modern Apprenticeships scheme, which was the Labour Party flagship, has an abysmal completion rate and on the other side there are high levels of completion on the managed apprenticeship programme, which is actually an overlapping provision that the Government—or National when it becomes the Government—is going to have to sort out. We have a massive problem there and it has all been due to the problems associated with a 7-year butchering of the tertiary education sector.

I appreciate the opportunity to rise and speak to Part 2 of the Education (Tertiary Reforms) Amendment Bill. It does give me an opportunity to correct an omission when I spoke on Part 1. I acknowledged the role of the officials and the fine, outstanding work of Dr Hutchison, which I want to repeat, and of the National members on the Education and Science Committee. I really should have paid tribute to the Hon Brian Donnelly, who led the committee through very difficult and complex stuff without a yawn, without missing a point, and with a very, very good grasp of detail. Although I disagreed with some of the things that Mr Donnelly said when he spoke in the House earlier this afternoon, I certainly do respect his grasp of the detail. There is no doubt about it, when Mr Donnelly abandons the sinking ship to go to the Cook Islands the select committee will very, very much miss his chairmanship.

💬 Colin King: A very good man.

As Mr King says, the committee will be losing a very, very good man. In speaking to Part 2, perhaps I could reflect for a minute on one of the things that so many of us are noticing in this Chamber now—Mr Donnelly’s defence of the Government was far more rigorous than the Government has been able to put up for itself. It was interesting to listen to the comments of the Minister in the chair, Maryan Street, when she spoke; and I just take the opportunity to congratulate her on her promotion and to wish her well.

When we think about Part 2 the words that kept coming out were “plans, plans, plans”. Goodness gracious me, it took me way back to fifth-form history and the lessons one learnt about the failures of the 5-year-plans of the Communist systems of Europe. I hope we are not falling into that sort of trap—the view that somehow one can plan, plan, plan, and somehow things will get better. Then that marvellous word “commissariat” came out. It is not a word that I have heard for many years, but it was dropped into the conversation so readily and so easily, and with so little thought, that it really does give those of us on this side of the Chamber a little bit of cause to wonder just what the underlying driving ideology is that has come from the other side.

I also want to take a minute to acknowledge the previous Minister of Tertiary Education and to congratulate him upon his appointment to the vice-chancellorship of Massey University. I think I am right in saying that he will not be the only former member of this House to hold that position. It is going to be really interesting to talk to Mr Maharey in a couple of years’ time and see the extent to which his perspectives have changed, and see the extent to which he will be pulling his hair out trying to run a university under the plans and other constraints that are being imposed by his very colleagues.

One would have to reflect a little bit on the irony of the situation. We are debating Part 2 because Mr Maharey, when he was Minister for Tertiary Education, made a bit of a botch of things. They put Dr Cullen in to sort of tidy it up, and now they have landed it on poor Pete Hodgson. In 12 months’ time the original cause of the trouble will be trying to run a university under this constraint.

When I reflect on the provisions of clause 2, I must say is not the House fortunate to have a man with the understanding of the industry training sector that my colleague Mr King has? Did he not speak well in drawing the Committee’s attention to the issues being faced? Would it not have been good if the Labour members on the committee, and those in the Chamber, had actually, instead of being in such a rush to get these controls and these plans and goodness knows what into place, taken a little time to listen to what Mr King has been saying, and to reflect on what sound observations and advice he has on this subject?

I move, That the question be now put.

I appreciate the call in enabling this debate to carry on, because these matters are important to the future of New Zealand. One should reflect on why the Government keeps trying to shut down the debate.

I want to finish my contribution, because I have a very, very important point to make. We have to see Part 2 in the context of the future that may lie out there for the New Zealand economy. One has to wonder why a Government—at a time when everybody is talking about the abilities, knowledge, skills, and attributes that graduates will need in the future to be successful in a modern market-based, knowledge-driven economy—wants to plan to restrict the universities, in particular, from the ability to produce that sort of graduate.

When we look at the provisions in Part 2, and consider them together with Part 1 and the rest of the bill, we have to ask ourselves how the tertiary education sector, which this bill seeks to shape, control, design, and plan—that word again—will contribute to producing both the quality and attitude of graduates that this country will need, whether they be from universities, polytechs, or trade training organisations.

I have heard Labour members defend Part 2 and talk about rationalising resources, getting the best result out of them, and all the rest of it. That is a smokescreen for the real purpose of this bill. Much of the purpose of this bill is what lies behind so much Government legislation that is brought to the House. This bill is not about the best outcome for New Zealanders or about strengthening the tertiary sector; it is all about Government control. For that reason alone, it is vital that the Committee votes the bill down.